EXHIBIT 4.4
EXECUTION COPY
SWEETHEART CUP COMPANY INC.
AND EACH OF THE GUARANTORS PARTY HERETO
9 1/2% SENIOR SECURED NOTES DUE 2007
-----------------------------
INDENTURE
Dated as of December 16, 2003
-----------------------------
XXXXX FARGO BANK MINNESOTA, 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)...................................................... 2.05
(b)...................................................... 12.03
(c)...................................................... 12.03
313 (a)...................................................... 7.06
(b)(1)................................................... 10.03
(b)(2)................................................... 7.06; 7.07
(c)...................................................... 7.06; 10.03;12.02
(d)...................................................... 7.06
314 (a)...................................................... 4.03;12.02; 12.05
(b)...................................................... 10.02
(c)(1)................................................... 12.04
(c)(2)................................................... 12.04
(c)(3)................................................... N.A.
(d)......................................................10.03, 10.04,10.05
(e)...................................................... 12.05
(f)...................................................... N.A.
315 (a)...................................................... 7.01
(b)...................................................... 7.05,12.02
(c)...................................................... 7.01
(d)...................................................... 7.01
(e)...................................................... 6.11
316 (a) (last sentence)...................................... 2.09
(a)(1)(A)................................................ 6.05
(a)(1)(B)................................................ 6.04
(a)(2)................................................... N.A.
(b)...................................................... 6.07
(c)...................................................... 2.12
317 (a)(1)................................................... 6.08
(a)(2)................................................... 6.09
(b)...................................................... 2.04
318 (a)...................................................... 12.01
(b)...................................................... N.A.
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Trust Indenture Act Section Indenture Section
(c)...................................................... 12.01
N.A. means not applicable.
* This Cross Reference Table is not part of this Indenture.
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Table of Contents
Page
ARTICLE 1
DEFINITIONS AND INCORPORATION BY REFERENCE
Section 1.01 Definitions................................................................................1
Section 1.02 Other Definitions.........................................................................23
Section 1.03 Incorporation by Reference of Trust Indenture Act.........................................23
Section 1.04 Rules of Construction.....................................................................24
ARTICLE 2
THE NOTES
Section 2.01 Form and Dating...........................................................................24
Section 2.02 Execution and Authentication..............................................................26
Section 2.03 Registrar and Paying Agent................................................................26
Section 2.04 Paying Agent to Hold Money in Trust.......................................................27
Section 2.05 Holder Lists..............................................................................27
Section 2.06 Transfer and Exchange.....................................................................27
Section 2.07 Replacement Notes.........................................................................42
Section 2.08 Outstanding Notes.........................................................................42
Section 2.09 Treasury Notes............................................................................43
Section 2.10 Temporary Notes...........................................................................43
Section 2.11 Cancellation..............................................................................43
Section 2.12 Defaulted Interest........................................................................43
ARTICLE 3
REDEMPTION AND PREPAYMENT
Section 3.01 Notices to Trustee........................................................................44
Section 3.02 Selection of Notes to Be Redeemed or Purchased............................................44
Section 3.03 Notice of Redemption......................................................................44
Section 3.04 Effect of Notice of Redemption............................................................45
Section 3.05 Deposit of Redemption or Purchase Price...................................................45
Section 3.06 Notes Redeemed or Purchased in Part.......................................................46
Section 3.07 Optional Redemption.......................................................................46
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Section 3.08 Mandatory Redemption......................................................................46
Section 3.09 Offer to Purchase by Application of Excess Proceeds.......................................46
ARTICLE 4
COVENANTS
Section 4.01 Payment of Notes..........................................................................48
Section 4.02 Maintenance of Office or Agency...........................................................49
Section 4.03 Reports...................................................................................49
Section 4.04 Compliance Certificate....................................................................50
Section 4.05 Taxes.....................................................................................51
Section 4.06 Stay, Extension and Usury Laws............................................................51
Section 4.07 Limitation on Restricted Payments.........................................................51
Section 4.08 Limitation on Dividends and Other Payment Restrictions Affecting Subsidiaries.............54
Section 4.09 Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock...............55
Section 4.10 Limitation on Asset Sales.................................................................58
Section 4.11 Limitation on Transactions with Affiliates................................................59
Section 4.12 Limitation on Liens.......................................................................60
Section 4.13 Line of Business..........................................................................60
Section 4.14 Corporate Existence.......................................................................61
Section 4.15 Offer to Repurchase Upon Change of Control................................................61
Section 4.16 Maintenance of Insurance and Properties...................................................63
Section 4.17 Future Guarantors.........................................................................63
Section 4.18 Designation of Restricted and Unrestricted Subsidiaries...................................63
Section 4.19 Impairment of Security Interest...........................................................64
ARTICLE 5
SUCCESSORS
Section 5.01 Merger, Consolidation, or Sale of Assets..................................................65
Section 5.02 Successor Corporation Substituted.........................................................66
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ARTICLE 6
DEFAULTS AND REMEDIES
Section 6.01 Events of Default.........................................................................66
Section 6.02 Acceleration..............................................................................68
Section 6.03 Other Remedies............................................................................68
Section 6.04 Waiver of Past Defaults...................................................................69
Section 6.05 Control by Majority.......................................................................69
Section 6.06 Limitation on Suits.......................................................................69
Section 6.07 Rights of Holders of Notes to Receive Payment.............................................69
Section 6.08 Collection Suit by Trustee................................................................70
Section 6.09 Trustee May File Proofs of Claim..........................................................70
Section 6.10 Priorities................................................................................70
Section 6.11 Undertaking for Costs.....................................................................71
ARTICLE 7
TRUSTEE
Section 7.01 Duties of Trustee.........................................................................71
Section 7.02 Rights of Trustee.........................................................................72
Section 7.03 Individual Rights of Trustee..............................................................73
Section 7.04 Trustee's Disclaimer......................................................................73
Section 7.05 Notice of Defaults........................................................................73
Section 7.06 Reports by Trustee to Holders of the Notes................................................73
Section 7.07 Compensation and Indemnity................................................................74
Section 7.08 Replacement of Trustee....................................................................75
Section 7.09 Successor Trustee by Merger, etc..........................................................76
Section 7.10 Eligibility; Disqualification.............................................................76
Section 7.11 Preferential Collection of Claims Against Company.........................................76
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ARTICLE 8
LEGAL DEFEASANCE AND COVENANT DEFEASANCE
Section 8.01 Option to Effect Legal Defeasance or Covenant Defeasance..................................76
Section 8.02 Legal Defeasance and Discharge............................................................76
Section 8.03 Covenant Defeasance.......................................................................77
Section 8.04 Conditions to Legal or Covenant Defeasance................................................77
Section 8.05 Deposited Money and Government Securities to be Held in Trust; Other Miscellaneous
Provisions................................................................................79
Section 8.06 Repayment to Company......................................................................79
Section 8.07 Reinstatement.............................................................................79
ARTICLE 9
AMENDMENT, SUPPLEMENT AND WAIVER
Section 9.01 Without Consent of Holders of Notes.......................................................80
Section 9.02 With Consent of Holders of Notes..........................................................81
Section 9.03 Compliance with Trust Indenture Act.......................................................82
Section 9.04 Revocation and Effect of Consents.........................................................82
Section 9.05 Notation on or Exchange of Notes..........................................................83
Section 9.06 Trustee to Sign Amendments, etc...........................................................83
ARTICLE 10
COLLATERAL AND SECURITY
Section 10.01 Collateral Agreements.....................................................................83
Section 10.02 Recording and Opinions....................................................................84
Section 10.03 Release of Collateral.....................................................................85
Section 10.04 Certificates of the Company...............................................................85
Section 10.05 Certificates of the Trustee...............................................................86
Section 10.06 Authorization of Actions to Be Taken by the Trustee Under the Collateral Agreements.......86
Section 10.07 Authorization of Receipt of Funds by the Trustee Under the Collateral Agreements..........86
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Section 10.08 Termination of Security Interest..........................................................86
ARTICLE 11
GUARANTIES
Section 11.01 Guarantee.................................................................................87
Section 11.02 Limitation on Guarantor Liability.........................................................88
Section 11.03 Execution and Delivery of Guaranty........................................................88
Section 11.04 Guarantors May Consolidate, etc., on Certain Terms........................................89
Section 11.05 Releases..................................................................................89
ARTICLE 12
SATISFACTION AND DISCHARGE
Section 12.01 Satisfaction and Discharge................................................................90
Section 12.02 Application of Trust Money................................................................91
ARTICLE 13
MISCELLANEOUS
Section 13.01 Trust Indenture Act Controls..............................................................92
Section 13.02 Notices...................................................................................92
Section 13.03 Communication by Holders of Notes with Other Holders of Notes.............................93
Section 13.04 Certificate and Opinion as to Conditions Precedent........................................93
Section 13.05 Statements Required in Certificate or Opinion.............................................93
Section 13.06 Rules by Trustee and Agents...............................................................94
Section 13.07 No Personal Liability of Directors, Officers, Employees and Stockholders..................94
Section 13.08 Governing Law.............................................................................94
Section 13.09 No Adverse Interpretation of Other Agreements.............................................94
Section 13.10 Successors................................................................................94
Section 13.11 Severability..............................................................................94
Section 13.12 Counterpart Originals.....................................................................94
Section 13.13 Table of Contents, Headings, etc..........................................................94
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EXHIBITS
Exhibit A1 Form of Note
Exhibit A2 Form of Regulation S Temporary Global Note
Exhibit B Form of Certificate of Transfer
Exhibit C Form of Certificate of Exchange
Exhibit D Form of Certificate of Acquiring Institutional Accredited Investor
Exhibit E Form of Guaranty
Exhibit F Form of Supplemental Indenture
INDENTURE, dated as of December 16, 2003, among Sweetheart Cup Company
Inc., a Delaware corporation (the "Company"), the Guarantors (as defined herein)
and Xxxxx Fargo Bank Minnesota, National Association, as trustee (in such
capacity, the "Trustee").
The Company, the Guarantors and the Trustee agree as follows for the
benefit of each other and for the equal and ratable benefit of the Holders (as
defined herein) of the 9 1/2% Senior Secured Notes due 2007 (the "Notes"):
ARTICLE 1
DEFINITIONS AND INCORPORATION
BY REFERENCE
Section 1.01 Definitions.
"144A Global Note" means a Global Note substantially in the form of
Exhibit A1 hereto 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 will be issued in a denomination equal to the
outstanding principal amount of the Notes sold in reliance on Rule 144A.
"Acquired Indebtedness" means Indebtedness of a Person existing at the
time such Person became a Restricted Subsidiary and not incurred in connection
with, or in contemplation of, such Person becoming a Restricted Subsidiary,
treating for purposes of this definition as Indebtedness the unused portion of
revolving loan commitments provided in agreements to which such Person is a
party as borrower or guarantor.
"Additional Interest" has the meaning set forth in the Registration
Rights Agreement.
"Additional Notes" means Notes (other than the Initial Notes) issued
under this Indenture in accordance with Sections 2.02 and 4.09 hereof, as part
of the same series as the Initial Notes.
"Administrative Agent" has the meaning set forth in the definition of
the term "Credit Agreement."
"Affiliate" of any specified Person means any other Person directly or
indirectly controlling, controlled by or under common control with such
specified Person. For the purposes of this definition, "control" (including,
with correlative meanings, the terms "controlling," "controlled by" and "under
common control with"), as used with respect to any Person, means 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; provided, however, that beneficial
ownership of 10% of the voting securities of a Person shall be deemed to be
control.
"Agent" means any Registrar, co-registrar, Paying Agent or additional
paying agent.
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"Applicable Indebtedness" means:
(1) in respect of any asset that is the subject of an Asset
Sale at a time when such asset is included in the Collateral,
Indebtedness that is pari passu with the Notes and secured at such time
by Collateral; or
(2) in respect of any other asset, Indebtedness that is pari
passu with the Notes.
"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, with respect to any Person, the sale, lease,
conveyance, disposition or other transfer by such Person of any of its assets
other than cash (including by way of a sale-leaseback transaction and including
the issuance, sale or other transfer of any of the Capital Stock of any
Restricted Subsidiary of such Person) other than to Sweetheart Holdings, the
Company or any of their Restricted Subsidiaries that is not a Receivables
Subsidiary (including the receipt of proceeds of insurance paid on account of
the loss of or damage to any asset and awards of compensation for any asset
taken by condemnation, eminent domain or similar proceeding, and including the
receipt of proceeds of business interruption insurance); provided that
notwithstanding the foregoing, the term "Asset Sale" shall not include:
(i) the sale, lease, conveyance, disposition or other transfer
of all or substantially all of the assets of Sweetheart Holdings or the
Company, as permitted pursuant to the "Merger, Consolidation or Sale of
Assets" covenant,
(ii) the sale or lease of inventory or accounts in the
ordinary course of business,
(iii) the sale, conveyance, disposition or other transfer of
the Capital Stock of an Unrestricted Subsidiary,
(iv) the sale or lease of assets in any one transaction or
series of related transactions (which, in the case of any lease, shall
be the annual (or, for any period of less than one year, annualized)
rental payments with respect thereto), the Net Proceeds of which do not
exceed $1.0 million,
(v) any Restricted Payment permitted by the terms of this
Indenture,
(vi) the surrender or waiver of contract rights or the
settlement, release or surrender of contract, tort or other claims of
any kind,
(vii) the grant in the ordinary course of business of any
non-exclusive license of patents, trademarks, registrations therefor
and other similar intellectual property, and
(viii) sales of accounts receivable and related assets of the
type specified in the definition of "Qualified Receivables Transaction"
to a Receivables Subsidiary for the Fair
2
Market Value thereof, including cash in an amount at least equal to 75%
of the book value thereof as determined in accordance with GAAP.
"Bankruptcy Law" means Title 11, U.S. 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" will 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 after the passage of time. The terms "beneficially owns" and
"beneficially owned" have a corresponding meaning.
"Board of Directors" means:
(1) with respect to a corporation, the board of directors of
the corporation or any committee thereof duly authorized to act on
behalf of such board;
(2) with respect to a partnership, the board of directors of
the general partner of the partnership;
(3) with respect to a limited liability company, the managing
member or members or any controlling committee of managing members
thereof; and
(4) with respect to any other Person, the board or committee
of such Person serving a similar function.
"Broker-Dealer" has the meaning set forth in the Registration Rights
Agreement.
"Business Day" means any day other than a Legal Holiday.
"capital lease" means, at the time any determination thereof is to be
made, any lease of property, real or personal, in respect of which the present
value of the minimum rental commitment would be capitalized on a balance sheet
of the lessee in accordance with GAAP.
"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 which
would at such time be so required to be capitalized on the balance sheet in
accordance with GAAP.
"Capital Stock" means any and all shares, interests, participations or
other equivalents (however designated) of corporate stock or partnership
interests.
"Cash Equivalents" means
(1) United States Government Securities,
3
(2) time deposits and certificates of deposit of any
commercial bank organized in the United States having capital and
surplus in excess of $100,000,000 or a commercial bank organized under
the laws of any other country that is a member of the OECD having total
assets in excess of $100,000,000 with a maturity date not more than one
year from the date of acquisition,
(3) repurchase obligations with a term of not more than seven
days for underlying securities of the types described in clause (1)
above entered into with any bank meeting the qualifications specified
in clause (2) above,
(4) direct obligations issued by any state of the United
States of America or any political subdivision of any such state or any
public instrumentality thereof maturing within six months after the
date of acquisition thereof and, at the time of acquisition, having one
of the two highest ratings obtainable from Standard & Poor's
Corporation or the highest available from Xxxxx'x Investors Service,
Inc. (or, if at any time neither Standard & Poor's Corporation nor
Xxxxx'x Investors Service, Inc. shall be rating such obligations, then
the highest available rating from such other nationally recognized
rating services acceptable to the Trustee),
(5) commercial paper issued by the parent corporation of any
commercial bank organized in the United States having capital and
surplus in excess of $100,000,000 or a commercial bank organized under
the laws of any other country that is a member of the OECD having total
assets in excess of $100,000,000, and commercial paper issued by others
having one of the two highest ratings obtainable from Standard & Poor's
Corporation or the highest available from Xxxxx'x Investors Service,
Inc. (or, if at any time neither Standard & Poor's Corporation nor
Xxxxx'x Investors Service, Inc. shall be rating such obligations, then
from such other nationally recognized rating services acceptable to the
Trustee) and in each case maturing within one year after the date of
acquisition,
(6) overnight bank deposits and bankers' acceptances at any
commercial bank organized in the United States having capital and
surplus in excess of $100,000,000 or a commercial bank organized under
the laws of any other country that is a member of the OECD having total
assets in excess of $100,000,000,
(7) deposits available for withdrawal on demand with
commercial banks organized in the United States having capital and
surplus in excess of $50,000,000 or a commercial bank organized under
the laws of any other country that is a member of the OECD having total
assets in excess of $50,000,000 and
(8) investments in money market funds substantially all of
whose assets comprise securities of the types described in clauses (1)
through (7), including without limitation, the UST Master Government
Fund.
"Change of Control" means such time as:
4
(1) prior to the initial public offering by Sweetheart
Holdings of its common stock (other than on Form S-8), Xxxxxx Xxxxxx
and his Related Parties cease to be the beneficial owners, in the
aggregate, of at least 51% of the voting power of the Voting Capital
Stock of Sweetheart Holdings and the Company, or
(2) after the initial public offering by Sweetheart Holdings
of its common stock (other than on Form S-8), (A) any Schedule 13D,
Form 13F or Schedule 13G under the Exchange Act, or any amendment to
any such Schedule or Form, is received by Sweetheart Holdings or the
Company which indicates that, or Sweetheart Holdings or the Company
otherwise becomes aware that, a "person" or "group" (within the meaning
of Sections 13(d) and 14(d) (2) of the Exchange Act) has become the
beneficial owner, by way of merger, consolidation or otherwise, of 35%
or more of the voting power of the Voting Capital Stock of Sweetheart
Holdings or the Company, and (B) such person or group has become the
beneficial owner of a greater percentage of the Voting Capital Stock of
Sweetheart Holdings or the Company than that beneficially owned by
Xxxxxx Xxxxxx and his Related Parties, or
(3) the sale, lease or transfer of all or substantially all of
the assets of Sweetheart Holdings or the Company to any person or group
(other than Xxxxxx Xxxxxx and his Related Parties), or
(4) during any period of two consecutive calendar years
following the date of this Indenture, individuals who at the beginning
of such period constituted the Board of Directors of Sweetheart
Holdings or the Company (together with any new directors whose election
by the Board of Directors of Sweetheart Holdings or the Company, as the
case may be, or whose nomination for election by the shareholders of
Sweetheart Holdings or the Company, as the case may be, was approved by
a vote of a majority of the directors then still in office who either
were directors at the beginning of such period or whose election or
nomination for election was previously so approved) cease for any
reason to constitute a majority of the directors of Sweetheart Holdings
or the Company, as the case may be, then in office.
Notwithstanding the foregoing, a Change of Control will be deemed not
to have occurred solely as a result of the merger or consolidation of Sweetheart
Holdings and the Company.
"Clearstream" means Clearstream Banking, S.A.
"Collateral" means "Collateral" as such term is defined in the Security
Agreement, all property mortgaged under the Mortgages and any other property,
whether now owned or hereafter acquired, upon which a Lien securing the
Obligations under this Indenture is granted or purported to be granted under any
Collateral Agreement; provided, that notwithstanding anything herein or in any
Collateral Agreement to the contrary, Collateral shall not in any event include
"accounts" (as defined in the UCC), "inventory" (as defined in the UCC),
trademarks, patents, copyrights, registrations or applications therefor or any
other intellectual property, any property used in any business unit of the
Company (other than the Xxxxx Business Unit (as defined in the Security
Agreement)) or any "proceeds" (as defined in the UCC) thereof.
5
"Collateral Agent" means Xxxxx Fargo Bank Minnesota, National
Association until a successor replaces it in accordance with the applicable
provisions of this Indenture and thereafter means the successor serving
hereunder.
"Collateral Agreements" means, collectively, the Security Agreement and
each Mortgage, in each case as the same may be in force from time to time.
"Company" means Sweetheart Cup Company Inc., and any and all successors
thereto.
"Consolidated Cash Flow" means, with respect to any Person for any
period, the Consolidated Net Income of such Person and its Restricted
Subsidiaries for such period plus, without duplication, to the extent deducted
in computing Consolidated Net Income:
(1) an amount equal to any extraordinary loss plus any net
loss realized in connection with an Asset Sale,
(2) provision for taxes based on income or profits of such
Person and its Restricted Subsidiaries for such period,
(3) consolidated interest expense of such Person and its
Restricted Subsidiaries for such period, whether paid or accrued and
whether or not capitalized (including, without limitation, amortization
of 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, commissions,
discounts and other fees and charges incurred in respect of letter of
credit or bankers' acceptance financings, and net payments (if any)
pursuant to Hedging Obligations), and
(4) depreciation and amortization (including amortization of
goodwill and other intangibles but excluding amortization of prepaid
cash expenses that were paid in a prior period) of such Person and its
Restricted Subsidiaries for such period, in each case, on a
consolidated basis and determined in accordance with GAAP.
Notwithstanding the foregoing, the provision for taxes on the income or
profits of, and the depreciation and amortization of, a Restricted Subsidiary of
the referent Person shall be added to Consolidated Net Income to compute
Consolidated Cash Flow only to the extent (and in same proportion) that the Net
Income of such Restricted Subsidiary was included in calculating the
Consolidated Net Income of such Person and only if a corresponding amount would
be permitted at the date of determination to be dividended, directly or
indirectly, to Sweetheart Holdings or 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 Restricted Subsidiary or its
stockholders.
"Consolidated Net Income" means, with respect to any Person for any
period, the aggregate of the Net Income of such Person and its Restricted
Subsidiaries for such period, on a consolidated basis, determined in accordance
with GAAP; provided that:
6
(1) the Net Income (but not loss) of any Person that is not a
Restricted Subsidiary or that is accounted for by the equity method of
accounting shall be included only to the extent of the amount of
dividends or distributions paid in cash to the referent Person or a
Wholly Owned Subsidiary thereof,
(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 Subsidiary of such 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
stockholders,
(3) the Net Income of any Person acquired in a pooling of
interests transaction for any period prior to the date of such
acquisition shall be excluded,
(4) the cumulative effect of a change in accounting principles
shall be excluded, and
(5) the Net Income of any Unrestricted Subsidiary shall be
excluded, whether or not distributed to Sweetheart Holdings or one of
its Restricted Subsidiaries.
"Consolidated Net Worth" means, with respect to any Person as of any
date, the sum of:
(1) the consolidated equity of the common equity holders of
such Person and its Restricted Subsidiaries as of such date plus
(2) the respective amounts reported on such Person's balance
sheet as of such date with respect to any series of preferred stock
(other than Disqualified Stock) that by its terms is not entitled to
the payment of dividends unless such dividends may be declared and paid
only out of net earnings in respect of the year of such declaration and
payment, but only to the extent of any cash received by such Person
upon issuance of such preferred stock, less
(a) all write-ups (other than write-ups resulting
from foreign currency translations and writeups of tangible
assets of a going concern business made within 12 months after
the acquisition of such business) subsequent to the date of
this Indenture in the book value of any asset owned by such
Person or a consolidated Restricted Subsidiary of such Person,
(b) all investments as of such date in unconsolidated
Restricted Subsidiaries and in Persons that are not Restricted
Subsidiaries (except, in each case, Permitted Investments),
and
7
(c) all unamortized debt discount and expense and
unamortized deferred charges as of such date, all of the
foregoing determined in accordance with GAAP.
"Corporate Trust Office of the Trustee" will be at the address of the
Trustee specified in Section 13.02 hereof or such other address as to which the
Trustee may give notice to the Company.
"Credit Agreement" means the Third Amended and Restated Loan and
Security Agreement, dated as of March 25, 2002, among Sweetheart Holdings, the
Company, Bank of America, N.A., as agent (together with any successor agent, the
"Administrative Agent"), and the lenders party thereto from time to time and the
other Loan Documents (as defined therein) (or other analogous documents entered
into in connection with any refinancing thereof), as any of the foregoing has
been or may from time to time be amended, renewed, supplemented, restated or
otherwise modified (whether upon or after termination or otherwise) at the
option of the parties thereto and any other agreement pursuant to which any of
the indebtedness, commitments, obligations, costs, expenses, fees,
reimbursements and other indemnities payable or owing under any agreement
theretofore constituting the Credit Agreement may be refinanced (including by
means of sales of debt securities to institutional investors), restructured,
renewed, extended, refunded or increased, as any such other agreement may from
time to time at the option of the parties thereto be amended, supplemented,
renewed, restated or otherwise modified.
"Custodian" means the Trustee, as custodian with respect to the Notes
in global form, or any successor entity thereto.
"Default" means any event which is, or after notice or passage of time
or both would become, an Event of Default.
"Definitive Note" means a certificated Note registered in the name of
the Holder thereof and issued in accordance with Section 2.06 hereof,
substantially in the form of Exhibit A1 hereto 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 2.03 hereof 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.
"Disqualified Stock" means any Equity Interest which, by its terms (or
by the terms of any security into which it is convertible or for which it is
exchangeable), or upon the happening of any event (other than a Change of
Control in which the terms of such Equity Interest provide for payment in full
of the Notes prior to any payment with respect to such Equity Interest), matures
or is mandatorily redeemable, pursuant to a sinking fund obligation or
otherwise, or is redeemable at the option of the Holder thereof, in whole or in
part, on or prior to the final maturity date of the Notes.
8
"Domestic Subsidiary" means any Restricted Subsidiary of the Company
that was formed under the laws of the United States or any state of the United
States or the District of Columbia.
"Equity Interests" means Capital Stock or warrants, options or other
rights to acquire Capital Stock (but excluding any debt security which is
convertible into, or exchangeable for, Capital Stock).
"Euroclear" means Euroclear Bank, S.A./N.V., as operator of the
Euroclear system.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Exchange Notes" means the Notes issued in the Exchange Offer pursuant
to Section 2.06(f) hereof.
"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.
"Existing Indebtedness" means Indebtedness of Sweetheart Holdings or
the Company or any Restricted Subsidiary in existence on the date of this
Indenture (including the Junior Subordinated Notes but excluding Indebtedness
under the Credit Agreement), until such Indebtedness is repaid.
"Fair Market Value" means the value that would be paid by a willing
buyer to an unaffiliated willing seller in a transaction not involving distress
or necessity of either party, determined in good faith by the Board of Directors
of Sweetheart Holdings (unless otherwise provided herein).
"Fixed Charge Coverage Ratio" means with respect to any 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
Sweetheart Holdings or any of its Restricted Subsidiaries incurs, assumes,
Guarantees or redeems any Indebtedness (other than revolving credit borrowings)
or issues or redeems preferred stock subsequent to the commencement of the
period for which the Fixed Charge Coverage Ratio is being calculated but 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 or redemption of Indebtedness, or such issuance or
redemption of preferred stock, as if the same had occurred at the beginning of
the applicable four-quarter reference period. In addition, for purposes of
making the computation referred to above, (1) acquisitions that have been made
by Sweetheart Holdings or any of its Restricted Subsidiaries, including 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 deemed to have occurred on the
first day of the four-quarter reference period and Consolidated Cash Flow for
such reference period shall be calculated without giving effect to clause (3) of
the proviso set forth in the definition of
9
Consolidated Net Income, (2) the Consolidated Cash Flow attributable to
discontinued operations (as determined in accordance with GAAP) and operations
or businesses disposed of prior to the Calculation Date shall be excluded, and
(3) the Fixed Charges attributable to discontinued operations (as determined in
accordance with GAAP) and operations or businesses disposed of prior to the
Calculation Date shall be excluded, but only to the extent that the obligations
giving rise to such Fixed Charges will not be obligations of the referent Person
or any of its Restricted Subsidiaries following the Calculation Date.
"Fixed Charges" means, with respect to any Person for any period, the
sum, without duplication, of:
(1) the consolidated interest expense of such Person and its Restricted
Subsidiaries for such period, whether paid or accrued (including, without
limitation, amortization of 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,
commissions, discounts and other fees and charges incurred in respect of letter
of credit or bankers' acceptance financings, and net payments (if any) pursuant
to Hedging Obligations),
(2) the consolidated interest expense of such Person and its Restricted
Subsidiaries that was capitalized during such period,
(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), and
(4) the product of (a) all dividend payments on any series of preferred
stock of such Person, other than dividend payments on preferred stock of
Sweetheart Holdings paid solely in additional shares of such preferred stock
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.
"Xxxxx Business Unit" has the meaning set forth in the Security
Agreement.
"Xxxxx Notes" means the Company's 9 1/2% Senior Subordinated Notes due
2007 assumed by the Company as a result of the merger of the Company with The
Xxxxx Group, Inc. on March 25, 2002.
"GAAP" means accounting principles generally accepted in the United
States of America.
"Global" means collectively, Global Cup, S.A. de C.V., Rentactivos,S.A.
de C.V., Servicios Tanairi, S.A. de C.V. and Paper Cups de Mexico, S.A. de C.V.
"Global Note Legend" means the legend set forth in Section 2.06(g)(2),
which is required to be placed on all Global Notes issued under this Indenture.
10
"Global Notes" means, individually and collectively, each of the
Restricted Global Notes and the Unrestricted Global Notes deposited with or on
behalf of and registered in the name of the Depository or its nominee,
substantially in the form of Exhibit A1 hereto and that bears the Global Note
Legend and that has the "Schedule of Exchanges of Interests in the Global Note"
attached thereto, issued in accordance with Section 2.01, 2.06(b)(3),
2.06(b)(4), 2.06(d)(2) or 2.06(f) hereof.
"Government Securities" means direct obligations of, or obligations
guaranteed by, the United States of America, and the payment for which the
United States pledges its full faith and credit.
"Guarantee" means a guarantee (other than by endorsement of negotiable
instruments for collection or deposit in the ordinary course of business),
direct or indirect, in any manner (including, without limitation, letters of
credit and reimbursement agreements in respect thereof), of all or any part of
any Indebtedness.
"Guarantors" means Sweetheart Holdings and any direct or indirect
Restricted Subsidiary of Sweetheart Holdings that executes a supplemental
indenture in accordance with this Indenture, and their respective successors and
assigns.
"Guaranty" means any Guarantee of the Company's Obligations with
respect to the Notes.
"Hedging Obligations" means, with respect to any Person,
(1) the obligations of such Person under interest rate swap
agreements, interest rate cap agreements and interest rate collar
agreements,
(2) the net cost to such Person of foreign exchange contracts
and currency protection arrangements, and
(3) obligations under other similar agreements or arrangements
designed to protect such Person against fluctuations in interest rates
or currencies.
"Holder" means a Person in whose name a Note is registered.
"IAI Global Note" means a Global Note substantially in the form of
Exhibit A1 hereto 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 will be issued in a denomination equal to the
outstanding principal amount of the Notes sold to Institutional Accredited
Investors.
"Immaterial Subsidiary" means, as of any date, any Restricted
Subsidiary whose total assets, as of that date, are less than $100,000 and whose
total revenues for the most recent 12-month period do not exceed $100,000;
provided that a Restricted Subsidiary will not be
11
considered to be an Immaterial Subsidiary if it, directly or indirectly,
guarantees or otherwise provides direct credit support for any Indebtedness
of the Company.
"Indebtedness" means, with respect to any Person (without duplication),
any indebtedness of such Person, whether or not contingent:
(1) in respect of borrowed money or evidenced by bonds, notes,
debentures or similar instruments or
(2) in respect of letters of credit (or reimbursement Obligations in
respect thereof) or
(3) representing the balance deferred and unpaid of the purchase price
of any property (including pursuant to capital leases) or
(4) representing any Hedging Obligations,
except any such balance that constitutes an accrued expense or a trade payable
arising in the ordinary course of business, if and to the extent any of the
foregoing indebtedness (other than with respect to letters of credit or
reimbursement Obligations in respect thereof, or Hedging Obligations) would
appear as a liability upon a balance sheet of such Person prepared on a
consolidated basis in accordance with GAAP, and also includes, to the extent not
otherwise included, the Guarantee of items which would be included within this
definition.
"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.
"Initial Notes" means the first $100,000,000 aggregate principal amount
of Notes issued under this Indenture on the date hereof.
"Initial Purchaser" means, with respect to the Initial Notes, Xxxxxxxxx
& Company, Inc. and with respect to any series of Additional Notes, the initial
purchaser or underwriter to whom the Additional Notes are originally sold.
"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 are not also QIBs.
"Intercreditor Agreement" means the Intercreditor Agreement among the
Administrative Agent, the Trustee and the Collateral Agent (and acknowledged and
agreed to by the Company and Sweetheart Holdings), dated as of December 16,
2003, as the same may be amended, supplemented or modified from time to time.
"Investment" means any direct or indirect advance (other than advances
to customers in the ordinary course of business, which are recorded as accounts
receivable or short term notes receivable on the balance sheet of any Person or
its Restricted Subsidiaries), loan or other extension of credit or capital
contribution to (by means of any transfer of cash or other property to others or
12
any payment for property or services for the account or use of others), or any
purchase or acquisition of Equity Interests, bonds, notes (other than notes
acquired from customers in the ordinary course of business), debentures or other
securities issued by, any Person. For the purposes of Section 4.07, (1) the term
"Investment" shall include the Fair Market Value of the net assets of any
Restricted Subsidiary at the time that such Restricted Subsidiary is designated
an Unrestricted Subsidiary, (2) any property transferred to an Unrestricted
Subsidiary shall be valued at Fair Market Value at the time of such transfer, in
each case as determined by the Board of Directors of Sweetheart Holdings in good
faith and (3) any Investment constituting an advance, loan, extension of credit
or capital contribution shall be deemed to be incurred only to the extent that
it is not repaid in cash or Cash Equivalents, provided that the amount credited
for such repayment shall not exceed the amount deducted as a result of such
Investment.
"Junior Subordinated Notes" means the Company's 9 1/2% Junior
Subordinated Notes due 2008.
"LCHC" means Lily Canada Holding Corporation, a Delaware corporation,
and the owner of all outstanding Capital Stock of Lily Canada.
"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. If a payment date is a
Legal Holiday at a place of payment, payment may be made at that place on the
next succeeding day that is not a Legal Holiday, and no interest shall accrue on
such payment for the intervening period.
"Lenders" means the financial institutions that may from time to time
be lenders under the Credit Agreement.
"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, any mortgage, deed of trust,
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, except in connection with any Qualified
Receivables Transaction, any filing of or agreement to give any financing
statement under the Uniform Commercial Code (or equivalent statutes) of any
jurisdiction).
"Lily Canada" means Lily Cups, Inc., a Canadian corporation.
"Lily Canada Loan Agreement" means the Credit Agreement, dated as of
June 15, 1998, between Lily Canada, as borrower, and General Electric Capital
Canada Inc., as lender, as in effect on the date of this Indenture and as
thereafter amended, and any replacement or refinancing thereof (whether or not
contemporaneous with the termination of an existing such facility).
13
"Management Services Agreement" means the management services agreement
among SF Holdings, Sweetheart Holdings and the Company, as in effect on the date
of this Indenture.
"Mortgages" means the mortgages, deeds of trust, deeds to secure
Indebtedness or other similar documents granting Liens on real property, as well
as the other Collateral described in the mortgages, deeds of trust, deeds to
secure Indebtedness or other similar documents, in each case, securing
Obligations under this Indenture.
"Net Income" means, with respect to any 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 (but not loss), together with any related provision for
taxes on such gain (but not loss), realized in connection with (a) any Asset
Sale (including, without limitation, dispositions pursuant to sale and leaseback
transactions) 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 or
nonrecurring gain (but not loss), together with any related provision for taxes
on such extraordinary or nonrecurring gain (but not loss).
"Net Proceeds" means the aggregate cash proceeds received by Sweetheart
Holdings, the Company or any of their Restricted Subsidiaries in respect of any
Asset Sale, net of:
(1) the direct costs relating to such Asset Sale (including,
without limitation, legal, accounting and investment banking fees, and
sales commissions and the expenses and fees associated with making the
Asset Sale Offer),
(2) any taxes paid or payable as a result thereof and after
taking into account any available tax credits or deductions arising
from such Asset Sale,
(3) any reserve for adjustment in respect of the sale price of
such asset or assets required by GAAP, and
(4) repayment or payment of or in connection with any
Indebtedness or obligations secured by the assets sold.
"Non-Recourse Debt" means Indebtedness (i) as to which neither
Sweetheart Holdings nor any of its Restricted Subsidiaries (a) provides credit
support of any kind (including any undertaking, agreement or instrument that
would constitute Indebtedness), (b) is directly or indirectly liable (as a
guarantor or otherwise), or (c) constitutes the lender, (ii) no default with
respect to which (including any rights that the Holders thereof may have to take
enforcement action against an Unrestricted Subsidiary) would permit (upon
notice, lapse of time or both) any holder of any other Indebtedness (other than
the Notes being offered hereby) of Sweetheart Holdings or any of its Restricted
Subsidiaries to declare a default on such other Indebtedness or cause the
payment thereof to be accelerated or payable prior to its stated maturity and
(iii) as to which the lenders have been notified in writing that they will not
have any recourse to the stock or assets of Sweetheart Holdings or any of its
Restricted Subsidiaries.
14
"Non-U.S. Person" means a Person who is not a U.S. Person.
"Notes" has the meaning assigned to it in the preamble to this
Indenture. The Initial Notes and the Additional Notes shall be treated as a
single class for all purposes under this Indenture, and unless the context
otherwise requires, all references to the Notes shall include the Initial Notes
and any Additional Notes.
"Obligations" means, with respect to any Person, any principal,
premium, interest, penalties, expenses, fees, indemnifications, reimbursements,
damages and other liabilities payable under the documentation governing any
Indebtedness of such Person including, without limitation, any amounts payable
by such Person as a result of any Hedging Obligations.
"Officers" means the Chairman of the Board, the President, the Chief
Financial Officer, the Treasurer, any Assistant Treasurer, Controller, Secretary
or any Vice-President of Sweetheart Holdings, the Company or any Guarantor, as
the case may be.
"Officers' Certificate" means a certificate signed by two Officers, one
of whom must be the President, Vice-President or Secretary of Sweetheart
Holdings, the Company or any Guarantor, as the case may be.
"Opinion of Counsel" means an opinion from legal counsel who is
reasonably acceptable to the Trustee. Such counsel may be an employee of or
counsel to Sweetheart Holdings, the Company, any Guarantor or the Trustee.
"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 Investments" means:
(1) cash or Cash Equivalents,
(2) Investments in Sweetheart Holdings, the Company or any
Restricted Subsidiary of Sweetheart Holdings or the Company that is a
Guarantor (including a transaction with a Person, the result of which
is that such Person becomes such a Restricted Subsidiary),
(3) Investments received as consideration for Asset Sales (or
transactions excluded from the definition of Asset Sale on account of
clause (4) of the definition thereof) to the extent not otherwise
prohibited by this Indenture,
(4) securities received in connection with any good faith
settlement or bankruptcy proceeding involving a claim relating to a
Permitted Investment,
(5) Hedging Obligations entered into in the ordinary course of
business in connection with the operation of the business of Sweetheart
Holdings, the Company and their Restricted Subsidiaries or relating to
(as determined in good faith by the Board of Directors of Sweetheart
15
Holdings) or as required by any Indebtedness permitted to be incurred
pursuant to Section 4.09,
(6) prepaid expenses and loans or advances to employees and
similar items in the ordinary course of business,
(7) endorsements of negotiable instruments and other similar
negotiable documents, and
(8) accounts receivable of Sweetheart Holdings, the Company or
any Restricted Subsidiary from Sweetheart Holdings, the Company or any
Restricted Subsidiary and any Unrestricted Subsidiary arising out of
the provision of managerial or administrative services rendered in the
ordinary course of business.
"Permitted Liens" means
(1) Liens in favor of the Company or the Guarantors;
(2) Liens on property of a Person existing at the time such
Person is merged with or into or consolidated with the Company or any
Restricted Subsidiary of the Company; provided that such Liens were in
existence prior to the contemplation of such merger or consolidation
and do not extend to any assets other than those of the Person merged
into or consolidated with the Company or the Restricted Subsidiary;
(3) Liens on property (including Capital Stock) existing at
the time of acquisition of the property by the Company or any
Restricted Subsidiary of the Company; provided that such Liens were in
existence prior to such acquisition, and not incurred in contemplation
of such acquisition;
(4) Liens to secure the performance of statutory obligations,
surety or appeal bonds, performance bonds or other obligations of a
like nature incurred in the ordinary course of business;
(5) Liens created for the benefit of (or to secure) the Notes;
(6) Liens to secure any Permitted Refinancing Indebtedness
permitted to be incurred under this Indenture; provided, however, that:
(a) the new Lien is limited to all or part of the
same property and assets that secured or, under the written
agreements pursuant to which the original Lien arose, could
secure the original Lien (plus improvements and accessions to
such property or proceeds or distributions thereof); and
(b) the Indebtedness secured by the new Lien is not
increased to any amount greater than the sum of (x) the
outstanding principal amount, or, if greater, committed
amount, of the Permitted Refinancing Indebtedness and (y) an
16
amount necessary to pay any fees and expenses, including
premiums, related to such renewal, refunding, refinancing,
replacement, defeasance or discharge;
(7) Liens on assets (other than Collateral) which secure
Indebtedness under or in respect of the Credit Agreement permitted
under any one or more of clauses (a), (d) and (e) of the second
paragraph of Section 4.09 and other Obligations under or in respect of
the Credit Agreement;
(8) Liens on assets of Global to secure Indebtedness of
Global;
(9) Liens for taxes, assessments, governmental charges or
claims which are being contested in good faith by appropriate
proceedings promptly instituted and diligently conducted and if a
reserve or other appropriate provision, if any, as shall be required in
conformity with GAAP shall have been made therefor;
(10) statutory Liens of landlords and mechanics', carriers',
warehousemen's, suppliers', materialmen's, repairmen's, or other like
Liens (including contractual landlords liens) arising in the ordinary
course of business and with respect to amounts not yet delinquent or
being contested in good faith by appropriate proceedings, if a reserve
or other appropriate provision, if any, as shall be required in
conformity with GAAP shall have been made therefor;
(11) Liens incurred or deposits made in the ordinary course of
business in connection with workers' compensation, unemployment
insurance and other types of social security;
(12) Liens incurred or deposits made to secure the performance
of tenders, bids, leases, statutory obligations, surety and appeal
bonds, government contracts, performance and return-of-money bonds and
other obligations of a like nature incurred in the ordinary course of
business (exclusive of obligations for the payment of borrowed money);
(13) easements, rights-of-way, restrictions, minor defects or
irregularities in title and other similar charges or encumbrances not
interfering in any material respect with the business of Sweetheart
Holdings or any of its Restricted Subsidiaries;
(14) Purchase Money Liens (including extensions and renewals
thereof);
(15) Liens securing reimbursement obligations with respect to
letters of credit which encumber only documents and other property
relating to such letters of credit and the products and proceeds
thereof;
(16) judgment and attachment Liens not giving rise to an Event
of Default;
(17) Liens encumbering deposits made to secure obligations
arising from statutory, regulatory, contractual or warranty
requirements of Sweetheart Holdings, the Company or their Restricted
Subsidiaries;
17
(18) Liens arising out of consignment or similar arrangements
for the sale of goods entered into by Sweetheart Holdings, the Company
or any of their Restricted Subsidiaries in the ordinary course of
business of Sweetheart Holdings, the Company and their Restricted
Subsidiaries;
(19) any interest or title of a lessor in the property subject
to any capital lease obligation or operating lease;
(20) Liens arising from filing Uniform Commercial Code
financing statements regarding leases (other than true leases or true
consignments); and
(21) Liens in effect on the date of this Indenture.
"Permitted Refinancing Indebtedness" means any Indebtedness of the
Company or any of its Restricted Subsidiaries issued in exchange for, or the net
proceeds of which are used to renew, refund, refinance, replace, defease or
discharge, other Indebtedness of the Company or any of its Restricted
Subsidiaries (other than intercompany Indebtedness); provided that:
(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 renewed,
refunded, refinanced, replaced, defeased or discharged (plus all
accrued interest on the Indebtedness and the amount of all fees and
expenses, including premiums, 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 renewed, refunded,
refinanced, replaced, defeased or discharged;
(3) if the Indebtedness being renewed, refunded, refinanced,
replaced, defeased or discharged is subordinated in right of payment to
the Notes, 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 renewed, refunded, refinanced, replaced, defeased or
discharged; and
(4) such Indebtedness is incurred either by the Company or by
the Restricted Subsidiary that is the obligor on the Indebtedness being
renewed, refunded, refinanced, replaced, defeased or discharged.
"Person" means any individual, corporation, partnership, joint venture,
association, joint stock company, trust, unincorporated organization or
government or any agency or political subdivision thereof.
18
"Private Placement Legend" means the legend set forth in Section
2.06(g)(1) to be placed on all Notes issued under this Indenture except where
otherwise permitted by the provisions of this Indenture.
"Purchase Money Lien" means a Lien granted on an asset or property to
secure a Purchase Money Obligation permitted to be incurred under Section 4.09
and incurred solely to finance the acquisition of such asset or property;
provided, however, that such Lien encumbers only such asset or property and is
granted within 180 days of such acquisition.
"Purchase Money Obligations" of any Person means any obligations of
such Person to any seller or any other Person incurred or assumed to finance the
acquisition of real or personal property to be used in the business of such
Person or any of its Restricted Subsidiaries in an amount that is not more than
100% of the cost of such property, and incurred within 180 days after the date
of such acquisition (excluding accounts payable to trade creditors incurred in
the ordinary course of business).
"QIB" means a "qualified institutional buyer" as defined in Rule 144A.
"Qualified Receivables Transaction" means any transaction or series of
transactions that may be entered into by Sweetheart Holdings or any of its
Restricted Subsidiaries pursuant to which Sweetheart Holdings or any of its
Restricted Subsidiaries may sell, convey or otherwise transfer to (1) a
Receivables Subsidiary (in the case of a transfer by Sweetheart Holdings or any
of its Restricted Subsidiaries) and (2) any other Person (in the case of a
transfer by a Receivables Subsidiary), or may grant a security interest in any
accounts receivable (whether now existing or arising in the future) of
Sweetheart Holdings or any of its Restricted Subsidiaries, and any assets
related thereto including, without limitation, all collateral securing such
accounts receivable, all material contracts and all guarantees or other
obligations in respect of such accounts receivable, proceeds of such accounts
receivable and other assets in respect of which security interests are
customarily granted in connection with asset securitization transactions
involving accounts receivable.
"Receivables Subsidiary" means a Wholly Owned Subsidiary of Sweetheart
Holdings which engages in no activities other than in connection with the
financing of accounts receivable and which is designated by the Board of
Directors of Sweetheart Holdings (as provided below) as a Receivables Subsidiary
(a) no portion of the Indebtedness or any other Obligations (contingent or
otherwise) of which (i) is guaranteed by Sweetheart Holdings or any Restricted
Subsidiary of Sweetheart Holdings, (ii) is recourse to or obligates Sweetheart
Holdings or any Restricted Subsidiary of Sweetheart Holdings in any way other
than pursuant to representations and covenants entered into in the ordinary
course of business in connection with a Qualified Receivables Transaction or
(iii) subjects any property or asset of Sweetheart Holdings or any Restricted
Subsidiary of Sweetheart Holdings, directly or indirectly, contingently or
otherwise, to the satisfaction thereof, other than pursuant to representations
and covenants entered into in the ordinary course of business in connection with
a Qualified Receivables Transaction, (b) with which neither Sweetheart Holdings
nor any Restricted Subsidiary of Sweetheart Holdings has any contract,
agreement, arrangement or understanding other than on terms no less favorable to
19
Sweetheart Holdings or such Restricted Subsidiary than those that might be
obtained at the time from Persons who are not Affiliates of Sweetheart Holdings,
other than fees payable in the ordinary course of business in connection with
servicing accounts receivable and (c) with which neither Sweetheart Holdings nor
any Restricted Subsidiary of Sweetheart Holdings has any obligation (i) to make
any Investment therein or (ii) to maintain or preserve such Restricted
Subsidiary's financial condition or to cause such Restricted Subsidiary to
achieve certain levels of operating results. Any such designation by the Board
of Directors of Sweetheart Holdings shall be evidenced to the Trustee by filing
with the Trustee a certified copy of the resolution of the Board of Directors of
Sweetheart Holdings giving effect to such designation and an Officers'
Certificate certifying that such designation complied with the foregoing
conditions.
"Registration Rights Agreement" means the Registration Rights
Agreement, dated as of December 16, 2003, among the Company, the Guarantors 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 among the Company,
the Guarantors 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 Regulation S Temporary Global Note
or Regulation S Permanent Global Note, as appropriate.
"Regulation S Permanent Global Note" means a permanent Global Note in
the form of Exhibit A1 hereto 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, issued in a denomination equal to the
outstanding principal amount of the Regulation S Temporary Global Note upon
expiration of the Restricted Period.
"Regulation S Temporary Global Note" means a temporary Global Note in
the form of Exhibit A2 hereto deposited with 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 of the Notes initially sold in reliance on Rule 903
of Regulation S.
"Related Party" means any (A) spouse or immediate family member of
Xxxxxx Xxxxxx or (B) trust, corporation, partnership or other entity, the
beneficiaries, stockholders, partners, owners or Persons beneficially holding an
80% or more controlling interest of which consist of Xxxxxx Xxxxxx and/or such
other Persons referred to in the immediately preceding clause (A).
"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
20
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 any 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.
"SEC" means the Securities and Exchange Commission.
"Securities Act" means the Securities Act of 1933, as amended.
"Security Agreement" means the Security Agreement, dated as of December
16, 2003, made by the Company and the Guarantors in favor of the Collateral
Agent, as amended or supplemented from time to time in accordance with its
terms.
"SF Holdings" means SF Holdings Group, Inc., a Delaware corporation.
"Shelf Registration Statement" has the meaning set forth in the
Registration Rights Agreement.
"Significant Subsidiary" has the meaning given to such term in Rule
1-02 of Regulation S-X of the United States Securities and Exchange Commission,
provided that all references to "10 percent" in such Rule shall be "5 percent"
for purposes of this definition.
"Subsidiary" means, with respect to any Person,
(1) a corporation a majority of whose stock with voting power,
under ordinary circumstances, to elect directors is at the time,
directly or indirectly, owned by such Person, by one or more
Subsidiaries of such Person or by such Person and one or more
Subsidiaries thereof or
21
(2) any other Person (other than a corporation) in which such
Person, one or more Subsidiaries thereof or such Person and one or more
Subsidiaries thereof, directly or indirectly, at the date of
determination thereof has at least majority ownership interest and the
power to direct the policies, management and affairs thereof.
"Sweetheart Holdings" means Sweetheart Holdings Inc., a Delaware
corporation.
"Tax Sharing Agreement" means that certain Tax Sharing Agreement,
effective as of March 12, 1998, by and among the Company, Sweetheart Holdings
and SF Holdings.
"TIA" means the Trust Indenture Act of 1939 (15 U.S.C. xx.xx.
77aaa-77bbbb) as in effect on the date on which this Indenture is qualified
under the TIA.
"Trustee" means the party named as such in the preamble to this
Indenture until a successor replaces it in accordance with the applicable
provisions of this Indenture and thereafter means the successor serving
hereunder.
"UCC" means the Uniform Commercial Code as in effect from time to time
in the State of New York.
"United States Government Securities" means securities issued directly
and fully guaranteed or insured by the United States of America or any agent or
instrumentality thereof (provided that the full faith and credit of the United
States of America is pledged in support thereof).
"Unrestricted Global Note" means a Global Note that does not bear and
is not required to bear the Private Placement Legend.
"Unrestricted Definitive Note" means a Definitive Note that does not
bear and is not required to 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 resolution of the Board of Directors, but only to the
extent that such Subsidiary has no Indebtedness other than Non-Recourse Debt (it
being understood that as of the date hereof Lily Canada shall be designated an
Unrestricted Subsidiary).
"U.S. Person" means a U.S. Person as defined in Rule 902(k) promulgated
under the Securities Act.
"Voting Capital 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 at any date, the number of years obtained by dividing (1) the then
outstanding principal amount of such Indebtedness into (2) the total of the
product obtained by multiplying (a) the amount of each then remaining
installment, sinking fund, serial maturity or other required payment of
22
principal, including payment at final maturity, in respect thereof, by (b) the
number of years (calculated to the nearest one-twelfth) which will elapse
between such date and the making of such payment.
"Wholly Owned Subsidiary" means for any Person, any Subsidiary of such
Person all of the outstanding Capital Stock (other than directors' qualifying
shares) of which is directly or indirectly owned by such Person. Unrestricted
Subsidiaries shall not be included in the definition of Wholly Owned
Subsidiaries for any purposes of this Indenture (except, as the context may
otherwise require, for purposes of the definition of "Unrestricted Subsidiary").
Section 1.02 Other Definitions.
Term Defined in
Section
Affiliate Transaction................................... 4.11
Asset Sale Offer........................................ 3.09
Authentication Order.................................... 2.02
Change of Control Offer................................. 4.15
Change of Control Payment............................... 4.15
Change of Control Payment Date.......................... 4.15
Covenant Defeasance..................................... 8.03
DTC..................................................... 2.03
Event of Default........................................ 6.01
Excess Proceeds......................................... 4.10
incur................................................... 4.09
Legal Defeasance........................................ 8.02
Offer Amount............................................ 3.09
Offer Period............................................ 3.09
Paying Agent............................................ 2.03
Permitted Debt.......................................... 4.09
Payment Default ........................................ 6.01
Purchase Date........................................... 3.09
Registrar............................................... 2.03
Restricted Payments..................................... 4.07
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;
23
"indenture trustee" or "institutional trustee" means the Trustee; and
"obligor" on the Notes and the Guaranties means the Company and the
Guarantors, respectively, and any successor obligor upon the Notes and the
Guaranties, respectively.
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:
(1) a term has the meaning assigned to it;
(2) an accounting term not otherwise defined has the meaning
assigned to it in accordance with GAAP;
(3) "or" is not exclusive;
(4) words in the singular include the plural, and in the
plural include the singular;
(5) "herein," "hereof" and other words of similar import refer
to this Indenture as a whole and not to any particular Article, Section
or other subdivision;
(6) "will" shall be interpreted to express a command;
(7) when the words "includes" or "including" are used herein,
they shall be deemed to be followed by the words "without limitation";
(8) provisions apply to successive events and transactions;
and
(9) references to sections of or rules under the Securities
Act will be deemed to include substitute, replacement of successor
sections or rules adopted by the SEC from time to time.
ARTICLE 2
THE NOTES
Section 2.01 Form and Dating.
(a) General. The Notes and the Trustee's certificate of authentication
will be substantially in the form of Exhibit A1 hereto. The Notes may have
notations, legends or endorsements required by law, stock exchange rule or
usage. Each Note will be dated the date of its authentication. The Notes shall
be in denominations of $1,000 and integral multiples thereof.
24
The terms and provisions contained in the Notes will 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 will be substantially in
the form of Exhibits A1 or A2 attached hereto (including the Global Note Legend
thereon and the "Schedule of Exchanges of Interests in the Global Note" attached
thereto). Notes issued in definitive form will be substantially in the form of
Exhibit A1 attached hereto (but without the Global Note Legend thereon and
without the "Schedule of Exchanges of Interests in the Global Note" attached
thereto). Each Global Note will represent such of the outstanding Notes as will
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 will be made by the Trustee or the Custodian, at the
direction of the Trustee, in accordance with instructions given by the Holder
thereof as required by Section 2.06 hereof.
(c) Temporary Global Notes. Notes offered and sold in reliance on
Regulation S will be issued initially in the form of the Regulation S Temporary
Global Note, which will be deposited on behalf of the purchasers of the Notes
represented thereby with the Trustee, at the Corporate Trust Office of the
Trustee, as custodian for the Depositary, 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. The Restricted
Period will be terminated upon the receipt by the Trustee of:
(1) a written certificate from the Depositary, together with
copies of certificates from Euroclear and Clearstream certifying that
they have received certification of non-United States beneficial
ownership of 100% of the aggregate principal amount of the Regulation S
Temporary Global Note (except to the extent of any beneficial owners
thereof who acquired an interest therein during the Restricted Period
pursuant to another exemption from registration under the Securities
Act and who will take delivery of a beneficial ownership interest in a
144A Global Note or an IAI Global Note bearing a Private Placement
Legend, all as contemplated by Section 2.06(b) hereof); and
(2) an Officers' Certificate from the Company.
Following the termination of the Restricted Period, beneficial
interests in the Regulation S Temporary Global Note will be exchanged for
beneficial interests in Regulation S Permanent Global Note pursuant to the
Applicable Procedures. Simultaneously with the authentication of Regulation S
Permanent Global Note, the Trustee will cancel the Regulation S Temporary Global
25
Note. The aggregate principal amount of the Regulation S Temporary Global Note
and the Regulation S Permanent Global Note 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.
(3) 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 will be applicable to transfers of beneficial interests in
the Regulation S Temporary Global Note and the Regulation S Permanent
Global Note that are held by Participants through Euroclear or
Clearstream.
Section 2.02 Execution and Authentication. At least one Officer must
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 will nevertheless be valid.
A Note will not be valid until authenticated by the manual signature of
the Trustee. The signature will be conclusive evidence that the Note has been
authenticated under this Indenture.
The Trustee will, upon receipt of a written order of the Company signed
by two Officers (an "Authentication Order"), authenticate (i) Initial Notes for
original issue in the aggregate principal amount not to exceed $100,000,000 and
(ii) subject to compliance with Section 4.09, one or more series of Additional
Notes for original issue after the Issue Date, which Authentication Order shall,
in the case of any issuance of Additional Notes, certify that such issuance is
in compliance with Section 4.09.
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.
All Notes issued under this Indenture shall vote and consent together
on all matters as one class and no series of Notes shall have the right to vote
or consent as a separate class on any matter.
Section 2.03 Registrar and Paying Agent. The Company will maintain an
office or agency where Notes may be presented for registration of transfer or
for exchange ("Registrar") and an office or agency where Notes may be presented
for payment ("Paying Agent"). The Registrar will 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
notice to any Holder. The Company will notify the Trustee in writing of the name
26
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.
The Company initially appoints The Depository Trust Company ("DTC") to
act as Depositary with respect to the Global Notes.
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 2.04 Paying Agent to Hold Money in Trust. The Company will
require each Paying Agent other than the Trustee to agree in writing that the
Paying Agent will 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
Additional Interest, if any, or interest on the Notes, and will 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 a Subsidiary) will have no further
liability for the money. If the Company or a Subsidiary acts as Paying Agent, it
will 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 will serve as Paying Agent for
the Notes.
Section 2.05 Holder Lists. The Trustee will 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 ss.
312(a). If the Trustee is not the Registrar, the Company will 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 ss.
312(a).
Section 2.06 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 will be exchanged by
the Company for Definitive Notes if:
(1) the Company delivers to the Trustee notice from the
Depositary that it is unwilling or unable to continue to act as
Depositary or that it is no longer a clearing agency registered under
the Exchange Act and, in either case, a successor Depositary is not
appointed by the Company within 120 days after the date of such notice
from the Depositary; or
27
(2) the Company in its sole discretion determines that the
Global Notes (in whole but not in part) should be exchanged for
Definitive Notes and delivers a written notice to such effect to the
Trustee; provided that in no event shall the Regulation S Temporary
Global Note be exchanged by the Company for Definitive Notes prior to
(x) the expiration of the Restricted Period and (y) the receipt by the
Registrar of any certificates required pursuant to Rule
903(b)(3)(ii)(B) under the Securities Act.
Upon the occurrence of either of the preceding events in (1) or (2)
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 2.07 and 2.10 hereof. Every Note
authenticated and delivered in exchange for, or in lieu of, a Global Note or any
portion thereof, pursuant to this Section 2.06 or Section 2.07 or 2.10 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 2.06(a), however, beneficial interests in a Global Note may be
transferred and exchanged as provided in Section 2.06(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 will be
effected through the Depositary, in accordance with the provisions of this
Indenture and the Applicable Procedures. Beneficial interests in the Restricted
Global Notes will 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 will require compliance with
either subparagraph (1) or (2) below, as applicable, as well as one or more of
the other following subparagraphs, as applicable:
(1) 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 Regulation S Temporary
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 2.06(b)(1).
(2) 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 2.06(b)(1) above,
the transferor of such beneficial interest must deliver to the
Registrar either:
(A) both:
(i) a written order from a Participant or an
Indirect Participant given to the Depositary in
accordance with the Applicable Procedures directing
28
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
(ii) instructions given in accordance with
the Applicable Procedures containing information
regarding the Participant account to be credited with
such increase; or
(B) both:
(i) 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
(ii) 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 Regulation S
Temporary Global Note prior to (A) the expiration of
the Restricted Period and (B) the receipt by the
Registrar of any certificates required pursuant to
Rule 903 under the Securities Act. Upon consummation
of an Exchange Offer by the Company in accordance
with Section 2.06(f) hereof, the requirements of this
Section 2.06(b)(2) 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 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 of the relevant Global Note(s)
pursuant to Section 2.06(h) hereof.
(3) 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 2.06(b)(2) above and the
Registrar receives the following:
(A) if the transferee will 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
hereto, including the certifications in item (1) thereof;
(B) if the transferee will take delivery in the form
of a beneficial interest in the Regulation S Temporary Global
29
Note or the Regulation S Global Note, then the transferor must
deliver a certificate in the form of Exhibit B hereto,
including the certifications in item (2) thereof; and
(C) if the transferee will take delivery in the form
of a beneficial interest in the IAI Global Note, then the
transferor must deliver a certificate in the form of Exhibit B
hereto, including the certifications, certificates and Opinion
of Counsel required by item (3) thereof, if applicable.
(4) 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 2.06(b)(2) 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 that it is not (i) a Broker-Dealer, (ii) a Person
participating in the distribution of the Exchange Notes or
(iii) a Person who is an affiliate (as defined in Rule 144) of
the Company;
(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:
(i) 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
hereto, including the certifications in item (1)(a)
thereof; or
(ii) 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
hereto, including the certifications in item (4)
thereof;
and, in each such case set forth in this subparagraph
(D), if the Registrar so requests or if the
Applicable Procedures so require, an Opinion of
30
Counsel in form reasonably acceptable to the
Registrar 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.
(1) 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 hereto, including the
certifications in item (2)(a) thereof;
(B) if such beneficial interest is being transferred
to a QIB in accordance with Rule 144A, a certificate to the
effect set forth in Exhibit B hereto, including the
certifications in item (1) thereof;
(C) if such beneficial interest 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 hereto, including the certifications in
item (2) thereof;
(D) if such beneficial interest is being transferred
pursuant to an exemption from the registration requirements of
the Securities Act in accordance with Rule 144, a certificate
to the effect set forth in Exhibit B hereto, including the
certifications in item (3)(a) thereof;
(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 those listed in subparagraphs (B) through (D)
31
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;
(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 hereto, including the
certifications in item (3)(b) thereof; or
(G) if such beneficial interest is being transferred
pursuant to an effective registration statement under the
Securities Act, a certificate to the effect set forth in
Exhibit B hereto, including the certifications in item (3)(c)
thereof,
the Trustee shall cause the aggregate principal amount of the applicable Global
Note to be reduced accordingly pursuant to Section 2.06(h) 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 2.06(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 2.06(c)(1) shall bear the Private Placement Legend and shall be
subject to all restrictions on transfer contained therein.
(2) Beneficial Interests in Regulation S Temporary Global Note
to Definitive Notes. Notwithstanding Sections 2.06(c)(1)(A) and (C)
hereof, a beneficial interest in the Regulation S Temporary 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
(A) the expiration of the Restricted Period and (B) the receipt by the
Registrar of any certificates required pursuant to Rule
903(b)(3)(ii)(B) under the Securities Act, 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.
(3) 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 it is not (i) a Broker-Dealer, (ii) a Person
participating in the distribution of the Exchange Notes or
(iii) a Person who is an affiliate (as defined in Rule 144) of
the Company;
32
(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:
(i) if the holder of such beneficial
interest in a Restricted Global Note proposes to
exchange such beneficial interest for an Unrestricted
Definitive Note, a certificate from such holder in
the form of Exhibit C hereto, including the
certifications in item (1)(b) thereof; or
(ii) 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 an
Unrestricted Definitive Note, a certificate from such
holder in the form of Exhibit B hereto, including the
certifications in item (4) thereof;
and, in each such case set forth in this subparagraph (D), if
the Registrar so requests or if the Applicable Procedures so
require, an Opinion of Counsel in form reasonably acceptable
to the Registrar 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.
(4) 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
2.06(b)(2) hereof, the Trustee will cause the aggregate principal
amount of the applicable Global Note to be reduced accordingly pursuant
to Section 2.06(h) hereof, and the Company will execute and the Trustee
will 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 2.06(c)(4) will be registered in such name or names and
in such authorized denomination or denominations as the holder of such
beneficial interest requests through instructions to the Registrar from
or through the Depositary and the Participant or Indirect Participant.
The Trustee will 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 pursuant to this Section 2.06(c)(4)
will not bear the Private Placement Legend.
33
(d) Transfer and Exchange of Definitive Notes for Beneficial Interests.
(1) 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 hereto, 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 hereto,
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 hereto, including the
certifications in item (2) thereof;
(D) if such Restricted Definitive Note is being
transferred pursuant to an exemption from the registration
requirements of the Securities Act in accordance with Rule
144, a certificate to the effect set forth in Exhibit B
hereto, including the certifications in item (3)(a) thereof;
(E) if such Restricted Definitive Note is being
transferred to an Institutional Accredited Investor in
reliance on an exemption from the registration requirements of
the Securities Act other than those listed in subparagraphs
(B) through (D) 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;
(F) 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 hereto,
including the certifications in item (3)(b) thereof; or
(G) if such Restricted Definitive Note is being
transferred pursuant to an effective registration statement
under the Securities Act, a certificate to the effect set
forth in Exhibit B hereto, including the certifications in
item (3)(c) thereof,
the Trustee will cancel the Restricted Definitive Note, 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
34
of clause (B) above, the 144A Global Note, in the case of clause (C)
above, the Regulation S Global Note, and in all other cases, the IAI
Global Note.
(2) 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 that it is not (i) a
Broker-Dealer, (ii) a Person participating in the distribution
of the Exchange Notes or (iii) a Person who is an affiliate
(as defined in Rule 144) of the Company;
(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:
(i) if the Holder of such Definitive Notes
proposes to exchange such Notes for a beneficial
interest in the Unrestricted Global Note, a
certificate from such Holder in the form of Exhibit C
hereto, including the certifications in item (1)(c)
thereof; or
(ii) if the Holder of such Definitive Notes
proposes to transfer such Notes 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
hereto, including the certifications in item (4)
thereof;
and, in each such case set forth in this subparagraph (D), if
the Registrar so requests or if the Applicable Procedures so
require, an Opinion of Counsel in form reasonably acceptable
to the Registrar 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 2.06(d)(2), the Trustee will
35
cancel the Definitive Notes and increase or cause to be
increased the aggregate principal amount of the Unrestricted
Global Note.
(3) 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 Definitive Notes 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 will 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 (2)(B),
(2)(D) or (3) above at a time when an Unrestricted Global Note has not
yet been issued, the Company will issue and, upon receipt of an
Authentication Order in accordance with Section 2.02 hereof, the
Trustee will authenticate one 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 2.06(e), the Registrar will register the transfer
or exchange of Definitive Notes. Prior to such registration of transfer or
exchange, the requesting Holder must 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
must provide any additional certifications, documents and information, as
applicable, required pursuant to the following provisions of this Section
2.06(e).
(1) 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 will be made pursuant to Rule
144A, then the transferor must deliver a certificate in the
form of Exhibit B hereto, including the certifications in item
(1) thereof;
(B) if the transfer will be made pursuant to Rule 903
or Rule 904, then the transferor must deliver a certificate in
the form of Exhibit B hereto, including the certifications in
item (2) thereof; and
(C) if the transfer will 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 hereto, including the certifications,
certificates and Opinion of Counsel required by item (3)
thereof, if applicable.
36
(2) 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 it is not (i) a
Broker-Dealer, (ii) a Person participating in the distribution
of the Exchange Notes or (iii) a Person who is an affiliate
(as defined in Rule 144) of the Company;
(B) any such transfer is effected pursuant to the
Shelf Registration Statement in accordance with the
Registration Rights Agreement;
(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:
(i) if the Holder of such Restricted
Definitive Notes proposes to exchange such Notes for
an Unrestricted Definitive Note, a certificate from
such Holder in the form of Exhibit C hereto,
including the certifications in item (1)(d) thereof;
or
(ii) if the Holder of such Restricted
Definitive Notes proposes to transfer such Notes 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 hereto,
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
Registrar 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.
(3) 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.
37
(f) Exchange Offer. Upon the occurrence of the Exchange Offer in
accordance with the Registration Rights Agreement, the Company will issue and,
upon receipt of an Authentication Order in accordance with Section 2.02 hereof,
the Trustee will authenticate:
(1) 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 accepted for exchange in the
Exchange Offer by Persons that certify in the applicable Letters of
Transmittal that (A) they are not Broker-Dealers, (B) they are not
participating in a distribution of the Exchange Notes and (C) they are
not affiliates (as defined in Rule 144) of the Company; and
(2) 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 will cause
the aggregate principal amount of the applicable Restricted Global Notes to be
reduced accordingly, and the Company will execute and the Trustee will
authenticate and deliver to the Persons designated by the Holders of Definitive
Notes so accepted Unrestricted Definitive Notes in the appropriate principal
amount.
(g) Legends. The following legends will 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.
(1) Private Placement Legend.
(A) Except as permitted by subparagraph (B) 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 SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED, OR ANY STATE SECURITIES LAWS. NEITHER THIS SECURITY
NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE REOFFERED, SOLD,
ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN
THE ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT
FROM, OR NOT SUBJECT TO, REGISTRATION.
THE HOLDER OF THIS SECURITY BY ITS ACCEPTANCE HEREOF (1) REPRESENTS
THAT (A) IT IS A "QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE
144A UNDER THE SECURITIES ACT), (B) IT IS A NON-U.S. PURCHASER AND IS
ACQUIRING THIS SECURITY IN AN OFFSHORE TRANSACTION WITHIN THE MEANING
OF REGULATION S UNDER THE SECURITIES ACT, OR (C) IT IS AN INSTITUTIONAL
"ACCREDITED INVESTOR" WITHIN THE MEANING OF SUBPARAGRAPH (a) (1), (2),
38
(3) OR (7) OF RULE 501 UNDER THE SECURITIES ACT, AND (2) 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 SECURITY (OR ANY PREDECESSOR OF SUCH SECURITY),
ONLY (A) TO THE COMPANY OR ANY OF ITS SUBSIDIARIES, (B) PURSUANT TO A
REGISTRATION STATEMENT WHICH HAS BEEN DECLARED EFFECTIVE UNDER THE
SECURITIES ACT, (C) FOR SO LONG AS THE NOTES ARE ELIGIBLE FOR RESALE
PURSUANT TO RULE 144A, TO A PERSON IT REASONABLY BELIEVES IS A
"QUALIFIED INSTITUTIONAL BUYER" AS DEFINED IN RULE 144A UNDER THE
SECURITIES ACT 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. PURCHASERS THAT OCCUR OUTSIDE THE UNITED STATES
WITHIN THE MEANING OF REGULATION S UNDER THE SECURITIES ACT, (E) TO AN
INSTITUTIONAL "ACCREDITED INVESTOR" WITHIN THE MEANING OF SUBPARAGRAPH
(a)(1), (2), (3) OR (7) OF RULE 501 UNDER THE SECURITIES ACT THAT IS
ACQUIRING THE SECURITY FOR ITS OWN ACCOUNT, OR FOR THE ACCOUNT OF SUCH
AN INSTITUTIONAL ACCREDITED INVESTOR, FOR INVESTMENT PURPOSES AND NOT
WITH A VIEW TO, OR FOR OFFER OR SALE IN CONNECTION WITH, ANY
DISTRIBUTION IN VIOLATION OF THE SECURITIES ACT OR (F) PURSUANT TO
ANOTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT, SUBJECT TO THE COMPANY'S AND THE TRUSTEE'S, OR TRANSFER
AGENT'S, AS APPLICABLE, RIGHT PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER
PURSUANT TO CLAUSES (D), (E), OR (F) TO REQUIRE THE DELIVERY OF AN
OPINION OF COUNSEL, CERTIFICATION AND/OR OTHER INFORMATION SATISFACTORY
TO EACH OF THEM, AND IN EACH OF THE FOREGOING CASES, A CERTIFICATE OF
TRANSFER IN THE FORM APPEARING ON THE OTHER SIDE OF THIS SECURITY IS
COMPLETED AND DELIVERED BY THE TRANSFEROR TO THE TRUSTEE OR TRANSFER
AGENT."
(B) Notwithstanding the foregoing, any Global Note or
Definitive Note issued pursuant to subparagraphs (b)(4),
(c)(3), (c)(4), (d)(2), (d)(3), (e)(2), (e)(3) or (f) of this
Section 2.06 (and all Notes issued in exchange therefor or
substitution thereof) will not bear the Private Placement
Legend.
(2) Global Note Legend. Each Global Note will bear a legend in
substantially the following form:
39
"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 (1) THE TRUSTEE MAY MAKE
SUCH NOTATIONS HEREON AS MAY BE REQUIRED PURSUANT TO SECTION 2.06 OF
THE INDENTURE, (2) THIS GLOBAL NOTE MAY BE EXCHANGED IN WHOLE BUT NOT
IN PART PURSUANT TO SECTION 2.06(a) OF THE INDENTURE, (3) THIS GLOBAL
NOTE MAY BE DELIVERED TO THE TRUSTEE FOR CANCELLATION PURSUANT TO
SECTION 2.11 OF THE INDENTURE AND (4) THIS GLOBAL NOTE MAY BE
TRANSFERRED TO A SUCCESSOR DEPOSITARY WITH THE PRIOR WRITTEN CONSENT OF
THE COMPANY.
UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR NOTES IN
DEFINITIVE FORM, THIS NOTE MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY
THE DEPOSITARY TO A NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE
DEPOSITARY TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY OR BY
THE DEPOSITARY OR ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITARY OR A
NOMINEE OF SUCH SUCCESSOR DEPOSITARY. UNLESS THIS CERTIFICATE IS
PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST
COMPANY (55 XXXXX XXXXXX, XXX XXXX, XXX XXXX) ("XXX"), TO THE COMPANY
OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY
CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH
OTHER NAME AS MAY BE REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC
(AND ANY PAYMENT IS MADE TO CEDE & CO. OR SUCH OTHER ENTITY AS MAY BE
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE
OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS
WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN
INTEREST HEREIN."
(3) Regulation S Temporary Global Note Legend.
"THE RIGHTS ATTACHING TO THIS REGULATION S TEMPORARY GLOBAL NOTE, AND
THE CONDITIONS AND PROCEDURES GOVERNING ITS EXCHANGE FOR CERTIFICATES
NOTES, ARE AS SPECIFIED IN THE INDENTURE (AS DEFINED HEREIN). NEITHER
THE HOLDER NOR THE BENEFICIAL OWNERS OF THIS REGULATION S TEMPORARY
GLOBAL NOTE SHALL BE ENTITLED TO RECEIVE PAYMENT OF INTEREST HEREON."
40
(h) 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 will be returned to or
retained and canceled by the Trustee in accordance with Section 2.11 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 will 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 will be
reduced accordingly and an endorsement will be made on such Global Note by the
Trustee or by the Depositary at the direction of the Trustee to reflect such
reduction; and if the beneficial interest is being exchanged for or transferred
to a Person who will take delivery thereof in the form of a beneficial interest
in another Global Note, such other Global Note will be increased accordingly and
an endorsement will be made on such Global Note by the Trustee or by the
Depositary at the direction of the Trustee to reflect such increase.
(i) General Provisions Relating to Transfers and Exchanges.
(1) To permit registrations of transfers and exchanges, the
Company will execute and the Trustee will authenticate Global Notes and
Definitive Notes upon receipt of an Authentication Order in accordance
with Section 2.02 or at the Registrar's request.
(2) No service charge will 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 2.10, 3.06, 3.09, 4.10, 4.15
and 9.05 hereof).
(3) The Registrar will not be required to register the
transfer of or exchange of any Note selected for redemption in whole or
in part, except the unredeemed portion of any Note being redeemed in
part.
(4) All Global Notes and Definitive Notes issued upon any
registration of transfer or exchange of Global Notes or Definitive
Notes will be the valid 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.
(5) Neither the Registrar nor the Company will 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 hereof and ending at the close
of business on the day of selection;
41
(B) to register the transfer of or to exchange any
Note selected for redemption in whole or in part, except the
unredeemed portion of any Note being redeemed in part; or
(C) to register the transfer of or to exchange a Note
between a record date and the next succeeding interest payment
date.
(6) 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.
(7) The Trustee will authenticate Global Notes and Definitive
Notes in accordance with the provisions of Section 2.02 hereof.
(8) All certifications, certificates and Opinions of Counsel
required to be submitted to the Registrar pursuant to this Section 2.06
to effect a registration of transfer or exchange may be submitted by
facsimile.
Section 2.07 Replacement Notes. 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 will issue and the
Trustee, upon receipt of an Authentication Order, will 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.
Every replacement Note is an additional obligation of the Company and
will be entitled to all of the benefits of this Indenture equally and
proportionately with all other Notes duly issued hereunder.
Section 2.08 Outstanding Notes. 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 2.09 hereof, a Note does not cease to be outstanding because the Company
or an Affiliate of the Company holds the Note.
If a Note is replaced pursuant to Section 2.07 hereof, it ceases to be
outstanding unless the Trustee receives proof satisfactory to it that the
replaced Note is held by a protected purchaser.
If the principal amount of any Note is considered paid under Section
4.01 hereof, it ceases to be outstanding and interest on it ceases to accrue.
42
If the Paying Agent (other than the Company, a Subsidiary or an
Affiliate of any thereof) 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 will be deemed to be no longer outstanding and will cease to accrue
interest.
Section 2.09 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 any Guarantor, or by any Person directly
or indirectly controlling or controlled by or under direct or indirect common
control with the Company or any Guarantor, will be considered as though not
outstanding, except that for the purposes of determining whether the Trustee
will be protected in relying on any such direction, waiver or consent, only
Notes that the Trustee knows are so owned will be so disregarded.
Section 2.10 Temporary Notes. Until certificates representing Notes are
ready for delivery, the Company may prepare and the Trustee, upon receipt of an
Authentication Order, will authenticate temporary Notes. Temporary Notes will be
substantially in the form of certificated Notes but may have variations that the
Company considers appropriate for temporary Notes and as may be reasonably
acceptable to the Trustee. Without unreasonable delay, the Company will prepare
and the Trustee will authenticate definitive Notes in exchange for temporary
Notes.
Holders of temporary Notes will be entitled to all of the benefits of
this Indenture.
Section 2.11 Cancellation. The Company at any time may deliver Notes to
the Trustee for cancellation. The Registrar and Paying Agent will forward to the
Trustee any Notes surrendered to them for registration of transfer, exchange or
payment. The Trustee and no one else will cancel all Notes surrendered for
registration of transfer, exchange, payment, replacement or cancellation and
will destroy canceled Notes (subject to the record retention requirement of the
Exchange Act). Certification of the destruction of all canceled Notes will 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 2.12 Defaulted Interest. If the Company defaults in a payment
of interest on the Notes, it will 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 hereof. The Company will
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 will fix or
cause to be fixed each such special record date and payment date, provided that
no such special record date may 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) will 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.
43
ARTICLE 3
REDEMPTION AND PREPAYMENT
Section 3.01 Notices to Trustee. If the Company elects to redeem Notes
pursuant to the optional redemption provisions of Section 3.07 hereof, it must
furnish to the Trustee, at least 30 days but not more than 60 days before a
redemption date, an Officers' Certificate setting forth:
(1) the clause of this Indenture pursuant to which the
redemption shall occur;
(2) the redemption date;
(3) the principal amount of Notes to be redeemed; and
(4) the redemption price.
Section 3.02 Selection of Notes to Be Redeemed or Purchased. If less
than all of the Notes are to be redeemed or purchased in an offer to purchase at
any time, the Trustee will select Notes for redemption or purchase as follows:
(1) if the Notes are listed on any national securities
exchange, in compliance with the requirements of the principal national
securities exchange on which the Notes are listed; or
(2) if the Notes are not listed on any national securities
exchange, on a pro rata basis, by lot or by such method as the Trustee
shall deem fair and appropriate.
In the event of partial redemption or purchase by lot, the particular
Notes to be redeemed or purchased will be selected, unless otherwise provided
herein, not less than 30 nor more than 60 days prior to the redemption or
purchase date by the Trustee from the outstanding Notes not previously called
for redemption or purchase.
The Trustee will promptly notify the Company in writing of the Notes
selected for redemption or purchase and, in the case of any Note selected for
partial redemption or purchase, the principal amount thereof to be redeemed or
purchased. Notes and portions of Notes selected will 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 or purchased, the entire outstanding amount of Notes held by such
Holder, even if not a multiple of $1,000, shall be redeemed or purchased. Except
as provided in the preceding sentence, provisions of this Indenture that apply
to Notes called for redemption or purchase also apply to portions of Notes
called for redemption or purchase.
Section 3.03 Notice of Redemption. Subject to the provisions of Section
3.09 hereof, at least 30 days but not more than 60 days before a redemption
date, the Company will 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
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Notes or a satisfaction and discharge of this Indenture pursuant to Articles 8
or 12 of this Indenture.
The notice will identify the Notes to be redeemed and will state:
(1) the redemption date;
(2) the redemption price;
(3) if any Note is being redeemed in part, the portion of the
principal amount 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 will be issued upon
cancellation of the original Note;
(4) the name and address of the Paying Agent;
(5) that Notes called for redemption must be surrendered to
the Paying Agent to collect the redemption price;
(6) that, unless the Company defaults in making such
redemption payment, interest on Notes called for redemption ceases to
accrue on and after the redemption date;
(7) the paragraph of the Notes and/or Section of this
Indenture pursuant to which the Notes called for redemption are being
redeemed; and
(8) 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.
At the Company's request, the Trustee will give the notice of
redemption in the Company's name and at its expense; provided, however, that the
Company has delivered to the Trustee, at least 45 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.
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. A notice of redemption may not be conditional.
Section 3.05 Deposit of Redemption or Purchase Price. One Business Day
prior to the redemption or purchase date, the Company will deposit with the
Trustee or with the Paying Agent money sufficient to pay the redemption or
purchase price of and accrued interest and Additional Interest, if any, on all
Notes to be redeemed or purchased on that date. The Trustee or the Paying Agent
will promptly return to the Company any money deposited with the Trustee or the
Paying Agent by the Company in excess of the amounts necessary to pay the
redemption or purchase price of, and accrued interest and Additional Interest,
if any, on, all Notes to be redeemed or purchased.
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If the Company complies with the provisions of the preceding paragraph,
on and after the redemption or purchase date, interest will cease to accrue on
the Notes or the portions of Notes called for redemption or purchase. If a Note
is redeemed or purchased 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 or purchase is
not so paid upon surrender for redemption or purchase because of the failure of
the Company to comply with the preceding paragraph, interest shall be paid on
the unpaid principal, from the redemption or purchase 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
hereof.
Section 3.06 Notes Redeemed or Purchased in Part. Upon surrender of a
Note that is redeemed or purchased in part, the Company will issue and, upon
receipt of an Authentication Order, the Trustee will authenticate for the Holder
at the expense of the Company a new Note equal in principal amount to the
unredeemed or unpurchased portion of the Note surrendered.
Section 3.07 Optional Redemption.
(a) The Company may redeem the Notes, in whole or in part at the
redemption prices (expressed as percentages of principal amount) set forth below
plus accrued and unpaid interest and Additional Interest, if any, thereon to the
applicable redemption date, if redeemed during the period beginning on the date
set forth below:
Year Percentage
---- ----------
Issue Date............................................. 102.000%
July 15, 2006 and thereafter........................... 100.000%
(b) Any redemption pursuant to this Section 3.07 shall be made pursuant
to the provisions of Section 3.01 through 3.06 hereof.
Section 3.08 Mandatory Redemption. The Company is not required to make
mandatory redemption or sinking fund payments with respect to the Notes.
Section 3.09 Offer to Purchase by Application of Excess Proceeds. In
the event that, pursuant to Section 4.10 hereof, the Company is required to
commence an offer to all Holders to purchase Notes (an "Asset Sale Offer"), it
will follow the procedures specified below.
The Asset Sale Offer shall be made to all Holders and all holders of
other Applicable Indebtedness containing provisions similar to those set forth
in this Indenture with respect to offers to purchase or redeem with the proceeds
of sales of assets. The Asset Sale Offer will remain open for a period of at
least 20 Business Days following its commencement and not more than 30 Business
Days, 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 will apply all Excess
Proceeds (the "Offer Amount") to the purchase of Notes and such other Applicable
Indebtedness (on a pro rata basis, if applicable) or, if less than the Offer
Amount has been tendered, all Notes and other Applicable Indebtedness tendered
46
in response to the Asset Sale Offer. Payment for any Notes so purchased will 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 and
Additional Interest, if any, will 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 will be payable to Holders who tender Notes pursuant to the Asset Sale
Offer.
Upon the commencement of an Asset Sale Offer, the Company will send, by
first class mail, a notice to the Trustee and each of the Holders, with a copy
to the Trustee. The notice will contain all instructions and materials necessary
to enable such Holders to tender Notes pursuant to the Asset Sale Offer. The
notice, which will govern the terms of the Asset Sale Offer, will state:
(1) that the Asset Sale Offer is being made pursuant to this
Section 3.09 and Section 4.10 hereof and the length of time the Asset
Sale Offer will remain open;
(2) the Offer Amount, the purchase price and the Purchase
Date;
(3) that any Note not tendered or accepted for payment will
continue to accrue interest;
(4) that, unless the Company defaults in making such payment,
any Note accepted for payment pursuant to the Asset Sale Offer will
cease to accrue interest after the Purchase Date;
(5) that Holders electing to have a Note purchased pursuant to
an Asset Sale Offer may elect to have Notes purchased in integral
multiples of $1,000 only;
(6) that Holders electing to have Notes purchased pursuant to
any Asset Sale Offer will be required to surrender the Note, with the
form entitled "Option of Holder to Elect Purchase" attached to the
Notes 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;
(7) that Holders will 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;
(8) that, if the aggregate principal amount of Notes and other
Applicable Indebtedness surrendered by holders thereof exceeds the
Offer Amount, the Company will select the Notes and other Applicable
Indebtedness to be purchased on a pro rata basis based on the principal
47
amount of Notes and such other Applicable Indebtedness surrendered
(with such adjustments as may be deemed appropriate by the Company so
that only Notes in denominations of $1,000, or integral multiples
thereof, will be purchased); and
(9) that Holders whose Notes were purchased only in part will
be issued new Notes equal in principal amount to the unpurchased
portion of the Notes surrendered (or transferred by book-entry
transfer).
On or before the Purchase Date, the Company will, to the extent lawful,
accept for payment, on a pro rata basis to the extent necessary, the Offer
Amount of Notes or portions thereof tendered pursuant to the Asset Sale Offer,
or if less than the Offer Amount has been tendered, all Notes tendered, and will
deliver or cause to be delivered to the Trustee the Notes properly accepted
together with 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 3.09. The Company, the Depositary or the Paying Agent, as the case
may be, will promptly (but in any case not later than five days after the
Purchase Date) mail or deliver to each tendering Holder an amount equal to the
purchase price of the Notes tendered by such Holder and accepted by the Company
for purchase, and the Company, will promptly issue a new Note, and the Trustee,
upon written request from the Company will authenticate and mail or deliver (or
cause to be transferred by book entry) such new Note to such Holder, in a
principal amount 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
Holder thereof. The Company will publicly announce the results of the Asset Sale
Offer on the Purchase Date.
Other than as specifically provided in this Section 3.09, any purchase
pursuant to this Section 3.09 shall be made pursuant to the provisions of
Sections 3.01 through 3.06 hereof.
ARTICLE 4
COVENANTS
Section 4.01 Payment of Notes. The Company will pay or cause to be paid
the principal of, premium, if any, and interest and Additional Interest, if any,
on the Notes on the dates and in the manner provided in the Notes. Principal,
premium, if any, and interest and Additional Interest, if any, will be
considered paid on the date due if the Paying Agent, if other than the Company
or a Subsidiary thereof, holds as of 10:00 a.m. 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 and
Additional Interest, if any, then due. The Company will pay all Additional
Interest, if any, in the same manner on the dates and in the amounts set forth
in the Registration Rights Agreement.
The Company will 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 will pay interest (including post-petition interest in any
proceeding under any Bankruptcy Law) on overdue installments of interest and
48
Additional Interest (without regard to any applicable grace period) at the same
rate to the extent lawful.
Section 4.02 Maintenance of Office or Agency. The Company will maintain
in the Borough of Manhattan, the City of New York, an office or agency (which
may be an office of the Trustee or an affiliate of the Trustee, Registrar or
co-registrar) where Notes may be surrendered for registration of transfer or for
exchange and where notices and demands to or upon the Company in respect of the
Notes and this Indenture may be served. The Company will 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 fails to maintain any such required
office or agency or fails 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.
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 will 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 will 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.
The Company hereby designates the Corporate Trust Office of the Trustee
as one such office or agency of the Company in accordance with Section 2.03
hereof.
Section 4.03 Reports.
(a) Whether or not required by the SEC's rules and regulations, so long
as any Notes are outstanding, Sweetheart Holdings will furnish to the Holders of
Notes, within the time periods specified in the SEC's rules and regulations:
(1) all quarterly and annual reports that would be required to
be filed with the SEC on Forms 10-Q and 10-K if Sweetheart Holdings
were required to file such reports; and
(2) all current reports that would be required to be filed
with the SEC on Form 8-K if Sweetheart Holdings were required to file
such reports.
All such reports will be prepared in all material respects in accordance with
all of the rules and regulations applicable to such reports. Each annual report
on Form 10-K will include a report on Sweetheart Holdings' consolidated
financial statements by Sweetheart Holdings' certified independent accountants.
In addition, Sweetheart Holdings will file a copy of each of the reports
referred to in clauses (1) and (2) above with the SEC for public availability
within the time periods specified in the rules and regulations applicable to
such reports (unless the SEC will not accept such a filing) and will post the
reports on its website within those time periods.
49
(b) If, at any time, Sweetheart Holdings is no longer subject to the
periodic reporting requirements of the Exchange Act for any reason, Sweetheart
Holdings will nevertheless continue filing the reports specified in the
preceding paragraph with the SEC within the time periods specified above unless
the SEC will not accept such a filing. If the SEC will not accept Sweetheart
Holdings' filings for any reason, Sweetheart Holdings will post the reports
referred to in the preceding paragraph on its website within the time periods
that would apply if Sweetheart Holdings were required to file those reports with
the SEC.
(c) Sweetheart Holdings and the Guarantors agree that, for so long as
any Notes remain outstanding, if at any time they are not required to file the
reports required by the preceding paragraphs with the SEC, they will furnish to
the Holders and to securities analysts and 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 the Collateral Agreements, and further
stating, as to each such Officer signing such certificate, that to the best of
his or her knowledge the Company has kept, observed, performed and fulfilled
each and every covenant contained in this Indenture and the Collateral
Agreements and is not in default in the performance or observance of any of the
terms, provisions and conditions of this Indenture or the Collateral Agreements
(or, if a Default or Event of Default has 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 the best
of 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 above shall be accompanied by a
written statement of the Company's independent public accountants (who 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 violated
any provisions of Article 4 or Article 5 hereof or, if any such violation has
occurred, 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) So long as any of the Notes are outstanding, the Company will
deliver to the Trustee, forthwith upon any Officer becoming aware of any Default
50
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 will pay, and will cause each of its
Subsidiaries to pay, prior to delinquency, all material taxes, assessments, and
governmental levies except such as are contested in 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 covenants (to the extent that it may lawfully do so) that it will
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 waives all benefit or
advantage of any such law, and covenants that it will not, by resort to any such
law, hinder, delay or impede the execution of any power herein granted to the
Trustee, but will suffer and permit the execution of every such power as though
no such law has been enacted.
Section 4.07 Limitation on Restricted Payments. Subject to the other
provisions of this Section 4.07, Sweetheart Holdings and the Company will not,
and will not permit any of their Restricted Subsidiaries to, directly or
indirectly:
(1) declare or pay any dividend or make any distribution on
account of the Equity Interests of Sweetheart Holdings, the Company or
any of their Restricted Subsidiaries (other than dividends or
distributions payable in Equity Interests (other than Disqualified
Stock) of Sweetheart Holdings, the Company or such Restricted
Subsidiary or dividends or distributions payable by a Restricted
Subsidiary to Sweetheart Holdings, the Company or any Restricted
Subsidiary);
(2) purchase, redeem or otherwise acquire or retire for value
any Equity Interest in Sweetheart Holdings or any Restricted Subsidiary
or other Affiliate of Sweetheart Holdings, other than Permitted
Investments in Restricted Subsidiaries and purchases, redemptions or
other acquisitions of Equity Interests of Sweetheart Holdings effected
(A) with other Equity Interests (other than Disqualified Stock) of
Sweetheart Holdings or (B) with the substantially simultaneous
application of the aggregate net cash proceeds received by Sweetheart
Holdings from the sale of Equity Interests (other than Disqualified
Stock), provided that such net cash proceeds shall be excluded for
purposes of clause (C)(iii) below;
(3) purchase, redeem, defease or otherwise acquire or retire
for value, prior to any scheduled maturity, repayment or sinking fund
payment, any Indebtedness that is subordinated in right of payment to
the Notes, other than any such purchase, redemption defeasance or
retirement specifically permitted by the terms of this Indenture or
effected (A) with Equity Interests (other than Disqualified Stock) of
Sweetheart Holdings, (B) with the substantially simultaneous
application of the aggregate net cash proceeds received by Sweetheart
Holdings from the sale of Equity Interests (other than Disqualified
51
Stock), provided that such net cash proceeds shall be excluded for
purposes of clause (C)(iii) below or (C) with the net cash proceeds
from a substantially concurrent incurrence of Permitted Refinancing
Indebtedness; and
(4) make any Restricted Investments;
(all such dividends, distributions, purchases, redemptions, other acquisitions,
retirements, prepayments, defeasances, or Restricted Investments set forth in
clauses (1) through (4) above being collectively referred to as "Restricted
Payments"), unless at the time of such Restricted Payment:
(A) no Default or Event of Default shall have occurred and be
continuing or shall occur as a consequence thereof;
(B) the Fixed Charge Coverage Ratio for the four fiscal
quarters immediately preceding the date of such Restricted Payment
(after giving pro forma effect to such Restricted Payment) would be
greater than 2.0 to 1.0; and
(C) such Restricted Payment, together with the aggregate of
all other Restricted Payments made after the date of this Indenture,
shall not exceed the sum of:
(i) 50% of the Consolidated Net Income of Sweetheart
Holdings for the period (taken as one accounting period)
commencing on September 30, 2003 through the end of Sweetheart
Holdings' fiscal quarter ending immediately prior to the time
of such Restricted Payment (or, if Consolidated Net Income for
such period is a deficit, less 100% of such deficit); plus
(ii) to the extent any Restricted Investment is sold
for cash or otherwise liquidated or repaid for cash, 100% of
the net cash proceeds thereof (less the cost of disposition
but only to the extent not included in subclause (i) of this
clause (C)); plus
(iii) 100% of the aggregate net cash proceeds (and
non-cash proceeds when converted into cash) received by
Sweetheart Holdings from the issue or sale after the date of
this Indenture of Equity Interests of Sweetheart Holdings
(other than Equity Interests issued or sold to the Company or
a Restricted Subsidiary of Sweetheart Holdings or the Company
and other than Disqualified Stock) or contributions of capital
to Sweetheart Holdings paid in cash.
Notwithstanding anything to the contrary contained herein, the
provisions of this Section 4.07 shall not prohibit:
(i) 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;
52
(ii) if no Default or Event of Default shall have
occurred and be continuing (and shall not have been waived) or
shall occur as a consequence thereof, the payment by
Sweetheart Holdings and the Company of a management fee to SF
Holdings pursuant to the Management Services Agreement in an
amount not to exceed $1.85 million in any year (payable
quarterly 15 days after each Interest Payment Date with
respect to and as defined in the Notes) plus an additional
amount in such year (not to exceed $1.85 million) to the
extent such management fee was not payable by reason of this
clause (ii) in any prior fiscal year, provided, however, that
the obligation of Sweetheart Holdings and the Company to pay
such management fee will be subordinated to the payment of all
Obligations in respect of the Notes (and any Guaranty thereof)
to at least the same extent as the payment of all Obligations
of the Company in respect of the Xxxxx Notes are subordinated
to the prior payment of the Notes;
(iii) the repurchase, redemption or other acquisition
or retirement for value of any Equity Interests of Sweetheart
Holdings held by any member of Sweetheart Holdings' (or any of
its Restricted Subsidiaries') management pursuant to any
management equity subscription agreement or stock option
agreement in effect as of the date of this Indenture;
provided, however, that the aggregate price paid for all such
repurchased, redeemed, acquired or retired Equity Interests
shall not exceed $750,000 in any fiscal year or $4.0 million
in the aggregate; and provided, further, that the obligation
of Sweetheart Holdings and the Company to pay such purchase
price will be subordinated to the payment of all Obligations
in respect of the Notes (and any Guaranty thereof) to at least
the same extent as the payment of all Obligations of the
Company in respect of the Xxxxx Notes are subordinated to the
prior payment of the Notes;
(iv) payments by Sweetheart Holdings or any
Restricted Subsidiary to SF Holdings to satisfy Sweetheart
Holdings' or such Restricted Subsidiary's obligations under or
in respect of the Tax Sharing Agreement; and
(v) Investments or other Restricted Payments in an
amount not to exceed $8.6 million.
Any payments made pursuant to clauses (i) and (iii) of the preceding
sentence will be deemed to be, and clauses (ii), (iv) and (v) of the preceding
sentence will not be deemed to be, Restricted Payments for the purposes of
clause (C) of the preceding paragraph.
Not later than the date of making any Restricted Payment, Sweetheart
Holdings and the Company shall jointly deliver to the Trustee an Officers'
Certificate stating that such Restricted Payment is permitted and setting forth
the basis upon which the required calculations were computed, which calculations
may be based upon Sweetheart Holdings' latest available consolidated internal
quarterly financial statements.
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Section 4.08 Limitation on Dividends and Other Payment Restrictions
Affecting Subsidiaries.
Sweetheart Holdings and the Company will not, and will not permit any
of their Restricted Subsidiaries to, directly or indirectly, create or otherwise
cause or suffer to exist or become effective any encumbrance or restriction on
the ability of any Restricted Subsidiary to (a) (i) pay dividends or make any
other distributions to Sweetheart Holdings, the Company or any of their
Restricted Subsidiaries on (A) its Capital Stock or (B) any other interest or
participation in, or measured by, its profits, or (ii) pay any interest on or
principal of any Indebtedness owed to Sweetheart Holdings, the Company or any of
their Restricted Subsidiaries, (b) make loans or advances to Sweetheart
Holdings, the Company or any of their Restricted Subsidiaries or (c) transfer
any of its properties or assets to Sweetheart Holdings, the Company or any of
their Restricted Subsidiaries, except for such encumbrances or restrictions
existing under or by reason of:
(i) this Indenture, the Collateral Agreements, the Notes, the
Existing Indebtedness, and Permitted Refinancing Indebtedness,
provided, that such Restricted Subsidiary restrictions contained in
such refinancings shall not be materially more restrictive than the
restrictions in the Indebtedness refinanced,
(ii) the Credit Agreement and permitted refinancings thereof,
provided, that such Restricted Subsidiary restrictions contained in
such refinancings of the Credit Agreement shall not be materially more
restrictive than the restrictions in the Indebtedness refinanced,
(iii) applicable law, rule, regulation or order,
(iv) any instrument governing Acquired Indebtedness or Capital
Stock of a Person acquired by the Company or any of its Restricted
Subsidiaries at the time of such acquisition (but not in connection
with or 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 or its Restricted Subsidiaries, and permitted
refinancings thereof, provided, that such Restricted Subsidiary
restrictions contained in such refinancings shall not be materially
more restrictive than the restrictions in the Indebtedness refinanced,
(v) customary non-assignment provisions in leases and other
contracts entered into in the ordinary course of business and
limitations imposed by the terms of Permitted Liens with respect to the
assets subject to such Permitted Liens,
(vi) an agreement relating to the financing of the acquisition
of real or tangible personal property acquired after the date of this
Indenture, provided that such encumbrance or restriction relates only
to the property which is acquired and in the case of any encumbrance or
restriction that constitutes a Lien, such Lien constitutes a Permitted
Lien as set forth in clause (14) of the definition of "Permitted
Liens,"
54
(vii) Indebtedness or other contractual requirements of a
Receivables Subsidiary in connection with a Qualified Receivables
Transaction, provided that such restrictions apply only to such
Receivables Subsidiary,
(viii) any restriction or encumbrance contained in contracts
for sale of assets permitted by this Indenture in respect of the assets
being sold pursuant to such contract, and
(ix) Indebtedness permitted to be incurred pursuant to Section
4.09 and incurred after the date of this Indenture; provided that such
encumbrances or restrictions in such Indebtedness are not materially
more restrictive than the restrictions contained in the Credit
Agreement on the date of this Indenture.
The foregoing limitations shall not apply to any encumbrance or restriction with
respect to Lily Canada pursuant to the Lily Canada Loan Agreement or to Global,
provided that no such restriction shall limit or prevent the payment of any
intercompany Indebtedness payable from Lily Canada or Global to the Company or
any of its Restricted Subsidiaries (other than Lily Canada, Global or any
Subsidiary of Lily Canada or Global) in accordance with its terms.
Section 4.09 Limitation on Incurrence of Indebtedness and Issuance of
Disqualified Stock.
Each of Sweetheart Holdings and the Company will not, and will not
permit any of their Restricted Subsidiaries to, directly or indirectly, create,
incur, issue, assume, guarantee or otherwise become directly or indirectly
liable with respect to ("incur"), any Indebtedness or issue any Disqualified
Stock, and Sweetheart Holdings will not permit any of its Restricted
Subsidiaries (including the Company) to issue any preferred stock (except for
preferred stock issued to the Company, Sweetheart Holdings or any Restricted
Subsidiary of the Company or Sweetheart Holdings), except that Sweetheart
Holdings, the Company and any of their Restricted Subsidiaries that is a
Guarantor may incur Indebtedness if, (1) after giving effect thereto, Sweetheart
Holdings' Fixed Charge Coverage Ratio for the four fiscal quarters immediately
preceding the date on which such Indebtedness is incurred shall be greater than
2.00 to 1.00; and (2) no Default or Event of Default shall have occurred and be
continuing (which has not been waived) or would occur as a consequence thereof;
provided that no Guarantee may be incurred pursuant to the provisions of this
paragraph, unless the guaranteed Indebtedness is also incurred pursuant to this
paragraph.
The foregoing limitations will not apply to the incurrence of (each of the
following, collectively, "Permitted Debt"):
(a) Indebtedness incurred by the Company, Sweetheart Holdings or any of
their Restricted Subsidiaries that is a Guarantor under or in respect of the
Credit Agreement in a principal amount outstanding at the time of any incurrence
not to exceed the greater of (1) 65% of inventory plus 85% of accounts
receivable of Sweetheart Holdings and its Restricted Subsidiaries (in each case
as determined in accordance with GAAP, but excluding accounts receivable that
are past due by more than 60 days, accounts receivable owned by a Receivables
55
Subsidiary and inventory and accounts receivable of Lily Canada), and (2) $205.0
million, reduced in the case of clause (2) by the amount of the proceeds of any
Asset Sales (including Asset Sales to a Receivables Subsidiary) applied to the
permanent reduction of the revolving loan commitments under the Credit
Agreement;
(b) Indebtedness in respect of the Notes offered hereby and Existing
Indebtedness;
(c) Permitted Refinancing Indebtedness incurred by the Company,
Sweetheart Holdings or any of their Restricted Subsidiaries that is a Guarantor
and issued in exchange for or the proceeds of which are used to extend,
refinance, renew, replace, substitute or refund, Indebtedness referred to in the
immediately preceding paragraph or clause (b) above, and Indebtedness
contemplated by this clause (c);
(d) Indebtedness incurred by the Company, Sweetheart Holdings or any of
their Restricted Subsidiaries in connection with any Hedging Obligations,
performance bonds, letter of credit obligations and bank overdrafts incurred in
the ordinary course of business or relating to (as determined in good faith by
the Board of Directors of Sweetheart Holdings) or required by the terms of any
Indebtedness permitted to be incurred pursuant to this Section 4.09;
(e) additional Indebtedness of the Company, Sweetheart Holdings or any
of their Restricted Subsidiaries that is a Guarantor (which Indebtedness may,
but need not, be incurred under the Credit Agreement), including capital lease
obligations and Purchase Money Obligations, in an aggregate principal amount not
to exceed $10.0 million at any one time outstanding, reduced by the principal
amount of any such Indebtedness repaid with Net Proceeds of Asset Sales (other
than Purchase Money Obligations repaid with the Net Proceeds of Asset Sales of
the assets securing such Obligations) to the extent no reduction is made
pursuant to clause (a) above;
(f) Indebtedness of Global in an amount not to exceed 65% of inventory
plus 85% of accounts receivables of Global, provided that such Indebtedness is
without recourse to Sweetheart Holdings or any of its Restricted Subsidiaries or
any of their respective assets (other than Global and its assets);
(g) Indebtedness between or among Sweetheart Holdings, the Company and
their Restricted Subsidiaries;
(h) Indebtedness incurred by the Company, Sweetheart Holdings or any of
their Restricted Subsidiaries and arising from agreements providing for
indemnification, adjustment of purchase price or similar obligations, or from
Guarantees or letters of credit, surety bonds or performance bonds securing any
Obligations of Sweetheart Holdings, the Company or any of their Restricted
Subsidiaries pursuant to such agreements, in any case incurred in connection
with the disposition of any business, assets or Restricted Subsidiary of
Sweetheart Holdings or the Company, other than Guarantees of Indebtedness
incurred by any Person acquiring all or any portion of such business, assets or
Restricted Subsidiary of Sweetheart Holdings or the Company for the purpose of
financing such acquisition, in a principal amount not to exceed 25% of the gross
proceeds (with proceeds other than cash or Cash Equivalents being valued at the
56
Fair Market Value thereof) actually received by Sweetheart Holdings, the Company
or any of their Restricted Subsidiaries in connection with such dispositions;
and
(i) the incurrence by a Receivables Subsidiary of Indebtedness in a
Qualified Receivables Transaction that is without recourse to the Company,
Sweetheart Holdings or any Restricted Subsidiary of either or any of their
respective assets (other than such Receivables Subsidiary and its assets), and
is not guaranteed by any such Person, including any refinancings thereof by such
Receivables Subsidiary.
For purposes of determining compliance with this Section 4.09, in the
event that an item of proposed Indebtedness meets the criteria of more than one
of the categories of Permitted Debt described in clauses (a) through (i) above,
or is entitled to be incurred pursuant to the first paragraph of this Section
4.09, the Company will be permitted to classify such item of Indebtedness on the
date of its incurrence, or later reclassify all or a portion of such item of
Indebtedness, in any manner that complies with this Section 4.09. The accrual of
interest, the accretion or amortization of original issue discount, the payment
of interest on any Indebtedness in the form of additional Indebtedness with the
same terms, the reclassification of preferred stock as Indebtedness due to a
change in accounting principles, and the payment of dividends on Disqualified
Stock in the form of additional shares of the same class of Disqualified Stock
will not be deemed to be an incurrence of Indebtedness or an issuance of
Disqualified Stock for purposes of this Section 4.09; provided, in each such
case, that the amount thereof is included in Fixed Charges of the Company as
accrued. Notwithstanding any other provision of this Section 4.09, the maximum
amount of Indebtedness that the Company or any Restricted Subsidiary may incur
pursuant to this Section 4.09 shall not be deemed to be exceeded solely as a
result of fluctuations in exchange rates or currency values.
The amount of any Indebtedness outstanding as of any date will be:
(1) the accreted value of the Indebtedness, in the case of any
Indebtedness issued with original issue discount;
(2) the principal amount of the Indebtedness, in the case of
any other Indebtedness; and
(3) in respect of Indebtedness of another Person secured by a
Lien on the assets of the specified Person, the lesser of:
(a) the Fair Market Value of such assets at the date
of determination; and
(b) the amount of the Indebtedness of the other
Person.
Notwithstanding any other provision of this Section 4.09, a Guarantee
of Indebtedness permitted by the terms of this Indenture at the time such
Indebtedness was incurred will not constitute a separate incurrence of
Indebtedness.
57
Section 4.10 Limitation on Asset Sales.
(1) Sweetheart Holdings and the Company will not, and will not permit
any of their Restricted Subsidiaries to, directly or indirectly, consummate an
Asset Sale, unless, in the case of such Asset Sale, Sweetheart Holdings, the
Company or any such Restricted Subsidiary, as the case may be, receives
consideration at the time of such Asset Sale at least equal to the Fair Market
Value, and in the case of a lease of assets, a lease providing for rent and
other terms and conditions which are consistent in all material respects with
the then prevailing market conditions (evidenced in each case by a resolution of
the Board of Directors of such entity set forth in an Officers' Certificate
delivered to the Trustee), of the assets sold or otherwise disposed of, and at
least 75% (100% in the case of lease payments) of the value of the consideration
therefor received by Sweetheart Holdings, the Company or such Restricted
Subsidiary is in the form of cash or Cash Equivalents; provided, however, that
the amount of:
(a) any liabilities (as shown on Sweetheart Holdings', the
Company's or such Restricted Subsidiary's most recent balance sheet or
in the notes thereto, excluding contingent liabilities and trade
payables) of Sweetheart Holdings, the Company or any such Restricted
Subsidiary that are not subordinated by their terms to the Notes or any
Guarantee thereof and that are assumed by the transferee of any such
assets;
(b) any Notes or other obligations received by Sweetheart
Holdings, the Company or any such Restricted Subsidiary from such
transferee that are promptly, but in no event more than 30 days after
receipt, converted by Sweetheart Holdings, the Company or such
Restricted Subsidiary into cash; and
(c) any stock or assets of the kind referred to in clause 2(b)
of the next paragraph of this Section 4.10;
shall be deemed to be cash for purposes of this provision.
(2) Sweetheart Holdings, the Company or any of their Restricted
Subsidiaries, as the case may be, may apply the Net Proceeds from an Asset Sale
to:
(a) repay Indebtedness under the Credit Agreement to the
extent that the assets and property sold pursuant to such Asset Sale do
not constitute Collateral; and
(b) acquire all or substantially all of the assets of, or a
majority of the Voting Stock of, a business that complies with Section
4.13 hereof, to make a capital expenditure, or to acquire other
long-term assets; provided, however, that, to the extent that the
assets and property sold pursuant to such Asset Sale constitute
Collateral, (i) the assets so acquired with the Net Proceeds of such
sale shall be pledged to the Collateral Agent pursuant to the
Collateral Agreements and shall constitute Collateral and (ii) any
capital expenditure so made with the Net Proceeds of such sale shall be
in respect of assets constituting Collateral.
58
Any Net Proceeds from an Asset Sale that are not applied or invested as
provided in the preceding sentence within 270 days of such Asset Sale will
constitute "Excess Proceeds." When the aggregate amount of Excess Proceeds
exceeds $5.0 million, within five days thereof, the Company will make an offer
to all Holders of Notes and all holders of other Applicable Indebtedness
containing provisions similar to those set forth in this Section 4.10 to
purchase the maximum principal amount of Notes and such other Applicable
Indebtedness that may be purchased with the Excess Proceeds at an offer price in
cash equal to 100% of the principal amount thereof plus accrued and unpaid
interest and Additional Interest, if any, to the date of purchase. If any Excess
Proceeds remain after consummation of an Asset Sale Offer, Sweetheart Holdings,
the Company or any of their Restricted Subsidiaries may use those Excess
Proceeds for any purpose not otherwise prohibited by this Indenture. If the
aggregate principal amount of Notes and other Applicable Indebtedness tendered
into such Asset Sale Offer exceeds the amount of Excess Proceeds, the Company
will purchase Notes and such other Applicable Indebtedness on a pro rata basis.
Upon completion of each Asset Sale Offer, the amount of Excess Proceeds will be
reset at zero.
(3) Any redemption of Notes as provided in this Section 4.10 shall be
made in compliance with Rule 14e-1 of the Exchange Act and any other securities
laws and regulations thereunder to the extent those laws and regulations are
applicable in connection with each repurchase of Notes pursuant to an Asset Sale
Offer. To the extent that the provisions of any securities laws or regulations
conflict with Sections 3.09 or 4.10 of this Indenture, Sweetheart Holdings will
comply with the applicable securities laws and regulations and will not be
deemed to have breached its obligations under Section 3.09 or this Section 4.10
by virtue of such compliance.
(4) Pending final application of any Net Proceeds of an Asset Sale,
subject to the terms of the Collateral Agreements, the Company may temporarily
repay revolving credit Indebtedness or otherwise apply such Net Proceeds in a
manner not prohibited by this Indenture.
Section 4.11 Limitation on Transactions with Affiliates.
Each of the Company and Sweetheart Holdings will not, and will not
permit any of their Restricted Subsidiaries to, sell, lease, transfer or
otherwise dispose of any of its properties or assets to, or purchase any
property or assets from, or enter into any contract, agreement, understanding,
loan, advance or Guarantee with, or for the benefit of, any Affiliate (each of
the foregoing, an "Affiliate Transaction"), except on terms that are no less
favorable to the Company, Sweetheart Holdings or the relevant Restricted
Subsidiary than those that would have been obtained in a comparable transaction
by the Company, Sweetheart Holdings or such Restricted Subsidiary with a Person
who is not an Affiliate; provided, however, that (1) transactions between or
among the Company, Sweetheart Holdings and their respective Restricted
Subsidiaries, which are not otherwise prohibited by this Indenture, (2) any
employment agreement entered into by Sweetheart Holdings, the Company or their
respective Restricted Subsidiaries in the ordinary course of business, (3)
Permitted Investments and transactions permitted by Section 4.07, (4) provision
of administrative or management services by the Company or Sweetheart Holdings
or any of their officers to any of their respective Restricted Subsidiaries and
59
any Unrestricted Subsidiaries in the ordinary course of business, (5) any
employee benefit plan, officer or director indemnification agreement or any
similar arrangement entered into by the Company or any of its Restricted
Subsidiaries in the ordinary course of business and payments pursuant thereto,
(6) transactions with a Person (other than an Unrestricted Subsidiary of the
Company) that is an Affiliate of the Company solely because the Company owns,
directly or through a Restricted Subsidiary, an Equity Interest in, or controls,
such Person, (7) payment of reasonable directors' fees to Persons who are not
otherwise Affiliates of the Company, (8) any issuance of Equity Interests (other
than Disqualified Stock) of the Company to Affiliates of the Company, and (9)
any transaction pursuant to arrangements in existence as of the date of this
Indenture and disclosed in this offering circular, in each case, shall not be
deemed Affiliate Transactions.
In addition to the foregoing, neither of the Company, Sweetheart
Holdings nor any of their Restricted Subsidiaries will enter into any Affiliate
Transaction or series of related Affiliate Transactions involving consideration
having a Fair Market Value:
(a) of more than $1.0 million unless prior to consummation of
such transaction, such transaction has been approved by a majority of
the disinterested members of the Board of Directors of the Company,
such approval to be evidenced by a board resolution stating that such
Board of Directors has determined that such transaction complies with
this Section 4.11; and
(b) of more than $5.0 million unless prior to consummation of
such transaction, the Company has delivered to the Trustee on behalf of
the Holders (1) a written opinion of a nationally recognized investment
banking, accounting or appraisal firm stating that such transaction is
fair to the Company, Sweetheart Holdings or such Restricted Subsidiary,
as the case may be, from a financial point of view or, (2) with respect
to real property, fixed assets or equipment, a written appraisal from a
nationally recognized appraiser showing such property to have a value
not less than the amount of such consideration.
Section 4.12 Limitation on Liens. Neither Sweetheart Holdings, the
Company nor any of their Restricted Subsidiaries will, directly or indirectly,
create, assume or suffer to exist any Lien (other than Permitted Liens) on any
asset now owned or hereafter acquired, or any income or profit therefrom.
Section 4.13 Line of Business. For so long as the Notes are
outstanding, (1) Sweetheart Holdings, the Company and their Restricted
Subsidiaries (other than any Receivables Subsidiary) will engage principally in
the business of producing and selling disposable foodservice and packaging
products and such other businesses as the Company and its Restricted
Subsidiaries are engaged in on the date of this Indenture, as well as reasonable
expansions or extensions thereof, and (2) Sweetheart Holdings and the Company
shall cause LCHC not to engage in any business other than ownership of Capital
Stock of Lily Canada.
60
Section 4.14 Corporate Existence. Subject to Article 5 hereof, the
Company shall do or cause to be done all things necessary to preserve and keep
in full force and effect:
(1) its corporate existence, and the corporate, partnership or
other existence of each of its Subsidiaries, in accordance with the
respective organizational documents (as the same may be amended from
time to time) of the Company or any such Subsidiary; and
(2) the rights (charter and statutory), licenses and
franchises of the Company and its Subsidiaries; provided, however, that
the Company shall not be required to preserve any such right, license
or franchise, or the corporate, partnership or other existence of any
of its Subsidiaries, if the Board of Directors shall determine that the
preservation thereof is no longer desirable in the conduct of the
business of the Company and its Subsidiaries, taken as a whole, and
that the loss thereof is not adverse in any material respect to the
Holders of the Notes.
Section 4.15 Offer to Repurchase Upon Change of Control.
(a) Upon the occurrence of a Change of Control, the Company will make
an offer (a "Change of Control Offer") to each Holder to repurchase all or any
part (equal to $1,000 or an integral multiple of $1,000) of each Holder's Notes
at a purchase price equal to 101% of the aggregate principal amount thereof plus
accrued and unpaid interest and Additional Interest, if any, on the Notes
repurchased, if any, to the date of purchase, subject to the rights of
noteholders on the relevant record date to receive interest due on the relevant
interest payment date (the "Change of Control Payment"). Within thirty days
following any Change of Control, the Company will mail a notice to each Holder
describing the transaction or transactions that constitute the Change of Control
and stating:
(1) that the Change of Control Offer is being made pursuant to
this Section 4.15 and that all Notes tendered will be accepted for
payment;
(2) the purchase price and the purchase date, which shall be
no earlier than 30 days and no later than 60 days from the date such
notice is mailed (the "Change of Control Payment Date");
(3) that any Note not tendered will continue to accrue
interest;
(4) that, unless the Company defaults in the payment of the
Change of Control Payment, all Notes accepted for payment pursuant to
the Change of Control Offer will cease to accrue interest after the
Change of Control Payment Date;
(5) that Holders electing to have any Notes purchased pursuant
to a Change of Control Offer will be required to surrender the Notes,
with the form entitled "Option of Holder to Elect Purchase" attached to
the Notes completed, or transfer by book-entry transfer, to the Paying
Agent at the address specified in the notice prior to the close of
business on the third Business Day preceding the Change of Control
Payment Date;
61
(6) that Holders will be entitled to withdraw their election
if the Paying Agent receives, not later than the close of business on
the second Business Day preceding the Change of Control Payment Date, a
telegram, telex, facsimile transmission or letter setting forth the
name of the Holder, the principal amount of Notes delivered for
purchase, and a statement that such Holder is withdrawing his election
to have the Notes purchased; and
(7) that Holders whose Notes are being purchased only in part
will be issued new Notes equal in principal amount to the unpurchased
portion of the Notes surrendered, which unpurchased portion must be
equal to $1,000 in principal amount or an integral multiple thereof.
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 those laws and regulations are applicable in connection with the
repurchase of the Notes as a result of a Change in Control. To the extent that
the provisions of any securities laws or regulations conflict with the
provisions of Sections 3.09 or 4.15 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 Section 3.09 or this Section 4.15 by virtue
of such compliance.
(b) On or before the Change of Control Payment Date, the Company will,
to the extent lawful:
(1) accept for payment all Notes or portions of Notes properly
tendered pursuant to the Change of Control Offer and not properly
withdrawn;
(2) deposit with the Paying Agent an amount equal to the
Change of Control Payment in respect of all Notes or portions of Notes
properly tendered and not properly withdrawn; and
(3) 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 of Notes being
purchased by the Company.
The Paying Agent will promptly mail to each Holder of Notes properly
tendered the Change of Control Payment for such Notes, and the Trustee will
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, however, that each new Note will be in
a principal amount of $1,000 or an integral multiple of $1,000. 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.
The Company will not be required to make a Change of Control Offer upon
a Change of Control if (1) 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 4.15 and Section 3.09 hereof and purchases all Notes
properly tendered and not withdrawn under the Change of Control Offer, or (2)
62
notice of redemption has been given pursuant to Section 3.07 hereof, unless and
until there is a default in payment of the applicable redemption price.
Section 4.16 Maintenance of Insurance and Properties. Sweetheart
Holdings and the Company shall, and shall cause each of their Restricted
Subsidiaries to, maintain liability, casualty and other insurance (subject to
customary deductibles and retentions) with responsible insurance companies in
such amounts and against such risks as is customarily carried by responsible
companies engaged in similar businesses and owning similar assets in the general
areas in which Sweetheart Holdings, the Company and their Restricted
Subsidiaries operate (which may include self-insurance in comparable form to
that maintained by such responsible companies).
Sweetheart Holdings and the Company shall, and shall cause each of
their Subsidiaries to, maintain their properties and assets in normal working
order and condition as on the date of this Indenture (reasonable wear and tear
excepted) and make all necessary repairs, renewals, replacements, additions,
betterments and improvements thereto, as shall be reasonably necessary for the
proper conduct of the business of Sweetheart Holdings, the Company and their
Subsidiaries taken as a whole; provided that nothing herein shall prevent
Sweetheart Holdings, the Company or any of their Subsidiaries from discontinuing
any maintenance of any such properties if such discontinuance is desirable in
the conduct of the business of Sweetheart Holdings, the Issuer and their
Subsidiaries, taken as a whole.
Section 4.17 Future Guarantors. If Sweetheart Holdings or any of its
Restricted Subsidiaries shall organize, acquire or otherwise invest in another
Domestic Subsidiary that is not a Guarantor, then such transferee or acquired or
other Subsidiary shall:
(1) execute and deliver to the Trustee a supplemental indenture in form
reasonably satisfactory to the Trustee pursuant to which such Restricted
Subsidiary shall unconditionally guarantee on a senior secured basis all of the
Company's obligations under the Notes and this Indenture on the terms set forth
in this Indenture; and
(2) cause such Restricted Subsidiary to take such actions necessary or
advisable to grant to the Trustee for the benefit of itself and the Holders of
Notes a perfected security interest in any Collateral held by such Domestic
Subsidiary, subject to the Permitted Liens.
Thereafter, such Domestic Subsidiary shall be a Guarantor for all
purposes of this Indenture; provided, that any Domestic Subsidiary that
constitutes an Immaterial Subsidiary need not become a Guarantor until such time
as it ceases to be an Immaterial Subsidiary.
Section 4.18 Designation of Restricted and Unrestricted Subsidiaries.
The Board of Directors of Sweetheart Holdings may designate any
Restricted Subsidiary to be an Unrestricted Subsidiary if that designation would
not cause a Default, unless such Restricted Subsidiary or any of its
Subsidiaries owns any Capital Stock or Indebtedness of, or holds any Lien on any
property of, Sweetheart Holdings or any other Restricted Subsidiary. If a
Restricted Subsidiary is designated as an Unrestricted Subsidiary, the aggregate
63
Fair Market Value of all outstanding Investments owned by the Company and its
Restricted Subsidiaries in the Subsidiary designated as Unrestricted will be
deemed to be an Investment made as of the time of the designation and will
reduce the amount available for Restricted Payments under Section 4.07 or under
one or more clauses of the definition of Permitted Investments, as determined by
Sweetheart Holdings. That designation will only be permitted if the Investment
would be permitted at that time and if the Restricted Subsidiary otherwise meets
the definition of an Unrestricted Subsidiary. The Board of Directors of
Sweetheart Holdings may redesignate any Unrestricted Subsidiary to be a
Restricted Subsidiary if that redesignation would not cause a Default.
Any designation of a Subsidiary of the Company as an Unrestricted
Subsidiary will be evidenced to the Trustee by filing with the Trustee a
certified copy of a resolution of the Board of Directors of Sweetheart Holdings
giving effect to such designation and an Officers' Certificate certifying that
such designation complied with the preceding conditions and was permitted by
Section 4.07. If, at any time, any Unrestricted Subsidiary would fail to meet
the preceding requirements as an Unrestricted Subsidiary, it will thereafter
cease to be an Unrestricted Subsidiary for purposes of this Indenture and any
Indebtedness of such Subsidiary will be deemed to be incurred by a Restricted
Subsidiary of the Company as of such date and, if such Indebtedness is not
permitted to be incurred as of such date under Section 4.09, the Company will be
in default of such Section 4.09. The Board of Directors of Sweetheart Holdings
may at any time designate any Unrestricted Subsidiary to be a Restricted
Subsidiary of the Company; provided that such designation will 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
will only be permitted if (1) Sweetheart Holdings could incur $1.00 of
additional Indebtedness under the first paragraph of Section 4.09, calculated on
a pro forma basis as if such designation had occurred at the beginning of the
four-quarter reference period; and (2) no Default or Event of Default would be
in existence following such designation.
Section 4.19 Impairment of Security Interest. Neither Sweetheart
Holdings nor any of its Restricted Subsidiaries will take or omit to take any
action which would materially adversely affect or impair the Liens in favor of
the Trustee and the Holders of the Notes with respect to the Collateral. Neither
Sweetheart Holdings nor any of its Restricted Subsidiaries shall grant to any
Person, or permit any Person to retain (other than the Trustee), any interest
whatsoever in the Collateral other than Permitted Liens. Neither Sweetheart
Holdings nor any of its Restricted Subsidiaries will enter into any agreement
that requires the proceeds received from any sale of Collateral to be applied to
repay, redeem, defease or otherwise acquire or retire any Indebtedness of any
Person, other than as permitted by this Indenture, the Notes and the Collateral
Agreements. The Company and Sweetheart Holdings shall, and shall cause each
Guarantor to, at their sole cost and expense, execute and deliver all such
agreements and instruments as the Trustee shall reasonably request to more fully
or accurately describe the property intended to be Collateral or the obligations
intended to be secured by the Collateral Agreements. The Company and Sweetheart
Holdings shall, and shall cause each of their Restricted Subsidiaries to, at
their sole cost and expense, file any such notice filings or other agreements or
instruments as may be reasonably necessary or desirable under applicable law to
perfect the Liens created by the Collateral Agreements at such times and at such
places as the Trustee may reasonably request.
64
ARTICLE 5
SUCCESSORS
Section 5.01 Merger, Consolidation, or Sale of Assets.
(a) Except in connection with a disposition of the Company that
complies with the requirements of paragraph (b) below, the Company may not merge
or consolidate with or into any Person other than (i) a merger with or into, or
a consolidation with, Sweetheart Holdings and (ii) the merger, subject to all
conditions applicable to Sweetheart Holdings in paragraph (b) below, of
Restricted Subsidiaries of the Company into the Company.
(b) Sweetheart Holdings will not consolidate or merge with or into any
Person (whether or not Sweetheart Holdings is the surviving Person), or sell,
assign, transfer, lease, convey or otherwise dispose of all or substantially all
of its properties or assets, or permit the Company to sell, assign, transfer,
lease, convey or otherwise dispose of all or substantially all of its properties
or assets (other than to Sweetheart Holdings), in one or more related
transactions to, another corporation, Person or entity unless:
(i) Sweetheart Holdings is the surviving Person or the entity
or the Person formed by or surviving any such consolidation or merger
(if other than Sweetheart Holdings) or to which such sale, assignment,
transfer, lease, conveyance or other disposition shall have been made
is organized and existing under the laws of the United States, any
state thereof or the District of Columbia;
(ii) the Person formed by or surviving any such consolidation
or merger (if other than Sweetheart Holdings) or the Person to which
such sale, assignment, transfer, lease, or other disposition will have
been made (if other than Sweetheart Holdings or the Company, as the
case may be) assumes all the obligations of Sweetheart Holdings (or the
Company, as the case may be) pursuant to a supplemental indenture in a
form reasonably satisfactory to the Trustee, under the Notes and this
Indenture;
(iii) immediately after giving effect to such transaction, no
Default or Event of Default exists; and
(iv) Sweetheart Holdings or any Person formed by or surviving
any such consolidation or merger, or to which such sale, assignment,
transfer, lease, conveyance or other disposition will have been made
(A) will have Consolidated Net Worth (immediately after giving effect
to such transaction) equal to or greater than the Consolidated Net
Worth of Sweetheart Holdings immediately preceding the transaction and
(B) will be permitted by virtue of its Fixed Charge Coverage Ratio to
incur, immediately after giving effect to such transaction, at least
$1.00 of additional Indebtedness pursuant to Section 4.09; provided,
that such clause (B) will not apply with respect to any merger of any
Restricted Subsidiary of the Company with or into, or a consolidation
with, the Company, or a merger of Sweetheart Holdings or any Restricted
Subsidiary of Sweetheart Holdings into any Person that has conducted no
65
business and incurred no liabilities solely for the purpose of
effecting a change in the state of incorporation of Sweetheart
Holdings, the Company or such Restricted Subsidiary.
The parties to any transaction consummated in accordance with this
Section 5.01 shall remain subject to the requirements of this Indenture with
respect to Change of Control Offers required pursuant to Section 4.15 to the
extent such transaction results in a Change of Control.
Sweetheart Holdings and the Company shall deliver to the Trustee prior
to the consummation of the proposed transaction an Officers' Certificate to the
foregoing effect and an Opinion of Counsel covering clauses (i), (ii) and (iii)
(in the case of clause (iii), to such counsel's knowledge), stating that the
proposed transaction and such supplemental indenture comply with this Indenture.
The Trustee shall be entitled to conclusively rely upon such Officers'
Certificate and Opinion of Counsel.
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 a
transaction that is subject to, and that complies with the provisions of,
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, lease, 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, lease, conveyance or other disposition, the provisions herein
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 on the
Notes except in the case of a sale of all of the Company's assets in a
transaction that is subject to, and that complies with the provisions of,
Section 5.01 hereof.
ARTICLE 6
DEFAULTS AND REMEDIES
Section 6.01 Events of Default. Each of the following is an "Event of
Default":
(1) default for 30 days in the payment when due of
interest on the Notes;
(2) default in payment when due and payable at maturity, upon
acceleration, redemption or otherwise of principal of any Note,
including without limitation payments due upon a Change of Control or
following an Asset Sale;
(3) a default in the observance or performance of any other
agreements of the Company or any Guarantor in the Indenture or the
Collateral Agreements for a period that continues for 60 days after
receipt of written notice from the Trustee or from Holders of at least
25% of the aggregate principal amount of the Notes then outstanding,
specifying such default and requiring that it be remedied;
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(4) 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 (other than the Notes and the
Guaranties with respect thereto) by the Company, Sweetheart Holdings or
any of their respective Restricted Subsidiaries (or the payment of
which is guaranteed by the Company, Sweetheart Holdings or any of their
respective Restricted Subsidiaries, except, in each case, for
Receivables Subsidiaries) whether such Indebtedness or Guarantee now
exists or is created after the date of this Indenture, which default:
(a) is caused by a failure to pay principal of, or
interest or premium, if any, on such Indebtedness prior to the
expiration of the grace period provided in such Indebtedness
on the date of such default (a "Payment Default"); or
(b) in the case of any default other than a payment
default referred to in clause (a) has resulted in the
acceleration of the maturity of such Indebtedness prior to its
express maturity;
and under subclauses (a) or (b) of this clause (4) the principal amount
of such Indebtedness either (i) is at least $10.0 million or (ii)
together with the principal amount of any other such Indebtedness, the
maturity of which has been so accelerated or which has not been paid at
maturity, aggregates $10.0 million or more;
(5) a final judgment or final judgments for the payment of
money are entered into by a court or courts of competent jurisdiction
against the Company, Sweetheart Holdings or any of their respective
Significant Subsidiaries and such judgment or judgments remain
undischarged or unstayed for a period of 60 consecutive days after
their entry, provided that the aggregate of all such judgments exceeds
$10.0 million;
(6) the Company or any of its Restricted Subsidiaries that is
a Significant Subsidiary or any group of Restricted Subsidiaries of the
Company that, taken 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) consents to the appointment of a
custodian of it or for all or substantially all of its property, (D)
makes a general assignment for the benefit of its creditors, or (E)
generally is not paying its debts as they become due;
(7) a court of competent jurisdiction enters an order or
decree under any Bankruptcy Law that: (A) is for relief against the
Company or any of its Restricted Subsidiaries that is a Significant
Subsidiary or any group of Restricted Subsidiaries of the Company that,
taken together, would constitute a Significant Subsidiary in an
involuntary case; (B) appoints a custodian of the Company or any of its
Restricted Subsidiaries that is a Significant Subsidiary or any group
of Restricted Subsidiaries of the Company that, taken together, would
constitute a Significant Subsidiary or for all or substantially all of
the property of the Company or any of its Restricted Subsidiaries that
is a Significant Subsidiary or any group of Restricted Subsidiaries of
the Company that, taken together, would constitute a Significant
Subsidiary; or (C) orders the liquidation of the Company or any of its
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Restricted Subsidiaries that is a Significant Subsidiary or any group
of Restricted Subsidiaries of the Company that, taken together, would
constitute a Significant Subsidiary; and the order or decree remains
unstayed and in effect for 60 consecutive days;
(8) any Guaranty of the Notes shall be held in any judicial
proceeding to be unenforceable or invalid or shall cease for any reason
to be in effect (except as otherwise permitted by this Indenture), or
the Company, Sweetheart Holdings or any Guarantor shall deny or
disaffirm its obligations under its Guaranty or the Notes, which in
each circumstance continues for a period of 30 days after receipt of
written notice thereof from the Trustee or Holders of at least 25% of
the aggregate principal amount of the Notes then outstanding;
(9) the Company ceases to be a Wholly Owned Subsidiary of
Sweetheart Holdings (except in the event of a Change of Control of the
Company or a consolidation with or a merger of the Company with or into
Sweetheart Holdings); and
(10) any Collateral Agreement at any time for any reason shall
cease to be in full force and effect, or ceases to give the Collateral
Agent the Liens, rights, powers and privileges purported to be created
thereby, superior to and prior to the rights of all third Persons other
than the holders of Permitted Liens and subject to no other Liens
except as expressly permitted by the applicable Collateral Agreement.
Section 6.02 Acceleration. In the case of an Event of Default specified
in clause (6) or (7) of Section 6.01 hereof, with respect to the Company or any
of its Restricted Subsidiaries that is a Significant Subsidiary or any group of
Restricted Subsidiaries of the Company that, taken 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.
Upon any such declaration, the Notes shall become due and payable
immediately.
The Holders of a majority in aggregate principal amount of the then
outstanding Notes by written notice to the Trustee may, on behalf of all of the
Holders, rescind an acceleration or waive any existing Default or Event of
Default and its consequences if the rescission would not conflict with any
judgment or decree and if all existing Events of Default (except nonpayment of
principal, interest or premium or Additional Interest, if any, that has become
due solely because of the acceleration) have been cured or waived.
Section 6.03 Other Remedies. If an Event of Default occurs and is
continuing, the Trustee may pursue any available remedy to collect the payment
of principal, premium and Additional Interest, if any, and interest on the Notes
or to enforce the performance of any provision of the Notes or this Indenture.
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The Trustee may maintain a proceeding even if it does not possess any
of the Notes or does not produce any of them in the proceeding. A delay or
omission by the Trustee or any Holder 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.
Section 6.04 Waiver of Past Defaults. Holders of not less than a
majority in aggregate principal amount of the then outstanding Notes by notice
to the Trustee may on behalf of the Holders of all of the Notes waive an
existing Default or Event of Default and its consequences hereunder, except a
continuing Default or Event of Default in the payment of the principal of,
premium and Additional Interest, if any, or interest on, the Notes (including in
connection with an offer to purchase).
Section 6.05 Control by Majority. Holders of a majority in principal
amount of the then outstanding Notes may direct the time, method and place of
conducting any proceeding for exercising any remedy available to the Trustee or
exercising any trust or power conferred on it. However, the Trustee may refuse
to follow any direction that conflicts with law or this Indenture that the
Trustee determines may be unduly prejudicial to the rights of other Holders of
Notes or that may involve the Trustee in personal liability.
Section 6.06 Limitation on Suits. A Holder may pursue a remedy with
respect to this Indenture or the Notes only if:
(1) the Holder of a Note gives to the Trustee written notice
that an Event of Default is continuing;
(2) Holders of at least 25% in principal amount of the then
outstanding Notes make a written request to the Trustee to pursue the
remedy;
(3) such Holder or Holders offer and, if requested, provide to
the Trustee security or indemnity reasonably satisfactory to the
Trustee against any loss, liability or expense;
(4) the Trustee does not comply with the request within 60
days after receipt of the request and the offer of security or
indemnity, if requested; and
(5) during such 60-day period the Holders of a majority in
aggregate principal amount of the then outstanding Notes do not give
the Trustee a direction inconsistent with the request.
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 herein, the right of any Holder of a Note to
receive payment of principal, premium and Additional Interest, if any, and
interest on the Note, on or after the respective due dates expressed in the Note
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(including in connection with an offer to purchase), or to bring suit for the
enforcement of any such payment on or after such respective dates, shall not be
impaired or affected without the consent of such Holder; provided that a Holder
shall not have the right to institute any such suit for the enforcement of
payment if and to the extent that the institution or prosecution thereof or the
entry of judgment therein would, under applicable law, result in the surrender,
impairment, waiver or loss of the Lien of this Indenture upon any property
subject to such Lien.
Section 6.08 Collection Suit by Trustee. If an Event of Default
specified in Section 6.01(1) or (2) 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 and
Additional Interest, if any, and interest remaining unpaid on the Notes and
interest on overdue principal and, to the extent lawful, interest 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 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 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 hereof. 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 hereof 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 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. If the Trustee collects any money pursuant to
this Article 6, 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 hereof, including payment of all compensation,
expenses and liabilities incurred, and all advances made, by the
Trustee and the costs and expenses of collection;
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Second: to Holders of Notes for amounts due and unpaid on the
Notes for principal, premium and Additional Interest, if any, and
interest, ratably, without preference or priority of any kind,
according to the amounts due and payable on the Notes for principal,
premium and Additional Interest, if any, and interest, respectively;
and
Third: to the Company or to such party as a court of
competent jurisdiction shall direct.
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 10% in principal amount of the then outstanding Notes.
ARTICLE 7
TRUSTEE
Section 7.01 Duties of Trustee.
(a) If an Event of Default has occurred and is continuing, the Trustee
will 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 person would
exercise or use under the circumstances in the conduct of such person's own
affairs.
(b) Except during the continuance of an Event of Default:
(1) the duties of the Trustee will 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
(2) 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 will examine the certificates and
opinions to determine whether or not they conform to the requirements
of this Indenture.
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(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:
(1) this paragraph does not limit the effect of paragraph (b)
of this Section 7.01;
(2) the Trustee will 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
(3) the Trustee will 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 hereof.
(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 will require the Trustee to expend
or risk its own funds or incur any liability. The Trustee will be under no
obligation to exercise any of its rights and powers under this Indenture at the
request of any Holders, unless such Holder has offered to the Trustee security
and indemnity satisfactory to it against any loss, liability or expense.
(f) The Trustee will not be liable for interest on any money received
by it except as the Trustee may agree in writing with the Company. Money held in
trust by the Trustee need not be segregated from other funds except to the
extent required by law.
Section 7.02 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 will not be
liable for any action it 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 written advice of such counsel or any Opinion of Counsel will 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 will not
be responsible for the misconduct or negligence of any agent appointed with due
care.
(d) The Trustee will 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.
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(e) Unless otherwise specifically provided in this Indenture, any
demand, request, direction or notice from the Company will be sufficient if
signed by an Officer of the Company.
(f) The Trustee will 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 have offered to the Trustee reasonable
security or indemnity against the costs, expenses and liabilities that might be
incurred by it in compliance with such request or direction.
(g) The Trustee will 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 any event which is in fact such a
Default or Event of Default is received by the Trustee at the Corporate Trust
Office of the Trustee and such notice references the Notes and this Indenture.
Section 7.03 Individual Rights of Trustee. The Trustee in its
individual or any other capacity may become the owner or pledgee of Notes and
may otherwise deal with the Company or any Affiliate of the Company with the
same rights it would have if it were not Trustee. However, in the event that the
Trustee acquires any conflicting interest it must eliminate such conflict within
90 days, apply to the SEC for permission to continue as trustee (if this
Indenture has been qualified under the TIA) 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 hereof.
Section 7.04 Trustee's Disclaimer. The Trustee will not be responsible
for and makes no representation as to the validity or adequacy of this Indenture
or the Notes, 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 will not be responsible for the use or
application of any money received by any Paying Agent other than the Trustee,
and it will 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.
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 will
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 in
payment of principal of, premium or Additional Interest, if any, or interest 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 of this Indenture, and for so long as Notes remain
outstanding, the Trustee will mail to the Holders of the Notes a brief report
dated as of such reporting date that complies with TIA ss. 313(a) (but if no
event described in TIA ss. 313(a) has occurred within the twelve months
preceding the reporting date, no report need be transmitted). The Trustee also
will comply with TIA ss. 313(b)(2). The Trustee will also transmit by mail all
reports as required by TIA ss. 313(c).
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(b) A copy of each report at the time of its mailing to the Holders of
Notes will be mailed by the Trustee to the Company and filed by the Trustee with
the SEC and each stock exchange on which the Notes are listed in accordance with
TIA ss. 313(d). The Company will promptly notify the Trustee when the Notes are
listed on any stock exchange.
Section 7.07 Compensation and Indemnity.
(a) The Company will pay to the Trustee from time to time reasonable
compensation for its acceptance of this Indenture and services hereunder. The
Trustee's compensation will not be limited by any law on compensation of a
trustee of an express trust. The Company will 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 will
include the reasonable compensation, disbursements and expenses of the Trustee's
agents and counsel.
(b) The Company and the Guarantors will 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 and the Guarantors (including this Section 7.07) and defending
itself against any claim (whether asserted by the Company, the Guarantors, 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 or bad
faith. The Trustee will notify the Company promptly of any claim for which it
may seek indemnity. Failure by the Trustee to so notify the Company will not
relieve the Company or any of the Guarantors of their obligations hereunder. The
Company or such Guarantor will defend the claim and the Trustee will cooperate
in the defense. The Trustee may have separate counsel and the Company will pay
the reasonable fees and expenses of such counsel. Neither the Company nor any
Guarantor need pay for any settlement made without its consent, which consent
will not be unreasonably withheld.
(c) The obligations of the Company and the Guarantors under this
Section 7.07 will survive the satisfaction and discharge of this Indenture.
(d) To secure the Company's and the Guarantors' payment obligations in
this Section 7.07, the Trustee will 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 will survive the
satisfaction and discharge of this Indenture.
(e) When the Trustee incurs expenses or renders services after an Event
of Default specified in Section 6.01(6) or (7) 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 will comply with the provisions of TIA ss. 313(b)(2) to
the extent applicable.
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Section 7.08 Replacement of Trustee.
(a) A resignation or removal of the Trustee and appointment of a
successor Trustee will 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:
(1) the Trustee fails to comply with Section 7.10 hereof;
(2) 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;
(3) a custodian or public officer takes charge of the Trustee
or its property; or
(4) 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 will 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 60 days after
the retiring Trustee resigns or is removed, the retiring Trustee, the Company,
or the Holders of at least 10% in principal amount of the then outstanding Notes
may petition 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 hereof, 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 will deliver a written acceptance of its
appointment to the retiring Trustee and to the Company. Thereupon, the
resignation or removal of the retiring Trustee will become effective, and the
successor Trustee will have all the rights, powers and duties of the Trustee
under this Indenture. The successor Trustee will mail a notice of its succession
to Holders. The retiring Trustee will 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
hereof. Notwithstanding replacement of the Trustee pursuant to this Section
7.08, the Company's obligations under Section 7.07 hereof will continue for the
benefit of the retiring Trustee.
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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 corporation, the successor corporation
without any further act will be the successor Trustee.
Section 7.10 Eligibility; Disqualification. There will 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 trustee power, that is subject to
supervision or examination by federal or state authorities and that has a
combined capital and surplus of at least $100.0 million as set forth in its most
recent published annual report of condition.
This Indenture will always have a Trustee who satisfies the
requirements of TIA ss. 310(a)(1), (2) and (5). The Trustee is subject to TIA
ss. 310(b).
Section 7.11 Preferential Collection of Claims Against Company. The
Trustee is subject to TIA ss. 311(a), excluding any creditor relationship listed
in TIA ss. 311(b). A Trustee who has resigned or been removed shall be subject
to TIA ss. 311(a) to the extent indicated therein.
ARTICLE 8
LEGAL DEFEASANCE AND COVENANT DEFEASANCE
Section 8.01 Option to Effect Legal Defeasance or Covenant Defeasance.
The Company may, at the option of its Board of Directors evidenced by a
resolution set forth in an Officers' Certificate, and at any time, elect to have
either Section 8.02 or 8.03 hereof be applied to all outstanding Notes upon
compliance with the conditions set forth below in this Article 8.
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 and each of the Guarantors will, subject to the satisfaction
of the conditions set forth in Section 8.04 hereof, be deemed to have been
discharged from their obligations with respect to all outstanding Notes
(including the Guaranties) 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 will be deemed to have paid and
discharged the entire Indebtedness represented by the outstanding Notes
(including the Guaranties), which will thereafter be deemed to be "outstanding"
only for the purposes of Section 8.05 hereof and the other Sections of this
Indenture referred to in clauses (1) and (2) below, and to have satisfied all
their other obligations under such Notes, the Guaranties 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 will survive until otherwise terminated or discharged hereunder:
(1) the rights of Holders of outstanding Notes to receive
payments in respect of the principal of, or interest or premium and
Additional Interest, if any, on such Notes when such payments are due
from the trust referred to in Section 8.04 hereof;
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(2) the Company's obligations with respect to such Notes
under Article 2 and Section 4.02 hereof;
(3) the rights, powers, trusts, duties and immunities of the
Trustee hereunder and the Company's and the Guarantors' obligations in
connection therewith; and
(4) this Article 8.
Subject to compliance with this Article 8, 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 each of the Guarantors will, subject to the satisfaction of the conditions
set forth in Section 8.04 hereof, be released from each of their obligations
under the covenants contained in Sections 4.07, 4.08, 4.09, 4.10, 4.11, 4.12,
4.13, 4.15, 4.16, 4.17, and 4.18 hereof and clause (b)(iv) of Section 5.01
hereof with respect to the outstanding Notes on and after the date the
conditions set forth in Section 8.04 hereof are satisfied (hereinafter,
"Covenant Defeasance"), and the Notes will 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 will continue to be deemed "outstanding" for all other purposes
hereunder (it being understood that such Notes will not be deemed outstanding
for accounting purposes). For this purpose, Covenant Defeasance means that, with
respect to the outstanding Notes and Guaranties, the Company and the Guarantors
may omit to comply with and will 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 will not constitute a Default
or an Event of Default under Section 6.01 hereof, but, except as specified
above, the remainder of this Indenture and such Notes and Guaranties will be
unaffected thereby. In addition, upon the Company's exercise under Section 8.01
hereof of the option applicable to this Section 8.03 hereof, subject to the
satisfaction of the conditions set forth in Section 8.04 hereof, Sections
6.01(3) through 6.01(5) hereof will not constitute Events of Default.
Section 8.04 Conditions to Legal or Covenant Defeasance. In order to
exercise either Legal Defeasance or Covenant Defeasance under either Section
8.02 or 8.03 hereof:
(1) the Company must irrevocably deposit with the Trustee, in
trust, for the benefit of the Holders, cash in U.S. dollars,
noncallable 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 expressed in a
written certification thereof delivered to the Trustee, to pay the
principal of, or interest and premium and Additional Interest, 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
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redemption date; provided that the Trustee will have been irrevocably
instructed to apply such money or the proceeds of such non-called
Government Securities to said payments with respect to the Notes;
(2) in the case of an election under Section 8.02 hereof, the
Company must deliver to the Trustee an Opinion of Counsel 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;
(3) in the case of an election under Section 8.03 hereof, the
Company must deliver to the Trustee an Opinion of Counsel 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;
(4) no Default or Event of Default shall have occurred and be
continuing on the date of such deposit, or insofar as an Event of
Default relating to certain events of bankruptcy or insolvency
described in this Indenture with respect to the Company or any of its
Restricted Subsidiaries is concerned, at any time in the period ending
on the 91st day after the date of such deposit (it being understood
that this condition will not be deemed satisfied until the expiration
of such period);
(5) such Legal Defeasance or Covenant Defeasance will not
result in a breach or violation of, or constitute a default under, this
Indenture or any material agreement or instrument to which the Company
is a party or by which the Company is bound;
(6) 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 any other creditors of the Company or others; and
(7) 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.
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Section 8.05 Deposited Money and Government Securities to be Held in
Trust; Other Miscellaneous Provisions. Subject to Section 8.06 hereof, all money
and noncallable Government Securities (including the proceeds thereof) deposited
with the Trustee (or other qualifying trustee, collectively for purposes of this
Section 8.05, the "Trustee") pursuant to Section 8.04 hereof in respect of the
outstanding Notes will 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
Additional Interest, if any, and interest, but such money need not be segregated
from other funds except to the extent required by law.
The Company will pay and indemnify the Trustee against any tax, fee or
other charge imposed on or assessed against the cash or noncallable Government
Securities deposited pursuant to Section 8.04 hereof 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.
Notwithstanding anything in this Article 8 to the contrary, the Trustee
will deliver or pay to the Company from time to time upon the request of the
Company any money or noncallable Government Securities held by it as provided in
Section 8.04 hereof 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(1) hereof), 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 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 or Additional Interest, if any, or interest on any
Note and remaining unclaimed for two years after such principal, premium or
Additional Interest, 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) will be
discharged from such trust; and the Holder of such Note will thereafter be
permitted to 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, will thereupon cease; provided,
however, that the Trustee or 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 and The Wall Street Journal (national edition),
notice that such money remains unclaimed and that, after a date specified
therein, which will not be less than 30 days from the date of such notification
or publication, any unclaimed balance of such money then remaining will be
repaid to the Company.
Section 8.07 Reinstatement. If the Trustee or Paying Agent is unable to
apply any United States dollars or noncallable Government Securities in
accordance with Section 8.02 or 8.03 hereof, 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 and
the Guarantors' obligations under this Indenture and the Notes and the
Guaranties will be revived and reinstated as though no deposit had occurred
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pursuant to Section 8.02 or 8.03 hereof 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 hereof, as the case may be; provided, however, that, if the Company makes
any payment of principal of, premium or Additional Interest, if any, or interest
on any Note following the reinstatement of its obligations, the Company will 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.
ARTICLE 9
AMENDMENT, SUPPLEMENT AND WAIVER
Section 9.01 Without Consent of Holders of Notes. Notwithstanding
Section 9.02 of this Indenture, the Company, the Guarantors and the Trustee may
amend or supplement this Indenture, the Guaranties or the Notes without the
consent of any Holder of a Note:
(1) to cure any ambiguity, defect or inconsistency;
(2) to provide for uncertificated Notes in addition to or in
place of certificated Notes or to alter the provisions of Article 2
hereof (including the related definitions) in a manner that does not
materially adversely affect any Holder;
(3) to provide for the assumption of the Company's or a
Guarantor's obligations to the Holders of the Notes by a successor to
the Company pursuant to Article 5 or Article 10 hereof;
(4) to make any change that would provide any additional
rights or benefits to the Holders of the Notes or that does not
adversely affect the legal rights hereunder of any Holder of the Notes;
(5) to comply with requirements of the SEC in order to effect
or maintain the qualification of this Indenture under the TIA;
(6) to conform the text of this Indenture, the Collateral
Agreements or the Notes to any provision of the "Description of Notes"
section of the Company's Offering Memorandum dated December 5, 2003,
relating to the initial offering of the Notes, to the extent that such
provision in that "Description of Notes" was intended to be a verbatim
recitation of a provision of this Indenture, the Collateral Agreements
or the Notes;
(7) to provide for the issuance of Additional Notes in
accordance with the limitations set forth in this Indenture as of the
date hereof;
(8) to allow any Guarantor to execute a supplemental indenture
and/or a Guaranty with respect to the Notes; or
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(9) to comply with the provisions in this Indenture regarding
the addition and release of Guarantors.
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 the documents described in Section
7.02 hereof, the Trustee will join with the Company and the Guarantors 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 will not be
obligated to enter into such amended or supplemental indenture that affects its
own rights, duties or immunities under this Indenture or otherwise.
Section 9.02 With Consent of Holders of Notes. Except as provided below
in this Section 9.02, the Company and the Trustee may amend or supplement this
Indenture (including, without limitation, Section 3.09, 4.10 and 4.15 hereof),
the Guaranties and the Notes with the consent of the Holders of at least a
majority in principal amount of the Notes (including, without limitation,
Additional Notes, if any) then outstanding voting as a single class (including,
without limitation, consents obtained in connection with a tender offer or
exchange offer for, or purchase of, the Notes), and, subject to Sections 6.04
and 6.07 hereof, any existing Default or Event of Default (other than a Default
or Event of Default in the payment of the principal of, premium or Additional
Interest, if any, or interest on the Notes, except a payment default resulting
from an acceleration that has been rescinded) or compliance with any provision
hereof, the Guaranties or the Notes may be waived with the consent of the
Holders of a majority in principal amount of the then outstanding Notes voting
as a single class (including consents obtained in connection with a tender offer
or exchange offer for, or purchase of, the Notes). Section 2.08 hereof shall
determine which Notes are considered to be "outstanding" for purposes of this
Section 9.02.
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 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 hereof, the Trustee will
join with the Company and the Guarantors in the execution of such amended or
supplemental indenture unless such amended or supplemental indenture 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 will not be
obligated to, enter into such amended or supplemental Indenture.
It is not necessary for the consent of the Holders of Notes under this
Section 9.02 to approve the particular form of any proposed amendment or waiver,
but it is sufficient if such consent approves the substance thereof.
After an amendment, supplement or waiver under this Section 9.02
becomes effective, the Company will 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, will not,
however, in any way impair or affect the validity of any such amended or
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supplemental indenture or waiver. Subject to Sections 6.04 and 6.07 hereof, the
Holders of a majority in aggregate principal amount of the Notes then
outstanding voting as a single class may waive compliance in a particular
instance by the Company with any provision hereof, the Notes, or the Guaranties.
However, without the consent of each Holder affected, an amendment, supplement
or waiver under this Section 9.02 may not (with respect to any Notes held by a
non-consenting Holder):
(1) reduce the principal amount of Notes whose Holders must
consent to an amendment, supplement or waiver;
(2) reduce the principal of or change the fixed maturity of
any Note or alter or waive any of the provisions with respect to the
redemption of the Notes (except with respect to Sections 3.09, 4.10 and
4.15 hereof);
(3) reduce the rate of or change the time for payment of
interest, including default interest, on any Note;
(4) waive a Default or Event of Default in the payment of, or
interest or premium or Additional Interest, 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 then outstanding
Notes and a waiver of the payment default that resulted from such
acceleration);
(5) make any Note payable in money other than that stated in
the Notes;
(6) 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
Additional Interest, if any, on the Notes;
(7) waive a redemption payment with respect to any Note (other
than a payment required by Sections 3.09, 4.10 or 4.15 hereof); or
(8) make any change covered by clause (6) in the
foregoing amendment and waiver provisions.
Section 9.03 Compliance with Trust Indenture Act. Every amendment or
supplement to this Indenture or the Notes will be set forth in an amended or
supplemental indenture 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
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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. 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.
Failure to make the appropriate notation or issue a new Note will not
affect the validity and effect of such amendment, supplement or waiver.
Section 9.06 Trustee to Sign Amendments, etc. The Trustee will sign any
amended or supplemental indenture authorized pursuant to this Article 9 if the
amendment or supplement does not adversely affect the rights, duties,
liabilities or immunities of the Trustee. The Company may not sign an amended or
supplemental indenture until the Board of Directors approves it. In executing
any amended or supplemental indenture, the Trustee will be entitled to receive
and (subject to Section 7.01 hereof) will be fully protected in relying upon, in
addition to the documents required by Section 13.04 hereof, an Officers'
Certificate and an Opinion of Counsel stating that the execution of such amended
or supplemental indenture is authorized or permitted by this Indenture.
ARTICLE 10
COLLATERAL AND SECURITY
Section 10.01 Collateral Agreements. The due and punctual payment of
the principal of and interest and Additional Interest, if any, on the Notes when
and as the same shall be due and payable, whether on an interest payment date,
at maturity, by acceleration, repurchase, redemption or otherwise, and interest
on the overdue principal of and interest and Additional Interest (to the extent
permitted by law), if any, on the Notes and performance of all other Obligations
of the Company and the Guarantors to the Holders of Notes or the Trustee under
this Indenture, the Notes and the Guaranties, according to the terms hereunder
or thereunder, are secured as provided in the Collateral Agreements which the
Company and the Guarantors have entered into simultaneously with the execution
of this Indenture. Each Holder of Notes, by its acceptance thereof, consents and
agrees to the terms of each of the Collateral Agreements and the Intercreditor
Agreement as the same may be in effect or may be amended from time to time in
accordance with their respective terms and authorizes and directs the Collateral
Agent (and the Trustee, in the case of the Intercreditor Agreement) to enter
into the Collateral Agreements and the Intercreditor Agreement and, in each
case, to perform its obligations and exercise its rights thereunder in
accordance therewith. The Company will deliver to the Trustee copies of all
documents delivered to the Collateral Agent pursuant to the Collateral
Agreements, and will do or cause to be done all such acts and things as may be
necessary or proper, or as may be required by the provisions of the Collateral
Agreements, to assure and confirm to the Trustee and the Collateral Agent the
security interest in the Collateral contemplated hereby, by the Collateral
Agreements or any part thereof, as from time to time constituted, so as to
render the same available for the security and benefit of this Indenture and of
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the Notes and Guaranties secured hereby, according to the intent and purposes
herein expressed. The Company will take, and will cause its Subsidiaries to
take, upon request of the Trustee, any and all actions reasonably required to
cause the Collateral Agreements to create and maintain, as security for the
Obligations of the Company hereunder, a valid and enforceable perfected first
priority Lien in and on all the Collateral, in favor of the Collateral Agent for
the benefit of the Holders of Notes, superior to and prior to the rights of all
third Persons and subject to no other Liens than Permitted Liens.
Section 10.02 Recording and Opinions.
(a) The Company will furnish to the Trustee simultaneously with the
execution and delivery of this Indenture an Opinion of Counsel either:
(1) stating that, in the opinion of such counsel, all action
has been taken with respect to the recording, registering and filing of
this Indenture, financing statements or other instruments necessary to
make effective the Lien intended to be created by the Collateral
Agreements, and reciting with respect to the security interests in the
Collateral, the details of such action; or
(2) stating that, in the opinion of such counsel, no such
action is necessary to make such Lien effective.
(b) The Company will furnish to the Collateral Agent and the Trustee on
June 1 in each year beginning with June 1, 2004, an Opinion of Counsel, dated as
of such date, either:
(1) (A) stating that, in the opinion of such counsel, action
has been taken with respect to the recording, registering, filing,
re-recording, re-registering and re-filing of all supplemental
indentures, financing statements, continuation statements or other
instruments of further assurance as is necessary to maintain the Lien
of the Collateral Agreements and reciting with respect to the security
interests in the Collateral the details of such action or referring to
prior Opinions of Counsel in which such details are given, and (B)
stating that, in the opinion of such counsel, based on relevant laws as
in effect on the date of such Opinion of Counsel, all financing
statements and continuation statements have been executed and filed
that are necessary as of such date and during the succeeding 12 months
fully to preserve and protect, to the extent such protection and
preservation are possible by filing, the rights of the Holders of Notes
and the Collateral Agent and the Trustee hereunder and under the
Collateral Agreements with respect to the security interests in the
Collateral;
(2) stating that, in the opinion of such counsel, no such
action is necessary to maintain such Lien and assignment.
(c) The Company will otherwise comply with the provisions of TIA
ss.314(b).
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Section 10.03 Release of Collateral.
(a) Subject to subsections (b), (c) and (d) of this Section 10.03,
Collateral may be released from the Lien and security interest created by the
Collateral Agreements at any time or from time to time in accordance with the
provisions of the Collateral Agreements or as provided hereby. In addition, upon
the request of the Company pursuant to an Officers' Certificate certifying that
all conditions precedent hereunder have been met and stating whether or not such
release is in connection with an Asset Sale and the Collateral Agent will
release Collateral that is sold, conveyed or disposed of in compliance with the
provisions of this Indenture; provided, that if such sale, conveyance or
disposition constitutes an Asset Sale, the Company will apply the Net Proceeds
in accordance with Section 4.10 hereof. Upon receipt of such Officers'
Certificate the Collateral Agent shall execute, deliver or acknowledge any
necessary or proper instruments of termination, satisfaction or release to
evidence the release of any Collateral permitted to be released pursuant to this
Indenture or the Collateral Agreements.
(b) No Collateral may be released from the Lien and security interest
created by the Collateral Agreements pursuant to the provisions of the
Collateral Agreements unless the certificate required by this Section 10.03 has
been delivered to the Collateral Agent.
(c) At any time when a Default or Event of Default has occurred and is
continuing and the maturity of the Notes has been accelerated (whether by
declaration or otherwise) and the Trustee has delivered a notice of acceleration
to the Collateral Agent, no release of Collateral pursuant to the provisions of
the Collateral Agreements will be effective as against the Holders of Notes.
(d) The release of any Collateral from the terms of this Indenture and
the Collateral Agreements will not be deemed to impair the security under this
Indenture in contravention of the provisions hereof if and to the extent the
Collateral is released pursuant to the terms of the Collateral Agreements and
this Indenture. To the extent applicable, the Company will cause TIA ss. 313(b),
relating to reports, and TIA ss. 314(d), relating to the release of property or
securities from the Lien and security interest of the Collateral Agreements and
relating to the substitution therefor of any property or securities to be
subjected to the Lien and security interest of the Collateral Agreements, to be
complied with. Any certificate or opinion required by TIA ss. 314(d) may be made
by an Officer of the Company except in cases where TIA ss. 314(d) requires that
such certificate or opinion be made by an independent Person, which Person will
be an independent engineer, appraiser or other expert selected or approved by
the Trustee and the Collateral Agent in the exercise of reasonable care.
Section 10.04 Certificates of the Company. The Company will furnish to
the Trustee and the Collateral Agent, prior to each proposed release of
Collateral pursuant to the Collateral Agreements:
(1) all documents required by TIA ss.314(d); and
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(2) an Opinion of Counsel, which may be rendered by internal
counsel to the Company, to the effect that such accompanying documents
constitute all documents required by TIA ss.314(d).
The Trustee may, to the extent permitted by Sections 7.01 and 7.02
hereof, accept as conclusive evidence of compliance with the foregoing
provisions the appropriate statements contained in such documents and such
Opinion of Counsel.
Section 10.05 Certificates of the Trustee. In the event that the
Company wishes to release Collateral in accordance with the Collateral
Agreements and has delivered the certificates and documents required by the
Collateral Agreements and Sections 10.03 and 10.04 hereof, the Trustee will
determine whether it has received all documentation required by TIA ss. 314(d)
in connection with such release and, based on such determination and the Opinion
of Counsel delivered pursuant to Section 10.04(2), will deliver a certificate to
the Collateral Agent setting forth such determination.
Section 10.06 Authorization of Actions to Be Taken by the Trustee Under
the Collateral Agreements. Subject to the provisions of Section 7.01 and 7.02
hereof, the Trustee may, in its sole discretion and without the consent of the
Holders of Notes, direct, on behalf of the Holders of Notes, the Collateral
Agent to, take all actions it deems necessary or appropriate in order to:
(1) enforce any of the terms of the Collateral Agreements; and
(2) collect and receive any and all amounts payable in respect
of the Obligations of the Company hereunder.
The Trustee will have power to institute and maintain such suits and
proceedings as it may deem expedient to prevent any impairment of the Collateral
by any acts that may be unlawful or in violation of the Collateral Agreements or
this Indenture, and such suits and proceedings as the Trustee may deem expedient
to preserve or protect its interests and the interests of the Holders of Notes
in the Collateral (including power to institute and maintain suits or
proceedings to restrain the enforcement of or compliance with any legislative or
other governmental enactment, rule or order that may be unconstitutional or
otherwise invalid if the enforcement of, or compliance with, such enactment,
rule or order would impair the security interest hereunder or be prejudicial to
the interests of the Holders of Notes or of the Trustee).
Section 10.07 Authorization of Receipt of Funds by the Trustee Under
the Collateral Agreements. The Trustee is authorized to receive any funds for
the benefit of the Holders of Notes distributed under the Collateral Agreements,
and to make further distributions of such funds to the Holders of Notes
according to the provisions of this Indenture.
Section 10.08 Termination of Security Interest. Upon the payment in
full of all Obligations of the Company under this Indenture and the Notes, or
upon Legal Defeasance or satisfaction and discharge of this Indenture pursuant
to Article 12, the Trustee will, at the request of the Company, deliver a
certificate to the Collateral Agent stating that such Obligations have been paid
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in full, and instruct the Collateral Agent to release the Liens pursuant to this
Indenture and the Collateral Agreements.
ARTICLE 11
GUARANTIES
Section 11.01 Guarantee.
(a) Subject to this Article 11, each of the Guarantors hereby, jointly
and severally, unconditionally guarantees on a senior secured basis 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:
(1) the principal of, premium and Additional Interest, if any,
and interest 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 and interest on the Notes, if any,
if lawful, and all other Obligations of the Company to the Holders or
the Trustee hereunder or thereunder will be promptly paid in full or
performed, all in accordance with the terms hereof and thereof; and
(2) in case of any extension of time of payment or renewal of
any Notes or any of such other Obligations, that 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.
Failing payment when due of any amount so guaranteed or any performance
so guaranteed for whatever reason, the Guarantors will 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 their Obligations hereunder are
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. 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 covenant that this Guaranty will 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 either the Company or the
Guarantors, any amount paid by either to the Trustee or such Holder, this
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Guaranty, to the extent theretofore discharged, will be reinstated in full force
and effect.
(d) Each Guarantor agrees that it will 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, (1) the maturity of the
Obligations guaranteed hereby may be accelerated as provided in Article 6 hereof
for the purposes of this Guaranty, notwithstanding any stay, injunction or other
prohibition preventing such acceleration in respect of the Obligations
guaranteed hereby, and (2) in the event of any declaration of acceleration of
such Obligations as provided in Article 6 hereof, such Obligations (whether or
not due and payable) will forthwith become due and payable by the Guarantors for
the purpose of this Guaranty. The Guarantors will 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 Guaranty.
Section 11.02 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 Guaranty of such Guarantor not constitute 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 any Guaranty. 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 that will, after giving effect to such maximum amount and 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 11, result
in the obligations of such Guarantor under its Guaranty not constituting a
fraudulent transfer or conveyance.
Section 11.03 Execution and Delivery of Guaranty. To evidence its
Guaranty set forth in Section 11.01 hereof, each Guarantor hereby agrees that a
notation of such Guaranty substantially in the form attached as Exhibit E hereto
will be endorsed by an Officer of such Guarantor on each Note authenticated and
delivered by the Trustee and that this Indenture will be executed on behalf of
such Guarantor by one of its Officers.
Each Guarantor hereby agrees that its Guaranty set forth in Section
11.01 hereof will remain in full force and effect notwithstanding any failure to
endorse on each Note a notation of such Guaranty.
If an Officer whose signature is on this Indenture or on the Guaranty
no longer holds that office at the time the Trustee authenticates the Note on
which a Guaranty is endorsed, the Guaranty will be valid nevertheless.
The delivery of any Note by the Trustee, after the authentication
thereof hereunder, will constitute due delivery of the Guaranty set forth in
this Indenture on behalf of the Guarantors.
88
Section 11.04 Guarantors May Consolidate, etc., on Certain Terms.
Except as otherwise provided in Section 11.05 hereof, no Guarantor may 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:
(1) immediately after giving effect to such transaction, no
Default or Event of Default exists; and
(2) either:
(A) subject to Section 11.05 hereof, the Person
acquiring the property in any such sale or disposition or the
Person formed by or surviving any such consolidation or merger
unconditionally assumes all the obligations of that Guarantor,
pursuant to a supplemental indenture in form and substance
reasonably satisfactory to the Trustee, under this Indenture
and the Guaranty on the terms set forth herein or therein; and
(B) the Net Proceeds of such sale or other
disposition are applied in accordance with the applicable
provisions of this Indenture, including without limitation,
Section 4.10 hereof.
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
Guaranty endorsed upon the Notes and the due and punctual performance of all of
the covenants and conditions of this Indenture to be performed by the Guarantor,
such successor Person will succeed to and be substituted for the 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 Guaranties 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 Guaranties
so issued will in all respects have the same legal rank and benefit under this
Indenture as the Guaranties theretofore and thereafter issued in accordance with
the terms of this Indenture as though all of such Guaranties had been issued at
the date of the execution hereof.
Except as set forth in Articles 4 and 5 hereof, and notwithstanding
clauses (A) and (B) above, nothing contained in this Indenture or in any of the
Notes will prevent any consolidation or merger of a Guarantor with or into the
Company or another Guarantor, or will 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 11.05 Releases.
(a) In the event of any sale or other transfer or disposition of all of
the Capital Stock of any Guarantor to any Person that is not an Affiliate of the
89
Company in compliance with the provisions of this Indenture, then such Guarantor
will be released and relieved of any Obligations under its Guaranty.
(b) In the event all Investments by Sweetheart Holdings, the Company or
any Restricted Subsidiary in such Restricted Subsidiary are sold or otherwise
transferred to a Person that is not an Affiliate of the Company in compliance
with the provisions of this Indenture, then such Guarantor will be released and
relieved of any Obligations under its Guaranty.
(c) Upon designation of any Guarantor as an Unrestricted Subsidiary in
accordance with the terms of this Indenture, such Guarantor will be released and
relieved of any Obligations under its Guaranty.
(d) Upon Legal Defeasance in accordance with Article 8 hereof or
satisfaction and discharge of this Indenture in accordance with Article 12
hereof, each Guarantor will be released and relieved of any Obligations under
its Guaranty.
Any Guarantor not released from its Obligations under its Guaranty as
provided in this Section 11.05 will remain liable for the full amount of
principal of and interest on the Notes and for the other Obligations of any
Guarantor under this Indenture as provided in this Article 11.
ARTICLE 12
SATISFACTION AND DISCHARGE
Section 12.01 Satisfaction and Discharge. This Indenture will be
discharged and will cease to be of further effect as to all Notes issued
hereunder, when:
(1) 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 mailing 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, noncallable
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, Additional Interest, if
any, and accrued interest to the date of maturity or
redemption;
90
(2) no Default or Event of Default has occurred and is
continuing on the date of such deposit (other than a Default or Event
of Default resulting from the borrowing of funds to be applied to such
deposit) and the 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;
(3) the Company or any Guarantor has paid or caused to be paid
all sums payable by it under this Indenture; and
(4) 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.
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.
Notwithstanding the satisfaction and discharge of this Indenture, if
money has been deposited with the Trustee pursuant to subclause (B) of clause
(1) of this Section, the provisions of Sections 12.02 and 8.06 will survive. In
addition, nothing in this Section 12.01 will be deemed to discharge those
provisions of Section 7.07 hereof, that, by their terms, survive the
satisfaction and discharge of this Indenture.
Section 12.02 Application of Trust Money. Subject to the provisions of
Section 8.06 hereof, all money deposited with the Trustee pursuant to Section
12.01 hereof shall be held in trust and applied by it, in accordance with the
provisions of the Notes and this Indenture, to the payment, either directly or
through any Paying Agent (including the Company acting as its own Paying Agent)
as the Trustee may determine, to the Persons entitled thereto, of the principal
(and premium, if any) and interest for whose payment such money has been
deposited with the Trustee; but such money need not be segregated from other
funds except to the extent required by law.
If the Trustee or Paying Agent is unable to apply any money or
Government Securities in accordance with Section 12.01 hereof by reason of any
legal proceeding or by reason of any order or judgment of any court or
governmental authority enjoining, restraining or otherwise prohibiting such
application, the Company's and any Guarantor's obligations under this Indenture
and the Notes shall be revived and reinstated as though no deposit had occurred
pursuant to Section 12.01 hereof; provided that if the Company has made any
payment of principal of, premium, if any, or interest on any Notes because of
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 or
Government Securities held by the Trustee or Paying Agent.
91
ARTICLE 13
MISCELLANEOUS
Section 13.01 Trust Indenture Act Controls. If any provision of this
Indenture limits, qualifies or conflicts with the duties imposed by TIA
ss.318(c), the imposed duties will control.
Section 13.02 Notices. Any notice or communication by the Company, any
Guarantor or the Trustee to the others is duly given if in writing and delivered
in Person or mailed by first class mail (registered or certified, return receipt
requested), telex, telecopier or overnight air courier guaranteeing next day
delivery, to the others' address:
If to the Company and/or any Guarantor:
Sweetheart Cup Company Inc.
c/o SF Holdings Group, Inc.
000 Xxxxxxx Xxxxxx
Xxxxxxxx, Xxx Xxxx 00000
Telecopier No.: (000) 000-0000
Attention: Xxxxxx X. Xxxxxxxx, General Counsel
with a copy to:
Xxxxxx & Xxxxxxx LLP
000 Xxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxx, Xxx Xxxx 00000
Telecopier No.: (000) 000-0000
Attention: Xxx Xxxxxxxxxxx
If to the Trustee:
Xxxxx Fargo Bank Minnesota, National Association
Corporate Trust Services
000 Xxxxx Xxxxxx, Xxxxx 000
Xxxxxxxxxx, XX 00000
Telecopier No.: 000-000-0000
Attention: Xxxxxx X. X'Xxxxxxx
The Company, any Guarantor or the Trustee, by notice to the others, may
designate additional or different addresses for subsequent notices or
communications.
All notices and communications (other than those sent to Holders) will
be deemed to have been duly given: at the time delivered by hand, if personally
delivered; five Business Days after being deposited in the mail, postage
prepaid, if mailed; when answered back, if telexed; 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.
92
Any notice or communication to a Holder will 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 will also be so mailed to any
Person described in TIA ss. 313(c), to the extent required by the TIA. Failure
to mail a notice or communication to a Holder or any defect in it will not
affect its sufficiency with respect to other Holders.
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.
If the Company mails a notice or communication to Holders, it will 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 ss. 312(b) with other Holders
with respect to their rights under this Indenture or the Notes. The Company, the
Trustee, the Registrar and anyone else shall have the protection of TIA ss.
312(c).
Section 13.04 Certificate and Opinion as to Conditions Precedent. Upon
any request or application by the Company to the Trustee to take any action
under this Indenture, the Company shall furnish to the Trustee:
(1) an Officers' Certificate in form and substance reasonably
satisfactory to the Trustee (which must 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
(2) an Opinion of Counsel in form and substance reasonably
satisfactory to the Trustee (which must include the statements set
forth in Section 13.05 hereof) stating that, in the opinion of such
counsel, all such conditions precedent and covenants have been
satisfied.
Section 13.05 Statements Required in Certificate or Opinion. 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 ss. 314(a)(4)) must comply with the provisions of TIA ss. 314(e) and must
include:
(1) a statement that the Person making such certificate or
opinion has read such covenant or condition;
(2) 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;
93
(3) a statement that, in the opinion of such Person, he or she
has made such examination or investigation as is necessary to enable
him or her to express an informed opinion as to whether or not such
covenant or condition has been satisfied; and
(4) a statement as to whether or not, in the opinion of such
Person, such condition or covenant has been satisfied.
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 past, present or future director, officer, employee,
incorporator or stockholder of the Company or any Guarantor, as such, will have
any liability for any obligations of the Company or the Guarantors under the
Notes, this Indenture, the Guaranties 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. The 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.
Section 13.08 Governing Law. THE INTERNAL LAW OF THE STATE OF NEW YORK
WILL GOVERN AND BE USED TO CONSTRUE THIS INDENTURE, THE NOTES AND THE GUARANTIES
WITHOUT GIVING EFFECT TO APPLICABLE PRINCIPLES OF CONFLICTS OF LAW TO THE EXTENT
THAT THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION WOULD BE REQUIRED
THEREBY.
Section 13.09 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 its Subsidiaries or of any other Person. Any such
indenture, loan or debt agreement may not be used to interpret this Indenture.
Section 13.10 Successors. All agreements of the Company in this
Indenture and the Notes will bind its successors. All agreements of the Trustee
in this Indenture will bind its successors. All agreements of each Guarantor in
this Indenture will bind its successors, except as otherwise provided in Section
11.05.
Section 13.11 Severability. In case any provision in this Indenture or
in the Notes is invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions will not in any way be affected or
impaired thereby.
Section 13.12 Counterpart Originals. The parties may sign any number of
copies of this Indenture. Each signed copy will be an original, but all of them
together represent the same agreement.
Section 13.13 Table of Contents, Headings, etc. The Table of Contents,
Cross-Reference Table and Headings of the Articles and Sections of this
94
Indenture have been inserted for convenience of reference only, are not to be
considered a part of this Indenture and will in no way modify or restrict any of
the terms or provisions hereof.
[Signatures on following page]
95
SIGNATURES
Dated as of December 16, 2003
SWEETHEART CUP COMPANY INC.
By:
------------------------------------------------------
Name:
Title:
SWEETHEART HOLDINGS INC.
By:
------------------------------------------------------
Name:
Title:
XXXXX FARGO BANK MINNESOTA, NATIONAL ASSOCIATION, as Trustee
By:
------------------------------------------------------
Name:
Title:
Indenture
EXHIBIT A1
A1-1
[Face of Note]
CUSIP/CINS
------------
9 1/2% Senior Secured Notes due 2007
No. $
--- ------------
SWEETHEART CUP COMPANY INC.
promises to pay to [ ] or registered assigns,
--------
the principal sum of
----------------------------------------------------------
DOLLARS on January 15, 2007.
Interest Payment Dates: January 15, April 15, July 15 and October 15.
Record Dates: January 1, April 1, July 1 and October 1.
Dated:
SWEETHEART CUP COMPANY INC.
By:
---------------------
Name:
Title:
This is one of the Notes referred to in the within-mentioned Indenture:
XXXXX FARGO BANK MINNESOTA,
NATIONAL ASSOCIATION,
as Trustee
By:
------------------------
Authorized Signatory
A1-1
[Back of Note]
9 1/2% Senior Secured Notes due 2007
[Insert the following Global Note Legend, if applicable, pursuant to the
provisions of the Indenture]
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 (1) THE TRUSTEE MAY MAKE SUCH NOTATIONS HEREON AS MAY BE REQUIRED
PURSUANT TO SECTION 2.06 OF THE INDENTURE, (2) THIS GLOBAL NOTE MAY BE EXCHANGED
IN WHOLE BUT NOT IN PART PURSUANT TO SECTION 2.06(a) OF THE INDENTURE, (3) THIS
GLOBAL NOTE MAY BE DELIVERED TO THE TRUSTEE FOR CANCELLATION PURSUANT TO SECTION
2.11 OF THE INDENTURE AND (4) THIS GLOBAL NOTE MAY BE TRANSFERRED TO A SUCCESSOR
DEPOSITARY WITH THE PRIOR WRITTEN CONSENT OF THE COMPANY.
UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR NOTES IN DEFINITIVE
FORM, THIS NOTE MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARY TO A
NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR
ANOTHER NOMINEE OF THE DEPOSITARY OR BY THE DEPOSITARY OR ANY SUCH NOMINEE TO A
SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITARY. UNLESS THIS
CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST
COMPANY (55 XXXXX XXXXXX, XXX XXXX, XXX XXXX) ("XXX"), TO THE COMPANY OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS MAY BE
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR SUCH OTHER ENTITY AS MAY BE REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
[Insert the following Private Placement Legend, if applicable, pursuant to the
provisions of the Indenture]
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, OR ANY STATE SECURITIES LAWS. NEITHER THIS SECURITY NOR ANY INTEREST OR
PARTICIPATION HEREIN MAY BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED,
ENCUMBERED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR
UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, REGISTRATION.
A1-2
THE HOLDER OF THIS SECURITY BY ITS ACCEPTANCE HEREOF (1) REPRESENTS THAT (A) IT
IS A "QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER THE
SECURITIES ACT), (B) IT IS A NON-U.S. PURCHASER AND IS ACQUIRING THIS SECURITY
IN AN OFFSHORE TRANSACTION WITHIN THE MEANING OF REGULATION S UNDER THE
SECURITIES ACT, OR (C) IT IS AN INSTITUTIONAL "ACCREDITED INVESTOR" WITHIN THE
MEANING OF SUBPARAGRAPH (a) (1), (2), (3) OR (7) OF RULE 501 UNDER THE
SECURITIES ACT, AND (2) 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 SECURITY (OR ANY PREDECESSOR OF SUCH SECURITY),
ONLY (A) TO THE COMPANY OR ANY OF ITS SUBSIDIARIES, (B) PURSUANT TO A
REGISTRATION STATEMENT WHICH HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES
ACT, (C) FOR SO LONG AS THE NOTES ARE ELIGIBLE FOR RESALE PURSUANT TO RULE 144A,
TO A PERSON IT REASONABLY BELIEVES IS A "QUALIFIED INSTITUTIONAL BUYER" AS
DEFINED IN RULE 144A UNDER THE SECURITIES ACT 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. PURCHASERS THAT OCCUR OUTSIDE THE UNITED STATES WITHIN THE
MEANING OF REGULATION S UNDER THE SECURITIES ACT, (E) TO AN INSTITUTIONAL
"ACCREDITED INVESTOR" WITHIN THE MEANING OF SUBPARAGRAPH (a)(1), (2), (3) OR (7)
OF RULE 501 UNDER THE SECURITIES ACT THAT IS ACQUIRING THE SECURITY FOR ITS OWN
ACCOUNT, OR FOR THE ACCOUNT OF SUCH AN INSTITUTIONAL ACCREDITED INVESTOR, FOR
INVESTMENT PURPOSES AND NOT WITH A VIEW TO, OR FOR OFFER OR SALE IN CONNECTION
WITH, ANY DISTRIBUTION IN VIOLATION OF THE SECURITIES ACT OR (F) PURSUANT TO
ANOTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES
ACT, SUBJECT TO THE COMPANY'S AND THE TRUSTEE'S, OR TRANSFER AGENT'S, AS
APPLICABLE, RIGHT PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER PURSUANT TO CLAUSES
(D), (E), OR (F) TO REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATION
AND/OR OTHER INFORMATION SATISFACTORY TO EACH OF THEM, AND IN EACH OF THE
FOREGOING CASES, A CERTIFICATE OF TRANSFER IN THE FORM APPEARING ON THE OTHER
SIDE OF THIS SECURITY IS COMPLETED AND DELIVERED BY THE TRANSFEROR TO THE
TRUSTEE OR TRANSFER AGENT.
Capitalized terms used herein have the meanings assigned to them in the
Indenture referred to below unless otherwise indicated.
1. Interest. Sweetheart Cup Company Inc., a Delaware corporation (the
"Company"), promises to pay interest on the principal amount of this Note at 9
1/2% per annum from [ ] until maturity and shall pay the Additional
--------------
Interest, if any, payable pursuant to Section 5 of the Registration Rights
A1-3
Agreement referred to below. The Company will pay interest and Additional
Interest, if any, quarterly in arrears on January 15, April 15, July 15 and
October 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 will accrue from the most recent date to which interest has been paid or,
if no interest has been paid, from the date of 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 [ ]. The Company will pay interest (including
--------------
post-petition interest in any proceeding under any Bankruptcy Law) on overdue
principal and premium, if any, from time to time on demand at a rate that is 1%
per annum in excess of the rate then in effect; it will pay interest (including
post-petition interest in any proceeding under any Bankruptcy Law) on overdue
installments of interest and Additional Interest, if any, (without regard to any
applicable grace periods) from time to time on demand at the same rate to the
extent lawful. Interest will be computed on the basis of a 360-day year of
twelve 30-day months.
2. Method of Payment. The Company will pay interest on the Notes
(except defaulted interest) and Additional Interest, if any, to the Persons who
are registered Holders of Notes at the close of business on the January 1, April
1, July 1 and October 1 next 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 2.12 of the Indenture with respect to
defaulted interest. The Notes will be payable as to principal, premium and
Additional Interest, if any, and interest at the office or agency of the Company
maintained for such purpose within or without the City and State of New York,
or, at the option of the Company, payment of interest and Additional Interest,
if any, may be made by check mailed to the Holders at their addresses set forth
in the register of Holders; provided that payment by wire transfer of
immediately available funds will be required with respect to principal of and
interest, premium and Additional Interest, if any, on all Global Notes and all
other Notes the Holders of which will have provided wire transfer instructions
to the Company or the Paying Agent. Such payment will 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, Xxxxx Fargo Bank Minnesota,
National Association, the Trustee under the Indenture, will act as Paying Agent
and Registrar. The Company may change any Paying Agent or Registrar without
notice to any Holder. The Company or any of its Subsidiaries may act in any such
capacity.
4. Indenture and Collateral Agreements. The Company issued the Notes
under an Indenture, dated as of December 16, 2003 (the "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
TIA (15 U.S. Code xx.xx. 77aaa-77bbbb). 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
A1-4
controlling. The Notes are secured obligations of the Company, secured by
certain property, plant and equipment of the Company pursuant to the Collateral
Agreements.
5. Optional Redemption. The Company will have the option to redeem the
Notes, in whole or in part, 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 Additional Interest, if any,
thereon to the applicable redemption date, if redeemed during the period
beginning on the date set forth below:
Year Percentage
---- ----------
December 16, 2003.......................................... 102.000%
July 15, 2006 and thereafter............................... 100.000%
6. Mandatory Redemption. The Company will not be required to make
mandatory redemption payments with respect to the Notes.
7. Repurchase at the Option of Holder.
(a) If there is a Change of Control, the Company will be required to
make an offer (a "Change of Control Offer") to repurchase all or any part (equal
to $1,000 or an integral multiple thereof) of each Holder's Notes at a purchase
price equal to 101% of the aggregate principal amount thereof plus accrued and
unpaid interest and Additional Interest thereon, if any, to the date of
purchase, subject to the rights of Holders on the relevant record date to
receive interest due on the relevant interest payment date (the "Change of
Control Payment"). Within 30 days following any Change of Control, the Company
will mail a notice to each Holder setting forth the procedures governing the
Change of Control Offer as required by the Indenture.
(b) If the Company or a Restricted Subsidiary of the Company
consummates any Asset Sales, within five days of each date on which the
aggregate amount of Excess Proceeds exceeds $5 million, the Company will
commence an offer to all Holders of Notes and all holders of other Applicable
Indebtedness containing provisions similar to those set forth in the Indenture
with respect to offers to purchase or redeem with the proceeds of sales of
assets (an "Asset Sale Offer") pursuant to Section 3.09 of the Indenture to
purchase the maximum principal amount of Notes (including any Additional Notes)
and other Applicable Indebtedness that may be purchased out of the Excess
Proceeds at an offer price in cash in an amount equal to 100% of the principal
amount thereof plus accrued and unpaid interest and Additional Interest thereon,
if any, to the date fixed for the closing of such, in accordance with the
procedures set forth in the Indenture. To the extent that the aggregate amount
of Notes (including any Additional Notes) and other Applicable Indebtedness
tendered pursuant to an Asset Sale Offer is less than the Excess Proceeds, the
Company (or such Restricted Subsidiary) may use such deficiency for any purpose
not otherwise prohibited by the Indenture. If the aggregate principal amount of
Notes and other Applicable Indebtedness surrendered by Holders thereof exceeds
the amount of Excess Proceeds, the Trustee shall select the Notes and other
Applicable Indebtedness to be purchased on a pro rata basis. Holders of Notes
that are the subject of an offer to purchase will receive an Asset Sale Offer
from the Company prior to any related purchase date and may elect to have such
A1-5
Notes purchased by completing the form entitled "Option of Holder to Elect
Purchase" attached to the Notes.
8. Notice of Redemption. Notice of redemption will be mailed or caused
to be mailed at least 30 days but not more than 60 days before the redemption
date 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 or discharge of the Indenture. Notes in denominations
larger than $1,000 may be redeemed in part but only in whole multiples of
$1,000, unless all of the Notes held by a Holder are to be redeemed. On and
after the redemption date interest ceases to accrue on Notes or portions thereof
called for redemption.
9. Denominations, Transfer, Exchange. The Notes are in registered form
without coupons in denominations of $1,000 and integral multiples of $1,000. 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 need not exchange or register the
transfer of any Note or portion of a Note selected for redemption, except for
the unredeemed portion of any Note being redeemed in part. Also, the Company
need not exchange or register the transfer of any Notes for a period of 15 days
before a selection of Notes to be redeemed or during the period between a record
date and the corresponding Interest Payment Date.
10. Persons Deemed Owners. The registered Holder of a Note may be
treated as its owner for all purposes.
11. Amendment, Supplement and Waiver. Subject to certain exceptions,
the Indenture, the Guaranties or the Notes may be amended or supplemented with
the consent of the Holders of at least a majority in principal amount of the
then outstanding Notes voting as a single class (including consents obtained in
connection with a tender offer or exchange offer for, or purchase of, the
Notes), and any existing Default or Event of Default (other than a Default or
Event of Default in the payment of principal of, premium or Additional Interest,
if any, or interest on the Notes, except a payment default resulting from an
acceleration that has been rescinded) or compliance with any provision of the
Indenture, the Guaranties or the Notes may be waived with the consent of the
Holders of a majority in principal amount of the then outstanding Notes voting
as a single class (including consents obtained in connection with a tender offer
or exchange offer for, or purchase of, the Notes). Without the consent of any
Holder of a Note, the Indenture, the Guaranties or the Notes may be amended or
supplemented to cure any ambiguity, defect or inconsistency, to provide for
uncertificated Notes in addition to or in place of certificated Notes, to
provide for the assumption of the Company's or any Guarantor's obligations to
Holders of the Notes in case of a merger or consolidation, to make any change
that would provide any additional rights or benefits to the Holders of the Notes
or that does not adversely affect the legal rights under the Indenture of any
such Holder, to comply with the requirements of the SEC in order to effect or
maintain the qualification of the Indenture under the TIA, to conform the text
of Indenture, the Collateral Agreements or the Notes to any provision of the
"Description of Notes" section of the Company's Offering Memorandum dated
December 5, 2003, relating to the initial offering of the Notes, to the extent
A1-6
that such provision in that "Description of Notes" was intended to be a verbatim
recitation of a provision of the Indenture, the Collateral Agreements or the
Notes; to provide for the Issuance of Additional Notes in accordance with the
limitations set forth in the Indenture, to allow any Guarantor to execute a
supplemental indenture to the Indenture and/or a Guaranty with respect to the
Notes, or to comply with the provisions in the Indenture regarding the addition
and release of Guarantors.
12. Defaults and Remedies. If any 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.
Notwithstanding the foregoing, in the case of an Event of Default arising from
certain events of bankruptcy or insolvency, all outstanding Notes will become
due and payable without further action or notice. Holders 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 continuing Default or Event
of Default (except a Default or Event of Default relating to the payment of
principal or interest) if it determines that withholding notice is in their
interest. The 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
under the Indenture except a continuing Default or Event of Default in the
payment of interest and Additional Interest, if any, on, or the principal of,
the Notes. The Company is required to deliver to the Trustee annually a
statement regarding compliance with the Indenture, and the Company is required
upon becoming aware of any Default or Event of Default, to deliver to the
Trustee a statement specifying such Default or Event of Default.
13. Trustee Dealings with Company. The Trustee, in its individual or
any other capacity, may make loans to, accept deposits from, and perform
services for the Company or its Affiliates, and may otherwise deal with the
Company or its Affiliates, as if it were not the Trustee.
14. No Recourse Against Others. A director, officer, employee,
incorporator or stockholder, of the Company or any of the Guarantors, as such,
will not have any liability for any obligations of the Company or such Guarantor
under the Notes, the Guaranties or the Indenture or for any claim based on, in
respect of, or by reason of, such obligations or their creation. Each Holder by
accepting a Note waives and releases all such liability. The waiver and release
are part of the consideration for the issuance of the Notes.
15. Authentication. This Note will not be valid until authenticated by
the manual signature of the Trustee or an authenticating agent.
16. Abbreviations. Customary abbreviations may be used in the name of a
Holder or an assignee, such as: TEN COM (= tenants in common), TEN ENT (=
tenants by the entireties), JT TEN (= joint tenants with right of survivorship
A1-7
and not as tenants in common), CUST (= Custodian), and U/G/M/A (= Uniform Gifts
to Minors Act).
17. Additional Rights of Holders of Restricted Global Notes and
Restricted Definitive Notes. In addition to the rights provided to Holders of
Notes under the Indenture, Holders of Restricted Global Notes and Restricted
Definitive Notes will have all the rights set forth in the Registration Rights
Agreement dated as of December 16, 2003, among the Company, the Guarantors and
the other parties named on the signature pages thereof or, in the case of
Additional Notes, Holders of Restricted Global Notes and Restricted Definitive
Notes will have the rights set forth in one or more registration rights
agreements, if any, among the Company, the Guarantors and the other parties
thereto, relating to rights given by the Company and the Guarantors to the
purchasers of any Additional Notes (collectively, the "Registration Rights
Agreement").
18. 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.
The Company will 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:
Sweetheart Cup Company Inc.
c/o SF Holdings Group, Inc.
000 Xxxxxxx Xxxxxx
Xxxxxxxx, Xxx Xxxx 00000
Telecopier No.: (000) 000-0000
Attention: Xxxxxx X. Xxxxxxxx, General Counsel
A1-8
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).
A1-9
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 4.15 of the Indenture, check the appropriate box
below:
|_| Section 4.10 |_| Section 4.15
If you want to elect to have only part of the Note purchased by the
Company pursuant to Section 4.10 or Section 4.15 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).
A1-10
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:
Date of Exchange Amount of decrease Amount of increase in Principal Amount Signature of
in Principal Amount Principal Amount [at maturity] of authorized officer
[at maturity] of [at maturity] of this Global Note of Trustee
this Global Note --------------------- following such or Custodian
this Global Note decrease
(or increase)
---------------- ------------------- --------------------- ---------------- ------------------
A1-11
* This schedule should be included only if the Note is issued in global form.
A1-12
EXHIBIT A2
[Face of Regulation S Temporary Global Note]
--------------------------------------------------------------------------------
CUSIP/CINS
------------
9 1/2% Senior Secured Notes due 2007
No. $
--- ------------
SWEETHEART CUP COMPANY INC.
promises to pay to [CEDE & CO.] or registered assigns,
-----------
the principal sum of
-----------------------------------------------------------
DOLLARS on January 15, 2007.
Interest Payment Dates: January 15, April 15, July 15 and October 15.
Record Dates: January 1, April 1, July 1 and October 1.
Dated:
SWEETHEART CUP COMPANY INC.
By:
------------------------
Name:
Title:
This is one of the Notes referred to
in the within-mentioned Indenture:
XXXXX FARGO BANK MINNESOTA,
NATIONAL ASSOCIATION,
as Trustee
By:
------------------------
Authorized Signatory
--------------------------------------------------------------------------------
A2-1
[Back of Regulation S Temporary Global Note]
9 1/2% Senior Secured Notes due 2007
THE RIGHTS ATTACHING TO THIS REGULATION S TEMPORARY GLOBAL NOTE, AND THE
CONDITIONS AND PROCEDURES GOVERNING ITS EXCHANGE FOR CERTIFICATES NOTES, ARE AS
SPECIFIED IN THE INDENTURE (AS DEFINED HEREIN). NEITHER THE HOLDER NOR THE
BENEFICIAL OWNERS OF THIS REGULATION S TEMPORARY GLOBAL NOTE SHALL BE ENTITLED
TO RECEIVE PAYMENT OF INTEREST HEREON.
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 (1) THE TRUSTEE MAY MAKE SUCH NOTATIONS HEREON AS MAY BE REQUIRED
PURSUANT TO SECTION 2.06 OF THE INDENTURE, (2) THIS GLOBAL NOTE MAY BE EXCHANGED
IN WHOLE BUT NOT IN PART PURSUANT TO SECTION 2.06(a) OF THE INDENTURE, (3) THIS
GLOBAL NOTE MAY BE DELIVERED TO THE TRUSTEE FOR CANCELLATION PURSUANT TO SECTION
2.11 OF THE INDENTURE AND (4) THIS GLOBAL NOTE MAY BE TRANSFERRED TO A SUCCESSOR
DEPOSITARY WITH THE PRIOR WRITTEN CONSENT OF THE COMPANY.
UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR NOTES IN DEFINITIVE
FORM, THIS NOTE MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARY TO A
NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR
ANOTHER NOMINEE OF THE DEPOSITARY OR BY THE DEPOSITARY OR ANY SUCH NOMINEE TO A
SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITARY. UNLESS THIS
CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST
COMPANY (55 XXXXX XXXXXX, XXX XXXX, XXX XXXX) ("XXX"), TO THE COMPANY OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS MAY BE
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR SUCH OTHER ENTITY AS MAY BE REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, OR ANY STATE SECURITIES LAWS. NEITHER THIS SECURITY NOR ANY INTEREST OR
PARTICIPATION HEREIN MAY BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED,
ENCUMBERED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR
UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, REGISTRATION.
A2-2
THE HOLDER OF THIS SECURITY BY ITS ACCEPTANCE HEREOF (1) REPRESENTS THAT (A) IT
IS A "QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER THE
SECURITIES ACT), (B) IT IS A NON-U.S. PURCHASER AND IS ACQUIRING THIS SECURITY
IN AN OFFSHORE TRANSACTION WITHIN THE MEANING OF REGULATION S UNDER THE
SECURITIES ACT, OR (C) IT IS AN INSTITUTIONAL "ACCREDITED INVESTOR" WITHIN THE
MEANING OF SUBPARAGRAPH (a) (1), (2), (3) OR (7) OF RULE 501 UNDER THE
SECURITIES ACT, AND (2) 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 SECURITY (OR ANY PREDECESSOR OF SUCH SECURITY),
ONLY (A) TO THE COMPANY OR ANY OF ITS SUBSIDIARIES, (B) PURSUANT TO A
REGISTRATION STATEMENT WHICH HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES
ACT, (C) FOR SO LONG AS THE NOTES ARE ELIGIBLE FOR RESALE PURSUANT TO RULE 144A,
TO A PERSON IT REASONABLY BELIEVES IS A "QUALIFIED INSTITUTIONAL BUYER" AS
DEFINED IN RULE 144A UNDER THE SECURITIES ACT 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. PURCHASERS THAT OCCUR OUTSIDE THE UNITED STATES WITHIN THE
MEANING OF REGULATION S UNDER THE SECURITIES ACT, (E) TO AN INSTITUTIONAL
"ACCREDITED INVESTOR" WITHIN THE MEANING OF SUBPARAGRAPH (a)(1), (2), (3) OR (7)
OF RULE 501 UNDER THE SECURITIES ACT THAT IS ACQUIRING THE SECURITY FOR ITS OWN
ACCOUNT, OR FOR THE ACCOUNT OF SUCH AN INSTITUTIONAL ACCREDITED INVESTOR, FOR
INVESTMENT PURPOSES AND NOT WITH A VIEW TO, OR FOR OFFER OR SALE IN CONNECTION
WITH, ANY DISTRIBUTION IN VIOLATION OF THE SECURITIES ACT OR (F) PURSUANT TO
ANOTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES
ACT, SUBJECT TO THE COMPANY'S AND THE TRUSTEE'S, OR TRANSFER AGENT'S, AS
APPLICABLE, RIGHT PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER PURSUANT TO CLAUSES
(D), (E), OR (F) TO REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATION
AND/OR OTHER INFORMATION SATISFACTORY TO EACH OF THEM, AND IN EACH OF THE
FOREGOING CASES, A CERTIFICATE OF TRANSFER IN THE FORM APPEARING ON THE OTHER
SIDE OF THIS SECURITY IS COMPLETED AND DELIVERED BY THE TRANSFEROR TO THE
TRUSTEE OR TRANSFER AGENT.
Capitalized terms used herein have the meanings assigned to them in the
Indenture referred to below unless otherwise indicated.
1. Interest. Sweetheart Cup Company Inc., a Delaware corporation (the
"Company"), promises to pay interest on the principal amount of this Note at 9
1/2% per annum from [ ] until maturity and shall pay the Additional
--------------
Interest, if any, payable pursuant to Section 5 of the Registration Rights
A2-3
Agreement referred to below. The Company will pay interest and Additional
Interest, if any, quarterly in arrears on January 15, April 15, July 15 and
October 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 will accrue from the most recent date to which interest has been paid or,
if no interest has been paid, from the date of 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 [ ]. The Company will pay interest (including
--------------
post-petition interest in any proceeding under any Bankruptcy Law) on overdue
principal and premium, if any, from time to time on demand at a rate that is 1%
per annum in excess of the rate then in effect; it will pay interest (including
post-petition interest in any proceeding under any Bankruptcy Law) on overdue
installments of interest and Additional Interest, if any, (without regard to any
applicable grace periods) from time to time on demand at the same rate to the
extent lawful. Interest will be computed on the basis of a 360-day year of
twelve 30-day months.
Until this Regulation S Temporary Global Note is exchanged for one or
more Regulation S Permanent Global Note, the Holder hereof shall not be entitled
to receive payments of interest hereon; until so exchanged in full, this
Regulation S Temporary Global Note shall in all other respects be entitled to
the same benefits as other Notes under the Indenture.
2. Method of Payment. The Company will pay interest on the Notes
(except defaulted interest) and Additional Interest, if any, to the Persons who
are registered Holders of Notes at the close of business on the January 1, April
1, July 1 and October 1 next 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 2.12 of the Indenture with respect to
defaulted interest. The Notes will be payable as to principal, premium and
Additional Interest, if any, and interest at the office or agency of the Company
maintained for such purpose within or without the City and State of New York,
or, at the option of the Company, payment of interest and Additional Interest,
if any, may be made by check mailed to the Holders at their addresses set forth
in the register of Holders; provided that payment by wire transfer of
immediately available funds will be required with respect to principal of and
interest, premium and Additional Interest, if any, on all Global Notes and all
other Notes the Holders of which will have provided wire transfer instructions
to the Company or the Paying Agent. Such payment will 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, Xxxxx Fargo Bank Minnesota,
National Association, the Trustee under the Indenture, will act as Paying Agent
and Registrar. The Company may change any Paying Agent or Registrar without
notice to any Holder. The Company or any of its Subsidiaries may act in any such
capacity.
4. Indenture and Collateral Agreements. The Company issued the Notes
under an Indenture, dated as of December 16, 2003 (the "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
A2-4
TIA (15 U.S. Code xx.xx. 77aaa-77bbbb). 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 Notes are secured obligations of the Company, secured by
certain property, plant and equipment of the Company pursuant to the Collateral
Agreements.
5. Optional Redemption. The Company will have the option to redeem the
Notes, in whole or in part, 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 Additional Interest, if any,
thereon to the applicable redemption date, if redeemed during the period
beginning on the date set forth below:
Year Percentage
---- ----------
December 16, 2003.................................... 102.000%
July 15, 2006 and thereafter......................... 100.000%
6. Mandatory Redemption. The Company will not be required to make
mandatory redemption payments with respect to the Notes.
7. Repurchase at the Option of Holder.
(a) If there is a Change of Control, the Company will be required to
make an offer (a "Change of Control Offer") to repurchase all or any part (equal
to $1,000 or an integral multiple thereof) of each Holder's Notes at a purchase
price equal to 101% of the aggregate principal amount thereof plus accrued and
unpaid interest and Additional Interest thereon, if any, to the date of
purchase, subject to the rights of Holders on the relevant record date to
receive interest due on the relevant interest payment date (the "Change of
Control Payment"). Within 30 days following any Change of Control, the Company
will mail a notice to each Holder setting forth the procedures governing the
Change of Control Offer as required by the Indenture.
(b) If the Company or a Restricted Subsidiary of the Company
consummates any Asset Sales, within five days of each date on which the
aggregate amount of Excess Proceeds exceeds $5 million, the Company will
commence an offer to all Holders of Notes and all holders of other Applicable
Indebtedness containing provisions similar to those set forth in the Indenture
with respect to offers to purchase or redeem with the proceeds of sales of
assets (an "Asset Sale Offer") pursuant to Section 3.09 of the Indenture to
purchase the maximum principal amount of Notes (including any Additional Notes)
and other Applicable Indebtedness that may be purchased out of the Excess
Proceeds at an offer price in cash in an amount equal to 100% of the principal
amount thereof plus accrued and unpaid interest and Additional Interest thereon,
if any, to the date fixed for the closing of such, in accordance with the
procedures set forth in the Indenture. To the extent that the aggregate amount
of Notes (including any Additional Notes) and other Applicable Indebtedness
tendered pursuant to an Asset Sale Offer is less than the Excess Proceeds, the
Company (or such Restricted Subsidiary) may use such deficiency for any purpose
not otherwise prohibited by the Indenture. If the aggregate principal amount of
Notes and other Applicable Indebtedness surrendered by Holders thereof exceeds
A2-5
the amount of Excess Proceeds, the Trustee shall select the Notes and other
Applicable Indebtedness to be purchased on a pro rata basis. Holders of Notes
that are the subject of an offer to purchase will receive an Asset Sale Offer
from the Company prior to any related purchase date and may elect to have such
Notes purchased by completing the form entitled "Option of Holder to Elect
Purchase" attached to the Notes.
8. Notice of Redemption. Notice of redemption will be mailed or caused
to be mailed at least 30 days but not more than 60 days before the redemption
date 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 or discharge of the Indenture. Notes in denominations
larger than $1,000 may be redeemed in part but only in whole multiples of
$1,000, unless all of the Notes held by a Holder are to be redeemed. On and
after the redemption date interest ceases to accrue on Notes or portions thereof
called for redemption.
9. Denominations, Transfer, Exchange. The Notes are in registered form
without coupons in denominations of $1,000 and integral multiples of $1,000. 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 need not exchange or register the
transfer of any Note or portion of a Note selected for redemption, except for
the unredeemed portion of any Note being redeemed in part. Also, the Company
need not exchange or register the transfer of any Notes for a period of 15 days
before a selection of Notes to be redeemed or during the period between a record
date and the corresponding Interest Payment Date.
This Regulation S Temporary Global Note is exchangeable in whole or in
part for one or more Global Notes only (i) on or after the termination of the
40-day restricted period (as defined in Regulation S) and (ii) upon presentation
of certificates (accompanied by an Opinion of Counsel, if applicable) required
by Article 2 of the Indenture. Upon exchange of this Regulation S Temporary
Global Note for one or more Global Notes, the Trustee shall cancel this
Regulation S Temporary Global Note.
10. Persons Deemed Owners. The registered Holder of a Note may be
treated as its owner for all purposes.
11. Amendment, Supplement and Waiver. Subject to certain exceptions,
the Indenture, the Guaranties or the Notes may be amended or supplemented with
the consent of the Holders of at least a majority in principal amount of the
then outstanding Notes voting as a single class (including consents obtained in
connection with a tender offer or exchange offer for, or purchase of, the
Notes), and any existing Default or Event of Default (other than a Default or
Event of Default in the payment of principal of, premium or Additional Interest,
if any, or interest on the Notes, except a payment default resulting from an
acceleration that has been rescinded) or compliance with any provision of the
Indenture, the Guaranties or the Notes may be waived with the consent of the
A2-6
Holders of a majority in principal amount of the then outstanding Notes voting
as a single class (including consents obtained in connection with a tender offer
or exchange offer for, or purchase of, the Notes). Without the consent of any
Holder of a Note, the Indenture, the Guaranties or the Notes may be amended or
supplemented to cure any ambiguity, defect or inconsistency, to provide for
uncertificated Notes in addition to or in place of certificated Notes, to
provide for the assumption of the Company's or any Guarantor's obligations to
Holders of the Notes in case of a merger or consolidation, to make any change
that would provide any additional rights or benefits to the Holders of the Notes
or that does not adversely affect the legal rights under the Indenture of any
such Holder, to comply with the requirements of the SEC in order to effect or
maintain the qualification of the Indenture under the TIA, to conform the text
of Indenture, the Collateral Agreements or the Notes to any provision of the
"Description of Notes" section of the Company's Offering Memorandum dated
December 5, 2003, relating to the initial offering of the Notes, to the extent
that such provision in that "Description of Notes" was intended to be a verbatim
recitation of a provision of the Indenture, the Collateral Agreements or the
Notes; to provide for the Issuance of Additional Notes in accordance with the
limitations set forth in the Indenture, to allow any Guarantor to execute a
supplemental indenture to the Indenture and/or a Guaranty with respect to the
Notes, or to comply with the provisions in the Indenture regarding the addition
and release of Guarantors.
12. Defaults and Remedies. If any 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.
Notwithstanding the foregoing, in the case of an Event of Default arising from
certain events of bankruptcy or insolvency, all outstanding Notes will become
due and payable without further action or notice. Holders 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 continuing Default or Event
of Default (except a Default or Event of Default relating to the payment of
principal or interest) if it determines that withholding notice is in their
interest. The 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
under the Indenture except a continuing Default or Event of Default in the
payment of interest and Additional Interest, if any, on, or the principal of,
the Notes. The Company is required to deliver to the Trustee annually a
statement regarding compliance with the Indenture, and the Company is required
upon becoming aware of any Default or Event of Default, to deliver to the
Trustee a statement specifying such Default or Event of Default.
13. Trustee Dealings with Company. The Trustee, in its individual or
any other capacity, may make loans to, accept deposits from, and perform
services for the Company or its Affiliates, and may otherwise deal with the
Company or its Affiliates, as if it were not the Trustee.
14. No Recourse Against Others. A director, officer, employee,
incorporator or stockholder, of the Company or any of the Guarantors, as such,
will not have any liability for any obligations of the Company or such Guarantor
under the Notes, the Guaranties or the Indenture or for any claim based on, in
A2-7
respect of, or by reason of, such obligations or their creation. Each Holder by
accepting a Note waives and releases all such liability. The waiver and release
are part of the consideration for the issuance of the Notes.
15. Authentication. This Note will not be valid until authenticated by
the manual signature of the Trustee or an authenticating agent.
16. Abbreviations. Customary abbreviations may be used in the name of a
Holder or an assignee, such as: TEN COM (= tenants in common), TEN ENT (=
tenants by the entireties), JT TEN (= joint tenants with right of survivorship
and not as tenants in common), CUST (= Custodian), and U/G/M/A (= Uniform Gifts
to Minors Act).
17. Additional Rights of Holders. In addition to the rights provided to
Holders of Notes under the Indenture, Holders of Restricted Global Notes and
Restricted Definitive Notes will have all the rights set forth in the
Registration Rights Agreement dated as of December 16, 2003, among the Company,
the Guarantors and the other parties named on the signature pages thereof or, in
the case of Additional Notes, Holders of Restricted Global Notes and Restricted
Definitive Notes will have the rights set forth in one or more registration
rights agreements, if any, among the Company, the Guarantors and the other
parties thereto, relating to rights given by the Company and the Guarantors to
the purchasers of any Additional Notes (collectively, the "Registration Rights
Agreement").
18. 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.
The Company will 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:
Sweetheart Cup Company Inc.
c/o SF Holdings Group, Inc.
000 Xxxxxxx Xxxxxx
Xxxxxxxx, Xxx Xxxx 00000
Telecopier No.: (000) 000-0000
Attention: Xxxxxx X. Xxxxxxxx, General Counsel
A2-8
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).
A2-9
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 4.15 of the Indenture, check the appropriate box
below:
|_| Section 4.10 |_| Section 4.15
If you want to elect to have only part of the Note purchased by the
Company pursuant to Section 4.10 or Section 4.15 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).
A2-10
SCHEDULE OF EXCHANGES OF REGULATION S TEMPORARY GLOBAL NOTE
The following exchanges of a part of this Regulation S Temporary Global
Note for an interest in another Global Note, or exchanges in part of another
other Restricted Global Note for an interest in this Regulation S Temporary
Global Note, have been made:
Date of Exchange Amount of decrease Amount of increase in Principal Amount Signature of
in Principal Amount Principal Amount [at maturity] of authorized officer
[at maturity] of [at maturity] of this Global Note of Trustee
this Global Note this Global Note following such or Custodian
decrease
(or increase)
---------------- ------------------- --------------------- ---------------- ------------------
A2-11
EXHIBIT B
FORM OF CERTIFICATE OF TRANSFER
Sweetheart Cup Company Inc.
c/o SF Holdings Group, Inc.
000 Xxxxxxx Xxxxxx
Xxxxxxxx, Xxx Xxxx 00000
[Registrar address block]
Re: 9 1/2% Senior Secured Notes due 2007
Reference is hereby made to the Indenture, dated as of December 16,
2003 (the "Indenture"), among Sweetheart Cup Company Inc., as issuer (the
"Company"), the Guarantors party thereto and Xxxxx Fargo Bank Minnesota,
National 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 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 Restricted 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 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 Restricted Definitive Note and
in the Indenture and the Securities Act.
2. |_| Check if Transferee will take delivery of a beneficial interest
in the Regulation S Temporary Global Note, the Regulation S Permanent Global
Note or a Restricted Definitive Note pursuant to Regulation S. The Transfer is
being effected pursuant to and in accordance with Rule 903 or Rule 904 under the
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
B-1
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) if the proposed
transfer is being made prior to the expiration of the Restricted Period, 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 Regulation S
Permanent Global Note, the Regulation S Temporary Global Note and/or the
Restricted Definitive Note and in the Indenture and the Securities Act.
3. |_| Check and complete if Transferee will take delivery of a
beneficial interest in the IAI Global Note or a Restricted Definitive Note
pursuant to any provision of the Securities Act other than 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 pursuant to and in
accordance with Rule 144 under the Securities Act;
or
(b) |_| such Transfer is being effected to the Company or a subsidiary
thereof;
or
(c) |_| such Transfer is being effected pursuant to an effective
registration statement under the Securities Act and in compliance with the
prospectus delivery requirements of the Securities Act;
or
(d) |_| 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, Rule 903 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 beneficial
interests in a Restricted Global Note or 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
B-2
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 beneficial interest or Definitive Note will be subject to the
restrictions on transfer enumerated in the Private Placement Legend printed on
the IAI Global Note and/or the Restricted 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 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 (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.
-------------------------------------------
[Insert Name of Transferor]
By:
------------------------------------
Name:
Title:
Dated:
-------------------
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
(iii)|_| IAI 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)|_| IAI Global Note (CUSIP ); or
---------
(iv) |_| 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
Sweetheart Cup Company Inc.
c/o SF Holdings Group, Inc.
000 Xxxxxxx Xxxxxx
Xxxxxxxx, Xxx Xxxx 00000
[Registrar address block]
Re: 9 1/2% Senior Secured Notes due 2007
(CUSIP )
-------------
Reference is hereby made to the Indenture, dated as of December 16,
2003 (the "Indenture"), among Sweetheart Cup Company Inc., as issuer (the
"Company"), the Guarantors party thereto and Xxxxx Fargo Bank Minnesota,
National 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 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, 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 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
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
C-1
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, 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, |_| IAI Global
Note with an equal principal amount, 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
C-2
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.
--------------------------------
[Insert Name of Transferor]
By:
-------------------------------
Name:
Title:
Dated:
-------------------
C-3
EXHIBIT D
FORM OF CERTIFICATE FROM
ACQUIRING INSTITUTIONAL ACCREDITED INVESTOR
Sweetheart Cup Company Inc.
c/o SF Holdings Group, Inc.
000 Xxxxxxx Xxxxxx
Xxxxxxxx, Xxx Xxxx 00000
[Registrar address block]
Re: 9 1/2% Senior Secured Notes due 2007
Reference is hereby made to the Indenture, dated as of December 16,
2003 (the "Indenture"), among Sweetheart Cup Company Inc., as issuer (the
"Company"), the Guarantors party thereto and Xxxxx Fargo Bank Minnesota,
National Association, as 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) |_| 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 will 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 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
D-1
(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.
You 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.
------------------------------------
[Insert Name of Accredited Investor]
By:
------------------------------
Name:
Title:
Dated:
-------------------
D-2
EXHIBIT E
[FORM OF GUARANTY]
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 the Indenture and subject to the
provisions in the Indenture dated as of December 16, 2003 (the "Indenture")
among Sweetheart Cup Company Inc., (the "Company"), the Guarantors party thereto
and Xxxxx Fargo Bank Minnesota, National Association, as trustee (the
"Trustee"), (a) the due and punctual payment of the principal of, premium and
Additional Interest, if any, and interest on, the Notes, whether at maturity, by
acceleration, redemption or otherwise, the due and punctual payment of interest
on overdue principal of and interest on the Notes, if any, if lawful, 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 (b)
in case of any extension of time of payment or renewal of any Notes or any of
such other obligations, that 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 Guaranty and the
Indenture are expressly set forth in Article 11 of the Indenture and reference
is hereby made to the Indenture for the precise terms of the Guaranty. Each
Holder of a Note, by accepting the same, (a) agrees to and shall be bound by
such provisions (b) authorizes and directs the Trustee, on behalf of such
Holder, to take such action as may be necessary or appropriate to effectuate the
subordination as provided in the Indenture and (c) appoints the Trustee
attorney-in-fact of such Holder for such purpose.
Capitalized terms used but not defined herein have the meanings given
to them in the Indenture.
[NAME OF GUARANTOR(S)]
By:
---------------------
Name:
Title:
E-1
EXHIBIT F
[FORM OF SUPPLEMENTAL INDENTURE
TO BE DELIVERED BY SUBSEQUENT GUARANTORS]
SUPPLEMENTAL INDENTURE (this "Supplemental Indenture"), dated as of
, 200 , among (the "Guaranteeing
---------------- --- -------------------
Subsidiary"), a subsidiary of (or its permitted successor),
--------------------
a [Delaware] corporation (the "Company"), the Company, the other Guarantors (as
defined in the Indenture referred to herein) and , as
--------------------
trustee under the Indenture referred to below (the "Trustee").
W I T N E S S E T H
WHEREAS, the Company has heretofore executed and delivered to the
Trustee an indenture (the "Indenture"), dated as of December 16, 2003 providing
for the issuance of 9 1/2% Senior Secured Notes due 2007 (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 unconditionally
guarantee all of the Company's Obligations under the Notes and the Indenture on
the terms and conditions set forth herein (the "Guaranty"); 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 mutually covenant and agree for the
equal and ratable benefit of the Holders of the Notes as follows:
1. Capitalized Terms. Capitalized terms used herein without definition
shall have the meanings assigned to them in the Indenture.
2. Agreement to Guarantee. The Guaranteeing Subsidiary hereby agrees to
provide an unconditional Guarantee on the terms and subject to the conditions
set forth in the Guaranty and in the Indenture including but not limited to
Article 11 thereof.
3. No Recourse Against Others. No past, present or future director,
officer, employee, incorporator, stockholder or agent of the Guaranteeing
Subsidiary, as such, shall have any liability for any obligations of the Company
or any Guaranteeing Subsidiary under the Notes, any Guaranties, the Indenture or
this Supplemental Indenture or for any claim based on, in respect of, or by
reason of, such obligations or their creation. Each Holder of the Notes by
accepting a Note waives and releases all such liability. The waiver and release
are part of the consideration for issuance of the Notes. Such waiver may not be
effective to waive liabilities under the federal securities laws and it is the
view of the SEC that such a waiver is against public policy.
F-1
4. New York Law to Govern. THE INTERNAL LAW OF THE STATE OF NEW YORK
SHALL GOVERN AND BE USED TO CONSTRUE THIS SUPPLEMENTAL INDENTURE BUT WITHOUT
GIVING EFFECT TO APPLICABLE PRINCIPLES OF CONFLICTS OF LAW TO THE EXTENT THAT
THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY.
5. Counterparts. The parties may sign any number of copies of this
Supplemental Indenture. Each signed copy shall be an original, but all of them
together represent the same agreement.
6. Effect of Headings. The Section headings herein are for convenience
only and shall not affect the construction hereof.
7. The 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.
F-2
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.
Dated: , 20
--------------- ---
[GUARANTEEING SUBSIDIARY]
By:
---------------------
Name:
Title:
[COMPANY]
By:
---------------------
Name:
Title:
[EXISTING GUARANTORS]
By:
---------------------
Name:
Title:
[TRUSTEE],
as Trustee
By:
---------------------
Authorized Signatory
F-3