EXHIBIT 4.2
--------------------------------------------------------------------------------
EXECUTION VERSION
SOLO CUP COMPANY
8 1/2% SENIOR SUBORDINATED NOTES DUE 2014
----------
INDENTURE
DATED AS OF FEBRUARY 27, 2004
----------
U.S. BANK NATIONAL ASSOCIATION
TRUSTEE
----------
--------------------------------------------------------------------------------
CROSS-REFERENCE TABLE*
TRUST INDENTURE
ACT SECTION INDENTURE SECTION
--------------- -----------------
310(a)(1).................................................................. 7.10
(a)(2).................................................................. 7.10
(a)(3).................................................................. N.A.
(a)(4).................................................................. N.A.
(a)(5).................................................................. 7.10
(b)..................................................................... 7.10
(c)..................................................................... N.A.
311(a)..................................................................... 7.11
(b)..................................................................... 7.11
(c)..................................................................... N.A.
312(a)..................................................................... 2.06
(b)..................................................................... 13.03
(c)..................................................................... 13.03
313(a)..................................................................... 7.06
(b)(1).................................................................. N.A.
(b)(2).................................................................. 7.06, 7.07
(c)..................................................................... 7.06, 13.02
(d)..................................................................... 7.06
314(a)..................................................................... 13.05
(b)..................................................................... N.A.
(c)(1).................................................................. N.A.
(c)(2).................................................................. N.A.
(c)(3).................................................................. N.A.
(d)..................................................................... N.A.
(e)..................................................................... 13.05
(f)..................................................................... N.A.
315(a)..................................................................... N.A.
(b)..................................................................... N.A.
(c)..................................................................... N.A.
(d)..................................................................... N.A.
(e)..................................................................... N.A.
316(a) (last sentence)..................................................... N.A.
(a)(1)(A)............................................................... N.A.
(a)(1)(B)............................................................... 6.04
(a)(2).................................................................. N.A.
(b)..................................................................... N.A.
----------
* N.A. means not applicable.
This Cross-Reference Table is not part of this Indenture
TRUST INDENTURE
ACT SECTION INDENTURE SECTION
--------------- -----------------
(c)..................................................................... 13.14
317(a)(1).................................................................. N.A.
(a)(2).................................................................. N.A.
(b)..................................................................... N.A.
318(a)..................................................................... N.A.
(b)..................................................................... N.A.
(c)..................................................................... 13.01
TABLE OF CONTENTS
Page
----
ARTICLE ONE
DEFINITIONS AND INCORPORATION
BY REFERENCE
Section 1.01. Definitions ............................................................ 1
Section 1.02. Other Definitions ......................................................31
Section 1.03. Incorporation by Reference of Trust Indenture Act ......................31
Section 1.04. Rules of Construction ..................................................32
ARTICLE TWO
THE NOTES
Section 2.01. Form and Dating ........................................................32
Section 2.02. Execution and Authentication ...........................................33
Section 2.03. Methods of Receiving Payments on the Notes .............................34
Section 2.04. Registrar and Paying Agent .............................................34
Section 2.05. Paying Agent to Hold Money in Trust ....................................35
Section 2.06. Holder Lists ...........................................................35
Section 2.07. Transfer and Exchange ..................................................35
Section 2.08. Replacement Notes ......................................................48
Section 2.09. Outstanding Notes ......................................................48
Section 2.10. Treasury Notes .........................................................48
Section 2.11. Temporary Notes ........................................................49
Section 2.12. Cancellation ...........................................................49
Section 2.13. Defaulted Interest .....................................................49
Section 2.14. CUSIP Numbers ..........................................................49
ARTICLE THREE
REDEMPTION AND OFFERS TO
PURCHASE
Section 3.01. Notices to Trustee .....................................................50
Section 3.02. Selection of Notes to Be Redeemed ......................................50
Section 3.03. Notice of Redemption ...................................................50
Section 3.04. Effect of Notice of Redemption .........................................51
Section 3.05. Deposit of Redemption Price ............................................51
Section 3.06. Notes Redeemed in Part .................................................52
Section 3.07. Optional Redemption ....................................................52
Section 3.08. Repurchase Offers ......................................................53
Section 3.09. Special Redemption .....................................................55
i
ARTICLE FOUR
COVENANTS
Section 4.01. Payment of Notes .......................................................55
Section 4.02. Maintenance of Office or Agency ........................................55
Section 4.03. Reports ................................................................56
Section 4.04. Compliance Certificate .................................................57
Section 4.05. Taxes ..................................................................57
Section 4.06. Stay, Extension and Usury Laws .........................................58
Section 4.07. Restricted Payments ....................................................58
Section 4.08. Dividend and Other Payment Restrictions Affecting
Restricted Subsidiaries ...............................................63
Section 4.09. Incurrence of Indebtedness and Issuance of Preferred Stock .............65
Section 4.10. Asset Sales ............................................................68
Section 4.11. Transactions with Affiliates ...........................................70
Section 4.12. Liens ..................................................................71
Section 4.13. Business Activities ....................................................72
Section 4.14. Offer to Repurchase upon a Change of Control ...........................72
Section 4.15. Limitation on Senior Subordinated Debt .................................73
Section 4.16. Designation of Restricted and Unrestricted Subsidiaries ................73
Section 4.17. Payments for Consent ...................................................75
Section 4.18. Guarantees .............................................................75
ARTICLE FIVE
SUCCESSORS
Section 5.01. Merger, Consolidation or Sale of Assets ................................76
Section 5.02. Successor Corporation Substituted ......................................77
ARTICLE SIX
DEFAULTS AND REMEDIES
Section 6.01. Events of Default ......................................................77
Section 6.02. Acceleration ...........................................................79
Section 6.03. Other Remedies .........................................................79
Section 6.04. Waiver of Past Defaults ................................................80
Section 6.05. Control by Majority ....................................................80
Section 6.06. Limitation on Suits ....................................................80
Section 6.07. Rights of Holders of Notes to Receive Payment ..........................81
Section 6.08. Collection Suit by Trustee .............................................81
Section 6.09. Trustee May File Proofs of Claim .......................................81
Section 6.10. Priorities .............................................................82
Section 6.11. Undertaking for Costs ..................................................82
ARTICLE SEVEN
TRUSTEE
Section 7.01. Duties of Trustee ......................................................82
ii
Section 7.02. Certain Rights of Trustee ..............................................83
Section 7.03. Individual Rights of Trustee ...........................................84
Section 7.04. Trustee's Disclaimer ...................................................84
Section 7.05. Notice of Defaults .....................................................85
Section 7.06. Reports by Trustee to Holders of the Notes .............................85
Section 7.07. Compensation and Indemnity .............................................85
Section 7.08. Replacement of Trustee .................................................86
Section 7.09. Successor Trustee by Merger, Etc .......................................87
Section 7.10. Eligibility; Disqualification ..........................................87
Section 7.11. Preferential Collection of Claims Against Company ......................87
ARTICLE EIGHT
DEFEASANCE AND COVENANT DEFEASANCE
Section 8.01. Option to Effect Legal Defeasance or Covenant Defeasance ...............88
Section 8.02. Legal Defeasance and Discharge .........................................88
Section 8.03. Covenant Defeasance ....................................................88
Section 8.04. Conditions to Legal or Covenant Defeasance .............................89
Section 8.05. Deposited Money and Government Securities to Be Held in
Trust; Other Miscellaneous Provisions .................................90
Section 8.06. Repayment to the Company ...............................................91
Section 8.07. Reinstatement ..........................................................91
ARTICLE NINE
AMENDMENT, SUPPLEMENT AND WAIVER
Section 9.01. Without Consent of Holders of Notes ....................................92
Section 9.02. With Consent of Holders of Notes .......................................93
Section 9.03. Compliance with Trust Indenture Act ....................................95
Section 9.04. Revocation and Effect of Consents ......................................95
Section 9.05. Notation on or Exchange of Notes .......................................95
Section 9.06. Trustee to Sign Amendments, Etc ........................................95
ARTICLE TEN
NOTE GUARANTEES
Section 10.01. Guarantee .............................................................95
Section 10.02. Limitation on Guarantor Liability .....................................96
Section 10.03. Execution and Delivery of Note Guarantee ..............................97
Section 10.04. Guarantors May Consolidate, Etc., on Certain Terms ....................97
Section 10.05. Release of Guarantor ..................................................98
Section 10.06. Subordination of Note Guarantee .......................................99
ARTICLE ELEVEN
SATISFACTION AND DISCHARGE
Section 11.01. Satisfaction and Discharge ............................................99
iii
Section 11.02. Deposited Money and Government Securities to Be Held in
Trust; Other Miscellaneous Provisions ................................100
Section 11.03. Repayment to the Company .............................................100
ARTICLE TWELVE
SUBORDINATION
Section 12.01. Agreement to Subordinate .............................................101
Section 12.02. Liquidation; Dissolution; Bankruptcy .................................101
Section 12.03. Default on Designated Senior Debt ....................................101
Section 12.04. Acceleration of Securities ...........................................102
Section 12.05. When Distribution Must Be Paid Over ..................................102
Section 12.06. Notice by the Company ................................................103
Section 12.07. Subrogation ..........................................................103
Section 12.08. Relative Rights ......................................................103
Section 12.09. Subordination May Not Be Impaired by the Company .....................104
Section 12.10. Distribution or Notice to Representative .............................104
Section 12.11. Rights of Trustee and Paying Agent ...................................104
Section 12.12. Authorization to Effect Subordination ................................104
ARTICLE THIRTEEN
MISCELLANEOUS
Section 13.01. Trust Indenture Act Controls .........................................105
Section 13.02. Notices ..............................................................105
Section 13.03. Communication by Holders of Notes with Other Holders of Notes ........106
Section 13.04. Certificate and Opinion as to Conditions Precedent ...................107
Section 13.05. Statements Required in Certificate or Opinion ........................107
Section 13.06. Rules by Trustee and Agents ..........................................107
Section 13.07. No Personal Liability of Directors, Officers, Employees
and Stockholders ....................................................107
Section 13.08. Governing Law ........................................................108
Section 13.09. Consent to Jurisdiction ..............................................108
Section 13.10. No Adverse Interpretation of Other Agreements ........................108
Section 13.11. Successors ...........................................................108
Section 13.12. Severability .........................................................108
Section 13.13. Counterpart Originals ................................................108
Section 13.14. Acts of Holders ......................................................109
Section 13.15. Benefit of Indenture .................................................110
Section 13.16. Table of Contents, Headings, Etc. ....................................110
EXHIBITS
Exhibit A FORM OF NOTE
Exhibit B FORM OF CERTIFICATE OF TRANSFER
Exhibit C FORM OF CERTIFICATE OF EXCHANGE
iv
Exhibit D FORM OF CERTIFICATE FROM ACQUIRING INSTITUTIONAL ACCREDITED
INVESTOR
Exhibit E FORM OF NOTATION OF GUARANTEE
Exhibit F FORM OF SUPPLEMENTAL INDENTURE TO BE DELIVERED BY SUBSEQUENT
GUARANTORS
v
INDENTURE dated as of February 27, 2004 among Solo Cup Company, a
Delaware corporation, the initial Guarantors (as defined below) listed on the
signature pages hereto and U.S. Bank National Association, a nationally
chartered banking association, as trustee.
The Company has duly authorized the execution and delivery of this
Indenture to provide for the issuance from time to time of its 8 1/2% Senior
Subordinated Notes due 2014 to be issued in one or more series as provided in
this Indenture. The initial Guarantors have duly authorized the execution and
delivery of this Indenture to provide for a guarantee of the Notes and of
certain of the Company's obligations hereunder. All things necessary to make
this Indenture a valid agreement of the Company and the initial Guarantors, in
accordance with its terms, have been done.
The Company (as defined below), the Guarantors and the Trustee (as
defined below) agree as follows for the benefit of each other and for the equal
and ratable benefit of the Holders (as defined below) of the Company's 8 1/2%
Senior Subordinated Notes due 2014:
ARTICLE ONE
DEFINITIONS AND INCORPORATION
BY REFERENCE
Section 1.01. DEFINITIONS.
"144A GLOBAL NOTE" means a global note substantially in the form
of EXHIBIT A bearing the Global Note Legend and the Private Placement Legend and
deposited with or on behalf of, and registered in the name of, the Depositary or
its nominee, that shall be issued in a denomination equal to the outstanding
principal amount at maturity of the Notes sold in reliance on Rule 144A.
"ACQUIRED DEBT" means, with respect to any specified Person:
(1) Indebtedness of any other Person existing at the time such other
Person is merged with or into, or becomes a Subsidiary of, such
specified Person, whether or not such Indebtedness is incurred
in connection with, or in contemplation of, such other Person
merging with or into, or becoming a Subsidiary of, such
specified Person; and
(2) Indebtedness secured by a Lien encumbering any asset acquired by
the specified Person, to the extent of the fair market value of
the asset where the Indebtedness so secured is not the
Indebtedness of the specified Person.
"ACQUISITION" means the acquisition by Solo Cup Company, an
Illinois corporation, of (i) SF Holdings Group, Inc. pursuant to the terms of a
definitive acquisition agreement dated as of December 22, 2003 and (ii) certain
leased manufacturing equipment and other assets that SF Holdings Group, Inc. and
its subsidiaries use in their operations, in each case as described in the
Offering Memorandum under "The Transactions."
1
"ADDITIONAL NOTES" means an unlimited maximum aggregate
principal amount of Notes (other than the Notes issued on the date hereof)
issued under this Indenture in accordance with Sections 2.02 and 4.09.
"AFFILIATE" of any specified Person means (1) any other Person
directly or indirectly controlling or controlled by or under direct or indirect
common control with such specified Person or (2) any executive officer or
director of such specified Person. For purposes of this definition, "control,"
as used with respect to any Person, shall mean the possession, directly or
indirectly, of the power to direct or cause the direction of the management or
policies of such Person, whether through the ownership of voting securities, by
agreement or otherwise. For purposes of this definition, the terms
"controlling," "controlled by" and "under common control with" shall have
correlative meanings. No Person, other than the Company or any of its
Subsidiaries, in whom a Receivables Subsidiary makes an Investment in connection
with a Qualified Receivables Transaction will be deemed to be an Affiliate of
the Company or any of its Subsidiaries solely by reason of such Investment.
"AGENT" means any Registrar or Paying Agent.
"APPLICABLE PROCEDURES" means, with respect to any transfer or
exchange of or for beneficial interests in any Global Note, the rules and
procedures of the Depositary, Euroclear and Clearstream that apply to such
transfer or exchange.
"ASSET SALE" means:
(1) the sale, lease, conveyance or other disposition of any property
or assets other than Equity Interests of the Company; PROVIDED
that the sale, lease, conveyance or other disposition of all or
substantially all of the assets of the Company and its
Restricted Subsidiaries taken as a whole will be governed by
Section 4.14 and/or Section 5.01 and not by Section 4.10; and
(2) the issuance of Equity Interests by any of the Company's
Restricted Subsidiaries or the sale by the Company or any
Restricted Subsidiary thereof of Equity Interests in any of its
Restricted Subsidiaries (other than directors' qualifying
shares).
Notwithstanding the preceding, the following items shall be deemed not to be
Asset Sales:
(1) any single transaction or series of related transactions that
involves property or assets having a fair market value of less
than $2.0 million;
(2) a transfer of property or assets between or among the Company
and its Restricted Subsidiaries;
(3) an issuance of Equity Interests by a Restricted Subsidiary of
the Company to the Company or to another Restricted Subsidiary
thereof;
(4) the sale, lease, assignment, license or sublease of equipment,
inventory, accounts receivable or other assets in the ordinary
course of business;
2
(5) the lease or sublease of property and assets in connection with
the integration of SF Holdings Group, Inc.; PROVIDED that any
such lease or sublease complies with the requirements of Section
4.10(a)(i) and 4.10(a)(ii);
(6) the sale or other disposition of cash or Cash Equivalents;
(7) a Restricted Payment that is permitted by Section 4.07 or a
Permitted Investment;
(8) any sale, exchange or other disposition of any property or
equipment that has become damaged, worn out, obsolete or
otherwise unsuitable for use in connection with the business of
the Company or its Restricted Subsidiaries;
(9) the licensing of intellectual property in the ordinary course of
business;
(10) any sale or other disposition deemed to occur with creating or
granting a Lien not otherwise prohibited by this Indenture;
(11) sales, conveyances or other transfers of accounts receivable and
related assets of the type specified in the definition of
Qualified Receivables Transaction to a Receivables Subsidiary
for the fair market value thereof, including cash in an amount
at least equal to 75% of the book value thereof as determined in
accordance with GAAP;
(12) any sale of Equity Interests in, or Indebtedness or other
securities of, an Unrestricted Subsidiary;
(13) the surrender or waiver of contract rights or settlement,
release or surrender of a contract, tort or other litigation
claim in the ordinary course of business;
(14) sales, conveyances or other transfers of accounts receivable and
related assets, or fractional undivided interests therein, by a
Foreign Subsidiary in connection with factoring or other
receivables financing transactions by such Foreign Subsidiary in
conjunction with an incurrence of Indebtedness permitted by
Section 4.09(b)(xiii); PROVIDED that each such sale, conveyance
or other transfer shall be subject to Section 4.10(a)(i); and
(15) transfers of accounts receivable and related assets and the
grants of security interests or creation of Liens of the type
specified in the definition of Qualified Receivables
Transaction, or a fractional undivided interest therein, by a
Receivables Subsidiary in a Qualified Receivables Transaction.
"ATTRIBUTABLE DEBT" in respect of a sale and leaseback
transaction means, at the time of determination, the present value of the
obligation of the lessee for net rental payments during the remaining term of
the lease included in such sale and leaseback transaction, including any period
for which such lease has been extended or may, at the option of the lessor, be
extended. Such present value shall be calculated using a discount rate equal to
the rate of interest implicit in such transaction, determined in accordance with
GAAP.
3
"BANKRUPTCY LAW" means title 11 of the United States Code or any
similar federal or state law for the relief of debtors.
"BENEFICIAL OWNER" has the meaning assigned to such term in Rule
13d-3 and Rule 13d-5 under the Exchange Act, except that in calculating the
beneficial ownership of any particular "person" (as that term is used in Section
13(d)(3) of the Exchange Act), such "person" shall be deemed to have beneficial
ownership of all securities that such "person" has the right to acquire by
conversion or exercise of other securities, whether such right is currently
exercisable or is exercisable only upon the occurrence of a subsequent
condition. The terms "Beneficially Owns" and "Beneficially Owned" shall have a
corresponding meaning.
"BOARD OF DIRECTORS" means:
(1) with respect to a corporation, the board of directors of the
corporation;
(2) with respect to a partnership, the board of directors of the
general partner of the partnership; and
(3) with respect to any other Person, the board or committee of such
Person serving a similar function.
"BOARD RESOLUTION" means a copy of a resolution certified by the
Secretary or an Assistant Secretary of the Company to have been duly adopted by
the Board of Directors of the Company and to be in full force and effect on the
date of such certification.
"BROKER-DEALER" has the meaning set forth in the Registration
Rights Agreement.
"BUSINESS DAY" means any day other than a Legal Holiday.
"CALCULATION DATE" has the meaning set forth below in the
definition of Fixed Charge Coverage Ratio.
"CAPITAL LEASE OBLIGATION" means, at the time any determination
thereof is to be made, the amount of the liability in respect of a capital lease
that would at that time be required to be capitalized on a balance sheet in
accordance with GAAP.
"CAPITAL STOCK" means:
(1) in the case of a corporation, corporate stock;
(2) in the case of an association or business entity, any and all
shares, interests, participations, rights or other equivalents
(however designated) of corporate stock;
(3) in the case of a partnership or limited liability company,
partnership or membership interests (whether general or
limited); and
4
(4) any other interest or participation that confers on a Person the
right to receive a share of the profits and losses of, or
distributions of assets of, the issuing Person.
"CASH EQUIVALENTS" means:
(1) United States dollars;
(2) securities issued or directly and fully guaranteed or insured by
the United States government or any agency or instrumentality
thereof (PROVIDED that the full faith and credit of the United
States is pledged in support thereof) having maturities of not
more than one year from the date of acquisition;
(3) time deposits, demand deposits, money market deposits,
certificates of deposit and eurodollar time deposits with
maturities of one year or less from the date of acquisition,
bankers' acceptances with maturities not exceeding one year from
the date of acquisition and overnight bank deposits, in each
case, with any domestic commercial bank having capital and
surplus in excess of $500.0 million and whose long term debt is
rated "A-3" or "A-" or higher according to Xxxxx'x Investor
Service, Inc. or Standard & Poor's Rating Services (or such
similar equivalent rating by at least one nationally recognized
statistical rating organization (as defined in Rule 436 under
the Securities Act));
(4) repurchase obligations with a term of not more than seven days
for underlying securities of the types described in clauses (2)
and (3) above entered into with any financial institution
meeting the qualifications specified in clause (3) above;
(5) commercial paper having the highest rating obtainable from
Xxxxx'x Investors Service, Inc. or from Standard & Poor's Rating
Services and in each case maturing within one year after the
date of acquisition;
(6) securities issued by any state of the United States or any
political subdivision of any such state or any public
instrumentality thereof maturing within one year from the date
of acquisition thereof and having the highest rating obtainable
from Xxxxx'x Investors Service, Inc. or Standard & Poor's Rating
Services;
(7) money market funds at least 95% of the assets of which
constitute Cash Equivalents of the kinds described in clauses
(1) through (6) of this definition; and
(8) in the case of any Foreign Subsidiary:
(a) local currency held by such Foreign Subsidiary from time
to time in the ordinary course of business;
(b) securities issued or directly and fully guaranteed by
the sovereign nation or any agency thereof (provided
that the full faith and credit of such sovereign nation
is pledged in support thereof) in which such Foreign
5
Subsidiary is organized and is conducting business
having maturities of not more than one year from the
date of acquisition; and
(c) investments of the type and maturity described in
clauses (3) through (5) above of foreign obligors, which
investments or obligors satisfy the requirements and
have ratings described in such clauses;
PROVIDED that the aggregate amount of any obligations and
investments that are at any time outstanding pursuant to
subclauses (b) and (c) of this clause (8) shall not exceed the
U.S. dollar equivalent of $15.0 million.
"CHANGE OF CONTROL" means the occurrence of any of the
following:
(1) the direct or indirect sale, transfer, conveyance or other
disposition (other than by way of merger or consolidation), in
one or a series of related transactions, of all or substantially
all of the properties or assets of the Company and its
Restricted Subsidiaries, taken as a whole, to any "person" (as
that term is used in Section 13(d)(3) of the Exchange Act) other
than one or more of the Principals and their Related Parties;
(2) the adoption of a plan relating to the liquidation or
dissolution of the Company;
(3) prior to the first public offering of common stock of the
Company or the Parent, the Principals and their Related Parties
cease to be the ultimate Beneficial Owner, directly or
indirectly, of a majority in the aggregate of the total voting
power of the Voting Stock of the Company, on a fully diluted
basis, whether as a result of issuance of securities of the
Company or the Parent, any merger, consolidation, liquidation or
dissolution of the Company or the Parent, or any direct or
indirect transfer of securities by the Company or the Parent, or
otherwise;
(4) on and following the first public offering of common stock of
the Company or the Parent, any "person" or "group" (as such
terms are used in Sections 13(d) and 14(d) of the Exchange Act),
other than one or more of the Principals and their Related
Parties, becomes the ultimate Beneficial Owner, directly or
indirectly, of 50% or more of the voting power of the Voting
Stock of the Company;
(5) the first day on which a majority of the members of the Board of
Directors of the Company or the Parent are not Continuing
Directors; or
(6) the Company or the Parent consolidates with, or merges with or
into, any Person, or any Person consolidates with, or merges
with or into the Company or the Parent, in any such event
pursuant to a transaction in which any of the outstanding Voting
Stock of the Company, the Parent or such other Person is
converted into or exchanged for cash, securities or other
property, other than any such transaction where (A) the Voting
Stock of the Company or the Parent outstanding immediately prior
to such transaction is converted into or exchanged for Voting
Stock (other than Disqualified Stock) of the surviving or
transferee Person constituting a majority of the outstanding
shares of such Voting Stock of such
6
surviving or transferee Person (immediately after giving effect
to such issuance) and (B) (i) prior to the first public offering
of common stock of the Company or the Parent, immediately after
such transaction, the Principals and their Related Parties are
the Beneficial Owner, directly or indirectly, of a majority in
the aggregate of the total voting power of the Voting Stock of
such surviving or transferee Person and (ii) on and following
the first public offering of common stock of the Company or the
Parent, immediately after such transaction, no "person" or
"group" (as such terms are used in Section 13(d) and 14(d) of
the Exchange Act), other than one or more of the Principals and
their Related Parties becomes, directly or indirectly, the
ultimate Beneficial Owner of 50% or more of the voting power of
the Voting Stock of such surviving or transferee Person;
PROVIDED that, notwithstanding the above, the consummation of the Transactions
on the Transactions Consummation Date will not constitute a Change of Control.
"CLEARSTREAM" means Clearstream Banking S.A. and any successor
thereto.
"COLLATERAL AGENT" means U.S. Bank National Association, a
nationally chartered banking association, as collateral agent under the Pledge
Agreement, until a successor replaces it in accordance with the applicable
provisions of the Pledge Agreement and thereafter means the successor serving
thereunder.
"COMPANY" means Solo Cup Company, a Delaware corporation, until
a successor replaces it pursuant to Section 5.01 and thereafter means the
successor.
"CONSOLIDATED CASH FLOW" means, with respect to any specified
Person for any period, the Consolidated Net Income of such Person for such
period PLUS:
(1) provision for taxes based on income or profits of such Person
and its Restricted Subsidiaries for such period, to the extent
that such provision for taxes was deducted in computing such
Consolidated Net Income; PLUS
(2) Fixed Charges of such Person and its Restricted Subsidiaries for
such period, to the extent that any such Fixed Charges were
deducted in computing such Consolidated Net Income; PLUS
(3) depreciation, amortization (including amortization or impairment
write-offs of goodwill and other intangibles but excluding
amortization of prepaid cash expenses that were paid in a prior
period) and other non-cash expenses or charges (excluding any
such non-cash expense or charge to the extent that it represents
an accrual of or reserve for cash expenses or charges in any
future period or amortization of a prepaid cash expense or
charge that was paid in a prior period) of such Person and its
Restricted Subsidiaries for such period to the extent that such
depreciation, amortization and other non-cash expenses or
charges were deducted in computing such Consolidated Net Income;
PLUS
(4) the amount of fees and related expenses paid pursuant to the
Vestar Management Agreement and the SCC Holding Management
Agreement as in effect on the
7
Transactions Consummation Date during such period, in an
aggregate amount in any calendar year not to exceed $3.3 million
plus expenses paid pursuant to the terms of such agreements as
in effect on the Transactions Consummation Date or, in each
case, pursuant to any amendment, modifications or supplements
thereto or replacements thereof, so long as such agreements, as
so amended, modified, supplemented or replaced, taken as a
whole, are not materially more disadvantageous to the Company
and its Restricted Subsidiaries than such original agreements as
in effect on the Transactions Consummation Date, to the extent
that such fees and related expenses were deducted in computing
Consolidated Net Income; MINUS
(5) non-cash items increasing such Consolidated Net Income for such
period, other than the accrual of revenue in the ordinary course
of business,
in each case, on a consolidated basis and determined in accordance with GAAP.
Notwithstanding the preceding, the provision for taxes based on
the income or profits of, the Fixed Charges of and the depreciation and
amortization and other non-cash expenses or charges of a Restricted Subsidiary
of the Company shall be added to, and the non-cash items of a Restricted
Subsidiary increasing Consolidated Net Income shall be subtracted from,
Consolidated Net Income to compute Consolidated Cash Flow of the Company (A) in
the same proportion that the Net Income of such Restricted Subsidiary was added
to compute such Consolidated Net Income of the Company and (B) only to the
extent that a corresponding amount would be permitted at the date of
determination to be dividended or distributed to the Company by such Restricted
Subsidiary without prior governmental approval (that has not been obtained), and
without direct or indirect restriction pursuant to the terms of its charter and
all agreements, instruments, judgments, decrees, orders, statutes, rules and
governmental regulations applicable to that Subsidiary or its stockholders,
unless such restrictions with respect to the declaration and payment of
dividends or distributions have been properly waived for such entire period.
"CONSOLIDATED NET INCOME" means, with respect to any specified
Person for any period, the aggregate of the Net Income of such Person and its
Subsidiaries for such period, on a consolidated basis, determined in accordance
with GAAP; PROVIDED that:
(1) the Net Income of any Person, other than the specified Person,
that is not a Restricted Subsidiary of the specified Person or
that is accounted for by the equity method of accounting shall
not be included, except (a) if the Net Income of such Person for
such period is greater than zero, to the extent of the amount of
dividends or distributions paid in cash to the specified Person
or a Restricted Subsidiary thereof during such period, and (b)
if the Net Income of such Person for such period is less than
zero, to the extent of the amount of Investments made by the
specified Person or any Restricted Subsidiary thereof in such
Person during such period;
(2) the Net Income of any Restricted Subsidiary shall be excluded to
the extent that the declaration or payment of dividends or
similar distributions by that Restricted
8
Subsidiary of that Net Income is not at the date of
determination permitted without any prior governmental approval
(that has not been obtained) or, directly or indirectly, by
operation of the terms of its charter or any agreement,
instrument, judgment, decree, order, statute, rule or
governmental regulation applicable to that Restricted Subsidiary
or its equityholders, unless such restrictions with respect to
the declaration and payment of dividends or distributions have
been properly waived for such entire period;
(3) the cumulative effect of a change in accounting principles shall
be excluded;
(4) (i) any amortization of fees or expenses that have been
capitalized and (ii) any one-time charges, in each case incurred
in connection with the Transactions, together with any related
provision for taxes, shall be excluded;
(5) any one-time non-cash charges resulting from the write-off of
unamortized debt issuance costs relating to Indebtedness that is
retired as part of the Transactions, together with any related
provision for taxes, shall be excluded;
(6) any restructuring charges incurred in connection with the
integration of SF Holdings Group, Inc. and its subsidiaries and
disclosed as such in the Company's audited financial statements
prepared in accordance with GAAP, together with any related
provision for taxes, in an aggregate amount since the date of
this Indenture not to exceed $40.0 million, shall be excluded;
(7) non-cash charges relating to employee benefit or management
compensation plans of the Company or any Restricted Subsidiary
thereof or any non-cash compensation charge arising from any
grant of stock, stock options or other equity-based awards for
the benefit of the members of the Board of Directors of the
Company or employees of the Company and its Restricted
Subsidiaries (excluding in each case any non-cash charge to the
extent that it represents an accrual of or reserve for cash
expenses in any future period or amortization of a prepaid cash
expense incurred in a prior period) shall be excluded; and
(8) any goodwill impairment charges shall be excluded.
"CONSOLIDATED NET TANGIBLE ASSETS" of any Person means, as of
any date, the amount which, in accordance with GAAP, would be set forth under
the caption "Total Assets" (or any like caption) on a consolidated balance sheet
of such Person and its Restricted Subsidiaries, as of the end of the most
recently ended fiscal quarter for which internal financial statements are
available, less (1) all intangible assets, including, without limitation,
goodwill, organization costs, patents, trademarks, copyrights, franchises, and
research and development costs and (2) current liabilities.
"CONTINUING DIRECTORS" means, as of any date of determination,
any member of the Board of Directors of the Company or the Parent, as the case
may be, who:
(1) was a member of such Board of Directors on the Issue Date or
Transactions Consummation Date;
9
(2) was nominated for election or elected to such Board of Directors
with the approval of a majority of the Continuing Directors who
were members of such Board at the time of such nomination or
election; or
(3) was nominated for election or elected to that Board of Directors
by the Principals or their Related Parties.
"CORPORATE TRUST OFFICE OF THE TRUSTEE" shall be at the address
of the Trustee specified in Section 13.02 or such other address as to which the
Trustee may give notice to the Company.
"CREDIT AGREEMENT" means that certain Credit Agreement, dated as
of the Transactions Consummation Date, by and among the Company, Bank of
America, N.A., as Administrative Agent, Citicorp North America, Inc. and the
other Lenders named therein providing for up to $650.0 million in term loan
borrowings and $150.0 million of revolving credit borrowings, including any
related notes, Guarantees, collateral documents, instruments and agreements
executed in connection therewith, and in each case as amended, modified,
renewed, refunded, replaced, restated, restructured, increased, supplemented or
refinanced in whole or in part from time to time, regardless of whether such
amendment, modification, renewal, refunding, replacement, restatement,
restructuring, increase, supplement or refinancing is with the same financial
institutions or otherwise.
"CREDIT FACILITIES" means one or more debt facilities
(including, without limitation, the Credit Agreement), commercial paper
facilities or indentures, in each case with banks, other lenders or trustees,
providing for revolving credit loans, term loans, receivables financing
(including through the sale of receivables to such lenders or to special purpose
entities formed to borrow from such lenders against such receivables), letters
of credit, notes or other borrowings, in each case, as amended, restated,
modified, renewed, refunded, restated, restructured, increased, supplemented,
replaced or refinanced in whole or in part from time to time.
"CUSTODIAN" means the Trustee, as custodian with respect to the
Notes in global form, or any successor entity thereto.
"DEFAULT" means any event that is, or with the passage of time
or the giving of notice or both would be, an Event of Default.
"DEFINITIVE NOTE" means a certificated Note registered in the
name of the Holder thereof and issued in accordance with Section 2.07,
substantially in the form of EXHIBIT A, except that such Note shall not bear the
Global Note Legend and shall not have the "Schedule of Exchanges of Interests in
the Global Note" attached thereto.
"DEPOSITARY" means, with respect to the Notes issuable or issued
in whole or in part in global form, the Person specified in Section 2.04 as the
Depositary with respect to the Notes, and any and all successors thereto
appointed as depositary hereunder and having become such pursuant to the
applicable provision of this Indenture.
10
"DESIGNATED SENIOR DEBT" means:
(1) any Indebtedness outstanding under the Credit Agreement; and
(2) after payment in full of all Obligations under the Credit
Agreement, any other Senior Debt permitted under this Indenture
the principal amount of which is $50.0 million or more and that
has been designated by the Company as "Designated Senior Debt."
"DISQUALIFIED STOCK" means any Capital Stock that, by its terms
(or by the terms of any security into which it is convertible, or for which it
is exchangeable, in each case at the option of the holder thereof), or upon the
happening of any event, matures or is mandatorily redeemable, pursuant to a
sinking fund obligation or otherwise, or redeemable at the option of the holder
thereof, in whole or in part, on or prior to the date that is one year after the
date on which the Notes mature; PROVIDED, HOWEVER, that only the portion of the
Capital Stock which so matures, is mandatorily redeemable or is redeemable at
the option of the holder prior to such date shall be deemed to be Disqualified
Stock. Notwithstanding the preceding sentence, any Capital Stock that would
constitute Disqualified Stock solely because the holders thereof have the right
to require the Company to repurchase such Capital Stock upon the occurrence of a
change of control or an asset sale shall not constitute Disqualified Stock if
the terms of such Capital Stock provide that the Company may not repurchase or
redeem any such Capital Stock pursuant to such provisions unless such repurchase
or redemption complies with Section 4.07. The term "Disqualified Stock" shall
also include any options, warrants or other rights that are convertible into
Disqualified Stock or that are redeemable at the option of the holder, or
required to be redeemed, prior to the date that is one year after the date on
which the Notes mature.
"DOMESTIC SUBSIDIARY" means any Restricted Subsidiary of the
Company other than a Restricted Subsidiary that is (1) a "controlled foreign
corporation" under Section 957 of the Internal Revenue Code of 1986, as amended,
or (2) a Subsidiary of any such controlled foreign corporation.
"EQUITY INTERESTS" means Capital Stock and all warrants, options
or other rights to acquire Capital Stock (but excluding any debt security that
is convertible into, or exchangeable for, Capital Stock).
"EUROCLEAR" means Euroclear Bank S.A./N.V., as operator of the
Euroclear system, and any successor thereto.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended.
"EXCHANGE NOTES" means the Notes issued in the Exchange Offer in
accordance with Section 2.07(f).
"EXCHANGE OFFER" has the meaning set forth in the Registration
Rights Agreement.
"EXCHANGE OFFER REGISTRATION STATEMENT" has the meaning set
forth in the Registration Rights Agreement.
11
"EXCLUDED SUBSIDIARY" means:
(1) Global Cup S.A. de C.V. and Servicios Tanairi S.A. de C.V., so
long as any such entity is not a Wholly Owned Restricted
Subsidiary;
(2) any Restricted Subsidiary of the Company that, on the date of
this Indenture, is organized or existing under any laws other
than the laws of the United States, any state thereof or the
District of Columbia; PROVIDED that no such Restricted
Subsidiary shall be deemed to be an Excluded Subsidiary under
this clause (2) at any time following the date that is 90 days
after the Transactions Consummation Date;
(3) any Foreign Subsidiary;
(4) any Receivables Subsidiary; and
(5) any Restricted Subsidiary of the Company that is organized or
existing under any laws other than the laws of the United
States, any state thereof or the District of Columbia; PROVIDED
that the total assets of all Restricted Subsidiaries that are
Excluded Subsidiaries solely as a result of this clause (5), as
reflected on their respective most recent balance sheets
prepared in accordance with GAAP, do not in the aggregate at any
time exceed $1.0 million.
"EXISTING INDEBTEDNESS" means the aggregate principal amount of
Indebtedness of the Company and its Subsidiaries (other than Indebtedness under
the Credit Agreement) in existence immediately following the Transactions
Consummation Date after giving effect to the application of the proceeds of the
Notes and any Indebtedness under the Credit Agreement borrowed on the
Transactions Consummation Date, until such amounts are repaid.
"FAIR MARKET VALUE" means the price that would be paid in an
arm's-length transaction between an informed and willing seller under no
compulsion to sell and an informed and willing buyer under no compulsion to buy.
Fair market value will be determined (1) if with respect to a security
registered under the Exchange Act, based on the average of the closing prices,
regular way, of such security for the 20 consecutive trading days immediately
preceding the acquisition or sale of such security, (2) if such Person or
assets, other than cash, Cash Equivalents and securities registered under the
Exchange Act, have a fair market value equal to or in excess $5.0 million, by
the Company's Board of Directors and evidenced by a board resolution and set
forth in an Officers' Certificate, dated within 30 days of the relevant
transaction, and (3) if such Person or assets, other than cash, Cash Equivalents
and securities registered under the Exchange Act, have a fair market value equal
to or in excess of $15.0 million, by an independent accounting, appraisal,
financial advisory or investment banking firm of national standing and set forth
in a written opinion of such firm which shall be delivered to the Trustee.
"FIXED CHARGES" means, with respect to any specified Person for
any period, the sum, without duplication, of:
12
(1) the consolidated interest expense of such Person and its
Restricted Subsidiaries for such period, whether paid or
accrued, including, without limitation, amortization of debt
issuance costs and original issue discount, non-cash interest
payments, the interest component of any deferred payment
obligations, the interest component of all payments associated
with Capital Lease Obligations, imputed interest with respect to
Attributable Debt, commissions, discounts and other fees and
charges incurred in respect of letter of credit or bankers'
acceptance financings, and net of the effect of all payments
made or received pursuant to Hedging Obligations; PLUS
(2) the consolidated interest of such Person and its Restricted
Subsidiaries that was capitalized during such period; PLUS
(3) any interest expense on Indebtedness of another Person that is
Guaranteed by such Person or one of its Restricted Subsidiaries
or secured by a Lien on assets of such Person or one of its
Restricted Subsidiaries, whether or not such Guarantee or Lien
is called upon; PLUS
(4) the product of (a) all dividends, whether paid or accrued and
whether or not in cash, on any series of Disqualified Stock or
preferred stock of such Person or any of its Restricted
Subsidiaries, other than dividends on Equity Interests payable
solely in Equity Interests of the Company (other than
Disqualified Stock) or to the Company or a Restricted Subsidiary
of the Company, times (b) a fraction, the numerator of which is
one and the denominator of which is one minus the then current
combined federal, state and local statutory tax rate of such
Person, expressed as a decimal,
in each case, on a consolidated basis and in accordance with GAAP.
"FIXED CHARGE COVERAGE RATIO" means with respect to any
specified Person for any period, the ratio of the Consolidated Cash Flow of such
Person for such period to the Fixed Charges of such Person for such period. In
the event that the specified Person or any of its Restricted Subsidiaries
incurs, assumes, Guarantees, repays, repurchases or redeems any Indebtedness or
issues, repurchases or redeems preferred stock subsequent to the commencement of
the period for which the Fixed Charge Coverage Ratio is being calculated and on
or prior to the date on which the event for which the calculation of the Fixed
Charge Coverage Ratio is made (the "CALCULATION DATE"), then the Fixed Charge
Coverage Ratio shall be calculated giving pro forma effect to such incurrence,
assumption, Guarantee, repayment, repurchase or redemption of Indebtedness, or
such issuance, repurchase or redemption of preferred stock, and the use of the
proceeds therefrom as if the same had occurred at the beginning of the
applicable four-quarter reference period.
In addition, for purposes of calculating the Fixed Charge
Coverage Ratio:
(1) acquisitions and dispositions of business entities or property
and assets constituting facilities or a division or line of
business of any Person that have been made by the specified
Person or any of its Restricted Subsidiaries, including
13
through mergers or consolidations and including any related
financing transactions, during the four-quarter reference period
or subsequent to such reference period and on or prior to the
Calculation Date shall be given pro forma effect as if they had
occurred on the first day of the four-quarter reference period
and Consolidated Cash Flow for such reference period shall be
calculated on a pro forma basis including Pro Forma Cost
Savings; if since the beginning of such period any Person that
subsequently becomes a Restricted Subsidiary of the Company or
was merged with or into the Company or any Restricted Subsidiary
thereof since the beginning of such period shall have made any
acquisition, or disposition of business entities or property and
assets constituting facilities or a division or line of
business, including through mergers or consolidations that would
have required adjustment pursuant to this definition, then the
Fixed Charge Coverage Ratio shall be calculated giving pro forma
effect thereto for such period as if such transaction had
occurred at the beginning of the applicable four-quarter period
and Consolidated Cash Flow for such reference period shall be
calculated on a pro forma basis, including Pro Forma Cost
Savings;
(2) the Consolidated Cash Flow attributable to discontinued
operations, as determined in accordance with GAAP, shall be
excluded;
(3) the Fixed Charges attributable to discontinued operations, as
determined in accordance with GAAP, shall be excluded, but only
to the extent that the obligations giving rise to such Fixed
Charges will not be obligations of the specified Person or any
of its Restricted Subsidiaries following the Calculation Date;
and
(4) consolidated interest expense attributable to interest on any
Indebtedness (whether existing or being incurred) computed on a
PRO FORMA basis and bearing a floating interest rate shall be
computed as if the rate in effect on the Calculation Date
(taking into account any interest rate option, swap, cap or
similar agreement applicable to such Indebtedness if such
agreement has a remaining term in excess of 12 months or, if
shorter, at least equal to the remaining term of such
Indebtedness) had been the applicable rate for the entire
period.
"FOREIGN SUBSIDIARY" means any Restricted Subsidiary of the
Company other than a Domestic Subsidiary.
"GAAP" means generally accepted accounting principles in the
United States set forth in the opinions and pronouncements of the Accounting
Principles Board of the American Institute of Certified Public Accountants, the
opinions and pronouncements of the Public Company Accounting Oversight Board and
in the statements and pronouncements of the Financial Accounting Standards Board
or in such other statements by such other entity as have been approved by a
significant segment of the accounting profession, which are in effect from time
to time.
"GLOBAL NOTE LEGEND" means the legend set forth in Section
2.07(g)(ii), which is required to be placed on all Global Notes issued under
this Indenture.
14
"GLOBAL NOTES" means, individually and collectively, each of the
Restricted Global Notes and the Unrestricted Global Notes, substantially in the
form of EXHIBIT A, issued in accordance with Section 2.01 or Section 2.07.
"GOVERNMENT SECURITIES" means securities that are direct
obligations of the United States of America for the timely payment of which its
full faith and credit is pledged.
"GUARANTEE" means, as to any Person, a guarantee other than by
endorsement of negotiable instruments for collection in the ordinary course of
business, direct or indirect, in any manner including, without limitation, by
way of a pledge of assets or through letters of credit or reimbursement
agreements in respect thereof, of all or any part of any Indebtedness of another
Person.
"GUARANTORS" means:
(1) each direct or indirect Domestic Subsidiary of the Company on
the date of this Indenture (other than any Excluded Subsidiary);
and
(2) any other Restricted Subsidiary of the Company that executes a
Note Guarantee in accordance with the provisions of this
Indenture;
and their respective successors and assigns until released from their
obligations under their Note Guarantees and this Indenture in accordance with
the terms of this Indenture.
"HEDGING OBLIGATIONS" means, with respect to any specified
Person, the obligations of such Person under:
(1) interest rate swap agreements, interest rate cap agreements,
interest rate collar agreements and other agreements or
arrangements designed for the purpose of fixing, hedging or
swapping interest rate risk;
(2) commodity swap agreements, commodity option agreements, forward
contracts and other agreements or arrangements designed for the
purpose of fixing, hedging or swapping commodity price risk; and
(3) foreign exchange contracts, currency swap agreements and other
agreements or arrangements designed for the purpose of fixing,
hedging or swapping foreign currency exchange rate risk.
"HOLDER" means a Person in whose name a Note is registered.
"INCUR" means, with respect to any Indebtedness, to incur,
create, issue, assume, Guarantee or otherwise become directly or indirectly
liable for or with respect to, or become responsible for, the payment of,
contingently or otherwise, such Indebtedness; PROVIDED that (1) any Indebtedness
of a Person existing at the time such Person becomes a Restricted Subsidiary of
the Company shall be deemed to be incurred by such Restricted Subsidiary at the
time it becomes a Restricted Subsidiary of the Company and (2) neither the
accrual of interest nor the accretion of original issue discount nor the payment
of interest in the form of additional
15
Indebtedness with the same terms and the payment of dividends on Disqualified
Stock in the form of additional shares of the same class of Disqualified Stock
(to the extent provided for when the Indebtedness or Disqualified Stock on which
such interest or dividend is paid was originally issued) shall be considered an
incurrence of Indebtedness; PROVIDED that in each case the amount thereof is for
all other purposes included in the Fixed Charges of the Company or its
Restricted Subsidiary as accrued and the amount of any such accretion or payment
of interest in the form of additional Indebtedness or additional shares of
Disqualified Stock is for all purposes included in the Indebtedness of the
Company or its Restricted Subsidiary as accreted or paid.
"INDEBTEDNESS" means, with respect to any specified Person, any
indebtedness of such Person, whether or not contingent:
(1) in respect of borrowed money;
(2) evidenced by bonds, notes, debentures or similar instruments;
(3) evidenced by letters of credit (or reimbursement agreements in
respect thereof), but excluding obligations with respect to
letters of credit (including trade letters of credit) securing
obligations (other than obligations described in clause (1) or
(2) above or clause (4), (5), (6), (7) or (8) below) entered
into in the ordinary course of business of such Person to the
extent such letters of credit are not drawn upon or, if drawn
upon, to the extent such drawing is reimbursed no later than the
third Business Day following receipt by such Person of a demand
for reimbursement;
(4) in respect of banker's acceptances;
(5) in respect of Capital Lease Obligations and Attributable Debt;
(6) in respect of the balance deferred and unpaid of the purchase
price of any property, except any such balance that constitutes
an accrued expense or trade payable;
(7) representing Hedging Obligations, other than Hedging Obligations
that are incurred in the normal course of business and not for
speculative purposes, and that do not increase the Indebtedness
of the obligor outstanding at any time other than as a result of
fluctuations in interest rates, commodity prices or foreign
currency exchange rates or by reason of fees, indemnities and
compensation payable thereunder; or
(8) representing Disqualified Stock valued at the greater of its
voluntary or involuntary maximum fixed repurchase price.
In addition, the term "Indebtedness" includes (x) all Indebtedness of others
secured by a Lien on any asset of the specified Person (whether or not such
Indebtedness is assumed by the specified Person), PROVIDED that the amount of
such Indebtedness shall be the lesser of (A) the fair market value of such asset
at such date of determination and (B) the amount of such Indebtedness, and (y)
to the extent not otherwise included, the Guarantee by the specified Person of
any Indebtedness of any other Person. For purposes hereof, the "maximum fixed
repurchase price"
16
of any Disqualified Stock which does not have a fixed repurchase price shall be
calculated in accordance with the terms of such Disqualified Stock as if such
Disqualified Stock were purchased on any date on which Indebtedness shall be
required to be determined pursuant to this Indenture, and if such price is based
upon, or measured by, the fair market value of such Disqualified Stock, such
fair market value shall be determined in good faith by the Board of Directors of
the issuer of such Disqualified Stock.
The amount of any Indebtedness outstanding as of any date shall
be the outstanding balance at such date of all unconditional obligations as
described above and, with respect to contingent obligations, the maximum
liability upon the occurrence of the contingency giving rise to the obligation,
and shall be:
(1) the accreted value thereof, in the case of any Indebtedness
issued with original issue discount; and
(2) the principal amount thereof, together with any interest thereon
that is more than 30 days past due, in the case of any other
Indebtedness;
PROVIDED that Indebtedness shall not include:
(i) any liability for federal, state, local or other taxes,
(ii) performance, bid, surety or appeal and similar bonds and
completion of performance guarantees provided by the Company or
any Restricted Subsidiary thereof in the ordinary course of
business,
(iii) any liability arising from the honoring by a bank or other
financial institution of a check, draft or similar instrument
drawn against insufficient funds in the ordinary course of
business, PROVIDED, HOWEVER, that such liability is extinguished
within five Business Days of its incurrence,
(iv) any liability owed to any Person in connection with workers'
compensation, health, disability or other employee benefits or
property, casualty or liability insurance provided by such
Person pursuant to reimbursement or indemnification obligations
to such Person, in each case incurred in the ordinary course of
business,
(v) any indebtedness existing on the date of this Indenture that has
been satisfied and discharged or defeased by legal defeasance,
or
(vi) agreements providing for indemnification, adjustment of purchase
price or similar obligations, or Guarantees or letters of
credit, surety bonds or performance bonds securing any
obligations of the Company or any of its Restricted Subsidiaries
pursuant to such agreements, in any case incurred in connection
with the disposition of any business, assets or Restricted
Subsidiary (other than Guarantees of Indebtedness incurred by
any Person acquiring all or any portion of such business, assets
or Restricted Subsidiary for the purpose of financing such
acquisition), so long as the principal amount does not exceed
the gross proceeds
17
actually received by the Company or any Restricted Subsidiary of
the Company in connection with such disposition.
"INDENTURE" means this Indenture, as amended or supplemented
from time to time.
"INDIRECT PARTICIPANT" means a Person who holds a beneficial
interest in a Global Note through a Participant.
"INSTITUTIONAL ACCREDITED INVESTOR" means an institution that is
an "accredited investor" as defined in Rule 501(a)(1), (2), (3) or (7) under the
Securities Act, who is not also a QIB.
"INVESTMENTS" means, with respect to any Person, all direct or
indirect investments by such Person in other Persons (including Affiliates) in
the forms of loans or other extensions of credit (including Guarantees, but
excluding advances to customers or suppliers in the ordinary course of business
that are, in conformity with GAAP, recorded as accounts receivable, prepaid
expenses or deposits on the balance sheet of the Company or its Restricted
Subsidiaries and endorsements for collection or deposit arising in the ordinary
course of business), advances (excluding commission, payroll, travel and similar
advances to officers and employees made in the ordinary course of business),
capital contributions (by means of any transfer of cash or other property to
others or any payment for property or services for the account or use of
others), purchases or other acquisitions for consideration of Indebtedness,
Equity Interests or other securities, together with all items that are or would
be classified as investments on a balance sheet prepared in accordance with
GAAP.
If the Company or any Restricted Subsidiary of the Company sells
or otherwise disposes of any Equity Interests of any direct or indirect
Restricted Subsidiary of the Company such that, after giving effect to any such
sale or disposition, such Person is no longer a Restricted Subsidiary of the
Company, the Company shall be deemed to have made an Investment on the date of
any such sale or disposition equal to the fair market value of the Investment in
such Restricted Subsidiary not sold or disposed of in an amount determined as
provided in Section 4.07(c). The acquisition by the Company or any Restricted
Subsidiary of the Company of a Person that holds an Investment in a third Person
shall be deemed to be an Investment by the Company or such Restricted Subsidiary
in such third Person only if such Investment was made in contemplation of, or in
connection with, the acquisition of such Person by the Company or such
Restricted Subsidiary and the amount of any such Investment shall be determined
as provided in Section 4.07(c).
"ISSUE DATE" means the date of the original issuance of the
Notes under this Indenture.
"LEGAL HOLIDAY" means a Saturday, a Sunday or a day on which
banking institutions in The City of
New York or at a place of payment are
authorized by law, regulation or executive order to remain closed.
"LEGENDED REGULATION S GLOBAL NOTE" means a global Note in the
form of EXHIBIT A bearing the Global Note Legend and the Private Placement
Legend and deposited with
18
or on behalf of and registered in the name of the Depositary or its nominee,
issued in a denomination equal to the outstanding principal amount at maturity
of the Notes initially sold in reliance on Rule 903 of Regulation S.
"LETTER OF TRANSMITTAL" means the letter of transmittal to be
prepared by the Company and sent to all Holders of the Notes for use by such
Holders in connection with the Exchange Offer.
"LIEN" means, with respect to any asset (except in connection
with any Qualified Receivables Transaction), any mortgage, lien, pledge, charge,
security interest or encumbrance of any kind in respect of such asset, whether
or not filed, recorded or otherwise perfected under applicable law, including
any conditional sale or other title retention agreement, any lease in the nature
thereof, any option or other agreement to sell or give a security interest in
and any filing of or agreement to give any financing statement under the Uniform
Commercial Code (or equivalent statutes) of any jurisdiction.
"LIQUIDATED DAMAGES" means all liquidated damages then owing
pursuant to the Registration Rights Agreement.
"NET INCOME" means, with respect to any specified Person for any
period, the net income (loss) of such Person for such period, determined in
accordance with GAAP and before any reduction in respect of preferred stock
dividends, excluding, however:
(1) any gain or loss, together with any related provision for taxes
on such gain or loss, realized in connection with: (a) any sale
of assets outside the ordinary course of business of such
Person; or (b) the disposition of any securities by such Person
or any of its Restricted Subsidiaries or the extinguishment of
any Indebtedness of such Person or any of its Restricted
Subsidiaries; and
(2) any extraordinary gain or loss, together with any related
provision for taxes on such extraordinary gain or loss.
"NET PROCEEDS" means the aggregate cash proceeds, including
payments in respect of deferred payment obligations (to the extent corresponding
to the principal, but not the interest component, thereof) received by the
Company or any of its Restricted Subsidiaries in respect of any Asset Sale
(including, without limitation, any cash received upon the sale or other
disposition of any non-cash consideration received in any Asset Sale), net of
(1) the direct costs relating to such Asset Sale and the sale or other
disposition of any non-cash consideration, including, without limitation, legal,
accounting and investment banking fees, and sales commissions, and any
relocation expenses incurred as a result thereof, (2) taxes paid or payable as a
result thereof, in each case, after taking into account any available tax
credits or deductions and any tax sharing arrangements, (3) amounts required to
be applied to the repayment of Indebtedness or other liabilities, secured by a
Lien on the asset or assets that were the subject of such Asset Sale, or
required to be paid as a result of such sale, and (4) any reserve for adjustment
in respect of the sale price of such asset or assets established in accordance
with GAAP.
"NON-U.S. PERSON" means a Person who is not a U.S. Person.
19
"NOTE GUARANTEE" means a Guarantee of the Notes pursuant to this
Indenture.
"NOTES" means the 8 1/2% Senior Subordinated Notes due 2014 of
the Company issued on the date hereof and any Additional Notes, including any
Exchange Notes. The Notes and the Additional Notes (including any Exchange
Notes), if any, shall be treated as a single class for all purposes under this
Indenture.
"OBLIGATIONS" means any principal, interest, penalties, fees,
indemnifications, reimbursements, damages and other liabilities payable under
the documentation governing any Indebtedness.
"OFFERING MEMORANDUM" means the offering memorandum, dated
February 12, 2004, relating to the Company's 8 1/2% Senior Subordinated Notes
due 2014.
"OFFICER" means, with respect to any Person, the Chairman of the
Board, the Chief Executive Officer, the President, the Chief Operating Officer,
the Chief Financial Officer, the Treasurer, any Assistant Treasurer, the
Controller, the Secretary, any Senior Vice President, any Vice President or any
Assistant Vice President of such Person.
"OFFICERS' CERTIFICATE" means a certificate signed on behalf of
the Company by at least two Officers of the Company, one of whom must be the
principal executive officer, the principal financial officer, the treasurer or
the principal accounting officer of the Company, that meets the requirements of
this Indenture.
"OPINION OF COUNSEL" means an opinion from legal counsel who is
reasonably acceptable to the Trustee (who may be counsel to or an employee of
the Company) that meets the requirements of this Indenture.
"PARENT" means Solo Cup Investment Corporation, a Delaware
corporation.
"PARTICIPANT" means, with respect to the Depositary, Euroclear
or Clearstream, a Person who has an account with the Depositary, Euroclear or
Clearstream, respectively (and with respect to DTC, shall include Euroclear and
Clearstream).
"PERMITTED BUSINESS" means any business conducted or proposed to
be conducted (as described in the Offering Memorandum) by the Company and its
Restricted Subsidiaries on the Transactions Consummation Date and other
businesses reasonably related complementary or ancillary thereto and reasonable
expansions or extensions thereof.
"PERMITTED INVESTMENTS" means:
(1) any Investment in the Company or in a Restricted Subsidiary of
the Company;
(2) any Investment in Cash Equivalents;
(3) any Investment by the Company or any Restricted Subsidiary of
the Company in a Person, if as a result of such Investment:
20
(a) such Person becomes a Restricted Subsidiary of the
Company; or
(b) such Person is merged, consolidated or amalgamated with
or into, or transfers or conveys substantially all of
its assets to, or is liquidated into, the Company or a
Restricted Subsidiary of the Company;
(4) any Investment made as a result of the receipt of non-cash
consideration from an Asset Sale that was made pursuant to and
in compliance with Section 4.10;
(5) Investments to the extent acquired in exchange for the issuance
of Equity Interests (other than Disqualified Stock) of the
Company;
(6) Hedging Obligations that are incurred in the normal course of
business, and not for speculative purposes, and that do not
increase the Indebtedness of the obligor outstanding at any time
other than as a result of fluctuations in interest rates,
commodity prices or foreign currency exchange rates or by reason
of fees, indemnities and compensation payable thereunder;
(7) Investments received in satisfaction of judgments or in
settlements of debt or compromises of obligations incurred in
the ordinary course of business;
(8) loans or advances to employees of the Company or any of its
Restricted Subsidiaries that are approved by a majority of the
disinterested members of the Board of Directors of the Company,
in an aggregate principal amount not to exceed $2.0 million at
any one time outstanding;
(9) Investments consisting of the licensing or contribution of
intellectual property pursuant to joint marketing arrangements
with other Persons;
(10) Investments in a Receivables Subsidiary or any Investment by a
Receivables Subsidiary in any other Person, in each case, in
connection with a Qualified Receivables Transaction; and
(11) other Investments in any Person that is not an Affiliate of the
Company (other than a Restricted Subsidiary or any Person that
is an Affiliate of the Company solely because the Company,
directly or indirectly, owns Equity Interests in or controls
such Person) having an aggregate fair market value (measured on
the date each such Investment was made and without giving effect
to subsequent changes in value), when taken together with all
other Investments made pursuant to this clause (11) since the
date of this Indenture, not to exceed $20.0 million.
"PERMITTED JUNIOR SECURITIES" means:
(1) Equity Interests in the Company; and
(2) debt securities of the Company or any Guarantor or any other
business entity provided for by a plan of reorganization that
are subordinated to all Senior Debt and any debt securities
issued in exchange for Senior Debt to substantially the
21
same extent as, or to a greater extent than, the Notes and the
Note Guarantees are subordinated to Senior Debt under this
Indenture.
"PERMITTED LIENS" means:
(1) Liens on the assets of the Company and any Guarantor securing
Senior Debt that was permitted by the terms of this Indenture to
be incurred;
(2) Liens in favor of the Company or any Restricted Subsidiary;
(3) Liens on property of a Person existing at the time such Person
is acquired by, merged with or into or consolidated, combined or
amalgamated with the Company or any Restricted Subsidiary of the
Company; PROVIDED that such Liens were in existence prior to,
and were not incurred in connection with or in the contemplation
of, such merger, acquisition, consolidation, combination or
amalgamation and do not extend to any assets other than those of
the Person acquired by or merged into or consolidated, combined
or amalgamated with the Company or the Restricted Subsidiary;
(4) Liens on property existing at the time of acquisition thereof by
the Company or any Restricted Subsidiary of the Company,
PROVIDED that such Liens were in existence prior to, and were
not incurred in connection with or in contemplation of, such
acquisition and do not extend to any property other than the
property so acquired by the Company or the Restricted
Subsidiary;
(5) Liens existing on the Transactions Consummation Date;
(6) Liens incurred in the ordinary course of business of the Company
or any Restricted Subsidiary of the Company with respect to
obligations that do not exceed $10.0 million at any one time
outstanding;
(7) Liens to secure Indebtedness (including Capital Lease
Obligations) permitted by Section 4.09(b)(iv); PROVIDED that any
such Lien (i) covers only the assets acquired, constructed or
improved with such Indebtedness and (ii) is created within 180
days of such acquisition, construction or improvement; and
(8) Liens to secure Indebtedness permitted by Section 4.09(b)(viii)
(but only with regard to the accounts receivable and related
assets that are subject to such Qualified Receivables
Transaction) and Section 4.09(b)(xiii).
"PERMITTED REFINANCING INDEBTEDNESS" means:
(A) any Indebtedness of the Company or any of its Restricted
Subsidiaries (other than Disqualified Stock) issued in exchange for, or
the net proceeds of which are used to extend, refinance, renew, replace,
defease or refund other Indebtedness of the Company or any of its
Restricted Subsidiaries (other than Disqualified Stock and intercompany
Indebtedness); PROVIDED that:
22
(1) the principal amount (or accreted value, if applicable) of such
Permitted Refinancing Indebtedness does not exceed the principal
amount (or accreted value, if applicable) of the Indebtedness so
extended, refinanced, renewed, replaced, defeased or refunded
(plus all accrued interest thereon and the amount of any
reasonably determined premium necessary to accomplish such
refinancing and such reasonable expenses incurred in connection
therewith);
(2) such Permitted Refinancing Indebtedness has a final maturity
date later than the final maturity date of, and has a Weighted
Average Life to Maturity equal to or greater than the Weighted
Average Life to Maturity of, the Indebtedness being extended,
refinanced, renewed, replaced, defeased or refunded;
(3) if the Indebtedness being extended, refinanced, renewed,
replaced, defeased or refunded is subordinated in right of
payment to the Notes or the Note Guarantees, such Permitted
Refinancing Indebtedness has a final maturity date later than
the final maturity date of, and is subordinated in right of
payment to, the Notes on terms at least as favorable to the
Holders of Notes as those contained in the documentation
governing the Indebtedness being extended, refinanced, renewed,
replaced, defeased or refunded;
(4) if the Indebtedness being extended, refinanced, renewed,
replaced, defeased or refunded is PARI PASSU in right of payment
with the Notes or any Note Guarantees, such Permitted
Refinancing Indebtedness is PARI PASSU in right of payment with,
or subordinated in right of payment to, the Notes or such Note
Guarantees; and
(5) such Indebtedness is incurred either by the Company, any
Guarantor or by the Restricted Subsidiary who is the obligor on
the Indebtedness being extended, refinanced, renewed, replaced,
defeased or refunded; and
(B) any Disqualified Stock of the Company or any of its
Restricted Subsidiaries issued in exchange for, or the net proceeds of
which are used to extend, refinance, renew, replace or refund other
Disqualified Stock of the Company or any of its Restricted Subsidiaries
(other than Disqualified Stock held by the Company or any of its
Restricted Subsidiaries); PROVIDED that:
(1) the liquidation or face value of such Permitted Refinancing
Indebtedness does not exceed the liquidation or face value of
the Disqualified Stock so extended, refinanced, renewed,
replaced or refunded (plus all accrued dividends thereon and the
amount of any reasonably determined premium necessary to
accomplish such refinancing and such reasonable expenses
incurred in connection therewith);
(2) such Permitted Refinancing Indebtedness has a final redemption
date later than the final redemption date of, and has a Weighted
Average Life to Maturity equal to or greater than the Weighted
Average Life to Maturity of, the Disqualified Stock being
extended, refinanced, renewed, replaced or refunded;
(3) such Permitted Refinancing Indebtedness has a final redemption
date later than the final maturity date of, and is subordinated
in right of payment to, the Notes on
23
terms at least as favorable to the Holders of Notes as those
contained in the documentation governing the Disqualified Stock
being extended, refinanced, renewed, replaced or refunded;
(4) such Permitted Refinancing Indebtedness is not redeemable at the
option of the holder thereof or mandatorily redeemable prior to
the final maturity of the Disqualified Stock being extended,
refinanced, renewed, replaced or refunded; and
(5) such Disqualified Stock is issued either by the Company or by
the Restricted Subsidiary who is the Issuer of the Disqualified
Stock being extended, refinanced, renewed, replaced or refunded.
"PERSON" means any individual, corporation, partnership, joint
venture, association, joint-stock company, trust, unincorporated organization,
limited liability company or government or other entity.
"PLEDGE AGREEMENT" means the Collateral Pledge and Security
Agreement to be entered into, at the Company's option, as of the date of this
Indenture by and among the Company, Banc of America Securities LLC and U.S. Bank
National Association.
"PREFERRED STOCK" means, with respect to any Person, any Capital
Stock of such Person that has preferential rights to any other Capital Stock of
such Person with respect to dividends or redemptions upon liquidation.
"PRINCIPALS" means (1) Xxxx X. Xxxxxxxx, (2) Xxxxxx X. Xxxxxxxx
and (3) Vestar Capital Partners IV, L.P., a Delaware limited partnership.
"PRIVATE PLACEMENT LEGEND" means the legend set forth in Section
2.07(g)(i) to be placed on all Notes issued under this Indenture except where
otherwise permitted by the provisions of this Indenture.
"PRO FORMA COST SAVINGS" means, with respect to any period, the
reduction in net costs and related adjustments that (1) were directly
attributable to an acquisition that occurred during the four-quarter period or
after the end of the four-quarter period and on or prior to the Calculation Date
and calculated on a basis that is consistent with Regulation S-X under the
Securities Act as in effect and applied as of the date of this Indenture, (2)
were actually implemented with respect to the subject acquisition within six
months after the date of the acquisition and prior to the Calculation Date that
are supportable and quantifiable by underlying accounting records or (3) relate
to the acquisition and that the Company reasonably determines are probable based
upon specifically identifiable actions to be taken within six months of the date
of the acquisition and, in the case of each of (1), (2) and (3), are described,
as provided below, in an Officers' Certificate, as if all such reductions in
costs had been effected as of the beginning of such period. Pro Forma Cost
Savings described above shall be established by a certificate delivered to the
Trustee from the Company's Chief Financial Officer that outlines the specific
actions taken or to be taken and the net cost savings achieved or to be achieved
from each such action and, in the case of clause (3) above, that states such
savings have been determined to be probable.
24
"QIB" means a "qualified institutional buyer" as defined in Rule
144A.
"QUALIFIED EQUITY OFFERING" means (1) any public or private
placement of Capital Stock (other than Disqualified Stock) of the Company or the
Parent (other than Capital Stock sold to the Company or a Subsidiary of the
Company); PROVIDED that if such public offering or private placement is of
Capital Stock of the Parent, 100% of the net cash proceeds therefrom has been
contributed to the equity of the Company or (2) the contribution of cash to the
Company as an equity capital contribution.
"QUALIFIED RECEIVABLES TRANSACTION" means any transaction or
series of transactions entered into by the Company or any of its Subsidiaries
pursuant to which the Company or any of its Restricted Subsidiaries sells,
conveys or otherwise transfers to a Receivables Subsidiary, or grants any
security interest in, any accounts receivable (whether now existing or arising
in the future) of the Company or any of its Restricted Subsidiaries, and any
assets related thereto, including, without limitation, all collateral securing
such accounts receivable, all contracts and all guarantees or other obligations
in respect of such accounts receivable, proceeds of such accounts receivable and
other assets which are customarily transferred or in respect of which security
interests are customarily granted in connection with asset securitization
transactions involving accounts receivable and pursuant to which such
Receivables Subsidiary may sell, convey, transfer or grant a security interest
in or Lien against such accounts receivable, or interests therein, and related
assets to any Person other than an Affiliate of the Company.
"RECEIVABLES SUBSIDIARY" means a Subsidiary of the Company which
engages in no activities other than in connection with a Qualified Receivables
Transaction and which is designated by the Board of Directors of the Company, as
described below, as a Receivables Subsidiary (1) no portion of the Indebtedness
or any other Obligations, contingent or otherwise, of which (a) is guaranteed by
the Company or any Restricted Subsidiary of the Company, excluding Guarantees of
Obligations, other than the principal of and interest on Indebtedness, pursuant
to reasonably customary representations, warranties, covenants and indemnities
entered into in connection with accounts receivable transactions, (b) is
recourse to or obligates the Company or any Restricted Subsidiary of the Company
in any way other than pursuant to reasonably customary representations,
warranties, covenants and indemnities entered into in connection with accounts
receivable transactions or (c) subjects any property or asset of the Company or
any Restricted Subsidiary of the Company, other than accounts receivable and
related assets as provided in the definition of "Qualified Receivables
Transaction," directly or indirectly, contingently or otherwise, to the
satisfaction thereof, other than pursuant to reasonably customary
representations, warranties, covenants and indemnities entered into in
connection with accounts receivable transactions, (2) with which neither the
Company nor any Restricted Subsidiary of the Company has any material contract,
agreement, arrangement or understanding other than on terms not materially less
favorable to the Company or such Restricted Subsidiary than those that might be
obtained at the time from Persons who are not Affiliates of the Company, other
than fees payable in the ordinary course of business in connection with
servicing accounts receivable and (3) with which neither the Company nor any
Restricted Subsidiary of the Company has any obligation to maintain or preserve
such Subsidiary's financial condition or to cause such Subsidiary to achieve
specified levels of operating results. Any such designation by the Board of
Directors of the Company must be
25
evidenced to the Trustee by filing with the Trustee a Board Resolution giving
effect to that designation.
"REGISTRATION RIGHTS AGREEMENT" means the Registration Rights
Agreement, dated as of the date hereof, by and among the Company and the other
parties named on the signature pages thereof, as such agreement may be amended,
modified or supplemented from time to time and, with respect to any Additional
Notes, one or more registration rights agreements between the Company and the
other parties thereto, as such agreement(s) may be amended, modified or
supplemented from time to time, relating to rights given by the Company to the
purchasers of Additional Notes to register such Additional Notes under the
Securities Act.
"REGULATION S" means Regulation S promulgated under the
Securities Act.
"REGULATION S GLOBAL NOTE" means a Legended Regulation S Global
Note or an Unlegended Regulation S Global Note, as appropriate.
"RELATED PARTY" means
(1) with respect to Xxxx X. Xxxxxxxx or Xxxxxx X. Xxxxxxxx (a) his
spouse, (b) his descendants and any member of his immediate
family, including in each case stepchildren and family members
by adoption, (c) his heirs at law and his estate and the
beneficiaries thereof, (d) any charitable foundation created by
Xxxx X. Xxxxxxxx or Xxxxxx X. Xxxxxxxx, as applicable, and (e)
any trust, corporation, limited liability company, partnership
or other entity, the beneficiaries, stockholders, members,
general partners, owners or Persons Beneficially Owning a
majority of the interests of which consist of Xxxx X. Xxxxxxxx
or Xxxxxx X. Xxxxxxxx, as applicable, and/or one or more of the
Persons referred to in the immediately preceding clauses (a)
through (d); PROVIDED that any Person in the immediately
preceding clauses (a) through (e) shall only be deemed to be a
Related Party to the extent that such Person's Voting Stock of
the Company or the Parent was received from Xxxx X. Xxxxxxxx or
Xxxxxx X. Xxxxxxxx or any Person referred to in the immediately
preceding clauses (a), (b) or (c); and
(2) with respect to any Vestar Capital Partners IV, L.P., (a) any
investment fund under common control or management with Vestar
Capital Partners IV, L.P., (b) any controlling stockholder,
general partner or member of Vestar Capital Partners IV, L.P.
and (c) any trust, corporation, limited liability company or
other entity, the beneficiaries, stockholders, members, general
partners or Persons Beneficially Owning an 80% or more interest
of which consist of Vestar Capital Partners IV, L.P. and/or the
Persons referred to in the immediately preceding clauses (a) and
(b).
"REPLACEMENT ASSETS" means (1) non-current tangible assets that
will be used or useful in a Permitted Business or (2) substantially all the
assets of a Permitted Business or a majority of the Voting Stock of any Person
engaged in a Permitted Business that will become on the date of acquisition
thereof a Restricted Subsidiary.
"REPRESENTATIVE" means the trustee, agent or representative for
any Senior Debt.
26
"RESPONSIBLE OFFICER," when used with respect to the Trustee,
means any officer within the Corporate Trust Office of the Trustee (or any
successor group of the Trustee) or any other officer of the Trustee customarily
performing functions similar to those performed by any of the above designated
officers and also means, with respect to a particular corporate trust matter,
any other officer to whom such matter is referred because of his knowledge of
and familiarity with the particular subject.
"RESTRICTED DEFINITIVE NOTE" means a Definitive Note bearing the
Private Placement Legend.
"RESTRICTED GLOBAL NOTE" means a Global Note bearing the Private
Placement Legend.
"RESTRICTED INVESTMENT" means an Investment other than a
Permitted Investment.
"RESTRICTED PERIOD" means the 40-day distribution compliance
period as defined in Regulation S.
"RESTRICTED SUBSIDIARY" of a Person means any Subsidiary of the
referent Person that is not an Unrestricted Subsidiary.
"RULE 144" means Rule 144 promulgated under the Securities Act.
"RULE 144A" means Rule 144A promulgated under the Securities
Act.
"RULE 903" means Rule 903 promulgated under the Securities Act.
"RULE 904" means Rule 904 promulgated under the Securities Act.
"SALE AND LEASEBACK TRANSACTION" means, with respect to any
Person, any transaction involving any of the assets or properties of such Person
whether now owned or hereafter acquired, whereby such Person sells or transfers
such assets or properties and then or thereafter leases such assets or
properties or any part thereof.
"SCC HOLDING" means SCC Holding Company LLC, a Delaware limited
liability company.
"SCC HOLDING MANAGEMENT AGREEMENT" means the Management
Agreement, to be dated the Transactions Consummation Date, among the Parent, the
Company and SCC Holding.
"SEC" means the Securities and Exchange Commission.
"SECURITIES ACT" means the Securities Act of 1933, as amended.
27
"SENIOR DEBT" means:
(1) all Indebtedness of the Company or any Guarantor outstanding
under the Credit Agreement and all Hedging Obligations with
respect thereto, whether outstanding on the date of this
Indenture or incurred thereafter;
(2) any other Indebtedness of the Company or any Guarantor permitted
to be incurred under the terms of this Indenture, unless the
instrument under which such Indebtedness is incurred expressly
provides that it is on a parity with or subordinated in right of
payment to the Notes or any Note Guarantee; and
(3) all Obligations with respect to the items listed in the
preceding clauses (1) and (2) (including any interest accruing
subsequent to the filing of a petition of bankruptcy at the rate
provided for in the documentation with respect thereto, whether
or not such interest is an allowed claim under applicable law).
Notwithstanding anything to the contrary in the preceding
paragraph, Senior Debt will not include:
(1) any Indebtedness of the Company or any Guarantor to any of their
Subsidiaries or other Affiliates;
(2) the portion of any Indebtedness that is incurred in violation of
this Indenture;
(3) any Indebtedness of the Company or any Guarantor that, when
incurred, was without recourse to the Company or such Guarantor;
(4) any repurchase, redemption or other obligation in respect of
Disqualified Stock; or
(5) any Indebtedness owed to any employee of the Company or any of
its Subsidiaries.
"SHELF REGISTRATION STATEMENT" means the Shelf Registration
Statement as defined in the Registration Rights Agreement.
"SIGNIFICANT SUBSIDIARY" means any Subsidiary that would
constitute a "significant subsidiary" within the meaning of Article 1 of
Regulation S-X under the Securities Act.
"STATED MATURITY" means, with respect to any installment of
interest or principal on any series of Indebtedness, the date on which such
payment of interest or principal was scheduled to be paid in the original
documentation governing such Indebtedness, and shall not include any contingent
obligations to repay, redeem or repurchase any such interest or principal prior
to the date originally scheduled for the payment thereof.
"STOCK PURCHASE AGREEMENT" means the Convertible Participating
Preferred Stock Purchase Agreement, to be dated as of the Transactions
Consummation Date, among the
28
Parent, Vestar Cup Investment, LLC, a Delaware limited liability company, and
Vestar Capital Partners IV, L.P., a Delaware limited partnership.
"STOCKHOLDERS' AGREEMENT" means the Stockholders' Agreement, to
be dated as of the Transactions Consummation Date, among the Parent, Vestar
Capital Partners IV, L.P., a Delaware limited partnership, Vestar Cup
Investment, LLC, a Delaware limited liability company, Vestar Cup Investment II,
LLC, a Delaware limited liability company, members of management of the Parent
that own shares of Common Stock, par value $.01 per share, of the Parent as of
the closing of the sale and purchase of Capital Stock of the Parent pursuant to
the Stock Purchase Agreement and SCC Holding.
"STOCKHOLDERS' REGISTRATION RIGHTS AGREEMENT" means the
registration rights agreement, to be dated as of the Transactions Consummation
Date, among SCC Holding, Vestar Capital Partners IV, L.P., a Delaware limited
partnership, Vestar Cup Investment, LLC, a Delaware limited liability company,
Vestar Cup Investment II, LLC, a Delaware limited liability company, the Parent
and the other parties thereto.
"SUBSIDIARY" means, with respect to any specified Person:
(1) any corporation, association or other business entity of which
more than 50% of the total voting power of shares of Capital
Stock entitled (without regard to the occurrence of any
contingency) to vote in the election of directors, managers or
trustees thereof is at the time owned or controlled, directly or
indirectly, by such Person or one or more of the other
Subsidiaries of that Person (or a combination thereof); and
(2) any partnership (a) the sole general partner or the managing
general partner of which is such Person or a Subsidiary of such
Person or (b) the only general partners of which are such Person
or one or more Subsidiaries of such Person (or any combination
thereof).
"TIA" means the Trust Indenture Act of 1939, as in effect on the
date on which this Indenture is qualified under the TIA.
"TRANSACTIONS" means the Acquisition and the other transactions
described in the Offering Memorandum under "The Transactions."
"TRANSACTIONS CONSUMMATION DATE" means the date of consummation
of the Transactions except that, if the Transactions other than the original
issuance of the Notes under this Indenture are consummated after the Issue Date,
"Transactions Consummation Date" means the date of consummation of the
Transactions other than the original issuance of the Notes under this Indenture.
"TREASURY REGULATIONS" means the Treasury regulations
promulgated under the Internal Revenue Code of 1986, as amended from time to
time (including any successor law).
29
"TRUSTEE" means U.S. Bank National Association, a nationally
chartered banking association, until a successor replaces it in accordance with
the applicable provisions of this Indenture and thereafter means the successor
serving hereunder.
"UNLEGENDED REGULATION S GLOBAL NOTE" means a permanent global
Note in the form of EXHIBIT A bearing the Global Note Legend, deposited with or
on behalf of and registered in the name of the Depositary or its nominee and
issued upon expiration of the Restricted Period.
"UNRESTRICTED DEFINITIVE NOTE" means one or more Definitive
Notes that do not bear and are not required to bear the Private Placement
Legend.
"UNRESTRICTED GLOBAL NOTE" means a permanent Global Note
substantially in the form of EXHIBIT A that bears the Global Note Legend, that
has the "Schedule of Exchanges of Interests in the Global Note" attached
thereto, that is deposited with or on behalf of and registered in the name of
the Depositary, representing a series of Notes, and that does not bear the
Private Placement Legend.
"UNRESTRICTED SUBSIDIARY" means any Subsidiary of the Company
that is designated by the Board of Directors of the Company as an Unrestricted
Subsidiary pursuant to a board resolution of such Board of Directors in
compliance with Section 4.16 and any Subsidiary of such Subsidiary.
"U.S. PERSON" means a U.S. person as defined in Rule 902(o)
under the Securities Act.
"VESTAR MANAGEMENT AGREEMENT" means the Management Agreement, to
be dated the Transactions Consummation Date, among the Parent, the Company and
Vestar Capital Partners.
"VOTING STOCK" of any Person as of any date means the Capital
Stock of such Person that is at the time entitled to vote in the election of the
Board of Directors of such Person.
"WEIGHTED AVERAGE LIFE TO MATURITY" means, when applied to any
Indebtedness or Disqualified Stock at any date, the number of years obtained by
dividing:
(1) the sum of the products obtained by multiplying (a) the amount
of each then remaining installment, sinking fund, serial
maturity or other required payments of principal or liquidation
or face value, including payment at final maturity or
redemption, in respect thereof, by (b) the number of years
(calculated to the nearest one-twelfth) that will elapse between
such date and the making of such payment; by
(2) the then outstanding principal or liquidation or face value
amount of such Indebtedness or Disqualified Stock.
"WHOLLY OWNED RESTRICTED SUBSIDIARY" of any specified Person
means a Restricted Subsidiary of such Person all of the outstanding Capital
Stock or other ownership interests of which (other than directors' qualifying
shares or Investments by foreign nationals
30
mandated by applicable law) shall at the time be owned by such Person or by one
or more Wholly Owned Restricted Subsidiaries of such Person or by such Person
and one or more Wholly Owned Restricted Subsidiaries of such Person.
Section 1.02. OTHER DEFINITIONS.
DEFINED IN
TERM SECTION
---- ----------
"AFFILIATE TRANSACTION" .................................... 4.11
"ASSET SALE OFFER" ......................................... 4.10
"AUTHENTICATION ORDER" ..................................... 2.02
"CHANGE OF CONTROL OFFER" .................................. 4.14
"CHANGE OF CONTROL PAYMENT" ................................ 4.14
"CHANGE OF CONTROL PAYMENT DATE" ........................... 4.14
"COVENANT DEFEASANCE" ...................................... 8.03
"DTC" ...................................................... 2.01
"EVENT OF DEFAULT" ......................................... 6.01
"LEGAL DEFEASANCE" ......................................... 8.02
"NONPAYMENT DEFAULT" ....................................... 12.03
"OFFER AMOUNT" ............................................. 3.08
"OFFER PERIOD" ............................................. 3.08
"OFFSHORE TRANSACTION" ..................................... 2.07
"PAYING AGENT" ............................................. 2.04
"PAYMENT BLOCKAGE NOTICE" .................................. 12.03
"PAYMENT DEFAULT" .......................................... 6.01
"PERMITTED DEBT" ........................................... 4.09
"PURCHASE DATE" ............................................ 3.08
"REGISTRAR" ................................................ 2.04
"RELATED PROCEEDINGS" ...................................... 13.09
"REPURCHASE OFFER" ......................................... 3.08
"RESTRICTED PAYMENTS" ...................................... 4.07
"SPECIAL REDEMPTION" ....................................... 3.09
"SPECIFIED COURTS" ......................................... 13.09
Section 1.03. INCORPORATION BY REFERENCE OF TRUST INDENTURE ACT.
Whenever this Indenture refers to a provision of the TIA, the
provision is incorporated by reference in and made a part of this Indenture.
The following TIA terms used in this Indenture have the
following meanings:
"INDENTURE SECURITIES" means the Notes;
"INDENTURE SECURITY HOLDER" means a Holder of a Note;
"INDENTURE TO BE QUALIFIED" means this Indenture;
"INDENTURE TRUSTEE" or "INSTITUTIONAL TRUSTEE" means the
Trustee; and
31
"OBLIGOR" on the Notes means the Company and any successor
obligor upon the Notes.
All other terms used in this Indenture that are defined by the
TIA, defined by TIA reference to another statute or defined by SEC rule under
the TIA have the meanings so assigned to them.
Section 1.04. RULES OF CONSTRUCTION. Unless the context otherwise requires:
(a) a term has the meaning assigned to it;
(b) an accounting term not otherwise defined has the meaning
assigned to it in accordance with GAAP;
(c) "or" is not exclusive;
(d) words in the singular include the plural, and in the
plural include the singular;
(e) "herein", "hereof" and other word of similar import
refer to this Indenture as a whole and not to any
particular Section, Article or other subdivision;
(f) all references to Sections or Articles or Exhibits refer
to Sections or Articles or Exhibits of or to this
Indenture unless otherwise indicated; and
(g) references to sections of or rules under the Securities
Act shall be deemed to include substitute, replacement
of successor sections or rules adopted by the SEC from
time to time.
ARTICLE TWO
THE NOTES
Section 2.01. FORM AND DATING.
(a) GENERAL. The Notes and the Trustee's certificate of
authentication shall be substantially in the form of EXHIBIT A. The Notes may
have notations, legends or endorsements required by law, stock exchange rule or
usage. Each Note shall be dated the date of its authentication. The Notes shall
be issued in registered form without interest coupons in minimum denominations
of $1,000 and integral multiples of $1,000 in excess thereof.
The terms and provisions contained in the Notes shall
constitute, and are hereby expressly made, a part of this Indenture, and the
Company, the Guarantors and the Trustee, by their execution and delivery of this
Indenture, expressly agree to such terms and provisions and to be bound thereby.
However, to the extent any provision of any Note conflicts with the express
provisions of this Indenture, the provisions of this Indenture shall govern and
be controlling.
(b) GLOBAL NOTES. Notes issued in global form shall be
substantially in the form of EXHIBIT A (and shall include the Global Note Legend
thereon and the "Schedule of
32
Exchanges of Interests in the Global Note" attached thereto). Notes issued in
definitive form shall be substantially in the form of EXHIBIT A (but without the
Global Note Legend thereon and without the "Schedule of Exchanges of Interests
in the Global Note" attached thereto). Each Global Note shall represent such of
the outstanding Notes as shall be specified therein and each shall provide that
it represents the aggregate principal amount of outstanding Notes from time to
time endorsed thereon and that the aggregate principal amount of outstanding
Notes represented thereby may from time to time be reduced or increased, as
appropriate, to reflect exchanges and redemptions. Any endorsement of a Global
Note to reflect the amount of any increase or decrease in the aggregate
principal amount of outstanding Notes represented thereby shall be made by the
Trustee or, if the Custodian and the Trustee are not the same Person, by the
Custodian at the direction of the Trustee, in accordance with instructions given
by the Holder thereof as required by Section 2.07 hereof.
(c) REGULATION S GLOBAL NOTES. Notes offered and sold in
reliance on Regulation S shall be issued initially in the form of the Legended
Regulation S Global Note, which shall be deposited on behalf of the purchasers
of the Notes represented thereby with the Trustee, as custodian for The
Depository Trust Company ("DTC") in
New York,
New York, and registered in the
name of the Depositary or the nominee of the Depositary for the accounts of
designated agents holding on behalf of Euroclear or Clearstream, duly executed
by the Company and authenticated by the Trustee as hereinafter provided.
Following the termination of the Restricted Period, beneficial interests in the
Legended Regulation S Global Note may be exchanged for beneficial interests in
Unlegended Regulation S Global Notes pursuant to Section 2.07 and the Applicable
Procedures. Simultaneously with the authentication of Unlegended Regulation S
Global Notes, the Trustee shall cancel the Legended Regulation S Global Note.
The aggregate principal amount of the Regulation S Global Notes may from time to
time be increased or decreased by adjustments made on the records of the Trustee
and the Depositary or its nominee, as the case may be, in connection with
transfers of interest as hereinafter provided.
(d) EUROCLEAR AND CLEARSTREAM PROCEDURES APPLICABLE. The
provisions of the "Operating Procedures of the Euroclear System" and "Terms and
Conditions Governing Use of Euroclear" and the "General Terms and Conditions of
Clearstream Banking" and "Customer Handbook" of Clearstream shall be applicable
to transfers of beneficial interests in the Regulation S Global Notes that are
held by Participants through Euroclear or Clearstream.
Section 2.02. EXECUTION AND AUTHENTICATION.
At least one Officer of the Company shall sign the Notes for the
Company by manual or facsimile signature.
If an Officer whose signature is on a Note no longer holds that
office at the time a Note is authenticated, the Note shall nevertheless be
valid.
A Note shall not be valid until authenticated by the manual
signature of the Trustee. Such signature shall be conclusive evidence that the
Note has been authenticated under this Indenture.
33
The aggregate principal amount of Notes which may be
authenticated and delivered under this Indenture is unlimited.
The Company may, subject to Article Four of this Indenture and
applicable law, issue Additional Notes under this Indenture, including Exchange
Notes. The Notes issued on the Issue Date and any Additional Notes subsequently
issued shall be treated as a single class for all purposes under this Indenture.
At any time and from time to time after the execution of this
Indenture, the Trustee shall, upon receipt of a written order of the Company
signed by an Officer of the Company (an "AUTHENTICATION ORDER"), authenticate
Notes for original issue in an aggregate principal amount specified in such
Authentication Order. The Authentication Order shall specify the amount of Notes
to be authenticated and the date on which the Notes are to be authenticated.
The Trustee may appoint an authenticating agent acceptable to
the Company to authenticate Notes. An authenticating agent may authenticate
Notes whenever the Trustee may do so. Each reference in this Indenture to
authentication by the Trustee includes authentication by such agent. An
authenticating agent has the same rights as an Agent to deal with Holders or an
Affiliate of the Company.
Section 2.03. METHODS OF RECEIVING PAYMENTS ON THE NOTES.
If a Holder has given wire transfer instructions to the Company,
the Company shall pay all principal, interest and premium and Liquidated
Damages, if any, on that Holder's Notes in accordance with those instructions.
All other payments on Notes shall be made at the office or agency of the Paying
Agent and Registrar within the City and State of
New York unless the Company
elects to make interest payments by check mailed to the Holders at their
addresses set forth in the register of Holders.
Section 2.04. REGISTRAR AND PAYING AGENT.
(a) The Company shall maintain a registrar with an office or
agency where Notes may be presented for registration of transfer or for exchange
("REGISTRAR") and a paying agent with an office or agency where Notes may be
presented for payment ("PAYING AGENT"). The Registrar shall keep a register of
the Notes and of their transfer and exchange. The Company may appoint one or
more co-registrars and one or more additional paying agents. The term
"Registrar" includes any co-registrar and the term "Paying Agent" includes any
additional paying agent. The Company may change any Paying Agent or Registrar
without prior notice to any Holder. The Company shall notify the Trustee in
writing of the name and address of any Agent not a party to this Indenture. If
the Company fails to appoint or maintain another entity as Registrar or Paying
Agent, the Trustee shall act as such. The Company or any of its Subsidiaries may
act as Paying Agent or Registrar; PROVIDED, HOWEVER, that neither the Company
nor any of its Subsidiaries shall act as Paying Agent for purposes of Section 7
of the Pledge Agreement.
(b) The Company initially appoints DTC to act as Depositary
with respect to the Global Notes.
34
(c) The Company initially appoints the Trustee to act as the
Registrar and Paying Agent and to act as Custodian with respect to the Global
Notes.
Section 2.05. PAYING AGENT TO HOLD MONEY IN TRUST.
The Company shall require each Paying Agent other than the
Trustee to agree in writing that the Paying Agent shall hold in trust for the
benefit of Holders or the Trustee all money held by the Paying Agent for the
payment of principal, premium or Liquidated Damages, if any, or interest on the
Notes, and shall notify the Trustee of any default by the Company in making any
such payment. While any such default continues, the Trustee may require a Paying
Agent to pay all money held by it to the Trustee. The Company at any time may
require a Paying Agent to pay all money held by it to the Trustee. Upon payment
over to the Trustee, the Paying Agent (if other than the Company or one of its
Subsidiaries) shall have no further liability for the money. If the Company or
one of its Subsidiaries acts as Paying Agent, it shall segregate and hold in a
separate trust fund for the benefit of the Holders all money held by it as
Paying Agent. Upon any bankruptcy or reorganization proceedings relating to the
Company, the Trustee shall serve as Paying Agent for the Notes.
Section 2.06. HOLDER LISTS.
The Trustee shall preserve in as current a form as is reasonably
practicable the most recent list available to it of the names and addresses of
all Holders and shall otherwise comply with TIA Section 312(a). If the Trustee
is not the Registrar, the Company shall furnish to the Trustee at least seven
Business Days before each interest payment date and at such other times as the
Trustee may request in writing, a list in such form and as of such date as the
Trustee may reasonably require of the names and addresses of the Holders of
Notes and the Company shall otherwise comply with TIA Section 312(a).
Section 2.07. TRANSFER AND EXCHANGE.
(a) TRANSFER AND EXCHANGE OF GLOBAL NOTES. A Global Note may
not be transferred as a whole except by the Depositary to a nominee of the
Depositary, by a nominee of the Depositary to the Depositary or to another
nominee of the Depositary, or by the Depositary or any such nominee to a
successor Depositary or a nominee of such successor Depositary. All Global Notes
shall be exchanged by the Company for Definitive Notes if (i) DTC (A) notifies
the Company that it is unwilling or unable to continue as Depositary for the
Global Notes and the Company fails to appoint a successor Depositary within 90
days after receiving such notice or (B) has ceased to be a clearing agency
registered under the Exchange Act and the Company fails to appoint a successor
Depositary within 90 days after becoming aware of such condition; (ii) the
Company, at its option, notifies the Trustee in writing that it elects to cause
the issuance of Definitive Notes; PROVIDED that in no event shall the Legended
Regulation S Global Note be exchanged by the Company for Definitive Notes other
than in accordance with Section 2.07(c)(ii); or (iii) there shall have occurred
and be continuing a Default or Event of Default with respect to the Notes. Upon
the occurrence of any of the preceding events in (i), (ii) or (iii) above,
Definitive Notes shall be issued in such names as the Depositary shall instruct
the Trustee. Global Notes also may be exchanged or replaced, in whole or in
part, as provided in Sections 2.08 and 2.11 hereof. Every Note authenticated and
delivered in exchange for, or in lieu of, a
35
Global Note or any portion thereof, pursuant to this Section 2.07 or Section
2.08 or 2.11 hereof, shall be authenticated and delivered in the form of, and
shall be, a Global Note. A Global Note may not be exchanged for another Note
other than as provided in this Section 2.07(a); however, beneficial interests in
a Global Note may be transferred and exchanged as provided in Section 2.07(b),
(c) or (f) hereof.
(b) TRANSFER AND EXCHANGE OF BENEFICIAL INTERESTS IN THE
GLOBAL NOTES. The transfer and exchange of beneficial interests in the Global
Notes shall be effected through the Depositary, in accordance with the
provisions of this Indenture and the Applicable Procedures. Beneficial interests
in the Restricted Global Notes shall be subject to restrictions on transfer
comparable to those set forth herein to the extent required by the Securities
Act. Transfers of beneficial interests in the Global Notes also shall require
compliance with either subparagraph (i) or (ii) below, as applicable, as well as
one or more of the other following subparagraphs, as applicable:
(i) TRANSFER OF BENEFICIAL INTERESTS IN THE SAME GLOBAL
NOTE. Beneficial interests in any Restricted Global Note may be
transferred to Persons who take delivery thereof in the form of a
beneficial interest in the same Restricted Global Note in accordance
with the transfer restrictions set forth in the Private Placement
Legend; PROVIDED, HOWEVER, that prior to the expiration of the
Restricted Period, transfers of beneficial interests in the Legended
Regulation S Global Note may not be made to a U.S. Person or for the
account or benefit of a U.S. Person (other than an Initial Purchaser).
Beneficial interests in any Unrestricted Global Note may be transferred
to Persons who take delivery thereof in the form of a beneficial
interest in an Unrestricted Global Note. No written orders or
instructions shall be required to be delivered to the Registrar to
effect the transfers described in this Section 2.07(b)(i).
(ii) ALL OTHER TRANSFERS AND EXCHANGES OF BENEFICIAL
INTERESTS IN GLOBAL NOTES. In connection with all transfers and
exchanges of beneficial interests that are not subject to Section
2.07(b)(i) above, the transferor of such beneficial interest must
deliver to the Registrar either (A) (1) a written order from a
Participant or an Indirect Participant given to the Depositary in
accordance with the Applicable Procedures directing the Depositary to
credit or cause to be credited a beneficial interest in another Global
Note in an amount equal to the beneficial interest to be transferred or
exchanged and (2) instructions given in accordance with the Applicable
Procedures containing information regarding the Participant account to
be credited with such increase or (B) (1) a written order from a
Participant or an Indirect Participant given to the Depositary in
accordance with the Applicable Procedures directing the Depositary to
cause to be issued a Definitive Note in an amount equal to the
beneficial interest to be transferred or exchanged and (2) instructions
given by the Depositary to the Registrar containing information
regarding the Person in whose name such Definitive Note shall be
registered to effect the transfer or exchange referred to in (1) above;
PROVIDED that in no event shall Definitive Notes be issued upon the
transfer or exchange of beneficial interests in the Legended Regulation
S Global Note other than in accordance with Section 2.07(c)(ii). Upon
consummation of an Exchange Offer by the Company in accordance with
Section 2.07(f), the requirements of this Section 2.07(b)(ii) shall be
deemed to have been satisfied upon receipt by the Registrar of the
instructions contained in the Letter of Transmittal delivered by the
holder
36
of such beneficial interests in the Restricted Global Notes. Upon
satisfaction of all of the requirements for transfer or exchange of
beneficial interests in Global Notes contained in this Indenture and the
Notes or otherwise applicable under the Securities Act, the Trustee
shall adjust the principal amount at maturity of the relevant Global
Notes pursuant to Section 2.07(i).
(iii) TRANSFER OF BENEFICIAL INTERESTS TO ANOTHER RESTRICTED
GLOBAL NOTE. A beneficial interest in any Restricted Global Note may be
transferred to a Person who takes delivery thereof in the form of a
beneficial interest in another Restricted Global Note if the transfer
complies with the requirements of Section 2.07(b)(ii) above and the
Registrar receives the following:
(A) if the transferee shall take delivery in the
form of a beneficial interest in the 144A Global Note, then the
transferor must deliver a certificate in the form of EXHIBIT B,
including the certifications in item (1) thereof; and
(B) if the transferee shall take delivery in the
form of a beneficial interest in a Legended Regulation S Global
Note, then the transferor must deliver a certificate in the form
of EXHIBIT B, including the certifications in item (2) thereof.
(iv) TRANSFER AND EXCHANGE OF BENEFICIAL INTERESTS IN A
RESTRICTED GLOBAL NOTE FOR BENEFICIAL INTERESTS IN AN UNRESTRICTED
GLOBAL NOTE. A beneficial interest in any Restricted Global Note may be
exchanged by any Holder thereof for a beneficial interest in an
Unrestricted Global Note or transferred to a Person who takes delivery
thereof in the form of a beneficial interest in an Unrestricted Global
Note if the exchange or transfer complies with the requirements of
Section 2.07(b)(ii) above and:
(A) such exchange or transfer is effected pursuant
to the Exchange Offer in accordance with the Registration Rights
Agreement and the Holder of the beneficial interest to be
transferred, in the case of an exchange, or the transferee, in
the case of a transfer, certifies in the applicable Letter of
Transmittal (1) it is not an affiliate (as defined in Rule 144)
of the Company, (2) it is not engaged in, and does not intend to
engage in, and has no arrangement or understanding with any
Person to participate in, a distribution of the Exchange Notes
to be issued in the Exchange Offer and (3) it is acquiring the
Exchange Notes in its ordinary course of business;
(B) such transfer is effected pursuant to the Shelf
Registration Statement in accordance with the Registration
Rights Agreement;
(C) such transfer is effected by a Broker-Dealer
pursuant to the Exchange Offer Registration Statement in
accordance with the Registration Rights Agreement; or
37
(D) the Registrar receives the following:
(1) if the holder of such beneficial
interest in a Restricted Global Note proposes to
exchange such beneficial interest for a beneficial
interest in an Unrestricted Global Note, a certificate
from such holder in the form of EXHIBIT C, including the
certifications in item (1)(a) thereof; or
(2) if the holder of such beneficial
interest in a Restricted Global Note proposes to
transfer such beneficial interest to a Person who shall
take delivery thereof in the form of a beneficial
interest in an Unrestricted Global Note, a certificate
from such holder in the form of EXHIBIT B, including the
certifications in item (4) thereof;
and, in each such case set forth in this subparagraph (D), if
the Registrar or the Company so requests or if the Applicable
Procedures so require, an opinion of counsel in form reasonably
acceptable to the Registrar and the Company to the effect that
such exchange or transfer is in compliance with the Securities
Act and that the restrictions on transfer contained herein and
in the Private Placement Legend are no longer required in order
to maintain compliance with the Securities Act.
If any such transfer is effected pursuant to subparagraph (B) or
(D) above at a time when an Unrestricted Global Note has not yet been issued,
the Company shall issue and, upon receipt of an Authentication Order in
accordance with Section 2.02 hereof, the Trustee shall authenticate one or more
Unrestricted Global Notes in an aggregate principal amount equal to the
aggregate principal amount of beneficial interests transferred pursuant to
subparagraph (B) or (D) above.
Beneficial interests in an Unrestricted Global Note cannot be
exchanged for, or transferred to Persons who take delivery thereof in the form
of, a beneficial interest in a Restricted Global Note.
(c) TRANSFER OR EXCHANGE OF BENEFICIAL INTERESTS FOR
DEFINITIVE NOTES.
(i) BENEFICIAL INTERESTS IN RESTRICTED GLOBAL NOTES TO
RESTRICTED DEFINITIVE NOTES. If any holder of a beneficial interest in a
Restricted Global Note proposes to exchange such beneficial interest for
a Restricted Definitive Note or to transfer such beneficial interest to
a Person who takes delivery thereof in the form of a Restricted
Definitive Note, then, upon receipt by the Registrar of the following
documentation:
(A) if the holder of such beneficial interest in a
Restricted Global Note proposes to exchange such beneficial
interest for a Restricted Definitive Note, a certificate from
such holder in the form of EXHIBIT C, including the
certifications in item (2)(a) thereof;
(B) if such beneficial interest is being transferred
to a QIB in accordance with Rule 144A under the Securities Act,
a certificate to the effect set forth in EXHIBIT B, including
the certifications in item (1) thereof;
38
(C) [INTENTIONALLY OMITTED];
(D) [INTENTIONALLY OMITTED];
(E) if such beneficial interest is being transferred
to an Institutional Accredited Investor in reliance on an
exemption from the registration requirements of the Securities
Act other than that listed in subparagraph (B) above, a
certificate to the effect set forth in EXHIBIT B hereto,
including the certifications, certificates and Opinion of
Counsel required by item (3) thereof, if applicable; or
(F) if such beneficial interest is being transferred
to the Company or any of its Subsidiaries, a certificate to the
effect set forth in EXHIBIT B, including the certifications in
item (3)(a) thereof,
the Trustee shall cause the aggregate principal amount of the applicable
Global Note to be reduced accordingly pursuant to Section 2.07(i)
hereof, and the Company shall execute and the Trustee shall authenticate
and deliver to the Person designated in the instructions a Definitive
Note in the appropriate principal amount. Any Definitive Note issued in
exchange for a beneficial interest in a Restricted Global Note pursuant
to this Section 2.07(c) shall be registered in such name or names and in
such authorized denomination or denominations as the holder of such
beneficial interest shall instruct the Registrar through instructions
from the Depositary and the Participant or Indirect Participant. The
Trustee shall deliver such Definitive Notes to the Persons in whose
names such Notes are so registered. Any Definitive Note issued in
exchange for a beneficial interest in a Restricted Global Note pursuant
to this Section 2.07(c)(i) shall bear the Private Placement Legend and
shall be subject to all restrictions on transfer contained therein.
(ii) BENEFICIAL INTERESTS IN LEGENDED REGULATION S GLOBAL
NOTE TO DEFINITIVE NOTES. A beneficial interest in the Legended
Regulation S Global Note may not be exchanged for a Definitive Note or
transferred to a Person who takes delivery thereof in the form of a
Definitive Note prior to the expiration of the Restricted Period, except
in the case of a transfer pursuant to an exemption from the registration
requirements of the Securities Act other than Rule 903 or Rule 904.
(iii) BENEFICIAL INTERESTS IN RESTRICTED GLOBAL NOTES TO
UNRESTRICTED DEFINITIVE NOTES. A holder of a beneficial interest in a
Restricted Global Note may exchange such beneficial interest for an
Unrestricted Definitive Note or may transfer such beneficial interest to
a Person who takes delivery thereof in the form of an Unrestricted
Definitive Note only if:
(A) such exchange or transfer is effected pursuant
to the Exchange Offer in accordance with the Registration Rights
Agreement and the holder of such beneficial interest, in the
case of an exchange, or the transferee, in the case of a
transfer, certifies in the applicable Letter of Transmittal that
(1) it is not an affiliate (as defined in Rule 144) of the
Company, (2) it is not engaged in, and
39
does not intend to engage in, and has no arrangement or
understanding with any Person to participate in, a distribution
of the Exchange Notes to be issued in the Exchange Offer and (3)
it is acquiring the Exchange Notes in its ordinary course of
business;
(B) such transfer is effected pursuant to the Shelf
Registration Statement in accordance with the Registration
Rights Agreement;
(C) such transfer is effected by a Broker-Dealer
pursuant to the Exchange Offer Registration Statement in
accordance with the Registration Rights Agreement; or
(D) the Registrar receives the following:
(1) if the holder of such beneficial
interest in a Restricted Global Note proposes to
exchange such beneficial interest for a Definitive Note
that does not bear the Private Placement Legend, a
certificate from such Holder in the form of EXHIBIT C,
including the certifications in item (1)(b) thereof; or
(2) if the holder of such beneficial
interest in a Restricted Global Note proposes to
transfer such beneficial interest to a Person who shall
take delivery thereof in the form of a Definitive Note
that does not bear the Private Placement Legend, a
certificate from such Holder in the form of EXHIBIT B,
including the certifications in item (4) thereof;
and, in each such case set forth in this subparagraph (D), if
the Registrar or the Company so requests or if the Applicable
Procedures so require, an opinion of counsel in form reasonably
acceptable to the Registrar and the Company to the effect that
such exchange or transfer is in compliance with the Securities
Act and that the restrictions on transfer contained herein and
in the Private Placement Legend are no longer required in order
to maintain compliance with the Securities Act.
(iv) BENEFICIAL INTERESTS IN UNRESTRICTED GLOBAL NOTES TO
UNRESTRICTED DEFINITIVE NOTES. If any holder of a beneficial interest in
an Unrestricted Global Note proposes to exchange such beneficial
interest for a Definitive Note or to transfer such beneficial interest
to a Person who takes delivery thereof in the form of a Definitive Note,
then, upon satisfaction of the conditions set forth in Section
2.07(b)(ii), the Trustee shall cause the aggregate principal amount of
the applicable Global Note to be reduced accordingly pursuant to Section
2.07(i), and the Company shall execute and the Trustee shall
authenticate and deliver to the Person designated in the instructions a
Definitive Note in the appropriate principal amount. Any Definitive Note
issued in exchange for a beneficial interest pursuant to this Section
2.07(c)(iv) shall be registered in such name or names and in such
authorized denomination or denominations as the holder of such
beneficial interest shall instruct the Registrar through instructions
from the Depositary and the Participant or Indirect Participant. The
Trustee shall deliver such Definitive
40
Notes to the Persons in whose names such Notes are so registered. Any
Definitive Note issued in exchange for a beneficial interest pursuant to
this Section 2.07(c)(iv) shall not bear the Private Placement Legend.
(d) TRANSFER AND EXCHANGE OF DEFINITIVE NOTES FOR BENEFICIAL
INTERESTS.
(i) RESTRICTED DEFINITIVE NOTES TO BENEFICIAL INTERESTS IN
RESTRICTED GLOBAL NOTES. If any Holder of a Restricted Definitive Note
proposes to exchange such Note for a beneficial interest in a Restricted
Global Note or to transfer such Restricted Definitive Notes to a Person
who takes delivery thereof in the form of a beneficial interest in a
Restricted Global Note, then, upon receipt by the Registrar of the
following documentation:
(A) if the Holder of such Restricted Definitive Note
proposes to exchange such Note for a beneficial interest in a
Restricted Global Note, a certificate from such Holder in the
form of EXHIBIT C, including the certifications in item (2)(b)
thereof;
(B) if such Restricted Definitive Note is being
transferred to a QIB in accordance with Rule 144A, a certificate
to the effect set forth in EXHIBIT B, including the
certifications in item (1) thereof;
(C) if such Restricted Definitive Note is being
transferred to a Non-U.S. Person in an "OFFSHORE TRANSACTION" in
accordance with Rule 903 or Rule 904, a certificate to the
effect set forth in EXHIBIT B, including the certifications in
item (2) thereof; or
(D) if such Restricted Definitive Note is being
transferred to the Company or any of its Subsidiaries, a
certificate to the effect set forth in EXHIBIT B, including the
certifications in item (3)(a) thereof,
the Trustee shall cancel the Restricted Definitive Note, and increase or
cause to be increased the aggregate principal amount of, in the case of
clause (A) above, the appropriate Restricted Global Note, in the case of
clause (B) above, the 144A Global Note, and in the case of clause (C)
above, the Regulation S Global Note.
(ii) RESTRICTED DEFINITIVE NOTES TO BENEFICIAL INTERESTS IN
UNRESTRICTED GLOBAL NOTES. A Holder of a Restricted Definitive Note may
exchange such Note for a beneficial interest in an Unrestricted Global
Note or transfer such Restricted Definitive Note to a Person who takes
delivery thereof in the form of a beneficial interest in an Unrestricted
Global Note only if:
(A) such exchange or transfer is effected pursuant
to the Exchange Offer in accordance with the Registration Rights
Agreement and the Holder, in the case of an exchange, or the
transferee, in the case of a transfer, certifies in the
applicable Letter of Transmittal (1) it is not an affiliate (as
defined in Rule 144) of the Company, (2) it is not engaged in,
and does not intend to engage in, and has no arrangement or
understanding with any Person to participate in, a distribution
41
of the Exchange Notes to be issued in the Exchange Offer and (3)
it is acquiring the Exchange Notes in its ordinary course of
business;
(B) such transfer is effected pursuant to the Shelf
Registration Statement in accordance with the Registration
Rights Agreement;
(C) such transfer is effected by a Broker-Dealer
pursuant to the Exchange Offer Registration Statement in
accordance with the Registration Rights Agreement; or
(D) the Registrar receives the following:
(1) if the Holder of such Restricted
Definitive Note proposes to exchange such Note for a
beneficial interest in the Unrestricted Global Note, a
certificate from such Holder in the form of EXHIBIT C,
including the certifications in item (1)(c) thereof; or
(2) if the Holder of such Restricted
Definitive Note proposes to transfer such Note to a
Person who shall take delivery thereof in the form of a
beneficial interest in the Unrestricted Global Note, a
certificate from such Holder in the form of EXHIBIT B,
including the certifications in item (4) thereof;
and, in each such case set forth in this subparagraph (D), if
the Registrar or the Company so requests or if the Applicable
Procedures so require, an opinion of counsel in form reasonably
acceptable to the Registrar and the Company to the effect that
such exchange or transfer is in compliance with the Securities
Act and that the restrictions on transfer contained herein and
in the Private Placement Legend are no longer required in order
to maintain compliance with the Securities Act.
Upon satisfaction of the conditions of any of the subparagraphs
in this Section 2.07(d)(ii), the Trustee shall cancel the Definitive
Notes and increase or cause to be increased the aggregate principal
amount of the Unrestricted Global Note.
(iii) UNRESTRICTED DEFINITIVE NOTES TO BENEFICIAL INTERESTS IN
UNRESTRICTED GLOBAL NOTES. A Holder of an Unrestricted Definitive Note
may exchange such Note for a beneficial interest in an Unrestricted
Global Note or transfer such Unrestricted Definitive Note to a Person
who takes delivery thereof in the form of a beneficial interest in an
Unrestricted Global Note at any time. Upon receipt of a request for such
an exchange or transfer, the Trustee shall cancel the applicable
Unrestricted Definitive Note and increase or cause to be increased the
aggregate principal amount of one of the Unrestricted Global Notes.
If any such exchange or transfer from a Definitive Note to a
beneficial interest is effected pursuant to subparagraphs (ii)(B), (ii)(D) or
(iii) above at a time when an Unrestricted Global Note has not yet been issued,
the Company shall issue and, upon receipt of an Authentication Order in
accordance with Section 2.02 hereof, the Trustee shall authenticate one
42
or more Unrestricted Global Notes in an aggregate principal amount equal to the
principal amount of Definitive Notes so transferred.
(e) TRANSFER AND EXCHANGE OF DEFINITIVE NOTES FOR DEFINITIVE
NOTES. Upon request by a Holder of Definitive Notes and such Holder's compliance
with the provisions of this Section 2.07(e), the Registrar shall register the
transfer or exchange of Definitive Notes. Prior to such registration of transfer
or exchange, the requesting Holder shall present or surrender to the Registrar
the Definitive Notes duly endorsed or accompanied by a written instruction of
transfer in form satisfactory to the Registrar duly executed by such Holder or
by its attorney, duly authorized in writing. In addition, the requesting Holder
shall provide any additional certifications, documents and information, as
applicable, required pursuant to the following provisions of this Section
2.07(e).
(i) RESTRICTED DEFINITIVE NOTES TO RESTRICTED DEFINITIVE
NOTES. Any Restricted Definitive Note may be transferred to and
registered in the name of Persons who take delivery thereof in the form
of a Restricted Definitive Note if the Registrar receives the following:
(A) if the transfer shall be made pursuant to Rule
144A under the Securities Act, then the transferor must deliver
a certificate in the form of EXHIBIT B, including the
certifications in item (1) thereof;
(B) [INTENTIONALLY OMITTED]; and
(C) if the transfer shall be made pursuant to any
other exemption from the registration requirements of the
Securities Act, then the transferor must deliver a certificate
in the form of EXHIBIT B, including the certifications,
certificates and Opinion of Counsel required by item (3)
thereof, if applicable.
(ii) RESTRICTED DEFINITIVE NOTES TO UNRESTRICTED DEFINITIVE
NOTES. Any Restricted Definitive Note may be exchanged by the Holder
thereof for an Unrestricted Definitive Note or transferred to a Person
or Persons who take delivery thereof in the form of an Unrestricted
Definitive Note if:
(A) such exchange or transfer is effected pursuant
to the Exchange Offer in accordance with the Registration Rights
Agreement and the Holder, in the case of an exchange, or the
transferee, in the case of a transfer, certifies in the
applicable Letter of Transmittal that (1) it is not an affiliate
(as defined in Rule 144) of the Company, (2) it is not engaged
in, and does not intend to engage in, and has no arrangement or
understanding with any Person to participate in, a distribution
of the Exchange Notes to be issued in the Exchange Offer and (3)
it is acquiring the Exchange Notes in its ordinary course of
business;
(B) any such transfer is effected pursuant to the
Shelf Registration Statement in accordance with the Registration
Rights Agreement;
43
(C) any such transfer is effected by a Broker-Dealer
pursuant to the Exchange Offer Registration Statement in
accordance with the Registration Rights Agreement; or
(D) the Registrar receives the following:
(1) if the Holder of such Restricted
Definitive Note proposes to exchange such Note for an
Unrestricted Definitive Note, a certificate from such
Holder in the form of EXHIBIT C, including the
certifications in item (1)(d) thereof; or
(2) if the Holder of such Restricted
Definitive Note proposes to transfer such Note to a
Person who shall take delivery thereof in the form of an
Unrestricted Definitive Note, a certificate from such
Holder in the form of EXHIBIT B, including the
certifications in item (4) thereof;
and, in each such case set forth in this subparagraph (D), if
the Registrar so requests, an opinion of counsel in form
reasonably acceptable to the Company to the effect that such
exchange or transfer is in compliance with the Securities Act
and that the restrictions on transfer contained herein and in
the Private Placement Legend are no longer required in order to
maintain compliance with the Securities Act.
(iii) UNRESTRICTED DEFINITIVE NOTES TO UNRESTRICTED DEFINITIVE
NOTES. A Holder of Unrestricted Definitive Notes may transfer such Notes
to a Person who takes delivery thereof in the form of an Unrestricted
Definitive Note. Upon receipt of a request to register such a transfer,
the Registrar shall register the Unrestricted Definitive Notes pursuant
to the instructions from the Holder thereof.
(f) EXCHANGE OFFER. Upon the occurrence of the Exchange
Offer in accordance with the Registration Rights Agreement, the Company shall
issue and, upon receipt of an Authentication Order in accordance with Section
2.02, the Trustee shall authenticate (i) one or more Unrestricted Global Notes
in an aggregate principal amount equal to the principal amount of the beneficial
interests in the Restricted Global Notes tendered for acceptance by Persons that
certify in the applicable Letters of Transmittal that (x) they are not
affiliates (as defined in Rule 144) of the Company, (y) they are not engaged in,
and do not intend to engage in, and have no arrangement or understanding with
any Person to participate in, a distribution of the Exchange Notes to be issued
in the Exchange Offer and (z) they are acquiring the Exchange Notes in their
ordinary course of business and (ii) Unrestricted Definitive Notes in an
aggregate principal amount equal to the principal amount of the Restricted
Definitive Notes accepted for exchange in the Exchange Offer. Concurrently with
the issuance of such Notes, the Trustee shall cause the aggregate principal
amount of the applicable Restricted Global Notes to be reduced accordingly, and
the Company shall execute and the Trustee shall authenticate and deliver to the
Persons designated by the Holders of Restricted Global Notes so accepted
Unrestricted Global Notes in the appropriate principal amount.
44
(g) LEGENDS. The following legends shall appear on the face
of all Global Notes and Definitive Notes issued under this Indenture unless
specifically stated otherwise in the applicable provisions of this Indenture.
(i) PRIVATE PLACEMENT LEGEND. Except as permitted below,
each Global Note and each Definitive Note (and all Notes issued in
exchange therefor or substitution thereof) shall bear the legend in
substantially the following form:
THIS NOTE AND THE GUARANTEES ENDORSED HEREON HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
"SECURITIES ACT"), OR ANY STATE SECURITIES LAWS. NEITHER THIS
NOTE NOR THE GUARANTEES ENDORSED HEREON NOR ANY INTEREST OR
PARTICIPATION HEREIN MAY BE OFFERED, SOLD, ASSIGNED,
TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE
ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS
EXEMPT FROM, OR NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF
THE SECURITIES ACT. THE HOLDER OF THIS NOTE AND THE GUARANTEES
ENDORSED HEREON BY ITS ACCEPTANCE HEREOF AGREES TO OFFER, SELL
OR OTHERWISE TRANSFER SUCH SECURITY, PRIOR TO THE DATE WHICH IS
TWO YEARS AFTER THE LATER OF THE ORIGINAL ISSUE DATE HEREOF AND
THE LAST DATE ON WHICH THE COMPANY OR ANY AFFILIATE OF THE
COMPANY WAS THE OWNER OF THIS NOTE AND THE GUARANTEES ENDORSED
HEREON (OR ANY PREDECESSOR OF THIS NOTE AND THE GUARANTEES
ENDORSED HEREON) (THE "RESALE RESTRICTION TERMINATION DATE")
ONLY (A) TO THE COMPANY OR ANY SUBSIDIARY THEREOF, (B) PURSUANT
TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT,
(C) FOR SO LONG AS THE NOTES ARE ELIGIBLE FOR RESALE PURSUANT TO
RULE 144A UNDER THE SECURITIES ACT ("RULE 144A"), TO A PERSON IT
REASONABLY BELIEVES IS A "QUALIFIED INSTITUTIONAL BUYER" AS
DEFINED IN RULE 144A THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR
THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS
GIVEN THAT THE TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A,
(D) PURSUANT TO OFFERS AND SALES TO NON-U.S. PERSONS THAT OCCUR
OUTSIDE THE UNITED STATES WITHIN THE MEANING OF REGULATION S
UNDER THE SECURITIES ACT OR (E) PURSUANT TO ANOTHER AVAILABLE
EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES
ACT, SUBJECT TO THE COMPANY'S AND THE TRUSTEE'S RIGHT PRIOR TO
ANY SUCH OFFER, SALE OR TRANSFER (i) PURSUANT TO CLAUSE (D)
PRIOR TO THE END OF THE 40 DAY DISTRIBUTION COMPLIANCE PERIOD
WITHIN THE MEANING OF REGULATION S UNDER THE SECURITIES ACT OR
PURSUANT TO CLAUSE (E) PRIOR TO THE RESALE RESTRICTION
TERMINATION DATE TO REQUIRE THE DELIVERY OF AN OPINION OF
COUNSEL,
45
CERTIFICATION AND/OR OTHER INFORMATION SATISFACTORY TO EACH OF
THEM, AND (ii) IN EACH OF THE FOREGOING CASES, TO REQUIRE THAT A
CERTIFICATE OF TRANSFER IN THE FORM APPEARING ON THIS NOTE IS
COMPLETED AND DELIVERED BY THE TRANSFEROR TO THE TRUSTEE. THIS
LEGEND WILL BE REMOVED UPON THE REQUEST OF A HOLDER AFTER THE
RESALE RESTRICTION TERMINATION DATE.
Notwithstanding the foregoing, any Global Note or Definitive
Note issued pursuant to subparagraph (b)(iv), (c)(iii), (c)(iv),
(d)(ii), (d)(iii), (e)(ii), (e)(iii) or (f) to this Section 2.07 (and
all Notes issued in exchange therefor or substitution thereof) shall not
bear the Private Placement Legend.
(ii) GLOBAL NOTE LEGEND. Each Global Note shall bear a legend
in substantially the following form:
THIS GLOBAL NOTE IS HELD BY THE DEPOSITARY (AS DEFINED IN THE
INDENTURE GOVERNING THIS NOTE) OR ITS NOMINEE IN CUSTODY FOR THE
BENEFIT OF THE BENEFICIAL OWNERS HEREOF, AND IS NOT TRANSFERABLE
TO ANY PERSON UNDER ANY CIRCUMSTANCES EXCEPT THAT (I) THE
TRUSTEE MAY MAKE SUCH NOTATIONS HEREON AS MAY BE REQUIRED
PURSUANT TO SECTION 2.07 OF THE INDENTURE, (II) THIS GLOBAL NOTE
MAY BE EXCHANGED IN WHOLE BUT NOT IN PART PURSUANT TO SECTION
2.07(a) OF THE INDENTURE, (III) THIS GLOBAL NOTE MAY BE
DELIVERED TO THE TRUSTEE FOR CANCELLATION PURSUANT TO SECTION
2.12 OF THE INDENTURE AND (IV) THIS GLOBAL NOTE MAY BE
TRANSFERRED TO A SUCCESSOR DEPOSITARY WITH THE PRIOR WRITTEN
CONSENT OF THE COMPANY.
(h) REGULATION S GLOBAL NOTE LEGEND. The Regulation S Global
Note shall bear a legend in substantially the following form:
THE RIGHTS ATTACHING TO THIS REGULATION S GLOBAL NOTE, AND THE
CONDITIONS AND PROCEDURES GOVERNING ITS EXCHANGE FOR
CERTIFICATED NOTES, ARE AS SPECIFIED IN THE INDENTURE (AS
DEFINED HEREIN).
(i) CANCELLATION AND/OR ADJUSTMENT OF GLOBAL NOTES. At such
time as all beneficial interests in a particular Global Note have been exchanged
for Definitive Notes or a particular Global Note has been redeemed, repurchased
or canceled in whole and not in part, each such Global Note shall be returned to
or retained and canceled by the Trustee in accordance with Section 2.12 hereof.
At any time prior to such cancellation, if any beneficial interest in a Global
Note is exchanged for or transferred to a Person who shall take delivery thereof
in the form of a beneficial interest in another Global Note or for Definitive
Notes, the principal amount of Notes represented by such Global Note shall be
reduced accordingly and an endorsement shall be made on such Global Note by the
Trustee or by the Depositary at the direction of the Trustee
46
to reflect such reduction; and if the beneficial interest is being exchanged for
or transferred to a Person who shall take delivery thereof in the form of a
beneficial interest in another Global Note, such other Global Note shall be
increased accordingly and an endorsement shall be made on such Global Note by
the Trustee or by the Depositary at the direction of the Trustee to reflect such
increase.
(j) GENERAL PROVISIONS RELATING TO TRANSFERS AND EXCHANGES.
(i) To permit registrations of transfers and exchanges, the
Company shall execute and the Trustee shall authenticate Global Notes
and Definitive Notes upon the Company's order or at the Registrar's
request.
(ii) No service charge shall be made to a Holder of a
beneficial interest in a Global Note or to a Holder of a Definitive Note
for any registration of transfer or exchange, but the Company may
require payment of a sum sufficient to cover any transfer tax or similar
governmental charge payable in connection therewith (other than any such
transfer taxes or similar governmental charge payable upon exchange or
transfer pursuant to Sections 2.11, 3.06, 3.08, 4.10, 4.14 and 9.05).
(iii) The Registrar shall not be required to register the
transfer of or exchange any Note selected for redemption in whole or in
part, except the unredeemed portion of any Note being redeemed in part.
(iv) All Global Notes and Definitive Notes issued upon any
registration of transfer or exchange of Global Notes or Definitive Notes
shall be the valid and legally binding obligations of the Company,
evidencing the same debt, and entitled to the same benefits under this
Indenture, as the Global Notes or Definitive Notes surrendered upon such
registration of transfer or exchange.
(v) The Company shall not be required (A) to issue, to
register the transfer of or to exchange any Notes during a period
beginning at the opening of business 15 days before the day of any
selection of Notes for redemption under Section 3.02 and ending at the
close of business on the day of selection, (B) to register the transfer
of or to exchange any Note so selected for redemption in whole or in
part, except the unredeemed portion of any Note being redeemed in part,
(C) to register the transfer of or to exchange a Note between a record
date and the next succeeding interest payment date or (D) to register
the transfer of or to exchange a Note tendered and not withdrawn in
connection with a Change of Control Offer or an Asset Sale Offer.
(vi) Prior to due presentment for the registration of a
transfer of any Note, the Trustee, any Agent and the Company may deem
and treat the Person in whose name any Note is registered as the
absolute owner of such Note for the purpose of receiving payment of
principal of and interest on such Notes and for all other purposes, and
none of the Trustee, any Agent or the Company shall be affected by
notice to the contrary.
(vii) The Trustee shall authenticate Global Notes and
Definitive Notes in accordance with the provisions of Section 2.02.
47
(viii) All certifications, certificates and Opinions of Counsel
required to be submitted to the Registrar pursuant to this Section 2.07
to effect a registration of transfer or exchange may be submitted by
facsimile.
Section 2.08. REPLACEMENT NOTES.
(a) If any mutilated Note is surrendered to the Trustee or
the Company and the Trustee receives evidence to its satisfaction of the
destruction, loss or theft of any Note, the Company shall issue and the Trustee,
upon receipt of an Authentication Order, shall authenticate a replacement Note
if the Trustee's requirements are met. If required by the Trustee or the
Company, an indemnity bond must be supplied by the Holder that is sufficient in
the judgment of the Trustee and the Company to protect the Company, the Trustee,
any Agent and any authenticating agent from any loss that any of them may suffer
if a Note is replaced. The Company may charge for its expenses in replacing a
Note.
(b) Every replacement Note is an additional obligation of
the Company and shall be entitled to all of the benefits of this Indenture
equally and proportionately with all other Notes duly issued hereunder.
Section 2.09. OUTSTANDING NOTES.
(a) The Notes outstanding at any time are all the Notes
authenticated by the Trustee except for those canceled by it, those delivered to
it for cancellation, those reductions in the interest in a Global Note effected
by the Trustee in accordance with the provisions hereof, and those described in
this Section as not outstanding. Except as set forth in Section 2.10, a Note
does not cease to be outstanding because the Company or an Affiliate of the
Company holds the Note; however, Notes held by the Company or a Subsidiary of
the Company shall not be deemed to be outstanding for purposes of Section
3.07(b).
(b) If a Note is replaced pursuant to Section 2.08, it
ceases to be outstanding unless the Trustee receives proof satisfactory to it
that the replaced Note is held by a bona fide purchaser or protected purchaser.
(c) If the principal amount of any Note is considered paid
under Section 4.01, it ceases to be outstanding and interest on it ceases to
accrue.
(d) If the Paying Agent (other than the Company, a
Subsidiary of the Company or an Affiliate of any of the foregoing) holds, on a
redemption date or maturity date, money sufficient to pay Notes payable on that
date, then on and after that date such Notes shall be deemed to be no longer
outstanding and shall cease to accrue interest.
Section 2.10. TREASURY NOTES.
In determining whether the Holders of the required principal
amount of Notes have concurred in any direction, waiver or consent, Notes owned
by the Company, or by any Person directly or indirectly controlling or
controlled by or under direct or indirect common control with the Company, shall
be considered as though not outstanding, except that for the
48
purposes of determining whether the Trustee shall be protected in relying on any
such direction, waiver or consent, only Notes that the Trustee knows are so
owned shall be so disregarded.
Section 2.11. TEMPORARY NOTES.
(a) Until certificates representing Notes are ready for
delivery, the Company may prepare and the Trustee, upon receipt of an
Authentication Order, shall authenticate temporary Notes. Temporary Notes shall
be substantially in the form of Definitive Notes but may have variations that
the Company considers appropriate for temporary Notes and as shall be reasonably
acceptable to the Trustee. Without unreasonable delay, the Company shall prepare
and the Trustee shall authenticate definitive Notes in exchange for temporary
Notes.
(b) Holders of temporary Notes shall be entitled to all of
the benefits of this Indenture.
Section 2.12. CANCELLATION.
The Company at any time may deliver Notes to the Trustee for
cancellation. The Registrar and Paying Agent shall forward to the Trustee any
Notes surrendered to them for registration of transfer, exchange or payment. The
Trustee and no one else shall cancel all Notes surrendered for registration of
transfer, exchange, payment, replacement or cancellation and shall dispose of
canceled Notes in accordance with its procedures for the disposition of canceled
securities in effect as of the date of such disposition (subject to the record
retention requirement of the Exchange Act). Certification of the disposition of
all canceled Notes shall be delivered to the Company. The Company may not issue
new Notes to replace Notes that it has paid or that have been delivered to the
Trustee for cancellation.
Section 2.13. DEFAULTED INTEREST.
If the Company defaults in a payment of interest on the Notes,
it shall pay the defaulted interest in any lawful manner plus, to the extent
lawful, interest payable on the defaulted interest, to the Persons who are
Holders on a subsequent special record date, in each case at the rate provided
in the Notes and in Section 4.01. The Company shall notify the Trustee in
writing of the amount of defaulted interest proposed to be paid on each Note and
the date of the proposed payment. The Company shall fix or cause to be fixed
each such special record date and payment date, PROVIDED that no such special
record date shall be less than 10 days prior to the related payment date for
such defaulted interest. At least 15 days before the special record date, the
Company (or, upon the written request of the Company, the Trustee in the name
and at the expense of the Company) shall mail or cause to be mailed to Holders a
notice that states the special record date, the related payment date and the
amount of such interest to be paid.
Section 2.14. CUSIP NUMBERS.
The Company in issuing the Notes may use "CUSIP" numbers (if
then generally in use), and, if so, the Trustee shall use "CUSIP" numbers in
notices of redemption as a convenience to Holders; PROVIDED that any such notice
may state that no representation is made as to the correctness of such numbers
either as printed on the Notes or as contained in any notice of a redemption and
that reliance may be placed only on the other identification numbers printed
49
on the Notes, and any such redemption shall not be affected by any defect in or
omission of such numbers. The Company shall promptly notify the Trustee of any
change in the "CUSIP" numbers.
ARTICLE THREE
REDEMPTION AND OFFERS TO
PURCHASE
Section 3.01. NOTICES TO TRUSTEE.
If the Company elects to redeem Notes pursuant to the optional
redemption provisions of Section 3.07, it shall furnish to the Trustee, at least
30 days but not more than 60 days before a redemption date, an Officers'
Certificate setting forth (i) the clause of this Indenture pursuant to which the
redemption shall occur, (ii) the redemption date, (iii) the principal amount of
Notes to be redeemed and (iv) the redemption price.
Section 3.02. SELECTION OF NOTES TO BE REDEEMED.
(a) If less than all of the Notes are to be redeemed at any
time, the Trustee shall select the Notes to be redeemed among the Holders of the
Notes in compliance with the requirements of the principal national securities
exchange, if any, on which the Notes are listed or, if the Notes are not so
listed, on a PRO RATA basis, by lot or in accordance with any other method the
Trustee shall deem fair and appropriate. In the event of partial redemption by
lot, the particular Notes to be redeemed shall be selected, unless otherwise
provided herein, not less than 30 nor more than 60 days prior to the redemption
date by the Trustee from the outstanding Notes not previously called for
redemption.
(b) The Trustee shall promptly notify the Company in writing
of the Notes selected for redemption and, in the case of any Note selected for
partial redemption, the principal amount at maturity thereof to be redeemed. No
Notes in amounts of $1,000 or less shall be redeemed in part. Notes and portions
of Notes selected shall be in amounts of $1,000 or whole multiples of $1,000;
except that if all of the Notes of a Holder are to be redeemed, the entire
outstanding amount of Notes held by such Holder, even if not a multiple of
$1,000, shall be redeemed. Except as provided in the preceding sentence,
provisions of this Indenture that apply to Notes called for redemption also
apply to portions of Notes called for redemption.
Section 3.03. NOTICE OF REDEMPTION.
(a) At least 30 days (or in the case of a Special
Redemption, five Business Days) but not more than 60 days before a redemption
date, the Company shall mail or cause to be mailed, by first class mail, a
notice of redemption to each Holder whose Notes are to be redeemed at its
registered address, except that redemption notices may be mailed more than 60
days prior to a redemption date if the notice is issued in connection with a
defeasance of the Notes or a satisfaction and discharge of this Indenture.
The notice shall identify the Notes to be redeemed and shall
state:
(i) the redemption date;
50
(ii) the redemption price;
(iii) if any Note is being redeemed in part, the portion of
the principal amount at maturity of such Note to be redeemed and that,
after the redemption date upon surrender of such Note, a new Note or
Notes in principal amount equal to the unredeemed portion of the
original Note shall be issued in the name of the Holder thereof upon
cancellation of the original Note;
(iv) the name and address of the Paying Agent;
(v) that Notes called for redemption must be surrendered to
the Paying Agent to collect the redemption price and become due on the
date fixed for redemption;
(vi) that, unless the Company defaults in making such
redemption payment, interest, if any, on Notes called for redemption
ceases to accrue on and after the redemption date;
(vii) the paragraph of the Notes and/or Section of this
Indenture pursuant to which the Notes called for redemption are being
redeemed; and
(viii) that no representation is made as to the correctness or
accuracy of the CUSIP number, if any, listed in such notice or printed
on the Notes.
(b) At the Company's request, the Trustee shall give the
notice of redemption in the Company's name and at its expense; PROVIDED,
HOWEVER, that the Company shall have delivered to the Trustee, at least 45 days
(or with respect to a Special Redemption pursuant to Section 3.09(b), at least 8
days) prior to the redemption date, an Officers' Certificate requesting that the
Trustee give such notice and setting forth the information to be stated in such
notice as provided in the preceding paragraph. The notice, if mailed in the
manner provided herein shall be presumed to have been given, whether or not the
Holder receives such notice.
Section 3.04. EFFECT OF NOTICE OF REDEMPTION.
Once notice of redemption is mailed in accordance with Section
3.03 hereof, Notes called for redemption become irrevocably due and payable on
the redemption date at the redemption price. Interest, if any, on Notes called
for redemption ceases to accrue on and after the redemption date, unless the
Company defaults in making the applicable redemption payment. A notice of
redemption may not be conditional.
Section 3.05. DEPOSIT OF REDEMPTION PRICE.
(a) Not later than 12:00 p.m. (noon) Eastern Time on the
redemption date, the Company shall deposit with the Trustee or with the Paying
Agent money sufficient to pay the redemption price of and accrued and unpaid
interest and Liquidated Damages, if any, on all Notes to be redeemed on that
date (or in the case of a Special Redemption, the difference between the amount
of collateral available to the Collateral Agent for the Special Redemption and
the amount required for the Special Redemption, in accordance with the terms of
the Pledge Agreement). The Trustee or the Paying Agent shall promptly return to
the Company any money
51
deposited with the Trustee or the Paying Agent by the Company in excess of the
amounts necessary to pay the redemption price of, and accrued and unpaid
interest on, all Notes to be redeemed.
(b) If the Company complies with the provisions of the
preceding paragraph, on and after the redemption date, interest shall cease to
accrue on the Notes or the portions of Notes called for redemption. If a Note is
redeemed on or after an interest record date but on or prior to the related
interest payment date, then any accrued and unpaid interest shall be paid to the
Person in whose name such Note was registered at the close of business on such
record date. If any Note called for redemption shall not be so paid upon
surrender for redemption because of the failure of the Company to comply with
the preceding paragraph, interest shall be paid on the unpaid principal from the
redemption date until such principal is paid and to the extent lawful on any
interest not paid on such unpaid principal, in each case at the rate provided in
the Notes and in Section 4.01.
Section 3.06. NOTES REDEEMED IN PART.
Upon surrender and cancellation of a Note that is redeemed in
part, the Company shall issue and the Trustee shall authenticate for the Holder
at the expense of the Company a new Note equal in principal amount to the
unredeemed portion of the Note surrendered. No Notes in denominations of $1,000
or less shall be redeemed in part.
Section 3.07. OPTIONAL REDEMPTION.
(a) Except as set forth in clause (b) of this Section 3.07,
the Company shall not have the option to redeem the Notes pursuant to this
Section 3.07 prior to February 15, 2009. On or after February 15, 2009, the
Company may redeem all or a part of the Notes upon not less than 30 nor more
than 60 days' notice, at the redemption prices (expressed as percentages of
principal amount) set forth below plus accrued and unpaid interest and
Liquidated Damages, if any, thereon, to the applicable redemption date, if
redeemed during the twelve-month period beginning on February 15 of the years
indicated below:
YEAR PERCENTAGE
---- ----------
2009 ............................... 104.250%
2010 ............................... 102.833%
2011 ............................... 101.417%
2012 and thereafter ................ 100.000%
(b) At any time prior to February 15, 2007, the Company may,
on any one or more occasions, redeem up to 35% of the aggregate principal amount
of Notes issued hereunder (including any Additional Notes) at a redemption price
of 108.5% of the principal amount thereof, plus accrued and unpaid interest and
Liquidated Damages, if any, thereon to the applicable redemption date, with the
net cash proceeds of one or more Qualified Equity
52
Offerings; PROVIDED that (1) at least 65% of the aggregate principal amount of
Notes issued under this Indenture (including any Additional Notes) remains
outstanding immediately after the occurrence of such redemption, excluding Notes
held by the Company and its Subsidiaries; and (2) the redemption must occur
within 90 days of the date of the closing of such Qualified Equity Offering.
(c) Any redemption pursuant to this Section 3.07 shall be
made in accordance with the provisions of Sections 3.01 through 3.06.
Section 3.08. REPURCHASE OFFERS.
In the event that, pursuant to Section 4.10 or Section 4.14, the
Company shall be required to commence an offer to all Holders to purchase all or
a portion of their respective Notes (a "REPURCHASE OFFER"), it shall follow the
procedures specified in such Sections and, to the extent not inconsistent
therewith, the procedures specified below.
The Repurchase Offer shall remain open for a period of no less
than 30 days and no more than 60 days following its commencement, except to the
extent that a longer period is required by applicable law (the "OFFER PERIOD").
No later than three Business Days after the termination of the Offer Period (the
"PURCHASE DATE"), the Company shall purchase the principal amount of Notes
required to be purchased pursuant to Section 4.10 or 4.14 hereof (the "OFFER
AMOUNT") or, if less than the Offer Amount has been tendered, all Notes tendered
in response to the Repurchase Offer. Payment for any Notes so purchased shall be
made in the same manner as interest payments are made.
If the Purchase Date is on or after an interest record date and
on or before the related interest payment date, any accrued and unpaid interest
shall be paid to the Person in whose name a Note is registered at the close of
business on such record date, and no additional interest shall be payable to
Holders who tender Notes pursuant to the Repurchase Offer.
Upon the commencement of a Repurchase Offer, the Company shall
send, by first class mail, a notice to the Trustee and each of the Holders, with
a copy to the Trustee. The notice shall contain all instructions and materials
necessary to enable such Holders to tender Notes pursuant to the Repurchase
Offer. The Repurchase Offer shall be made to all Holders. The notice, which
shall govern the terms of the Repurchase Offer, shall state:
(i) that the Repurchase Offer is being made pursuant to this
Section 3.08 and Section 4.10 or Section 4.14 hereof, and the length of
time the Repurchase Offer shall remain open;
(ii) the Offer Amount, the purchase price and the Purchase
Date;
(iii) that any Note not tendered or accepted for payment shall
continue to accrue interest and Liquidated Damages, if any;
(iv) that, unless the Company defaults in making such
payment, any Note (or portion thereof) accepted for payment pursuant to
the Repurchase Offer shall cease to accrue interest and Liquidated
Damages, if any, after the Purchase Date;
53
(v) that Holders electing to have a Note purchased pursuant
to a Repurchase Offer may elect to have Notes purchased in integral
multiples of $1,000 only;
(vi) that Holders electing to have a Note purchased pursuant
to any Repurchase Offer shall be required to surrender the Note, with
the form entitled "Option of Holder to Elect Purchase" on the reverse of
the Note completed, or transfer by book-entry transfer, to the Company,
a depositary, if appointed by the Company, or a Paying Agent at the
address specified in the notice at least three days before the Purchase
Date;
(vii) that Holders shall be entitled to withdraw their
election if the Company, the Depositary or the Paying Agent, as the case
may be, receives, not later than the expiration of the Offer Period, a
telegram, telex, facsimile transmission or letter setting forth the name
of the Holder, the principal amount of the Note the Holder delivered for
purchase and a statement that such Holder is withdrawing his election to
have such Note purchased;
(viii) that, if the aggregate amount of Notes surrendered by
Holders exceeds the Offer Amount, the Trustee shall, subject in the case
of a Repurchase Offer made pursuant to Section 4.10 to the provisions of
Section 4.10, select the Notes to be purchased on a pro rata basis (with
such adjustments as may be deemed appropriate by the Trustee so that
only Notes in denominations of $1,000, or integral multiples thereof,
shall be purchased); and
(ix) that Holders whose Notes were purchased only in part
shall be issued new Notes equal in principal amount to the unpurchased
portion of the Notes surrendered (or transferred by book-entry
transfer).
On the Purchase Date, the Company shall, to the extent lawful,
subject in the case of a Repurchase Offer made pursuant to Section 4.10 to the
provisions of Section 4.10, accept for payment on a pro rata basis to the extent
necessary, the Offer Amount of Notes (or portions thereof) tendered pursuant to
the Repurchase Offer, or if less than the Offer Amount has been tendered, all
Notes tendered, and shall deliver to the Trustee an Officers' Certificate
stating that such Notes (or portions thereof) were accepted for payment by the
Company in accordance with the terms of this Section 3.08. The Company, the
Depositary or the Paying Agent, as the case may be, shall promptly (but in any
case not later than three days after the Purchase Date) mail or deliver to each
tendering Holder an amount equal to the purchase price of Notes tendered by such
Holder, as the case may be, and accepted by the Company for purchase, and the
Company shall promptly issue a new Note. The Trustee, upon written request from
the Company shall authenticate and mail or deliver such new Note to such Holder,
in a principal amount at maturity equal to any unpurchased portion of the Note
surrendered. Any Note not so accepted shall be promptly mailed or delivered by
the Company to the respective Holder thereof. The Company shall publicly
announce the results of the Repurchase Offer on the Purchase Date.
The Company shall comply with the requirements of Rule 14e-1
under the Exchange Act and any other securities laws and regulations thereunder
to the extent such laws or regulations are applicable in connection with the
repurchase of the Notes pursuant to a
54
Repurchase Offer. To the extent that the provisions of any securities laws or
regulations conflict with Section 3.08, 4.10 or 4.14, the Company will comply
with the applicable securities laws and regulations and shall not be deemed to
have breached its obligations under Section 3.08, 4.10 or 4.14 by virtue of such
compliance.
Section 3.09. SPECIAL REDEMPTION.
(a) Except as set forth in Section 3.09(b), the Company is
not required to make mandatory redemption or sinking fund payments with respect
to the Notes.
(b) Upon receipt by the Trustee of written direction from
the Collateral Agent in accordance with the terms of the Pledge Agreement, the
Company shall be required to redeem (the "SPECIAL REDEMPTION") all outstanding
Notes at a redemption price equal to 101% of the principal amount thereof plus
accrued and unpaid interest to the date of redemption (which date shall be the
fifth Business Day after the date the notice described in the immediately
following sentence is mailed by the Trustee). The Trustee shall, no later than
the second Business Day after the date of receipt of such written direction from
the Collateral Agent, send notice of such redemption by first class mail to each
Holder.
(c) Any Special Redemption pursuant to this Section 3.09
shall be made in accordance with the provisions of Sections 3.03 through 3.05
hereof.
ARTICLE FOUR
COVENANTS
Section 4.01. PAYMENT OF NOTES.
(a) The Company shall pay or cause to be paid the principal
of, premium, if any, and interest on the Notes on the dates and in the manner
provided in the Notes. Principal, premium, if any, and interest shall be
considered paid on the date due if the Paying Agent, if other than the Company
or one of its Subsidiaries, holds as of 12:00 p.m. (noon) Eastern Time on the
due date money deposited by the Company in immediately available funds and
designated for and sufficient to pay all principal, premium, if any, and
interest then due. The Company shall pay all Liquidated Damages, if any, in the
same manner on the dates and in the amounts set forth in the Registration Rights
Agreement.
(b) The Company shall pay interest (including post-petition
interest in any proceeding under any Bankruptcy Law) on overdue principal at the
rate equal to 1% per annum in excess of the then applicable interest rate on the
Notes to the extent lawful; it shall pay interest (including post-petition
interest in any proceeding under any Bankruptcy Law) on overdue installments of
interest, and Liquidated Damages (without regard to any applicable grace period)
at the same rate to the extent lawful.
Section 4.02. MAINTENANCE OF OFFICE OR AGENCY.
(a) The Company shall maintain in the Borough of Manhattan,
The City of
New York, an office or agency (which may be an office of the Trustee
or Registrar or agent of the Trustee or Registrar) where Notes may be
surrendered for registration of transfer or for
55
exchange and where notices and demands to or upon the Company in respect of the
Notes and this Indenture may be served. The Company shall give prompt written
notice to the Trustee of the location, and any change in the location, of such
office or agency. If at any time the Company shall fail to maintain any such
required office or agency or shall fail to furnish the Trustee with the address
thereof, such presentations, surrenders, notices and demands may be made or
served at the Corporate Trust Office of the Trustee.
(b) The Company may also from time to time designate one or
more other offices or agencies where the Notes may be presented or surrendered
for any or all such purposes and may from time to time rescind such
designations; PROVIDED, HOWEVER, that no such designation or rescission shall in
any manner relieve the Company of its obligation to maintain an office or agency
in the Borough of Manhattan, The City of
New York for such purposes. The Company
shall give prompt written notice to the Trustee of any such designation or
rescission and of any change in the location of any such other office or agency.
(c) The Company hereby designates the Corporate Trust Office
of the Trustee as one such office or agency of the Company in accordance with
Section 2.04 of this Indenture.
Section 4.03. REPORTS.
(a) At all times from and after the earlier of (1) the date
of the commencement of the Exchange Offer or the effectiveness of the Shelf
Registration Statement and (2) the date that is 210 days after the Issue Date,
in either case, whether or not required by the SEC, so long as any Notes are
outstanding, the Company will prepare and furnish to the Holders of Notes,
within the time periods specified in the SEC's rules and regulations:
(i) all quarterly and annual financial information that
would be required to be contained in a filing with the SEC on Forms 10-Q
and 10-K if the Company were required to file such Forms, including a
"Management's Discussion and Analysis of Financial Condition and Results
of Operations" and, with respect to the annual information only, a
report on the annual financial statements by the Company's certified
independent accountants; and
(ii) all current reports that would be required to be filed
with the SEC on Form 8-K if the Company were required to file such
reports.
(b) Whether or not required by the SEC, the Company shall
file a copy of all of the information and reports referred to in Section
4.03(a)(i) and Section 4.03(a)(ii) with the SEC for public availability within
the time periods specified in the SEC's rules and regulations (unless the SEC
will not accept such a filing) and make such information available to securities
analysts and prospective investors upon request.
(c) If the Company has designated any of its Subsidiaries as
Unrestricted Subsidiaries, then the quarterly and annual financial information
required by this Section 4.03 shall include a reasonably detailed presentation,
either on the face of the financial statements or in the footnotes thereto, and
in "Management's Discussion and Analysis of Financial Condition and Results of
Operations," of the financial condition and results of operations of the Company
56
and its Restricted Subsidiaries separate from the financial condition and
results of operations of the Unrestricted Subsidiaries of the Company.
(d) For so long as any Notes remain outstanding, the Company
and the Guarantors shall furnish to the Holders and to prospective investors,
upon their request, the information required to be delivered pursuant to Rule
144A(d)(4) under the Securities Act.
Section 4.04. COMPLIANCE CERTIFICATE.
(a) The Company and each Guarantor (to the extent that such
Guarantor is so required under the TIA) shall deliver to the Trustee, within 90
days after the end of each fiscal year, an Officers' Certificate stating that a
review of the activities of the Company and its Subsidiaries during the
preceding fiscal year has been made under the supervision of the signing
Officers with a view to determining whether the Company has kept, observed,
performed and fulfilled its obligations under this Indenture, and further
stating, as to each such Officer signing such certificate, that to his or her
knowledge, the Company has kept, observed, performed and fulfilled its
obligations under this Indenture and is not in default in the performance or
observance of any of the terms, provisions and conditions of this Indenture (or,
if a Default or Event of Default shall have occurred, describing all such
Defaults or Events of Default of which he or she may have knowledge and what
action the Company is taking or proposes to take with respect thereto) and that
to his or her knowledge no event has occurred and remains in existence by reason
of which payments on account of the principal of or interest, if any, on the
Notes is prohibited or if such event has occurred, a description of the event
and what action the Company is taking or proposes to take with respect thereto.
(b) So long as not contrary to the then current
recommendations of the American Institute of Certified Public Accountants, the
year-end financial statements delivered pursuant to Section 4.03(a)(i) above
shall be accompanied by a written statement of the Company's independent public
accountants (which shall be a firm of established national reputation) that in
making the examination necessary for certification of such financial statements,
nothing has come to their attention that would lead them to believe that the
Company has failed to comply with the provisions of Article Four or Article Five
hereof in so far as they relate to financial or accounting matters or, if an
event of noncompliance has come to their attention, specifying the nature and
period of existence thereof, it being understood that such accountants shall not
be liable directly or indirectly to any Person for any failure to obtain
knowledge of any such violation.
(c) The Company shall, so long as any of the Notes are
outstanding, deliver to the Trustee, within five Business Days after any Officer
becomes aware of any Default or Event of Default, an Officers' Certificate
specifying such Default or Event of Default and what action the Company is
taking or proposes to take with respect thereto.
Section 4.05. TAXES.
The Company shall pay, and shall cause each of its Subsidiaries
to pay, prior to delinquency, any taxes, assessments, and governmental levies
except such as are contested in
57
good faith and by appropriate proceedings or where the failure to effect such
payment is not adverse in any material respect to the Holders of the Notes.
Section 4.06. STAY, EXTENSION AND USURY LAWS.
The Company and each of the Guarantors covenant (to the extent
that it may lawfully do so) that it shall not at any time insist upon, plead, or
in any manner whatsoever claim or take the benefit or advantage of, any stay,
extension or usury law wherever enacted, now or at any time hereafter in force,
that may affect the covenants or the performance of this Indenture; and the
Company and each of the Guarantors (to the extent that it may lawfully do so)
hereby expressly waive all benefit or advantage of any such law, and covenants
that it shall not, by resort to any such law, hinder, delay or impede the
execution of any power herein granted to the Trustee, but shall suffer and
permit the execution of every such power as though no such law has been enacted.
Section 4.07. RESTRICTED PAYMENTS.
(a) The Company shall not, and shall not permit any of its
Restricted Subsidiaries to, directly or indirectly:
(i) declare or pay any dividend or make any other payment or
distribution on account of the Company's or any of its Restricted
Subsidiaries' Equity Interests (including, without limitation, any
payment in connection with any merger or consolidation involving the
Company or any of its Restricted Subsidiaries) or to the direct or
indirect holders of the Company's or any of its Restricted Subsidiaries'
Equity Interests in their capacity as such (other than dividends,
payments or distributions payable in Equity Interests (other than
Disqualified Stock) of the Company or to the Company or a Restricted
Subsidiary of the Company);
(ii) purchase, redeem or otherwise acquire or retire for
value (including, without limitation, in connection with any merger or
consolidation involving the Company) any Equity Interests of the Company
or of any Restricted Subsidiary thereof held by Persons other than the
Company or any Restricted Subsidiary thereof;
(iii) make any payment on or with respect to, or purchase,
redeem, defease or otherwise acquire or retire for value any
Indebtedness that is subordinated in right of payment to the Notes or
the Note Guarantees, except payments of interest or principal at the
Stated Maturity thereof; or
(iv) make any Restricted Investment;
(all such payments and other actions set forth in Section 4.07(a)(i) through
(iv) being collectively referred to as "RESTRICTED PAYMENTS"), unless, at the
time of and after giving effect to such Restricted Payment:
(A) no Default or Event of Default shall have
occurred and be continuing or would occur as a consequence
thereof;
58
(B) the Company would, at the time of such
Restricted Payment and after giving pro forma effect thereto as
if such Restricted Payment had been made at the beginning of the
applicable four-quarter period, have been permitted to incur at
least $1.00 of additional Indebtedness pursuant to the Fixed
Charge Coverage Ratio test set forth in Section 4.09(a); and
(C) such Restricted Payment, together with the
aggregate amount of all other Restricted Payments made by the
Company and its Restricted Subsidiaries after the date of this
Indenture (excluding Restricted Payments permitted by clauses
(2), (3), (5) and (6) of Section 4.07(b)), is less than the sum,
without duplication, of:
(1) 50% of the Consolidated Net Income of
the Company for the period (taken as one accounting
period) from the beginning of the first fiscal quarter
commencing after the date of this Indenture to the end
of the Company's most recently ended fiscal quarter for
which internal financial statements are available at the
time of such Restricted Payment (or, if such
Consolidated Net Income for such period is a deficit,
less 100% of such deficit), PLUS
(2) 100% of the aggregate net cash proceeds
and the fair market value of assets other than cash
received by the Company since the Transactions
Consummation Date as a contribution to its equity
capital or from the issue or sale of Equity Interests of
the Company (other than Disqualified Stock) or from the
issue or sale of convertible or exchangeable
Disqualified Stock or convertible or exchangeable debt
securities of the Company that have been converted into
or exchanged for such Equity Interests (other than
Equity Interests (or Disqualified Stock or debt
securities) sold to a Restricted Subsidiary of the
Company), PLUS
(3) the lesser of (i) the net cash proceeds
and the fair market value of assets other than cash, net
of disposition costs, received by the Company or any
Restricted Subsidiary of the Company from the
disposition, sale, liquidation, retirement or redemption
of all or any portion of any Restricted Investment made
after the Transactions Consummation Date and (ii) the
original value of the Company's or such Restricted
Subsidiary's Investment in such Restricted Investment
that was previously treated as a Restricted Payment,
plus if (i) exceeds (ii), 50% of the amount by which (i)
exceeds (ii), except, in each case, to the extent that
any such proceeds or such fair market value of assets
other than cash are included in the calculation of
Consolidated Net Income, PLUS
(4) without duplication, (i) to the extent
that any Unrestricted Subsidiary of the Company that was
designated as such after the Transactions Consummation
Date is redesignated as a Restricted Subsidiary, the
lesser of (A) the fair market value of the Company's
direct or indirect Investment in such Subsidiary as of
the date of such
59
redesignation and (B) the original value of the
Investment in such Subsidiary that was previously
treated as a Restricted Payment, plus, if (A) exceeds
(B), 50% of the amount by which (A) exceeds (B), plus
(ii) an amount equal to the net reduction in Investments
in Unrestricted Subsidiaries resulting from payments of
dividends, repayments of the principal of loans or
advances or other transfers of assets from Unrestricted
Subsidiaries of the Company to the Company or any
Restricted Subsidiary of the Company after the
Transactions Consummation Date, except, in each case, to
the extent that any such Investment or net reduction in
Investment is included in the calculation of
Consolidated Net Income, PLUS
(5) without duplication, in the event the
Company or any Restricted Subsidiary of the Company
makes any Investment in a Person that, as a result of or
in connection with such Investment, becomes a Restricted
Subsidiary, an amount equal to the lesser of (i) the
fair market value of the existing Investment in such
Person that was previously treated as a Restricted
Payment and (ii) the Company's or any such Restricted
Subsidiary's existing Investment in such Person that was
previously treated as a Restricted Payment, plus, if (i)
exceeds (ii), 50% of the amount by which (i) exceeds
(ii).
(b) Section 4.07(a) shall not prohibit:
(1) the payment of any dividend within 60 days after the
date of declaration thereof, if at said date of declaration such payment
would have complied with the provisions of this Indenture;
(2) the payment, redemption, repurchase, retirement,
defeasance or other acquisition of any subordinated Indebtedness of the
Company or any Guarantor or of any Equity Interests of the Company or
any Restricted Subsidiary thereof in exchange for, or out of the net
cash proceeds of contributions to the equity capital of the Company or a
substantially concurrent sale (other than to a Restricted Subsidiary of
the Company) of, Equity Interests of the Company (other than
Disqualified Stock); PROVIDED that the amount of any such net cash
proceeds and the fair market value of any assets that are utilized for
any such payment, redemption, repurchase, retirement, defeasance or
other acquisition shall be excluded from Section 4.07(a)(C)(2);
(3) the payment, defeasance, redemption, repurchase,
retirement or other acquisition of subordinated Indebtedness or
Disqualified Stock of the Company or any Restricted Subsidiary thereof
in exchange for, or out of the net cash proceeds from, an incurrence of
Permitted Refinancing Indebtedness;
(4) the payment of any dividend by a Restricted Subsidiary
of the Company to the holders of its common Equity Interests on a pro
rata basis;
60
(5) Restricted Investments acquired as a capital
contribution to, or in exchange for, or out of the net cash proceeds of
contributions to the equity capital of the Company or a substantially
concurrent sale (other than to a Restricted Subsidiary of the Company)
of, Equity Interests of the Company (other than Disqualified Stock);
PROVIDED that the amount of any such net cash proceeds that are utilized
for any such acquisition and the fair market value of any assets so
acquired or exchanged shall be excluded from Section 4.07(a)(C)(2);
(6) the repurchase of Equity Interests deemed to occur upon
the exercise of options or warrants if such Equity Interests represents
all or a portion of the exercise price thereof;
(7) in the event that, and for each taxable year in which,
the Parent is treated as an association taxable as a corporation for
Federal, state and local income tax purposes and the Company and its
Subsidiaries are included in a consolidated or combined tax group with
the Parent, the payment of dividends or distributions by the Company to
the Parent in an amount equal to the share of the consolidated or
combined income tax liability allocable to the Company and its
Subsidiaries in accordance with applicable Treasury Regulations;
PROVIDED that any refunds received by the Parent attributable to the
Company and its Subsidiaries shall promptly be paid by the Parent to the
Company;
(8) dividends, distributions or loans from the Company or
any Restricted Subsidiary thereof to the Parent to satisfy the Parent's
advisory fee and expense reimbursement obligations in connection with
the Transactions under the Stock Purchase Agreement as in effect on the
Transactions Consummation Date and as described in the Offering
Memorandum under "Arrangements with Vestar Capital Partners;" PROVIDED
that the aggregate amount of all such dividends, distributions or loans,
together with all other direct or indirect payments by the Company or
any of its Restricted Subsidiaries on account of the Stock Purchase
Agreement, does not exceed $4.0 million plus expenses in accordance with
the terms of the Stock Purchase Agreement as in effect on the
Transactions Consummation Date;
(9) dividends, distributions or loans from the Company or
any Restricted Subsidiary of the Company to the Parent to satisfy the
Parent's payment obligations under the Vestar Management Agreement and
the SCC Holding Management Agreement, in each case, as in effect on the
Transactions Consummation Date and as described in the Offering
Memorandum under "Arrangements with Vestar Capital Partners" or "Certain
Relationships and Related Transactions," as the case may be, or any
amendments, modifications or supplements thereto or replacements
thereof, so long as such agreements, as so amended, modified,
supplemented or replaced, taken as a whole, are not materially more
disadvantageous to the Company and its Restricted Subsidiaries than such
original agreements as in effect on the Transactions Consummation Date;
PROVIDED that the aggregate amount of all such dividends, distributions
or loans, together with all other direct or indirect payments by the
Company or any of its Restricted Subsidiaries on account of such
agreements (as they may be so amended, modified, supplemented or
replaced), in any calendar year shall not exceed $3.3 million plus
expenses in accordance
61
with the terms of such agreements (as they may be so amended, modified,
supplemented or replaced);
(10) the purchase, redemption or other acquisition or
retirement for value of any Equity Interests of the Company or the
Parent held by any current or former director, officer, consultant or
employee of the Company, the Parent or any Restricted Subsidiary of the
Company, or their estates or the beneficiaries of such estates, in an
amount not to exceed $3.0 million in any calendar year; PROVIDED that
the Company may carry over and make in subsequent calendar years, in
addition to the amounts permitted for such calendar year, the amount of
purchases, redemptions, acquisitions or retirements for value permitted
to have been but not made in any preceding calendar year up to a maximum
of $9.0 million in any calendar year;
(11) the distribution, as a dividend or otherwise, of Equity
Interests of, or Indebtedness owed to the Company or a Restricted
Subsidiary thereof by, any Unrestricted Subsidiary;
(12) upon the occurrence of a Change of Control and within 90
days after completion of the offer to repurchase Notes pursuant to
Section 4.14 (including the purchase of all Notes tendered), any
purchase or redemption of Indebtedness of the Company subordinated to
the Notes that is required to be repurchased or redeemed pursuant to the
terms thereof as a result of such Change of Control, at a purchase price
not greater than 101% of the outstanding principal amount thereof (plus
accrued and unpaid interest and liquidated damages, if any);
(13) within 90 days after completion of any offer to
repurchase Notes pursuant to Section 4.10 (including the purchase of all
Notes tendered), any purchase or redemption of Indebtedness of the
Company subordinated to the Notes that is required to be repurchased or
redeemed pursuant to the terms thereof as a result of such Asset Sale,
at a purchase price not greater than 100% of the outstanding principal
amount thereof (plus accrued and unpaid interest and liquidated damages,
if any);
(14) payments or distributions, in the nature of satisfaction
of dissenters' rights, pursuant to or in connection with a
consolidation, merger or transfer of assets that complies with the
provisions of this Indenture applicable to mergers, consolidations and
transfers of all or substantially all the property and assets of the
Company;
(15) the payment of cash in lieu of the issuance of
fractional shares of Equity Interests upon exercise or conversion of
securities exercisable or convertible into Equity Interests of the
Company;
(16) dividends, distributions or loans from the Company or
any Restricted Subsidiary thereof to the Parent in amounts sufficient to
pay the Parent's actual out-of-pocket administrative and operating
expenses so long as the Parent has no operations and no Investments
other than its ownership of Equity Interests of the Company and cash or
Cash Equivalents; provided that the aggregate amount of all such
dividends, distributions or loans in any calendar year shall not exceed
$1.0 million; or
62
(17) other Restricted Payments in an amount which, taken
together with all other Restricted Payments made pursuant to Section
4.07(b)(17), do not exceed $35.0 million;
PROVIDED that, in the case of clauses (4), (8), (9), (10), (11), (12), (13) and
(17) above, no Default or Event of Default has occurred and is continuing.
(c) The amount of all Restricted Payments (other than cash)
shall be the fair market value on the date of the Restricted Payment of the
asset(s) or securities proposed to be transferred or issued to or by the Company
or such Restricted Subsidiary, as the case may be, pursuant to the Restricted
Payment. Not later than the date of making any Restricted Payment that, together
with any Restricted Payments not previously reported hereunder, exceeds $10.0
million, the Company shall deliver to the Trustee an Officers' Certificate
stating that such Restricted Payment is permitted and setting forth the basis
upon which the calculations required by this Section 4.07 were computed,
together with a copy of any opinion or appraisal required by this Indenture. In
determining whether any Restricted Payment is permitted by this Section 4.07,
the Company and its Restricted Subsidiaries may allocate all or any portion of
such Restricted Payment among the categories described in Section 4.07(b)(1)
through 4.07(b)(17) or among such categories and the types of Restricted
Payments described in Section 4.07(a); provided that at the time of such
allocation, all such Restricted Payments, or allocated portions thereof, would
be permitted under the various provisions of this Section.
Section 4.08. DIVIDEND AND OTHER PAYMENT RESTRICTIONS AFFECTING RESTRICTED
SUBSIDIARIES.
(a) The Company shall not, and shall not permit any of its
Restricted Subsidiaries to, directly or indirectly, create or permit to exist or
become effective any consensual encumbrance or restriction on the ability of any
Restricted Subsidiary to:
(i) pay dividends or make any other distributions on its
Capital Stock (or with respect to any other interest or participation
in, or measured by, its profits) to the Company or any of its Restricted
Subsidiaries or pay any liabilities owed to the Company or any of its
Restricted Subsidiaries;
(ii) make loans or advances to the Company or any of its
Restricted Subsidiaries; or
(iii) transfer any of its properties or assets to the Company
or any of its Restricted Subsidiaries.
(b) However, the preceding restrictions shall not apply to
encumbrances or restrictions:
(i) existing under, by reason of or with respect to the
Credit Agreement, Existing Indebtedness, the Stockholders' Agreement or
any other agreements in effect on the Transactions Consummation Date and
any amendments, modifications, restatements, renewals, extensions,
increases, supplements, refundings, replacements or refinancings
thereof, PROVIDED that the encumbrances and restrictions in any such
amendments, modifications, restatements, renewals, extensions,
increases, supplements, refundings,
63
replacement or refinancings are not materially more restrictive, taken
as a whole, than those in effect on the Transactions Consummation Date;
(ii) existing under, by reason of or with respect to any
other Credit Facility of the Company permitted under this Indenture,
PROVIDED that the applicable encumbrances and restrictions contained in
the agreement or agreements governing the other Credit Facility are not
materially more restrictive, taken as a whole, than those contained in
the Credit Agreement, as in effect on the Transactions Consummation
Date;
(iii) existing under, by reason of or with respect to
applicable law, rule, regulation or administrative or court order;
(iv) with respect to any Person or the property or assets of
a Person acquired by the Company or any of its Restricted Subsidiaries
existing at the time of such acquisition and not incurred in connection
with or in contemplation of such acquisition, which encumbrance or
restriction is not applicable to any Person or the properties or assets
of any Person, other than the Person, or the property or assets of the
Person, so acquired and any amendments, modifications, restatements,
renewals, extensions, increases, supplements, refundings, replacements
or refinancings thereof, PROVIDED that the encumbrances and restrictions
in any such amendments, modifications, restatements, renewals,
extensions, increases, supplements, refundings, replacement or
refinancings are not materially more restrictive, taken as a whole, than
those contained in the Credit Agreement, Existing Indebtedness or such
other agreements as in effect on the date of the acquisition;
(v) in the case of Section 4.08(a)(iii):
(a) that restrict in a customary manner the
subletting, assignment or transfer of any property or asset that
is a lease, license, conveyance or contract or similar property
or asset,
(b) existing by virtue of any transfer of, agreement
to transfer, option or right with respect to, or Lien on, any
property or assets of the Company or any Restricted Subsidiary
thereof not otherwise prohibited by this Indenture,
(c) existing under, by reason of or with respect to
purchase money obligations for property acquired in the ordinary
course of business, or
(d) arising or agreed to in the ordinary course of
business, not relating to any Indebtedness, and that do not,
individually or in the aggregate, detract from the value of
property or assets of the Company or any Restricted Subsidiary
thereof in any manner material to the Company or any Restricted
Subsidiary thereof;
(vi) existing under, by reason of or with respect to
customary provisions with respect to the disposition or distribution of
assets or property contained in joint venture and similar agreements
entered into in the ordinary course of business;
64
(vii) existing under, by reason of or with respect to any
agreement for the sale or other disposition of all or substantially all
of the capital stock of, or property and assets of, a Restricted
Subsidiary that restricted distributions by that Restricted Subsidiary
pending such sale or other disposition;
(viii) existing under, by reason of or with respect to
Permitted Refinancing Indebtedness, PROVIDED that the encumbrances and
restrictions contained in the agreements governing that Permitted
Refinancing Indebtedness are not materially more restrictive, taken as a
whole, than those contained in the agreements governing the Indebtedness
being refinanced;
(ix) on cash or other deposits or net worth imposed by
customers under contracts entered into in the ordinary course of
business;
(x) existing under, by reason of or with respect to
Indebtedness or other contractual requirements of a Receivables
Subsidiary in connection with a Qualified Receivables Transaction,
PROVIDED that the encumbrances and restrictions apply only to that
Receivables Subsidiary;
(xi) existing under, by reason of or with respect to this
Indenture, the Notes and the Note Guarantees; and
(xii) existing under, by reason of or with respect to,
Indebtedness of a Restricted Subsidiary not prohibited to be incurred
under this Indenture; PROVIDED that (a) such encumbrances or
restrictions are ordinary and customary in light of the type of
Indebtedness being incurred and the jurisdiction of the obligor and (b)
such encumbrances or restrictions will not affect the Company's or any
Guarantor's ability to make principal and interest payments on the
Notes, as determined in good faith by the Board of Directors of the
Company.
Section 4.09. INCURRENCE OF INDEBTEDNESS AND ISSUANCE OF PREFERRED STOCK.
(a) The Company shall not, and shall not permit any of its
Restricted Subsidiaries to, directly or indirectly, incur any Indebtedness
(including Acquired Debt), and the Company shall not permit any of its
Restricted Subsidiaries to issue any preferred stock; PROVIDED, HOWEVER, that
the Company or any Guarantor may incur Indebtedness, including Acquired Debt,
and any Guarantor may issue preferred stock, if the Fixed Charge Coverage Ratio
for the Company's most recently ended four full fiscal quarters for which
internal financial statements are available immediately preceding the date on
which such additional Indebtedness is incurred or preferred stock is issued
would have been at least 2.0 to 1, determined on a pro forma basis (including a
pro forma application of the net proceeds therefrom), as if the additional
Indebtedness had been incurred or the preferred stock had been issued, as the
case may be, at the beginning of such four-quarter period.
(b) Section 4.09(a) will not prohibit the incurrence or
issuance of any of the following (collectively, "PERMITTED DEBT"):
65
(i) the incurrence by the Company or any Guarantor of
Indebtedness under Credit Facilities (and the incurrence by the
Guarantors of Guarantees thereof) in an aggregate principal amount at
any one time outstanding pursuant to this clause (i) (with letters of
credit being deemed to have a principal amount equal to the maximum
potential liability of the Company and its Restricted Subsidiaries
thereunder) not to exceed $850.0 million, LESS (x) the aggregate amount
of all Net Proceeds of Asset Sales applied by the Company or any
Restricted Subsidiary to permanently repay any such Indebtedness (and,
in the case of any revolving credit Indebtedness, to effect a
corresponding commitment reduction thereunder) pursuant to Section 4.10
and (y) the aggregate amount of all permanent repayments of any such
Indebtedness (and, in the case of any revolving credit Indebtedness,
corresponding commitment reductions thereunder) required under the terms
of such Indebtedness upon any sale, conveyance or other transfer of any
accounts receivable of the Company or any of its Restricted
Subsidiaries;
(ii) the incurrence of Existing Indebtedness;
(iii) the incurrence by the Company and the Guarantors of
Indebtedness represented by the Notes and the related Note Guarantees to
be issued on the date of this Indenture and the Exchange Notes and the
related Note Guarantees to be issued pursuant to the Registration Rights
Agreement;
(iv) the incurrence by the Company or any of its Restricted
Subsidiaries of Indebtedness represented by Capital Lease Obligations,
mortgage financings or purchase money obligations, in each case,
incurred for the purpose of financing all or any part of the purchase
price or cost of construction or improvement of property, plant or
equipment used in the business of the Company or such Restricted
Subsidiary, in an aggregate principal amount at any time outstanding,
including all Permitted Refinancing Indebtedness incurred to refund,
refinance or replace any Indebtedness incurred pursuant to this clause
(iv), not to exceed the greater of (x) 3% of Consolidated Net Tangible
Assets of the Company and (y) $35.0 million;
(v) the incurrence by the Company or any Restricted
Subsidiary of the Company of Permitted Refinancing Indebtedness in
exchange for, or the net proceeds of which are used to refund, refinance
or replace Indebtedness (other than intercompany Indebtedness) that was
permitted by this Indenture to be incurred under Section 4.09(a) or
clauses (ii), (iii), (iv), (v) or (xiii) of this Section 4.09(b);
(vi) the incurrence by the Company or any of its Restricted
Subsidiaries of intercompany Indebtedness owing to and held by the
Company or any of its Restricted Subsidiaries; PROVIDED, HOWEVER, that:
(a) if the Company or any Guarantor is the obligor on such
Indebtedness, such Indebtedness must be unsecured and
expressly subordinated to the prior payment in full in
cash of all Obligations with respect to the Notes, in
the case of the Company, or the Note Guarantee, in the
case of a Guarantor; and
66
(b) (i) any subsequent issuance or transfer of Equity
Interests that results in any such Indebtedness being
held by a Person other than the Company or a Restricted
Subsidiary thereof and (ii) any sale or other transfer
of any such Indebtedness to a Person that is not either
the Company or a Restricted Subsidiary thereof, shall be
deemed, in each case, to constitute an incurrence of
such Indebtedness by the Company or such Restricted
Subsidiary, as the case may be, that was not permitted
by this clause (vi);
(vii) the Guarantee by the Company or any of the Guarantors of
Indebtedness of the Company or a Restricted Subsidiary of the Company
that was permitted to be incurred by another provision of this Section
4.09;
(viii) the incurrence by a Receivables Subsidiary of
Indebtedness in a Qualified Receivables Transaction that is without
recourse to the Company or to any Restricted Subsidiary thereof or their
assets, other than such Receivables Subsidiary and its assets and, as to
the Company or any Restricted Subsidiary of the Company, other than
pursuant to representations, warranties, covenants and indemnities
customary for such transactions, and is not guaranteed by the Company or
any other Restricted Subsidiary thereof;
(ix) Indebtedness of the Company or any Restricted Subsidiary
thereof to the extent the net proceeds thereof are promptly used to
purchase Notes tendered pursuant to a Change of Control Offer;
(x) the incurrence of Acquired Debt; PROVIDED that, after
giving effect to the transactions that result in the incurrence or
issuance thereof, the Company's Fixed Charge Coverage Ratio for the
four-quarter period immediately preceding such incurrence would not be
less than immediately prior to such transactions;
(xi) the 9 1/2% Senior Subordinated Notes due 2007 of
Sweetheart Cup Company Inc. and the 9 1/2% Senior Secured Notes due 2007
of Sweetheart Cup Company Inc.; PROVIDED that such notes are either (x)
covenant defeased on the Transactions Consummation Date and redeemed in
full within 40 days after the Transactions Consummation Date or (y)
satisfied and discharged on the Transactions Consummation Date;
(xii) the issuance of preferred stock of a Restricted
Subsidiary of the Company to the Company or another Restricted
Subsidiary of the Company; PROVIDED that (x) any subsequent issuance or
transfer of Equity Interests that results in any such preferred stock
being held by a Person other than the Company or a Restricted Subsidiary
thereof and (y) any sale or other transfer of any such preferred stock
to a Person that is not either the Company or a Restricted Subsidiary
thereof will be deemed, in each case, to constitute an issuance of such
preferred stock that was not permitted by this clause (xii); and
(xiii) the incurrence by the Company or any Restricted
Subsidiary of the Company of additional Indebtedness in an aggregate
principal amount at any time outstanding, including all Permitted
Refinancing Indebtedness incurred to refund,
67
refinance or replace any Indebtedness incurred pursuant to this clause
(xiii), not to exceed the greater of (x) 3% of the Consolidated Net
Tangible Assets of the Company and (y) $50.0 million.
For purposes of determining compliance with this Section 4.09,
in the event that any proposed Indebtedness or preferred stock meets the
criteria of more than one of the categories of Permitted Debt described in
Sections 4.09(b)(i) through (xiii) above, or is entitled to be incurred or
issued pursuant to Section 4.09(a), the Company, in its sole discretion, shall
be permitted to classify at the time of its incurrence or issuance such item of
Indebtedness or preferred stock in any manner that complies with this Section
4.09. Indebtedness under the Credit Agreement outstanding immediately following
the Transactions Consummation Date shall be deemed to have been incurred on such
date in reliance on the exception provided by clause (i) of the definition of
Permitted Debt.
(c) Notwithstanding any other provision of this Section
4.09, the maximum amount of Indebtedness that may be incurred pursuant to this
Section 4.09 shall not be deemed to be exceeded, with respect to any outstanding
Indebtedness due solely to the result of fluctuations in the exchange rates of
currencies.
Section 4.10. ASSET SALES.
(a) The Company shall not, and shall not permit any of its
Restricted Subsidiaries to, consummate an Asset Sale unless:
(i) the Company (or the Restricted Subsidiary, as the case
may be) receives consideration at the time of such Asset Sale at least
equal to the fair market value of the assets or Equity Interests issued
or sold or otherwise disposed of;
(ii) such fair market value is determined in accordance with
the provisions of the definition of fair market value; and
(iii) at least 75% of the consideration therefor received by
the Company or such Restricted Subsidiary is in the form of cash, Cash
Equivalents or Replacement Assets or a combination of both. For purposes
of this Section 4.10(a)(iii), each of the following shall be deemed to
be cash:
(A) any liabilities (as shown on the Company's or
such Restricted Subsidiary's most recent balance sheet) of the
Company or any Restricted Subsidiary (other than contingent
liabilities, Indebtedness that is by it terms subordinated to
the Notes or any Note Guarantee and liabilities to the extent
owed to the Company or any Restricted Subsidiary of the Company)
that are assumed by the transferee of any such assets or Equity
Interests pursuant to an agreement that releases the Company or
such Restricted Subsidiary, as the case may be, from further
liability; and
(B) any securities, notes or other obligations
received by the Company or any such Restricted Subsidiary, as
the case may be, from such transferee that are converted by the
Company or such Restricted Subsidiary into Cash
68
Equivalents within 180 days (to the extent of the Cash
Equivalents received in that conversion).
(b) Within 365 days after the receipt of any Net Proceeds from
an Asset Sale, the Company or such Restricted Subsidiary may apply such Net
Proceeds at its option and to the extent it so elects:
(i) to repay (a) Senior Debt and, if the Senior Debt repaid
is revolving credit Indebtedness, to correspondingly reduce commitments
with respect thereto and (b) if there is no Senior Debt outstanding, any
outstanding Indebtedness of any Restricted Subsidiary of the Company
that is not a Guarantor and, if such Indebtedness repaid is revolving
credit Indebtedness, to correspondingly reduce commitments thereunder;
(ii) to purchase Replacement Assets or make a capital
expenditure in or that is used or useful in a Permitted Business; or
(iii) any combination of the foregoing;
PROVIDED that the Company will be deemed to have complied with Section
4.10(b)(ii) if and to the extent that, within 365 days after the Asset Sale that
generated the Net Proceeds, the Company has entered into and not abandoned or
rejected a binding agreement to purchase Replacement Assets or make a capital
expenditure in compliance with Section 4.10(b)(ii), and that purchase or capital
expenditure is thereafter completed within 90 days after the end of such 365-day
period. Pending the final application of any such Net Proceeds, the Company may
temporarily reduce revolving credit borrowings or otherwise invest such Net
Proceeds in any manner that is not prohibited by this Indenture.
(c) Any Net Proceeds from Asset Sales that are not applied
or invested as provided in Section 4.10(b) shall constitute "EXCESS PROCEEDS."
Within 10 days after the aggregate amount of Excess Proceeds exceeds $10.0
million, the Company shall make an offer (an "ASSET SALE OFFER") to all Holders
of Notes and all holders of other Indebtedness that is PARI PASSU with the Notes
or any Note Guarantee containing provisions similar to those set forth in this
Indenture with respect to offers to purchase with the proceeds of sales of
assets, to purchase the maximum principal amount of Notes and such other PARI
PASSU Indebtedness that may be purchased out of the Excess Proceeds. The offer
price for the Notes and any PARI PASSU Indebtedness in any Asset Sale Offer will
be equal to 100% of the principal amount of the Notes and such other PARI PASSU
Indebtedness plus accrued and unpaid interest and Liquidated Damages, if any, on
the Notes and any PARI PASSU Indebtedness to the date of purchase, and will be
payable in cash. If any Excess Proceeds remain after consummation of an Asset
Sale Offer, the Company may use such Excess Proceeds for any purpose not
otherwise prohibited by this Indenture. If the aggregate principal amount of
Notes and such other PARI PASSU Indebtedness tendered into such Asset Sale Offer
exceeds the amount of Excess Proceeds, the Notes and such other PARI PASSU
Indebtedness shall be purchased on a pro rata basis based on the principal
amount of Notes and such other PARI PASSU Indebtedness tendered. Upon completion
of each Asset Sale Offer, the amount of Excess Proceeds shall be reset at zero.
69
(d) The Company will comply with the requirements of Rule
14e-1 under the Exchange Act and any other securities laws and regulations
thereunder to the extent such laws and regulations are applicable in connection
with each repurchase of Notes pursuant to an Asset Sale Offer. To the extent
that the provisions of any securities laws or regulations conflict with the
Asset Sales provisions of this Indenture, the Company will comply with the
applicable securities laws and regulations and will not be deemed to have
breached its obligations under the Asset Sale provisions of this Indenture by
virtue of such compliance.
Section 4.11. TRANSACTIONS WITH AFFILIATES.
(a) The Company shall not, and shall not permit any of its
Restricted Subsidiaries to, make any payment to, or sell, lease, transfer or
otherwise dispose of any of its properties or assets to, or purchase any
property or assets from, or enter into, make, amend, renew or extend any
transaction, contract, agreement, understanding, loan, advance or Guarantee
with, or for the benefit of, any Affiliate (each, an "AFFILIATE TRANSACTION"),
unless:
(i) such Affiliate Transaction is on terms that are no less
favorable to the Company or the relevant Restricted Subsidiary than
those that would have been obtained in a comparable arm's-length
transaction by the Company or such Restricted Subsidiary with a Person
that is not an Affiliate of the Company; and
(ii) the Company delivers to the Trustee:
(A) with respect to any Affiliate Transaction or
series of related Affiliate Transactions involving aggregate
consideration in excess of $5.0 million, a resolution of the
Board of Directors of the Company set forth in an Officers'
Certificate certifying that such Affiliate Transaction or series
of related Affiliate Transactions complies with this Section
4.11 and that such Affiliate Transaction or series of related
Affiliate Transactions has been approved by a majority of the
disinterested members of the Board of Directors; and
(B) with respect to any Affiliate Transaction or
series of related Affiliate Transactions involving aggregate
consideration in excess of $15.0 million, an opinion as to the
fairness to the Company of such Affiliate Transaction or series
of related Affiliate Transactions from a financial point of view
issued by an independent accounting, appraisal or investment
banking firm of national standing.
(b) The following items shall not be deemed to be Affiliate
Transactions and, therefore, will not be subject to the provisions of Section
4.11(a):
(i) transactions between or among the Company and/or its
Restricted Subsidiaries;
(ii) payment of reasonable fees to, and reasonable
indemnification and similar payments on behalf of, directors of the
Parent, the Company or any Restricted Subsidiary of the Company;
70
(iii) Restricted Payments that are permitted by the provisions
of Section 4.07 and Permitted Investments;
(iv) any sale of Equity Interests (other than Disqualified
Stock) of the Company;
(v) loans and advances to officers and employees of the
Company or any of its Restricted Subsidiaries for bona fide business
purposes in the ordinary course of business;
(vi) any employment, consulting, service or termination
agreement, or reasonable and customary indemnification arrangements,
entered into by the Company or any of its Restricted Subsidiaries with
officers and employees of the Company or any of its Restricted
Subsidiaries and the payment of compensation to officers and employees
of the Company or any of its Restricted Subsidiaries (including amounts
paid pursuant to employee benefit plans, employee stock option or
similar plans), in each case in the ordinary course of business;
(vii) transactions with a Person that is an Affiliate of the
Company solely because the Company, directly or indirectly, owns Equity
Interests in, or controls, such Person;
(viii) payments by the Company or any of its Restricted
Subsidiaries to Vestar Capital Partners IV, L.P. and its Affiliates made
for any financial advisory services, financing, underwriting or
placement services or in respect of other investment banking services,
including without limitation, in connection with acquisitions or
divestitures, which payments are approved by a majority of the
disinterested members of the Board of Directors of the Company in good
faith;
(ix) transactions pursuant to the Stock Purchase Agreement,
the Vestar Management Agreement, the SCC Holding Management Agreement,
the Stockholders' Agreement, the Stockholders' Registration Rights
Agreement and other agreements or arrangements in each case as in effect
on the Transactions Consummation Date and as described in the Offering
Memorandum, or any amendment, modification or supplement thereto or any
replacement thereof, as long as such agreement or arrangement as so
amended, modified, supplemented or replaced, taken as a whole, is not
materially more disadvantageous to the Company and its Restricted
Subsidiaries than the original agreement or arrangement as in effect on
the Transactions Consummation Date; and
(x) any other agreements or arrangements in effect on the
date of this Indenture, or any amendment, modification or supplement
thereto, in an aggregate amount not to exceed $250,000 in any calendar
year.
Section 4.12. LIENS.
The Company shall not, and shall not permit any of its
Restricted Subsidiaries to, create, incur, assume or otherwise cause or suffer
to exist or become effective any Lien of any kind securing Indebtedness (other
than Permitted Liens) upon any of their property or assets,
71
now owned or hereafter acquired, unless all payments due under this Indenture
and the Notes are secured on an equal and ratable basis with the obligations so
secured (or, in the case of subordinated Indebtedness, contractually prior or
senior thereto, with the same relative priority as the Notes shall have with
respect to such subordinated Indebtedness) until such time as such obligations
are no longer secured by a Lien.
Section 4.13. BUSINESS ACTIVITIES.
The Company shall not, and shall not permit any of its
Restricted Subsidiaries (other than any Receivables Subsidiary) to, engage in
any business other than Permitted Businesses, except to such extent as would not
be material to the Company and its Restricted Subsidiaries taken as a whole.
Section 4.14. OFFER TO REPURCHASE UPON A CHANGE OF CONTROL.
(a) If a Change of Control occurs, each Holder of Notes
shall have the right to require the Company to repurchase all or any part (equal
to $1,000 or an integral multiple thereof) of that Holder's Notes pursuant to an
offer by the Company (a "CHANGE OF CONTROL OFFER") at an offer price (a "CHANGE
OF CONTROL PAYMENT") in cash equal to 101% of the aggregate principal amount
thereof plus accrued and unpaid interest and Liquidated Damages, if any,
thereon, to the date of purchase. Within 30 days following any Change of
Control, the Company shall mail a notice to each Holder describing the
transaction or transactions that constitute the Change of Control and offering
to repurchase Notes on a date (the "CHANGE OF CONTROL PAYMENT DATE") specified
in such notice, which date shall be no earlier than 30 days and no later than 60
days from the date such notice is mailed, pursuant to the procedures described
in Section 3.08 (including the notice required thereby). The Company will comply
with the requirements of Rule 14e-1 under the Exchange Act and any other
securities laws and regulations thereunder to the extent such laws and
regulations are applicable in connection with the repurchase of the Notes as a
result of a Change of Control. To the extent that the provisions of any
securities laws or regulations conflict with the Change of Control provisions of
this Indenture, the Company will comply with the applicable securities laws and
regulations and will not be deemed to have breached its obligations under the
Change of Control provisions of this Indenture by virtue of such compliance.
(b) On the Change of Control Payment Date, the Company shall, to
the extent lawful:
(i) accept for payment all Notes or portions thereof
properly tendered pursuant to the Change of Control Offer;
(ii) deposit with the Paying Agent an amount equal to the
Change of Control Payment in respect of all Notes or portions thereof
properly tendered; and
(iii) deliver or cause to be delivered to the Trustee the
Notes so accepted together with an Officers' Certificate stating the
aggregate principal amount of Notes or portions thereof being purchased
by the Company.
72
(c) The Paying Agent shall promptly mail or wire transfer to
each Holder of Notes properly tendered and so accepted the Change of Control
Payment for such Notes, and the Trustee shall promptly authenticate and mail (or
cause to be transferred by book entry) to each Holder a new Note equal in
principal amount to any unpurchased portion of the Notes surrendered, if any;
PROVIDED that each such new Note shall be in a principal amount of $1,000 or an
integral multiple thereof. Any Note so accepted for payment will cease to accrue
interest on and after the Change of Control Payment Date.
(d) The Company will publicly announce the results of the
Change of Control Offer on or as soon as practicable after the Change of Control
Payment Date.
(e) Prior to complying with any of the provisions of this
Section 4.14, but in any event within 30 days following a Change of Control, the
Company will either repay all outstanding Senior Debt or obtain the requisite
consents, if any, under all agreements governing outstanding Senior Debt to
permit the repurchase of Notes required by this Section.
(f) Notwithstanding anything to the contrary in this Section
4.14, the Company shall not be required to make a Change of Control Offer upon a
Change of Control if (i) a third party makes the Change of Control Offer in the
manner, at the times and otherwise in compliance with the requirements set forth
in this Section 4.14 and all other provisions of this Indenture applicable to a
Change of Control Offer made by the Company and purchases all Notes properly
tendered and not withdrawn under such Change of Control Offer or (ii) a notice
of redemption has been given for all of the Notes pursuant to Section 3.07,
unless and until there is a default in payment of the applicable redemption
price.
Section 4.15. LIMITATION ON SENIOR SUBORDINATED DEBT. The Company shall not
incur any Indebtedness that is contractually subordinate or junior in right of
payment to any Senior Debt of the Company unless it is PARI PASSU or
contractually subordinate in right of payment to the Notes to the same extent.
No Guarantor shall incur any Indebtedness that is contractually subordinate or
junior in right of payment to the Senior Debt of such Guarantor unless it is
PARI PASSU or contractually subordinate in right of payment to such Guarantor's
Note Guarantee to the same extent; PROVIDED that no Indebtedness of the Company
or any Guarantor shall be deemed to be subordinated in right of payment to any
other Indebtedness of the Company or any of its Subsidiaries solely by virtue of
being unsecured or by virtue of the fact that the holders of such Indebtedness
have entered into intercreditor agreements or other arrangements giving one or
more of such holders priority over the other holders in the collateral held by
them.
Section 4.16. DESIGNATION OF RESTRICTED AND UNRESTRICTED SUBSIDIARIES.
(a) The Board of Directors of the Company may designate any
Restricted Subsidiary to be an Unrestricted Subsidiary; PROVIDED that:
(i) any Guarantee by the Company or any Restricted
Subsidiary of any Indebtedness of the Subsidiary being so designated
shall be deemed to be an incurrence of Indebtedness by the Company or
such Restricted Subsidiary (or both, if applicable) at the time of such
designation, and such incurrence of Indebtedness would be permitted
under Section 4.09;
73
(ii) the aggregate fair market value of all outstanding
Investments owned by the Company and its Restricted Subsidiaries in the
Subsidiary being so designated (including any Guarantee by the Company
or any Restricted Subsidiary of any Indebtedness of such Subsidiary)
shall be deemed to be an Investment made as of the time of such
designation and such Investment would be permitted under Section 4.07;
(iii) such Subsidiary does not own any Equity Interests of, or
hold any Liens on any property of, the Company or any Restricted
Subsidiary;
(iv) the Subsidiary being so designated:
(A) is not party to any agreement, contract,
arrangement or understanding with the Company or any Restricted
Subsidiary of the Company unless the terms of any such
agreement, contract, arrangement or understanding are no less
favorable to the Company or such Restricted Subsidiary than
those that might be obtained at the time from Persons who are
not Affiliates of the Company;
(B) is a Person with respect to which neither the
Company nor any of its Restricted Subsidiaries has any direct or
indirect obligation (1) to subscribe for additional Equity
Interests or (2) to maintain or preserve such Person's financial
condition or to cause such Person to achieve any specified
levels of operating results; and
(C) has not Guaranteed or otherwise directly or
indirectly provided credit support for any Indebtedness of the
Company or any of its Restricted Subsidiaries, except to the
extent such Guarantee or credit support would be released upon
such designation; and
(v) no Event of Default would be in existence following such
designation.
(b) Any designation of a Restricted Subsidiary of the
Company as an Unrestricted Subsidiary shall be evidenced to the Trustee by
filing with the Trustee a Board Resolution giving effect to such designation and
an Officers' Certificate certifying that such designation complied with the
preceding conditions and was permitted by this Indenture. If, at any time, any
Unrestricted Subsidiary would fail to meet any of the requirements described in
clause (iv) above, it shall thereafter cease to be an Unrestricted Subsidiary
for purposes of this Indenture and any Indebtedness, Investments, or Liens on
the property, of such Subsidiary shall be deemed to be incurred or made by a
Restricted Subsidiary of the Company as of such date and, if such Indebtedness,
Investments or Liens are not permitted to be incurred or made as of such date
under this Indenture, the Company shall be in default under this Indenture.
(c) The Board of Directors of the Company may at any time
designate any Unrestricted Subsidiary to be a Restricted Subsidiary; PROVIDED
that:
(i) such designation shall be deemed to be an incurrence of
Indebtedness by a Restricted Subsidiary of the Company of any
outstanding Indebtedness of such Unrestricted Subsidiary and such
designation shall only be permitted if such Indebtedness
74
is permitted under Section 4.09 calculated on a pro forma basis as if
such designation had occurred at the beginning of the four-quarter
reference period;
(ii) all outstanding Investments owned by such Unrestricted
Subsidiary shall be deemed to be made as of the time of such designation
and such Investments shall only be permitted if such Investments would
be permitted under Section 4.07;
(iii) all Liens upon property or assets of such Unrestricted
Subsidiary existing at the time of such designation would be permitted
under Section 4.12; and
(iv) no Default or Event of Default would be in existence
following such designation.
Section 4.17. PAYMENTS FOR CONSENT.
The Company shall not, and shall not permit any of its
Restricted Subsidiaries to, directly or indirectly, pay or cause to be paid any
consideration to or for the benefit of any Holder of Notes for or as an
inducement to any consent, waiver or amendment of any of the terms or provisions
of this Indenture or the Notes unless such consideration is offered to be paid
and is paid to all Holders of the Notes that consent, waive or agree to amend in
the time frame set forth in the solicitation documents relating to such consent,
waiver or agreement.
Section 4.18. GUARANTEES.
(a) If the Company or any of its Restricted Subsidiaries
acquires or creates another Domestic Subsidiary (other than an Excluded
Subsidiary) on or after the date of this Indenture, then that newly acquired or
created Domestic Subsidiary must become a Guarantor and execute a supplemental
indenture and deliver an Opinion of Counsel to the Trustee within 30 days of
such acquisition or creation. The Company will not permit any of its Restricted
Subsidiaries, directly or indirectly, to Guarantee or pledge any assets to
secure the payment of any other Indebtedness of the Company or any Guarantor
unless such Restricted Subsidiary is a Guarantor or simultaneously executes and
delivers a supplemental indenture providing for the Guarantee of the payment of
the Notes by such Restricted Subsidiary, which Guarantee shall be senior to or
PARI PASSU with such Subsidiary's Guarantee of such other Indebtedness unless
such other Indebtedness is Senior Debt, in which case the Guarantee of the Notes
may be subordinated to the Guarantee of such Senior Debt to the same extent as
the Notes are subordinated to such Senior Debt. In addition, in the event that
any Restricted Subsidiary that is an Excluded Subsidiary ceases to be an
Excluded Subsidiary, then such Restricted Subsidiary must become a Guarantor and
execute a supplemental indenture and deliver an Opinion of Counsel to the
Trustee within 30 days of the date of such event. The form of the Note Guarantee
is attached as EXHIBIT E hereto and the form of the Supplemental Indenture is
attached as EXHIBIT F hereto.
(b) Notwithstanding Section 4.18(a), any Note Guarantee may
provide by its terms that it will be automatically and unconditionally released
and discharged under the circumstances described under Section 10.05 hereof.
75
ARTICLE FIVE
SUCCESSORS
Section 5.01. MERGER, CONSOLIDATION OR SALE OF ASSETS.
(a) The Company shall not, directly or indirectly: (1)
consolidate or merge with or into another Person (whether or not the Company is
the surviving corporation) or (2) sell, assign, transfer, convey or otherwise
dispose of all or substantially all of the properties and assets of the Company
and its Restricted Subsidiaries taken as a whole, in one or more related
transactions, to another Person or Persons, unless:
(i) either: (a) the Company is the surviving corporation; or
(b) the Person formed by or surviving any such consolidation or merger
(if other than the Company) or to which such sale, assignment, transfer,
conveyance or other disposition shall have been made (i) is a
corporation, limited liability company or partnership organized or
existing under the laws of the United States, any state thereof or the
District of Columbia; PROVIDED that if such Person is a limited
liability company or partnership, a corporate Wholly Owned Restricted
Subsidiary of such Person organized or existing under the laws of the
United States, any state thereof or the District of Columbia becomes a
co-issuer of the Notes in connection therewith and (ii) assumes all the
obligations of the Company under the Notes, this Indenture and the
Registration Rights Agreement pursuant to agreements reasonably
satisfactory to the Trustee;
(ii) immediately after giving effect to such transaction, no
Event of Default exists;
(iii) immediately after giving effect to such transaction on a
pro forma basis, the Company or the Person formed by or surviving any
such consolidation or merger (if other than the Company), or to which
such sale, assignment, transfer, conveyance or other disposition shall
have been made, will, on the date of such transaction after giving pro
forma effect thereto and any related financing transactions as if the
same had occurred at the beginning of the applicable four-quarter
period, be permitted to incur at least $1.00 of additional Indebtedness
pursuant to the Fixed Charge Coverage Ratio test set forth in Section
4.09(a); and
(iv) each Guarantor, unless such Guarantor is the Person with
which the Company has entered into a transaction under this Section
5.01, shall have by amendment to its Note Guarantee confirmed that its
Note Guarantee shall apply to the obligations of the Company or the
surviving Person in accordance with the Notes and this Indenture.
(b) In addition, the Company shall not, and shall not permit
any Restricted Subsidiary of the Company to, directly or indirectly, lease all
or substantially all of the properties or assets of the Company and its
Restricted Subsidiaries considered as a whole, in one or more related
transactions, to any other Person. Section 5.01(a)(iii) shall not apply to any
merger, consolidation or sale, assignment, lease, transfer, conveyance or other
disposition of assets between or among the Company and any of its Restricted
Subsidiaries.
76
Section 5.02. SUCCESSOR CORPORATION SUBSTITUTED.
Upon any consolidation or merger, or any sale, assignment,
transfer, lease, conveyance or other disposition of all or substantially all of
the assets of the Company in accordance with Section 5.01 hereof, the successor
corporation formed by such consolidation or into or with which the Company is
merged or to which such sale, assignment, transfer, conveyance or other
disposition is made shall succeed to, and be substituted for (so that from and
after the date of such consolidation, merger, sale, conveyance or other
disposition, the provisions of this Indenture referring to the "Company" shall
refer instead to the successor corporation and not to the Company), and may
exercise every right and power of, the Company under this Indenture with the
same effect as if such successor Person had been named as the Company herein;
PROVIDED, HOWEVER, that the predecessor Company shall not be relieved from the
obligation to pay the principal of and interest and Liquidated Damages, if any,
on the Notes except in the case of a sale, assignment, transfer, conveyance or
other disposition of all of the Company's assets that meets the requirements of
Section 5.01 hereof.
ARTICLE SIX
DEFAULTS AND REMEDIES
Section 6.01. EVENTS OF DEFAULT.
(a) Each of the following is an "EVENT OF DEFAULT":
(i) default for 30 consecutive days in the payment when due
of interest on, or Liquidated Damages with respect to, the Notes whether
or not prohibited by the subordination provisions of this Indenture;
(ii) default in payment when due (whether at maturity, upon
acceleration, redemption or otherwise) of the principal of, or premium,
if any, on the Notes, whether or not prohibited by Article Twelve of
this Indenture;
(iii) failure by the Company or any of its Restricted
Subsidiaries to comply with Sections 3.09(b), 4.10, 4.14, 5.01 or
10.04(a);
(iv) failure by the Company or any of its Restricted
Subsidiaries for 60 days after written notice by the Trustee or Holders
representing 25% or more of the aggregate principal amount of Notes
outstanding to comply with any of the other agreements in this
Indenture;
(v) default under any mortgage, indenture or instrument
under which there may be issued or by which there may be secured or
evidenced any Indebtedness for money borrowed by the Company or any of
its Significant Subsidiaries (or any group of Restricted Subsidiaries
that together would constitute a Significant Subsidiary of the Company)
or the payment of which is Guaranteed by the Company or any of its
Significant Subsidiaries (or any group of Restricted Subsidiaries that
together would constitute a Significant Subsidiary of the Company)
whether such Indebtedness or Guarantee now exists, or is created after
the date of this Indenture, if that default:
77
(A) is caused by a failure to make any payment when
due at the final maturity of such Indebtedness (a "PAYMENT
DEFAULT"); or
(B) results in the acceleration of such Indebtedness
prior to its express maturity,
and, in each case, the principal amount of any such Indebtedness,
together with the principal amount of any other such Indebtedness under
which there has been a Payment Default or the maturity of which has been
so accelerated, aggregates $15.0 million or more;
(vi) failure by the Company or any of its Significant
Subsidiaries (or any group of Restricted Subsidiaries that together
would constitute a Significant Subsidiary of the Company) to pay final
judgments aggregating in excess of $15.0 million (excluding amounts
covered by insurance provided by a carrier that has acknowledged
coverage in writing and has the ability to perform), which judgments are
not paid, discharged or stayed for a period of 60 days;
(vii) the Pledge Agreement shall cease to be in full force and
effect or enforceable in accordance with its terms (other than in
accordance with its terms) or the Company denies or disaffirms its
obligations under the Pledge Agreement or the obligations under the
Pledge Agreement cease to be secured by a perfected first priority
security interest in any portion of the collateral purported to be
pledged under the Pledge Agreement (other than in accordance with its
terms);
(viii) except as permitted by this Indenture, any Note
Guarantee shall be held in any judicial proceeding to be unenforceable
or invalid or shall cease for any reason to be in full force and effect
or any Guarantor, or any Person acting on behalf of any Guarantor, shall
deny or disaffirm its obligations under its Note Guarantee; and
(ix) the Company, any Guarantor or any Significant Subsidiary
of the Company (or any Restricted Subsidiaries that together would
constitute a Significant Subsidiary) pursuant to or within the meaning
of Bankruptcy Law:
(A) commences a voluntary case,
(B) consents to the entry of an order for relief
against it in an involuntary case,
(C) makes a general assignment for the benefit of
its creditors, or
(D) generally is not paying its debts as they become
due; and
(x) a court of competent jurisdiction enters an order or
decree under any Bankruptcy Law that:
78
(A) is for relief against the Company, any Guarantor
or any of its Restricted Subsidiaries that is a Significant
Subsidiary (or Restricted Subsidiaries that together would
constitute a Significant Subsidiary), in an involuntary case; or
(B) appoints a custodian of the Company, any
Guarantor or any of its Restricted Subsidiaries that is a
Significant Subsidiary (or Restricted Subsidiaries that together
would constitute a Significant Subsidiary) or for all or
substantially all of the property of the Company, any Guarantor
or any of its Restricted Subsidiaries that is a Significant
Subsidiary (or Restricted Subsidiaries that together would
constitute a Significant Subsidiary); or
(C) orders the liquidation of the Company, any
Guarantor or any of its Restricted Subsidiaries that is a
Significant Subsidiary (or Restricted Subsidiaries that together
would constitute a Significant Subsidiary);
and the order or decree remains unstayed and in effect for 60
consecutive days.
Section 6.02. ACCELERATION.
In the case of an Event of Default specified in clause (ix) or
(x) of Section 6.01, with respect to the Company, any Guarantor or any
Significant Subsidiary of the Company (or any Restricted Subsidiaries that
together would constitute a Significant Subsidiary), all outstanding Notes will
become due and payable immediately without further action or notice. If any
other Event of Default occurs and is continuing, the Trustee or the Holders of
at least 25% in principal amount of the then outstanding Notes may declare all
the Notes to be due and payable immediately by notice in writing to the Company
specifying the Event of Default; provided, however, that so long as any
Indebtedness permitted to be incurred pursuant to the Credit Agreement shall be
outstanding, that acceleration shall not be effective until the earlier of (1)
an acceleration of Indebtedness under the Credit Agreement; and (2) five
Business Days after receipt by the Company and the agent under the Credit
Agreement of written notice of the acceleration of the Notes.
Section 6.03. OTHER REMEDIES.
(a) If an Event of Default occurs and is continuing, the
Trustee may pursue any available remedy to collect the payment of principal,
premium, if any, interest, and Liquidated Damages, if any, with respect to, the
Notes or to enforce the performance of any provision of the Notes or this
Indenture.
(b) The Trustee may maintain a proceeding even if it does
not possess any of the Notes or does not produce any of them in the proceeding.
A delay or omission by the Trustee or any Holder of a Note in exercising any
right or remedy accruing upon an Event of Default shall not impair the right or
remedy or constitute a waiver of or acquiescence in the Event of Default. All
remedies are cumulative to the extent permitted by law.
79
Section 6.04. WAIVER OF PAST DEFAULTS.
Holders of a majority in aggregate principal amount of the Notes
then outstanding by notice to the Trustee may on behalf of the Holders of all of
the Notes waive any existing Default or Event of Default and its consequences
hereunder except a continuing Default or Event of Default in the payment of
interest or Liquidated Damages on, or the principal of, the Notes; PROVIDED,
HOWEVER, that the Holders of a majority in principal amount of the then
outstanding Notes may rescind an acceleration and its consequences, including
any related payment default that resulted from such acceleration.
The Company shall deliver to the Trustee an Officers'
Certificate stating that the requisite percentage of Holders have consented to
such waiver and attaching copies of such consents. In case of any such waiver,
the Company, the Trustee and the Holders shall be restored to their former
positions and rights hereunder and under the Notes, respectively. This Section
6.04 shall be in lieu of Section 316(a)(1)(B) of the TIA and such Section
316(a)(1)(B) of the TIA is hereby expressly excluded from this Indenture and the
Notes, as permitted by the TIA. Upon any such waiver, such Default shall cease
to exist, and any Event of Default arising therefrom shall be deemed to have
been cured for every purpose of this Indenture; but no such waiver shall extend
to any subsequent or other Default or impair any right consequent thereon
Section 6.05. CONTROL BY MAJORITY.
The Holders of a majority in principal amount of the then
outstanding Notes will have the right to direct the time, method and place of
conducting any proceeding for exercising any remedy available to the Trustee.
However, the Trustee may refuse to follow any direction that conflicts with law
or this Indenture, that may involve the Trustee in personal liability, or that
the Trustee determines in good faith may be unduly prejudicial to the rights of
Holders of Notes not joining in the giving of such direction and may take any
other action it deems proper that is not inconsistent with any such direction
received from Holders of Notes.
Section 6.06. LIMITATION ON SUITS.
(a) A Holder may not pursue any remedy with respect to this
Indenture or the Notes unless:
(i) the Holder gives the Trustee written notice of a
continuing Event of Default;
(ii) the Holders of at least 25% in aggregate principal
amount of outstanding Notes make a written request to the Trustee to
pursue the remedy;
(iii) such Holder or Holders offer the Trustee indemnity
satisfactory to the Trustee against any costs, liability or expense;
(iv) the Trustee does not comply with the request within 60
days after receipt of the request and the offer of indemnity; and
80
(v) during such 60-day period, the Holders of a majority in
aggregate principal amount of the outstanding Notes do not give the
Trustee a direction that is inconsistent with the request.
(b) A Holder of a Note may not use this Indenture to prejudice
the rights of another Holder of a Note or to obtain a preference or priority
over another Holder of a Note.
Section 6.07. RIGHTS OF HOLDERS OF NOTES TO RECEIVE PAYMENT.
Notwithstanding any other provision of this Indenture, the right
of any Holder of a Note to receive payment of the principal of, premium or
Liquidated Damages, if any, or interest on, such Note or to bring suit for the
enforcement of any such payment, on or after the due date expressed in the
Notes, which right shall not be impaired or affected without the consent of the
Holder.
Section 6.08. COLLECTION SUIT BY TRUSTEE.
If an Event of Default specified in Section 6.01(a)(i) or
(a)(ii) occurs and is continuing, the Trustee is authorized to recover judgment
in its own name and as trustee of an express trust against the Company for the
whole amount of principal of, premium, if any, interest, and Liquidated Damages,
if any, remaining unpaid on the Notes and interest on overdue principal and
premium, if any, and, to the extent lawful, interest and Liquidated Damages, if
any, and such further amount as shall be sufficient to cover the costs and
expenses of collection, including the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel.
Section 6.09. TRUSTEE MAY FILE PROOFS OF CLAIM.
The Trustee is authorized to file such proofs of claim and other
papers or documents as may be necessary or advisable in order to have the claims
of the Trustee (including any claim for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel) and the
Holders of the Notes allowed in any judicial proceedings relative to the Company
or any Guarantor (or any other obligor upon the Notes), its creditors or its
property and shall be entitled and empowered to collect, receive and distribute
any money or other securities or property payable or deliverable on any such
claims and any custodian in any such judicial proceeding is hereby authorized by
each Holder to make such payments to the Trustee, and in the event that the
Trustee shall consent to the making of such payments directly to the Holders, to
pay to the Trustee any amount due to it for the reasonable compensation,
expenses, disbursements and advances of the Trustee, its agents and counsel, and
any other amounts due the Trustee under Section 7.07. To the extent that the
payment of any such compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel and any other amounts due the Trustee under
Section 7.07 out of the estate in any such proceeding shall be denied for any
reason, payment of the same shall be secured by a Lien on, and shall be paid out
of, any and all distributions, dividends, money, securities and other properties
that the Holders may be entitled to receive in such proceeding whether in
liquidation or under any plan of reorganization or arrangement or otherwise.
Nothing herein contained shall be deemed to authorize the Trustee to authorize
or consent to or accept or adopt on behalf of any Holder any
81
plan of reorganization, arrangement, adjustment or composition affecting the
Notes or the rights of any Holder, or to authorize the Trustee to vote in
respect of the claim of any Holder in any such proceeding.
Section 6.10. PRIORITIES.
(a) If the Trustee collects any money pursuant to this
Article Six, it shall pay out the money in the following order:
First: to the Trustee, its agents and attorneys for amounts due
under Section 7.07, including payment of all compensation, expense and
liabilities incurred, and all advances made, by the Trustee and the
costs and expenses of collection;
Second: to Holders of Notes for amounts due and unpaid on the
Notes for principal, premium, if any, interest and Liquidated Damages,
if any, ratably, without preference or priority of any kind, according
to the amounts due and payable on the Notes for principal, premium, if
any, interest, and Liquidated Damages, if any, respectively; and
Third: to the Company or to such party as a court of competent
jurisdiction shall direct.
(b) The Trustee may fix a record date and payment date for
any payment to Holders of Notes pursuant to this Section 6.10.
Section 6.11. UNDERTAKING FOR COSTS.
In any suit for the enforcement of any right or remedy under
this Indenture or in any suit against the Trustee for any action taken or
omitted by it as a Trustee, a court in its discretion may require the filing by
any party litigant in the suit of an undertaking to pay the costs of the suit,
and the court in its discretion may assess reasonable costs, including
reasonable attorneys' fees, against any party litigant in the suit, having due
regard to the merits and good faith of the claims or defenses made by the party
litigant. This Section 6.11 does not apply to a suit by the Trustee, a suit by a
Holder of a Note pursuant to Section 6.07 hereof, or a suit by Holders of more
than ten percent in principal amount of the then outstanding Notes.
ARTICLE SEVEN
TRUSTEE
Section 7.01. DUTIES OF TRUSTEE.
Except to the extent, if any, provided otherwise in the Trust
Indenture Act of 1939 (as from time to time in effect):
(a) If an Event of Default has occurred and is continuing,
the Trustee shall exercise such of the rights and powers vested in it by this
Indenture, and use the same degree of care and skill in its exercise, as a
prudent man would exercise or use under the circumstances in the conduct of his
own affairs.
82
(b) Except during the continuance of an Event of Default:
(i) the duties of the Trustee shall be determined solely by
the express provisions of this Indenture and the Trustee need perform
only those duties that are specifically set forth in this Indenture and
no others, and no implied covenants or obligations shall be read into
this Indenture against the Trustee; and
(ii) in the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the correctness
of the opinions expressed therein, upon certificates or opinions
furnished to the Trustee and conforming to the requirements of this
Indenture. However, the Trustee shall examine the certificates and
opinions to determine whether or not they conform to the requirements of
this Indenture.
(c) The Trustee may not be relieved from liabilities for its
own negligent action, its own negligent failure to act, or its own willful
misconduct, except that:
(i) this paragraph does not limit the effect of paragraph
(b) of this Section 7.01;
(ii) the Trustee shall not be liable for any error of
judgment made in good faith by a Responsible Officer, unless it is
proved that the Trustee was negligent in ascertaining the pertinent
facts; and
(iii) the Trustee shall not be liable with respect to any
action it takes or omits to take in good faith in accordance with a
direction received by it pursuant to Section 6.05.
(d) Whether or not therein expressly so provided, every
provision of this Indenture that in any way relates to the Trustee is subject to
paragraphs (a), (b) and (c) of this Section 7.01.
(e) No provision of this Indenture shall require the Trustee
to expend or risk its own funds or incur any liability. The Trustee shall be
under no obligation to exercise any of its rights and powers under this
Indenture at the request of any Holders, unless such Holder shall have offered
to the Trustee security and indemnity satisfactory to it against any loss,
costs, liability or expense that might be incurred by it in connection with the
request or direction.
(f) Money held in trust by the Trustee need not be
segregated from other funds except to the extent required by law.
Section 7.02. CERTAIN RIGHTS OF TRUSTEE.
(a) The Trustee may conclusively rely upon any document
believed by it to be genuine and to have been signed or presented by the proper
Person. The Trustee need not investigate any fact or matter stated in the
document.
(b) Before the Trustee acts or refrains from acting, it may
require an Officers' Certificate or an Opinion of Counsel or both. The Trustee
shall not be liable for any action it
83
takes or omits to take in good faith in reliance on such Officers' Certificate
or Opinion of Counsel. The Trustee may consult with counsel and the advice of
such counsel or any Opinion of Counsel shall be full and complete authorization
and protection from liability in respect of any action taken, suffered or
omitted by it hereunder in good faith and in reliance thereon.
(c) The Trustee may act through its attorneys and agents and
shall not be responsible for the misconduct or negligence of any agent appointed
with due care.
(d) The Trustee shall not be liable for any action it takes
or omits to take in good faith that it believes to be authorized or within the
rights or powers conferred upon it by this Indenture.
(e) Unless otherwise specifically provided in this
Indenture, any demand, request, direction or notice from the Company shall be
sufficient if signed by an Officer of the Company.
(f) The Trustee shall be under no obligation to exercise any
of the rights or powers vested in it by this Indenture at the request or
direction of any of the Holders unless such Holders shall have offered to the
Trustee security or indemnity reasonably satisfactory to it against the costs,
expenses and liabilities that might be incurred by it in compliance with such
request or direction.
(g) The Trustee shall not be deemed to have notice of any
Default or Event of Default unless a Responsible Officer of the Trustee has
actual knowledge thereof or unless written notice of such event is sent to the
Trustee in accordance with Section 12.03, and such notice references the Notes.
Section 7.03. INDIVIDUAL RIGHTS OF TRUSTEE.
The Trustee in its individual or any other capacity may become
the owner or pledgee of Notes and may become a creditor of, or otherwise deal
with, the Company or any of its Affiliates with the same rights it would have if
it were not Trustee. However, in the event that the Trustee acquires any
conflicting interest as described in the Trust Indenture Act of 1939 (as in
effect at such time), it must eliminate such conflict within 90 days, apply to
the SEC for permission to continue as trustee or resign. Any Agent may do the
same with like rights and duties. The Trustee is also subject to Sections 7.10
and 7.11.
Section 7.04. TRUSTEE'S DISCLAIMER.
The Trustee shall not be responsible for and makes no
representation as to the validity or adequacy of this Indenture, it shall not be
accountable for the Company's use of the proceeds from the Notes or any money
paid to the Company or upon the Company's direction under any provision of this
Indenture, it shall not be responsible for the use or application of any money
received by any Paying Agent other than the Trustee, and it shall not be
responsible for any statement or recital herein or any statement in the Notes or
any other document in connection with the sale of the Notes or pursuant to this
Indenture other than its certificate of authentication.
84
Section 7.05. NOTICE OF DEFAULTS.
If a Default or Event of Default occurs and is continuing and if
it is known to the Trustee, the Trustee shall mail to Holders of Notes a notice
of the Default or Event of Default within 90 days after it occurs. Except in the
case of a Default or Event of Default relating to the payment of principal or
interest or Liquidated Damages on any Note, the Trustee may withhold the notice
if and so long as a committee of its Responsible Officers in good faith
determines that withholding the notice is in the interests of the Holders of the
Notes.
Section 7.06. REPORTS BY TRUSTEE TO HOLDERS OF THE NOTES.
(a) Within 60 days after each May 15 beginning with the
May 15 following the date hereof, and for so long as Notes remain outstanding,
the Trustee shall mail to the Holders of the Notes a brief report dated as of
such reporting date that complies with TIA Section 313(a) (but if no event
described in TIA Section 313(a) has occurred within the twelve months preceding
the reporting date, no report need be transmitted). The Trustee also shall
comply with TIA Section 313(b)(2). The Trustee shall also transmit by mail all
reports as required by TIA Section 313(c).
(b) A copy of each report at the time of its mailing to the
Holders of Notes shall be mailed to the Company and filed with the SEC and each
stock exchange on which the Notes are listed in accordance with TIA Section
313(d). The Company shall promptly notify the Trustee when the Notes are listed
on any stock exchange or any delisting thereof.
Section 7.07. COMPENSATION AND INDEMNITY.
(a) The Company shall pay to the Trustee from time to time
reasonable compensation for its acceptance of this Indenture and services
hereunder in accordance with a written schedule provided by the Trustee to the
Company. The Trustee's compensation shall not be limited by any law on
compensation of a trustee of an express trust. The Company shall reimburse the
Trustee promptly upon request for all reasonable disbursements, advances and
expenses incurred or made by it in addition to the compensation for its
services. Such expenses shall include the reasonable compensation, disbursements
and expenses of the Trustee's agents and counsel.
(b) The Company shall indemnify the Trustee against any and
all losses, liabilities or expenses incurred by it arising out of or in
connection with the acceptance or administration of its duties under this
Indenture, including the costs and expenses of enforcing this Indenture against
the Company (including this Section 7.07) and defending itself against any claim
(whether asserted by either of the Company or any Holder or any other person) or
liability in connection with the exercise or performance of any of its powers or
duties hereunder, except to the extent any such loss, liability or expense may
be attributable to its negligence, bad faith or willful misconduct. The Trustee
shall notify the Company promptly of any claim for which it may seek indemnity.
Failure by the Trustee to so notify the Company shall not relieve the Company of
its obligations hereunder unless the failure to notify the Company impairs the
Company's ability to defend such claim. The Company shall defend the claim and
the Trustee
85
shall cooperate in the defense. The Company need not pay for any settlement made
without its consent.
(c) The obligations of the Company under this Section 7.07
shall survive the satisfaction and discharge of this Indenture and resignation
of removal of the Trustee.
(d) To secure the Company's payment obligations in this
Section 7.07, the Trustee shall have a Lien prior to the Notes on all money or
property held or collected by the Trustee, except that held in trust to pay
principal and interest on particular Notes. Such Lien shall survive the
satisfaction and discharge of this Indenture and resignation or removal of the
Trustee.
(e) When the Trustee incurs expenses or renders services
after an Event of Default specified in Section 6.01(a)(ix) and (x) hereof
occurs, the expenses and the compensation for the services (including the fees
and expenses of its agents and counsel) are intended to constitute expenses of
administration under any Bankruptcy Law.
(f) The Trustee shall comply with the provisions of TIA
Section 313(b)(2) to the extent applicable.
Section 7.08. REPLACEMENT OF TRUSTEE.
(a) A resignation or removal of the Trustee and appointment
of a successor Trustee shall become effective only upon the successor Trustee's
acceptance of appointment as provided in this Section 7.08.
(b) The Trustee may resign in writing at any time and be
discharged from the trust hereby created by so notifying the Company. The
Holders of a majority in principal amount of the then outstanding Notes may
remove the Trustee by so notifying the Trustee and the Company in writing. The
Company may remove the Trustee if:
(i) the Trustee fails to comply with Section 7.10;
(ii) the Trustee is adjudged a bankrupt or an insolvent or an
order for relief is entered with respect to the Trustee under any
Bankruptcy Law;
(iii) a custodian or public officer takes charge of the
Trustee or its property; or
(iv) the Trustee becomes incapable of acting.
(c) If the Trustee resigns or is removed or if a vacancy
exists in the office of Trustee for any reason, the Company shall promptly
appoint a successor Trustee. Within one year after the successor Trustee takes
office, the Holders of a majority in principal amount of the then outstanding
Notes may appoint a successor Trustee to replace the successor Trustee appointed
by the Company.
(d) If a successor Trustee does not take office within 30
days after the retiring Trustee resigns or is removed, the retiring Trustee, the
Company, or the Holders of at least 10%
86
in principal amount of the then outstanding Notes may petition at the expense of
the Company any court of competent jurisdiction for the appointment of a
successor Trustee.
(e) If the Trustee, after written request by any Holder who
has been a Holder for at least six months, fails to comply with Section 7.10,
such Holder may petition any court of competent jurisdiction for the removal of
the Trustee and the appointment of a successor Trustee.
(f) A successor Trustee shall deliver a written acceptance
of its appointment to the retiring Trustee and to the Company. Thereupon, the
resignation or removal of the retiring Trustee shall become effective, and the
successor Trustee shall have all the rights, powers and duties of the Trustee
under this Indenture. The successor Trustee shall mail a notice of its
succession to Holders. The retiring Trustee shall promptly transfer all property
held by it as Trustee to the successor Trustee, PROVIDED all sums owing to the
Trustee hereunder have been paid and subject to the Lien provided for in Section
7.07. Notwithstanding replacement of the Trustee pursuant to this Section 7.08,
the Company's obligations under Section 7.07 shall continue for the benefit of
the retiring Trustee.
Section 7.09. SUCCESSOR TRUSTEE BY MERGER, ETC.
If the Trustee consolidates, merges or converts into, or
transfers all or substantially all of its corporate trust business to, another
Person, the successor Person without any further act shall be the successor
Trustee.
Section 7.10. ELIGIBILITY; DISQUALIFICATION.
There shall at all times be a Trustee hereunder that is a
corporation organized and doing business under the laws of the United States of
America or of any state thereof that is authorized under such laws to exercise
corporate trust powers, that is subject to supervision or examination by federal
or state authorities and that has a combined capital and surplus of at least
$50.0 million as set forth in its most recent published annual report of
condition.
This Indenture shall always have a Trustee who satisfies the
requirements of TIA Section 310(a)(1), (2) and (5). The Trustee is subject to
TIA Section 310(b).
Section 7.11. PREFERENTIAL COLLECTION OF CLAIMS AGAINST COMPANY.
The Trustee is subject to TIA Section 311(a), excluding any
creditor relationship listed in TIA Section 311(b). A Trustee who has resigned
or been removed shall be subject to TIA Section 311(a) to the extent indicated
therein. The Trustee hereby waives any right to set off any claim that it may
have against the Company in any capacity (other than as Trustee and Paying
Agent) against any of the assets of the Company held by the Trustee; PROVIDED,
HOWEVER, that if the Trustee is or becomes a lender of any other Indebtedness
permitted hereunder to be PARI PASSU with the Notes, then such waiver shall not
apply to the extent of such Indebtedness.
87
ARTICLE EIGHT
DEFEASANCE AND COVENANT DEFEASANCE
Section 8.01. OPTION TO EFFECT LEGAL DEFEASANCE OR COVENANT DEFEASANCE.
The Company may, at the option of the Board of Directors
evidenced by a resolution set forth in an Officers' Certificate, at any time,
elect to have either Section 8.02 or 8.03 be applied to all outstanding Notes
upon compliance with the conditions set forth below in this Article Eight.
Section 8.02. LEGAL DEFEASANCE AND DISCHARGE.
Upon the Company's exercise under Section 8.01 hereof of the
option applicable to this Section 8.02, the Company shall, subject to the
satisfaction of the conditions set forth in Section 8.04 hereof, be deemed to
have been discharged from its obligations with respect to all outstanding Notes
and all obligations of the Guarantors shall be deemed to have been discharged
with respect to their obligations under the Note Guarantees on the date the
conditions set forth below are satisfied (hereinafter, "LEGAL DEFEASANCE"). For
this purpose, Legal Defeasance means that the Company and the Guarantors shall
be deemed to have paid and discharged the entire Indebtedness represented by the
outstanding Notes and Note Guarantees, respectively, which shall thereafter be
deemed to be "outstanding" only for the purposes of Section 8.05 and the other
Sections of this Indenture referred to in (a) and (b) below, and to have
satisfied all its other obligations under such Notes and this Indenture (and the
Trustee, on demand of and at the expense of the Company, shall execute proper
instruments acknowledging the same), except for the following provisions which
shall survive until otherwise terminated or discharged hereunder: (a) the rights
of Holders of outstanding Notes to receive solely from the trust fund described
in Section 8.04, and as more fully set forth in such Section, payments in
respect of the principal of, premium, if any, interest and Liquidated Damages,
if any, on such Notes when such payments are due, (b) the Company's obligations
with respect to such Notes under Article Two concerning issuing temporary Notes,
registration of Notes and mutilated, destroyed, lost or stolen Notes and the
Company's obligations under Section 4.02, (c) the rights, powers, trusts, duties
and immunities of the Trustee hereunder and the Company's and the Guarantors'
obligations in connection therewith and (d) this Article Eight. Subject to
compliance with this Article Eight, the Company may exercise its option under
this Section 8.02 notwithstanding the prior exercise of its option under Section
8.03 hereof.
Section 8.03. COVENANT DEFEASANCE.
Upon the Company's exercise under Section 8.01 hereof of the
option applicable to this Section 8.03, the Company and the Guarantors shall,
subject to the satisfaction of the conditions set forth in Section 8.04 hereof,
be released from their obligations under the covenants contained in Sections
3.08, 4.03, 4.07, 4.08, 4.09, 4.10, 4.11, 4.12, 4.13, 4.14, 4.15, 4.16, 4.17,
4.18, 5.01 and 10.04 with respect to the outstanding Notes on and after the date
the conditions set forth in Section 8.04 are satisfied (hereinafter, "COVENANT
DEFEASANCE"), and the Notes shall thereafter be deemed not "outstanding" for the
purposes of any direction, waiver, consent or declaration or act of Holders (and
the consequences of any thereof) in connection with such covenants, but shall
continue to be deemed "outstanding" for all other purposes hereunder (it
88
being understood that such Notes shall not be deemed outstanding for accounting
purposes). For this purpose, Covenant Defeasance means that, with respect to the
outstanding Notes, the Company and the Guarantors may omit to comply with and
shall have no liability in respect of any term, condition or limitation set
forth in any such covenant, whether directly or indirectly, by reason of any
reference elsewhere herein to any such covenant or by reason of any reference in
any such covenant to any other provision herein or in any other document and
such omission to comply shall not constitute a Default or an Event of Default
under Section 6.01, but, except as specified above, the remainder of this
Indenture and such Notes shall be unaffected thereby. In addition, upon the
Company's exercise under Section 8.01 of the option applicable to this Section
8.03, subject to the satisfaction of the conditions set forth in Section 8.04,
Sections 6.01(a)(iii) through (viii) shall not constitute Events of Default.
Section 8.04. CONDITIONS TO LEGAL OR COVENANT DEFEASANCE.
(a) The following shall be the conditions to the application
of either Section 8.02 or 8.03 to the outstanding Notes:
(i) the Company must irrevocably deposit with the Trustee,
in trust, for the benefit of the Holders of the Notes, cash in U.S.
dollars, non-callable Government Securities, or a combination thereof,
in such amounts as will be sufficient, in the opinion of a nationally
recognized firm of independent public accountants, to pay the principal
of, or interest and premium and Liquidated Damages, if any, on the
outstanding Notes on the Stated Maturity or on the applicable redemption
date, as the case may be, and the Company must specify whether the Notes
are being defeased to maturity or to a particular redemption date;
(ii) in the case of Legal Defeasance, the Company shall have
delivered to the Trustee an Opinion of Counsel reasonably acceptable to
the Trustee confirming that (a) the Company has received from, or there
has been published by, the Internal Revenue Service a ruling or (b)
since the date of this Indenture, there has been a change in the
applicable federal income tax law, in either case to the effect that,
and based thereon such Opinion of Counsel shall confirm that, the
Holders of the outstanding Notes will not recognize income, gain or loss
for federal income tax purposes as a result of such Legal Defeasance and
will be subject to federal income tax on the same amounts, in the same
manner and at the same times as would have been the case if such Legal
Defeasance had not occurred;
(iii) in the case of Covenant Defeasance, the Company shall
have delivered to the Trustee an Opinion of Counsel reasonably
acceptable to the Trustee confirming that the Holders of the outstanding
Notes will not recognize income, gain or loss for federal income tax
purposes as a result of such Covenant Defeasance and will be subject to
federal income tax on the same amounts, in the same manner and at the
same times as would have been the case if such Covenant Defeasance had
not occurred;
(iv) no Default or Event of Default shall have occurred and
be continuing either: (a) on the date of such deposit; or (b) insofar as
Events of Default from
89
bankruptcy or insolvency events are concerned, at any time in the period
ending on the 123rd day after the date of deposit;
(v) such Legal Defeasance or Covenant Defeasance will not
result in a breach or violation of, or constitute a default under any
material agreement or instrument to which the Company or any of its
Subsidiaries is a party or by which the Company or any of its
Subsidiaries is bound;
(vi) the Company must have delivered to the Trustee an
Opinion of Counsel to the effect that (1) assuming no intervening
bankruptcy of the Company or any Guarantor between the date of deposit
and the 123rd day following the deposit and assuming that no Holder is
an "insider" of the Company under applicable bankruptcy law, after the
123rd day following the deposit, the trust funds will not be subject to
the effect of any applicable bankruptcy, insolvency, reorganization or
similar laws affecting creditors' rights generally, including Xxxxxxx
000 xx xxx Xxxxxx Xxxxxx Bankruptcy Code, and (2) the creation of the
defeasance trust does not violate the Investment Company Act of 1940;
(vii) the Company must deliver to the Trustee an Officers'
Certificate stating that the deposit was not made by the Company with
the intent of preferring the Holders of Notes over the other creditors
of the Company with the intent of defeating, hindering, delaying or
defrauding creditors of the Company or others;
(viii) if the Notes are to be redeemed prior to their Stated
Maturity, the Company must deliver to the Trustee irrevocable
instructions to redeem all of the Notes on the specified redemption
date; and
(ix) the Company must deliver to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent relating to the Legal Defeasance or the Covenant Defeasance
have been complied with.
Section 8.05. DEPOSITED MONEY AND GOVERNMENT SECURITIES TO BE HELD IN TRUST;
OTHER MISCELLANEOUS PROVISIONS.
(a) Subject to Section 8.06, all money and non-callable
Government Securities (including the proceeds thereof) deposited with the
Trustee pursuant to Section 8.04 in respect of the outstanding Notes shall be
held in trust and applied by the Trustee, in accordance with the provisions of
such Notes and this Indenture, to the payment, either directly or through any
Paying Agent (including the Company acting as Paying Agent) as the Trustee may
determine, to the Holders of such Notes of all sums due and to become due
thereon in respect of principal, premium and Liquidated Damages, if any, and
interest, but such money need not be segregated from other funds except to the
extent required by law.
(b) The Company shall pay and indemnify the Trustee against
any tax, fee or other charge imposed on or assessed against the cash or
non-callable Government Securities deposited pursuant to Section 8.04 or the
principal and interest received in respect thereof other than any such tax, fee
or other charge which by law is for the account of the Holders of the
outstanding Notes.
90
(c) Anything in this Article Eight to the contrary
notwithstanding, the Trustee shall deliver or pay to the Company from time to
time upon the request of the Company any money or non-callable Government
Securities held by it as provided in Section 8.04 which, in the opinion of a
nationally recognized firm of independent public accountants expressed in a
written certification thereof delivered to the Trustee (which may be the opinion
delivered under Section 8.04(a)), are in excess of the amount thereof that would
then be required to be deposited to effect an equivalent Legal Defeasance or
Covenant Defeasance.
Section 8.06. REPAYMENT TO THE COMPANY.
Any money deposited with the Trustee or any Paying Agent, or
then held by the Company, in trust for the payment of the principal of, premium,
if any, interest, or Liquidated Damages, if any, on any Note and remaining
unclaimed for two years after such principal, and premium, if any, interest, or
Liquidated Damages, if any, has become due and payable shall be paid to the
Company on its request or (if then held by the Company) shall be discharged from
such trust; and the Holder of such Note shall thereafter look only to the
Company for payment thereof, and all liability of the Trustee or such Paying
Agent with respect to such trust money, and all liability of the Company as
trustee thereof, shall thereupon cease; PROVIDED, HOWEVER, that the Trustee or
such Paying Agent, before being required to make any such repayment, may at the
reasonable expense of the Company cause to be published once, in the
New York
Times and The Wall Street Journal (national edition), notice that such money
remains unclaimed and that, after a date specified therein, which shall not be
less than 30 days from the date of such notification or publication, any
unclaimed balance of such money then remaining shall be repaid to the Company.
Section 8.07. REINSTATEMENT.
If the Trustee or Paying Agent is unable to apply any United
States dollars or non-callable Government Securities in accordance with Section
8.02 or 8.03, as the case may be, by reason of any order or judgment of any
court or governmental authority enjoining, restraining or otherwise prohibiting
such application, then the Company's obligations under this Indenture and the
Notes shall be revived and reinstated as though no deposit had occurred pursuant
to Section 8.02 or 8.03 and, in the case of a Legal Defeasance, the Guarantors'
obligations under their respective Note Guarantees shall be revised and
reinstated as though no deposit had occurred pursuant to Section 8.02, in each
case until such time as the Trustee or Paying Agent is permitted to apply all
such money in accordance with Section 8.02 or 8.03, as the case may be;
PROVIDED, HOWEVER, that, if the Company makes any payment of principal of,
premium, if any, or interest on any Note following the reinstatement of its
obligations, the Company shall be subrogated to the rights of the Holders of
such Notes to receive such payment from the money held by the Trustee or Paying
Agent.
91
ARTICLE NINE
AMENDMENT, SUPPLEMENT AND WAIVER
Section 9.01. WITHOUT CONSENT OF HOLDERS OF NOTES.
(a) Notwithstanding Section 9.02, the Company, the
Guarantors, and the Trustee may amend or supplement this Indenture, the Pledge
Agreement, the Notes or the Note Guarantees without the consent of any Holder of
a Note:
(i) to cure any ambiguity, defect or inconsistency;
(ii) to provide for uncertificated Notes in addition to or in
place of certificated Notes;
(iii) to provide for the assumption of the Company's or any
Guarantor's obligations to Holders of Notes in the case of a merger or
consolidation or sale of all or substantially all of the Company's or
such Guarantor's assets;
(iv) to make any change that would provide any additional
rights or benefits to the Holders of Notes or that does not adversely
affect the legal rights under this Indenture of any such Holder;
(v) to comply with requirements of the SEC in order to
effect or maintain the qualification of this Indenture under the Trust
Indenture Act of 1939;
(vi) to comply with Section 4.18;
(vii) to conform the text of this Indenture or the Notes to
any provision of the section of the Offering Memorandum entitled
"Description of Notes" to the extent that such provision in the
"Description of Notes" was intended to be a verbatim recitation of a
provision of this Indenture or the Notes;
(viii) to evidence and provide for the acceptance of
appointment by a successor Trustee; or
(ix) to provide for the issuance of Additional Notes in
accordance with this Indenture.
Upon the request of the Company accompanied by a resolution of
its Board of Directors authorizing the execution of any such amended or
supplemental Indenture, and upon receipt by the Trustee of any documents
requested under Section 7.02(b) hereof, the Trustee shall join with the Company
in the execution of any amended or supplemental Indenture authorized or
permitted by the terms of this Indenture and to make any further appropriate
agreements and stipulations that may be therein contained, but the Trustee shall
not be obligated to enter into such amended or supplemental Indenture that
affects its own rights, duties or immunities under this Indenture or otherwise.
92
Section 9.02. WITH CONSENT OF HOLDERS OF NOTES.
(a) Except as otherwise provided in this Section 9.02, the
Company, the Guarantors and the Trustee may amend or supplement this Indenture,
the Pledge Agreement, the Notes or the Notes Guarantees with the consent of the
Holders of at least a majority in principal amount of the Notes then outstanding
(including, without limitation, consents obtained in connection with a purchase
of, or tender offer or exchange offer for, Notes), and, subject to Sections 6.04
and 6.07, any existing Default or Event of Default or compliance with any
provision of this Indenture or the Notes or the Notes Guarantees may be waived
with the consent of the Holders of a majority in principal amount of the then
outstanding Notes (including Additional Notes, if any) (including, without
limitation, consents obtained in connection with a purchase of, or tender offer
or exchange offer for, Notes).
(b) The Company may, but shall not be obligated to, fix a
record date for the purpose of determining the Persons entitled to consent to
any indenture supplemental hereto. If a record date is fixed, the Holders on
such record date, or its duly designated proxies, and only such Persons, shall
be entitled to consent to such supplemental indenture, whether or not such
Holders remain Holders after such record date; PROVIDED that unless such consent
shall have become effective by virtue of the requisite percentage having been
obtained prior to the date which is 90 days after such record date, any such
consent previously given shall automatically and without further action by any
Holder be cancelled and of no further effect.
(c) Upon the request of the Company accompanied by a
resolution of its Board of Directors authorizing the execution of any such
amendment or supplement to this Indenture, and upon the filing with the Trustee
of evidence satisfactory to the Trustee of the consent of the Holders of Notes
as aforesaid, and upon receipt by the Trustee of the documents described in
Section 7.02(b), the Trustee shall join with the Company in the execution of
such amendment or supplement unless such amendment or supplement directly
affects the Trustee's own rights, duties or immunities under this Indenture or
otherwise, in which case the Trustee may in its discretion, but shall not be
obligated to, enter into such amendment or supplement.
(d) It shall not be necessary for the consent of the Holders
of Notes under this Section 9.02 to approve the particular form of any proposed
amendment, supplement or waiver, but it shall be sufficient if such consent
approves the substance thereof.
(e) After an amendment, supplement or waiver under this
Section becomes effective, the Company shall mail to the Holders of Notes
affected thereby a notice briefly describing the amendment, supplement or
waiver. Any failure of the Company to mail such notice, or any defect therein,
shall not, however, in any way impair or affect the validity of any such
amendment, supplement or waiver. Subject to Sections 6.04 and 6.07, the Holders
of a majority in aggregate principal amount of the then outstanding Notes
(including Additional Notes, if any) may waive compliance in a particular
instance by the Company with any provision of this Indenture, or the Notes.
However, without the consent of each Holder affected, an amendment or waiver
under this Section 9.02 may not (with respect to any Notes held by a
non-consenting Holder):
93
(i) reduce the principal amount of Notes whose Holders must
consent to an amendment, supplement or waiver;
(ii) reduce the principal of or change the fixed maturity of
any Note or alter the provisions, or waive any payment, with respect to
the redemption of the Notes other than provisions relating to Sections
4.10 and 4.14 (except to the extent provided in clause (ix) below);
(iii) reduce the rate of or change the time for payment of
interest on any Note;
(iv) waive a Default or Event of Default in the payment of
principal of, or interest or premium, or Liquidated Damages, if any, on
the Notes (except a rescission of acceleration of the Notes by the
Holders of at least a majority in aggregate principal amount of the
Notes and a waiver of the payment default that resulted from such
acceleration);
(v) make any Note payable in money other than U.S. dollars;
(vi) make any change in the provisions of this Indenture
relating to waivers of past Defaults or the rights of Holders of Notes
to receive payments of principal of, or interest or premium or
Liquidated Damages, if any, on the Notes;
(vii) release any Guarantor from any of its obligations under
its Note Guarantee or this Indenture or release any collateral under the
Pledge Agreement, except in accordance with the terms of this Indenture
or the Pledge Agreement, respectively;
(viii) impair the right to institute suit for the enforcement
of any payment on or with respect to the Notes or the Note Guarantees;
(ix) amend, change or modify the obligation of the Company to
make and consummate an Asset Sale Offer with respect to any Asset Sale
in accordance with Section 4.10 after the obligation to make such Asset
Sale Offer has arisen, or the obligation of the Company to make and
consummate a Change of Control Offer in the event of a Change of Control
in accordance with Section 4.14 after such Change of Control has
occurred, including, in each case, amending, changing or modifying any
definition relating thereto;
(x) except as otherwise permitted under Section 4.18 and
Section 5.01, consent to the assignment or transfer by the Company or
any Guarantor of any of their rights or obligations under this
Indenture;
(xi) amend or modify any of the provisions of this Indenture
or the related definitions affecting the subordination or ranking of the
Notes or any Note Guarantee in any manner adverse to the holders of the
Notes or any Note Guarantee; and
(xii) make any change in the preceding amendment and waiver
provisions.
94
Section 9.03. COMPLIANCE WITH TRUST INDENTURE ACT.
Every amendment or supplement to this Indenture or the Notes
shall be set forth in a document that complies with the TIA as then in effect.
Section 9.04. REVOCATION AND EFFECT OF CONSENTS.
Until an amendment, supplement or waiver becomes effective, a
consent to it by a Holder of a Note is a continuing consent by the Holder of a
Note and every subsequent Holder of a Note or portion of a Note that evidences
the same debt as the consenting Holder's Note, even if notation of the consent
is not made on any Note. However, any such Holder of a Note or subsequent Holder
of a Note may revoke the consent as to its Note if the Trustee receives written
notice of revocation before the date the waiver, supplement or amendment becomes
effective. An amendment, supplement or waiver becomes effective in accordance
with its terms and thereafter binds every Holder.
Section 9.05. NOTATION ON OR EXCHANGE OF NOTES.
(a) The Trustee may place an appropriate notation about an
amendment, supplement or waiver on any Note thereafter authenticated. The
Company in exchange for all Notes may issue and the Trustee shall, upon receipt
of an Authentication Order, authenticate new Notes that reflect the amendment,
supplement or waiver.
(b) Failure to make the appropriate notation or issue a new
Note shall not affect the validity and effect of such amendment, supplement or
waiver.
Section 9.06. TRUSTEE TO SIGN AMENDMENTS, ETC.
The Trustee shall sign any amendment or supplement to this
Indenture or any Note authorized pursuant to this Article Nine if the amendment
or supplement does not adversely affect the rights, duties, liabilities or
immunities of the Trustee. The Company may not sign an amendment or supplemental
Indenture or Note until its Board of Directors approves it. In executing any
amendment or supplement or Note, the Trustee shall be entitled to receive and
(subject to Section 7.01) shall be fully protected in relying upon an Officers'
Certificate and an Opinion of Counsel stating that the execution of such
amendment or supplement is authorized or permitted by this Indenture.
ARTICLE TEN
NOTE GUARANTEES
Section 10.01. GUARANTEE.
(a) Subject to this Article Ten, each of the Guarantors
hereby, jointly and severally, and fully and unconditionally, guarantees to each
Holder of a Note authenticated and delivered by the Trustee and to the Trustee
and its successors and assigns, irrespective of the validity and enforceability
of, this Indenture, the Notes or the obligations of the Company hereunder or
thereunder, that: (i) the principal of, premium, if any, and interest and
Liquidated Damages, if any, on the Notes will be promptly paid in full when due,
whether at maturity, by
95
acceleration, redemption or otherwise, and interest on the overdue principal of,
premium, if any, and interest and Liquidated Damages, if any, on the Notes, if
lawful (subject in all cases to any applicable grace period provided herein),
and all other obligations of the Company to the Holders or the Trustee hereunder
or thereunder will be promptly paid in full, all in accordance with the terms
hereof and thereof; and (ii) in case of any extension of time of payment or
renewal of any Notes or any of such other obligations, the same will be promptly
paid in full when due in accordance with the terms of the extension or renewal,
whether at stated maturity, by acceleration or otherwise. Failing payment when
due of any amount so guaranteed for whatever reason, the Guarantors shall be
jointly and severally obligated to pay the same immediately. Each Guarantor
agrees that this is a guarantee of payment and not a guarantee of collection.
(b) The Guarantors hereby agree that, to the maximum extent
permitted under applicable law, their obligations hereunder shall be
unconditional, irrespective of the validity, regularity or enforceability of the
Notes or this Indenture, the absence of any action to enforce the same, any
waiver or consent by any Holder of the Notes with respect to any provisions
hereof or thereof, the recovery of any judgment against the Company, any action
to enforce the same or any other circumstance which might otherwise constitute a
legal or equitable discharge or defense of a Guarantor. Subject to Section 6.06,
each Guarantor hereby waives diligence, presentment, demand of payment, filing
of claims with a court in the event of insolvency or bankruptcy of the Company,
any right to require a proceeding first against the Company, protest, notice and
all demands whatsoever and covenants that this Note Guarantee shall not be
discharged except by complete performance of the obligations contained in the
Notes and this Indenture.
(c) If any Holder or the Trustee is required by any court or
otherwise to return to the Company, the Guarantors or any custodian, trustee,
liquidator or other similar official acting in relation to any of the Company or
the Guarantors, any amount paid by any of them to the Trustee or such Holder,
this Note Guarantee, to the extent theretofore discharged, shall be reinstated
in full force and effect.
(d) Each Guarantor agrees that it shall not be entitled to
any right of subrogation in relation to the Holders in respect of any
obligations guaranteed hereby until payment in full of all obligations
guaranteed hereby. Each Guarantor further agrees that, as between the
Guarantors, on the one hand, and the Holders and the Trustee, on the other hand,
(x) the maturity of the obligations guaranteed hereby may be accelerated as
provided in Article Six for the purposes of this Note Guarantee, notwithstanding
any stay, injunction or other prohibition preventing such acceleration in
respect of the obligations guaranteed hereby, and (y) in the event of any
declaration of acceleration of such obligations as provided in Article Six
hereof, such obligations (whether or not due and payable) shall forthwith become
due and payable by the Guarantors for the purpose of this Note Guarantee. The
Guarantors shall have the right to seek contribution from any non-paying
Guarantor so long as the exercise of such right does not impair the rights of
the Holders under the Note Guarantee.
Section 10.02. LIMITATION ON GUARANTOR LIABILITY.
Each Guarantor, and by its acceptance of Notes, each Holder,
hereby confirms that it is the intention of all such parties that the Note
Guarantee of such Guarantor not constitute
96
(i) a fraudulent transfer or conveyance for purposes of Bankruptcy Law, the
Uniform Fraudulent Conveyance Act, the Uniform Fraudulent Transfer Act or any
similar federal or state law to the extent applicable to its Note Guarantee or
(ii) an unlawful distribution under any applicable state law prohibiting
shareholder distributions by an insolvent subsidiary to the extent applicable to
its Note Guarantee. To effectuate the foregoing intention, the Trustee, the
Holders and the Guarantors hereby irrevocably agree that the obligations of such
Guarantor will be limited to the maximum amount as will, after giving effect to
all other contingent and fixed liabilities of such Guarantor that are relevant
under such laws, and after giving effect to any collections from, rights to
receive contribution from or payments made by or on behalf of any other
Guarantor in respect of the obligations of such other Guarantor under this
Article Ten, result in the obligations of such Guarantor under its Note
Guarantee not constituting a fraudulent transfer or conveyance or such an
unlawful shareholder distribution.
Section 10.03. EXECUTION AND DELIVERY OF NOTE GUARANTEE.
(a) To evidence its Note Guarantee set forth in Section
10.01, each Guarantor hereby agrees that a notation of such Note Guarantee
substantially in the form included in EXHIBIT E shall be endorsed by an Officer
of such Guarantor by manual or facsimile signature on each Note authenticated
and delivered by the Trustee and that this Indenture shall be executed on behalf
of such Guarantor by one of its Officers.
(b) Each Guarantor hereby agrees that its Note Guarantee set
forth in Section 10.01 shall remain in full force and effect notwithstanding any
failure to endorse on each Note a notation of such Note Guarantee.
(c) If an Officer whose signature is on this Indenture or on
the Note Guarantee no longer holds that office at the time the Trustee
authenticates the Note on which a Note Guarantee is endorsed, the Note Guarantee
shall be valid nevertheless.
(d) The delivery of any Note by the Trustee, after the
authentication thereof hereunder, shall constitute due delivery of the Note
Guarantee set forth in this Indenture on behalf of the Guarantors.
(e) If required by Section 4.18, the Company shall cause
such Subsidiaries to execute supplemental indentures to this Indenture and Note
Guarantees in accordance with Section 4.18 and this Article Ten, to the extent
applicable.
Section 10.04. GUARANTORS MAY CONSOLIDATE, ETC., ON CERTAIN TERMS.
(a) A Guarantor may not sell or otherwise dispose of all or
substantially all of its assets to, or consolidate with or merge with or into
(whether or not such Guarantor is the surviving Person), another Person, other
than the Company or another Guarantor, unless:
(i) immediately after giving effect to that transaction, no
Default or Event of Default exists; and
(ii) either:
97
(A) the Person acquiring the property in any such
sale or disposition or the Person formed by or surviving any
such consolidation or merger (if other than the Guarantor) is
organized or existing under the laws of the United States, any
state thereof or the District of Columbia and assumes all the
obligations of that Guarantor under this Indenture, its Note
Guarantee and the Registration Rights Agreement pursuant to a
supplemental indenture reasonably satisfactory to the Trustee;
or
(B) such sale or other disposition or consolidation
or merger complies with Section 4.10.
(b) In case of any such consolidation, merger, sale or
conveyance and upon the assumption by the successor Person, by supplemental
indenture, executed and delivered to the Trustee and satisfactory in form to the
Trustee, of the Note Guarantee endorsed upon the Notes and the due and punctual
performance of all of the covenants and conditions of this Indenture to be
performed by a Guarantor, such successor Person shall succeed to and be
substituted for a Guarantor with the same effect as if it had been named herein
as a Guarantor. Such successor Person thereupon may cause to be signed any or
all of the Note Guarantees to be endorsed upon all of the Notes issuable
hereunder which theretofore shall not have been signed by the Company and
delivered to the Trustee. All the Note Guarantees so issued shall in all
respects have the same legal rank and benefit under this Indenture as the Note
Guarantees theretofore and thereafter issued in accordance with the terms of
this Indenture as though all of such Note Guarantees had been issued at the date
of the execution hereof.
(c) Except as set forth in Article Five, and notwithstanding
clauses (i) and (ii) of Section 10.04(a), nothing contained in this Indenture or
in any of the Notes shall prevent any consolidation or merger of a Guarantor
with or into the Company or another Guarantor, or shall prevent any sale or
conveyance of the property of a Guarantor as an entirety or substantially as an
entirety to the Company or another Guarantor.
Section 10.05. RELEASE OF GUARANTOR.
(a) Any Guarantor will be released and relieved of any
obligations under its Note Guarantee, (i) in connection with any sale or other
disposition of Capital Stock of that Guarantor to a Person that is not (either
before or after giving effect to such transaction) a Subsidiary of the Company,
such that, immediately after giving effect to such transaction, such Guarantor
would no longer constitute a Subsidiary of the Company, if the sale of such
Capital Stock of that Guarantor complies with Section 4.10 and Section 4.07;
(ii) if the Company properly designates any Restricted Subsidiary that is a
Guarantor as an Unrestricted Subsidiary under this Indenture; or (iii) solely in
the case of a Note Guarantee created pursuant to the second sentence of Section
4.18(a), upon the release or discharge of the Guarantee which resulted in the
creation of such Note Guarantee pursuant to Section 4.18(a), except a discharge
or release by or as a result of payment under such Guarantee. Upon delivery by
the Company to the Trustee of an Officers' Certificate and an Opinion of Counsel
to the effect that one of the foregoing requirements has been satisfied and the
conditions to the release of a Guarantor under this Section 10.05 have been met,
the Trustee shall execute any documents reasonably required in order to evidence
the release of such Guarantor from its obligations under its Note Guarantee.
98
(b) Any Guarantor not released from its obligations under
its Note Guarantee shall remain liable for the full amount of principal of and
interest and Liquidated Damages, if any, on the Notes and for the other
obligations of any Guarantor under this Indenture as provided in this Article
Ten.
Section 10.06. SUBORDINATION OF NOTE GUARANTEE.
Payments under the Note Guarantees shall be subordinated to the
prior payment in full of all Senior Debt of such Guarantor, including Senior
Debt incurred after the date of this Indenture, on the same basis as the
payments by the Company on the Notes are subordinated to the prior payment in
full of Senior Debt of the Company. For the purposes of the foregoing sentence,
the Trustee and the Holders shall have the right to receive and/or retain
payments by any of the Guarantors only at such times as they may receive and/or
retain payments in respect of the Notes pursuant to this Indenture, including
Article Twelve.
ARTICLE ELEVEN
SATISFACTION AND DISCHARGE
Section 11.01. SATISFACTION AND DISCHARGE.
(a) This Indenture shall be discharged and shall cease to be
of further effect as to all Notes issued hereunder, when:
(i) either:
(A) all Notes that have been authenticated (except
lost, stolen or destroyed Notes that have been replaced or paid
and Notes for whose payment money has theretofore been deposited
in trust and thereafter repaid to the Company) have been
delivered to the Trustee for cancellation; or
(B) all Notes that have not been delivered to the
Trustee for cancellation have become due and payable by reason
of the making of a notice of redemption or otherwise or will
become due and payable within one year and the Company or any
Guarantor has irrevocably deposited or caused to be deposited
with the Trustee as trust funds in trust solely for the benefit
of the Holders, cash in U.S. dollars, non-callable Government
Securities, or a combination thereof, in such amounts as will be
sufficient without consideration of any reinvestment of
interest, to pay and discharge the entire indebtedness on the
Notes not delivered to the Trustee for cancellation for
principal, premium and Liquidated Damages, if any, and accrued
interest to the date of maturity or redemption;
(ii) no Default or Event of Default shall have occurred and
be continuing on the date of such deposit or shall occur as a result of
such deposit and such deposit will not result in a breach or violation
of, or constitute a default under, any other instrument to which the
Company or any Guarantor is a party or by which the Company or any
Guarantor is bound;
99
(iii) the Company or any Guarantor has paid or caused to be
paid all sums payable by it under this Indenture; and
(iv) the Company has delivered irrevocable instructions to
the Trustee under this Indenture to apply the deposited money toward the
payment of the Notes at maturity or the redemption date, as the case may
be.
(b) In addition, the Company must deliver an Officers'
Certificate and an Opinion of Counsel to the Trustee stating that all conditions
precedent to satisfaction and discharge have been satisfied.
(c) Notwithstanding the above, the Trustee shall pay to the
Company from time to time upon its request any cash or Government Securities
held by it as provided in this section which, in the opinion of a nationally
recognized firm of independent public accountants expressed in a written
certification delivered to the Trustee, are in excess of the amount thereof that
would then be required to be deposited to effect a satisfaction and discharge
under this Article Eleven.
(d) After the conditions to discharge contained in this
Article Eleven have been satisfied, and the Company has paid or caused to be
paid all other sums payable hereunder by the Company, and delivered to the
Trustee an Officers' Certificate and Opinion of Counsel, each stating that all
conditions precedent to satisfaction and discharge have been satisfied, the
Trustee upon written request shall acknowledge in writing the discharge of the
obligations of the Company and the Guarantors under this Indenture (except for
those surviving obligations specified Section 11.01).
Section 11.02. DEPOSITED MONEY AND GOVERNMENT SECURITIES TO BE HELD IN TRUST;
OTHER MISCELLANEOUS PROVISIONS.
Subject to Section 11.03 hereof, all money and non-callable
Government Securities (including the proceeds thereof) deposited with the
Trustee pursuant to Section 11.01 hereof in respect of the outstanding Notes
shall be held in trust and applied by the Trustee, in accordance with the
provisions of such Notes and this Indenture, to the payment, either directly or
through any Paying Agent (including the Company acting as Paying Agent) as the
Trustee may determine, to the Holders of such Notes of all sums due and to
become due thereon in respect of principal, premium and Liquidated Damages, if
any, and interest, but such money need not be segregated from other funds except
to the extent required by law.
Section 11.03. REPAYMENT TO THE COMPANY.
Any money deposited with the Trustee or any Paying Agent, or
then held by the Company, in trust for the payment of the principal of, premium
and Liquidated Damages, if any, or interest on any Note and remaining unclaimed
for two years after such principal, and premium or Liquidated Damages, if any,
or interest has become due and payable shall be paid to the Company on its
request or (if then held by the Company) shall be discharged from such trust;
and the Holder of such Note shall thereafter look only to the Company for
payment thereof, and all liability of the Trustee or such Paying Agent with
respect to such trust money, and all liability of the Company as trustee
thereof, shall thereupon cease; PROVIDED, HOWEVER, that the Trustee or
100
such Paying Agent, before being required to make any such repayment, may at the
expense of the Company cause to be published once, in the
New York Times or The
Wall Street Journal (national edition), notice that such money remains unclaimed
and that, after a date specified therein, which shall not be less than 30 days
from the date of such notification or publication, any unclaimed balance of such
money then remaining shall be repaid to the Company.
ARTICLE TWELVE
SUBORDINATION
Section 12.01. AGREEMENT TO SUBORDINATE.
The Company agrees, and each Holder by accepting a Note agrees,
that the Indebtedness evidenced by the Notes is subordinated in right of
payment, to the extent and in the manner provided in this Article 12, to the
prior payment in full in cash or Cash Equivalents (which for purposes hereof
excludes any Cash Equivalents specified in clause (8) of the definition of Cash
Equivalents) of all Senior Debt of the Company, including Senior Debt of the
Company incurred after the date hereof.
Section 12.02. LIQUIDATION; DISSOLUTION; BANKRUPTCY.
The holders of Senior Debt of the Company shall be entitled to
receive payment in full in cash or Cash Equivalents (which for the purposes
hereof excludes any Cash Equivalents specified in clause (8) of the definition
of Cash Equivalents) of all Obligations due in respect of Senior Debt of the
Company (including interest after the commencement of any bankruptcy proceeding
at the rate specified in the documentation for the applicable Senior Debt of the
Company) before the Holders of Notes shall be entitled to receive any payment
with respect to the Notes (except that Holders of Notes may receive and retain
Permitted Junior Securities and payments made from the trust pursuant to Article
8), in the event of any distribution to creditors of the Company in (a) any
liquidation or dissolution of the Company; (b) any bankruptcy, reorganization,
insolvency, receivership or similar proceeding relating to the Company or its
property; (c) any assignment by the Company for the benefit of its creditors; or
(d) any marshaling of the Company's assets and liabilities.
Section 12.03. DEFAULT ON DESIGNATED SENIOR DEBT.
The Company shall not make any payment in respect of the Notes
(except in Permitted Junior Securities or from the trust pursuant to Article 8)
if:
(a) a payment default on Designated Senior Debt of the
Company occurs and is continuing beyond any applicable grace period; or
(b) any other default (a "NONPAYMENT DEFAULT") occurs and is
continuing on any series of Designated Senior Debt of the Company that
permits holders of that series of Designated Senior Debt of the Company
to accelerate its maturity and the Trustee receives a notice of such
default (a "PAYMENT BLOCKAGE NOTICE") from a representative of the
holders of such Designated Senior Debt.
101
(c) Payments on the Notes may and shall be resumed:
(i) in the case of a payment default on Designated
Senior Debt of the Company, upon the date on which such default
is cured or waived; and
(ii) in case of a non-payment default or Designated
Senior Debt of the Company, the earlier of (x) the date on which
such default is cured or waived, (y) 179 days after the date on
which the applicable Payment Blockage Notice is received and (z)
the date the Trustee receives notice from the representative for
such Designated Senior Debt rescinding the Payment Blockage
Notice, unless the maturity of such Designated Senior Debt of
the Company has been accelerated.
(d) No new Payment Blockage Notice may be delivered unless
and until:
(i) 360 days have elapsed since the delivery of the
immediately prior Payment Blockage Notice; and
(ii) all scheduled payments of principal, interest
and premium and Liquidated Damages, if any, on the Notes that
have come due have been paid in full in cash.
(e) No non-payment default that existed or was continuing on
the date of delivery of any Payment Blockage Notice to the Trustee shall
be, or be made, the basis for a subsequent Payment Blockage Notice
unless such default has been cured or waived for a period of not less
than 90 days.
(f) If the Trustee or any Holder of the Notes receives a
payment in respect of the Notes (except in Permitted Junior Securities
or from the trust described under Article 8) when (i) the payment is
prohibited by this Article Twelve and (ii) the Trustee or the Holder has
actual knowledge that the payment is prohibited, PROVIDED that such
actual knowledge shall not be required in the case of any payment
default on Designated Senior Debt, the Trustee or the Holder, as the
case may be, shall hold the payment in trust for the benefit of the
holders of Senior Debt of the Company. Upon the proper written request
of the holders of Senior Debt of the Company or if there is any payment
default on any Designated Senior Debt, the Trustee or the Holder, as the
case may be, shall deliver the amounts in trust to the holders of Senior
Debt of the Company or their proper representative.
Section 12.04. ACCELERATION OF SECURITIES.
If payment of the Securities is accelerated because of an Event
of Default, the Company and the Trustee shall promptly notify holders of Senior
Debt of the acceleration.
Section 12.05. WHEN DISTRIBUTION MUST BE PAID OVER.
In the event that the Trustee or any Holder receives any payment
of any Obligations with respect to the Notes (except in Permitted Junior
Securities or from the trust pursuant to Article Eight hereof) at a time when
the Trustee or such Holder, as applicable, has
102
actual knowledge that such payment is prohibited by Article Twelve, such payment
shall be held by the Trustee or such Holder, as applicable, in trust for the
benefit of, and shall be paid forthwith over and delivered, upon written
request, to the holders of Senior Debt as their interests may appear or their
Representative under this Indenture or other agreement (if any) pursuant to
which Senior Debt may have been issued, as their respective interests may
appear, for application to the payment of all Obligations with respect to Senior
Debt remaining unpaid to the extent necessary to pay such Obligations in full in
accordance with their terms, after giving effect to any concurrent payment or
distribution to or for the holders of Senior Debt.
With respect to the holders of Senior Debt, the Trustee
undertakes to perform only such obligations on the part of the Trustee as are
specifically set forth in this Article Twelve, and no implied covenants or
obligations with respect to the holders of Senior Debt shall be read into this
Indenture against the Trustee. The Trustee shall not be deemed to owe any
fiduciary duty to the holders of Senior Debt, and shall not be liable to any
such holders if the Trustee shall pay over or distribute to or on behalf of
Holders or the Company or any other Person money or assets to which any holders
of Senior Debt shall be entitled by virtue of this Article Twelve, except if
such payment is made as a result of the willful misconduct or gross negligence
of the Trustee.
Section 12.06. NOTICE BY THE COMPANY.
The Company shall promptly notify the Trustee and the Paying
Agent in writing of any facts known to the Company that would cause a payment of
any Obligations with respect to the Notes to violate this Article Twelve, but
failure to give such notice shall not affect the subordination of the Notes to
the Senior Debt as provided in this Article Twelve.
Section 12.07. SUBROGATION.
After all Senior Debt is paid in full and until the Notes are
paid in full, Holders of Notes shall be subrogated (equally and ratably with all
other Indebtedness PARI PASSU with the Notes) to the rights of holders of Senior
Debt to receive distributions applicable to Senior Debt to the extent that
distributions otherwise payable to the Holders of Notes have been applied to the
payment of Senior Debt. A distribution made under this Article Twelve to holders
of Senior Debt that otherwise would have been made to Holders of Notes is not,
as between the Company and Holders, a payment by the Company on the Notes.
Section 12.08. RELATIVE RIGHTS.
This Article Twelve defines the relative rights of Holders of
Notes and holders of Senior Debt. Nothing in this Indenture shall:
(a) impair, as between the Company and Holders of Notes, the
obligation of the Company, which is absolute and unconditional, to pay
principal of and interest on the Notes in accordance with their terms;
(b) affect the relative rights of Holders of Notes and
creditors of the Company other than their rights in relation to holders
of Senior Debt; or
103
(c) prevent the Trustee or any Holder of Notes from
exercising its available remedies upon a Default or Event of Default,
subject to the rights of holders and owners of Senior Debt to receive
distributions and payments otherwise payable to Holders of Notes.
If the Company fails because of this Article Twelve to pay
principal of or interest on a Note on the due date, the failure is still a
Default or Event of Default.
Section 12.09. SUBORDINATION MAY NOT BE IMPAIRED BY THE COMPANY.
No right of any holder of Senior Debt to enforce the
subordination of the Indebtedness evidenced by the Notes shall be impaired by
any act or failure to act by the Company or any Holder or by the failure of the
Company or any Holder to comply with this Indenture.
Section 12.10. DISTRIBUTION OR NOTICE TO REPRESENTATIVE.
Whenever a distribution is to be made or a notice given to
holders of Senior Debt, the distribution may be made and the notice given to
their Representative.
Upon any payment or distribution of assets of the Company
referred to in this Article Twelve, the Trustee and the Holders of Notes shall
be entitled to rely upon any order or decree made by any court of competent
jurisdiction or upon any certificate of such Representative or of the
liquidating trustee or agent or other Person making any distribution to the
Trustee or to the Holders of Notes for the purpose of ascertaining the Persons
entitled to participate in such distribution, the holders of the Senior Debt and
other Indebtedness of the Company, the amount thereof or payable thereon, the
amount or amounts paid or distributed thereon and all other facts pertinent
thereto or to this Article Twelve.
Section 12.11. RIGHTS OF TRUSTEE AND PAYING AGENT.
Notwithstanding this Article Twelve or any other provision of
this Indenture, the Trustee shall not be charged with knowledge of the existence
of any facts that would prohibit the making of any payment or distribution by
the Trustee, and the Trustee and the Paying Agent may continue to make payments
on the Notes, unless the Trustee shall have received at its Corporate Trust
Office at least five Business Days prior to the date of such payment written
notice of facts that would cause the payment of any Obligations with respect to
the Notes to violate this Article Twelve. Only the Company or a Representative
may give the notice. Nothing in this Article Twelve shall impair the claims of,
or payments to, the Trustee under or pursuant to Section 7.07 hereof.
The Trustee in its individual or any other capacity may hold
Senior Debt with the same rights it would have if it were not Trustee. Any Agent
may do the same with like rights.
Section 12.12. AUTHORIZATION TO EFFECT SUBORDINATION.
Each Holder of Notes, by the Holder's acceptance thereof,
authorizes and directs the Trustee on such Holder's behalf to take such action
as may be necessary or appropriate to
104
effectuate the subordination as provided in this Article Twelve, and appoints
the Trustee to act as such Holder's attorney-in-fact for any and all such
purposes. If the Trustee does not file a proper proof of claim or proof of debt
in the form required in any proceeding referred to in Section 6.09 hereof at
least 30 days before the expiration of the time to file such claim, the lenders
under the Credit Agreement are hereby authorized to file an appropriate claim
for and on behalf of the Holders of the Notes.
ARTICLE THIRTEEN
MISCELLANEOUS
Section 13.01. TRUST INDENTURE ACT CONTROLS.
If any provision of this Indenture limits, qualifies or
conflicts with the duties imposed by TIA Section 318(c), the imposed duties
shall control.
Section 13.02. NOTICES.
(a) Any notice or communication by the Company or any
Guarantor, on the one hand, or the Trustee on the other hand, to the other is
duly given if in writing and delivered in Person or mailed by first class mail
(registered or certified, return receipt requested), telecopier or overnight air
courier guaranteeing next day delivery, to the others' address:
If to the Company and/or any Guarantor:
Solo Cup Company
0000 Xxx Xxxxxxxxx Xxxx
Xxxxxxxx Xxxx, XX 00000
Facsimile: (000) 000-0000
Attention: Chief Financial Officer
with a copy to:
Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP
000 Xxxx Xxxxxx Xxxxx
Xxxxxxx, XX 00000
Facsimile: (000) 000-0000
Attention: Xxxxx X. Xxxx, Esq.
105
If to the Trustee:
U.S. Bank National Association
00 Xxxxxxxxxx Xxxxxx
Xx. Xxxx, XX 00000-0000
Facsimile: 000-000-0000
Attention: Xxxxx Xxxxxx
(b) The Company, the Guarantors or the Trustee, by notice to
the others may designate additional or different addresses for subsequent
notices or communications.
(c) All notices and communications (other than those sent to
Holders) shall be deemed to have been duly given: at the time delivered by hand,
if personally delivered; three Business Days after being deposited in the mail,
postage prepaid, if mailed; when receipt acknowledged, if telecopied; and the
next Business Day after timely delivery to the courier, if sent by overnight air
courier guaranteeing next day delivery.
(d) Any notice or communication to a Holder shall be mailed
by first class mail, certified or registered, return receipt requested, or by
overnight air courier guaranteeing next day delivery to its address shown on the
register kept by the Registrar. Any notice or communication shall also be so
mailed to any Person described in TIA Section 313(c), to the extent required by
the TIA. Failure to mail a notice or communication to a Holder or any defect in
it shall not affect its sufficiency with respect to other Holders.
(e) Where this Indenture provides for notice in any manner,
such notice may be waived in writing by the Person entitled to receive such
notice, either before or after the event, and such waiver shall be the
equivalent of such notice. Waivers of notice by Holders shall be filed with the
Trustee, but such filing shall not be a condition precedent to the validity of
any action taken in reliance on such waiver.
(f) In case by reason of the suspension of regular mail
service or by reason of any other cause it shall be impracticable to give such
notice by mail, then such notification as shall be made with the approval of the
Trustee shall constitute a sufficient notification for every purpose hereunder.
(g) If a notice or communication is mailed in the manner
provided above within the time prescribed, it is duly given, whether or not the
addressee receives it.
(h) If the Company mails a notice or communication to
Holders, it shall mail a copy to the Trustee and each Agent at the same time.
Section 13.03. COMMUNICATION BY HOLDERS OF NOTES WITH OTHER HOLDERS OF NOTES.
Holders may communicate pursuant to TIA Section 312(b) with
other Holders with respect to their rights under this Indenture or the Notes.
The Company, the Trustee, the Registrar and any other Person shall have the
protection of TIA Section 312(c).
106
Section 13.04. CERTIFICATE AND OPINION AS TO CONDITIONS PRECEDENT.
Upon any request or application by the Company to the Trustee to
take any action under this Indenture, the Company shall furnish to the Trustee:
(i) an Officers' Certificate in form and substance
reasonably satisfactory to the Trustee (which shall include the
statements set forth in Section 13.05 hereof) stating that, in the
opinion of the signers, all conditions precedent and covenants, if any,
provided for in this Indenture relating to the proposed action have been
satisfied; and
(ii) an Opinion of Counsel in form and substance reasonably
satisfactory to the Trustee (which shall include the statements set
forth in Section 13.05 hereof) stating that, in the opinion of such
counsel (who may rely upon an Officers' Certificate as to matters of
fact), all such conditions precedent and covenants have been satisfied.
Section 13.05. STATEMENTS REQUIRED IN CERTIFICATE OR OPINION.
(a) Each certificate or opinion with respect to compliance
with a condition or covenant provided for in this Indenture (other than a
certificate provided pursuant to TIA Section 314(a)(4)) shall comply with the
provisions of TIA Section 314(e) and shall include:
(i) a statement that the Person making such certificate or
opinion has read such covenant or condition;
(ii) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions
contained in such certificate or opinion are based;
(iii) a statement that, in the opinion of such Person, he or
she has made such examination or investigation as is necessary to enable
him to express an informed opinion as to whether or not such covenant or
condition has been complied with; and
(iv) a statement as to whether or not, in the opinion of such
Person, such condition or covenant has been complied with.
Section 13.06. RULES BY TRUSTEE AND AGENTS.
The Trustee may make reasonable rules for action by or at a
meeting of Holders. The Registrar or Paying Agent may make reasonable rules and
set reasonable requirements for its functions.
Section 13.07. NO PERSONAL LIABILITY OF DIRECTORS, OFFICERS, EMPLOYEES AND
STOCKHOLDERS.
No director, officer, employee, incorporator or stockholder of
the Company or any Guarantor, as such, shall have any liability for any
obligations of the Company or the Guarantors under the Notes, this Indenture,
the Note Guarantees, the Pledge Agreement or for any claim based on, in respect
of, or by reason of, such obligations or their creation. Each Holder of Notes by
accepting a Note waives and releases all such liability. This waiver and
107
release are part of the consideration for issuance of the Notes and the Note
Guarantees. The waiver may not be effective to waive liabilities under the
federal securities laws.
Section 13.08. GOVERNING LAW.
THE LAWS OF THE STATE OF
NEW YORK SHALL GOVERN AND BE USED TO
CONSTRUE THIS INDENTURE, THE NOTES AND THE NOTE GUARANTEES.
Section 13.09. CONSENT TO JURISDICTION.
Any legal suit, action or proceeding arising out of or based
upon this Indenture or the transactions contemplated hereby ("RELATED
PROCEEDINGS") may be instituted in the federal courts of the United States of
America located in the City of
New York or the courts of the State of New York
in each case located in the City of New York (collectively, the "SPECIFIED
COURTS"), and each party irrevocably submits to the non-exclusive jurisdiction
of such courts in any such suit, action or proceeding. Service of any process,
summons, notice or document by mail (to the extent allowed under any applicable
statute or rule of court) to such party's address set forth above shall be
effective service of process for any suit, action or other proceeding brought in
any such court. The parties irrevocably and unconditionally waive any objection
to the laying of venue of any suit, action or other proceeding in the Specified
Courts and irrevocably and unconditionally waive and agree not to plead or claim
in any such court has been brought in an inconvenient forum.
Section 13.10. NO ADVERSE INTERPRETATION OF OTHER AGREEMENTS.
This Indenture may not be used to interpret any other indenture,
loan or debt agreement of the Company or any of its Subsidiaries or of any other
Person. Any such indenture, loan or debt agreement may not be used to interpret
this Indenture.
Section 13.11. SUCCESSORS.
All agreements of the Company in this Indenture and the Notes
shall bind its successors. All agreements of the Trustee in this Indenture shall
bind its successors. All agreements of each Guarantor in this Indenture shall
bind such Guarantor's successors, except as otherwise provided in Section 10.04.
Section 13.12. SEVERABILITY.
In case any provision in this Indenture or the Notes shall be
invalid, illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions shall not in any way be affected or impaired thereby.
Section 13.13. COUNTERPART ORIGINALS.
The parties may sign any number of copies of this Indenture.
Each signed copy shall be an original, but all of them together represent the
same agreement.
108
Section 13.14. ACTS OF HOLDERS.
(a) Any request, demand, authorization, direction, notice,
consent, waiver or other action provided by this Indenture to be given or taken
by the Holders may be embodied in and evidenced by one or more instruments of
substantially similar tenor signed by such Holders in person or by agents duly
appointed in writing; and, except as herein otherwise expressly provided, such
action shall become effective when such instrument or instruments are delivered
to the Trustee and, where it is hereby expressly required, to the Company. Such
instrument or instruments (and the action embodied therein and evidenced
thereby) are herein sometimes referred to as the "ACT" of the Holders signing
such instrument or instruments. Proof of execution of any such instrument or of
a writing appointing any such agent shall be sufficient for any purpose of this
Indenture and conclusive in favor of the Trustee and the Company if made in the
manner provided in this Section 13.14.
(b) The fact and date of the execution by any Person of any
such instrument or writing may be proved by the affidavit of a witness of such
execution or by a certificate of a notary public or other officer authorized by
law to take acknowledgments of deeds, certifying that the individual signing
such instrument or writing acknowledged to such witness, notary or officer the
execution thereof. Where such execution is by a signer acting in a capacity
other than his individual capacity, such certificate or affidavit shall also
constitute sufficient proof of authority. The fact and date of the execution of
any such instrument or writing, or the authority of the Person executing the
same, may also be proved in any other manner which the Trustee deems sufficient.
(c) Notwithstanding anything to the contrary contained in
this Section 13.14, the principal amount and serial numbers of Notes held by any
Holder, and the date of holding the same, shall be proved by the register of the
Notes maintained by the Registrar as provided in Section 2.04.
(d) If the Company shall solicit from the Holders of the
Notes any request, demand, authorization, direction, notice, consent, waiver or
other Act, the Company may, at its option, by or pursuant to a resolution of its
Board of Directors, fix in advance a record date for the determination of
Holders entitled to give such request, demand, authorization, direction, notice,
consent, waiver or other Act, but the Company shall have no obligation to do so.
Notwithstanding TIA Section 316(c), such record date shall be the record date
specified in or pursuant to such resolution, which shall be a date not earlier
than the date 30 days prior to the first solicitation of Holders generally in
connection therewith or the date of the most recent list of Holders forwarded to
the Trustee prior to such solicitation pursuant to Section 2.06 and not later
than the date such solicitation is completed. If such a record date is fixed,
such request, demand, authorization, direction, notice, consent, waiver or other
Act may be given before or after such record date, but only the Holders of
record at the close of business on such record date shall be deemed to be
Holders for the purposes of determining whether Holders of the requisite
proportion of the then outstanding Notes have authorized or agreed or consented
to such request, demand, authorization, direction, notice, consent, waiver or
other Act, and for that purpose the then outstanding Notes shall be computed as
of such record date; PROVIDED that no such authorization, agreement or consent
by the Holders on such record date shall be deemed effective
109
unless it shall become effective pursuant to the provisions of this Indenture
not later than eleven months after the record date.
(e) Any request, demand, authorization, direction, notice,
consent, waiver or other Act of the Holder of any Note shall bind every future
Holder of the same Note and the Holder of every Note issued upon the
registration or transfer thereof or in exchange therefor or in lieu thereof in
respect of anything done, omitted or suffered to be done by the Trustee or the
Company in reliance thereon, whether or not notation of such action is made upon
such Note.
(f) Without limiting the foregoing, a Holder entitled
hereunder to take any action hereunder with regard to any particular Note may do
so itself with regard to all or any part of the principal amount of such Note or
by one or more duly appointed agents each of which may do so pursuant to such
appointment with regard to all or any part of such principal amount.
Section 13.15. BENEFIT OF INDENTURE.
Nothing in this Indenture, the Notes or the Note Guarantees,
express or implied, shall give to any Person, other than the parties hereto, any
Paying Agent, any Registrar and its successors hereunder, and the Holders, any
benefit or any legal or equitable right, remedy or claim under this Indenture.
Section 13.16. TABLE OF CONTENTS, HEADINGS, ETC.
The Table of Contents, Cross-Reference Table and Headings of the
Articles and Sections of this Indenture have been inserted for convenience of
reference only, are not to be considered a part of this Indenture and shall in
no way modify or restrict any of the terms or provisions hereof.
[SIGNATURE PAGES FOLLOW]
110
IN WITNESS WHEREOF, the parties have executed this Indenture as
of February 27, 2004.
SOLO CUP COMPANY, a Delaware corporation
By: /s/ Xxxxx X. Xxxxx
-----------------------------------------------
Name: Xxxxx X. Xxxxx
Title: Executive Vice President and Chief
Financial Officer
SOLO CUP COMPANY, an Illinois corporation
By: /s/ Xxxxx X. Xxxxx
-----------------------------------------------
Name: Xxxxx X. Xxxxx
Title: Executive Vice President and Chief
Financial Officer
SOLO MANAGEMENT COMPANY, an Illinois
corporation
By: /s/ Xxxxxx X. Xxxxxx
-----------------------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Chief Financial Officer
P.R. SOLO CUP, INC., an Illinois corporation
By: /s/ Xxxxxx X. Xxxxxx
-----------------------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Chief Financial Officer, Executive
Vice President, Treasurer and
Assistant Secretary
SOLO TEXAS, LLC, a Texas limited liability
company
By: Solo Cup Company, an Illinois corporation, its
sole member
By: /s/ Xxxxxxxx X. Xxxx
-----------------------------------------------
Name: Xxxxxxxx X. Xxxx
Title: Executive Vice President and
Assistant Secretary
SF HOLDINGS GROUP, INC., a Delaware
corporation
By:/s/ Xxxxx X. Xxxxx
-----------------------------------------------
Name: Xxxxx X. Xxxxx
Title: Secretary
SWEETHEART HOLDINGS INC., a Delaware
corporation
By:/s/ Xxxxx X. Xxxxx
-----------------------------------------------
Name: Xxxxx X. Xxxxx
Title: Chief Financial Officer, Executive
Vice President and Treasurer
SWEETHEART CUP COMPANY INC., a
Delaware corporation
By:/s/ Xxxxx X. Xxxxx
-----------------------------------------------
Name: Xxxxx X. Xxxxx
Title: Chief Financial Officer, Executive
Vice President and Treasurer
LILY CANADA HOLDING CORPORATION, a
Delaware corporation
By:/s/ Xxxxx X. Xxxxx
-----------------------------------------------
Name: Xxxxx X. Xxxxx
Title: Chief Financial Officer, Executive
Vice President and Treasurer
CUPCORP, INC., a Delaware corporation
By:/s/ Xxxxx X. Xxxxx
-----------------------------------------------
Name: Xxxxx X. Xxxxx
Title: Vice President, Secretary and
Treasurer
EMERALD LADY INC., a Delaware corporation
By:/s/ Xxxxx X. Xxxxx
-----------------------------------------------
Name: Xxxxx X. Xxxxx
Title: Vice President, Secretary and
Treasurer
NEWCUP LLC, a Delaware limited liability
company
By: /s/ Xxxxxx X. Xxxxxx
-----------------------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Manager
U.S. BANK NATIONAL ASSOCIATION, as
Trustee
By: /s/ Xxxxx X. Xxxxxx
-----------------------------------------------
Name: Xxxxx X. Xxxxxx
Title: Vice President
EXHIBIT A
[Face of Note]
THIS GLOBAL NOTE IS HELD BY THE DEPOSITARY (AS DEFINED IN THE INDENTURE
GOVERNING THIS NOTE) OR ITS NOMINEE IN CUSTODY FOR THE BENEFIT OF THE BENEFICIAL
OWNERS HEREOF, AND IS NOT TRANSFERABLE TO ANY PERSON UNDER ANY CIRCUMSTANCES
EXCEPT THAT (I) THE TRUSTEE MAY MAKE SUCH NOTATIONS HEREON AS MAY BE REQUIRED
PURSUANT TO SECTION 2.07 OF THE INDENTURE, (II) THIS GLOBAL NOTE MAY BE
EXCHANGED IN WHOLE BUT NOT IN PART PURSUANT TO SECTION 2.07(a) OF THE INDENTURE,
(III) THIS GLOBAL NOTE MAY BE DELIVERED TO THE TRUSTEE FOR CANCELLATION PURSUANT
TO SECTION 2.12 OF THE INDENTURE AND (IV) THIS GLOBAL NOTE MAY BE TRANSFERRED TO
A SUCCESSOR DEPOSITARY WITH THE PRIOR WRITTEN CONSENT OF THE COMPANY.
THIS NOTE AND THE GUARANTEES ENDORSED HEREON HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE
SECURITIES LAWS. NEITHER THIS NOTE NOR THE GUARANTEES ENDORSED HEREON NOR ANY
INTEREST OR PARTICIPATION HEREIN MAY BE OFFERED, SOLD, ASSIGNED, TRANSFERRED,
PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION
OR UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT. THE HOLDER OF THIS NOTE AND THE GUARANTEES
ENDORSED HEREON BY ITS ACCEPTANCE HEREOF AGREES TO OFFER, SELL OR OTHERWISE
TRANSFER SUCH SECURITY, PRIOR TO THE DATE WHICH IS TWO YEARS AFTER THE LATER OF
THE ORIGINAL ISSUE DATE HEREOF AND THE LAST DATE ON WHICH THE COMPANY OR ANY
AFFILIATE OF THE COMPANY WAS THE OWNER OF THIS NOTE AND THE GUARANTEES ENDORSED
HEREON (OR ANY PREDECESSOR OF THIS NOTE AND THE GUARANTEES ENDORSED HEREON) (THE
"RESALE RESTRICTION TERMINATION DATE") ONLY (A) TO THE COMPANY OR ANY SUBSIDIARY
THEREOF, (B) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE
SECURITIES ACT, (C) FOR SO LONG AS THE NOTES ARE ELIGIBLE FOR RESALE PURSUANT TO
RULE 144A UNDER THE SECURITIES ACT ("RULE 144A"), TO A PERSON IT REASONABLY
BELIEVES IS A "QUALIFIED INSTITUTIONAL BUYER" AS DEFINED IN RULE 144A THAT
PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL
BUYER TO WHOM NOTICE IS GIVEN THAT THE TRANSFER IS BEING MADE IN RELIANCE ON
RULE 144A, (D) PURSUANT TO OFFERS AND SALES TO NON-U.S. PERSONS THAT OCCUR
OUTSIDE THE UNITED STATES WITHIN THE MEANING OF REGULATION S UNDER THE
SECURITIES ACT OR (E) PURSUANT TO ANOTHER AVAILABLE EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, SUBJECT TO THE COMPANY'S AND
THE TRUSTEE'S RIGHT PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER (i) PURSUANT TO
CLAUSE (D) PRIOR TO THE END OF THE 40 DAY DISTRIBUTION COMPLIANCE PERIOD WITHIN
THE MEANING OF REGULATION S
A-1
UNDER THE SECURITIES ACT OR PURSUANT TO CLAUSE (E) PRIOR TO THE RESALE
RESTRICTION TERMINATION DATE TO REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL,
CERTIFICATION AND/OR OTHER INFORMATION SATISFACTORY TO EACH OF THEM, AND (ii) IN
EACH OF THE FOREGOING CASES, TO REQUIRE THAT A CERTIFICATE OF TRANSFER IN THE
FORM APPEARING ON THIS NOTE IS COMPLETED AND DELIVERED BY THE TRANSFEROR TO THE
TRUSTEE. THIS LEGEND WILL BE REMOVED UPON THE REQUEST OF A HOLDER AFTER THE
RESALE RESTRICTION TERMINATION DATE.
[ADDITIONAL LANGUAGE FOR REGULATION S NOTE TO BE INSERTED AFTER PARAGRAPH 1]
THE RIGHTS ATTACHING TO THIS REGULATION S GLOBAL NOTE, AND THE CONDITIONS AND
PROCEDURES GOVERNING ITS EXCHANGE FOR CERTIFICATED NOTES, ARE AS SPECIFIED IN
THE INDENTURE (AS DEFINED HEREIN).
A-2
CUSIP
No. **$_________**
SOLO CUP COMPANY
8 1/2% SENIOR SUBORDINATED NOTES DUE 2014
Issue Date:
Solo Cup Company, a Delaware corporation (the "COMPANY," which term
includes any successor under the Indenture hereinafter referred to), for value
received, promises to pay to CEDE & CO., or its registered assigns, the
principal sum of $325,000,000 on February 15, 2014.
Interest Payment Dates: February 15 and August 15, commencing August 15, 2004.
Record Dates: February 1 and August 1.
Reference is hereby made to the further provisions of this Note set
forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.
[SIGNATURE PAGE FOLLOWS]
[ATTACH NOTATION OF GUARANTEE FOR EACH GUARANTOR]
A-3
IN WITNESS WHEREOF, the Company has caused this Note to be signed
manually or by facsimile by its duly authorized officer.
SOLO CUP COMPANY, a Delaware corporation
By:
---------------------------------
Name:
Title:
A-4
(Trustee's Certificate of Authentication)
This is one of the 8 1/2% Senior Subordinated Notes due 2014 described in the
within-mentioned Indenture.
Dated: February 27, 2004
U.S. BANK NATIONAL ASSOCIATION,
as Trustee
By:
----------------------------------
Authorized Signatory
A-5
[Reverse Side of Note]
SOLO CUP COMPANY
8 1/2% Senior Subordinated Notes due 2014
Capitalized terms used herein shall have the meanings assigned to them
in the Indenture referred to below unless otherwise indicated.
1. INTEREST. The Company promises to pay interest on the principal
amount of this Note at 8 1/2% per annum from the date hereof until maturity and
shall pay the Liquidated Damages, if any, payable pursuant to Section 5 of the
Registration Rights Agreement referred to below. The Company shall pay interest
and Liquidated Damages, if any, semi-annually in arrears on February 15 and
August 15 of each year, or if any such day is not a Business Day, on the next
succeeding Business Day (each an "INTEREST PAYMENT DATE"). Interest on the Notes
shall accrue from the most recent date to which interest has been paid or, if no
interest has been paid, from the date of original issuance; PROVIDED that if
there is no existing Default in the payment of interest, and if this Note is
authenticated between a record date referred to on the face hereof and the next
succeeding Interest Payment Date, interest shall accrue from such next
succeeding Interest Payment Date; PROVIDED FURTHER that the first Interest
Payment Date shall be August 15, 2004. The Company shall pay interest (including
post-petition interest in any proceeding under any Bankruptcy Law) on overdue
principal from time to time on demand at a rate that is 1% per annum in excess
of the rate then in effect; it shall pay interest (including post-petition
interest in any proceeding under any Bankruptcy Law) on overdue installments of
interest and Liquidated Damages (without regard to any applicable grace periods)
from time to time on demand at the same rate to the extent lawful. Interest
shall be computed on the basis of a 360-day year of twelve 30-day months.
2. METHOD OF PAYMENT. The Company shall pay interest on the Notes
(except defaulted interest) and Liquidated Damages, if any, to the Persons who
are registered Holders of Notes at the close of business on the record date
immediately preceding the Interest Payment Date, even if such Notes are canceled
after such record date and on or before such Interest Payment Date, except as
provided in Section 2.13 of the Indenture with respect to defaulted interest. If
a Holder has given wire transfer instructions to the Company, the Company shall
pay all principal, interest and premium and Liquidated Damages, if any, on that
Holder's Notes in accordance with those instructions. All other payments on
Notes shall be made at the office or agency of the Paying Agent and Registrar
within the City and State of New York unless the Company elects to make interest
payments by check mailed to the Holders at their addresses set forth in the
register of Holders. Such payment shall be in such coin or currency of the
United States of America as at the time of payment is legal tender for payment
of public and private debts.
3. PAYING AGENT AND REGISTRAR. Initially, the Trustee under the
Indenture shall act as Paying Agent and Registrar. The Company may change any
Paying Agent or Registrar without prior notice to any Holder. The Company or any
of its Subsidiaries may act in any such capacity.
A-6
4. INDENTURE. The Company issued the Notes under an Indenture dated
as of February 27, 2004 ("INDENTURE") among the Company, the Guarantors and the
Trustee. The terms of the Notes include those stated in the Indenture and those
made part of the Indenture by reference to the Trust Indenture Act of 1939, as
amended. The Notes are subject to all such terms, and Holders are referred to
the Indenture and such Act for a statement of such terms. To the extent any
provision of this Note conflicts with the express provisions of the Indenture,
the provisions of the Indenture shall govern and be controlling. The Indenture
pursuant to which this Note is issued provides that an unlimited aggregate
principal amount of Additional Notes may be issued thereunder.
5. OPTIONAL REDEMPTION. (a) Except as set forth in paragraph 5(b)
below, the Company shall not have the option to redeem the Notes prior to
February 15, 2009. On or after February 15, 2009, the Company may redeem all or
part of the Notes upon not less than 30 nor more than 60 days' notice, at the
redemption prices (expressed as percentages of principal amount) set forth below
plus accrued and unpaid interest and Liquidated Damages, if any, thereon to the
applicable redemption date, if redeemed during the twelve-month period beginning
on February 15 of the years indicated below:
Year Percentage
2009 .............................................. 104.250%
2010 .............................................. 102.833%
2011 .............................................. 101.417%
2012 and thereafter ............................... 100.000%
(b) At any time prior to February 15, 2007, the Company may, on any
one or more occasions, redeem up to 35% of the aggregate principal amount of
Notes issued under the Indenture (including any Additional Notes) at a
redemption price of 108.5% of the principal amount thereof, plus accrued and
unpaid interest and Liquidated Damages, if any, thereon to the applicable
redemption date, with the net cash proceeds of one or more Qualified Equity
Offerings; PROVIDED that (1) at least 65% of the aggregate principal amount of
Notes issued under the Indenture (including any Additional Notes) remains
outstanding immediately after the occurrence of such redemption, excluding Notes
held by the Company and its Subsidiaries; and (2) the redemption must occur
within 90 days of the date of the closing of such Qualified Equity Offering.
6. SPECIAL REDEMPTION. Upon receipt by the Trustee of written
direction from the Collateral Agent in accordance with the terms of the Pledge
Agreement, the Company shall be required to redeem (the "SPECIAL REDEMPTION")
all outstanding Notes at a redemption price equal to 101% of the principal
amount thereof plus accrued and unpaid interest, to the date of redemption
(which date shall be the fifth Business Day after the date the notice described
in the immediately following sentence is mailed by the Trustee). The Trustee
shall, no later than the second Business Day after the date of receipt of such
written direction from the Collateral Agent, send notice of such redemption by
first class mail to each Holder.
7. REPURCHASE AT OPTION OF HOLDER. (a) If a Change of Control
occurs, each Holder of Notes shall have the right to require the Company to
repurchase all or any part (equal to $1,000 or an integral multiple thereof) of
that Holder's Notes pursuant to an offer by the
A-7
Company (a "CHANGE OF CONTROL OFFER") at an offer price (a "CHANGE OF CONTROL
PAYMENT") in cash equal to 101% of the aggregate principal amount thereof plus
accrued and unpaid interest and Liquidated Damages, if any, thereon, to the date
of purchase. Within 30 days following any Change of Control, the Company shall
mail a notice to each Holder describing the transaction or transactions that
constitute the Change of Control and offering to repurchase Notes on a date (the
"CHANGE OF CONTROL PAYMENT DATE") specified in such notice, which shall be no
earlier than 30 days and no later than 60 days from the date such notice is
mailed, pursuant to the procedures required by the Indenture and described in
such notice.
(b) Within 365 days after the receipt of any Net Proceeds from an
Asset Sale, the Company or Restricted Subsidiary of the Company, as applicable,
may apply such Net Proceeds at its option: (1) to repay (A) Senior Debt and, if
the Senior Debt repaid is revolving credit Indebtedness, to correspondingly
reduce commitments with respect thereto and (B) if there is no Senior Debt
outstanding, any outstanding Indebtedness of any Restricted Subsidiary of the
Company that is not a Guarantor and, if such Indebtedness repaid is revolving
credit Indebtedness, to correspondingly reduce commitments thereunder; (2) to
purchase Replacement Assets or make a capital expenditure in or that is used or
useful in a Permitted Business; or (3) any combination of the foregoing;
PROVIDED that the Company will be deemed to have complied with clause (2) of
this paragraph (b) if and to the extent that, within 365 days after the Asset
Sale that generated the Net Proceeds, the Company has entered into and not
abandoned or rejected a binding agreement to purchase Replacement Assets or make
a capital expenditure in compliance with clause (2) of this paragraph (b), and
that purchase or capital expenditure is thereafter completed within 90 days
after the end of such 365-day period. Pending the final application of any such
Net Proceeds, the Company may temporarily reduce revolving credit borrowings or
otherwise invest such Net Proceeds in any manner that is not prohibited by the
Indenture.
Any Net Proceeds from Asset Sales that are not applied or invested as
provided in the preceding paragraph shall constitute "EXCESS PROCEEDS." Within
10 days after the aggregate amount of Excess Proceeds exceeds $10.0 million, the
Company shall make an offer (an "ASSET SALE OFFER") to all Holders of Notes and
all holders of other Indebtedness that is PARI PASSU with the Notes or any Note
Guarantee containing provisions similar to those set forth in the Indenture with
respect to offers to purchase with the proceeds of sales of assets, to purchase
the maximum principal amount of Notes and such other PARI PASSU Indebtedness
that may be purchased out of the Excess Proceeds. The offer price for the Notes
and any PARI PASSU Indebtedness in any Asset Sale Offer will be equal to 100% of
the principal amount of the Notes and such other PARI PASSU Indebtedness plus
accrued and unpaid interest and Liquidated Damages, if any, on the Notes and any
PARI PASSU Indebtedness to the date of purchase, and will be payable in cash. If
any Excess Proceeds remain after consummation of an Asset Sale Offer, the
Company may use such Excess Proceeds for any purpose not otherwise prohibited by
the Indenture. If the aggregate principal amount of Notes and such other PARI
PASSU Indebtedness tendered into such Asset Sale Offer exceeds the amount of
Excess Proceeds, the Notes and such other PARI PASSU Indebtedness shall be
purchased on a pro rata basis based on the principal amount of Notes and such
other PARI PASSU Indebtedness tendered. Upon completion of each Asset Sale
Offer, the amount of Excess Proceeds shall be reset at zero.
A-8
8. DENOMINATIONS, TRANSFER, EXCHANGE. The Notes are in registered
form without coupons in minimum denominations of $1,000 and integral multiples
of $1,000 in excess thereof. The transfer of Notes may be registered and Notes
may be exchanged as provided in the Indenture. The Registrar and the Trustee may
require a Holder, among other things, to furnish appropriate endorsements and
transfer documents and the Company may require a Holder to pay any taxes and
fees required by law or permitted by the Indenture. The Company is not required
to transfer or exchange any Note selected for redemption. Also, the Company is
not required to transfer or exchange any Note (1) for a period of 15 days before
a selection of Notes to be redeemed or (2) tendered and not withdrawn in
connection with a Change of Control Offer or an Asset Sale Offer. Transfer may
be restricted as provided in the Indenture.
9. PERSONS DEEMED OWNERS. The registered Holder of a Note will be
treated as its owner for all purposes.
10. AMENDMENT, SUPPLEMENT AND WAIVER. Subject to certain exceptions,
the Indenture, the Pledge Agreement, or the Notes may be amended or supplemented
with the consent of the Holders of at least a majority in principal amount of
the Notes then outstanding (including, without limitation, consents obtained in
connection with a purchase of, or tender offer or exchange offer for, Notes),
and any existing default or compliance with any provision of the Indenture or
the Notes may be waived with the consent of the Holders of a majority in
principal amount of the then outstanding Notes (including, without limitation,
consents obtained in connection with a purchase of, or tender offer or exchange
offer for, Notes). Without the consent of any Holder of a Note, the Indenture,
the Pledge Agreement, or the Notes may be amended or supplemented to, among
other things, cure any ambiguity, defect or inconsistency, or make any change
that does not adversely affect the legal rights under the Indenture of any such
Holder.
11. DEFAULTS AND REMEDIES. In the case of an Event of Default arising
from events of bankruptcy or insolvency specified in clause (ix) or (x) of
Section 6.01 of the Indenture, with respect to the Company, any Guarantor or any
Significant Subsidiary of the Company (or any Restricted Subsidiaries that
together would constitute a Significant Subsidiary), all outstanding Notes will
become due and payable immediately without further action or notice. If any
other Event of Default occurs and is continuing, the Trustee or the Holders of
at least 25% in principal amount of the then outstanding Notes may declare all
the Notes to be due and payable immediately by notice in writing to the Company
specifying the Event of Default; PROVIDED, HOWEVER, that so long as any
Indebtedness permitted to be incurred pursuant to the Credit Agreement shall be
outstanding, that acceleration shall not be effective until the earlier of (1)
an acceleration of Indebtedness under the Credit Agreement; and (2) five
Business Days after receipt by the Company and the agent under the Credit
Agreement of written notice of the acceleration of the Notes. Holders of the
Notes may not enforce the Indenture or the Notes except as provided in the
Indenture. Subject to certain limitations, Holders of a majority in principal
amount of the then outstanding Notes may direct the Trustee in its exercise of
any trust or power. The Trustee may withhold from Holders of the Notes notice of
any Default or Event of Default (except a Default or Event of Default relating
to the payment of principal or interest or Liquidated Damages) if and so long as
a committee of its Responsible Officers in good faith determines that
withholding the notice is in the interests of the Holders of the Notes. If
certain conditions are satisfied, Holders of a majority in aggregate principal
amount of the Notes then outstanding by notice to the Trustee may on behalf of
the Holders of all of the
A-9
Notes waive any existing Default or Event of Default and its consequences under
the Indenture, except a continuing Default or Event of Default in the payment of
interest or Liquidated Damages on, or the principal of, the Notes; PROVIDED,
HOWEVER, that the Holders of a majority in principal amount of the then
outstanding Notes may rescind an acceleration and its consequences, including
any related payment default that resulted from such acceleration.
12. TRUSTEE DEALINGS WITH COMPANY. The Trustee in its individual or
any other capacity may become the owner or pledgee of Notes and may become a
creditor of, or otherwise deal with the Company or any of its Affiliates, with
the same rights it would have if it were not Trustee.
13. NO RECOURSE AGAINST OTHERS. No director, officer, employee,
incorporator or stockholder of the Company or any Guarantor, as such, shall have
any liability for any obligations of the Company or the Guarantors under the
Notes, the Indenture, the Note Guarantees, the Pledge Agreement or for any claim
based on, in respect of, or by reason of, such obligations or their creation.
Each Holder of Notes by accepting a Note waives and releases all such liability.
This waiver and release are part of the consideration for issuance of the Notes.
The waiver may not be effective to waive liabilities under the federal
securities laws.
14. AUTHENTICATION. This Note shall not be valid until authenticated
by the manual signature of the Trustee or an authenticating agent.
15. ADDITIONAL RIGHTS OF HOLDERS OF RESTRICTED GLOBAL NOTES AND
RESTRICTED DEFINITIVE NOTES. In addition to the rights provided to Holders under
the Indenture, Holders of Restricted Global Notes and Restricted Definitive
Notes shall have all the rights set forth in the Registration Rights Agreement
dated as of the date of the Indenture, by and among the Company, the Guarantors
and the parties named on the signature pages thereof, as such agreement may be
amended, modified or supplemented from time to time and, with respect to any
Additional Notes, one or more registration rights agreements between the Company
and the other parties thereto, as such agreement(s) may be amended, modified or
supplemented from time to time, relating to rights given by the Company to the
purchasers of Additional Notes to register such Additional Notes under the
Securities Act (the "REGISTRATION RIGHTS AGREEMENT").
16. CUSIP NUMBERS. Pursuant to a recommendation promulgated by the
Committee on Uniform Security Identification Procedures, the Company has caused
CUSIP numbers to be printed on the Notes and the Trustee may use CUSIP numbers
in notices of redemption as a convenience to Holders. No representation is made
as to the accuracy of such numbers either as printed on the Notes or as
contained in any notice of redemption and reliance may be placed only on the
other identification numbers placed thereon.
17. GUARANTEE. The Company's obligations under the Notes are fully
and unconditionally guaranteed, jointly and severally, by the Guarantors.
18. COPIES OF DOCUMENTS. The Company shall furnish to any Holder upon
written request and without charge a copy of the Indenture and/or the
Registration Rights Agreement. Requests may be made to:
Solo Cup Company
A-10
0000 Xxx Xxxxxxxxx Xxxx
Xxxxxxxx Xxxx, XX 00000
Attention: Chief Financial Officer
A-11
ASSIGNMENT FORM
To assign this Note, fill in the form below:
(I) or (we) assign and transfer this Note to:___________________________________
(INSERT ASSIGNEE'S LEGAL NAME)
________________________________________________________________________________
(Insert assignee's soc. sec. or tax I.D. no.)
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Print or type assignee's name, address and zip code)
and irrevocably appoint_________________________________________________________
to transfer this Note on the books of the Company. The agent may substitute
another to act for him.
Date:
-------------
Your Signature:
--------------------------------------
(Sign exactly as your name appears
on the face of this Note)
Signature Guarantee*:
----------------
* Participant in a recognized Signature Guarantee Medallion Program (or other
signature guarantor acceptable to the Trustee).
A-12
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Note purchased by the Company
pursuant to Section 4.10 or 4.14 of the Indenture, check the appropriate box
below:
/ / Section 4.10 / / Section 4.14
If you want to elect to have only part of the Note purchased by the
Company pursuant to Section 4.10 or Section 4.14 of the Indenture, state the
amount you elect to have purchased:
$_________________
Date:
-------------
Your Signature:
--------------------------------------
(Sign exactly as your name appears
on the face of this Note)
Tax Identification No.:
------------------------------
Signature Guarantee*:
----------------
* Participant in a recognized Signature Guarantee Medallion Program (or other
signature guarantor acceptable to the Trustee).
A-13
[TO BE INSERTED FOR RULE 144A GLOBAL NOTE]
SCHEDULE OF EXCHANGES OF INTERESTS IN THE GLOBAL NOTE
The following exchanges of a part of this Global Note for an interest
in another Global Note or for a Definitive Note, or exchanges of a part of
another Global Note or Definitive Note for an interest in this Global Note, have
been made:
Principal Amount at
Amount of Decrease in Amount of Increase in Maturity Signature of
Principal Amount at Principal Amount at of this Global Note Authorized Officer
Maturity Maturity Following such of Trustee or
Date of Exchange of this Global Note of this Global Note decrease (or increase) Custodian
---------------- --------------------- --------------------- ---------------------- ------------------
[TO BE INSERTED FOR REGULATION S GLOBAL NOTE]
SCHEDULE OF EXCHANGES OF REGULATION S GLOBAL NOTE
The following exchanges of a part of this Regulation S Global Note for
an interest in another Global Note or of other Restricted Global Notes for an
interest in this Regulation S Global Note, have been made:
Principal Amount at
Amount of Decrease in Amount of Increase in Maturity Signature of
Principal Amount at Principal Amount at of this Global Note Authorized Officer
Maturity Maturity Following such of Trustee or
Date of Exchange of this Global Note of this Global Note decrease (or increase) Custodian
---------------- --------------------- --------------------- ---------------------- ------------------
A-14
EXHIBIT B
FORM OF CERTIFICATE OF TRANSFER
Solo Cup Company
0000 Xxx Xxxxxxxxx Xxxx
Xxxxxxxx Xxxx, XX 00000
Attention: Chief Financial Officer
U.S. Bank National Association
00 Xxxxxxxxxx Xxxxxx
Xx. Xxxx, XX 00000-0000
Attention: Corporate Trust Administration
Re: 8 1/2% Senior Subordinated Notes due 2014
Reference is hereby made to the Indenture, dated as of February 27,
2004 (the "INDENTURE"), among Solo Cup Company, a Delaware corporation (the
"Company"), the Guarantors, and U.S. Bank National Association, a nationally
chartered banking association, as trustee. Capitalized terms used but not
defined herein shall have the meanings given to them in the Indenture.
___________________ (the "TRANSFEROR") owns and proposes to transfer
the Note[s] or interest in such Note[s] specified in Annex A hereto, in the
principal amount at maturity of $___________ in such Note[s] or interests (the
"TRANSFER"), to ___________________________ (the "TRANSFEREE"), as further
specified in Annex A hereto. In connection with the Transfer, the Transferor
hereby certifies that:
[CHECK ALL THAT APPLY]
/ / 1. CHECK IF TRANSFEREE WILL TAKE DELIVERY OF A BENEFICIAL INTEREST
IN THE 144A GLOBAL NOTE OR A DEFINITIVE NOTE PURSUANT TO RULE 144A. The Transfer
is being effected pursuant to and in accordance with Rule 144A under the
Securities Act of 1933, as amended (the "SECURITIES ACT"), and, accordingly, the
Transferor hereby further certifies that the beneficial interest or Definitive
Note is being transferred to a Person that the Transferor reasonably believed
and believes is purchasing the beneficial interest or Definitive Note for its
own account, or for one or more accounts with respect to which such Person
exercises sole investment discretion, and such Person and each such account is a
"qualified institutional buyer" within the meaning of Rule 144A in a transaction
meeting the requirements of Rule 144A and such Transfer is in compliance with
any applicable blue sky securities laws of any state of the United States. Upon
consummation of the proposed Transfer in accordance with the terms of the
Indenture, the transferred beneficial interest or Definitive Note will be
subject to the restrictions on transfer enumerated in the Private Placement
Legend printed on the 144A Global Note and/or the Definitive Note and in the
Indenture and the Securities Act.
/ / 2. CHECK IF TRANSFEREE WILL TAKE DELIVERY OF A BENEFICIAL INTEREST
IN A LEGENDED REGULATION S GLOBAL NOTE, OR A DEFINITIVE NOTE PURSUANT TO
REGULATION S. The Transfer is being effected pursuant to and in accordance with
Rule 903 or Rule 904 under the
B-1
Securities Act and, accordingly, the Transferor hereby further certifies that
(i) the Transfer is not being made to a person in the United States and (x) at
the time the buy order was originated, the Transferee was outside the United
States or such Transferor and any Person acting on its behalf reasonably
believed and believes that the Transferee was outside the United States or (y)
the transaction was executed in, on or through the facilities of a designated
offshore securities market and neither such Transferor nor any Person acting on
its behalf knows that the transaction was prearranged with a buyer in the United
States, (ii) no directed selling efforts have been made in contravention of the
requirements of Rule 903(b) or Rule 904(b) of Regulation S under the Securities
Act, (iii) the transaction is not part of a plan or scheme to evade the
registration requirements of the Securities Act and (iv) the transfer is not
being made to a U.S. Person or for the account or benefit of a U.S. Person
(other than an Initial Purchaser). Upon consummation of the proposed transfer in
accordance with the terms of the Indenture, the transferred beneficial interest
or Definitive Note will be subject to the restrictions on transfer enumerated in
the Private Placement Legend printed on the Legended Regulation S Global Note
and/or the Definitive Note and in the Indenture and the Securities Act.
/ / 3. CHECK AND COMPLETE IF TRANSFEREE WILL TAKE DELIVERY OF A
RESTRICTED DEFINITIVE NOTE PURSUANT TO ANY PROVISION OF THE SECURITIES ACT OTHER
THAN RULE 144, RULE 144A OR REGULATION S. The Transfer is being effected in
compliance with the transfer restrictions applicable to beneficial interests in
Restricted Global Notes and Restricted Definitive Notes and pursuant to and in
accordance with the Securities Act and any applicable blue sky securities laws
of any state of the United States, and accordingly the Transferor hereby further
certifies that (check one):
/ / (a) such Transfer is being effected to the Company or a subsidiary
thereof; or
/ / (b) such Transfer is being effected to an Institutional Accredited
Investor and pursuant to an exemption from the registration requirements of the
Securities Act other than Rule 144A, Rule 144 or Rule 904, and the Transferor
hereby further certifies that it has not engaged in any general solicitation
within the meaning of Regulation D under the Securities Act and the Transfer
complies with the transfer restrictions applicable to Restricted Definitive
Notes and the requirements of the exemption claimed, which certification is
supported by (1) a certificate executed by the Transferee in the form of EXHIBIT
D to the Indenture and (2) an Opinion of Counsel provided by the Transferor or
the Transferee (a copy of which the Transferor has attached to this
certification), to the effect that such Transfer is in compliance with the
Securities Act. Upon consummation of the proposed transfer in accordance with
the terms of the Indenture, the transferred Definitive Note will be subject to
the restrictions on transfer enumerated in the Private Placement Legend printed
on the Definitive Notes and in the Indenture and the Securities Act.
4. CHECK IF TRANSFEREE WILL TAKE DELIVERY OF A BENEFICIAL INTEREST
IN AN UNRESTRICTED GLOBAL NOTE OR OF AN UNRESTRICTED DEFINITIVE NOTE.
/ / (a) Check if Transfer is Pursuant to Rule 144. (i) The Transfer is
being effected pursuant to and in accordance with Rule 144 under the Securities
Act and in compliance with the transfer restrictions contained in the Indenture
and any applicable blue sky securities laws of any state of the United States
and (ii) the restrictions on transfer contained in the
B-2
Indenture and the Private Placement Legend are not required in order to maintain
compliance with the Securities Act. Upon consummation of the proposed Transfer
in accordance with the terms of the Indenture, the transferred beneficial
interest or Definitive Note will no longer be subject to the restrictions on
transfer enumerated in the Private Placement Legend printed on the Restricted
Global Notes, on Restricted Definitive Notes and in the Indenture.
/ / (b) Check if Transfer is Pursuant to Regulation S. (i) The Transfer
is being effected pursuant to and in accordance with Rule 903 or Rule 904 under
the Securities Act and in compliance with the transfer restrictions contained in
the Indenture and any applicable blue sky securities laws of any state of the
United States and, in the case of a transfer from a Restricted Global Note or a
Restricted Definitive Note, the Transferor hereby further certifies that (a) the
Transfer is not being made to a person in the United States and (x) at the time
the buy order was originated, the Transferee was outside the United States or
such Transferor and any Person acting on its behalf reasonably believed and
believes that the Transferee was outside the United States or (y) the
transaction was executed in, on or through the facilities of a designated
offshore securities market and neither such Transferor nor any Person acting on
its behalf knows that the transaction was prearranged with a buyer in the United
States, (b) no directed selling efforts have been made in contravention of the
requirements of Rule 903(b) or Rule 904(b) of Regulation S under the Securities
Act, (c) the transaction is not part of a plan or scheme to evade the
registration requirements of the Securities Act and (d) the transfer is not
being made to a U.S. Person or for the account or benefit of a U.S. Person, and
(ii) the restrictions on transfer contained in the Indenture and the Private
Placement Legend are not required in order to maintain compliance with the
Securities Act. Upon consummation of the proposed Transfer in accordance with
the terms of the Indenture, the transferred beneficial interest or Definitive
Note will no longer be subject to the restrictions on transfer enumerated in the
Private Placement Legend printed on the Restricted Global Notes, on Restricted
Definitive Notes and in the Indenture.
/ / (c) Check if Transfer is Pursuant to Other Exemption. (i) The
Transfer is being effected pursuant to and in compliance with an exemption from
the registration requirements of the Securities Act other than Rule 144, Rule
903 or Rule 904 and in compliance with the transfer restrictions contained in
the Indenture and any applicable blue sky securities laws of any State of the
United States and (ii) the restrictions on transfer contained in the Indenture
and the Private Placement Legend are not required in order to maintain
compliance with the Securities Act. Upon consummation of the proposed Transfer
in accordance with the terms of the Indenture, the transferred beneficial
interest or Definitive Note will not be subject to the restrictions on transfer
enumerated in the Private Placement Legend printed on the Restricted Global
Notes or Restricted Definitive Notes and in the Indenture.
B-3
This certificate and the statements contained herein are made for your
benefit and the benefit of the Company.
Dated:
----------------
-----------------------------------
[Insert Name of Transferor]
By:
-----------------------------------
Name:
Title:
B-4
ANNEX A TO CERTIFICATE OF TRANSFER
1. The Transferor owns and proposes to transfer the following:
[CHECK ONE OF (a) OR (b)]
/ / (a) a beneficial interest in the:
(i) 144A Global Note (CUSIP __________); or
(ii) Regulation S Global Note (CUSIP __________); or
/ / (b) a Restricted Definitive Note.
2. After the Transfer the Transferee will hold:
[CHECK ONE]
/ / (a) a beneficial interest in the:
(i) 144A Global Note (CUSIP __________); or
(ii) Regulation S Global Note (CUSIP __________); or
(iii) Unrestricted Global Note (CUSIP __________); or
/ / (b) a Restricted Definitive Note; or
/ / (c) an Unrestricted Definitive Note,
in accordance with the terms of the Indenture.
B-5
EXHIBIT C
FORM OF CERTIFICATE OF EXCHANGE
Solo Cup Company
0000 Xxx Xxxxxxxxx Xxxx
Xxxxxxxx Xxxx, XX 00000
Attention: Chief Financial Officer
U.S. Bank National Association
00 Xxxxxxxxxx Xxxxxx
Xx. Xxxx, XX 00000-0000
Attention: Corporate Trust Administration
Re: 8 1/2% Senior Subordinated Notes due 2014
Reference is hereby made to the Indenture, dated as of February 27,
2004 (the "INDENTURE"), among Solo Cup Company, a Delaware corporation (the
"COMPANY"), the Guarantors and U.S. Bank National Association, a nationally
chartered banking association, as trustee. Capitalized terms used but not
defined herein shall have the meanings given to them in the Indenture.
__________________________ (the "OWNER") owns and proposes to exchange
the Note[s] or interest in such Note[s] specified herein, in the principal
amount at maturity of $____________ in such Note[s] or interests (the
"EXCHANGE"). In connection with the Exchange, the Owner hereby certifies that:
1. Exchange of Restricted Definitive Notes or Beneficial Interests
in a Restricted Global Note for Unrestricted Definitive Notes or Beneficial
Interests in an Unrestricted Global Note
/ / (a) Check if Exchange is from beneficial interest in a Restricted
Global Note to beneficial interest in an Unrestricted Global Note. In connection
with the Exchange of the Owner's beneficial interest in a Restricted Global Note
for a beneficial interest in an Unrestricted Global Note in an equal principal
amount at maturity, the Owner hereby certifies (i) the beneficial interest is
being acquired for the Owner's own account without transfer, (ii) such Exchange
has been effected in compliance with the transfer restrictions applicable to the
Global Notes and pursuant to and in accordance with the United States Securities
Act of 1933, as amended (the "SECURITIES ACT"), (iii) the restrictions on
transfer contained in the Indenture and the Private Placement Legend are not
required in order to maintain compliance with the Securities Act and (iv) the
beneficial interest in an Unrestricted Global Note is being acquired in
compliance with any applicable blue sky securities laws of any state of the
United States.
/ / (b) Check if Exchange is from beneficial interest in a Restricted
Global Note to Unrestricted Definitive Note. In connection with the Exchange of
the Owner's beneficial interest in a Restricted Global Note for an Unrestricted
Definitive Note, the Owner hereby certifies (i) the Definitive Note is being
acquired for the Owner's own account without transfer, (ii) such Exchange has
been effected in compliance with the transfer restrictions applicable to the
C-1
Restricted Global Notes and pursuant to and in accordance with the Securities
Act, (iii) the restrictions on transfer contained in the Indenture and the
Private Placement Legend are not required in order to maintain compliance with
the Securities Act and (iv) the Definitive Note is being acquired in compliance
with any applicable blue sky securities laws of any state of the United States.
/ / (c) Check if Exchange is from Restricted Definitive Note to
beneficial interest in an Unrestricted Global Note. In connection with the
Owner's Exchange of a Restricted Definitive Note for a beneficial interest in an
Unrestricted Global Note, the Owner hereby certifies (i) the beneficial interest
is being acquired for the Owner's own account without transfer, (ii) such
Exchange has been effected in compliance with the transfer restrictions
applicable to Restricted Definitive Notes and pursuant to and in accordance with
the Securities Act, (iii) the restrictions on transfer contained in the
Indenture and the Private Placement Legend are not required in order to maintain
compliance with the Securities Act and (iv) the beneficial interest is being
acquired in compliance with any applicable blue sky securities laws of any state
of the United States.
/ / (d) Check if Exchange is from Restricted Definitive Note to
Unrestricted Definitive Note. In connection with the Owner's Exchange of a
Restricted Definitive Note for an Unrestricted Definitive Note, the Owner hereby
certifies (i) the Unrestricted Definitive Note is being acquired for the Owner's
own account without transfer, (ii) such Exchange has been effected in compliance
with the transfer restrictions applicable to Restricted Definitive Notes and
pursuant to and in accordance with the Securities Act, (iii) the restrictions on
transfer contained in the Indenture and the Private Placement Legend are not
required in order to maintain compliance with the Securities Act and (iv) the
Unrestricted Definitive Note is being acquired in compliance with any applicable
blue sky securities laws of any state of the United States.
2. Exchange of Restricted Definitive Notes or Beneficial Interests
in Restricted Global Notes for Restricted Definitive Notes or Beneficial
Interests in Restricted Global Notes
/ / (a) Check if Exchange is from beneficial interest in a Restricted
Global Note to Restricted Definitive Note. In connection with the Exchange of
the Owner's beneficial interest in a Restricted Global Note for a Restricted
Definitive Note with an equal principal amount at maturity, the Owner hereby
certifies that the Restricted Definitive Note is being acquired for the Owner's
own account without transfer. Upon consummation of the proposed Exchange in
accordance with the terms of the Indenture, the Restricted Definitive Note
issued will continue to be subject to the restrictions on transfer enumerated in
the Private Placement Legend printed on the Restricted Definitive Note and in
the Indenture and the Securities Act.
/ / (b) Check if Exchange is from Restricted Definitive Note to
beneficial interest in a Restricted Global Note. In connection with the Exchange
of the Owner's Restricted Definitive Note for a beneficial interest in the
[CHECK ONE] :
/ / 144A Global Note, :
/ / Regulation S Global Note, :
C-2
with an equal principal amount at maturity, the Owner hereby certifies (i) the
beneficial interest is being acquired for the Owner's own account without
transfer and (ii) such Exchange has been effected in compliance with the
transfer restrictions applicable to the Restricted Global Notes and pursuant to
and in accordance with the Securities Act, and in compliance with any applicable
blue sky securities laws of any state of the United States. Upon consummation of
the proposed Exchange in accordance with the terms of the Indenture, the
beneficial interest issued will be subject to the restrictions on transfer
enumerated in the Private Placement Legend printed on the relevant Restricted
Global Note and in the Indenture and the Securities Act.
This certificate and the statements contained herein are made for your
benefit and the benefit of the Company.
Dated:
----------------
-----------------------------------
[Insert Name of Transferor]
By:
--------------------------------
Name:
Title:
C-3
EXHIBIT D
FORM OF CERTIFICATE FROM
ACQUIRING INSTITUTIONAL ACCREDITED INVESTOR
Solo Cup Company
0000 Xxx Xxxxxxxxx Xxxx
Xxxxxxxx Xxxx, XX 00000
Attention: Chief Financial Officer
U.S. Bank National Association
00 Xxxxxxxxxx Xxxxxx
Xx. Xxxx, XX 00000-0000
Attention: Corporate Trust Administration
Re: 8 1/2% Senior Subordinated Notes due 2014
Reference is hereby made to the Indenture, dated as of February 27,
2004 (the "INDENTURE"), among Solo Cup Company, a Delaware corporation (the
"COMPANY"), the Guarantors and U.S. Bank National Association, a nationally
chartered banking association, as trustee (the "TRUSTEE"). Capitalized terms
used but not defined herein shall have the meanings given to them in the
Indenture.
In connection with our proposed purchase of $____________ aggregate
principal amount of:
(a) / / beneficial interest in a Global Note, or
(b) / / a Definitive Note,
we confirm that:
1. We understand that any subsequent transfer of the Notes or any
interest therein is subject to certain restrictions and conditions set forth in
the Indenture and the undersigned agrees to be bound by, and not to resell,
pledge or otherwise transfer the Notes or any interest therein except in
compliance with, such restrictions and conditions and the Securities Act of
1933, as amended (the "SECURITIES ACT").
2. We understand that the offer and sale of the Notes have not been
registered under the Securities Act, and that the Notes and any interest therein
may not be offered or sold except as permitted in the following sentence. We
agree, on our own behalf and on behalf of any accounts for which we are acting
as hereinafter stated, that if we should sell the Notes or any interest therein,
we shall do so only (A) to the Company or any subsidiary thereof, (B) in
accordance with Rule 144A under the Securities Act to a "qualified institutional
buyer" (as defined therein), (C) to an institutional "accredited investor" (as
defined below) that, prior to such transfer, furnishes (or has furnished on its
behalf by a U.S. broker-dealer) to you and to the Company a signed letter
substantially in the form of this letter and an Opinion of Counsel in
D-1
form reasonably acceptable to the Company to the effect that such transfer is in
compliance with the Securities Act, (D) outside the United States in accordance
with Rule 904 of Regulation S under the Securities Act, (E) pursuant to the
provisions of Rule 144(k) under the Securities Act or (F) pursuant to an
effective registration statement under the Securities Act, and we further agree
to provide to any person purchasing the Definitive Note or beneficial interest
in a Global Note from us in a transaction meeting the requirements of clauses
(A) through (E) of this paragraph a notice advising such purchaser that resales
thereof are restricted as stated herein.
3. We understand that, on any proposed resale of the Notes or
beneficial interest therein, we will be required to furnish to you and the
Company such certifications, legal opinions and other information as you and the
Company may reasonably require to confirm that the proposed sale complies with
the foregoing restrictions. We further understand that the Notes purchased by us
will bear a legend to the foregoing effect.
4. We are an institutional "accredited investor" (as defined in Rule
501(a)(1), (2), (3) or (7) of Regulation D under the Securities Act) and have
such knowledge and experience in financial and business matters as to be capable
of evaluating the merits and risks of our investment in the Notes, and we and
any accounts for which we are acting are each able to bear the economic risk of
our or its investment.
5. We are acquiring the Notes or beneficial interest therein
purchased by us for our own account or for one or more accounts (each of which
is an institutional "accredited investor") as to each of which we exercise sole
investment discretion.
The Trustee and the Company are entitled to rely upon this letter and
are irrevocably authorized to produce this letter or a copy hereof to any
interested party in any administrative or legal proceedings or official inquiry
with respect to the matters covered hereby.
Dated:
---------------- ----------------------------------------
[Insert Name of Accredited Investor]
By:
-------------------------------------
Name:
Title:
D-2
EXHIBIT E
FORM OF NOTATION OF GUARANTEE
For value received, each Guarantor (which term includes any successor
Person under the Indenture) has, jointly and severally, unconditionally
guaranteed, to the extent set forth in and subject to the provisions in the
Indenture dated as of February 27, 2004 (the "INDENTURE") among Solo Cup
Company, a Delaware corporation, the other Guarantors (as defined in the
Indenture) and U.S. Bank National Association, a nationally chartered banking
association, as trustee (the "TRUSTEE"), (a) the due and punctual payment of the
principal of, premium, if any, and interest and Liquidated Damages, if any, on
the Notes (as defined in the Indenture), whether at maturity, by acceleration,
redemption or otherwise, and the due and punctual payment of interest on overdue
principal, premium, if any, and interest and Liquidated Damages, if any, on the
Notes, if lawful (subject in all cases to any applicable grace periods provided
in the Indenture and the Notes), and the due and punctual performance of all
other obligations of the Company to the Holders or the Trustee all in accordance
with the terms of the Indenture and the Notes and (b) in case of any extension
of time of payment or renewal of any Notes or any of such other obligations, the
same will be promptly paid in full when due or performed in accordance with the
terms of the extension or renewal, whether at stated maturity, by acceleration
or otherwise. The obligations of the Guarantors to the Holders of Notes and to
the Trustee pursuant to the Note Guarantee and the Indenture are expressly set
forth in Article Ten of the Indenture and reference is hereby made to the
Indenture for the precise terms of the Note Guarantee. Each Holder of a Note, by
accepting the same, (a) agrees to and shall be bound by such provisions and (b)
appoints the Trustee attorney-in-fact of such Holder for such purpose.
[SIGNATURE PAGE FOLLOWS]
E-1
IN WITNESS HEREOF, each Guarantor has caused this Notation of
Guarantee to be signed manually or by facsimile by its duly authorized officer.
[NAME OF GUARANTOR]
E-2
EXHIBIT F
FORM OF SUPPLEMENTAL INDENTURE
TO BE DELIVERED BY SUBSEQUENT GUARANTORS
Supplemental Indenture (this "SUPPLEMENTAL INDENTURE"), dated as of
_____________, among __________________ (the "GUARANTEEING SUBSIDIARY"), a
subsidiary of Solo Cup Company, a Delaware corporation (or its permitted
successor) (the "COMPANY"), and U.S. Bank National Association, a nationally
chartered banking association (or its permitted successor), as trustee under the
Indenture referred to below (the "TRUSTEE").
W I T N E S S E T H
WHEREAS, the Company and the other Guarantors party thereto have
heretofore executed and delivered to the Trustee an indenture (the "INDENTURE"),
dated as of February 27, 2004 providing for the issuance of the Company's 8 1/2%
Senior Subordinated Notes due 2014 (the "NOTES");
WHEREAS, the Indenture provides that under certain circumstances the
Guaranteeing Subsidiary shall execute and deliver to the Trustee a supplemental
indenture pursuant to which the Guaranteeing Subsidiary shall, subject to
Article Ten of the Indenture, unconditionally guarantee the Notes on the terms
and conditions set forth therein (the "NOTE GUARANTEE"); and
WHEREAS, pursuant to Section 9.01 of the Indenture, the Trustee is
authorized to execute and deliver this Supplemental Indenture.
NOW THEREFORE, in consideration of the foregoing and for other good
and valuable consideration, the receipt of which is hereby acknowledged, the
Guaranteeing Subsidiary and the Trustee agree as follows for the equal and
ratable benefit of the Holders of the Notes:
1. CAPITALIZED TERMS. Capitalized terms used herein without
definition shall have the meanings assigned to them in the Indenture.
2. AGREEMENT TO GUARANTEE.
(a) Subject to Article Ten of the Indenture, the Guaranteeing
Subsidiary, jointly and severally with all other Guarantors, fully and
unconditionally guarantees to each Holder of a Note authenticated and delivered
by the Trustee and to the Trustee and its successors and assigns, irrespective
of the validity and enforceability of the Indenture, the Notes or the
obligations of the Company hereunder or thereunder, that:
(i) the principal of, premium, if any, and interest and Liquidated
Damages, if any, on the Notes will be promptly paid in full when due,
whether at maturity, by acceleration, redemption or otherwise, and interest
on the overdue principal of, premium, if any, and interest and Liquidated
Damages, if any, on the Notes, if lawful (subject in all cases to any
applicable grace period provided herein), and all other obligations of the
F-1
Company to the Holders or the Trustee hereunder or thereunder will be
promptly paid in full, all in accordance with the terms hereof and thereof;
and
(ii) in case of any extension of time of payment or renewal of any
Notes or any of such other obligations, the same will be promptly paid in
full when due in accordance with the terms of the extension or renewal,
whether at stated maturity, by acceleration or otherwise. Failing payment
when due of any amount so guaranteed for whatever reason, the Guarantors
shall be jointly and severally obligated to pay the same immediately. The
Guaranteeing Subsidiary agrees that this is a guarantee of payment and not
a guarantee of collection.
(b) The Guaranteeing Subsidiary hereby agrees that, to the maximum
extent permitted under applicable law, its obligations hereunder shall be
unconditional, irrespective of the validity, regularity or enforceability of the
Notes or the Indenture, the absence of any action to enforce the same, any
waiver or consent by any Holder of the Notes with respect to any provisions
hereof or thereof, the recovery of any judgment against the Company, any action
to enforce the same or any other circumstance which might otherwise constitute a
legal or equitable discharge or defense of a Guarantor.
(c) The Guaranteeing Subsidiary, subject to Section 6.06 of the
Indenture, hereby waives diligence, presentment, demand of payment, filing of
claims with a court in the event of insolvency or bankruptcy of the Company, any
right to require a proceeding first against the Company, protest, notice and all
demands whatsoever and covenants that this Note Guarantee shall not be
discharged except by complete performance of the obligations contained in the
Notes and the Indenture.
(d) If any Holder or the Trustee is required by any court or
otherwise to return to the Company, the Guarantors, or any custodian, trustee,
liquidator or other similar official acting in relation to any of the Company or
the Guarantors, any amount paid by any of them to the Trustee or such Holder,
this Note Guarantee, to the extent theretofore discharged, shall be reinstated
in full force and effect.
(e) The Guaranteeing Subsidiary agrees that it shall not be entitled
to any right of subrogation in relation to the Holders in respect of any
obligations guaranteed hereby until payment in full of all obligations
guaranteed hereby.
(f) The Guaranteeing Subsidiary agrees that, as between the
Guarantors, on the one hand, and the Holders and the Trustee, on the other hand,
(x) the maturity of the obligations guaranteed hereby may be accelerated as
provided in Article Six of the Indenture for the purposes of the Note Guarantee,
notwithstanding any stay, injunction or other prohibition preventing such
acceleration in respect of the obligations guaranteed hereby, and (y) in the
event of any declaration of acceleration of such obligations as provided in
Article Six of the Indenture, such obligations (whether or not due and payable)
shall forthwith become due and payable by the Guarantors for the purpose of the
Note Guarantee.
F-2
(g) The Guaranteeing Subsidiary shall have the right to seek
contribution from any non-paying Guarantor so long as the exercise of such right
does not impair the rights of the Holders under the Note Guarantee.
(h) The Guaranteeing Subsidiary confirms, pursuant to Section 10.02
of the Indenture, that it is the intention of such Guaranteeing Subsidiary that
the Note Guarantee not constitute (i) a fraudulent transfer or conveyance for
purposes of Bankruptcy Law, the Uniform Fraudulent Conveyance Act, the Uniform
Fraudulent Transfer Act or any similar federal or state law to the extent
applicable to the Note Guarantee or (ii) an unlawful distribution under any
applicable state law prohibiting shareholder distributions by an insolvent
subsidiary to the extent applicable to the Note Guarantee. To effectuate the
foregoing intention, the Guaranteeing Subsidiary and the Trustee hereby
irrevocably agree that the obligations of the Guaranteeing Subsidiary will be
limited to the maximum amount as will, after giving effect to all other
contingent and fixed liabilities of such Guaranteeing Subsidiary that are
relevant under such laws, and after giving effect to any collections from,
rights to receive contribution from or payments made by or on behalf of any
other Guarantor in respect of the obligations of such other Guarantor under
Article Ten of the Indenture, result in the obligations of the Guaranteeing
Subsidiary under the Note Guarantee not constituting a fraudulent transfer or
conveyance or such an unlawful shareholder distribution.
3. EXECUTION AND DELIVERY. The Guaranteeing Subsidiary agrees that
the Note Guarantee shall remain in full force and effect notwithstanding any
failure to endorse on each Note a notation of the Note Guarantee.
4. GUARANTEEING SUBSIDIARY MAY CONSOLIDATE, ETC., ON CERTAIN TERMS.
(a) The Guaranteeing Subsidiary may not sell or otherwise dispose of
all or substantially all of its assets to, or consolidate with or merge with or
into (whether or not the Guaranteeing Subsidiary is the surviving Person),
another Person, other than the Company or another Guarantor, unless:
(i) immediately after giving effect to that transaction, no Default
or Event of Default exists; and
(ii) either:
(A) the Person acquiring the property in any such sale or
disposition or the Person formed by or surviving any such
consolidation or merger (if other than the Guaranteeing Subsidiary) is
organized or existing under the laws of the United States, any state
thereof or the District of Columbia and assumes all the obligations of
that Guaranteeing Subsidiary under the Indenture, this Supplemental
Indenture, the Note Guarantee and the Registration Rights Agreement
pursuant to a supplemental indenture reasonably satisfactory to the
Trustee; or
(B) such sale or other disposition or consolidation or merger
complies with Section 4.10 of the Indenture.
F-3
(b) In case of any such consolidation, merger, sale or conveyance and
upon the assumption by the successor Person, by supplemental indenture, executed
and delivered to the Trustee and satisfactory in form to the Trustee, of the
Note Guarantee endorsed upon the Notes and the due and punctual performance of
all of the covenants and conditions of the Indenture to be performed by the
Guaranteeing Subsidiary, such successor Person shall succeed to and be
substituted for the Guaranteeing Subsidiary with the same effect as if it had
been named herein as a Guaranteeing Subsidiary. Such successor Person thereupon
may cause to be signed any or all of the Note Guarantees to be endorsed upon all
of the Notes issuable under the Indenture which theretofore shall not have been
signed by the Company and delivered to the Trustee. All the Note Guarantees so
issued shall in all respects have the same legal rank and benefit under the
Indenture as the Note Guarantees theretofore and thereafter issued in accordance
with the terms of the Indenture as though all of such Note Guarantees had been
issued at the date of the execution of the Indenture.
(c) Except as set forth in Article Five of the Indenture, and
notwithstanding clauses (i) and (ii) of Section 4(a) above and clauses (i) and
(ii) of Section 10.04(a) of the Indenture, nothing contained in the Indenture or
in any of the Notes shall prevent any consolidation or merger of a Guaranteeing
Subsidiary with or into the Company or another Guarantor, or shall prevent any
sale or conveyance of the property of a Guaranteeing Subsidiary as an entirety
or substantially as an entirety to the Company or another Guarantor.
5. RELEASE.
(a) The Guaranteeing Subsidiary will be released and relieved of any
obligations under the Note Guarantee, (i) in connection with any sale or other
disposition of Capital Stock of the Guaranteeing Subsidiary to a Person that is
not (either before or after giving effect to such transaction) a Subsidiary of
the Company such that, immediately after giving effect to such transaction, the
Guaranteeing Subsidiary would no longer constitute a Subsidiary of the Company,
if the sale of such Capital Stock of the Guaranteeing Subsidiary complies with
Section 4.10 and Section 4.07 of the Indenture; (ii) if the Company properly
designates the Guaranteeing Subsidiary as an Unrestricted Subsidiary under the
Indenture; or (iii) solely in the case of a Note Guarantee created pursuant to
the second sentence of Section 4.18(a) of the Indenture, upon the release or
discharge of the Guarantee which resulted in the creation of the Note Guarantee
pursuant to Section 4.18(b) of the Indenture, except a discharge or release by
or as a result of payment under such Guarantee. Upon delivery by the Company to
the Trustee of an Officers' Certificate and an Opinion of Counsel to the effect
that one of the foregoing requirements has been satisfied and the conditions to
the release of the Guaranteeing Subsidiary under this Section 5 have been met,
the Trustee shall execute any documents reasonably required in order to evidence
the release of the Guaranteeing Subsidiary from its obligations under the Note
Guarantee.
(b) If the Guaranteeing Subsidiary is not released from its
obligations under the Note Guarantee it shall remain liable for the full amount
of principal of and interest and Liquidated Damages, if any, on the Notes and
for the other obligations of any Guarantor under the Indenture as provided in
Article Ten of the Indenture.
F-4
6. NO RECOURSE AGAINST OTHERS. Pursuant to Section 13.07 of the
Indenture, no director, officer, employee, incorporator or stockholder of the
Guaranteeing Subsidiary shall have any liability for any obligations of the
Guaranteeing Subsidiary under the Notes, the Indenture, this Supplemental
Indenture, the Note Guarantees, the Pledge Agreement or for any claim based on,
in respect of, or by reason of, such obligations or their creation. This waiver
and release are part of the consideration for the Note Guarantee.
7. SUBORDINATION OF NOTE GUARANTEE. Payments under the Note
Guarantees pursuant to this Supplemental Indenture shall be subordinated to the
prior payment in full of all Senior Debt of such Guarantor, including Senior
Debt incurred after the date of this Supplemental Indenture, on the same basis
as the payments by the Company on the Notes are subordinated to the prior
payment in full of Senior Debt of the Company. For the purposes of the foregoing
sentence, the Trustee and the Holders shall have the right to receive and/or
retain payments by the Guaranteeing Subsidiary only at such times as they may
receive and/or retain payments in respect of the Notes pursuant to the
Indenture, including Article Twelve thereof.
8. NEW YORK LAW TO GOVERN. THE LAWS OF THE STATE OF NEW YORK SHALL
GOVERN AND BE USED TO CONSTRUE THIS SUPPLEMENTAL INDENTURE AND THE NOTE
GUARANTEE.
9. COUNTERPARTS. The parties may sign any number of copies of this
Supplemental Indenture. Each signed copy shall be an original, but all of them
together represent the same agreement.
10. EFFECT OF HEADINGS. The Section headings herein are for
convenience only and shall not affect the construction hereof.
11. TRUSTEE. The Trustee shall not be responsible in any manner
whatsoever for or in respect of the validity or sufficiency of this Supplemental
Indenture or for or in respect of the recitals contained herein, all of which
recitals are made solely by the Guaranteeing Subsidiary and the Company.
[SIGNATURE PAGE FOLLOWS]
F-5
IN WITNESS WHEREOF, the parties hereto have caused this Supplemental
Indenture to be duly executed and attested, all as of the date first above
written.
[NAME OF GUARANTEEING SUBSIDIARY]
By:
------------------------
Name:
Title:
SOLO CUP COMPANY, a Delaware corporation
By:
------------------------
Name:
Title:
U.S. BANK NATIONAL ASSOCIATION,
AS TRUSTEE
By:
------------------------
Name:
Title:
F-6
