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SF HOLDINGS GROUP, INC.
SERIES A AND SERIES B
13 3/4% SUBORDINATED NOTES DUE 2009
INDENTURE
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Dated as of ______ ___, 199_
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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)..................................................................................... 11.03
(c)..................................................................................... 11.03
313 (a)................................................................................. 7.06
(b)(1).................................................................................. N.A.
(b)(2).................................................................................. 7.07
(c)..................................................................................... 7.06;11.02
(d)..................................................................................... 7.06
314 (a)................................................................................. 4.03;11.02
(b)..................................................................................... N.A.
(c)(1).................................................................................. 11.04
(c)(2).................................................................................. 11.04
(c)(3).................................................................................. N.A.
(d)..................................................................................... N.A.
(e)..................................................................................... 11.05
(f)..................................................................................... N.A.
315 (a)................................................................................. 7.01
(b)..................................................................................... 7.05,11.02
(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)................................................................................. 11.01
(b)..................................................................................... N.A.
(c)..................................................................................... 11.01
N.A. means not applicable.
*This Cross-Reference Table is not part of this Indenture.
TABLE OF CONTENTS
ARTICLE 1.
DEFINITIONS AND INCORPORATION BY REFERENCE....................................................................... 1
SECTION 1.01. DEFINITIONS...................................................................................... 1
SECTION 1.02. OTHER DEFINITIONS................................................................................ 15
SECTION 1.03. INCORPORATION BY REFERENCE OF TRUST INDENTURE ACT................................................ 15
SECTION 1.04. RULES OF CONSTRUCTION............................................................................ 16
ARTICLE 2.
THE SUBORDINATED NOTES........................................................................................... 16
SECTION 2.01. FORM AND DATING.................................................................................. 16
SECTION 2.03. REGISTRAR AND PAYING AGENT....................................................................... 18
SECTION 2.04. PAYING AGENT TO HOLD MONEY IN TRUST.............................................................. 18
SECTION 2.05. HOLDER LISTS..................................................................................... 19
SECTION 2.06. TRANSFER AND EXCHANGE............................................................................ 19
SECTION 2.07. REPLACEMENT SUBORDINATED NOTES................................................................... 31
SECTION 2.08. OUTSTANDING SUBORDINATED NOTES................................................................... 31
SECTION 2.09. TREASURY SUBORDINATED NOTES...................................................................... 32
SECTION 2.10. TEMPORARY SUBORDINATED NOTES..................................................................... 32
SECTION 2.11. CANCELLATION..................................................................................... 32
SECTION 2.12. DEFAULTED INTEREST............................................................................... 33
ARTICLE 3.
REDEMPTION AND PREPAYMENT........................................................................................ 33
SECTION 3.01. NOTICES TO TRUSTEE................................................................................ 33
SECTION 3.02. SELECTION OF SUBORDINATED NOTES TO BE REDEEMED................................................... 33
SECTION 3.03. NOTICE OF REDEMPTION............................................................................. 34
SECTION 3.04. EFFECT OF NOTICE OF REDEMPTION................................................................... 34
SECTION 3.05. DEPOSIT OF REDEMPTION PRICE...................................................................... 35
SECTION 3.06. SUBORDINATED NOTES REDEEMED IN PART.............................................................. 35
SECTION 3.07. OPTIONAL REDEMPTION.............................................................................. 35
SECTION 3.08. MANDATORY REDEMPTION............................................................................. 36
SECTION 3.09. REPURCHASE OFFERS................................................................................ 36
ARTICLE 4.
COVENANTS........................................................................................................ 38
SECTION 4.01. PAYMENT OF SUBORDINATED NOTES.................................................................... 38
SECTION 4.02. MAINTENANCE OF OFFICE OR AGENCY.................................................................. 38
SECTION 4.03. REPORTS.......................................................................................... 39
SECTION 4.04. COMPLIANCE CERTIFICATE........................................................................... 39
SECTION 4.05. TAXES............................................................................................ 40
SECTION 4.06. STAY, EXTENSION AND USURY LAWS................................................................... 40
SECTION 4.07. RESTRICTED PAYMENTS.............................................................................. 40
i
SECTION 4.08. DIVIDEND AND OTHER PAYMENT RESTRICTIONS AFFECTING SUBSIDIARIES................................... 42
SECTION 4.09. INCURRENCE OF INDEBTEDNESS AND ISSUANCE OF PREFERRED STOCK....................................... 43
SECTION 4.10. ASSET SALES AND EVENTS OF LOSS. ................................................................. 45
SECTION 4.11. TRANSACTIONS WITH AFFILIATES..................................................................... 46
SECTION 4.12. LIENS............................................................................................ 46
SECTION 4.13. LINE OF BUSINESS................................................................................. 46
SECTION 4.14. CORPORATE EXISTENCE.............................................................................. 46
SECTION 4.15. OFFER TO REPURCHASE UPON CHANGE OF CONTROL....................................................... 47
SECTION 4.16. LIMITATION ON ISSUANCES AND SALES OF CAPITAL STOCK IN WHOLLY OWNED RESTRICTED SUBSIDIARIES....... 47
SECTION 4.17. PAYMENTS FOR CONSENT............................................................................. 48
ARTICLE 5.
SUCCESSORS....................................................................................................... 48
SECTION 5.01. MERGER, CONSOLIDATION, OR SALE OF ASSETS......................................................... 48
SECTION 5.02. SUCCESSOR CORPORATION SUBSTITUTED................................................................ 49
ARTICLE 6.
DEFAULTS AND REMEDIES............................................................................................ 49
SECTION 6.01. EVENTS OF DEFAULT................................................................................ 49
SECTION 6.02. ACCELERATION..................................................................................... 50
SECTION 6.03. OTHER REMEDIES................................................................................... 51
SECTION 6.04. WAIVER OF PAST DEFAULTS.......................................................................... 51
SECTION 6.05. CONTROL BY MAJORITY.............................................................................. 52
SECTION 6.06. LIMITATION ON SUITS.............................................................................. 52
SECTION 6.07. RIGHTS OF HOLDERS OF SUBORDINATED NOTES TO RECEIVE PAYMENT....................................... 52
SECTION 6.08. COLLECTION SUIT BY TRUSTEE....................................................................... 52
SECTION 6.09. TRUSTEE MAY FILE PROOFS OF CLAIM................................................................. 53
SECTION 6.10. PRIORITIES....................................................................................... 53
SECTION 6.11. UNDERTAKING FOR COSTS............................................................................ 54
ARTICLE 7.
TRUSTEE.......................................................................................................... 54
SECTION 7.01. DUTIES OF TRUSTEE................................................................................ 54
SECTION 7.02. RIGHTS OF TRUSTEE................................................................................ 55
SECTION 7.03. INDIVIDUAL RIGHTS OF TRUSTEE..................................................................... 55
SECTION 7.04. TRUSTEE'S DISCLAIMER............................................................................. 56
SECTION 7.05. NOTICE OF DEFAULTS............................................................................... 56
SECTION 7.06. REPORTS BY TRUSTEE TO HOLDERS OF THE SUBORDINATED NOTES.......................................... 56
SECTION 7.07. COMPENSATION AND INDEMNITY....................................................................... 56
SECTION 7.08. REPLACEMENT OF TRUSTEE........................................................................... 57
SECTION 7.09. SUCCESSOR TRUSTEE BY MERGER, ETC................................................................. 58
SECTION 7.10. ELIGIBILITY; DISQUALIFICATION.................................................................... 58
SECTION 7.11. PREFERENTIAL COLLECTION OF CLAIMS AGAINST THE COMPANY............................................ 58
ii
ARTICLE 8.
LEGAL DEFEASANCE AND COVENANT DEFEASANCE..................................................................... 59
SECTION 8.01. OPTION TO EFFECT LEGAL DEFEASANCE OR COVENANT DEFEASANCE. ................................... 59
SECTION 8.02. LEGAL DEFEASANCE AND DISCHARGE............................................................... 59
SECTION 8.03. COVENANT DEFEASANCE.......................................................................... 59
SECTION 8.04. CONDITIONS TO LEGAL OR COVENANT DEFEASANCE................................................... 60
SECTION 8.05. DEPOSITED MONEY AND GOVERNMENT SECURITIES TO BE HELD IN TRUST;
OTHER MISCELLANEOUS PROVISIONS............................................................... 61
SECTION 8.06. REPAYMENT TO COMPANY......................................................................... 61
SECTION 8.07. REINSTATEMENT................................................................................ 62
ARTICLE 9.
AMENDMENT, SUPPLEMENT AND WAIVER ............................................................................ 62
SECTION 9.01. WITHOUT CONSENT OF HOLDERS OF SUBORDINATED NOTES............................................. 62
SECTION 9.02. WITH CONSENT OF HOLDERS OF SUBORDINATED NOTES................................................ 63
SECTION 9.03. COMPLIANCE WITH TRUST INDENTURE ACT.......................................................... 64
SECTION 9.04. REVOCATION AND EFFECT OF CONSENTS............................................................ 64
SECTION 9.05. NOTATION ON OR EXCHANGE OF SUBORDINATED NOTES................................................ 65
SECTION 9.06. TRUSTEE TO SIGN AMENDMENTS, ETC.............................................................. 65
ARTICLE 10.
SUBORDINATION................................................................................................ 65
SECTION 10.01. AGREEMENT TO SUBORDINATE..................................................................... 65
SECTION 10.02. LIQUIDATION; DISSOLUTION; BANKRUPTCY......................................................... 65
SECTION 10.03. DEFAULT ON INDEBTEDNESS...................................................................... 66
SECTION 10.04. ACCELERATION OF SUBORDINATED NOTES........................................................... 67
SECTION 10.05. WHEN DISTRIBUTION MUST BE PAID OVER.......................................................... 67
SECTION 10.06. NOTICE BY COMPANY............................................................................ 68
SECTION 10.07. SUBROGATION.................................................................................. 68
SECTION 10.08. RELATIVE RIGHTS.............................................................................. 68
SECTION 10.09. SUBORDINATION MAY NOT BE IMPAIRED BY COMPANY................................................. 68
SECTION 10.10. DISTRIBUTION OR NOTICE TO REPRESENTATIVE..................................................... 69
SECTION 10.11. RIGHTS OF TRUSTEE AND PAYING AGENT........................................................... 69
SECTION 10.12. AUTHORIZATION TO EFFECT SUBORDINATION........................................................ 69
SECTION 10.13. AMENDMENTS................................................................................... 69
SECTION 10.14. NO WAIVER OF SUBORDINATION PROVISIONS........................................................ 70
SECTION 10.15. CERTAIN DEFINITIONS.......................................................................... 70
ARTICLE 11.
MISCELLANEOUS................................................................................................ 70
SECTION 11.01. TRUST INDENTURE ACT CONTROLS................................................................. 70
SECTION 11.02. NOTICES...................................................................................... 70
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SECTION 11.03. COMMUNICATION BY HOLDERS OF SUBORDINATED NOTES WITH OTHER
HOLDERS OF SUBORDINATED NOTES................................................................ 71
SECTION 11.04. CERTIFICATE AND OPINION AS TO CONDITIONS PRECEDENT........................................... 71
SECTION 11.05. STATEMENTS REQUIRED IN CERTIFICATE OR OPINION................................................ 72
SECTION 11.06. RULES BY TRUSTEE AND AGENTS.................................................................. 72
SECTION 11.07. NO PERSONAL LIABILITY OF DIRECTORS, OFFICERS, EMPLOYEES AND STOCKHOLDERS..................... 72
SECTION 11.08. GOVERNING LAW................................................................................ 72
SECTION 11.09. NO ADVERSE INTERPRETATION OF OTHER AGREEMENTS. .............................................. 73
SECTION 11.10. SUCCESSORS................................................................................... 73
SECTION 11.11. SEVERABILITY................................................................................. 73
SECTION 11.12. COUNTERPART ORIGINALS........................................................................ 73
SECTION 11.13. TABLE OF CONTENTS, HEADINGS, ETC............................................................. 73
iv
INDENTURE, dated as of _______ __, 199_, between SF Holdings
Group, Inc., a Delaware corporation (the "Company"), and _______________, as
trustee (the "Trustee").
The Company and the Trustee agree as follows for the benefit
of each other and for the equal and ratable benefit of the Holders of the
13 3/4% Series A Subordinated Notes due 2009 (the "Series A Subordinated
Notes") and the 13 3/4% Series B Subordinated Notes due 2009 (the "Series B
Subordinated Notes" and, together with the Series A Notes, the "Subordinated
Notes"):
ARTICLE 1.
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.01. DEFINITIONS.
"144A Global Note" means a global Subordinated Note in the
form of Exhibit A-1 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 Subordinated Notes sold in reliance
on Rule 144A.
"Acquired Debt" means, with respect to any specified Person,
(i) Indebtedness of any other Person existing at the time such other Person is
merged with or into or became a Restricted Subsidiary of such specified Person,
including, without limitation, Indebtedness incurred in connection with, or in
contemplation of, such other Person merging with or into or becoming a
Restricted Subsidiary of such specified Person, and (ii) Indebtedness secured
by a Lien encumbering any asset acquired by such specified Person.
"Affiliate" of any specified Person means any other Person
directly or indirectly controlling or controlled by or under direct or indirect
common control with such specified Person. For 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, shall mean the possession, directly or indirectly, of the power to
direct or cause the direction of the management or policies of such Person,
whether through the ownership of voting securities, by agreement or otherwise;
provided that beneficial ownership of 10% or more of the Voting Stock of a
Person shall be deemed to be control.
"Agent" means any Registrar, Paying Agent or co-registrar.
"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 Cedel that apply to such transfer
or exchange.
"Asset Sale" means (i) the sale, lease, conveyance or other
disposition of any assets or rights (including, without limitation, by way of a
sale and leaseback) other than sales of inventory in the ordinary course of
business consistent with past practices (provided that the sale, lease,
conveyance or other disposition of all or substantially all of the assets of
the Company and its Restricted Subsidiaries taken as a whole will be governed
by Section 4.15 hereof and/or Article 5 hereof and not by Section 4.10 hereof),
and (ii) the issue or sale by the Company or any of its Restricted Subsidiaries
of Equity Interests of any of the Company's Restricted Subsidiaries, in the
case of either clause (i) or (ii), whether
1
in a single transaction or a series of related transactions (a) that have a
fair market value in excess of $2.5 million or (b) for net proceeds in excess
of $2.5 million. Notwithstanding the foregoing, the following items shall not
be deemed to be Asset Sales: (i) a transfer of assets by the Company to a
Restricted Subsidiary or by a Restricted Subsidiary to the Company or to
another Restricted Subsidiary and (ii) a Restricted Payment that is permitted
by Section 4.07 hereof.
"Bankruptcy Law" means Title 11, U.S. Code or any similar
federal or state law for the relief of debtors.
"Board of Directors" means the Board of Directors of the
Company, or any authorized committee of the Board of Directors.
"Business Day" means any day other than a Legal Holiday.
"Capital Lease Obligation" means, at the time any
determination thereof is to be made, the amount of the liability in respect of
a capital lease that would at such time be required to be capitalized on a
balance sheet in accordance with GAAP.
"Capital Stock" means (i) in the case of a corporation,
corporate stock, (ii) in the case of an association or business entity, any and
all shares, interests, participations, rights or other equivalents (however
designated) of corporate stock, (iii) in the case of a partnership or limited
liability company, partnership or membership interests (whether general or
limited) and (iv) any other interest or participation that confers on a Person
the right to receive a share of the profits and losses of, or distributions of
assets of, the issuing Person, excluding stock appreciation rights issued in
the ordinary course of business.
"Cash Equivalents" means (i) United States dollars, (ii)
securities issued or directly and fully guaranteed or insured by the United
States government or any agency or instrumentality thereof (provided that the
full faith and credit of the United States is pledged in support thereof)
having maturities of not more than six months from the date of acquisition,
(iii) certificates of deposit and eurodollar time deposits with maturities of
six months or less from the date of acquisition, bankers' acceptances with
maturities not exceeding six months and overnight bank deposits, in each case
with any domestic commercial bank having capital and surplus in excess of $500
million and a ▇▇▇▇▇▇▇▇ Bank Watch Rating of "B" or better, (iv) repurchase
obligations with a term of not more than seven days for underlying securities
of the types described in clauses (ii) and (iii) above entered into with any
financial institution meeting the qualifications specified in clause (iii)
above, (v) commercial paper having the highest rating obtainable from ▇▇▇▇▇'▇
Investors Service, Inc. or Standard & Poor's Corporation and in each case
maturing within one year after the date of acquisition and (vi) money market
funds at least 95% of the assets of which constitute Cash Equivalents of the
kinds described in clauses (i) - (v) of this definition.
"Cedel" means Cedel Bank, SA.
"CEG" means Creative Expressions Group, Inc., and CEG
Holdings, LLC.
"Change of Control" means the occurrence of any of the
following: (i) the sale, lease, transfer, conveyance or other disposition
(other than by way of merger or consolidation), in one or a series of related
transactions, of all or substantially all of the assets of the Company and its
Restricted
2
Subsidiaries taken as a whole to any "person" (as such term is used in Section
13(d)(3) of the Exchange Act) or "group" (as defined in Sections 13(d)(3) and
14(d)(2) of the Exchange Act) other than the Principals, (ii) the adoption of a
plan relating to the liquidation or dissolution of the Company, (iii) the
consummation of any transaction (including, without limitation, any merger or
consolidation) the result of which is that any "person" or "group" (as defined
above), other than the Principals, becomes the "beneficial owner" (as such term
is defined in Rule 13d-3 and Rule 13d-5 under the Exchange Act, directly or
indirectly, of more of the voting power of the Voting Stock of the Company than
at that time is beneficially owned by the Principals or (iv) the first day on
which more than a majority of the members of the Board of Directors of the
Company are not Continuing Directors. For purposes of this definition, any
transfer of an equity interest of an entity that was formed for the purpose of
acquiring Voting Stock of the Company will be deemed to be a transfer of such
portion of such Voting Stock as corresponds to the portion of the equity of
such entity that has been so transferred.
The definition of Change of Control includes a phrase
relating to the sale, lease, transfer, conveyance or other disposition of "all
or substantially all" of the assets of the Company and its Subsidiaries taken
as a whole. Although there is a developing body of case law interpreting the
phrase "substantially all," there is no precise established definition of the
phrase under applicable law. Accordingly, the ability of a Holder of
Subordinated Notes to require the Company to repurchase such Subordinated Notes
as a result of a sale, lease, transfer, conveyance or other disposition of less
than all of the assets of the Company and its Subsidiaries taken as a whole to
another Person or group may be uncertain.
"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 (i) an amount equal to any extraordinary loss
plus any net loss realized in connection with an Asset Sale (to the extent such
losses were deducted in computing such Consolidated Net Income), plus (ii)
provision for taxes based on income or profits of such Person and its
Restricted Subsidiaries for such period, to the extent that such provision for
taxes was included in computing such Consolidated Net Income, plus (iii)
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 debt issuance costs and
original issue discount, non-cash interest payments, the interest component of
any deferred payment obligations, the interest component of all payments
associated with Capital Lease Obligations, 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), to the
extent that any such expense was deducted in computing such Consolidated Net
Income, plus (iv) depreciation, amortization (including amortization of
goodwill and other intangibles but excluding amortization of prepaid cash
expenses that were paid in a prior period) and other non-cash charges
(excluding any such non-cash charge to the extent that it represents an accrual
of or reserve for cash charges in any future period or amortization of a
prepaid cash expense that was paid in a prior period) of such Person and its
Restricted Subsidiaries for such period to the extent that such depreciation,
amortization and other non-cash charges were deducted in computing such
Consolidated Net Income, minus (v) non-cash items increasing such Consolidated
Net Income 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 and other non-cash charges of, a Restricted Subsidiary of the
referent Person shall be added to Consolidated Net Income to compute
Consolidated Cash Flow only to the extent that a corresponding amount would be
permitted at the date of determination to be dividended to the Company by such
Restricted Subsidiary without prior governmental approval (that has not been
obtained), and without direct or indirect restriction pursuant to
3
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 (i) 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 Restricted Subsidiary thereof, (ii) 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 that Net
Income is not at the date of determination permitted without any prior
governmental approval (that has not been obtained) or, directly or indirectly,
by operation of the terms of its charter or any agreement, instrument,
judgment, decree, order, statute, rule or governmental regulation applicable to
that Restricted Subsidiary or its stockholders, (iii) 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, (iv) the cumulative effect of a
change in accounting principles shall be excluded and (v) income of any
Unrestricted Subsidiary shall be excluded whether or not distributed to the
Company or any of its Restricted Subsidiaries.
"Consolidated Net Worth" means, with respect to any Person as
of any date, the sum of (i) the consolidated equity of the common stockholders
of such Person and its consolidated Restricted Subsidiaries as of such date
plus (ii) 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 (x) all write-ups (other than write-ups resulting from foreign
currency translations and write-ups of tangible assets of a going concern
business made within 12 months after the acquisition of such business)
subsequent to March 12, 1998 in the book value of any asset owned by such
Person or a consolidated Subsidiary of such Person, (y) all investments as of
such date in unconsolidated Subsidiaries and in Persons that are not
Subsidiaries (except, in each case, Permitted Investments), and (z) all
unamortized debt discount and expense and unamortized deferred charges as of
such date, all of the foregoing determined in accordance with GAAP.
"Continuing Directors" means, as of any date of
determination, any member of the Board of Directors of the Company who (i) was
a member of such Board of Directors on March 12, 1998 or (ii) was nominated for
election or elected to such Board of Directors with the approval of a majority
of the Continuing Directors who were members of such Board at the time of such
nomination or election.
"Corporate Trust Office of the Trustee" shall be at the
address of the Trustee specified in Section 11.02 hereof or such other address
as to which the Trustee may give notice to the Company.
"Custodian" means the Trustee, as custodian with respect to
the Subordinated Notes in global form, or any successor entity thereto.
"Default" means any event that is or with the passage of time
or the giving of notice or both would be an Event of Default.
4
"Definitive Note" means a certificated Subordinated Note
registered in the name of the Holder thereof and issued in accordance with
Section 2.06 hereof, in the form of Exhibit A-1 hereto except that such
Subordinated 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 Subordinated 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 Subordinated Notes,
until a successor shall have been appointed and become such pursuant to the
applicable provision of this Indenture, and, thereafter, "Depositary" shall
mean or include such successor.
"Disqualified Stock" means any Capital Stock that, by its
terms (or by the terms of any security into which it is convertible, or for
which it is exchangeable, at the option of the holder thereof), or upon the
happening of any event, matures or is mandatorily redeemable, pursuant to a
sinking fund obligation or otherwise, or redeemable at the option of the Holder
thereof, in whole or in part, on or prior to the date that is 91 days after the
date on which the Senior Secured Discount Notes mature; provided, however, that
any Capital Stock that would constitute Disqualified Stock solely because the
holders thereof have the right to require the Company to repurchase such
Capital Stock upon the occurrence of a Change of Control or an Asset Sale shall
not constitute Disqualified Stock if the terms of such Capital Stock provide
that the Company may not repurchase or redeem any such Capital Stock pursuant
to such provisions unless such repurchase or redemption complies with Section
4.07 hereof.
"Eligible Institution" means (a) the Trustee, (b) an
affiliate of the Trustee or (c) a commercial banking institution that is
federally chartered, has combined capital and surplus in excess of $500
million, conducts banking operations in the State of New York and whose debt is
rated "A" (or higher) according to Standard & Poor's Ratings Group or ▇▇▇▇▇'▇
Investors Service, Inc.
"Equity Interests" means Capital Stock and all warrants,
options or other rights to acquire Capital Stock (but excluding any debt
security that is convertible into, or exchangeable for, Capital Stock).
"Equity Offering" means an underwritten public offering of
common stock (other than Disqualified Stock) of the Company registered under
the Securities Act (other than a public offering registered on Form S-8 under
the Securities Act).
"Euroclear" means ▇▇▇▇▇▇ Guaranty Trust Company of New York,
Brussels office, as operator of the Euroclear system.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended.
"Exchange Notes" means the Subordinated Notes issued in the
Exchange Offer pursuant to Section 2.06(f) hereof.
"Exchange Offer" means the offer that may be made by the
Company pursuant to the Registration Rights Agreement to exchange Series B
Subordinated Notes for Series A Subordinated Notes.
5
"Exchange Offer Registration Statement" has the meaning set
forth in the Registration Rights Agreement.
"Existing Indebtedness" means Indebtedness of the Company and
its Restricted Subsidiaries in existence on March 12, 1998, including
Indebtedness represented by the Demand Note, until such amounts are repaid.
"Fixed Charges" means, with respect to any Person for any
period, the sum, without duplication, of (i) the consolidated interest expense
of such Person and its Restricted Subsidiaries for such period, whether paid or
accrued (including, without limitation, amortization of debt issuance costs and
original issue discount, non-cash interest payments, the interest component of
any deferred payment obligations, the interest component of all payments
associated with Capital Lease Obligations, 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 (ii)
the consolidated interest of such Person and its Restricted Subsidiaries that
was capitalized during such period, and (iii) 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 (iv) the product of (a) all dividend payments, whether or not in
cash, on any series of preferred stock of such Person, other than dividend
payments on Equity Interests payable solely in Equity Interests of the Company
(other than Disqualified Stock) or to the Company or a Restricted Subsidiary of
the Company, times (b) a fraction, the numerator of which is one and the
denominator of which is one minus the then current combined federal, state and
local statutory tax rate of such Person, expressed as a decimal, in each case,
on a consolidated basis and in accordance with GAAP.
"Fixed Charge Coverage Ratio" means with respect to any
Person for any period, the ratio of the Consolidated Cash Flow of such Person
for such period to the Fixed Charges of such Person for such period. In the
event that the referent Person 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, (i) acquisitions that have been made
by the Company 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 (iii) of
the proviso set forth in the definition of Consolidated Net Income, and (ii)
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 (iii) 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
Subsidiaries following the Calculation Date.
6
"▇▇▇▇▇" means The ▇▇▇▇▇ Group, Inc.
"Four M" means Four M Corporation.
"GAAP" means generally accepted accounting principles set
forth in the opinions and pronouncements of the Accounting Principles Board of
the American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board or in such other
statements by such other entity as have been approved by a significant segment
of the accounting profession, which are in effect on March 12, 1998.
"Global Notes" means, individually and collectively, each of
the Restricted Global Notes and the Unrestricted Global Notes, in the form of
Exhibit A hereto issued in accordance with Section 2.01, 2.06(b)(iv),
2.06(d)(ii) or 2.06(f) hereof.
"Global Note Legend" means the legend set forth in Section
2.06(g)(ii), which is required to be placed on all Global Notes issued under
this Indenture.
"Government Securities" means direct obligations of, or
obligations guaranteed by, the United States of America for the payment of
which guarantee or obligations the full faith and credit of the United States
is pledged.
"Guarantee" means a guarantee (other than by endorsement of
negotiable instruments for collection in the ordinary course of business),
direct or indirect, in any manner (including, without limitation, by way of a
pledge of assets or through letters of credit or reimbursement agreements in
respect thereof), of all or any part of any Indebtedness.
"Hedging Obligations" means, with respect to any Person, the
obligations of such Person under (i) interest rate swap agreements, interest
rate cap agreements and interest rate collar agreements and (ii) other
agreements or arrangements designed to protect such Person against fluctuations
in interest rates.
"Holder" means a Person in whose name a Subordinated Note is
registered.
"IAI Global Note" means the global Subordinated Note in the
form of Exhibit A-1 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 Subordinated Notes sold to
Institutional Accredited Investors.
"Indebtedness" means, with respect to any Person, any
indebtedness of such Person, whether or not contingent, in respect of borrowed
money or evidenced by bonds, notes, debentures or similar instruments or
letters of credit (or reimbursement agreements in respect thereof) or banker's
acceptances or representing Capital Lease Obligations or the balance deferred
and unpaid of the purchase price of any property or representing any Hedging
Obligations, except any such balance that constitutes an accrued expense or
trade payable, if and to the extent any of the foregoing (other than letters of
credit and Hedging Obligations) would appear as a liability upon a balance
sheet of such Person prepared in accordance with GAAP, as well as all
Indebtedness of others secured by a Lien on any asset of such Person (whether
or not such Indebtedness is assumed by such Person) and, to the extent not
7
otherwise included, the Guarantee by such Person of any indebtedness of any
other Person. The amount of any Indebtedness outstanding as of any date shall
be (i) the accreted value thereof, in the case of any Indebtedness issued with
original issue discount, and (ii) the principal amount thereof, together with
any interest thereon that is more than 30 days past due, in the case of any
other Indebtedness.
"Indenture" means this Indenture, as amended, modified or
supplemented from time to time, in accordance with the terms hereof.
"Indirect Participant" means a Person who holds a beneficial
interest in a Global Note through a Participant.
"Initial Purchaser" means Bear, ▇▇▇▇▇▇▇ & Co. Inc.
"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.
"Investments" means, with respect to any Person, all
investments by such Person in other Persons (including Affiliates) in the forms
of direct or indirect loans (including guarantees of Indebtedness or other
obligations), advances or capital contributions (excluding commission, travel
and similar advances to officers and employees made in the ordinary course of
business), purchases or other acquisitions for consideration of Indebtedness,
Equity Interests or other securities, together with all items that are or would
be classified as investments on a balance sheet prepared in accordance with
GAAP. If the Company or any Restricted Subsidiary of the Company sells or
otherwise disposes of any Equity Interests of any direct or indirect Subsidiary
of the Company such that, after giving effect to any such sale or disposition,
such Person is no longer a Subsidiary of the Company, the Company shall be
deemed to have made an Investment on the date of any such sale or disposition
equal to the fair market value of the Equity Interests of such Subsidiary not
sold or disposed of in an amount determined as provided in the final paragraph
of Section 4.07.
"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 for the intervening period.
"Letter of Transmittal" means the letter of transmittal to be
prepared by the Company and sent to all Holders of the Subordinated Notes for
use by such Holders in connection with the Exchange Offer.
"Lien" means, with respect to any asset, any mortgage, lien,
pledge, charge, security interest or encumbrance of any kind in respect of such
asset, whether or not filed, recorded or otherwise perfected under applicable
law (including any conditional sale or other title retention agreement, any
lease in the nature thereof, any option or other agreement to sell or give a
security interest in and any filing of or agreement to give any financing
statement under the Uniform Commercial Code (or equivalent statutes) of any
jurisdiction).
"Liquidated Damages" means all liquidated damages then owing
pursuant to Section 5 of the Registration Rights Agreement.
8
"Net Income" means, with respect to any Person, the net
income (loss) of such Person, determined in accordance with GAAP and before any
reduction in respect of preferred stock dividends, excluding, however, (i) 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 (ii) 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
the Company or any of its Restricted Subsidiaries in respect of any Asset Sale
(including, without limitation, any cash received upon the sale or other
disposition of any non-cash consideration received in any Asset Sale), net of
the direct costs relating to such Asset Sale (including, without limitation,
legal, accounting and investment banking fees, and sales commissions) and any
relocation expenses incurred as a result thereof, taxes paid or payable as a
result thereof (after taking into account any available tax credits or
deductions and any tax sharing arrangements), amounts required to be applied to
the repayment of Indebtedness secured by a Lien on the asset or assets that
were the subject of such Asset Sale, and any reserve for adjustment in respect
of the sale price of such asset or assets established in accordance with GAAP.
"Non-Recourse Debt" means Indebtedness (i) as to which
neither the Company 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; and (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 Subordinated Notes or the Senior Secured Discount Notes) of the
Company 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 the Company or any of its Restricted Subsidiaries.
"Non-U.S. Person" means a Person who is not a U.S. Person.
"Note Custodian" means the Trustee, as custodian with respect
to the Subordinated Notes in global form, or any successor entity thereto.
"Note Units" means the Units consisting of $144,000,000 in
aggregate principal amount at maturity of the Senior Secured Discount Notes and
288,000 shares of Class C Common Stock, par value $.001 per share, of the
Company.
"Obligations" means any principal, interest, penalties, fees,
indemnifications, reimbursements, damages and other liabilities payable under
the documentation governing any Indebtedness.
"Officer" means, with respect to any Person, the Chairman of
the Board, the Chief Executive Officer, the President, the Chief Operating
Officer, the Chief Financial Officer, the Treasurer, any Assistant Treasurer,
the Controller, the Secretary or any Vice-President of such Person.
9
"Officers' Certificate" means a certificate signed on behalf
of the Company by two Officers of the Company, one of whom must be the
principal executive officer, the principal financial officer, the treasurer or
the principal accounting officer of the Company, that meets the requirements of
Section 11.05 hereof.
"Opinion of Counsel" means an opinion from legal counsel who
is reasonably acceptable to the Trustee, that meets the requirements of Section
11.05 hereof. The counsel may be an employee of or counsel to the Company, any
Subsidiary of the Company or the Trustee.
"Participant" means, with respect to the Depositary,
Euroclear or Cedel, a Person who has an account with the Depositary, Euroclear
or Cedel, respectively (and, with respect to The Depository Trust Company,
shall include Euroclear and Cedel).
"Participating Broker-Dealer" has the meaning set forth in
the Registration Rights Agreement.
"Permitted Business" means the business of producing and
selling food service, packaging, tissue and party goods products and such other
businesses as the Company and its Restricted Subsidiaries are engaged in on
March 12, 1998, and reasonable expansions and extensions thereof.
"Permitted Investments" means (a) any Investment in the
Company or in a Restricted Subsidiary of the Company; (b) any Investment in
Cash Equivalents; (c) any Investment by the Company or any Restricted
Subsidiary of the Company in a Person that is evidenced by Capital Stock or
Subsidiary Intercompany Notes that are pledged to the trustee under the Senior
Secured Discount Notes Indenture as collateral for the Senior Secured Discount
Notes, if as a result of such Investment (i) such Person becomes a Restricted
Subsidiary of the Company or (ii) such Person is merged, consolidated or
amalgamated with or into, or transfers or conveys substantially all of its
assets to, or is liquidated into, the Company or a Restricted Subsidiary of the
Company; (d) any Investment made as a result of the receipt of non-cash
consideration from an Asset Sale that was made pursuant to and in compliance
with Section 4.10 hereof; (e) a $2.6 million loan from ▇▇▇▇▇ to CEG, as in
effect on March 12, 1998 as such loan may be amended or refinanced in a manner
not adverse to ▇▇▇▇▇, the Company or the Holders of the Subordinated Notes; and
(f) other Investments in an aggregate amount not to exceed $5.0 million.
"Permitted Liens" means (i) Liens on Indebtedness of the
Company's Restricted Subsidiaries that was permitted by the terms of this
Indenture to be incurred; (ii) Liens in favor of the Company or any of its
Restricted Subsidiaries; (iii) Liens on property of a Person existing at the
time such Person is merged 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 any Restricted Subsidiary; (iv) Liens on property existing
at the time of acquisition thereof by the Company or any Restricted Subsidiary
of the Company, provided that such Liens were in existence prior to the
contemplation of such acquisition; (v) 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; (vi)
Liens to secure Indebtedness (including Capital Lease Obligations) permitted by
clause (iv) of the third paragraph of Section 4.09 covering only the assets
acquired with such Indebtedness; (vii) Liens existing on March 12, 1998; (viii)
Liens for taxes, assessments or governmental charges or claims that are not yet
delinquent or that are being contested in good faith by appropriate proceedings
promptly instituted and diligently concluded, provided that any reserve or
other
10
appropriate provision as shall be required in conformity with GAAP shall have
been made therefor; (ix) Liens incurred in the ordinary course of business of
the Company or any Restricted Subsidiary of the Company with respect to
obligations that do not exceed $2.5 million at any one time outstanding and
that (a) are not incurred in connection with the borrowing of money or the
obtaining of advances or credit (other than trade credit in the ordinary course
of business) and (b) do not in the aggregate materially detract from the value
of the property or materially impair the use thereof in the operation of
business by the Company or such Restricted Subsidiary; (x) Liens in favor of
the Holders of Subordinated Notes or Senior Secured Discount Notes; and (xi)
renewals or refundings of any Liens referred to in clauses (iii) through (x)
above provided that any such renewal or refunding does not extend to any assets
or secure any Indebtedness not securing or secured by the Liens being renewed
or refinanced.
"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 extend, refinance, renew, replace,
defease or refund other Indebtedness of the Company or any such Restricted
Subsidiary; provided that: (i) the principal amount (or accreted value, if
applicable) of such Permitted Refinancing Indebtedness does not exceed the
principal amount of (or accreted value, if applicable), plus accrued interest
on, the Indebtedness so extended, refinanced, renewed, replaced, defeased or
refunded (plus the amount of reasonable expenses incurred in connection
therewith); (ii) such Permitted Refinancing Indebtedness has a final maturity
date later than the final maturity date of, and has a Weighted Average Life to
Maturity equal to or greater than the Weighted Average Life to Maturity of, the
Indebtedness being extended, refinanced, renewed, replaced, defeased or
refunded; (iii) if the Indebtedness being extended, refinanced, renewed,
replaced, defeased or refunded is subordinated in right of payment to the
Senior Secured Discount 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 Senior Secured Discount Notes on terms at least as
favorable to the Holders of Senior Secured Discount Notes as those contained in
the documentation governing the Indebtedness being extended, refinanced,
renewed, replaced, defeased or refunded; and (iv) such Indebtedness is incurred
either by the Company or by the Subsidiary who is the obligor on the
Indebtedness being extended, refinanced, renewed, replaced, defeased or
refunded.
"Person" means any individual, corporation, partnership,
joint venture, association, joint-stock company, limited liability company,
trust, unincorporated organization or government or agency or political
subdivision thereof (including any subdivision or ongoing business of any such
entity or substantially all of the assets of any such entity, subdivision or
business).
"Preferred Stock" means the Company's 13 3/4% Exchangeable
Preferred Stock due 2009.
"Principals" means ▇▇▇▇▇▇ ▇▇▇▇▇▇, his lineal descendants and
any trust, corporation, partnership, association, limited liability company or
other entity in which ▇▇▇▇▇▇ ▇▇▇▇▇▇ and/or his lineal descendants hold at least
80% of the total, combined outstanding voting power or similar controlling
interest.
"Private Placement Legend" means the legend set forth in
Section 2.06(g)(i) to be placed on all Subordinated Notes issued under this
Indenture except where otherwise permitted by the provisions of this Indenture.
"QIB" means a "qualified institutional buyer" as defined in
Rule 144A.
11
"Registration Rights Agreement" means the Registration Rights
Agreement, dated as of March 20, 1998, by and among the Company and the other
parties named on the signature pages thereof, as such agreement may be amended,
modified or supplemented from time to time.
"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
Subordinated Note in the form of Exhibit A-1 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
Subordinated Note in the form of Exhibit A-2 hereto bearing 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 Subordinated Notes initially sold in
reliance on Rule 903 of Regulation S.
"Responsible Officer," when used with respect to the Trustee,
means any officer within the Corporate Trust Administration department of the
Trustee (or any successor group of the Trustee) or any other officer of the
Trustee customarily performing functions similar to those performed by any of
the above designated officers and also means, with respect to a particular
corporate trust matter, any other officer to whom such matter is referred
because of his knowledge of, and familiarity with, the particular subject.
"Restricted Investment" means an Investment other than a
Permitted Investment.
"Restricted Subsidiary" of a Person means any Subsidiary of
the referent Person that is not an Unrestricted Subsidiary.
"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 Period" means the 40-day restricted period as
defined in Regulation S.
"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.
12
"SEC" means the Securities and Exchange Commission.
"Senior Secured Discount Notes" shall mean the Company's
Series A and Series B 12 3/4% Senior Secured Discount Notes due 2008.
"Senior Secured Discount Notes Indenture" shall mean the
Indenture, dated as of March 12, 1998, between the Company and the Bank of New
York, as Trustee.
"Securities Act" means the Securities Act of 1933, as amended.
"Separation Date" means the earliest to occur of (i) 90 days
from March 20, 1998; (ii) such earlier date as the Initial Purchaser may
determine; and (iii) the occurrence of a Change of Control.
"Shelf Registration Statement" means the Shelf Registration
Statement as defined in the Registration Rights Agreement.
"Significant Subsidiary" means any Restricted Subsidiary that
would be a "significant subsidiary" as defined in Article 1, Rule 1-02 of
Regulation S-X, promulgated pursuant to the Securities Act, as such Regulation
is in effect on the date hereof.
"Subordinated Note Obligations" means all Obligations of the
Company with respect to the Subordinated Notes.
"Subsidiary" means, with respect to any Person, (i) any
corporation, association or other business entity of which more than 50% of the
total voting power of shares of Capital Stock entitled (without regard to the
occurrence of any contingency) to vote in the election of directors, managers
or trustees thereof is at the time owned or controlled, directly or indirectly,
by such Person or one or more of the other Subsidiaries of that Person (or a
combination thereof) and (ii) any partnership (a) the sole general partner or
the managing general partner of which is such Person or a Subsidiary of such
Person or (b) the only general partners of which are such Person or of one or
more Subsidiaries of such Person (or any combination thereof); provided,
however, that Sweetheart shall be deemed to be a Subsidiary of the Company for
so long as the Company directly or indirectly owns at least 50% of Sweetheart's
aggregate outstanding common stock.
"Subsidiary Debt Instruments" means the instruments governing
the indebtedness of Sweetheart and ▇▇▇▇▇.
"Sweetheart" means Sweetheart Holdings Inc. and its
Subsidiaries.
"TIA" means the Trust Indenture Act of 1939 (15 U.S.C. ▇▇.▇▇.
77aaa-77bbbb), as in effect on the date on which this Indenture is qualified
under the TIA.
"Transfer Restricted Securities" means securities that bear
or are required to bear the legend set forth in Section 2.06 hereof.
"Trustee" means the party named as "Trustee" in the first
paragraph of this Indenture until a successor replaces it in accordance with
the applicable provisions of this Indenture and, thereafter, means the
successor serving hereunder.
13
"Unrestricted Global Note" means a permanent global
Subordinated Note in the form of Exhibit A-1 attached hereto that bears the
Global Note Legend and that has the "Schedule of Exchanges of Interests in the
Global Note" attached thereto, and that is deposited with or on behalf of and
registered in the name of the Depositary, representing a series of Subordinated
Notes that do not bear the Private Placement Legend.
"Unrestricted Definitive Note" means one or more Definitive
Notes that do not bear and are not required to bear the Private Placement
Legend.
"Unrestricted Subsidiary" means (i) any Subsidiary (other
than ▇▇▇▇▇ or Sweetheart or any successor to any of them) that is designated by
the Board of Directors as an Unrestricted Subsidiary pursuant to a Board
Resolution; but only to the extent that such Subsidiary: (a) has no
Indebtedness other than Non-Recourse Debt; (b) is not party to any agreement,
contract, arrangement or understanding with the Company or any Restricted
Subsidiary of the Company unless the terms of any such agreement, contract,
arrangement or understanding are no less favorable to the Company or such
Restricted Subsidiary than those that might be obtained at the time from
Persons who are not Affiliates of the Company; (c) is a Person with respect to
which neither the Company nor any of its Restricted Subsidiaries has any direct
or indirect obligation (x) to subscribe for additional Equity Interests or (y)
to maintain or preserve such Person's financial condition or to cause such
Person to achieve any specified levels of operating results; (d) has not
guaranteed or otherwise directly or indirectly provided credit support for any
Indebtedness of the Company or any of its Restricted Subsidiaries; and (e) has
at least one director on its board of directors that is not a director or
executive officer of the Company or any of its Restricted Subsidiaries and has
at least one executive officer that is not a director or executive officer of
the Company or any of its Restricted Subsidiaries. Any such designation by the
Board of Directors shall be evidenced to the Trustee by filing with the Trustee
a certified copy of the Board Resolution giving effect to such designation and
an Officers' Certificate certifying that such designation complied with the
foregoing conditions and was permitted by Section 4.07 hereof. If, at any time,
any Unrestricted Subsidiary would fail to meet the foregoing requirements as an
Unrestricted Subsidiary, it shall thereafter cease to be an Unrestricted
Subsidiary for purposes of this Indenture and any Indebtedness of such
Subsidiary shall 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 shall be in default of
such Section). The Board of Directors of the Company may at any time designate
any Unrestricted Subsidiary to be a Restricted Subsidiary; provided that such
designation shall be deemed to be an incurrence of Indebtedness by a Restricted
Subsidiary of the Company of any outstanding Indebtedness of such Unrestricted
Subsidiary and such designation shall only be permitted if (i) such
Indebtedness is permitted under Section 4.09, calculated on a pro forma basis
as if such designation had occurred at the beginning of the four-quarter
reference period, and (ii) no Default or Event of Default would be in existence
following such designation
"U.S. Person" means a U.S. person as defined in Rule 902(o)
under the Securities Act.
"Voting Stock" of any Person as of any date means the Capital
Stock of such Person that is at the time entitled to vote in the election of
the Board of Directors of such Person.
"Weighted Average Life to Maturity" means, when applied to
any Indebtedness at any date, the number of years obtained by dividing (i) the
sum of the products obtained by multiplying (a) the amount of each then
remaining installment, sinking fund, serial maturity or other required payments
of principal, including payment at final maturity, in respect thereof, by (b)
the number of years
14
(calculated to the nearest one-twelfth) that will elapse between such date and
the making of such payment, by (ii) the then outstanding principal amount of
such Indebtedness.
"Wholly Owned Restricted Subsidiary" of any Person means a
Restricted Subsidiary of such Person all of the outstanding Capital Stock or
other ownership interests of which (other than directors' qualifying shares)
shall at the time be owned by such Person or by one or more Wholly Owned
Restricted Subsidiaries of such Person and one or more Wholly Owned Restricted
Subsidiaries of such Person.
SECTION 1.02. OTHER DEFINITIONS.
Defined in
Term Section
"Affiliate Transaction".................................... 4.11
"Asset Sale"............................................... 4.10
"Asset Sale Offer"......................................... 3.09
"Authentication Order"..................................... 2.02
"Bank"..................................................... 10.11
"Bankruptcy Law"........................................... 4.01
"Change of Control Offer".................................. 3.09
"Change of Control Payment"................................ 4.15
"Change of Control Redemption" ............................ 3.07
"Covenant Defeasance"...................................... 8.03
"Event of Default"......................................... 6.01
"Excess Proceeds".......................................... 4.10
"Excess Proceeds Offer Triggering Event"................... 4.10
"incur".................................................... 4.09
"Legal Defeasance" ........................................ 8.02
"Offer Amount"............................................. 3.09
"Paying Agent"............................................. 2.03
"Paying Agent"............................................. 2.03
"Offer Period"............................................. 3.09
"Payment Default".......................................... 6.01
"Paying Agent"............................................. 2.03
"Purchase Date"............................................ 3.09
"Registrar"................................................ 2.03
"Repurchase Offer"......................................... 3.09
"Restricted Payments"...................................... 4.07
SECTION 1.03. INCORPORATION BY REFERENCE OF TRUST INDENTURE ACT.
Whenever this Indenture refers to a provision of the TIA,
such 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 Subordinated Notes;
15
"indenture security holder" means a Holder of a Subordinated
Note;
"indenture to be qualified" means this Indenture;
"indenture trustee" or "institutional trustee" means the
Trustee;
"obligor" on the Subordinated Notes means the Company and any
successor obligor upon the Subordinated Notes.
All other terms used in this Indenture that are defined by
the TIA, defined by TIA reference to another statute or defined by SEC rule
under the TIA have the meanings so assigned to them.
SECTION 1.04. RULES OF CONSTRUCTION.
Unless the context otherwise requires:
(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) provisions apply to successive events and transactions;
and
(6) references to sections of or rules under the Securities
Act shall be deemed to include substitute, replacement of successor sections or
rules adopted by the SEC from time to time.
ARTICLE 2.
THE SUBORDINATED NOTES
SECTION 2.01. FORM AND DATING.
(a) General. The Subordinated Notes and the Trustee's
certificate of authentication shall be substantially in the form of Exhibit A-1
hereto. The Subordinated Notes may have notations, legends or endorsements
required by law, stock exchange rules or usage. Each Subordinated Note shall be
dated the date of its authentication. The Subordinated Notes shall be issued
initially in denominations of $1,000 and integral multiples thereof. In
addition, Subordinated Notes may be issued in such smaller denominations as is
necessary for the payment of interest on the Subordinated Notes by the issuance
of additional Subordinated Notes pursuant to the terms thereof.
The terms and provisions contained in the Subordinated Notes
shall constitute, and are hereby expressly made, a part of this Indenture and
the Company and the Trustee, by their execution and delivery of this Indenture,
expressly agree to such terms and provisions and to be bound thereby.
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However, to the extent any provision of any Subordinated Note conflicts with
the express provisions of this Indenture, the provisions of this Indenture
shall govern and be controlling.
(b) Global Notes. Subordinated Notes issued in global form
shall be substantially in the form of Exhibits A-1 or A-2 attached hereto
(including the Global Note Legend thereon and the "Schedule of Exchanges of
Interests in the Global Note" attached thereto). Subordinated Notes issued in
definitive form shall be substantially in the form of Exhibit A-1 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
shall represent such of the outstanding Subordinated Notes as shall be
specified therein and each shall provide that it shall represent the aggregate
principal amount of outstanding Subordinated Notes from time to time endorsed
thereon and that the aggregate principal amount of outstanding Subordinated
Notes represented thereby may from time to time be reduced or increased, as
appropriate, to reflect issuances, 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 Subordinated Notes represented
thereby shall be made by the Trustee or the Subordinated Note 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. Subordinated Notes offered and
sold in reliance on Regulation S shall be issued initially in the form of the
Regulation S Temporary Global Note, which shall be deposited on behalf of the
purchasers of the Subordinated Notes represented thereby with the Trustee, at
its New York office, 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 Cedel, duly executed by the
Company and authenticated by the Trustee as hereinafter provided. The
Restricted Period shall be terminated upon the receipt by the Trustee of (i) a
written certificate from the Depositary, together with copies of certificates
from Euroclear and Cedel 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(a)(ii) hereof) and (ii) an Officers'
Certificate from the Company. Following the termination of the Restricted
Period, beneficial interests in the Regulation S Temporary Global Note shall be
exchanged for beneficial interests in Regulation S Permanent Global Notes
pursuant to the Applicable Procedures. Simultaneously with the authentication
of Regulation S Permanent Global Notes, the Trustee shall cancel the Regulation
S Temporary Global Note. The aggregate principal amount of the Regulation S
Temporary Global Note or the Regulation S Permanent Global Notes may from time
to time be increased or decreased by adjustments made on the records of the
Trustee and the Depositary or its nominee, as the case may be, in connection
with transfers of interest as hereinafter provided.
(d) Euroclear and Cedel 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 Cedel
Bank" and "Customer Handbook" of Cedel shall be applicable to transfers of
beneficial interests in the Regulation S Temporary Global Note and the
Regulation S Permanent Global Notes that are held by Participants through
Euroclear or Cedel.
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SECTION 2.02. EXECUTION AND AUTHENTICATION.
One Officer shall sign the Subordinated Notes for the Company
by manual or facsimile signature. The Company's seal shall be reproduced on the
Subordinated Notes and may be in facsimile form.
If an Officer whose signature is on a Subordinated Note no
longer holds that office at the time a Subordinated Note is authenticated, the
Subordinated Note shall nevertheless be valid.
A Subordinated Note shall not be valid until authenticated by
the manual signature of the Trustee. The signature shall be conclusive evidence
that the Subordinated Note has been authenticated under this Indenture. The
form of the Trustee's certificate of authentication to be borne by the
Subordinated Notes shall be substantially as set forth in Exhibit A-1 attached
hereto.
The Trustee shall, upon a written order of the Company signed
by an Officer (an "Authentication Order"), authenticate Subordinated Notes for
original issue up to the aggregate principal amount stated in paragraph 4 of
the Subordinated Notes. The aggregate principal amount of Subordinated Notes
outstanding at any time may not exceed such amount except as provided in
Section 2.07 hereof.
The Trustee may appoint an authenticating agent acceptable to
the Company to authenticate Subordinated Notes. An authenticating agent may
authenticate Subordinated Notes whenever the Trustee may do so. Each reference
in this Indenture to authentication by the Trustee includes authentication by
such agent. An authenticating agent has the same rights as an Agent to deal
with Holders or an Affiliate of the Company.
SECTION 2.03. REGISTRAR AND PAYING AGENT.
The Company shall maintain an office or agency where
Subordinated Notes may be presented for registration of transfer or for
exchange ("Registrar") and an office or agency where Subordinated Notes may be
presented for payment ("Paying Agent"). The Registrar shall keep a register of
the Subordinated Notes, the names and addresses of the Holders 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 shall notify the Trustee in writing of the name and address
of any Agent not a party to this Indenture. If the Company fails to appoint or
maintain another entity as Registrar or Paying Agent, the Trustee shall act as
such and shall be entitled to appropriate compensation in accordance with
Section 7.07 hereof. The Company or any of its Subsidiaries may act as Paying
Agent or Registrar. The form of the Trustee's certificate of authentication to
be borne by the Subordinated Notes shall be substantially as set forth in
Exhibit A-1 attached hereto.
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 Note Custodian with respect to the
Global Notes.
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SECTION 2.04. PAYING AGENT TO HOLD MONEY IN TRUST.
The Company shall require each Paying Agent other than the
Trustee to agree in writing that the Paying Agent will hold in trust for the
benefit of Holders or the Trustee all money held by the Paying Agent for the
payment of principal of, premium on, if any, interest on, or Liquidated Damages
on, if any, the Subordinated Notes, and will notify the Trustee of any default
by the Company in making any such payment. At any time during the continuance
of any such default, the Trustee may require a Paying Agent to pay all money
held by it as Paying Agent to the Trustee and account for any funds disbursed.
The Company, at any time, may require a Paying Agent to pay all money held by
it as Paying Agent to the Trustee and account for any funds disbursed. Upon
payment over to the Trustee, the Paying Agent (if other than the Company or a
Subsidiary) shall have no further liability for the money delivered to the
Trustee. If the Company or a Subsidiary acts as Paying Agent, it shall
segregate and hold in a separate trust fund for the benefit of the Holders all
money held by it as Paying Agent. Upon any bankruptcy or reorganization
proceedings relating to the Company, the Trustee shall serve as Paying Agent
for the Subordinated Notes.
SECTION 2.05. HOLDER LISTS.
The Trustee shall preserve in as current a form as is
reasonably practicable the most recent list available to it of the names and
addresses of all Holders and shall otherwise comply with TIA ss. 312(a). If the
Trustee is not the Registrar, the Company shall furnish to the Trustee at least
seven Business Days before each interest payment date and at such other times
as the Trustee may request in writing, a list in such form and as of such date
as the Trustee may reasonably require of the names and addresses of the Holders
of Subordinated Notes, including the aggregate principal amount of Subordinated
Notes held by each Holder thereof 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 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 (i) 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 (ii) 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(c)(3)(ii)(B) under the Securities Act. Upon the occurrence of either of the
preceding events in (i) or (ii) 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 Subordinated 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 Subordinated 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.
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(b) Transfer and Exchange of Beneficial Interests in the
Global Notes. The transfer and exchange of beneficial interests in the Global
Notes shall be effected through the Depositary, in accordance with the
provisions of this Indenture and the Applicable Procedures. Beneficial
interests in the Restricted Global Notes shall be subject to restrictions on
transfer comparable to those set forth herein to the extent required by the
Securities Act. Transfers of beneficial interests in the Global Notes also
shall require compliance with either subparagraph (i) or (ii) below, as
applicable, as well as one or more of the other following subparagraphs, as
applicable:
(i) Transfer of Beneficial Interests in the Same Global Note.
Beneficial interests in any Restricted Global Note may be transferred to
Persons who take delivery thereof in the form of a beneficial interest in the
same Restricted Global Note in accordance with the transfer restrictions set
forth in the Private Placement Legend; provided, however, that prior to the
expiration of the Restricted Period, transfers of beneficial interests in the
Temporary Regulation S Global Note may not be made to a U.S. Person or for the
account or benefit of a U.S. Person (other than an Initial Purchaser).
Beneficial interests in any Unrestricted Global Note may be transferred to
Persons who take delivery thereof in the form of a beneficial interest in an
Unrestricted Global Note. No written orders or instructions shall be required
to be delivered to the Registrar to effect the transfers described in this
Section 2.06(b)(i).
(ii) All Other Transfers and Exchanges of Beneficial
Interests in Global Notes. In connection with all transfers and exchanges of
beneficial interests that are not subject to Section 2.06(b)(i) above, the
transferor of such beneficial interest must deliver to the Registrar either (A)
(1) a written order from a Participant or an Indirect Participant given to the
Depositary in accordance with the Applicable Procedures directing the
Depositary to credit or cause to be credited a beneficial interest in another
Global Note in an amount equal to the beneficial interest to be transferred or
exchanged and (2) instructions given in accordance with the Applicable
Procedures containing information regarding the Participant account to be
credited with such increase or (B) (1) a written order from a Participant or an
Indirect Participant given to the Depositary in accordance with the Applicable
Procedures directing the Depositary to cause to be issued a Definitive Note in
an amount equal to the beneficial interest to be transferred or exchanged and
(2) instructions given by the Depositary to the Registrar containing
information regarding the Person in whose name such Definitive Note shall be
registered to effect the transfer or exchange referred to in (1) above;
provided that in no event shall Definitive Notes be issued upon the transfer or
exchange of beneficial interests in the Regulation S Temporary Global Note
prior to (x) the expiration of the Restricted Period and (y) 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)(ii) shall be deemed to have been satisfied upon receipt by the
Registrar of the instructions contained in the Letter of Transmittal delivered
by the Holder 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 Subordinated
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.
(iii) Transfer of Beneficial Interests to Another Restricted
Global Note. A beneficial interest in any Restricted Global Note may be
transferred to a Person who takes delivery thereof in the form of a beneficial
interest in another Restricted Global Note if the transfer complies with the
requirements of Section 2.06(b)(ii) above and the Registrar receives the
following:
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(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) the transferee will take delivery in the form of a
beneficial interest in the Regulation S Temporary Global 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.
(iv) Transfer and Exchange of Beneficial Interests in a
Restricted Global Note for Beneficial Interests in the 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)(ii) above and:
(A) such exchange or transfer is effected pursuant to the
Exchange Offer in accordance with the Registration Rights Agreement and the
holder of the beneficial interest to be transferred, in the case of an
exchange, or the transferee, in the case of a transfer, certifies in the
applicable Letter of Transmittal that it is not (1) a broker-dealer, (2) a
Person participating in the distribution of the Exchange Notes or (3) 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 Participating
Broker-Dealer pursuant to the Exchange Offer Registration Statement in
accordance with the Registration Rights Agreement; or
(D) the Registrar receives the following:
(1) if the holder of such beneficial interest in a Restricted
Global Note proposes to exchange such beneficial interest for a 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
(2) if the holder of such beneficial interest in a Restricted
Global Note proposes to transfer such beneficial interest to a Person who shall
take delivery thereof in the form of a beneficial interest in an Unrestricted
Global Note, a certificate from such holder in the form of Exhibit B 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
21
transfer contained herein and in the Private Placement Legend are no longer
required in order to maintain compliance with the Securities Act.
If any such transfer is effected pursuant to subparagraph (B) or (D)
above at a time when an Unrestricted Global Note has not yet been issued, the
Company shall issue and, upon receipt of an Authentication Order in accordance
with Section 2.02 hereof, the Trustee shall authenticate one or more
Unrestricted Global Notes in an aggregate principal amount equal to the
aggregate principal amount of beneficial interests transferred pursuant to
subparagraph (B) or (D) above.
Beneficial interests in an Unrestricted Global Note cannot be
exchanged for, or transferred to Persons who take delivery thereof in the form
of, a beneficial interest in a Restricted Global Note.
(c) Transfer or Exchange of Beneficial Interests for
Definitive Notes.
(i) Beneficial Interests in Restricted Global Notes to
Restricted Definitive Notes. If any holder of a beneficial interest in a
Restricted Global Note proposes to exchange such beneficial interest for a
Restricted Definitive Note or to transfer such beneficial interest to a Person
who takes delivery thereof in the form of a Restricted Definitive Note, then,
upon receipt by the Registrar of the following documentation:
(A) if the holder of such beneficial interest in a Restricted
Global Note proposes to exchange such beneficial interest for a Restricted
Definitive Note, a certificate from such holder in the form of Exhibit C
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 under the Securities Act, 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 under the Securities Act, 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 under the Securities Act, 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) 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
22
(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 Definitive 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)(i) shall bear the
Private Placement Legend and shall be subject to all restrictions on transfer
contained therein.
Notwithstanding Sections 2.06(c)(i)(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 (x) the expiration of the
Restricted Period and (y) the receipt by the Registrar of any certificates
required pursuant to Rule 903(c)(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.
(ii) 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 (1) a broker-dealer, (2) a Person participating in
the distribution of the Exchange Notes or (3) 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 Participating
Broker-Dealer pursuant to the Exchange Offer Registration Statement in
accordance with the Registration Rights Agreement; or
(D) the Registrar receives the following:
(1) if the holder of such beneficial interest in a Restricted
Global Note proposes to exchange such beneficial interest for a Definitive Note
that does not bear the Private Placement Legend, a certificate from such holder
in the form of Exhibit C hereto, including the certifications in item (1)(b)
thereof; or
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(2) if the holder of such beneficial interest in a Restricted
Global Note proposes to transfer such beneficial interest to a Person who shall
take delivery thereof in the form of a Definitive Note that does not bear the
Private Placement Legend, a certificate from such holder in the form of Exhibit
B 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.
(iii) 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)(ii) hereof, 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 pursuant to this
Section 2.06(c)(iii) 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 Definitive Notes are so
registered. Any Definitive Note issued in exchange for a beneficial interest
pursuant to this Section 2.06(c)(iii) shall not bear the Private Placement
Legend.
(d) Transfer and Exchange of Definitive Notes for Beneficial
Interests.
(i) Restricted Definitive Notes to Beneficial Interests in
Restricted Global Notes. If any Holder of a Restricted Definitive Note proposes
to exchange such Restricted Definitive 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 Subordinated 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 under the Securities Act, 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 under the Securities Act, a certificate to the effect set forth in
Exhibit B hereto, including the certifications in item (2) thereof;
24
(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 under the Securities Act, 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 shall 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
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.
(ii) Restricted Definitive Notes to Beneficial Interests in
Unrestricted Global Notes. A Holder of a Restricted Definitive Note may
exchange such Restricted Definitive 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 (1)
a broker-dealer, (2) a Person participating in the distribution of the Exchange
Notes or (3) 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 Participating
Broker-Dealer pursuant to the Exchange Offer Registration Statement in
accordance with the Registration Rights Agreement; or
(D) the Registrar receives the following:
(1) if the Holder of such Definitive Notes proposes to
exchange such Subordinated 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
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(2) if the Holder of such Definitive Notes proposes to
transfer such Subordinated 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)(ii), the Trustee shall cancel the
Definitive Notes and increase or cause to be increased the aggregate principal
amount of the Unrestricted Global Note.
(iii) Unrestricted Definitive Notes to Beneficial Interests
in Unrestricted Global Notes. A Holder of an Unrestricted Definitive Note may
exchange such Unrestricted Definitive 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 shall cancel the applicable Unrestricted Definitive Note
and increase or cause to be increased the aggregate principal amount of one of
the Unrestricted Global Notes.
If any such exchange or transfer from a Definitive Note to a
beneficial interest is effected pursuant to subparagraphs (ii)(B), (ii)(D) or
(iii) above at a time when an Unrestricted Global Note has not yet been issued,
the Company shall issue and, upon receipt of an Authentication Order in
accordance with Section 2.02 hereof, the Trustee shall authenticate one 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 shall
register the transfer or exchange of Definitive Notes. Prior to such
registration of transfer or exchange, the requesting Holder shall present or
surrender to the Registrar the Definitive Notes duly endorsed or accompanied by
a written instruction of transfer in form satisfactory to the Registrar duly
executed by such Holder or by his attorney, duly authorized in writing. In
addition, the requesting Holder shall provide any additional certifications,
documents and information, as applicable, required pursuant to the following
provisions of this Section 2.06(e).
(i) Restricted Definitive Notes to Restricted Definitive
Notes. Any Restricted Definitive Note may be transferred to and registered in
the name of Persons who take delivery thereof in the form of a Restricted
Definitive Note if the Registrar receives the following:
(A) if the transfer will be made pursuant to Rule 144A under
the Securities Act, then the transferor must deliver a certificate in the form
of Exhibit B hereto, including the certifications in item (1) thereof;
26
(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.
(ii) Restricted Definitive Notes to Unrestricted Definitive
Notes. Any Restricted Definitive Note may be exchanged by the Holder thereof
for an Unrestricted Definitive Note or transferred to a Person or Persons who
take delivery thereof in the form of an Unrestricted Definitive Note if:
(A) such exchange or transfer is effected pursuant to the
Exchange Offer in accordance with the Registration Rights Agreement and the
Holder, in the case of an exchange, or the transferee, in the case of a
transfer, certifies in the applicable Letter of Transmittal that it is not (1)
a broker-dealer, (2) a Person participating in the distribution of the Exchange
Notes or (3) 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 Participating
Broker-Dealer pursuant to the Exchange Offer Registration Statement in
accordance with the Registration Rights Agreement; or
(D) the Registrar receives the following:
(1) if the Holder of such Restricted Definitive 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
(2) if the Holder of such Restricted Definitive Notes
proposes to transfer such Definitive 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 Company to the effect that such exchange or transfer is in compliance
with the Securities Act and that the restrictions on transfer contained herein
and in the Private Placement Legend are no longer required in order to maintain
compliance with the Securities Act.
(iii) Unrestricted Definitive Notes to Unrestricted
Definitive Notes. A Holder of Unrestricted Definitive Notes may transfer such
Unrestricted Definitive 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.
27
(f) Exchange Offer. Upon the occurrence of the Exchange Offer
in accordance with the Registration Rights Agreement, the Company shall issue
and, upon receipt of an Authentication Order in accordance with Section 2.02,
the Trustee shall authenticate (i) one or more Unrestricted Global Notes in an
aggregate principal amount equal to the principal amount of the beneficial
interests in the Restricted Global Notes tendered for acceptance by Persons
that certify in the applicable Letters of Transmittal that (x) they are not
broker-dealers, (y) they are not participating in a distribution of the
Exchange Notes and (z) they are not affiliates (as defined in Rule 144) of the
Company, and accepted for exchange in the Exchange Offer and (ii) Definitive
Notes in an aggregate principal amount equal to the principal amount of the
Restricted Definitive Notes accepted for exchange in the Exchange Offer.
Concurrently with the issuance of such Notes, the Trustee shall cause the
aggregate principal amount of the applicable Restricted Global Notes to be
reduced accordingly, and the Company shall execute and the Trustee shall
authenticate and deliver to the Persons designated by the Holders of Definitive
Notes so accepted Definitive Notes in the appropriate principal amount.
(g) Legends. The following legends shall appear on the face
of all Global Notes and Definitive Notes issued under this Indenture unless
specifically stated otherwise in the applicable provisions of this Indenture.
(i) Private Placement Legend.
(A) Except as permitted by subparagraphs (B) and (C) below,
each Global Note and each Definitive Note (and all Subordinated Notes issued in
exchange therefor or substitution thereof) shall bear the legend in
substantially the following:
"THIS SECURITY (OR ITS PREDECESSOR) HAS NOT BEEN REGISTERED UNDER THE
UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES
ACT") AND, ACCORDINGLY, MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE
TRANSFERRED WITHIN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR
BENEFIT OF, U.S. PERSONS, EXCEPT AS SET FORTH IN THE NEXT SENTENCE. BY
ITS ACQUISITION HEREOF OR OF A BENEFICIAL INTEREST HEREIN, THE HOLDER
REPRESENTS THAT (A) IT IS A "QUALIFIED INSTITUTIONAL BUYER" (AS
DEFINED IN RULE 144A UNDER THE SECURITIES ACT) (A "QIB"), (B) IT HAS
ACQUIRED THIS SECURITY IN AN OFFSHORE TRANSACTION IN COMPLIANCE WITH
REGULATION S UNDER THE SECURITIES ACT OR (C) IT IS AN INSTITUTIONAL
"ACCREDITED INVESTOR" (AS DEFINED IN RULE 501(A)(1), (2), (3) OR (7)
OF REGULATION D UNDER THE SECURITIES ACT) (AN "IAI"), AGREES THAT IT
WILL NOT RESELL OR OTHERWISE TRANSFER THIS SECURITY EXCEPT (A) TO THE
COMPANY OR ANY OF ITS SUBSIDIARIES (B) TO A PERSON WHOM THE SELLER
REASONABLY BELIEVES IS A QIB PURCHASING FOR ITS OWN ACCOUNT OR FOR THE
ACCOUNT OF A QIB IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE
144A, (C) IN AN OFFSHORE TRANSACTION MEETING THE REQUIREMENTS OF RULE
903 OR 904 OF THE SECURITIES ACT, (D) IN A TRANSACTION MEETING THE
REQUIREMENTS OF RULE 144 UNDER THE SECURITIES ACT, (E) TO AN IAI THAT,
PRIOR TO SUCH TRANSFER, FURNISHES TO THE TRUSTEE A SIGNED LETTER
CONTAINING CERTAIN REPRESENTATIONS AND AGREEMENTS RELATING TO THE
TRANSFER OF THIS SECURITY (THE FORM OF WHICH LETTER CAN BE OBTAINED
FROM THE TRUSTEE) AND, IF SUCH TRANSFER IS IN RESPECT OF AN AGGREGATE
PRINCIPAL AMOUNT OF SECURITIES LESS THAN $250,000, AN OPINION OF
COUNSEL
28
ACCEPTABLE TO THE COMPANY THAT SUCH TRANSFER IS IN COMPLIANCE WITH THE
SECURITIES ACT OR (F) IN ACCORDANCE WITH ANOTHER EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT (AND BASED UPON AN
OPINION OF COUNSEL ACCEPTABLE TO THE COMPANY) OR (G)PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT AND, IN EACH CASE, IN ACCORDANCE WITH
THE APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES OR
ANY OTHER APPLICABLE JURISDICTION; AND AGREES THAT IT WILL DELIVER TO
EACH PERSON TO WHOM THIS SECURITY OR AN INTEREST HEREIN IS TRANSFERRED
A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND. AS USED HEREIN,
THE TERMS "OFFSHORE TRANSACTION" AND "UNITED STATES" HAVE THE MEANINGS
GIVEN TO THEM BY RULE 902 OF REGULATION S UNDER THE SECURITIES ACT.
THE INDENTURE CONTAINS A PROVISION REQUIRING THE TRUSTEE TO REFUSE TO
REGISTER ANY TRANSFER OF THIS SECURITY IN VIOLATION OF THE FOREGOING."
(B) Notwithstanding the foregoing:
(I) any Global Note or Definitive Note issued pursuant to
subparagraphs (b)(iv), (c)(ii), (c)(iii), (d)(ii), (d)(iii), (e)(ii), (e)(iii)
or (f) to this Section 2.06 (and all Subordinated Notes issued in exchange
therefor or substitution thereof) shall not bear the Private Placement Legend;
(II) in connection with the original issuance of the
Subordinated Notes by the Company in exchange for shares of the Preferred
Stock, the Global Notes and/or Definitive Notes issued shall not bear the
Private Placement Legend if the certificates representing the shares of
Preferred Stock in respect of which such Global Notes and/or Definitive Notes
are issued do not bear a comparable private placement legend at such time; and
(III) in connection with the payment of interest on the
Subordinated Notes by the issuance of additional Subordinated Notes pursuant to
the terms thereof, any Global Note or Definitive Note issued shall only bear
the Private Placement Legend if the Global Note or Definitive Note in respect
of which such Global Note or Definitive Note is issued bears the Private
Placement Legend at such time.
(ii) Global Note Legend. Each Global Note shall bear a legend
in substantially the following form:
"THIS GLOBAL NOTE IS HELD BY THE DEPOSITARY (AS DEFINED IN THE
INDENTURE GOVERNING THIS SECURITY) OR ITS NOMINEE IN CUSTODY FOR THE
BENEFIT OF THE BENEFICIAL OWNERS HEREOF, AND IS NOT TRANSFERABLE TO
ANY PERSON UNDER ANY CIRCUMSTANCES EXCEPT THAT (I) THE TRUSTEE MAY
MAKE SUCH NOTATIONS HEREON AS MAY BE REQUIRED PURSUANT TO SECTION 2.07
OF THE INDENTURE, (II) THIS GLOBAL NOTE MAY BE EXCHANGED IN WHOLE BUT
NOT IN PART PURSUANT TO SECTION 2.06(a) OF THE INDENTURE, (III) THIS
GLOBAL NOTE MAY BE DELIVERED TO THE TRUSTEE FOR CANCELLATION PURSUANT
TO SECTION 2.11 OF THE INDENTURE AND (IV) THIS GLOBAL NOTE MAY BE
TRANSFERRED TO A SUCCESSOR DEPOSITARY WITH THE PRIOR WRITTEN CONSENT
OF THE COMPANY."
29
(iii) Regulation S Temporary Global Note Legend. The
Regulation S Temporary Global Note shall bear a legend in substantially the
following form:
"THE RIGHTS ATTACHING TO THIS REGULATION S TEMPORARY GLOBAL NOTE, AND
THE CONDITIONS AND PROCEDURES GOVERNING ITS EXCHANGE FOR CERTIFICATED
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."
(iv) Original Issue Discount Legend. Each Subordinated Note
shall bear a legend in substantially the following form:
"FOR THE PURPOSES OF SECTIONS 1272, 1273 AND 1275 OF THE INTERNAL
REVENUE CODE OF 1986, AS AMENDED, THIS SECURITY IS BEING ISSUED WITH
ORIGINAL ISSUE DISCOUNT; FOR EACH $______ AGGREGATE PRINCIPAL AMOUNT
OF THIS SECURITY, THE ISSUE PRICE IS $______, THE AMOUNT OF ORIGINAL
ISSUE DISCOUNT IS $_______, THE ISSUE DATE IS _______ ___, 199__ AND
THE YIELD TO MATURITY IS 13 3/4% PER ANNUM."
(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 shall
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 Subordinated Notes
represented by such Global Note shall be reduced accordingly and an endorsement
shall be made on such Global Note by the Trustee or by the Depositary at the
direction of the Trustee 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 shall be increased accordingly and an endorsement shall
be made on such Global Note by the Trustee or by the Depositary at the
direction of the Trustee to reflect such increase.
(i) General Provisions Relating to Transfers and Exchanges.
(i) To permit registrations of transfers and exchanges, the
Company shall execute and the Trustee shall authenticate Global Notes and
Definitive Notes upon the Company's order or at the Registrar's request.
(ii) No service charge shall be made to a holder of a
beneficial interest in a Global Note or to a Holder of a Definitive Note for
any registration of transfer or exchange, but the Company may require payment
of a sum sufficient to cover any transfer tax or similar governmental charge
payable in connection therewith (other than any such transfer taxes or similar
governmental charge payable upon exchange or transfer pursuant to Sections
2.10, 3.06, 3.09, 4.10, 4.15 and 9.05 hereof).
30
(iii) The Registrar shall not be required to register the
transfer of or exchange any Subordinated Note selected for redemption in whole
or in part, except the unredeemed portion of any Subordinated Note being
redeemed in part.
(iv) All Global Notes and Definitive Notes issued upon any
registration of transfer or exchange of Global Notes or Definitive Notes shall
be the valid obligations of the Company, evidencing the same debt, and entitled
to the same benefits under this Indenture, as the Global Notes or Definitive
Notes surrendered upon such registration of transfer or exchange.
(v) The Company shall not be required (A) to issue, to
register the transfer of or to exchange any Subordinated Notes during a period
beginning at the opening of business 15 days before the day of any selection of
Subordinated Notes for redemption under Section 3.02 hereof and ending at the
close of business on the day of selection, (B) to register the transfer of or
to exchange any Subordinated Note so selected for redemption in whole or in
part, except the unredeemed portion of any Subordinated Note being redeemed in
part or (C) to register the transfer of or to exchange a Subordinated Note
between a record date and the next succeeding Interest Payment Date.
(vi) Prior to due presentment for the registration of a
transfer of any Subordinated Note, the Trustee, any Agent and the Company may
deem and treat the Person in whose name any Subordinated Note is registered as
the absolute owner of such Subordinated Note for the purpose of receiving
payment of principal of and interest on such Subordinated Notes and for all
other purposes, and none of the Trustee, any Agent or the Company shall be
affected by notice to the contrary.
(vii) The Trustee shall authenticate Global Notes and
Definitive Notes in accordance with the provisions of Section 2.02 hereof.
(viii) 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 SUBORDINATED NOTES.
If any mutilated Subordinated 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 Subordinated Note, the Company shall
issue and the Trustee, upon receipt of an Authentication Order, shall
authenticate a replacement Subordinated 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
Subordinated Note is replaced. The Company may charge for its expenses in
replacing a Subordinated Note.
Every replacement Subordinated Note is an additional
obligation of the Company and shall be entitled to all of the benefits of this
Indenture equally and proportionately with all other Subordinated Notes duly
issued hereunder.
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SECTION 2.08. OUTSTANDING SUBORDINATED NOTES.
The Subordinated Notes outstanding at any time are all the
Subordinated 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 Subordinated Note does not cease to be outstanding
because the Company or an Affiliate of the Company holds the Subordinated Note.
If a Subordinated 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 Subordinated Note is held by a bona fide
purchaser.
If the principal amount of any Subordinated Note is
considered paid under Section 4.01 hereof, it ceases to be outstanding and
interest on it ceases to accrue.
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 Subordinated Notes payable on that date, then on and
after that date such Subordinated Notes shall be deemed to be no longer
outstanding and shall cease to accrue interest.
Upon a "legal defeasance" pursuant to Article 8 hereof, the
Subordinated Notes shall be deemed to be outstanding to the extent provided in
the applicable section of Article 8 hereof.
SECTION 2.09. TREASURY SUBORDINATED NOTES.
In determining whether the Holders of the required principal
amount of Subordinated Notes have concurred in any direction, waiver or
consent, Subordinated Notes owned by the Company, or by any Affiliate of the
Company, shall be considered as though not outstanding, except that for the
purposes of determining whether the Trustee shall be protected in relying on
any such direction, waiver or consent, only Subordinated Notes that the Trustee
knows are so owned shall be so disregarded.
SECTION 2.10. TEMPORARY SUBORDINATED NOTES.
Until definitive Subordinated Notes are ready for delivery,
the Company may prepare and the Trustee, upon receipt of an Authentication
Order, shall authenticate temporary Subordinated Notes. Temporary Subordinated
Notes shall be substantially in the form of definitive Notes but may have
variations that the Company considers appropriate for temporary Subordinated
Notes and as shall be reasonably acceptable to the Trustee. Without
unreasonable delay, the Company shall prepare and the Trustee shall
authenticate definitive Subordinated Notes in exchange for temporary
Subordinated Notes.
Holders of temporary Subordinated Notes shall be entitled to
all of the benefits of this Indenture.
SECTION 2.11. CANCELLATION.
The Company at any time may deliver Subordinated Notes to the
Trustee for cancellation. The Registrar and Paying Agent shall forward to the
Trustee any Subordinated Notes surrendered to them for registration of
transfer, exchange or payment. The Trustee and no one else shall
32
cancel all Subordinated Notes surrendered for registration of transfer,
exchange, payment, replacement or cancellation and shall, upon written request,
return such canceled Subordinated Notes to the Company. The Company may not
issue new Subordinated Notes to replace Subordinated 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
Subordinated Notes, it shall pay the defaulted interest specified in Section
4.01 hereof 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 Subordinated
Notes and in Section 4.01 hereof. The Company shall notify the Trustee in
writing of the amount of defaulted interest proposed to be paid on each
Subordinated Note and the date of the proposed payment. The Company shall fix
or cause to be fixed each such special record date and payment date, provided
that no such special record date shall be less than 10 days prior to the
related payment date for such defaulted interest. At least 15 days before the
special record date, the Company (or, upon the written request of the Company,
the Trustee in the name and at the expense of the Company) shall mail or cause
to be mailed to Holders a notice that states the special record date, the
related payment date and the amount of such interest to be paid.
ARTICLE 3.
REDEMPTION AND PREPAYMENT
SECTION 3.01. NOTICES TO TRUSTEE.
If the Company elects to redeem Subordinated Notes pursuant
to the optional redemption provisions of Section 3.07 hereof, it shall furnish
to the Trustee, at least 45 days but not more than 60 days before a redemption
date, an Officers' Certificate setting forth (i) the clause of this Indenture
pursuant to which the redemption shall occur, (ii) the redemption date, (iii)
the principal amount of Subordinated Notes to be redeemed and (iv) the
redemption price.
If the Company is required to make an offer to repurchase
Subordinated Notes pursuant to the provisions of Section 3.09, 4.10 or 4.15
hereof, it shall furnish to the Trustee at least 45 days but not more than 60
days before a repurchase date, an Officers' Certificate setting forth (i) the
Section of this Indenture pursuant to which the repurchase shall occur, (ii)
the repurchase date, (iii) the maximum principal amount of Subordinated Notes
to be repurchased, (iv) the repurchase price and (v) further setting forth a
statement to the effect that (a) an Excess Proceeds Offer Triggering Event has
occurred and the conditions set forth in Section 4.10 have been satisfied or
(b) a Change of Control has occurred and the conditions set forth in Section
4.15 have been satisfied.
SECTION 3.02. SELECTION OF SUBORDINATED NOTES TO BE REDEEMED.
If less than all of the Subordinated Notes are to be redeemed
at any time, selection of Subordinated Notes for redemption will be made by the
Trustee in compliance with the requirements of the principal national
securities exchange, if any, on which the Subordinated Notes are listed, or, if
the Subordinated Notes are not so listed, on a pro rata basis, by lot or by
such method as the Trustee shall deem fair and appropriate; provided that no
Subordinated Notes of $1,000 or less shall be redeemed in part. Notices of
redemption shall be mailed by first class mail at least 30 but not more than 60
days before the redemption date to each Holder of Subordinated Notes to be
redeemed at its registered
33
address. If any Subordinated Note is to be redeemed in part only, the notice of
redemption that relates to such Subordinated Note shall state the portion of
the principal amount thereof to be redeemed. A new Subordinated Note in
principal amount equal to the unredeemed portion thereof will be issued in the
name of the Holder thereof upon cancellation of the original Subordinated Note.
On and after the redemption date, interest ceases to accrue on Subordinated
Notes or portions of them called for redemption.
SECTION 3.03. NOTICE OF REDEMPTION.
At least 30 days but not more than 60 days before a
redemption date, the Company shall mail or cause to be mailed, by first class
mail, a notice of redemption to each Holder whose Subordinated Notes are to be
redeemed at its registered address.
The notice shall identify the Subordinated Notes to be
redeemed and shall state:
(a) the redemption date;
(b) the redemption price;
(c) if any Subordinated Note is being redeemed in part, the
portion of the principal amount of such Subordinated Note to be redeemed and
that, after the redemption date upon surrender of such Subordinated Note, a new
Subordinated Note or Subordinated Notes in aggregate principal amount equal to
the unredeemed portion shall be issued upon cancellation of the original
Subordinated Note;
(d) the name and address of the Paying Agent;
(e) that Subordinated Notes called for redemption must be
surrendered to the Paying Agent to collect the redemption price;
(f) that, unless the Company defaults in making such
redemption payment, interest on Subordinated Notes or portions thereof called
for redemption ceases to accrue on and after the redemption date;
(g) the paragraph of the Subordinated Notes and/or Section of
this Indenture pursuant to which the Subordinated Notes called for redemption
are being redeemed; and
(h) 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
Subordinated Notes.
At the Company's request, the Trustee shall give the notice
of redemption in the Company's name and at its expense; provided, however, that
the Company shall have delivered to the Trustee, at least 10 days prior to the
redemption date, an Officers' Certificate requesting that the Trustee give such
notice and that the text of such notice shall be prepared or approved by the
Company.
SECTION 3.04. EFFECT OF NOTICE OF REDEMPTION.
Once notice of redemption is mailed in accordance with
Section 3.03 hereof, Subordinated Notes or portions thereof called for
redemption become irrevocably due and payable on the redemption date at the
redemption price. A notice of redemption may not be conditional.
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SECTION 3.05. DEPOSIT OF REDEMPTION PRICE.
By 10:00 am on the redemption date, the Company shall deposit
with the Trustee or with the Paying Agent money, in same-day funds, sufficient
to pay the redemption price of, premiums, if any, accrued interest on, and
Liquidated Damages, if any, on all Subordinated Notes to be redeemed on that
date. The Trustee or the Paying Agent shall 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 price of, premiums, if any,
accrued interest on, and Liquidated Damages, if any, on all Subordinated Notes
to be redeemed.
If the Company complies with the provisions of the preceding
paragraph, on and after the redemption date, whether or not such Subordinated
Notes are presented for payment, interest shall cease to accrue on the
Subordinated Notes or the portions of Subordinated Notes called for redemption.
If a Subordinated Note is redeemed on or after an interest record date but on
or prior to the related interest payment date, then any accrued and unpaid
interest shall be paid to the Person in whose name such Subordinated Note was
registered at the close of business on such record date. If any Subordinated
Note called for redemption shall not be so paid upon surrender for redemption
because of the failure of the Company to comply with the preceding paragraph,
interest shall be paid on the unpaid principal, from the redemption date until
such principal is paid, and to the extent lawful on any interest not paid on
such unpaid principal, in each case at the rate provided in the Subordinated
Notes and in Section 4.01 hereof.
SECTION 3.06. SUBORDINATED NOTES REDEEMED IN PART.
Upon surrender of a Subordinated Note that is redeemed in
part, the Company shall issue and, upon the Company's written request, the
Trustee shall authenticate for the Holder at the expense of the Company a new
Subordinated Note equal in principal amount to the unredeemed portion of the
Subordinated Note surrendered.
SECTION 3.07. OPTIONAL REDEMPTION.
(a) Except as set forth in clause (b) of this Section 3.07,
the Subordinated Notes shall not be redeemable at the Company's option prior to
March 15, 2003. Thereafter, the Subordinated Notes shall be subject to
redemption at any time at the option of the Company, 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 Liquidated Damages thereon, if any, to the applicable
redemption date, if redeemed during the twelve-month period beginning on March
15 of the years indicated below:
Year Percentage
---- ----------
2003.......................................106.875%
2004.......................................104.583%
2005.......................................102.293%
2006 and thereafter........................100.000%
(b) Notwithstanding the foregoing, at any time prior to March
15, 2001, the Company may, at its option, redeem up to one-half of the
aggregate principal amount of Subordinated Notes at a redemption price equal to
113.75% of the principal amount thereof, plus Liquidated Damages
35
thereon, if any, with the net cash proceeds of an Equity Offering; provided
that at least one-half of the original aggregate principal amount of the
Subordinated Notes remains outstanding immediately after the occurrence of such
redemption (excluding Subordinated Notes held by the Company and its
Subsidiaries); and provided, further, that any such redemption shall occur
within 60 days of the date of the closing of such Equity Offering.
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.
Except as set forth under Sections 4.10 and 4.15 hereof, the
Company shall not be required to make mandatory redemption or sinking fund
payments with respect to the Subordinated Notes.
SECTION 3.09. REPURCHASE OFFERS.
In the event that the Company shall be required to commence
an offer to all Holders to repurchase Subordinated Notes (a "Repurchase Offer")
pursuant to Section 4.10 hereof (an "Excess Proceeds Offer"), or pursuant to
Section 4.15 hereof (a "Change of Control Offer") the Company shall follow the
procedures specified below.
A Repurchase Offer shall commence no later than ten Business
Days after a Change of Control (unless the Company is not required to make such
offer pursuant to Section 4.15(c) hereof) or an Excess Proceeds Offer
Triggering Event, as the case may be, and remain open for a period of 20
Business Days following its commencement and no longer, except to the extent
that a longer period is required by applicable law (the "Offer Period"). No
later than five Business Days after the termination of the Offer Period (the
"Purchase Date"), the Company shall purchase the principal amount of
Subordinated Notes required to be purchased pursuant to Section 4.10 hereof, in
the case of an Excess Proceeds Offer, or 4.15 hereof, in the case of a Change
of Control Offer (the "Offer Amount") or, if less than the Offer Amount has
been tendered, all Subordinated Notes tendered in response to the Repurchase
Offer. Payment for any Subordinated Notes so purchased shall be made in the
same manner as interest payments are made.
If the Purchase Date is on or after an interest record date
and on or before the related interest payment date, any accrued and unpaid
interest shall be paid to the Person in whose name a Subordinated Note is
registered at the close of business on such record date, and no additional
interest shall be payable to Holders who tender Subordinated Notes pursuant to
the Repurchase Offer.
Upon the commencement of a Repurchase Offer, the Company
shall send, by first class mail, a notice to the Trustee and each of the
Holders, with a copy to the Trustee. The notice shall contain all instructions
and materials necessary to enable such Holders to tender Subordinated Notes
pursuant to such Repurchase Offer. The Repurchase Offer shall be made to all
Holders. The notice, which shall govern the terms of the Repurchase Offer,
shall describe the transaction or transactions that constitute the Change of
Control or Excess Proceeds Offer Triggering Event, as the case may be and shall
state:
36
(a) that the Repurchase Offer is being made pursuant to this
Section 3.09 and Section 4.10 or 4.15 hereof, as the case may be, and the
length of time the Repurchase Offer shall remain open;
(b) the Offer Amount, the purchase price and the Purchase
Date;
(c) that any Subordinated Note not tendered or accepted for
payment shall continue to accrete or accrue interest;
(d) that, unless the Company defaults in making such payment,
any Subordinated Note accepted for payment pursuant to the Repurchase Offer
shall cease to accrete or accrue interest after the Purchase Date;
(e) that Holders electing to have a Subordinated Note
purchased pursuant to a Repurchase Offer may elect to have all or any portion
of such Subordinated Note purchased;
(f) that Holders electing to have a Subordinated Note
purchased pursuant to any Repurchase Offer shall be required to surrender the
Subordinated Note, with the form entitled "Option of Holder to Elect Purchase"
on the reverse of the Subordinated Note, or such other customary documents of
surrender and transfer as the Company may reasonably request, duly completed,
or transfer by book-entry transfer, to the Company, the Depositary, or the
Paying Agent at the address specified in the notice at least three days before
the Purchase Date;
(g) that Holders shall be entitled to withdraw their election
if the Company, the Depositary or the Paying Agent, as the case may be,
receives, not later than the expiration of the Offer Period, a telegram, telex,
facsimile transmission or letter setting forth the name of the Holder, the
principal amount of the Subordinated Note the Holder delivered for purchase and
a statement that such Holder is withdrawing his election to have such
Subordinated Note purchased;
(h) that, if the aggregate principal amount of Subordinated
Notes surrendered by Holders exceeds the Offer Amount, the Company shall select
the Subordinated Notes to be purchased on a pro rata basis (with such
adjustments as may be deemed appropriate by the Company so that only
Subordinated Notes in denominations of $1,000, or integral multiples thereof,
shall be purchased); and
(i) that Holders whose Subordinated Notes were purchased only
in part shall be issued new Subordinated Notes equal in principal amount to the
unpurchased portion of the Subordinated Notes surrendered (or transferred by
book-entry transfer).
On (or at the Company's election, before) the Purchase Date,
the Company shall, to the extent lawful, accept for payment, on a pro rata
basis to the extent necessary, the Offer Amount of Subordinated Notes or
portions thereof tendered pursuant to the Repurchase Offer and not theretofore
withdrawn, or if less than the Offer Amount has been tendered, all Subordinated
Notes tendered, and shall deliver to the Trustee an Officers' Certificate
stating that such Subordinated 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, shall 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
Subordinated Notes tendered by such Holder and accepted by the Company for
purchase, and the Company shall promptly issue a new Subordinated Note, and the
37
Trustee, upon written request from the Company shall authenticate and mail or
deliver such new Subordinated Note to such Holder, in a principal amount equal
to any unpurchased portion of the Subordinated Note surrendered. Any
Subordinated Note not so accepted shall be promptly mailed or delivered by the
Company to the Holder thereof. All Subordinated Notes or portions thereof
purchased pursuant to the Repurchase Offer will be canceled by the Trustee. The
Company shall publicly announce the results of the Repurchase Offer on or as
soon as practicable after the Purchase Date, but in no case more than five
Business Days after 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 SUBORDINATED NOTES.
The Company shall pay or cause to be paid the principal of,
interest and premium, if any, on the Subordinated Notes on the dates and in the
manner provided in the Subordinated Notes. Principal, premium, if any, and
interest shall be considered paid on the applicable 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 then due. The Company shall pay all Liquidated
Damages, if any, in the same manner on the dates and in the amounts set forth
in the Registration Rights Agreement.
The Company shall pay interest (including post-petition
interest in any proceeding under any Bankruptcy Law) on overdue principal at
the rate equal to 2% per annum in excess of the then applicable interest rate
on the Subordinated Notes to the extent lawful; it shall pay interest
(including post-petition interest in any proceeding under any Bankruptcy Law)
on overdue installments of interest and Liquidated Damages or any other
premiums, if any, at the same rate to the extent lawful.
SECTION 4.02. MAINTENANCE OF OFFICE OR AGENCY.
The Company shall maintain an office or agency (which may be
an office of the Trustee or an affiliate of the Trustee, Registrar or
co-registrar) where Subordinated 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 Subordinated Notes and this Indenture may be served. The
Company shall give prompt written notice to the Trustee of the location, and
any change in the location, of such office or agency. If at any time the
Company shall fail to maintain any such required office or agency or shall fail
to furnish the Trustee with the address thereof, such presentations,
surrenders, notices and demands may be made or served at the Corporate Trust
Office of the Trustee.
The Company may also from time to time designate one or more
other offices or agencies where the Subordinated Notes may be presented or
surrendered for any or all such purposes and may from time to time rescind such
designations; provided, however, that no such designation or rescission shall
in any manner relieve the Company of its obligation to maintain an office or
agency for such purposes. The Company shall give prompt written notice to the
Trustee of any such designation or rescission and of any change in the location
of any such other office or agency.
38
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.
SECTION 4.03. REPORTS.
(a) Whether or not required by the rules and regulations of
the Commission, so long as any Subordinated Notes are outstanding, the Company
shall furnish to the Holders of Subordinated Notes (i) all quarterly and annual
financial information that would be required to be contained in a filing with
the Commission on Forms 10-Q and 10-K if the Company were required to file such
Forms, including a "Management's Discussion and Analysis of Financial Condition
and Results of Operations" that describes the financial condition and results
of operations of the Company and its consolidated Subsidiaries (showing in
reasonable detail, either on the face of the financial statements or in the
footnotes thereto and in "Management's Discussion and Analysis of Financial
Condition and Results of Operations," the financial condition and results of
operations of the Company and its Restricted Subsidiaries separate from the
financial condition and results of operations of the Unrestricted Subsidiaries
of the Company ) and, with respect to the annual information only, a report
thereon by the Company's certified independent accountants and (ii) all current
reports that would be required to be filed with the Commission on Form 8-K if
the Company were required to file such reports, in each case within the time
periods specified in the Commission's rules and regulations. In addition,
following the consummation of the exchange offer contemplated by the
Registration Rights Agreement, whether or not required by the rules and
regulations of the Commission, the Company shall file a copy of all such
information and reports with the Commission for public availability within the
time periods specified in the Commission's rules and regulations (unless the
Commission will not accept such a filing) and make such information available
to securities analysts and prospective investors upon request.
(b) For so long as any Subordinated Notes remain outstanding,
the Company shall 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 shall deliver to the Trustee, within 90 days
after the end of each fiscal year, an Officers' Certificate stating that a
review of the activities of the Company and its Subsidiaries during the
preceding fiscal year has been made under the supervision of the signing
Officers with a view to determining whether the Company has kept, observed,
performed and fulfilled its obligations under this Indenture, and further
stating, as to each such Officer signing such certificate, whether 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 whether any Default or
Event of Default shall have occurred under this Indenture (and, if a Default or
Event of Default shall have occurred, describing all such Defaults or Events of
Default of which he or she may have knowledge and what action the Company is
taking or proposes to take with respect thereto) and that to 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, premiums, if any, interest, or
Liquidated Damages, if any, on the Subordinated 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
39
Section 4.03(a) 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
Four or Article Five 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) The Company shall, so long as any of the Subordinated
Notes are outstanding, deliver to the Trustee, forthwith upon any Officer
becoming aware of any Default or Event of Default, an Officers' Certificate
specifying such Default or Event of Default and what action the Company is
taking or proposes to take with respect thereto.
SECTION 4.05. TAXES.
The Company shall pay, and shall cause each of its
Subsidiaries to pay, prior to delinquency, all material taxes, assessments, and
governmental levies except such as are contested in good faith and by
appropriate proceedings.
SECTION 4.06. STAY, EXTENSION AND USURY LAWS.
The Company covenants (to the extent that it may lawfully do
so) that it shall not at any time insist upon, plead, or in any manner
whatsoever claim or take the benefit or advantage of, any stay, extension or
usury law wherever enacted, now or at any time hereafter in force, that may
affect the covenants or the performance of this Indenture; and the Company (to
the extent that it may lawfully do so) hereby expressly waives all benefit or
advantage of any such law, and covenants that it shall not, by resort to any
such law, hinder, delay or impede the execution of any power herein granted to
the Trustee, but shall suffer and permit the execution of every such power as
though no such law has been enacted.
SECTION 4.07. RESTRICTED PAYMENTS.
The Company shall not, and shall not permit any of its
Restricted Subsidiaries to, directly or indirectly: (i) declare or pay any
dividend or make any other payment or distribution on account of the Company's
or any of its Restricted Subsidiaries' Equity Interests (including, without
limitation, any payment in connection with any merger or consolidation
involving the Company or any of its Restricted Subsidiaries) or to the direct
or indirect holders of the Company's or any of its Restricted Subsidiaries'
Equity Interests in their capacity as such (other than dividends or
distributions payable in Equity Interests (other than Disqualified Stock) of
the Company or to the Company or any Restricted Subsidiary of the Company);
(ii) purchase, redeem or otherwise acquire or retire for value (including,
without limitation, in connection with any merger or consolidation involving
the Company) any Equity Interests of the Company or any direct or indirect
parent of the Company or other Affiliate of the Company (other than any such
Equity Interests owned by the Company or any Restricted Subsidiary of the
Company); (iii) make any principal payment on or with respect to, or purchase,
redeem, defease or otherwise acquire or retire for value any Indebtedness that
is subordinated to the Subordinated Notes, except a payment of principal at
Stated Maturity; or (iv) make any Restricted Investment (all such payments and
other actions set forth in clauses (i) through (iv) above being
40
collectively referred to as "Restricted Payments"), unless, at the time of and
after giving effect to such Restricted Payment:
(a) no Default or Event of Default shall have
occurred and be continuing or would occur as a consequence thereof;
and
(b) the Company would, at the time of such
Restricted Payment and after giving pro forma effect thereto as if
such Restricted Payment had been made at the beginning of the
applicable four-quarter period, have been permitted to incur at least
$1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage
Ratio test set forth in the first paragraph of Section 4.09 hereof;
and
(c) such Restricted Payment, together with the
aggregate amount of all other Restricted Payments made by the Company
and its Restricted Subsidiaries after March 12, 1998 (excluding
Restricted Payments permitted by clauses (ii), (iii) and (iv) of the
next succeeding paragraph), is less than the sum, without duplication,
of (i) 50% of the Consolidated Net Income of the Company for the
period (taken as one accounting period) from the beginning of the
first fiscal quarter commencing after March 12, 1998 to the end of the
Company's most recently ended fiscal quarter for which internal
financial statements are available at the time of such Restricted
Payment (or, if such Consolidated Net Income for such period is a
deficit, less 100% of such deficit), plus (ii) 100% of the aggregate
net cash proceeds received by the Company since March 12, 1998 as a
contribution to its common equity capital or from the issue or sale of
Equity Interests of the Company (other than Disqualified Stock) or
from the issue or sale of Disqualified Stock or debt securities of the
Company that have been converted into such Equity Interests (other
than Equity Interests (or Disqualified Stock or convertible debt
securities) sold to a Restricted Subsidiary of the Company), plus
(iii) to the extent that any Restricted Investment that was made after
March 12, 1998 is sold for cash or otherwise liquidated or repaid for
cash, 100% of the net cash proceeds thereof (less the cost of
disposition, if any), but only to the extent not included in subclause
(i) of this clause (c).
The foregoing provisions shall not prohibit (i) the payments
and applications of the proceeds to be received by the Company from the
issuance of the Note Units as described under the caption "Use of Proceeds" of
the Offering Memorandum governing the issuance of the Note Units; (ii) 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; (iii) the redemption, repurchase, retirement,
defeasance or other acquisition of any Equity Interests of the Company in
exchange for, or out of the net cash proceeds of the substantially concurrent
sale (other than to a Restricted Subsidiary of the Company) of, other Equity
Interests of the Company (other than any Disqualified Stock); provided that the
amount of any such net cash proceeds that are utilized for any such redemption,
repurchase, retirement, defeasance or other acquisition shall be excluded from
clause (c) of the preceding paragraph; (iv) the defeasance, redemption,
repurchase or other acquisition of subordinated Indebtedness with the net cash
proceeds from an incurrence of Permitted Refinancing Indebtedness or the
substantially concurrent sale (other than to a Restricted Subsidiary of the
Company) of Equity Interests of the Company (other than Disqualified Stock);
provided that the amount of any such net cash proceeds that are utilized for
any such defeasance, redemption or repurchase shall be excluded from clause (c)
of the preceding paragraph; (v) the payment of any dividend by a Restricted
Subsidiary of the Company to the holders of its Equity Interests on a pro rata
basis; and (vi) so long as no Default or Event of Default shall have occurred
and be continuing immediately after such transaction,
41
the repurchase, redemption or other acquisition or retirement for value of any
Equity Interests of the Company or any Restricted Subsidiary of the Company
held by any member of the Company's (or any of its Restricted Subsidiaries')
management; provided that the aggregate price paid for all such repurchased,
redeemed, acquired or retired Equity Interests shall not exceed $1.0 million in
any twelve-month period plus the aggregate cash proceeds received by the
Company (or any of its Restricted Subsidiaries) during any such twelve-month
period from any issuance of Equity Interests by the Company (or any of its
Restricted Subsidiaries) to members of management of the Company (or any of its
Restricted Subsidiaries) (provided that such proceeds are excluded from clause
(c) of the preceding paragraph; and provided, further, that such repurchase,
redemption or other acquisition or retirement may not include any Equity
Interests owned, directly or indirectly, but the Principals.
The Board of Directors may designate any Restricted
Subsidiary to be an Unrestricted Subsidiary if such designation would not cause
a Default. For purposes of making such determination, all outstanding
Investments by the Company and its Restricted Subsidiaries (except to the
extent repaid in cash) in the Subsidiary so designated shall be deemed to be
Restricted Payments at the time of such designation and shall reduce the amount
available for Restricted Payments under the first paragraph of this Section.
All such outstanding Investments shall be deemed to constitute Investments in
an amount equal to the greatest of (i) the net book value of such Investments
at the time of such designation, (ii) the fair market value of such Investments
at the time of such designation and (iii) the original fair market value of
such Investments at the time they were made. Such designation shall only be
permitted if such Restricted Payment would be permitted at such time and if
such Restricted Subsidiary otherwise meets the definition of an Unrestricted
Subsidiary.
The amount of all Restricted Payments (other than cash) shall
be the fair market value on the date of the Restricted Payment of the asset(s)
or securities proposed to be transferred or issued by the Company or such
Restricted Subsidiary, as the case may be, pursuant to the Restricted Payment.
The fair market value of any non-cash Restricted Payment shall be determined by
the Board of Directors whose resolution with respect thereto shall be delivered
to the Trustee, such determination to be based upon an opinion or appraisal
issued by an accounting, appraisal or investment banking firm of national
standing if such fair market value exceeds $1.0 million. Not later than the
date of making any Restricted Payment, the Company shall deliver to the Trustee
an Officers' Certificate stating that such Restricted Payment is permitted and
setting forth the basis upon which the calculations required by this Section
4.07 were computed, together with a copy of any fairness opinion or appraisal
required by this Indenture.
SECTION 4.08. DIVIDEND AND OTHER PAYMENT RESTRICTIONS AFFECTING SUBSIDIARIES.
The Company shall not, and shall not permit any of its
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 (i)(a) pay dividends or make any other
distributions to the Company or any of its Restricted Subsidiaries (1) on its
Capital Stock or (2) with respect to any other interest or participation in, or
measured by, its profits, or (b) pay any indebtedness owed to the Company or
any of its Restricted Subsidiaries, (ii) make loans or advances to the Company
or any of its Restricted Subsidiaries or (iii) transfer any of its properties
or assets to the Company or any of its Restricted Subsidiaries. However, the
foregoing restrictions shall not apply to encumbrances or restrictions existing
under or by reason of (a) Existing Indebtedness as in effect on March 12, 1998
and any amendments, modifications, restatements, renewals, increases,
supplements, refundings, replacements or refinancings thereof, provided that
such amendments, modifications, restatements, renewals, increases,
42
supplements, refundings, replacement or refinancings are no more restrictive,
with respect to such dividend and other payment restrictions than those as in
effect on March 12, 1998, (b) this Indenture, the Subordinated Notes, the
Senior Secured Discount Notes Indenture and the Senior Secured Discount Notes,
(c) applicable law, (d) any instrument governing Indebtedness or Capital Stock
of a Person acquired by the Company or any of its Restricted Subsidiaries as in
effect at the time of such acquisition (except to the extent such Indebtedness
was incurred in connection with or in contemplation of such acquisition), which
encumbrance or restriction is not applicable to any Person, or the properties
or assets of any Person, other than the Person, or the property or assets of
the Person, so acquired, provided that, in the case of Indebtedness, such
Indebtedness was permitted by the terms of this Indenture to be incurred, (e)
customary non-assignment provisions in leases entered into in the ordinary
course of business and consistent with past practices, (f) purchase money
obligations for property acquired in the ordinary course of business that
impose restrictions of the nature described in clause (iii) above on the
property so acquired, (g) restrictions relating to a Restricted Subsidiary
formed for the sole purpose of engaging in accounts receivable financing, (h)
any agreement for the sale of a Restricted Subsidiary that restricts
distributions by that Restricted Subsidiary pending its sale, (i) Permitted
Refinancing Indebtedness, provided that the restrictions contained in the
agreements governing such Permitted Refinancing Indebtedness are no more
restrictive, taken as a whole, than those contained in the agreements governing
the Indebtedness being refinanced and (j) secured Indebtedness otherwise
permitted to be incurred pursuant to the provisions of Section 4.12 that limits
the right of the debtor to dispose of the assets securing such Indebtedness.
SECTION 4.09. INCURRENCE OF INDEBTEDNESS AND ISSUANCE OF PREFERRED STOCK.
The Company shall not, and shall not permit any of its
Restricted Subsidiaries to, directly or indirectly, create, incur, issue,
assume, guarantee or otherwise become directly or indirectly liable,
contingently or otherwise, with respect to (collectively, "incur") any
Indebtedness (including Acquired Debt) and the Company shall not permit any of
its Restricted Subsidiaries to issue any shares of preferred stock; provided,
however, that so long as no Default or Event of Default has occurred or is
continuing, the Company and its Restricted Subsidiaries may incur Indebtedness
(including Acquired Debt) if the Fixed Charge Coverage Ratio for the Company's
most recently ended four full fiscal quarters for which internal financial
statements are available immediately preceding the date on which such
additional Indebtedness is incurred would have been at least 1.75 to 1, if such
additional Indebtedness is incurred prior to March 15, 2000, or at least 2.0 to
1, if such additional Indebtedness is incurred on or after March 15, 2000, in
each case, determined on a pro forma basis (including a pro forma application
of the net proceeds therefrom), as if the additional Indebtedness had been
incurred at the beginning of such four-quarter period.
The provisions of the first paragraph of this covenant shall
not apply to the incurrence of any of the following items of Indebtedness
(collectively, "Permitted Debt"):
(i) the incurrence by the Company and its Restricted
Subsidiaries of Indebtedness from a bank or other financial institution in an
aggregate principal amount not to exceed $200.0 million at any one time
outstanding, less any Net Proceeds of Asset Sales applied to permanently reduce
any such Indebtedness pursuant to Section 4.10 hereof;
(ii) the incurrence by the Company and its Restricted
Subsidiaries of the Existing Indebtedness, other than pursuant to the ▇▇▇▇▇
Credit Facility or the Sweetheart Credit Facilities;
43
(iii) the incurrence by the Company of Indebtedness
represented by the Senior Secured Discount Notes, the Senior Secured Discount
Notes Indenture, the Subordinated Notes and this Indenture and the issuance of
additional Subordinated Notes in connection with the Company's interest payment
obligations under the Subordinated Notes;
(iv) the incurrence by the Company or any of its Restricted
Subsidiaries of Indebtedness represented by Capital Lease Obligations, mortgage
financings or purchase money obligations, in each case incurred for the purpose
of financing all or any part of the purchase price or cost of construction or
improvement of property, plant or equipment used in the business of the Company
or such Restricted Subsidiary, in an aggregate principal amount not to exceed
$5.0 million at any time outstanding;
(v) the incurrence by the Company or any of its Restricted
Subsidiaries of Indebtedness in connection with the acquisition of assets or a
new Restricted Subsidiary; provided that such Indebtedness was incurred by the
prior owner of such assets or such Restricted Subsidiary prior to such
acquisition by the Company or one of its Restricted Subsidiaries and was not
incurred in connection with, or in contemplation of, such acquisition by the
Company or one of its Restricted Subsidiaries; and provided further that the
principal amount (or accreted value, as applicable) of such Indebtedness,
together with any other outstanding Indebtedness incurred pursuant to this
clause (v) and any Permitted Refinancing Indebtedness incurred to refund,
refinance or replace any Indebtedness incurred pursuant to this clause (v),
does not exceed $5.0 million;
(vi) the incurrence by the Company or any of its Restricted
Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or the net
proceeds of which are used to refund, refinance or replace Indebtedness (other
than intercompany Indebtedness) that was permitted by this Indenture to be
incurred under the first paragraph hereof or clauses (ii), (iii), (iv) or (v)
of this paragraph;
(vii) the incurrence by the Company or any of its Restricted
Subsidiaries of intercompany Indebtedness between or among the Company and any
of its Restricted Subsidiaries; provided, however, that (a) any subsequent
issuance or transfer of Equity Interests that results in any such Indebtedness
being held by a Person other than the Company or a Restricted Subsidiary
thereof and (b) any sale or other transfer of any such Indebtedness to a Person
that is not either the Company or a Restricted Subsidiary thereof shall be
deemed, in each case, to constitute an incurrence of such Indebtedness by the
Company or such Restricted Subsidiary, as the case may be, that was not
permitted by this clause (vii);
(viii) the incurrence by the Company or any of its Restricted
Subsidiaries of Hedging Obligations that are incurred for the purpose of fixing
or hedging interest rate risk with respect to any floating rate Indebtedness
that is permitted by the terms of this Indenture to be outstanding; and
(ix) the incurrence by the Company or any of its Restricted
Subsidiaries of additional Indebtedness in an aggregate principal amount (or
accreted value, as applicable) not to exceed $25.0 million at any one time
outstanding.
For purposes of determining compliance with this covenant, in
the event that an item of Indebtedness meets the criteria of more than one of
the categories of Permitted Debt described in clauses (i) through (ix) above or
is entitled to be incurred pursuant to the first paragraph of this covenant,
the Company shall, in its sole discretion, classify such item of Indebtedness
in any manner that complies
44
with this covenant. Accrual of interest, accretion or amortization of original
issue discount, and the payment of interest on any Indebtedness in the form of
additional Indebtedness with the same terms shall not be deemed to be an
incurrence of Indebtedness for purposes of this Section; provided, in each such
case, that the amount thereof is included in Fixed Charges of the Company as
accrued.
SECTION 4.10. ASSET SALES AND EVENTS OF LOSS.
The Company shall not, and shall not permit any of its
Restricted Subsidiaries to, consummate an Asset Sale unless (i) the Company (or
the Restricted Subsidiary, as the case may be) receives consideration at the
time of such Asset Sale at least equal to the fair market value (evidenced by a
resolution of the Board of Directors set forth in an Officers' Certificate
delivered to the Trustee) of the assets or Equity Interests issued or sold or
otherwise disposed of and (ii) at least 75% of the consideration therefor
received by the Company or such Restricted Subsidiary is in the form of cash;
provided that the amount of (x) any liabilities (as shown on the Company's or
such Restricted Subsidiary's most recent balance sheet), of the Company or any
Restricted Subsidiary (other than contingent liabilities) that are assumed by
the transferee of any such assets pursuant to a customary novation agreement
that releases the Company or such Restricted Subsidiary from further liability
and (y) any securities, notes or other obligations received by the Company or
any such Restricted Subsidiary from such transferee that are contemporaneously
(subject to ordinary settlement periods) converted by the Company or such
Restricted Subsidiary into cash (to the extent of the cash received), shall be
deemed to be cash for purposes of this provision.
Within 365 days after the Company's or any Restricted
Subsidiary's receipt of any Net Proceeds from an Asset Sale, the Company or
such Restricted Subsidiary may apply such Net Proceeds (a) to permanently repay
Indebtedness of a Restricted Subsidiary of the Company (and, in the case of
revolving borrowings, to correspondingly reduce commitments with respect
thereto), or (b) to the acquisition of a majority of the assets of, or a
majority of the Voting Stock of, another Permitted Business, the making of a
capital expenditure or the acquisition of other long-term assets that are used
or useful in a Permitted Business. Pending the final application of any such
Net Proceeds, the Company may temporarily reduce revolving credit borrowings or
otherwise invest such Net Proceeds in any manner that is not prohibited by this
Indenture. Any Net Proceeds from Asset Sales that are not applied or invested
as provided in the first sentence of this paragraph shall be deemed to
constitute "Excess Proceeds." When the aggregate amount of Excess Proceeds
exceeds $10.0 million (an "Excess Proceeds Offer Triggering Event"), the
Company shall be required to make an offer to all Holders of Subordinated Notes
(an "Asset Sale Offer") to purchase the maximum principal amount of
Subordinated Notes that may be purchased out of the Excess Proceeds, at an
offer price in cash in an amount equal to 100% of the aggregate principal
amount thereof, plus accrued and unpaid interest and Liquidated Damages
thereon, if any, to the date of purchase, in accordance with the procedures set
forth in this Indenture; provided however, that such offer will not be required
if the application of such Excess Proceeds to repurchase Subordinated Notes
would cause an Event of Default under any of the agreements governing
Indebtedness of the Company or its Subsidiaries. If the aggregate purchase
price of Subordinated Notes tendered into such Asset Sale Offer by Holders
thereof is less than the amount of Excess Proceeds, the Company may use such
Excess Proceeds for general corporate purposes (subject to the restrictions of
this Indenture). If the aggregate purchase price of Subordinated Notes tendered
into such Asset Sale Offer by Holders thereof exceeds the amount of Excess
Proceeds, the Trustee shall select the Subordinated Notes to be purchased on a
pro rata basis. Upon completion of such Asset Sale Offer, the amount of Excess
Proceeds shall be reset at zero.
45
SECTION 4.11. TRANSACTIONS WITH AFFILIATES.
The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, make any payment to, or sell, lease, transfer or otherwise
dispose of any of its properties or assets to, or purchase any property or
assets from, or enter into or make or amend any transaction, contract,
agreement, understanding, loan, advance or guarantee with, or for the benefit
of, any Affiliate (each of the foregoing, an "Affiliate Transaction"), unless
(i) such Affiliate Transaction is on terms that are no less favorable to the
Company or the relevant Restricted Subsidiary than those that would have been
obtained in a comparable transaction by the Company or such Restricted
Subsidiary with an unrelated Person and (ii) the Company delivers to the
Trustee (a) with respect to any Affiliate Transaction or series of related
Affiliate Transactions involving aggregate consideration in excess of $1.0
million, a resolution of the Board of Directors set forth in an Officers'
Certificate certifying that such Affiliate Transaction complies with clause (i)
above and that such Affiliate Transaction has been approved by a majority of
the disinterested members of the Board of Directors and (b) with respect to any
Affiliate Transaction or series of related Affiliate Transactions involving
aggregate consideration in excess of $5.0 million, an opinion as to the
fairness to the Holders of such Affiliate Transaction from a financial point of
view issued by an accounting, appraisal or investment banking firm of national
standing with total assets in excess of $1.0 billion, except with respect to
transactions in the ordinary course of business and consistent with past
practice between the Company or any of its Restricted Subsidiaries and Four M,
CEG or any of their respective subsidiaries; provided that the following shall
not be deemed to be Affiliate Transactions: (1) the Indenture of Lease dated as
of January 1, 1995, between ▇▇▇▇▇▇ ▇▇▇▇▇▇ and ▇▇▇▇▇ relating to the
Jacksonville Facility except for any purchases of property by ▇▇▇▇▇ that may
arise thereunder; (2) any employment agreement entered into by the Company or
any of its Restricted Subsidiaries in the ordinary course of business and
consistent with the past practice of the Company or such Restricted Subsidiary
in an amount not to exceed $1.0 million per annum; (3) transactions between or
among the Company and its Restricted Subsidiaries; (4) Restricted Payments and
Permitted Investments that are permitted by Section 4.07 hereof; and (5)
transactions entered into in connection with the Transactions.
SECTION 4.12. LIENS.
The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, directly or indirectly, create, incur, assume or suffer to
exist any Lien on any asset now owned or hereafter acquired, or any income or
profits therefrom or assign or convey any right to receive income therefrom,
except Permitted Liens.
SECTION 4.13. LINE OF BUSINESS.
The Company shall not, and shall not permit any Subsidiary to, engage
in any business other than Permitted Businesses, except to such extent as would
not be material to the Company and its Restricted Subsidiaries taken as a
whole.
SECTION 4.14. 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 (i) its
corporate existence, and the corporate, partnership or other existence of each
of its Restricted Subsidiaries, in accordance with the respective
organizational documents (as the same may be amended from time to time) of the
Company or any such Restricted
46
Subsidiary and (ii) the rights (charter and statutory), licenses and franchises
of the Company and its Restricted 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 Restricted
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 Restricted Subsidiaries, taken as a whole, and that the loss thereof is
not adverse in any material respect to the Holders of the Subordinated Notes.
SECTION 4.15. OFFER TO REPURCHASE UPON CHANGE OF CONTROL.
(a) Upon the occurrence of a Change of Control, the Company
shall be required to make an offer to each Holder of Subordinated Notes to
repurchase all or any part (equal to $1,000 or an integral multiple thereof) of
such Holder's Subordinated Notes pursuant to the offer described below (the
"Change of Control Offer") at an offer price in cash equal to 101% of the
aggregate principal amount thereof, plus accrued and unpaid interest and
Liquidated Damages thereon, if any, to the date of purchase (the "Change of
Control Payment"). Within ten days following any Change of Control, the Company
shall mail a notice to each Holder describing the transaction or transactions
that constitute the Change of Control and offering to repurchase Subordinated
Notes on the date specified in such notice, which date shall be no earlier than
30 days and no later than 60 days from the date such notice is mailed (the
"Change of Control Payment Date"), pursuant to the procedures required by this
Indenture and described in such notice. The Company shall comply with the
requirements of Rule 14e-1 under the Exchange Act and any other securities laws
and regulations thereunder to the extent such laws and regulations are
applicable in connection with the repurchase of the Subordinated Notes as a
result of a Change of Control.
(b) On the Change of Control Payment Date, the Company shall,
to the extent lawful, (1) accept for payment all Subordinated Notes or portions
thereof properly tendered pursuant to the Change of Control Offer, (2) deposit
with the Paying Agent an amount equal to the Change of Control Payment in
respect of all Subordinated Notes or portions thereof so tendered and (3)
deliver or cause to be delivered to the Trustee the Subordinated Notes so
accepted together with an Officers' Certificate stating the aggregate principal
amount of Subordinated Notes or portions thereof being purchased by the
Company. The Paying Agent shall promptly mail to each Holder of Subordinated
Notes so tendered the Change of Control Payment for such Subordinated Notes,
and the Trustee shall promptly authenticate and mail (or cause to be
transferred by book entry) to each Holder a new Subordinated Note equal in
principal amount to any unpurchased portion of the Subordinated Notes
surrendered, if any; provided that each such new Subordinated Note shall be in
a principal amount of $1,000 or an integral multiple thereof. The Company shall
publicly announce the results of the Change of Control Offer on or as soon as
practicable after the Change of Control Payment Date.
(c) Notwithstanding the foregoing, the Company shall not be
required to make a Change of Control Offer upon a Change of Control if such
Change of Control Offer would cause an event of default under any of the
agreements governing Indebtedness of the Company or its Subsidiaries, or if a
third party makes the Change of Control Offer in the manner, at the times and
otherwise in compliance with the requirements set forth in this Indenture
applicable to a Change of Control Offer made by the Company and purchases all
Subordinated Notes validly tendered and not withdrawn under such Change of
Control Offer.
47
SECTION 4.16. LIMITATION ON ISSUANCES AND SALES OF CAPITAL STOCK IN WHOLLY
OWNED RESTRICTED SUBSIDIARIES.
The Company (i) shall not, and shall not permit any Wholly
Owned Restricted Subsidiary of the Company to, transfer, convey, sell, lease or
otherwise dispose of any Capital Stock in any Wholly Owned Restricted
Subsidiary of the Company to any Person (other than the Company or a Wholly
Owned Restricted Subsidiary of the Company), unless (a) such transfer,
conveyance, sale, lease or other disposition is of all the Capital Stock in
such Wholly Owned Restricted Subsidiary and (b) the cash Net Proceeds from such
transfer, conveyance, sale, lease or other disposition are applied in
accordance with Section 4.10 hereof, and (ii) shall not permit any Wholly Owned
Restricted Subsidiary of the Company to issue any of its Equity Interests
(other than, if necessary, shares of its Capital Stock constituting directors'
qualifying shares) to any Person other than to the Company or a Wholly Owned
Restricted Subsidiary of the Company.
SECTION 4.17. PAYMENTS FOR CONSENT.
Neither the Company nor any of its Restricted Subsidiaries
shall, directly or indirectly, pay or cause to be paid any consideration,
whether by way of interest, fee or otherwise, to any Holder of any Subordinated
Notes for or as an inducement to any consent, waiver or amendment of any of the
terms or provisions of this Indenture or the Subordinated Notes unless such
consideration is offered to be paid or is paid to all Holders of the
Subordinated Notes that consent, waive or agree to amend in the time frame set
forth in the solicitation documents relating to such consent, waiver or
agreement.
ARTICLE 5.
SUCCESSORS
SECTION 5.01. MERGER, CONSOLIDATION, OR SALE OF ASSETS.
The Company may not consolidate or merge with or into
(whether or not the Company is the surviving entity), or sell, assign,
transfer, lease, convey or otherwise dispose of all or substantially all of its
properties or assets in one or more related transactions, to another
corporation, Person or entity unless (i) the Company is the surviving
corporation or the entity or the Person formed by or surviving any such
consolidation or merger (if other than the Company) or to which such sale,
assignment, transfer, lease, conveyance or other disposition shall have been
made is a corporation organized or existing under the laws of the United
States, any state thereof or the District of Columbia; (ii) the entity or
Person formed by or surviving any such consolidation or merger (if other than
the Company) or the entity or Person to which such sale, assignment, transfer,
lease, conveyance or other disposition shall have been made assumes all the
obligations of the Company under the Registration Rights Agreement, the
Subordinated Notes and this Indenture pursuant to supplemental agreements in a
form reasonably satisfactory to the Trustee; (iii) immediately after such
transaction no Default or Event of Default exists; and (iv) except in the case
of a merger of the Company with or into a Wholly Owned Restricted Subsidiary of
the Company, the Company or the entity or Person formed by or surviving any
such consolidation or merger (if other than the Company), or to which such
sale, assignment, transfer, lease, conveyance or other disposition shall have
been made (A) shall have Consolidated Net Worth immediately after the
transaction equal to or greater than the Consolidated Net Worth of the Company
immediately preceding the transaction and (B) shall, at the time of such
transaction and after giving pro forma effect thereto as if such transaction
had occurred at the beginning of the applicable four-quarter period, be
permitted to incur at least $1.00 of additional Indebtedness pursuant to the
Fixed Charge Coverage Ratio test set forth in the first paragraph of Section
4.09.
48
SECTION 5.02. SUCCESSOR CORPORATION SUBSTITUTED.
Upon any consolidation or merger, or any sale, assignment,
transfer, lease, conveyance or other disposition of all or substantially all of
the assets of the Company in accordance with Section 5.01 hereof, the successor
corporation formed by such consolidation or into or with which the Company is
merged or to which such sale, assignment, transfer, 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 of this Indenture referring to the "Company" shall
refer instead to the successor corporation and not to the Company), and may
exercise every right and power of the Company under this Indenture with the
same effect as if such successor Person had been named as the Company herein;
provided, however, that the predecessor Company shall not be relieved from the
obligation to pay the principal of and interest on the Subordinated Notes
except in the case of a sale of all of the Company's assets that meets the
requirements of Section 5.01 hereof.
ARTICLE 6.
DEFAULTS AND REMEDIES
SECTION 6.01. EVENTS OF DEFAULT.
Each of the following constitutes an "Event of Default":
(a) default for 30 days in the payment when due of interest
on the Subordinated Notes (whether or not prohibited by Article 10 hereof);
(b) default in payment when due of the principal of or
premium, or Liquidated Damages, if any, on the Subordinated Notes (whether or
not prohibited by Article 10 hereof);
(c) failure by the Company or any of its Subsidiaries to
comply with the provisions described under Sections 4.07, 4.09, 4.10, 4.15 and
5.01 hereof (whether or not prohibited by Article 10 hereof);
(d) failure by the Company or any of its Subsidiaries for 30
days after notice to comply with any of its other agreements in this Indenture
or the Subordinated Notes;
(e) default under any mortgage, indenture or instrument under
which there may be issued or by which there may be secured or evidenced any
Indebtedness for money borrowed by the Company or any of its Restricted
Subsidiaries (or the payment of which is guaranteed by the Company or any of
its Restricted Subsidiaries) whether such Indebtedness or guarantee now exists,
or is created after March 12, 1998, which default (a) is caused by a failure to
pay principal of or premium, if any, or interest 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) results in the acceleration of such
Indebtedness prior to its express maturity and, in each case, the principal
amount of any such Indebtedness, together with the principal amount of any
other such Indebtedness under which there has been a Payment Default or the
maturity of which has been so accelerated, aggregates $5.0 million or more;
(f) failure by the Company or any of its Restricted
Subsidiaries to pay final judgments aggregating in excess of $5.0 million and
either (a) any creditor commences enforcement
49
proceedings upon any such judgments or (b) such judgments are not paid,
discharged or stayed for a period of 45 days;
(g) the Company or any of its Significant Subsidiaries or any
group of Subsidiaries that, taken as a whole, would constitute a Significant
Subsidiary pursuant to or within the meaning of Bankruptcy Law:
(i) commences a voluntary case,
(ii) consents to the entry of an order for relief against it
in an involuntary case, (iii) consents to the appointment of a custodian of it
or for all or substantially all of its property,
(iv) makes a general assignment for the benefit of its
creditors, or
(v) generally is not paying its debts as they become due; or
(i) a court of competent jurisdiction enters an order or
decree under any Bankruptcy Law that:
(h) is for relief against the Company or any of its
Significant Subsidiaries or any group of Subsidiaries that, taken as a whole,
would constitute a Significant Subsidiary in an involuntary case,
(ii) appoints a custodian of the Company or any of its
Significant Subsidiaries or any group of Subsidiaries that, taken as a whole,
would constitute a Significant Subsidiary or for all or substantially all of
the property of the Company or any of its Significant Subsidiaries or any group
of Subsidiaries that, taken as a whole, would constitute a Significant
Subsidiary, or
(iii) orders the liquidation of the Company or any of its
Significant Subsidiaries or any group of Subsidiaries that, taken as a whole,
would constitute a Significant Subsidiary,
and the order or decree remains unstayed and in effect for 60
consecutive days.
SECTION 6.02. ACCELERATION.
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
Subordinated Notes may declare all the Subordinated Notes to be due and payable
immediately. Notwithstanding the foregoing, in the case of an Event of Default
arising from certain events of bankruptcy or insolvency, with respect to the
Company, any Significant Subsidiary or any group of Subsidiaries that, taken
together, would constitute a Significant Subsidiary, all outstanding
Subordinated Notes will become due and payable without further action or
notice. Upon any acceleration of maturity of the Subordinated Notes, all
principal of and accrued interest on and Liquidated Damages, if any, of the
Subordinated Notes shall be due and payable immediately. Holders of the
Subordinated Notes may not enforce this Indenture or the Subordinated
50
Notes except as provided in this Indenture. Subject to certain limitations,
Holders of a majority in principal amount of the then outstanding Subordinated
Notes may direct the Trustee in its exercise of any trust or power. The Trustee
may withhold from Holders of the Subordinated 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.
In the case of any Event of Default occurring by reason of
any willful action (or inaction) taken (or not taken) by or on behalf of the
Company with the intention of avoiding payment of the premium that the Company
would have had to pay if the Company then had elected to redeem the
Subordinated Notes pursuant to the optional redemption provisions of this
Indenture, an equivalent premium shall also become and be immediately due and
payable to the extent permitted by law upon the acceleration of the
Subordinated Notes. If an Event of Default occurs prior to March 12, 2003 by
reason of any willful action (or inaction) taken (or not taken) by or on behalf
of the Company with the intention of avoiding the prohibition on redemption of
the Subordinated Notes prior to March 12, 2003, then the premium specified
herein shall also become immediately due and payable to the extent permitted by
law upon the acceleration of the Subordinated Notes.
Year Percentage
---- ----------
1998.......................................118.333%
1999.......................................116.042%
2000...................................... 113.750%
2001.......................................111.459%
2002.......................................109.167%
SECTION 6.03. OTHER REMEDIES.
If an Event of Default occurs and is continuing, the Trustee
may pursue any available remedy to collect the payment of principal of,
interest on, premiums, or Liquidated Damages, if any, on the Subordinated Notes
or to enforce the performance of any provision of the Subordinated Notes or
this Indenture.
The Trustee may maintain a proceeding even if it does not
possess any of the Subordinated Notes or does not produce any of them in the
proceeding. A delay or omission by the Trustee or any Holder of a Subordinated
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 a majority in aggregate principal amount of the
Subordinated Notes then outstanding by notice to the Trustee (and without
notice to any other Holders) may on behalf of the Holders of all of the
Subordinated 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, premiums, if any, or interest on, the Subordinated
Notes (including in connection with an offer to purchase) (provided, however,
that the Holders of a majority in aggregate principal amount of the then
outstanding Subordinated Notes may rescind an acceleration and its
consequences, including any related payment default that resulted from such
acceleration). Upon any such waiver, such Default shall cease to exist, and any
Event of Default arising therefrom shall be deemed to have been cured for every
51
purpose of this Indenture; but no such waiver shall extend to any subsequent or
other Default or impair any right consequent thereon.
SECTION 6.05. CONTROL BY MAJORITY.
Holders of a majority in principal amount of the then
outstanding Subordinated Notes shall have the right to 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, subject to
certain exceptions. 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 Subordinated Notes or that
may involve the Trustee in personal liability.
SECTION 6.06. LIMITATION ON SUITS.
A Holder of a Subordinated Note may pursue a remedy with
respect to this Indenture or the Subordinated Notes only if:
(a) the Holder of a Subordinated Note gives to the Trustee
written notice of a continuing Event of Default;
(b) the Holders of at least 25% in aggregate principal amount
of the then outstanding Subordinated Notes make a written request to the
Trustee to pursue the remedy;
(c) such Holder of a Subordinated Note or Holders of
Subordinated Notes offer and, if requested, provide to the Trustee indemnity
satisfactory to the Trustee against any loss, liability or expense;
(d) the Trustee does not comply with the request within 60
days after receipt of the request and the offer and, if requested, the
provision of indemnity; and
(e) during such 60-day period the Holders of a majority in
aggregate principal amount of the then outstanding Subordinated Notes do not
give the Trustee a direction inconsistent with the request.
A Holder of a Subordinated Note may not use this Indenture to
prejudice the rights of another Holder of a Subordinated Note or to obtain a
preference or priority over another Holder of a Subordinated Note.
SECTION 6.07. RIGHTS OF HOLDERS OF SUBORDINATED NOTES TO RECEIVE PAYMENT.
Notwithstanding any other provision of this Indenture, but
subject to the provisions of Sections 6.04 and 6.06, the right of any Holder of
a Subordinated Note to receive payment of principal, premium, if any, interest
or Liquidated Damages, if any, on the Subordinated Note, on or after the
respective due dates expressed in the Subordinated Note (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.
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SECTION 6.08. COLLECTION SUIT BY TRUSTEE.
If an Event of Default specified in Section 6.01(a) or (b)
occurs and is continuing, the Trustee 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, premiums, if any, interest or Liquidated Damages, if
any, remaining unpaid on the Subordinated 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 (a) to file proofs of claim for the
whole amount of the principal of, premium, if any, interest and Liquidated
Damages, if any, on the Subordinated Notes and to file such proof 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 Subordinated Notes allowed in such judicial proceedings
and (b) 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, prior to any
payment to such Holder. 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 Subordinated 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 Section
6.10, 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, expense
and liabilities incurred, and all advances made, by the Trustee and the costs
and expenses of collection;
Second: to Holders of Subordinated Notes for amounts due and
unpaid on the Subordinated Notes for principal, premium, if any, interest and
Liquidated Damages, if any, ratably, without preference or priority of any
kind, according to the amounts due and payable on the Subordinated Notes for
principal, premium, if any, interest and Liquidated Damages, if any,
respectively; and
53
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 Subordinated 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 does not apply to a suit by the Trustee, a suit by a
Holder of a Subordinated Note pursuant to Section 6.07 hereof, or a suit by
Holders of more than 10% in principal amount of the then outstanding
Subordinated Notes.
ARTICLE 7.
TRUSTEE
SECTION 7.01. DUTIES OF TRUSTEE.
(a) If an Event of Default has occurred and is continuing,
the Trustee shall exercise such of the rights and powers vested in it by this
Indenture, and use the same degree of care and skill in its exercise, as a
prudent person would exercise or use under the circumstances in the conduct of
such person's own affairs.
(b) Except during the continuance of an Event of Default:
(i) the duties of the Trustee shall be determined solely by
the express provisions of this Indenture and the Trustee need perform only
those duties that are specifically set forth in this Indenture and no others,
and no implied covenants or obligations shall be read into this Indenture
against the Trustee; and
(ii) in the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the correctness of the
opinions expressed therein, upon certificates or opinions furnished to the
Trustee and conforming to the requirements of this Indenture. However, the
Trustee shall examine the certificates and opinions to determine whether or not
they conform to the requirements of this Indenture.
(c) The Trustee may not be relieved from liabilities for its
own negligent action, its own negligent failure to act, or its own willful
misconduct, except that:
(i) this paragraph does not limit the effect of paragraph (b)
of this Section;
(ii) the Trustee shall not be liable for any error of
judgment made in good faith by a Responsible Officer, unless it is proved that
the Trustee was negligent in ascertaining the pertinent facts; and
54
(iii) the Trustee shall not be liable with respect to any
action it takes or omits to take in good faith in accordance with a direction
received by it pursuant to Section 6.05 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 shall require the Trustee
to expend or risk its own funds or incur any financial liability. The Trustee
shall be under no obligation to exercise any of its rights and powers under
this Indenture at the request of any Holders, unless such Holder shall have
offered to the Trustee security and indemnity satisfactory to it against any
loss, liability or expense.
(f) The Trustee shall 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) Subject to Section 7.01(b)(ii), the Trustee may
conclusively rely upon any document believed by it to be genuine and to have
been signed or presented by the proper Person. The Trustee need not investigate
any fact or matter stated in the document.
(b) Before the Trustee acts or refrains from acting, it may
require an Officers' Certificate or an Opinion of Counsel or both. The Trustee
shall not be liable for any action it takes or omits to take in good faith in
reliance on such Officers' Certificate or Opinion of Counsel. The Trustee may
consult with counsel of its selection and the advice of such counsel or any
Opinion of Counsel shall be full and complete authorization and protection from
liability in respect of any action taken, suffered or omitted by it hereunder
in good faith and in reliance thereon.
(c) The Trustee may act through its attorneys and agents and
shall not be responsible for the misconduct or negligence of any agent
appointed with due care.
(d) The Trustee shall not be liable for any action it takes
or omits to take in good faith that it believes to be authorized or within the
rights or powers conferred upon it by this Indenture.
(e) Unless otherwise specifically provided in this Indenture,
any demand, request, direction or notice from the Company shall be sufficient
if signed by an Officer of the Company.
(f) The Trustee shall be under no obligation to exercise any
of the rights or powers vested in it by this Indenture at the request or
direction of any of the Holders unless such Holders shall have offered to the
Trustee reasonable security or indemnity against the costs, expenses and
liabilities that might be incurred by it in compliance with such request or
direction.
SECTION 7.03. INDIVIDUAL RIGHTS OF TRUSTEE.
The Trustee in its individual or any other capacity may
become the owner or pledgee of Subordinated 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
55
continue as trustee or resign. Any Agent may do the same with like rights and
duties. The Trustee is also subject to Sections 7.10 and 7.11 hereof.
SECTION 7.04. TRUSTEE'S DISCLAIMER.
The Trustee shall not be responsible for and makes no
representation as to the validity or adequacy of this Indenture or the
Subordinated Notes, it shall not be accountable for the Company's use of the
proceeds from the Subordinated Notes or the use or application of any money
paid to the Company or upon the Company's direction under any provision of this
Indenture, it shall not be responsible for the use or application of any money
received by any Paying Agent other than the Trustee, and it shall not be
responsible for any statement or recital herein or any statement in the
Subordinated Notes or any registration statement for the Subordinated Notes
(other than statements in any Form T-1 filed with the SEC under the TIA) or in
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 shall mail to Holders of
Subordinated 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, if any, interest or Liquidated Damages, if any, on
any Subordinated 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 Subordinated Notes.
SECTION 7.06. REPORTS BY TRUSTEE TO HOLDERS OF THE SUBORDINATED NOTES.
Within 60 days after each July 31 beginning with the July 31
following the date of this Indenture, and for so long as Subordinated Notes
remain outstanding, the Trustee shall mail to the Holders of the Subordinated
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 shall comply with TIA ss. 313(b). The Trustee shall also transmit
by mail all reports as required by TIA ss. 313(c).
A copy of each report at the time of its mailing to the
Holders of Subordinated Notes shall be mailed to the Company and filed with the
SEC, if accepted, and each stock exchange on which the Subordinated Notes are
listed in accordance with TIA ss. 313(d). The Company shall promptly notify the
Trustee when the Subordinated Notes are listed on any stock exchange.
SECTION 7.07. COMPENSATION AND INDEMNITY.
The Company shall pay to the Trustee from time to time such
compensation for its acceptance of this Indenture and services in accordance
with any provision of this Indenture as the parties shall agree from time to
time. The Trustee's compensation shall not be limited by any law on
compensation of a trustee of an express trust. The Company shall reimburse the
Trustee promptly upon request for all reasonable disbursements, advances and
expenses incurred or made by it in addition to the compensation for its
services in accordance with any provision of this Indenture. Such expenses
shall include the reasonable compensation, disbursements and expenses of the
Trustee's agents and counsel.
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The Company shall indemnify the Trustee against any and all
losses, liabilities or expenses incurred by it arising out of or in connection
with the acceptance or administration of its duties under this Indenture,
including the costs and expenses of enforcing this Indenture against the
Company (including this Section 7.07) and defending itself against any claim
(whether asserted by the Company or any Holder or any other person) or
liability in connection with the exercise or performance of any of its powers
or duties hereunder, except to the extent any such loss, liability or expense
may be attributable to its negligence or bad faith. The Trustee shall notify
the Company promptly of any claim for which it may seek indemnity. Failure by
the Trustee to so notify the Company shall not relieve the Company of its
obligations hereunder. The Company shall defend the claim and the Trustee shall
cooperate in the defense. The Trustee may have separate counsel and the Company
shall pay the reasonable fees and expenses of such counsel. The Company need
not pay for any settlement made without its consent, which consent shall not be
unreasonably withheld.
The obligations of the Company under this Section 7.07 shall
survive the satisfaction and discharge of this Indenture.
To secure the Company's payment obligations in this Section,
the Trustee shall have a Lien prior to the Subordinated Notes on all money or
property held or collected by the Trustee, except that held in trust to pay
principal and interest on particular Subordinated Notes. Such Lien shall
survive the satisfaction and discharge of this Indenture.
When the Trustee incurs expenses or renders services after an
Event of Default specified in Section 6.01(i) or (j) 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.
The Trustee shall comply with the provisions of TIA ss.
313(b)(2) to the extent applicable.
SECTION 7.08. REPLACEMENT OF TRUSTEE.
A resignation or removal of the Trustee and appointment of a
successor Trustee shall become effective only upon the successor Trustee's
acceptance of appointment as provided in this Section 7.08.
The Trustee may resign in writing at any time and be
discharged from the trust hereby created by so notifying the Company at least
45 days prior to the date of the proposed resignation. The Holders of
Subordinated Notes of a majority in principal amount of the then outstanding
Subordinated Notes may remove the Trustee by so notifying the Trustee and the
Company in writing. The Company may remove the Trustee if:
(a) the Trustee fails to comply with Section 7.10 hereof;
(b) 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;
(c) a custodian, receiver or public officer takes charge of
the Trustee or its property; or
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(d) the Trustee otherwise becomes incapable of acting.
If the Trustee resigns or is removed or if a vacancy exists
in the office of Trustee for any reason, the Company shall promptly appoint a
successor Trustee. Within one year after the successor Trustee takes office,
the Holders of a majority in principal amount of the then outstanding
Subordinated Notes may appoint a successor Trustee to replace the successor
Trustee appointed by the Company.
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 Subordinated Notes of at least 10% in principal
amount of the then outstanding Subordinated Notes may petition any court of
competent jurisdiction for the appointment of a successor Trustee.
If the Trustee, after written request by any Holder of a
Subordinated Note who has been a Holder of a Subordinated Note for at least six
months, fails to comply with Section 7.10, such Holder of a Subordinated Note
may petition any court of competent jurisdiction for the removal of the Trustee
and the appointment of a successor Trustee.
A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Company. Thereupon, the
resignation or removal of the retiring Trustee shall become effective, and the
successor Trustee shall have all the rights, powers and duties of the Trustee
under this Indenture. The successor Trustee shall mail a notice of its
succession to Holders of the Subordinated Notes. The retiring Trustee shall
promptly transfer all property held by it as Trustee to the successor Trustee;
provided that 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 shall continue for the benefit of the
retiring Trustee.
SECTION 7.09. SUCCESSOR TRUSTEE BY MERGER, ETC.
If the Trustee consolidates, merges or converts into, or
transfers all or substantially all of its corporate trust business to, another
corporation, the successor corporation without any further act shall be the
successor Trustee.
SECTION 7.10. ELIGIBILITY; DISQUALIFICATION.
There shall at all times be a Trustee hereunder that is a
corporation organized and doing business under the laws of the United States of
America or of any state thereof that is authorized under such laws to exercise
corporate 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 $500.0 million as set forth in its most recent published annual report of
condition.
This Indenture shall always have a Trustee who satisfies the
requirements of TIA ss. 310(a)(1), (2) and (5). The Trustee shall comply with
TIA ss. 310(b).
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SECTION 7.11. PREFERENTIAL COLLECTION OF CLAIMS AGAINST THE COMPANY.
The Trustee shall comply with TIA ss. 311(a), excluding any
creditor relationship listed in TIA ss. 311(b). A Trustee who has resigned or
been removed shall be subject to TIA ss. 311(a) to the extent indicated
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, at any time,
elect to have either Section 8.02 or 8.03 hereof be applied to all outstanding
Subordinated Notes upon compliance with the conditions set forth below in this
Article Eight.
SECTION 8.02. LEGAL DEFEASANCE AND DISCHARGE.
Upon the Company's exercise under Section 8.01 hereof of the
option applicable to this Section 8.02, the Company shall, subject to the
satisfaction of the conditions set forth in Section 8.04 hereof, be deemed to
have been discharged from its obligations with respect to all outstanding
Subordinated Notes on the date the conditions set forth below are satisfied
(hereinafter, "Legal Defeasance"). For this purpose, Legal Defeasance means
that the Company shall be deemed to have paid and discharged the entire
indebtedness represented by the outstanding Subordinated Notes, which shall
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 (a) and (b)
below, and to have satisfied all its other obligations under such Subordinated
Notes and this Indenture (and the Trustee, on demand of and at the expense of
the Company, shall execute proper instruments acknowledging the same), except
for the following provisions which shall survive until otherwise terminated or
discharged hereunder: (a) the rights of Holders of outstanding Subordinated
Notes to receive payments in respect of the principal amount of, and premium,
if any, interest and Liquidated Damages, if any, on such Subordinated Notes
when such payments are due from the trust described in Section 8.04 hereof, as
more fully set forth in such Section, (b) the Company's obligations with
respect to the Subordinated Notes concerning issuing temporary Subordinated
Notes, registration of Subordinated Notes, mutilated, destroyed, lost or stolen
Subordinated Notes and the maintenance of an office or agency for payment and
money for security payments held in trust, (c) the rights, powers, trusts,
duties and immunities of the Trustee, and the Company's obligations in
connection therewith and (d) this Article Eight. Subject to compliance with
this Article Eight, the Company may exercise its option under this Section 8.02
notwithstanding the prior exercise of its option under Section 8.03 hereof.
SECTION 8.03. COVENANT DEFEASANCE.
Upon the Company's exercise under Section 8.01 hereof of the
option applicable to this Section 8.03, the Company shall, subject to the
satisfaction of the conditions set forth in Section 8.04 hereof, be released
from its 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, 5.01 and 5.02 hereof with respect to
the outstanding Subordinated Notes on and after the date the conditions set
forth below are satisfied (hereinafter, "Covenant Defeasance"), and the
Subordinated Notes shall thereafter be deemed not "outstanding" for the
purposes of any direction, waiver, consent or declaration or act of Holders
(and the consequences of any thereof) in connection with such covenants, but
shall continue to be deemed "outstanding" for all other purposes hereunder (it
59
being understood that such Subordinated Notes shall not be deemed outstanding
for accounting purposes). For this purpose, Covenant Defeasance means that,
with respect to the outstanding Subordinated Notes, the Company may omit to
comply with and shall have no liability in respect of any term, condition or
limitation set forth in any such covenant, whether directly or indirectly, by
reason of any reference elsewhere herein to any such covenant or by reason of
any reference in any such covenant to any other provision herein or in any
other document and such omission to comply shall not constitute a Default or an
Event of Default under Section 6.01 hereof, but, except as specified above, the
remainder of this Indenture and such Subordinated Notes shall 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 and Sections 6.01(c) through
6.01(h) shall not constitute Events of Default.
SECTION 8.04. CONDITIONS TO LEGAL OR COVENANT DEFEASANCE.
The following shall be the conditions to the application of
either Section 8.02 or 8.03 hereof to the outstanding Subordinated Notes:
In order to exercise either Legal Defeasance or Covenant
Defeasance:
(i) the Company must irrevocably deposit with the Trustee, in
trust, for the benefit of the Holders of the Subordinated Notes, cash in U.S.
dollars, non-callable Government Securities, or a combination thereof, in such
amounts as will be sufficient, in the opinion of a nationally recognized firm
of independent public accountants, to pay the principal amount of premium, if
any, interest and Liquidated Damages, if any, on the outstanding Subordinated
Notes on the stated maturity or on the applicable redemption date, as the case
may be, and the Company must specify whether the Subordinated Notes are being
defeased to maturity or to a particular redemption date;
(ii) in the case of Legal Defeasance, the Company shall have
delivered to the Trustee an opinion of counsel in the United States reasonably
acceptable to the Trustee confirming that (A) the Company has received from, or
there has been published by, the Internal Revenue Service a ruling or (B) since
March 12, 1998, 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 Subordinated Notes
will not recognize income, gain or loss for federal income tax purposes as a
result of such Legal Defeasance and will be subject to federal income tax on
the same amounts, in the same manner and at the same times as would have been
the case if such Legal Defeasance had not occurred;
(iii) in the case of Covenant Defeasance, the Company shall
have delivered to the Trustee an opinion of counsel in the United States
reasonably acceptable to the Trustee confirming that the Holders of the
outstanding Subordinated Notes will not recognize income, gain or loss for
federal income tax purposes as a result of such Covenant Defeasance and will be
subject to federal income tax on the same amounts, in the same manner and at
the same times as would have been the case if such Covenant Defeasance had not
occurred;
(iv) no Default or Event of Default shall have occurred and
be continuing 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) or
insofar as Events of Default from bankruptcy or insolvency events are
concerned, at any time in the period ending on the 91st day after the date of
deposit;
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(v) such Legal Defeasance or Covenant Defeasance will not
result in a breach or violation of, or constitute a default under any material
agreement or instrument (other than this Indenture) to which the Company or any
of its Subsidiaries is a party or by which the Company or any of its
Subsidiaries is bound;
(vi) the Company must have delivered to the Trustee an
opinion of counsel to the effect that after the 91st day following the deposit,
the trust funds will not be subject to the effect of any applicable bankruptcy,
insolvency, reorganization or similar laws affecting creditors' rights
generally;
(vii) the Company must deliver to the Trustee an Officers'
Certificate stating that the deposit was not made by the Company with the
intent of preferring the Holders of Subordinated Notes over the other creditors
of the Company with the intent of defeating, hindering, delaying or defrauding
creditors of the Company or others; and
(viii) the Company must deliver to the Trustee an Officers'
Certificate and an opinion of counsel, each stating that all conditions
precedent provided for relating to the Legal Defeasance or the Covenant
Defeasance have been complied with.
SECTION 8.05. DEPOSITED MONEY AND GOVERNMENT SECURITIES TO BE HELD IN TRUST;
OTHER MISCELLANEOUS PROVISIONS.
Subject to Section 8.06 hereof, all money and non-callable
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 Subordinated Notes shall be held in trust and applied by the
Trustee, in accordance with the provisions of such Subordinated 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 Subordinated Notes of all sums due and to become due
thereon in respect of principal, premium, if any, interest and Liquidated
Damages, if any, but such money need not be segregated from other funds except
to the extent required by law.
The Company shall pay and indemnify the Trustee against any
tax, fee or other charge imposed on or assessed against the cash or
non-callable Government Securities deposited pursuant to Section 8.04 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 Subordinated Notes.
Anything in this Article Eight to the contrary
notwithstanding, the Trustee shall deliver or pay to the Company from time to
time upon the request of the Company any money or non-callable Government
Securities held by it as provided in Section 8.04 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(a) 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,
premiums, if any, interest on, and Liquidated
61
Damages on, if any, any Subordinated Note and remaining unclaimed for two years
after such principal, premiums, if any, interest, and Liquidated Damages, if
any, has become due and payable shall be paid to the Company on its request or
(if then held by the Company) shall be discharged from such trust; and the
Holder of such Subordinated Note shall thereafter, as a secured creditor, look
only to the Company for payment thereof, and all liability of the Trustee or
such Paying Agent with respect to such trust money, and all liability of the
Company as trustee thereof, shall thereupon cease; provided, however, that the
Trustee or such Paying Agent, before being required to make any such repayment,
may at the expense of the Company cause to be published once, in the New York
Times and The Wall Street Journal (national edition), notice that such money
remains unclaimed and that, after a date specified therein, which shall not be
less than 30 days from the date of such notification or publication, any
unclaimed balance of such money then remaining 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 non-callable 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 obligations under this
Indenture and the Subordinated Notes shall be revived and reinstated as though
no deposit had occurred 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, if
any, or interest on any Subordinated Note following the reinstatement of its
obligations, the Company shall be subrogated to the rights of the Holders of
such Subordinated 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 SUBORDINATED NOTES.
Notwithstanding Section 9.02 hereof, the Company and the
Trustee may amend or supplement this Indenture or the Subordinated Notes
without the consent of any Holder of a Subordinated Note:
(a) to cure any ambiguity, defect or inconsistency,
(b) to provide for uncertificated Subordinated Notes in
addition to or in place of certificated Subordinated Notes,
(c) to provide for the assumption of the Company's
obligations to Holders of Subordinated Notes in the case of a merger or
consolidation or sale of all or substantially all of the Company's assets,
62
(d) to make any change that would provide any additional
rights or benefits to the Holders of Subordinated Notes or that does not
adversely affect the legal rights under this Indenture of any such Holder, or
(e) to comply with requirements of the Commission in order to
effect or maintain the qualification of this Indenture under the Trust
Indenture Act.
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 9.06 hereof, the Trustee shall join with the Company in
the execution of any amended or supplemental Indenture authorized or permitted
by the terms of this Indenture and to make any further appropriate agreements
and stipulations that may be therein contained, but the Trustee shall not be
obligated to enter into such amended or supplemental Indenture that affects its
own rights, duties or immunities under this Indenture or otherwise.
SECTION 9.02. WITH CONSENT OF HOLDERS OF SUBORDINATED NOTES.
Except as provided below in this Section 9.02, the Company
and the Trustee may amend or supplement this Indenture and the Subordinated
Notes may be amended or supplemented with the consent of the Holders of at
least a majority in principal amount of the Subordinated Notes then outstanding
(including, without limitation, consents obtained in connection with a purchase
of, or tender offer or exchange offer for the Subordinated 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,
premiums on, if any, interest on, or Liquidated Damages on, if any, the
Subordinated Notes, except a payment default resulting from an acceleration
that has been rescinded) or compliance with any provision of this Indenture or
the Subordinated Notes may be waived with the consent of the Holders of a
majority in principal amount of the then outstanding Subordinated Notes
(including, without limitation, consents obtained in connection with a purchase
of, or tender offer or exchange offer for the Subordinated Notes).
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 Subordinated Notes
as aforesaid, and upon receipt by the Trustee of the documents described in
Section 9.06 hereof, the Trustee shall join with the Company in the execution
of such amended or supplemental Indenture unless such amended or supplemental
Indenture affects the Trustee's own rights, duties or immunities under this
Indenture or otherwise, in which case the Trustee may in its discretion, but
shall not be obligated to, enter into such amended or supplemental Indenture.
It shall not be necessary for the consent of the Holders of
Subordinated Notes under this Section 9.02 to approve the particular form of
any proposed amendment or waiver, but it shall be sufficient if such consent
approves the substance thereof.
After an amendment, supplement or waiver under this Section
9.02 becomes effective, the Company shall mail to the Holders of Subordinated
Notes affected thereby a notice briefly describing the amendment, supplement or
waiver. Any failure of the Company to mail such notice, or any defect therein,
shall not, however, in any way impair or affect the validity of any such
amended or supplemental Indenture or waiver. Subject to Sections 6.04 and 6.07
hereof, the Holders of a majority
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in aggregate principal amount of the Subordinated Notes then outstanding may
waive compliance in a particular instance by the Company with any provision of
this Indenture or the Subordinated Notes. However, without the consent of each
Holder affected, an amendment or waiver may not (with respect to any
Subordinated Notes held by a non-consenting Holder):
(i) reduce the principal amount of Subordinated Notes whose
Holders must consent to an amendment, supplement or waiver,
(ii) reduce the principal amount of, change the fixed
maturity of, alter the provisions with respect to the redemption of the
Subordinated Notes (other than provisions relating to Sections 4.10 and 4.15
hereof),
(iii) reduce the rate of or change the time for payment of
interest on any Subordinated Note,
(iv) waive a Default or Event of Default in the payment of
principal of or premium, if any, or interest on the Subordinated Notes (except
a rescission of acceleration of the Subordinated Notes by the Holders of at
least a majority in aggregate principal amount of the Subordinated Notes and a
waiver of the payment default that resulted from such acceleration),
(v) make any Subordinated Note payable in money other than
that stated in the Subordinated Notes,
(vi) make any change in the provisions of this Indenture
relating to waivers of past Defaults or the rights of Holders of Subordinated
Notes to receive payments of principal of or premium, if any, or interest on
the Subordinated Notes,
(vii) waive a redemption or repurchase payment with respect
to any Subordinated Note (other than a payment required by Sections 4.10 and
4.15 hereof),
(viii) make any change in the foregoing amendment and waiver
provisions or
(ix) modify any provision of this Indenture with respect to
the priority of the Subordinated Notes in right of payment. Notwithstanding the
foregoing, any amendment or waiver to Section 4.15 hereof will require the
consent of the Holders of at least two-thirds in aggregate principal amount of
the Subordinated Notes then outstanding if such amendment would adversely
affect the rights of Holders of the Subordinated Notes.
SECTION 9.03. COMPLIANCE WITH TRUST INDENTURE ACT.
Every amendment or supplement to this Indenture or the
Subordinated Notes shall 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 Subordinated Note is a continuing consent by the
Holder of a Subordinated Note and every subsequent Holder of a Subordinated
Note or portion of a Subordinated Note that evidences the same
64
debt as the consenting Holder's Subordinated Note, even if notation of the
consent is not made on any Subordinated Note. However, any such Holder of a
Subordinated Note or subsequent Holder of a Subordinated Note may revoke the
consent as to its Subordinated Note if the Trustee receives written notice of
revocation before the date the waiver, supplement or amendment becomes
effective. An amendment, supplement or waiver becomes effective in accordance
with its terms and thereafter binds every Holder.
SECTION 9.05. NOTATION ON OR EXCHANGE OF SUBORDINATED NOTES.
The Trustee may place an appropriate notation about an
amendment, supplement or waiver on any Subordinated Note thereafter
authenticated. The Company in exchange for all Subordinated Notes may issue and
the Trustee shall authenticate new Subordinated Notes that reflect the
amendment, supplement or waiver.
Failure to make the appropriate notation or issue a new
Subordinated Note shall not affect the validity and effect of such amendment,
supplement or waiver.
SECTION 9.06. TRUSTEE TO SIGN AMENDMENTS, ETC.
The Trustee shall sign any amended or supplemental Indenture
authorized pursuant to this Article Nine if the amendment or supplement does
not adversely affect the rights, duties, liabilities or immunities of the
Trustee. The Company may not sign an amendment or supplemental Indenture until
the Board of Directors approves it. In executing any amended or supplemental
indenture, the Trustee shall be entitled to receive and (subject to Section
7.01) shall be fully protected in relying upon, an Officer's 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.
SUBORDINATION
SECTION 10.01. AGREEMENT TO SUBORDINATE.
The Company agrees, and each Holder by accepting Subordinated
Notes agrees, that the Subordinated Note Obligations shall be subordinated in
right of payment, to the extent and in the manner provided in this Article 10,
to the prior payment in full in cash or cash equivalents of all Indebtedness of
the Company, whether outstanding on the date hereof or thereafter incurred.
The provisions of this Article 10 shall constitute a
continuing offer to all Persons that, in reliance upon such provisions, become
holders or, or continue to hold Indebtedness of the Company; such provisions
are made for the benefit of holders of Indebtedness of the Company and they or
each of them may enforce the rights of holders of Indebtedness of the Company
hereunder, subject to the terms and provisions hereof.
SECTION 10.02. LIQUIDATION; DISSOLUTION; BANKRUPTCY.
Upon any distribution to creditors of the Company in a
liquidation or dissolution of the Company or in a bankruptcy, reorganization,
insolvency, receivership or similar proceeding relating to
65
the Company or its property, an assignment for the benefit of its creditors or
any marshalling of its Company's assets and liabilities:
(a) the holders of Indebtedness of the Company will be
entitled to receive payment in full in cash or cash equivalents of all
Obligations due in respect of such Indebtedness (including interest after the
commencement of any such proceeding at the rate specified in the applicable
Indebtedness) before the Holders of Subordinated Notes will be entitled to
receive any payment with respect to the Subordinated Note Obligations (except
that Holders of Subordinated Notes may receive (i) interest in additional
Subordinated Notes to the extent permitted by law, and (ii) payments made from
the trust created pursuant to Article 8 hereof); and
(b) until all Obligations with respect to Indebtedness of the
Company are paid in full in cash or cash equivalents, any distribution to which
the Holders of Subordinated Notes would be entitled shall be made to the
holders of Indebtedness of the Company (except that Holders of Subordinated
Notes may receive (i) interest in additional Subordinated Notes, and (ii)
payments made from the trust created pursuant to Article 8 hereof).
SECTION 10.03. DEFAULT ON INDEBTEDNESS.
The Company may not make any payment upon or in respect of
the Subordinated Notes, (except that Holders of Subordinated Notes may receive
(i) interest in additional Subordinated Notes, to the extent permitted by law,
and (ii) payments made from the trust created pursuant to Article 8 hereof) if:
(i) a default in the payment of the principal
of or interest or premium, if any, on any
Indebtedness of the Company (a "payment
default") occurs and is continuing beyond
any applicable period of grace; or
(ii) any other default occurs and is continuing
with respect to Indebtedness of the Company
that permits holders of the Indebtedness as
to which such other default relates to
accelerate its maturity and the Trustee
receives a notice of such default (a
"Payment Blockage Notice") from the Company
or a Representative with respect to such
Indebtedness. Payments on the Subordinated
Notes may and shall be resumed (a) in the
case of a payment default, upon the date on
which such default is cured or waived and
(b) in case of any other default, the
earlier of the date on which such other
default is cured or waived or 179 days
after the date on which the applicable
Payment Blockage Notice is received, unless
the maturity of any such Indebtedness has
been accelerated. No new period of payment
blockage may be commenced unless and until
360 days have elapsed since the first day
of the effectiveness of the immediately
prior Payment Blockage Notice. No
nonpayment default that existed or was
continuing on the date of delivery of any
Payment Blockage Notice to the Trustee
shall be, or be made, the basis for a
subsequent Payment Blockage Notice unless
such default shall have been cured or
waived for a period of not less than 90
days.
The Company may and shall resume payments on the Subordinated Notes:
66
(a) in the case of payment default described in clause
(i) above, upon the date on which such default is
cured or waived, and
(b) in case of a default described in clause (ii) above,
the earlier of the date on which such default is
cured or waived or 179 days after the date on which
the applicable Payment Blockage Notice is received,
unless the maturity of any Indebtedness has been
accelerated.
SECTION 10.04. ACCELERATION OF SUBORDINATED NOTES.
The Company shall provide the names of the Representatives of
the Indebtedness of the Company to the Trustee; provided, however, that the
failure to provide such notice shall not prejudice any of the rights hereunder
of the holders of Indebtedness.
SECTION 10.05. WHEN DISTRIBUTION MUST BE PAID OVER.
In the event that the Trustee receives any payment of any
Obligations with respect to the Subordinated Note Obligations at a time when
the Trustee has received written notice at least two Business Days prior to
such payment is prohibited by Section 10.02 or 10.03 hereof, such payment shall
be held by the Trustee, for the benefit of, and shall be paid forthwith over
and delivered, upon written request to, the holders of Indebtedness of the
Company as their interest may appear or their Representative under the
indenture or other agreement (if any) pursuant to which such Indebtedness may
have been issued, as their interest may appear, for application to the payment
of all Obligations with respect to such Indebtedness remaining unpaid to the
extent necessary to pay such Obligations in full in accordance with their
terms, after giving effect to any concurrent payment or distribution to or for
the holders of such Indebtedness.
In the event that any Holder receives any payment of any
Obligations with respect to the Subordinated Note Obligations at a time when
such payment is prohibited by Section 10.02 or 10.03 hereof, such payment shall
be held by such Holder, in trust for the benefit of, and shall be paid
forthwith over and delivered, upon written request to, the holders of
Indebtedness of the Company as their interest may appear or their
Representative under the indenture or other agreement (if any) pursuant to
which such Indebtedness may have been issued, as their interest may appear, for
application to the payment of all Obligations with respect to such Indebtedness
remaining unpaid to the extent necessary to pay such Obligations in full in
accordance with their terms, after giving effect to any concurrent payment or
distribution to or for the holders of such Indebtedness.
With respect to the holders of Indebtedness of the Company,
the Trustee undertakes to perform only such obligations on the part of the
Trustee as are specifically set forth in this Article 10, and no implied
covenants or obligations with respect to the holders of such Indebtedness shall
be read into this Indenture against the Trustee. The Trustee shall not be
deemed to owe any fiduciary duty to the holders of such Indebtedness, and shall
not be liable to any such holders if the Trustee shall pay over or distribute
to or on behalf of Holders or the Company or any other Person money or assets
to which any holders of such Indebtedness shall be entitled by virtue of this
Article 10, except if such payment is made as a result of the negligence, bad
faith or willful misconduct of the Trustee.
67
SECTION 10.06. NOTICE BY COMPANY.
The Company shall promptly notify the Trustee and the Paying
Agent of any facts known to the Company that would cause a payment of any
Obligations with respect to the Subordinated Note Obligations to violate this
Article 10, but failure to give such notice shall not affect the subordination
of the Subordinated Note Obligations to the Indebtedness of the Company as
provided in this Article 10.
SECTION 10.07. SUBROGATION.
After all Indebtedness of the Company is paid in full in cash
or cash equivalents and until the Subordinated Notes are paid in full, Holders
shall be subrogated (equally and ratably with all other Indebtedness pari passu
with the Subordinated Notes) to the rights of holders of such Indebtedness to
receive distributions applicable to such Indebtedness to the extent that
distributions otherwise payable to the Holders have been applied to the payment
of such Indebtedness. A distribution made under this Article 10 to holders of
Indebtedness of the Company that otherwise would have been made to Holders is
not, as between the Company and Holders, a payment by the Company on such
Indebtedness.
SECTION 10.08. RELATIVE RIGHTS.
This Article 10 defines the relative rights of the Holders
and holders of Indebtedness of the Company. Nothing in this Indenture shall:
(i) impair, as between the Company and the Holders, the
obligation of the Company, which is absolute and
unconditional, to pay principal of, interest,
premium, if any, and Liquidated Damages, if any, on
the Subordinated Notes in accordance with their
terms;
(ii) affect the relative rights of Holders and creditors
of the Company other than their rights in relation
to holders of Indebtedness of the Company; or
(iii) prevent the Trustee or any Holder from
exercising its available remedies upon a
Default or an Event of Default, subject to
the rights of holders and owners of
Indebtedness of the Company to receive
distributions and payments otherwise
payable to Holders.
If the Company fails because of this Article 10 to pay
principal, interest, premium, if any, or Liquidated Damages, if any, on a
Subordinated Note on the due date (subject to grace periods provided in Section
6.01), the failure is nevertheless a Default or an Event of Default.
SECTION 10.09. SUBORDINATION MAY NOT BE IMPAIRED BY COMPANY.
No right of any holder of Indebtedness of the Company to
enforce the subordination of the Subordinated Notes Obligations shall be
prejudiced or impaired by any act or failure to act by the Company or any
Holder or by the failure of the Company or any Holder to comply with this
Indenture.
68
SECTION 10.10. DISTRIBUTION OR NOTICE TO REPRESENTATIVE.
Whenever a distribution is to be made or a notice given to
holders of Indebtedness of the Company, the distribution may be made and the
notice given to their Representative.
Upon any payment or distribution of assets of the Company
referred to in this Article 10, the Trustee and the Holders shall be entitled
to rely upon any order or decree made by any court of competent jurisdiction or
upon any certificate of such Representative or of the liquidating trustee or
agent or other Person making any distribution to the Trustee or to the Holders
for the purpose of ascertaining the Persons entitled to participate in such
distribution, the holders of the Indebtedness of the Company, the amount
thereof or payable thereon, the amount or amounts paid or distributed thereon
and all other facts pertinent thereto or to this Article 10.
SECTION 10.11. RIGHTS OF TRUSTEE AND PAYING AGENT.
Notwithstanding the provisions of this Article 10 or any
other provision of this Indenture, the Trustee shall not be charged with
knowledge of the existence of any facts that would prohibit the making of any
payment or distribution by the Trustee, and the Trustee and the Paying Agent
may continue to make payments on the Notes, unless the Trustee shall have
received at its Corporate Trust Office at least two Business Days prior to the
date of such payment written notice that the payment of any Obligations with
respect to the Notes would violate this Article 10, provided, however, that
this Section 10.11 shall not limit or modify the rights of holders of
Indebtedness of the Company to recover any such payments from the Holders of
the Notes pursuant to Sections 10.02, 10.03 and/or 10.05. Only the Company or a
Representative may give such notice. Nothing in this Article 10 shall impair
the claims of, or payments to, the Trustee under or pursuant to Section 7.07
hereof.
The Trustee in its individual or any other capacity may hold
Indebtedness of the Company with the same rights it would have if it were not
Trustee. Any Agent may do the same with like rights.
SECTION 10.12. AUTHORIZATION TO EFFECT SUBORDINATION.
Each Holder of a Subordinated Note by the Holder's acceptance
thereof authorizes and directs the Trustee on the Holder's behalf to take such
action as may be necessary or appropriate to effectuate the subordination as
provided in this Article 10, and appoints the Trustee to act as the Holder's
attorney-in-fact for any and all such purposes. If the Trustee does not file a
proper proof of claim or proof of debt in the form required in any proceeding
referred to in Section 6.01(h) and (i) and Section 6.09 hereof at least 30 days
before the expiration of the time to file such claim, each Representative of
Indebtedness of the Company is hereby authorized to file an appropriate claim
for and on behalf of the Holders of the Subordinated Notes.
SECTION 10.13. AMENDMENTS.
Any amendment to the provisions of this Article 10 shall
require the written consent of 100% of Subordinated Notes then outstanding.
69
SECTION 10.14. NO WAIVER OF SUBORDINATION PROVISIONS.
(a) No right of any present or future holder of any
Indebtedness of the Company to enforce subordination as herein provided shall
at any time in any way be prejudiced or impaired by any act or failure to act,
in good faith, by any such holder.
(b) Without in any way limiting the generality of paragraph
(a) of this Section, the holders of Indebtedness of the Company may, at any
time and from time to time, without the consent of or notice to the Trustee or
the Holders, without incurring responsibility to the Holders of the
Subordinated Notes and without impairing or releasing the subordination
provided in this Article or the obligations hereunder of the Holders to the
holders of such Indebtedness, do any one or more of the following: (1) change
the manner, place or terms of payment or extend the time of payment of, or
renew or alter, any such Indebtedness or any instrument evidencing the same or
any agreement under which such Indebtedness is outstanding; (2) sell, exchange,
release or otherwise deal with any property pledged, mortgaged or otherwise
securing such Indebtedness; (3) release any Person liable in any manner for the
collection of such Indebtedness; and (4) exercise or refrain from exercising
any rights against the Company and any other Person.
SECTION 10.15. CERTAIN DEFINITIONS.
For purposes of this Section 10, the terms "distribution" and
"payment" include payments, distributions and other transfers of assets by or
on behalf of the Company (including redemptions, repurchases or other
acquisitions of the Subordinated Notes) from any source, of any kind or
character, whether direct or indirect, by set-off or otherwise, whether in
cash, property or securities.
ARTICLE 11.
MISCELLANEOUS
SECTION 11.01. 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 shall
control.
SECTION 11.02. NOTICES.
Any notice or communication by the Company 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:
SF Holdings Group, Inc.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
70
With a copy to:
Kramer, Levin, Naftalis & ▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇
If to the Trustee:
The Company 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) shall 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 telecopied; and the
next Business Day after timely delivery to the courier, if sent by overnight
air courier guaranteeing next day delivery.
Any notice or communication to a Holder shall be mailed by
first class mail to its address shown on the register kept by the Registrar.
Any notice or communication shall also be so mailed to any Person described in
TIA 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 shall 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
shall mail a copy to the Trustee and each Agent at the same time.
SECTION 11.03. COMMUNICATION BY HOLDERS OF SUBORDINATED NOTES WITH OTHER
HOLDERS OF SUBORDINATED NOTES.
Holders may communicate pursuant to TIA ss. 312(b) with other
Holders with respect tO their rights under this Indenture or the Subordinated
Notes. The Company, the Trustee, the Registrar and anyone else shall have the
protection of TIA ss. 312(c).
SECTION 11.04. 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:
71
(a) an Officers' Certificate in form and substance reasonably
satisfactory to the Trustee (which shall include the statements set forth in
Section 11.05 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
(b) an Opinion of Counsel in form and substance reasonably
satisfactory to the Trustee (which shall include the statements set forth in
Section 11.05 hereof) stating that, in the opinion of such counsel, all such
conditions precedent and covenants have been satisfied.
SECTION 11.05. 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)) shall comply with the provisions of TIA
ss. 314(e) and shall include:
(a) a statement that the Person making such certificate or
opinion has read such covenant or condition;
(b) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions contained in
such certificate or opinion are based;
(c) a statement that, in the opinion of such Person, he or
she has made such examination or investigation as is necessary to enable him to
express an informed opinion as to whether or not such covenant or condition has
been satisfied; and
(d) a statement as to whether or not, in the opinion of such
Person, such condition or covenant has been satisfied.
SECTION 11.06. 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 11.07. NO PERSONAL LIABILITY OF DIRECTORS, OFFICERS, EMPLOYEES AND
STOCKHOLDERS.
No director, officer, employee, incorporator or stockholder
of the Company, as such, shall have any liability for any obligations of the
Company under the Subordinated Notes, this Indenture or for any claim based on,
in respect of, or by reason of, such obligations or their creation. Each Holder
of Subordinated Notes by accepting a Subordinated Note waives and releases all
such liability. The waiver and release are part of the consideration for
issuance of the Subordinated Notes. Such waiver may not be effective to waive
liabilities under the federal securities laws and it is the view of the
Commission that such a waiver is against public policy
SECTION 11.08. GOVERNING LAW.
THE INTERNAL LAW OF THE STATE OF NEW YORK SHALL GOVERN AND BE
USED TO CONSTRUE THIS INDENTURE AND THE SUBORDINATED NOTES.
72
SECTION 11.09. 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 11.10. SUCCESSORS.
All agreements of the Company in this Indenture and the
Subordinated Notes shall bind their respective successors. All agreements of
the Trustee in this Indenture shall bind its successors.
SECTION 11.11. SEVERABILITY.
In case any provision in this Indenture or in the
Subordinated Notes shall be invalid, illegal or unenforceable, the validity,
legality and enforceability of the remaining provisions shall not in any way be
affected or impaired thereby.
SECTION 11.12. COUNTERPART ORIGINALS.
The parties may sign any number of copies of this Indenture.
Each signed copy shall be an original, but all of them together represent the
same agreement.
SECTION 11.13. TABLE OF CONTENTS, HEADINGS, ETC.
The Table of Contents, Cross-Reference Table and Headings of
the Articles and Sections of this Indenture have been inserted for convenience
of reference only, are not to be considered a part of this Indenture and shall
in no way modify or restrict any of the terms or provisions hereof.
[Signatures on following page]
73
SIGNATURES
Dated as of March 12, 1998
SF HOLDINGS GROUP, INC.
By:
-------------------------------
Name:
Title:
Attest:
-------------------------------
Name:
Title:
By:
-------------------------------
Name:
Title:
74
EXHIBIT A-1
(Face of Note)
[FOR THE PURPOSES OF SECTIONS 1272, 1273 AND 1275 OF THE INTERNAL REVENUE CODE
OF 1986, AS AMENDED, THIS SECURITY IS BEING ISSUED WITH ORIGINAL ISSUE
DISCOUNT; FOR EACH $_______ AGGREGATE PRINCIPAL AMOUNT OF THIS SECURITY, THE
ISSUE PRICE IS $_______, THE AMOUNT OF ORIGINAL ISSUE DISCOUNT IS $_______, THE
ISSUE DATE IS ______ ___, 199_ AND THE YIELD TO MATURITY IS 13 3/4% PER ANNUM.]
13 3/4% Series A Subordinated Notes due 2009
CUSIP No.
No. 1 $_____________
SF HOLDINGS GROUP, INC.
promises to pay to________________________________________________________
or registered assigns,
the principal sum of_____________________________________________
Dollars on March 13, 2009.
Interest Payment Dates: March 15 and September 15.
Record Dates: March 1 and September 1.
Dated: , 199_
SF Holdings Group, Inc.
By:___________________
Name:
Title:
(SEAL)
This is one of the Global
Notes referred to in the
within-mentioned Indenture:
as Trustee
By:_______________________
Dated:____________________
A1-1
(Back of Note)
13 3/4% Subordinated Notes due 2009
THIS SECURITY (OR ITS PREDECESSOR) HAS NOT BEEN REGISTERED UNDER THE UNITED
STATES SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT") AND,
ACCORDINGLY, MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED WITHIN
THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, U.S. PERSONS, EXCEPT
AS SET FORTH IN THE NEXT SENTENCE. BY ITS ACQUISITION HEREOF OR OF A BENEFICIAL
INTEREST HEREIN, THE HOLDER REPRESENTS THAT (A) IT IS A "QUALIFIED
INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) (A
"QIB"), (B) IT HAS ACQUIRED THIS SECURITY IN AN OFFSHORE TRANSACTION IN
COMPLIANCE WITH REGULATION S UNDER THE SECURITIES ACT OR (C) IT IS AN
INSTITUTIONAL "ACCREDITED INVESTOR" (AS DEFINED IN RULE 501(A)(1), (2), (3) OR
(7) OF REGULATION D UNDER THE SECURITIES ACT) (AN "IAI"), AGREES THAT IT WILL
NOT RESELL OR OTHERWISE TRANSFER THIS SECURITY EXCEPT (A) TO THE COMPANY OR ANY
OF ITS SUBSIDIARIES (B) TO A PERSON WHOM THE SELLER REASONABLY BELIEVES IS A
QIB PURCHASING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QIB IN A TRANSACTION
MEETING THE REQUIREMENTS OF RULE 144A, (C) IN AN OFFSHORE TRANSACTION MEETING
THE REQUIREMENTS OF RULE 903 OR 904 OF THE SECURITIES ACT, (D) IN A TRANSACTION
MEETING THE REQUIREMENTS OF RULE 144 UNDER THE SECURITIES ACT, (E) TO AN IAI
THAT, PRIOR TO SUCH TRANSFER, FURNISHES TO THE TRUSTEE A SIGNED LETTER
CONTAINING CERTAIN REPRESENTATIONS AND AGREEMENTS RELATING TO THE TRANSFER OF
THIS SECURITY (THE FORM OF WHICH LETTER CAN BE OBTAINED FROM THE TRUSTEE) AND,
IF SUCH TRANSFER IS IN RESPECT OF AN AGGREGATE PRINCIPAL AMOUNT OF SECURITIES
LESS THAN $250,000, AN OPINION OF COUNSEL ACCEPTABLE TO THE COMPANY THAT SUCH
TRANSFER IS IN COMPLIANCE WITH THE SECURITIES ACT OR (F) IN ACCORDANCE WITH
ANOTHER EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT (AND
BASED UPON AN OPINION OF COUNSEL ACCEPTABLE TO THE COMPANY) OR (G)PURSUANT TO
AN EFFECTIVE REGISTRATION STATEMENT AND, IN EACH CASE, IN ACCORDANCE WITH THE
APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES OR ANY OTHER
APPLICABLE JURISDICTION; AND AGREES THAT IT WILL DELIVER TO EACH PERSON TO WHOM
THIS SECURITY OR AN INTEREST HEREIN IS TRANSFERRED A NOTICE SUBSTANTIALLY TO
THE EFFECT OF THIS LEGEND. AS USED HEREIN, THE TERMS "OFFSHORE TRANSACTION" AND
"UNITED STATES" HAVE THE MEANINGS GIVEN TO THEM BY RULE 902 OF REGULATION S
UNDER THE SECURITIES ACT. THE INDENTURE CONTAINS A PROVISION REQUIRING THE
TRUSTEE TO REFUSE TO REGISTER ANY TRANSFER OF THIS SECURITY IN VIOLATION OF THE
FOREGOING.
THIS GLOBAL NOTE IS HELD BY THE DEPOSITARY (AS DEFINED IN THE INDENTURE
GOVERNING THIS SECURITY) OR ITS NOMINEE IN CUSTODY FOR THE BENEFIT OF THE
BENEFICIAL OWNERS HEREOF, AND IS NOT TRANSFERABLE TO ANY PERSON UNDER ANY
CIRCUMSTANCES EXCEPT THAT (I) THE TRUSTEE MAY MAKE SUCH NOTATIONS HEREON AS MAY
BE REQUIRED PURSUANT TO SECTION 2.07 OF THE INDENTURE, (II) THIS GLOBAL NOTE
MAY BE EXCHANGED IN WHOLE BUT NOT IN PART PURSUANT TO SECTION 2.06(a) OF THE
INDENTURE, (III) THIS GLOBAL NOTE MAY BE DELIVERED TO THE TRUSTEE FOR
CANCELLATION PURSUANT TO SECTION 2.11 OF THE INDENTURE
A1-2
AND (IV) THIS GLOBAL NOTE MAY BE TRANSFERRED TO A SUCCESSOR DEPOSITARY WITH THE
PRIOR WRITTEN CONSENT OF THE COMPANY.
Capitalized terms used herein shall have the meanings
assigned to them in the Indenture referred to below unless otherwise indicated.
1. INTEREST. SF Holdings Group, Inc., a Delaware corporation
(the "Company"), promises to pay interest on the principal amount of this
Subordinated Note at 13 3/4% per annum in the manner specified below and shall
pay the Liquidated Damages, if any, payable pursuant to Section 5 of the
Registration Rights Agreement referred to below. Interest on the Subordinated
Notes will accrue from the most recent date to which interest has been paid or,
if no interest has been paid, from ______ __, 1998. The Company will pay
interest and Liquidated Damages, if any, semi-annually on March 15 and
September 15 each year, or if any such day is not a Business Day, on the next
succeeding Business Day (each an "Interest Payment Date"). The Company shall
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
shall pay interest (including post-petition interest in any proceeding under
any Bankruptcy Law) on overdue installments of interest and Liquidated Damages
(without regard to any applicable grace periods) from time to time on demand at
the same rate to the extent lawful. Interest 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
Subordinated Notes (except defaulted interest) and Liquidated Damages, if any,
to the Persons who are registered Holders of Subordinated Notes at the close of
business on the March 1, June 1, September 1 or December 1 next preceding the
Interest Payment Date, even if such Subordinated 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. Until March
15, 2003, interest on the Subordinated Notes shall be payable, at the option of
the Company, in cash or by the issuance of additional Subordinated Notes with
an aggregate principal amount equal to the amount of interest due. Thereafter,
interest on the Subordinated Notes shall be payable in cash. The Subordinated
Notes will be payable as to principal, premium, if any, and Liquidated Damages,
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 Liquidated Damages, if any, may be made by
check mailed to the Holders at their addresses set forth in the register of
Holders, and provided that payment by wire transfer of immediately available
funds will be required with respect to principal of and interest, premium, if
any, and Liquidated Damages, if any, on, all Global Notes and all other
Subordinated Notes the Holders of which shall have provided wire transfer
instructions to the Company or the Paying Agent. Such payment shall be in such
coin or currency of the United States of America as at the time of payment is
legal tender for payment of public and private debts.
3. PAYING AGENT AND REGISTRAR. Initially,
____________________, the Trustee under the Indenture, 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. The Company issued the Subordinated Notes under
an Indenture dated as of _______ __, 1999 ("Indenture") between the Company and
the Trustee. The terms of the Subordinated Notes include those stated in the
Indenture and those made part of the Indenture by
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reference to the Trust Indenture Act of 1939, as amended (15 U.S. Code ▇▇.▇▇.
77aaa-77bbbb). The Subordinated 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 Subordinated Note conflicts with the
express provisions of the Indenture, the provisions of the Indenture shall
govern and be controlling. The Subordinated Notes are an obligation of the
Company limited to $_____ million in aggregate principal amount plus such
additional principal amount as may be required by the Company to pay interest
pursuant to Paragraph 2, hereof.
5. OPTIONAL REDEMPTION.
(a) Except as set forth in subparagraph (b) of this Paragraph
5, the Subordinated Notes shall not be redeemable at the Company's option prior
to March 15, 2003. Thereafter, the Subordinated Notes shall be subject to
redemption at any time at the option of the Company, 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 Liquidated Damages, if any, to the applicable redemption
date, if redeemed during the twelve-month period beginning on March 15 of the
years indicated below:
Year Percentage
---- ----------
2003.......................................106.875%
2004.......................................104.583%
2005.......................................102.293%
2006 and thereafter........................100.000%
(b) Notwithstanding the provisions of subparagraph (a) of
this Paragraph 5, at any time prior to March 15, 2001, the Company may, at its
option, redeem up to one-half of the aggregate principal amount of Subordinated
Notes at a redemption price equal to 113.75% of the principal amount thereof,
plus Liquidated Damages thereon, if any, with the net cash proceeds of an
Equity Offering; provided that at least one-half of the original aggregate
principal amount of the Subordinated Notes remains outstanding immediately
after the occurrence of such redemption (excluding Subordinated Notes held by
the Company and its Subsidiaries); and provided, further that any such
redemption shall occur within 60 days of the date of the closing of such Equity
Offering.
6. MANDATORY REDEMPTION.
Except as set forth in paragraph 7 below, the Company shall
not be required to make mandatory redemption or sinking fund payments with
respect to the Subordinated Notes.
7. REPURCHASE AT OPTION OF HOLDER.
(a) Upon the occurrence of a Change of Control, the Company
shall be required to make an offer to each Holder of Subordinated Notes to
repurchase all or any part (equal to $1,000 or an integral multiple thereof) of
such Holder's Subordinated Notes pursuant to an offer (the "Change of Control
Offer") at an offer price in cash equal to 101% of the aggregate principal
amount thereof plus accrued and unpaid interest and Liquidated Damages thereon,
if any, to the date of purchase (the "Change of Control Payment"). Within 10
days following any Change of Control, the Company shall mail a notice to each
Holder setting forth the procedures governing the Change of Control Offer as
required by the Indenture.
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(b) When the aggregate amount of Excess Proceeds exceeds $10
million, the Company shall commence an offer to all Holders of Subordinated
Notes (an "Asset Sale Offer") pursuant to Section 3.09 of the Indenture to
purchase the maximum principal amount of Subordinated Notes that may be
purchased out of the Excess Proceeds, at an offer price in cash in an amount
equal to 100% of the aggregate principal amount thereof, plus accrued and
unpaid interest and Liquidated Damages thereon, if any, to the date of
purchase, in accordance with the procedures set forth in the Indenture;
provided, however, that such offer shall not be required if the application of
such Excess Proceeds to repurchase Subordinated Notes would cause an Event of
Default under any of the agreements governing Indebtedness of the Company. If
the aggregate purchase price of Subordinated Notes tendered into such Asset
Sale Offer by Holders thereof is less than the Excess Proceeds, the Company may
use such Excess Proceeds for general corporate purposes (subject to
restrictions of the Indenture). If the aggregate purchase price of Subordinated
Notes tendered into such Asset Sale Offer by Holders thereof exceeds the amount
of Excess Proceeds, the Trustee shall select the Subordinated Notes to be
purchased on a pro rata basis. Upon completion of such Asset Sale Offer, the
amount of Excess Proceeds shall be reset at zero. Holders of Subordinated 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
Subordinated Notes purchased by completing the form entitled "Option of Holder
to Elect Purchase" on the reverse of the Subordinated Notes.
8. NOTICE OF REDEMPTION. Notice of redemption will be mailed
at least 30 days but not more than 60 days before the redemption date to each
Holder whose Subordinated Notes are to be redeemed at its registered address.
Subordinated Notes in denominations larger than $1,000 may be redeemed in part
but only in whole multiples of $1,000, unless all of the Subordinated Notes
held by a Holder are to be redeemed. On and after the redemption date interest
ceases to accrue on Subordinated Notes or portions thereof called for
redemption.
9. DENOMINATIONS, TRANSFER, EXCHANGE. The Subordinated Notes
are in registered form without coupons in denominations of $1,000 and integral
multiples of $1,000, except that Subordinated Notes may be issued in such
smaller denominations as is necessary for the payment of interest by the
issuance of additional Subordinated Notes pursuant to Paragraph 2 hereof. The
transfer of Subordinated Notes may be registered and Subordinated 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 Subordinated Note or portion of a
Subordinated Note selected for redemption, except for the unredeemed portion of
any Subordinated Note being redeemed in part. Also, the Company need not
exchange or register the transfer of any Subordinated Notes for a period of 15
days before a selection of Subordinated 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
Subordinated Note may be treated as its owner for all purposes.
11. AMENDMENT, SUPPLEMENT AND WAIVER. Subject to certain
exceptions, the Indenture or the Subordinated Notes may be amended or
supplemented with the consent of the Holders of at least a majority in
principal amount of the Subordinated Notes then outstanding (including, without
limitation, consents obtained in connection with a purchase of, or tender offer
or exchange offer for, Subordinated Notes), and subject to Sections 6.04 and
6.07 of the Indenture any existing Default or
A1-5
Event of Default (other than a Default or Event of Default in the payment of
the principal of, premiums on, if any, interest on or Liquidated Damages on, if
any, the Subordinated Notes, except a payment default resulting from an
acceleration that has been rescinded) or compliance with any provision of the
Indenture or the Subordinated Notes may be waived with the consent of the
Holders of a majority in principal amount of the then outstanding Subordinated
Notes voting as a single class. Without the consent of any Holder of
Subordinated Notes, the Indenture or the Subordinated Notes may be amended or
supplemented by the Company and the Trustee to cure any ambiguity, defect or
inconsistency, to provide for uncertificated Subordinated Notes in addition to
or in place of certificated Subordinated Notes, to provide for the assumption
of the Company's obligations to Holders of the Subordinated Notes in the case
of a merger or consolidation or sale of all or substantially all of the
Company's assets, to make any change that would provide any additional rights
or benefits to the Holders of the Subordinated Notes or that does not adversely
affect the legal rights under the Indenture of any such Holder or to comply
with the requirements of the Commission in order to effect or maintain the
qualification of the Indenture under the Trust Indenture Act.
12. DEFAULTS AND REMEDIES. Events of Default include: (i)
default for 30 days in the payment when due of interest on the Subordinated
Notes (whether or not prohibited by Article 10 of the Indenture); (ii) default
in payment when due of the principal of or premium, or Liquidated Damages, if
any, on the Subordinated Notes when the same becomes due and payable at
maturity, upon redemption (including in connection with an offer to purchase)
or otherwise (whether or not prohibited by Article 10 of the Indenture); (iii)
failure by the Company or any of its Subsidiaries to comply with Sections 4.07,
4.09, 4.10, 4.15 and 5.01 of the Indenture (whether or not prohibited by
Article 10 of the Indenture); (iv) failure by the Company or any of its
Subsidiaries for 30 days after notice to comply with any of its other
agreements in the Indenture or the Subordinated Notes; (v) default under
certain other agreements relating to Indebtedness of the Company which default
results in the acceleration of such Indebtedness prior to its express maturity;
(vi) certain final judgments for the payment of money that remain undischarged
for a period of 45 days; and (vii) certain events of bankruptcy or insolvency
with respect to the Company or any of its Significant Subsidiaries. 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 Subordinated Notes may
declare all the Subordinated Notes to be due and payable immediately.
Notwithstanding the foregoing, in the case of an Event of Default arising from
certain events of bankruptcy or insolvency, with respect to the Company, any
Significant Subsidiary or any group of Subsidiaries that, taken together, would
constitute a Significant Subsidiary, all outstanding Subordinated Notes will
become due and payable without further action or notice. Upon any acceleration
of maturity of the Subordinated Notes, all principal of and accrued interest on
and Liquidated Damages, if any, of the Subordinated Notes shall be due and
payable immediately. Holders may not enforce the Indenture or the Subordinated
Notes except as provided in the Indenture. Subject to certain limitations,
Holders of a majority in principal amount of the then outstanding Subordinated
Notes may direct the Trustee in its exercise of any trust or power. The Trustee
may withhold from Holders of the Subordinated 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 Subordinated Notes then outstanding by notice to the Trustee (and
without notice to any other Holder) may on behalf of the Holders of all of the
Subordinated Notes waive an existing Default or Event of Default and its
consequences under the Indenture except a continuing Default or Event of
Default in the payment of the principal of, premiums, if any, or interest on,
the Subordinated Notes (including in connection with an offer to purchase)
(provided, however, that Holders of a majority in aggregate principal amount of
the then outstanding Subordinated Notes may rescind an acceleration and its
consequences, including any related payment
A1-6
default that resulted from such acceleration). 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. No director, officer,
employee, incorporator or stockholder, of the Company, as such, shall have any
liability for any obligations of the Company under the Subordinated Notes or
the Indenture or for any claim based on, in respect of, or by reason of, such
obligations or their creation. Each Holder of Subordinated Notes by accepting a
Subordinated Note waives and releases all such liability. The waiver and
release are part of the consideration for the issuance of the Subordinated
Notes. Such waiver may not be effective to waive liabilities under the federal
securities laws and it is the view of the Commission that such waiver is
against public policy.
15. AUTHENTICATION. This Subordinated Note shall 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 OF RESTRICTED GLOBAL NOTES
AND RESTRICTED DEFINITIVE NOTES. In addition to the rights provided to Holders
of Subordinated Notes under the Indenture, Holders of Restricted Global Notes
and Restricted Definitive Notes shall have all the rights set forth in the A/B
Exchange Registration Rights Agreement dated as of ___________ ____, 1998,
between the Company and the parties named on the signature pages thereof (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 Subordinated 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 Subordinated 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:
SF Holdings Group, Inc.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: General Counsel
A1-7
ASSIGNMENT FORM
To assign this Subordinated Note, fill in the form below: (I) or (we) assign
and transfer this Subordinated Note to
-------------------------------------------------------------------------------
(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 Subordinated 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
subordinated Note)
SIGNATURE GUARANTEE.
Signatures must be guaranteed by an "eligible guarantor institution" meeting
the requirements of the Registrar, which requirements include membership or
participation in the Security Transfer Agent Medallion Program ("STAMP") or
such other "signature guarantee program" as may be determined by the Registrar
in addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended.
A1-8
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Subordinated Note purchased
by the Company pursuant to Section 4.10 or 4.15 of the Indenture, check the box
below:
[ ] Section 4.10 [ ] Section 4.15
If you want to elect to have only part of the Subordinated
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
Subordinated Note)
Tax Identification No:
-------------------
SIGNATURE GUARANTEE.
Signatures must be guaranteed by an "eligible guarantor institution" meeting
the requirements of the Registrar, which requirements include membership or
participation in the Security Transfer Agent Medallion Program ("STAMP") or
such other "signature guarantee program" as may be determined by the Registrar
in addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended.
A1-9
SCHEDULE OF EXCHANGES OF INTERESTS IN THE GLOBAL NOTE
The following exchanges of a part of this Global Note for an
interest in another Global Note or for a Definitive Note, or exchanges of a
part of another Global Note or Definitive Note for an interest in this Global
Note, have been made:
Principal Amount
Amount of Amount of increase of
decrease in in Principal this Global Note Signature of
Principal Amount Amount following such authorized officer
of of decrease (or of Trustee or
Date of Exchange this Global Note this Global Note increase) Note Custodian
---------------- ---------------- ---------------- --------- --------------
A1-10
EXHIBIT A-2
(Face of Regulation S Temporary Global Note)
[FOR THE PURPOSES OF SECTIONS 1272, 1273 AND 1275 OF THE INTERNAL REVENUE CODE
OF 1986, AS AMENDED, THIS SECURITY IS BEING ISSUED WITH ORIGINAL ISSUE
DISCOUNT; FOR EACH $________ AGGREGATE PRINCIPAL AMOUNT OF THIS SECURITY, THE
ISSUE PRICE IS $__________ THE AMOUNT OF ORIGINAL ISSUE DISCOUNT IS $__________
THE ISSUE DATE IS __________ ____, 199__ AND THE YIELD TO MATURITY IS 13 3/4%
PER ANNUM.]
13 3/4% Senior Subordinated Notes due 2009
CUSIP ▇▇.
▇▇▇▇ ▇▇.
▇▇. ▇ $______________________
SF HOLDINGS GROUP, INC.
promises to pay to_________________________________________
or registered assigns,
the principal sum of_______________________________________
Dollars on March 13, 2009
Interest Payment Dates: March 15 and September 15.
Record Dates: March 1 and September 1.
Dated:__________ , 199__
SF Holdings Group, Inc.
By:__________________________
Name:
Title:
This is one of the Global
Notes referred to in the [(SEAL)]
within-mentioned Indenture:
________________________________
as Trustee
By:_____________________________
Dated:__________________________
A2-1
(Back of Regulation S Temporary Global Note)
13 3/4% Subordinated Notes due 2009
THE RIGHTS ATTACHING TO THIS REGULATION S TEMPORARY GLOBAL NOTE, AND THE
CONDITIONS AND PROCEDURES GOVERNING ITS EXCHANGE FOR CERTIFICATED 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.
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 ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇) ("▇▇▇"), 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 GLOBAL NOTE IS HELD BY THE DEPOSITARY (AS DEFINED IN THE INDENTURE
GOVERNING THIS SECURITY) OR ITS NOMINEE IN CUSTODY FOR THE BENEFIT OF THE
BENEFICIAL OWNERS HEREOF, AND IS NOT TRANSFERABLE TO ANY PERSON UNDER ANY
CIRCUMSTANCES EXCEPT THAT (I) THE TRUSTEE MAY MAKE SUCH NOTATIONS HEREON AS MAY
BE REQUIRED PURSUANT TO SECTION 2.07 OF THE INDENTURE, (II) THIS GLOBAL NOTE
MAY BE EXCHANGED IN WHOLE BUT NOT IN PART PURSUANT TO SECTION 2.06(a) OF THE
INDENTURE, (III) THIS GLOBAL NOTE MAY BE DELIVERED TO THE TRUSTEE FOR
CANCELLATION PURSUANT TO SECTION 2.11 OF THE INDENTURE AND (IV) THIS GLOBAL
NOTE MAY BE TRANSFERRED TO A SUCCESSOR DEPOSITARY WITH THE PRIOR WRITTEN
CONSENT OF THE COMPANY.
Capitalized terms used herein shall have the meanings
assigned to them in the Indenture referred to below unless otherwise indicated.
1. INTEREST. SF Holdings Group, Inc., a Delaware corporation
(the "Company"), promises to pay interest on the principal amount of this
Subordinated Note at 13 3/4% per annum in the manner specified below and shall
pay the Liquidated Damages, if any, payable pursuant to Section 5 of the
Registration Rights Agreement referred to below. Interest on the Subordinated
Notes will accrue from the most recent date to which interest has been paid or,
if no interest has been paid, from ______ __, 1998. The Company will pay
interest and Liquidated Damages, if any, semi-annually on March 15, and
September 15 each year, or if any such day is not a Business Day, on the next
succeeding Business Day (each an "Interest Payment Date"). The Company shall
pay interest (including post-petition interest
A2-2
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 shall pay interest (including post-petition
interest in any proceeding under any Bankruptcy Law) on overdue installments of
interest and Liquidated Damages (without regard to any applicable grace
periods) from time to time on demand at the same rate to the extent lawful.
Interest 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 Notes, 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 Subordinated Notes under the Indenture.
2. METHOD OF PAYMENT. The Company will pay interest on the
Subordinated Notes (except defaulted interest) and Liquidated Damages, if any,
to the Persons who are registered Holders of Subordinated Notes at the close of
business on the March 1 and September 1 next preceding the Interest Payment
Date, even if such Subordinated 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. Until March 15, 2003,
interest on the Subordinated Notes shall be payable, at the option of the
Company, in cash or by the issuance of additional Subordinated Notes with an
aggregate principal amount equal to the amount of interest due. Thereafter,
interest on the Subordinated Notes shall be payable in cash. The Subordinated
Notes will be payable as to principal, premium, if any, and Liquidated Damages,
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 Liquidated Damages, if any, may be made by
check mailed to the Holders at their addresses set forth in the register of
Holders, and provided that payment by wire transfer of immediately available
funds will be required with respect to principal of and interest, premium, if
any, and Liquidated Damages, if any, on, all Global Notes and all other
Subordinated Notes the Holders of which shall have provided wire transfer
instructions to the Company or the Paying Agent. Such payment shall be in such
coin or currency of the United States of America as at the time of payment is
legal tender for payment of public and private debts.
3. PAYING AGENT AND REGISTRAR. Initially,
____________________, the Trustee under the Indenture, 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. The Company issued the Subordinated Notes under
an Indenture dated as of _______ __, 199_ ("Indenture") between the Company and
the Trustee. The terms of the Subordinated Notes include those stated in the
Indenture and those made part of the Indenture by reference to the Trust
Indenture Act of 1939, as amended (15 U.S. Code ▇▇.▇▇. 77aaa-77bbbb). The
Subordinated 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 Subordinated Note conflicts with the express provisions of
the Indenture, the provisions of the Indenture shall govern and be controlling.
The Subordinated Notes are an obligation of the Company limited to $_____
million in aggregate principal amount plus such additional principal amount as
may be required by the Company to pay interest pursuant to Paragraph 2 hereof.
A2-3
5. OPTIONAL REDEMPTION.
(a) Except as set forth in subparagraph (b) of this Paragraph
5, the Subordinated Notes shall not be redeemable at the Company's option prior
to March 15, 2003. Thereafter, the Subordinated Notes shall be subject to
redemption at any time at the option of the Company, 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 Liquidated Damages, if any, to the applicable redemption
date, if redeemed during the twelve-month period beginning on March 15 of the
years indicated below:
Year Percentage
---- ----------
2003.......................................106.875%
2004.......................................104.583%
2005.......................................102.293%
2006 and thereafter........................100.000%
(b) Notwithstanding the provisions of subparagraph (a) of
this Paragraph 5, at any time prior to March 15, 2001, the Company may, at its
option, redeem up to one-half of the aggregate principal amount of Subordinated
Notes at a redemption price equal to 113.75% of the principal amount thereof,
plus Liquidated Damages thereon, if any, with the net cash proceeds of an
Equity Offering; provided that at least one-half of the original aggregate
principal amount of the Subordinated Notes remains outstanding immediately
after the occurrence of such redemption (excluding Subordinated Notes held by
the Company and its Subsidiaries); and provided, further that any such
redemption shall occur within 60 days of the date of the closing of such Equity
Offering.
6. MANDATORY REDEMPTION.
Except as set forth in paragraph 7 below, the Company shall
not be required to make mandatory redemption or sinking fund payments with
respect to the Subordinated Notes.
7. REPURCHASE AT OPTION OF HOLDER.
(a) Upon the occurrence of a Change of Control, the Company
shall be required to make an offer to each Holder of Subordinated Notes to
repurchase all or any part (equal to $1,000 or an integral multiple thereof) of
such Holder's Subordinated Notes pursuant to an offer (the "Change of Control
Offer") at an offer price in cash equal to 101% of the aggregate principal
amount thereof plus accrued and unpaid interest and Liquidated Damages thereon,
if any, to the date of purchase (the "Change of Control Payment"). Within 10
days following any Change of Control, the Company shall mail a notice to each
Holder setting forth the procedures governing the Change of Control Offer as
required by the Indenture.
(b) When the aggregate amount of Excess Proceeds exceeds $10
million, the Company shall commence an offer to all Holders of Subordinated
Notes (an "Asset Sale Offer") pursuant to Section 3.09 of the Indenture to
purchase the maximum principal amount of Subordinated Notes that may be
purchased out of the Excess Proceeds, at an offer price in cash in an amount
equal to 100% of the aggregate principal amount thereof, plus accrued and
unpaid interest and Liquidated Damages thereon, if any, to the date of
purchase, in accordance with the procedures set forth in the Indenture;
provided, however, that such offer shall not be required if the application of
such Excess Proceeds to repurchase Subordinated Notes would cause an Event of
Default under any of the agreements governing Indebtedness of the Company. If
the aggregate purchase price of Subordinated
A2-4
Notes tendered into such Asset Sale Offer by Holders thereof is less than the
Excess Proceeds, the Company may use such Excess Proceeds for general corporate
purposes (subject to restrictions of the Indenture). If the aggregate purchase
price of Subordinated Notes tendered into such Asset Sale Offer by Holders
thereof exceeds the amount of Excess Proceeds, the Trustee shall select the
Subordinated Notes to be purchased on a pro rata basis. Upon completion of such
Asset Sale Offer, the amount of Excess Proceeds shall be reset at zero. Holders
of Subordinated 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 Subordinated Notes purchased by completing the form entitled
"Option of Holder to Elect Purchase" on the reverse of the Subordinated Notes.
9. DENOMINATIONS, TRANSFER, EXCHANGE. The Subordinated Notes
are in registered form without coupons in denominations of $1,000 and integral
multiples of $1,000, except that Subordinated Notes may be issued in such
smaller denominations as is necessary for the payment of interest by the
issuance of additional Subordinated Notes pursuant to Paragraph 2 hereof. The
transfer of Subordinated Notes may be registered and Subordinated 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 Subordinated Note or portion of a
Subordinated Note selected for redemption, except for the unredeemed portion of
any Subordinated Note being redeemed in part. Also, the Company need not
exchange or register the transfer of any Subordinated Notes for a period of 15
days before a selection of Subordinated 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
Subordinated Note may be treated as its owner for all purposes.
11. AMENDMENT, SUPPLEMENT AND WAIVER. Subject to certain
exceptions, the Indenture or the Subordinated Notes may be amended or
supplemented with the consent of the Holders of at least a majority in
principal amount of the Subordinated Notes then outstanding (including, without
limitation, consents obtained in connection with a purchase of, or tender offer
or exchange offer for, Subordinated Notes), and subject to Sections 6.04 and
6.07 of the Indenture any existing Default or Event of Default (other than a
Default or Event of Default in the payment of the principal of, premiums on, if
any, interest on or Liquidated Damages on, if any, the Subordinated Notes,
except a payment default resulting from an acceleration that has been
rescinded) or compliance with any provision of the Indenture or the
Subordinated Notes may be waived with the consent of the Holders of a majority
in principal amount of the then outstanding Subordinated Notes voting as a
single class. Without the consent of any Holder of Subordinated Notes, the
Indenture or the Subordinated Notes may be amended or supplemented by the
Company and the Trustee to cure any ambiguity, defect or inconsistency, to
provide for uncertificated Subordinated Notes in addition to or in place of
certificated Subordinated Notes, to provide for the assumption of the Company's
obligations to Holders of the Subordinated Notes
A2-5
in the case of a merger or consolidation or sale of all or substantially all of
the Company's assets, to make any change that would provide any additional
rights or benefits to the Holders of the Subordinated Notes or that does not
adversely affect the legal rights under the Indenture of any such Holder or to
comply with the requirements of the Commission in order to effect or maintain
the qualification of the Indenture under the Trust Indenture Act.
12. DEFAULTS AND REMEDIES. Events of Default include: (i)
default for 30 days in the payment when due of interest on the Subordinated
Notes (whether or not prohibited by Article 10 of the Indenture); (ii) default
in payment when due of the principal of or premium, or Liquidated Damages, if
any, on the Subordinated Notes when the same becomes due and payable at
maturity, upon redemption (including in connection with an offer to purchase)
or otherwise (whether or not prohibited by Article 10 of the Indenture); (iii)
failure by the Company or any of its Subsidiaries to comply with Sections 4.07,
4.09, 4.10, 4.15 and 5.01 of the Indenture (whether or not prohibited by
Article 10 of the Indenture); (iv) failure by the Company or any of its
Subsidiaries for 30 days after notice to comply with any of its other
agreements in the Indenture or the Subordinated Notes; (v) default under
certain other agreements relating to Indebtedness of the Company which default
results in the acceleration of such Indebtedness prior to its express maturity;
(vi) certain final judgments for the payment of money that remain undischarged
for a period of 45 days; and (vii) certain events of bankruptcy or insolvency
with respect to the Company or any of its Significant Subsidiaries. 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 Subordinated Notes may
declare all the Subordinated Notes to be due and payable immediately.
Notwithstanding the foregoing, in the case of an Event of Default arising from
certain events of bankruptcy or insolvency, with respect to the Company, any
Significant Subsidiary or any group of Subsidiaries that, taken together, would
constitute a Significant Subsidiary, all outstanding Subordinated Notes will
become due and payable without further action or notice. Upon any acceleration
of maturity of the Subordinated Notes, all principal of and accrued interest on
and Liquidated Damages, of the Subordinated Notes shall be due and payable
immediately. Holders may not enforce the Indenture or the Subordinated Notes
except as provided in the Indenture. Subject to certain limitations, Holders of
a majority in principal amount of the then outstanding Subordinated Notes may
direct the Trustee in its exercise of any trust or power. The Trustee may
withhold from Holders of the Subordinated 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 Subordinated Notes then outstanding by notice to the Trustee (and
without notice to any other Holder) may on behalf of the Holders of all of the
Subordinated Notes waive an existing Default or Event of Default and its
consequences under the Indenture except a continuing Default or Event of
Default in the payment of the principal of, premiums, if any, or interest on,
the Subordinated Notes (including in connection with an offer to purchase)
(provided, however, that Holders of a majority in aggregate principal amount of
the then outstanding Subordinated Notes may rescind an acceleration and its
consequences, including any related payment default that resulted from such
acceleration). 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.
A2-6
14. NO RECOURSE AGAINST OTHERS. No director, officer,
employee, incorporator or stockholder, of the Company, as such, shall have any
liability for any obligations of the Company under the Subordinated Notes or
the Indenture or for any claim based on, in respect of, or by reason of, such
obligations or their creation. Each Holder of Subordinated Notes by accepting a
Subordinated Note waives and releases all such liability. The waiver and
release are part of the consideration for the issuance of the Subordinated
Notes. Such waiver may not be effective to waive liabilities under the federal
securities laws and it is the view of the Commission that such waiver is
against public policy.
15. AUTHENTICATION. This Subordinated Note shall 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 OF RESTRICTED GLOBAL NOTES
AND RESTRICTED DEFINITIVE NOTES. In addition to the rights provided to Holders
of Subordinated Notes under the Indenture, Holders of Restricted Global Notes
and Restricted Definitive Notes shall have all the rights set forth in the A/B
Exchange Registration Rights Agreement dated as of ___________ ____, 1998,
between the Company and the parties named on the signature pages thereof (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 Subordinated 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 Subordinated Notes or as contained in any notice of redemption and reliance
may be placed only on the other identification numbers placed thereon.
A2-7
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:
SF Holdings Group, Inc.
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Attention: General Counsel
A2-8
To assign this Subordinated Note, fill in the form below: (I) or (we) assign
and transfer this Subordinated Note to
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(Insert assignee's soc. sec. or tax I.D. no.)
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
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(Print or type assignee's name, address and zip code)
and irrevocably appoint_____________________________________________________
to transfer this Subordinated Note on the books of the Company. The agent may
substitute another to act for him.
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Date:
---------------------------
Your Signature:
---------------------------------
(Sign exactly as your name appears on the face of
this Subordinated Note)
SIGNATURE GUARANTEE.
Signatures must be guaranteed by an "eligible guarantor institution" meeting
the requirements of the Registrar, which requirements include membership or
participation in the Security Transfer Agent Medallion Program ("STAMP") or
such other "signature guarantee program" as may be determined by the Registrar
in addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended.
A2-9
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Subordinated Note purchased
by the Company pursuant to Section 4.10 or 4.15 of the Indenture, check the box
below:
[ ] Section 4.10 [ ] Section 4.15
If you want to elect to have only part of the Subordinated
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 Subordinated Note)
Tax Identification No:
-------------------
SIGNATURE GUARANTEE.
Signatures must be guaranteed by an "eligible guarantor institution" meeting
the requirements of the Registrar, which requirements include membership or
participation in the Security Transfer Agent Medallion Program ("STAMP") or
such other "signature guarantee program" as may be determined by the Registrar
in addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended.
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 of other
Restricted Global Notes for an interest in this Regulation S Temporary Global
Note, have been made:
Principal Amount
Amount of Amount of increase of this Signature of
decrease in in Principal Global Note authorized officer
Principal Amount Amount following such of Trustee or
of of decrease Note
Date of Exchange this Global Note this Global Note (or increase) Custodian
---------------- ---------------- ---------------- ------------- -------------
A2-11
EXHIBIT B
FORM OF CERTIFICATE OF TRANSFER
SF Holdings Group, Inc.
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[Trustee]
Re: Subordinated Notes due 2009
Reference is hereby made to the Indenture, dated as of
__________ ____, 199__ (the "Indenture"), between SF Holdings Group, Inc., as
issuer (the "Company"), and ______________ 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 Subordinated Note[s] or interest in such Subordinated Note[s]
specified in Annex A hereto, in the principal amount of $___________ in such
Subordinated Note[s] or interests (the "Transfer"), to __________ (the
"Transferee"), as further specified in Annex A hereto. In connection with the
Transfer, the Transferor hereby certifies that:
[CHECK ALL THAT APPLY]
1. [ ] CHECK IF TRANSFEREE WILL TAKE DELIVERY OF A BENEFICIAL INTEREST IN THE
144A GLOBAL NOTE OR A DEFINITIVE NOTE PURSUANT TO RULE 144A. The Transfer is
being effected pursuant to and in accordance with Rule 144A under the United
States Securities Act of 1933, as amended (the "Securities Act"), and,
accordingly, the Transferor hereby further certifies that the beneficial
interest or Definitive Note is being transferred to a Person that the
Transferor reasonably believed and believes is purchasing the beneficial
interest or Definitive Note for its own account, or for one or more accounts
with respect to which such Person exercises sole investment discretion, and
such Person and each such account is a "qualified institutional buyer" within
the meaning of Rule 144A in a transaction meeting the requirements of Rule 144A
and such Transfer is in compliance with any applicable blue sky securities laws
of any state of the United States. Upon consummation of the proposed Transfer
in accordance with the terms of the Indenture, the transferred beneficial
interest or Definitive Note will be subject to the restrictions on transfer
enumerated in the Private Placement Legend printed on the 144A Global Note
and/or the Definitive Note and in the Indenture and under the Securities Act.
2. [ ] CHECK IF TRANSFEREE WILL TAKE DELIVERY OF A BENEFICIAL INTEREST IN THE
TEMPORARY REGULATION S GLOBAL NOTE, THE REGULATION S GLOBAL NOTE OR A
DEFINITIVE NOTE PURSUANT TO REGULATION S. The Transfer is being effected
pursuant to and in accordance with Rule 903 or Rule 904 under the Securities
Act and, accordingly, the Transferor hereby further certifies that (i) the
Transfer is not being made to a person in the United States and (x) at the time
the buy order was originated, the Transferee was outside the United States or
such Transferor and any Person acting on its behalf reasonably believed and
believes that the Transferee was outside the United States or (y) the
transaction was executed in, on or through the facilities of a designated
offshore securities market and neither such Transferor nor any Person acting on
its behalf knows that the transaction was prearranged with a buyer
B-1
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 Global Note, the Temporary Regulation S Global Note and/or the
Definitive Note and in the Indenture and under the Securities Act.
3. [ ] CHECK AND COMPLETE IF TRANSFEREE WILL TAKE DELIVERY OF A BENEFICIAL
INTEREST IN THE IAI GLOBAL NOTE OR A 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 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) if such Transfer is in respect of a principal amount of
Subordinated Notes at the time of transfer of less than $250,000, an Opinion of
Counsel provided by the Transferor or the Transferee (a copy of which the
Transferor has attached to this certification), to the effect that such
Transfer is in compliance with the Securities Act. Upon consummation of the
proposed transfer in accordance with the terms of the Indenture, the
transferred 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 Definitive Notes and in the Indenture and under
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.
B-2
(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.
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-3
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-4
EXHIBIT C
FORM OF CERTIFICATE OF EXCHANGE
SF Holdings Group, Inc.
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[Trustee]
Re: Subordinated Discount Notes due 2008
(CUSIP______________)
Reference is hereby made to the Indenture, dated as of March
12, 1998 (the "Indenture"), between SF Holdings Group, Inc., as issuer (the
"Company"), and ___________, 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
Subordinated Note[s] or interest in such Subordinated Note[s] specified herein,
in the principal amount of $____________ in such Subordinated 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
United States Securities Act of 1933, as amended (the "Securities Act"), (iii)
the restrictions on transfer contained in the Indenture and the Private
Placement Legend are not required in order to maintain compliance with the
Securities Act and (iv) the beneficial interest in an Unrestricted Global Note
is being acquired in compliance with any applicable blue sky securities laws of
any state of the United States.
(b) [ ] CHECK IF EXCHANGE IS FROM BENEFICIAL INTEREST IN A
RESTRICTED GLOBAL NOTE TO UNRESTRICTED DEFINITIVE NOTE. In connection with the
Exchange of the Owner's beneficial interest in a Restricted Global Note for an
Unrestricted Definitive Note, the Owner hereby certifies (i) the Definitive
Note is being acquired for the Owner's own account without transfer, (ii) such
Exchange has been effected in compliance with the transfer restrictions
applicable to the Restricted Global Notes and pursuant to and in accordance
with the Securities Act, (iii) the restrictions on transfer contained in the
Indenture and the Private Placement Legend are not required in order to
maintain compliance with the Securities Act and (iv) the Definitive Note is
being acquired in compliance with any applicable blue sky securities laws of
any state of the United States.
C-1
(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 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 Owner]
C-2
By: _______________________________
Name:
Title:
Dated: ________________, ____
C-3
EXHIBIT D
FORM OF CERTIFICATE FROM
ACQUIRING INSTITUTIONAL ACCREDITED INVESTOR
SF Holdings Group, Inc.
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[Trustee]
Re: Subordinated Notes due 2009
Reference is hereby made to the Indenture, dated as of
__________ ____, 1998 (the "Indenture"), between SF Holdings Group, Inc., as
issuer (the "Company"), and __________, 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
Subordinated 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 Subordinated
Notes or any interest therein except in compliance with, such restrictions and
conditions and the United States Securities Act of 1933, as amended (the
"Securities Act").
2. We understand that the offer and sale of the Subordinated
Notes have not been registered under the Securities Act, and that the
Subordinated 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 Subordinated 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, if such transfer is in respect of a principal
amount of Subordinated Notes, at the time of transfer of less than $250,000, 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
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meeting the requirements of clauses (A) through (E) of this paragraph a notice
advising such purchaser that resales thereof are restricted as stated herein.
3. We understand that, on any proposed resale of the
Subordinated 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 Subordinated Notes purchased by us will bear a legend to the foregoing
effect. We further understand that any subsequent transfer by us of the
Subordinated Notes or beneficial interest therein acquired by us must be
effected through one of the Placement Agents.
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
Subordinated 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 Subordinated 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.
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[Insert Name of Accredited Investor]
By:_______________________________
Name:
Title:
Dated: ________________, ____
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