Exhibit 10.3
THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "ACT"), OR THE SECURITIES LAWS OF ANY STATE AND MAY NOT BE SOLD,
TRANSFERRED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE ACT OR AN EXEMPTION THEREFROM UNDER THE ACT, THE RULES AND
REGULATIONS THEREUNDER AND APPLICABLE STATE LAWS. THE TRANSFER OF THIS NOTE IS
SUBJECT TO THE CONDITIONS SPECIFIED IN THE NOTE PURCHASE AGREEMENT DATED AS OF
JANUARY 25, 2002, BY AND AMONG THE COMPANY, THE COLLATERAL AGENT AND THE
PURCHASER PARTY THERETO AS AMENDED, MODIFIED AND SUPPLEMENTED FROM TIME TO TIME.
14.26% SERIES B SECURED NOTE DUE JANUARY 24, 2009.
No. 1 $19,500,000.00
NEWCUP, LLC
promises to pay to XXXXXXXXX & COMPANY, INC.
or registered assigns,
the principal sum of NINETEEN MILLION FIVE HUNDRED THOUSAND AND NO/100 DOLLARS
($19,500,000.00)
Dollars on January 24, 2009
Interest Payment Dates: March 31, June 30, September 30, December 31
Record Dates: March 15, June 15, September 15, December 15
Date: January 25, 2002 NEWCUP, LLC,
a Delaware limited liability company
by: Cupcorp, Inc., a Delaware corporation
its sole manager
By: /s/ Xxxx Xxxxxxxxx
----------------------
Name: Xxxx Xxxxxxxxx
Title: President
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14.26% SERIES B SECURED NOTE DUE JANUARY 24, 2009
(THE "SERIES B NOTE")
Capitalized terms used herein shall have the meanings ascribed to them in
the Agreement (as defined below) unless otherwise indicated.
1. INTEREST. NEWCUP, LLC, a Delaware limited liability company (the
"Company"), promises to pay interest on the principal amount of this Series B
Note at 14.26% per annum from January 25, 2002 until maturity. The Company will
pay interest quarterly on March 31, June 30, September 30 and December 31 of
each year, or if any such day is not a Business Day, on the next succeeding
Business Day (each an "Interest Payment Date"). Interest on the Series B Notes
will accrue from the most recent date on which interest has been paid or, if no
interest has been paid, from the date of issuance; provided, that the first
Interest Payment Date shall be March 31, 2002. The Company shall pay interest
(including post-petition interest in any proceeding under Bankruptcy Law) on all
due and unpaid amounts outstanding under the Series B Notes (including overdue
installments of principal, premium, if any, or interest), from time to time on
demand at a rate equal to 2% per annum in excess of the interest rate otherwise
specified in this Series B Note, compounded quarterly, to the extent lawful.
Interest will be computed on the basis of a 360-day year of twelve 30-day
months.
Notwithstanding the foregoing, with respect to any Interest Payment Date
other than the Interest Payment Date occurring March 31, 2004 (the "Mandatory
Cash Pay Date") or any Interest Payment Date occurring after December 31, 2006,
the Company may defer the interest hereunder due on such Interest Payment Date
(each calendar quarter or portion thereof ending on any Interest Payment Date on
which the Company elects to defer the interest due on this Note as permitted
hereunder is referred to herein as a "PIK Quarter") and such deferred interest,
computed at the rate per annum set forth in clause (ii) next following (the "PIK
Interest"), shall become a part of the principal due hereunder as of the
Interest Payment Date such interest became due, shall earn interest as provided
hereunder and shall be due and payable on March 31, 2007 unless the amounts due
hereunder are accelerated pursuant to the terms of the Agreement prior to
maturity; provided that (i) the Company notifies each Holder in writing of its
election to defer the interest due on any Interest Payment Date at least five
days prior to such Interest Payment Date, (ii) interest shall be deemed to have
accrued at a rate of 15.26% per annum during each PIK Quarter and (iii) the
total number of PIK Quarters after the earlier of (a) the first Interest Payment
Date in which interest is paid in cash or (b) the Mandatory Cash Pay Date (the
earlier of the foregoing clauses (a) and (b) is referred to herein as the "Cash
Pay Date"), shall not exceed the lesser of (x) eight (8) minus the number of PIK
Quarters occurring prior to the Cash Pay Date and (y) six (6).
2. METHOD OF PAYMENT. The Company will pay interest on the Series B Notes
to the Persons who are registered Holders of Series B Notes at the close of
business on March 15, June 15, September 15 or December 15 next preceding the
Interest Payment Date, even if such Series B Notes are cancelled after such
record date and on or before such Interest Payment Date. The Series B Notes will
be payable both as to principal and interest by Federal funds wire transfer of
U.S. Legal Tender to each Holder's account in any bank in the United
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States as may be designated and specified in writing by such Holder at least two
Business Days prior thereto.
3. NOTE PURCHASE AGREEMENT. The Company issued the Series B Notes under
the Note Purchase Agreement dated as of January 25, 2002 (as amended, modified
and supplemented from time to time, the "Agreement") by and among the Company,
the Collateral Agent and the Purchaser. The Series B Notes are subject to, and
qualified by, all such terms, certain of which are summarized herein, and
Holders of Series B Notes are referred to the Agreement for a statement of such
terms. The Series B Notes are general obligations of the Company. The Series B
Notes are limited to $19,500,000 in aggregate principal amount except to the
extent interest is added to the principal of the Series B Notes in accordance
with the provisions hereof.
4. OPTIONAL REDEMPTION. The Company may redeem all or any of the Series B
Notes, in whole or in part, at any time on or after January 25, 2002, at the
applicable Redemption Price plus accrued and unpaid interest to the redemption
date.
5. MANDATORY REDEMPTION.
The Company shall redeem all outstanding Series B Notes on January 24,
2009.
On March 31, 2007, the Company shall redeem for cash all PIK Interest at
the applicable Redemption Price plus accrued and unpaid interest thereon to the
redemption date together with such additional amounts of each Note, at the
applicable Redemption Price, as is sufficient to prevent such Note from being
treated as an "applicable high yield discount obligation" as defined under
Section 163 of the Internal Revenue Code of 1986, as amended, and such amount
shall be unconditionally due and payable.
Upon the occurrence of a Newcup Change of Control or an Equity Realization
Event, the Company shall redeem all outstanding Series B Notes upon the terms
set forth in the Agreement.
6. NOTICE OF REDEMPTION. Notice of redemption pursuant to Section 4 or
Section 5 hereof shall be mailed at least 10 days but not more than 20 days
before a redemption date by first class mail to each Holder whose Notes are to
be redeemed at such Holder's registered address. If, on or prior to the
redemption date, the Company deposits in a segregated account or otherwise sets
aside funds sufficient to pay the redemption price of the Series B Notes called
for redemption, then, on and after the redemption date, interest ceases to
accrue on Series B Notes or portions thereof called for redemption, unless the
Company defaults in paying the redemption price.
7. DENOMINATIONS, TRANSFER, EXCHANGE. The Series B Notes are without
coupons. The transfer of Series B Notes may be registered and Series B Notes may
be exchanged as provided in the Agreement. The Company may require a Holder,
among other things, to furnish appropriate opinions, endorsements and transfer
documents, and the Company may require a Holder to pay any taxes and fees
required by law or permitted by the Agreement. The Company need not exchange or
register the transfer of any Series B Note or portion of a
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Series B Note selected for redemption, except for the unredeemed portion of any
Series B Note being redeemed in part. Also, the Company need not exchange or
register the transfer of any Series B Notes for a period of 15 days before a
selection of Series B Notes to be redeemed or during the period between a record
date and the corresponding Interest Payment Date.
8. PERSONS DEEMED OWNERS. The registered Holder of a Series B Note may be
treated as its owner for all purposes.
9. AMENDMENTS AND WAIVERS. Subject to certain exceptions, the Agreement
and the Series B Notes may be amended or supplemented and any existing Default
or Event of Default under, or compliance with any provision of, the Agreement
may be waived with the written consent of the Holders of at least a majority in
aggregate principal amount of the outstanding Series B Notes.
The right of any Holder to participate in any consent required or sought
pursuant to any provision of the Agreement (and the obligation of the Company to
obtain any such consent otherwise required from such Holder) may be subject to
the requirement that such Holder shall have been the Holder of record of any
Series B Notes with respect to which such consent is required or sought as of a
date identified by the Company in a notice furnished to Holders in accordance
with the terms of this Agreement.
10. DEFAULTS AND REMEDIES. The Events of Default with respect to the
Series B Notes and the remedies of each Holder of a Series B Note are set forth
in Section 4 of the Agreement. Holders of the Notes may not enforce the
Agreement or the Notes except as provided in the Agreement.
11. NO RECOURSE AGAINST OTHERS. No director, officer, employee or
stockholder of the Company, as such, shall have any liability for any
obligations of the Company under the Series B Notes or the Agreement or for any
claim based on, in respect of, or by reason of, such obligations or their
creation. Each Holder by accepting a Series B Note waives and releases all such
liability. The waiver and release are part of the consideration for the issuance
of the Series B Notes.
The Company will furnish to any Holder upon written request and without
charge a copy of the Agreement. Requests may be made to:
NEWCUP, LLC
x/x XXX/Xxxxxxxx Xxxxxxxxx, X.X.X.
00000 Xxxxx Xxxxxx Xxxx.
Xxxxx 0000
Xxx Xxxxxxx, XX 00000
Attention: Xxxxx Xxxxxx
Telecopy No.: (000) 000-0000
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GUARANTY
For value received, the undersigned hereby unconditionally guarantees to
the Holder of the Note upon which this Guaranty is endorsed, subject to the
terms of the Guaranty Agreement pursuant to which this Guaranty was issued, (a)
the due and punctual payment of the principal of, premium (if any) and interest
on such Note when and as the same shall become due and payable for any reason
according to the terms of such Note, the Agreement and/or the Guaranty
Agreement, and (b) that all other payment obligations of the Company under the
Agreement or the Notes will be promptly paid in full in accordance with the
terms of the Agreement, the Guaranty Agreement and the Notes.
SF HOLDINGS GROUP, INC.
By: /s/ Xxxxxx Xxxxxx
---------------------------
Name: Xxxxxx Xxxxxx
Title: Chairman
Dated: January 26, 2002
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ASSIGNMENT FORM
To assign this Series B Note, fill in the form below:
(I) or (we) assign and transfer this Series B Note to
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(Print or type assignee's name, address and zip code)
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(Insert assignee's Soc. Sec. or tax I.D. no.)
and irrevocably appoint_____________________________________________
to transfer this Series B Note on the books of the Company.
Date:_________________________________
Your Signature:____________________________
(Sign exactly as your name appears on the
face of this Series B Note)
Signature Guarantee
By:______________________________________
(Bank or trust company having an
office or correspondent in the United
States or a broker or dealer which is a
member of a registered securities exchange
or the National Association
of Securities Dealers, Inc.)
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