Exhibit 10.1
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APPLETON PAPERS INC.
AND
THE PARTIES LISTED AS GUARANTORS ON EXHIBIT A HERETO
$250,000,000
12 1/2% Series A Senior Subordinated Notes due 2008
Purchase Agreement
December 11, 2001
BEAR, XXXXXXX & CO. INC.
TD SECURITIES (USA) INC.
ABN AMRO INCORPORATED
U.S. BANCORP XXXXX XXXXXXX INC.
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Appleton Papers Inc.
$250,000,000
12 1/2% Series A Senior Subordinated Notes due 2008
PURCHASE AGREEMENT
December 11, 2001
New York, New York
BEAR, XXXXXXX & CO. INC.
TD SECURITIES (USA) INC.
ABN AMRO INCORPORATED
U.S. BANCORP XXXXX XXXXXXX INC.
c/o Bear, Xxxxxxx & Co. Inc.
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies & Gentlemen:
Appleton Papers Inc., a Delaware corporation (the "Company"), proposes
to issue and sell to Bear, Xxxxxxx & Co. Inc. ("Bear Xxxxxxx"), TD Securities
(USA) Inc., ABN AMRO Incorporated and U.S. Bancorp Xxxxx Xxxxxxx Inc. (each, an
"Initial Purchaser" and, collectively, the "Initial Purchasers") $250,000,000 in
aggregate principal amount of 12 1/2% Series A Senior Subordinated Notes due
2008 (the "Series A Notes"), subject to the terms and conditions set forth
herein. The Series A Notes will be issued pursuant to an indenture (the
"Indenture"), to be dated the Closing Date (as defined), among the Company, the
Guarantors (as defined) and U.S. Bank National Association, as trustee (the
"Trustee"). The Notes (as defined) will be fully and unconditionally guaranteed
(the "Guarantees") as to payment of principal, interest, premium and liquidated
damages, if any, on an unsecured senior subordinated basis, jointly and
severally by each entity listed on Exhibit A hereto (collectively, the
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"Guarantors"). Capitalized terms used herein and not otherwise defined shall
have the meanings assigned to such terms in the Indenture.
The Notes (as defined) are being issued and sold in connection with the
acquisition, consummated on November 9, 2001, by Paperweight Development Corp.
and its wholly owned subsidiary at the time, New Appleton LLC (each a "Buyer"
and collectively, the "Buyers"), of 100% of the partnership interests in Arjo
Xxxxxxx Delaware General Partnership ("AWDGP"), which owned, indirectly, all of
the issued and outstanding shares of capital stock of the Company, which
partnership interests were then owned by Arjo Xxxxxxx U.S. Holdings Ltd. and
Arjo Xxxxxxx North America Investments Ltd. (each, a "Seller" and collectively,
the "Sellers"), pursuant to a purchase agreement dated as of July 5, 2001 (the
"Acquisition Agreement") for a total consideration of $810 million, which
included the present value of the Deferred Payment Obligation (as defined)
issued to one of the Sellers, plus proceeds of $7.4 million from the sale of the
Company's Harrisburg, PA facility (the "Acquisition"). In order to (a) pay for
the Acquisition, (b) refinance certain of the Company's and its subsidiaries'
existing debt concurrently with the Acquisition and (c) pay certain fees and
expenses associated with the
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Acquisition and the financing thereof, (i) the Company (x) entered into new
revolving credit and term loan facilities in the amount of $340 million pursuant
to a credit agreement dated November 8, 2001 among the Company, Paperweight
Development Corp., the several lenders party thereto, Bear Xxxxxxx, as sole lead
arranger and sole bookrunner, Bear Xxxxxxx Corporate Lending Inc., as
syndication agent, U.S. Bank National Association d/b/a Firstar Bank, N.A. and
LaSalle Bank National Association, as documentation agents, M&I Xxxxxxxx &
Ilsley Bank, as managing agent, Associated Bank, N.A. as co-agent and Toronto
Dominion (Texas), Inc. as administrative agent (the "Credit Agreement"), and, to
induce the lenders thereto to enter into the Credit Agreement, the Company,
Paperweight Development Corp., New Appleton LLC, AWDGP, Appleton Investments
L.L.C. and WTA Inc. entered into a related guarantee and collateral agreement
dated November 8, 2001 in favor of Toronto Dominion (Texas), Inc., the
administrative agent for the lenders party to the Credit Agreement (the
"Guarantee Agreement") (y) used $106,843,717.13 from elections made by certain
employees of the Company, through the Company's employee stock ownership plan
(the "ESOP"), to direct the transfer of account balances to the Company Stock
Fund established under the Company's Retirement Savings and Employee Stock
Ownership Plan (the "Equity Financing") and (z) issued and sold a senior
subordinated note due 2008, in the principal amount of $250,000,000, to Arjo
Xxxxxxx Appleton p.l.c., now known as Arjo Xxxxxxx Appleton Limited, which is an
indirect parent company of the Sellers ("AWA") (the "Acquisition Note") and (ii)
Paperweight Development Corp. became liable for a deferred payment obligation of
approximately $320 million to be paid to one of the Sellers eight and one-half
years after the closing of the Acquisition pursuant to the terms and conditions
set forth in Schedule 2.3 of the Acquisition Agreement (which is the
mathematical equivalent of a $140 million principal amount obligation issued on
the closing date of the Acquisition accruing interest at a rate of 10% per year,
compounded semi-annually) (the "Deferred Payment Obligation"). The Company
intends to redeem the Acquisition Note with the proceeds of the Notes (as
defined).
In connection with the Acquisition, the Company, the Buyers and AWA
entered into an indemnification agreement dated November 9, 2001 related to the
Lower Fox River under which AWA agreed to indemnify the Buyers for all
governmental and third party liabilities related to the past discharge of
polychlorinated biphenyls from the Company's Appleton, Wisconsin plant or
otherwise relating to the manufacture of carbonless paper at various locations,
including the Lower Fox River (the "Fox River Liabilities") (and such agreement,
the "Fox River AWA Environmental Indemnity Agreement") and the Company and the
Buyers entered into an indemnification agreement dated November 9, 2001 related
to the Lower Fox River under which the Buyers agreed to indemnify the Company
for the Fox River Liabilities (the "Fox River PDC Environmental Indemnity
Agreement" and together with the Fox River AWA Environmental Indemnity
Agreement, the "Environmental Indemnity Agreements"). To provide financial
assurance that AWA will be able to meet its indemnification obligations under
the Fox River AWA Environmental Indemnity Agreement, AWA provided financial
assurance, including, but not limited to, a credit enhancement in the form of an
indemnity claim insurance policy issued on November 9, 2001 by Commerce &
Industry Insurance Company ("CIIC") that provides security for AWA's payment of
the Fox River Liabilities (the "Policy"). In connection with the Policy and the
Environmental Indemnity Agreements (a) the Company, Paperweight Development
Corp., New Appleton LLC and AWA entered into a Security Agreement dated November
9, 2001 (the "Fox River Security Agreement"), (b) Arjo Xxxxxxx Appleton
(Bermuda) Limited ("AWA Bermuda") and AWA entered into an Assignment and
Assumption
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Deed dated November 9, 2001 pursuant to which AWA Bermuda agreed to assume
certain liabilities of AWA relating to the Fox River AWA Environmental Indemnity
Agreement and to accept an assignment of AWA's rights under the Fox River AWA
Environmental Indemnity Agreement (the "Assumption Agreement"), (c) AWA, Arjo
Xxxxxxx (Bermuda) Holdings Limited, Paperweight Development Corp., PDC Capital
Corporation and AWA Bermuda entered into a Relationship Agreement dated November
9, 2001 (the "Relationship Agreement") and (d) AWA Bermuda and the Company
entered into a Collateral Assignment dated November 9, 2001 (the "Bermuda
Security Agreement").
Subsequent to November 9, 2001 (a) Appleton International Sales Inc.
was liquidated into the Company, (b) Appleton Investments L.L.C. was liquidated
into AWDGP, (c) AWDGP was merged into the Company and (d) New Appleton LLC was
liquidated into Paperweight Development Corp. (the "Restructuring", with
Appleton International Sales Inc., New Appleton LLC, Appleton Investments L.L.C.
and AWDGP being referred to collectively as the "Restructured Entities").
In connection with the transactions contemplated in the previous
paragraph, Appleton International Sales Inc., Appleton Investments L.L.C., New
Appleton LLC and AWDGP ceased to exist, Paperweight Development Corp. became the
successor in interest to New Appleton LLC and the Company became the successor
in interest to each of Appleton International Sales Inc., Appleton Investments
L.L.C. and AWDGP.
1. Issuance of Securities. The Company proposes, upon the terms and
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subject to the conditions set forth herein, to issue and sell to the Initial
Purchasers an aggregate of $250,000,000 in principal amount of Series A Notes.
The Series A Notes and the Series B Notes (as defined) issuable in exchange
therefor are collectively referred to herein as the "Notes."
Upon original issuance thereof, and until such time as the same is no
longer required under the applicable requirements of the Securities Act of 1933,
as amended (the "Act"), the Series A Notes (and all securities issued in
exchange therefor or in substitution thereof) shall bear the following legend:
"THE SECURITY (OR ITS PREDECESSOR) EVIDENCED HEREBY WAS
ORIGINALLY ISSUED IN A TRANSACTION EXEMPT FROM REGISTRATION
UNDER XXXXXXX 0 XX XXX XXXXXX XXXXXX SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT"), AND THE SECURITY EVIDENCED
HEREBY MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED IN THE
ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION
THEREFROM. EACH PURCHASER OF THE SECURITY EVIDENCED HEREBY IS
HEREBY NOTIFIED THAT THE SELLER MAY BE RELYING ON THE EXEMPTION
FROM THE PROVISIONS OF SECTION 5 OF THE SECURITIES ACT PROVIDED
BY RULE 144A THEREUNDER. THE HOLDER OF THE SECURITY EVIDENCED
HEREBY AGREES FOR THE BENEFIT OF THE ISSUER THAT (A) SUCH
SECURITY MAY BE RESOLD, PLEDGED OR OTHERWISE TRANSFERRED ONLY
(1)(a) IN THE UNITED
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STATES TO A PERSON WHO THE SELLER REASONABLY BELIEVES IS A
QUALIFIED INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A UNDER THE
SECURITIES ACT) IN A TRANSACTION MEETING THE REQUIREMENTS OF
RULE 144A, (b) OUTSIDE THE UNITED STATES IN AN OFFSHORE
TRANSACTION IN ACCORDANCE WITH RULE 904 UNDER THE SECURITIES
ACT, (c) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144
UNDER THE SECURITIES ACT, (d) TO AN INSTITUTIONAL "ACCREDITED
INVESTOR" (AS DEFINED IN RULE 501(a)(1), (2), (3) OR (7) OF THE
SECURITIES ACT (AN "INSTITUTIONAL ACCREDITED INVESTOR")) THAT,
PRIOR TO SUCH TRANSFER, FURNISHES THE TRUSTEE A SIGNED LETTER
CONTAINING CERTAIN REPRESENTATIONS AND AGREEMENTS (THE FORM OF
WHICH CAN BE OBTAINED FROM THE TRUSTEE) AND, IF SUCH TRANSFER IS
IN RESPECT OF AN AGGREGATE PRINCIPAL AMOUNT OF NOTES LESS THAN
$250,000, AN OPINION OF COUNSEL ACCEPTABLE TO APPLETON PAPERS
INC. THAT SUCH TRANSFER IS IN COMPLIANCE WITH THE SECURITIES ACT
OR (e) IN ACCORDANCE WITH ANOTHER EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT (AND BASED UPON
AN OPINION OF COUNSEL IF APPLETON PAPERS INC. SO REQUESTS), (2)
TO APPLETON PAPERS INC. OR (3) PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT AND, IN EACH CASE, IN ACCORDANCE WITH ANY
APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES OR
ANY OTHER APPLICABLE JURISDICTION AND (B) THE HOLDER WILL, AND
EACH SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER FROM
IT OF THE SECURITY EVIDENCED HEREBY OF THE RESALE RESTRICTIONS
SET FORTH IN (A) ABOVE."
2. Offering. The Series A Notes will be offered and sold to the
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Initial Purchasers pursuant to an exemption from the registration requirements
under the Act. The Company has prepared a preliminary offering memorandum, dated
November 27, 2001 (the "Preliminary Offering Memorandum"), and a final offering
memorandum, dated December 11, 2001 (the "Offering Memorandum"), relating to the
Company and its subsidiaries and the Series A Notes.
The Initial Purchasers have advised the Company that the Initial
Purchasers will make offers (the "Exempt Resales") of the Series A Notes on the
terms set forth in the Offering Memorandum, as amended or supplemented, solely
to (i) persons whom the Initial Purchasers reasonably believe to be "qualified
institutional buyers," as defined in Rule 144A under the Act ("QIBs") and (ii)
non-U.S. persons outside the United States (each, a "Reg S Investor") in
reliance upon and as defined in Regulation S under the Act ("Regulation S"). The
QIBs and the Reg S Investors are collectively referred to herein as the
"Eligible Purchasers." The Initial Purchasers will offer the Series A Notes to
such Eligible Purchasers initially at a price equal to 100% of the principal
amount thereof. Such price may be changed at any time without notice.
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Holders (including subsequent transferees) of the Series A Notes will
have the registration rights set forth in the registration rights agreement
relating thereto (the "Registration Rights Agreement"), to be dated the Closing
Date, for so long as such Series A Notes constitute "Transfer Restricted
Securities" (as defined in the Registration Rights Agreement). Pursuant to the
Registration Rights Agreement, the Company and the Guarantors will agree to file
with the Securities and Exchange Commission (the "Commission"), under the
circumstances set forth therein, (i) a registration statement under the Act (the
"Exchange Offer Registration Statement") relating to the Company's 12 1/2%
Series B Senior Subordinated Notes due 2008 (the "Series B Notes") and
Guarantees thereof to be offered in exchange for the Series A Notes and
Guarantees thereof (the "Exchange Offer") and (ii) a shelf registration
statement pursuant to Rule 415 under the Act (the "Shelf Registration Statement"
and, together with the Exchange Offer Registration Statement, the "Registration
Statements") relating to the resale by certain holders of the Series A Notes,
and to use their reasonable best efforts to cause such Registration Statements
to be declared effective and to consummate the Exchange Offer. This Agreement,
the Notes, the Guarantees, the Indenture, the Registration Rights Agreement, the
Credit Agreement, the Guarantee Agreement, the Acquisition Agreement and all
attachments thereto, including the Deferred Payment Obligation, the
Environmental Indemnity Agreements, the Fox River Security Agreement, the
Relationship Agreement, the Assumption Agreement, the Bermuda Security
Agreement, the Policy and the Security Holders Agreements (as defined) are
hereinafter referred to collectively as the "Operative Documents."
3. Purchase, Sale and Delivery. (a) (a) On the basis of the
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representations, warranties and covenants contained in this Agreement, and
subject to its terms and conditions, the Company agrees to issue and sell to the
Initial Purchasers, and each of the Initial Purchasers agrees, severally and not
jointly, to purchase from the Company the principal amounts of Series A Notes
set forth opposite the name of such Initial Purchaser on Schedule I. The
purchase price for the Series A Notes will be $1000 per $1,000 principal amount
Series A Note.
(b) Delivery of the Series A Notes shall be made, against payment of
the purchase price therefor, at the offices of Xxxxxx & Xxxxxxx, New York, New
York or such other location as may be mutually acceptable. Such delivery and
payment shall be made at 9:00 a.m., New York City time, on December 14, 2001 or
at such other time as shall be agreed upon by the Initial Purchasers and the
Company. The time and date of such delivery and payment are herein called the
"Closing Date."
(c) On the Closing Date, one or more Series A Notes in definitive
global form, registered in the name of Cede & Co., as nominee of The Depository
Trust Company ("DTC"), having an aggregate amount corresponding to the aggregate
principal amount of the Series A Notes (the "Global Note") sold pursuant to
Exempt Resales to Eligible Purchasers shall be delivered by the Company to the
Initial Purchasers (or as the Initial Purchasers direct), against payment by the
Initial Purchasers of the gross proceeds of the offering of the Notes, by wire
transfer of same day funds, to an account designated by the Company, provided
that the Company shall give at least two business days' prior written notice to
the Initial Purchasers of the information required to effect such wire transfer,
and further provided that the Initial Purchasers shall have previously received
their discounts and commissions and all reasonable and customary out-of-pocket
expenses (including, without limitation, reasonable fees and disbursements of
counsel, and of other consultants and advisors retained by the Initial
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Purchasers) in respect of the purchase of the Notes, by wire transfer of same
day funds, to an account designated by the Initial Purchasers, and acknowledged
receipt of the same. The Global Note shall be made available to the Initial
Purchasers for inspection not later than 9:30 a.m. on the business day
immediately preceding the Closing Date.
4. Agreements of the Company and the Guarantors. Each of the
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Company and the Guarantors covenants and agrees with the Initial Purchasers as
follows:
(a) To advise the Initial Purchasers promptly and, if
requested by the Initial Purchasers, confirm such advice in writing,
(i) of the issuance by any state securities commission of any stop
order suspending the qualification or exemption from qualification of
any Notes or the related Guarantees for offering or sale in any
jurisdiction, or the initiation of any proceeding for such purpose by
any state securities commission or other regulatory authority and (ii)
of the happening of any event that makes any statement of a material
fact made in the Preliminary Offering Memorandum or the Offering
Memorandum untrue or that requires the making of any additions to or
changes in the Preliminary Offering Memorandum or the Offering
Memorandum in order to make the statements therein, in the light of the
circumstances under which they are made, not misleading. The Company
and the Guarantors shall use their best efforts to prevent the issuance
of any stop order or order suspending the qualification or exemption of
any Notes or the related Guarantees under any state securities or Blue
Sky laws and, if at any time any state securities commission or other
regulatory authority shall issue an order suspending the qualification
or exemption of any Notes or the related Guarantees under any state
securities or Blue Sky laws, the Company and the Guarantors shall use
their respective reasonable best efforts to obtain the withdrawal or
lifting of such order at the earliest possible time.
(b) To furnish the Initial Purchasers and those persons
identified by the Initial Purchasers to the Company, without charge, as
many copies of the Preliminary Offering Memorandum and the Offering
Memorandum and any amendments or supplements thereto, as the Initial
Purchasers may reasonably request. The Company and the Guarantors
consent to the use of the Preliminary Offering Memorandum and the
Offering Memorandum, and any amendments and supplements thereto
required pursuant hereto, by the Initial Purchasers in connection with
Exempt Resales.
(c) Not to amend or supplement the Preliminary Offering
Memorandum or the Offering Memorandum during such period as in the
opinion of counsel for the Initial Purchasers the Preliminary Offering
Memorandum or the Offering Memorandum is required by law to be
delivered in connection with Exempt Resales and in connection with
market-making activities of the Initial Purchasers for so long as any
Series A Notes are outstanding unless the Initial Purchasers shall
previously have been advised thereof and shall not have reasonably
objected thereto within a reasonable time after being furnished a copy
thereof. The Company and the Guarantors shall promptly prepare, upon
the Initial Purchasers' request, any amendment or supplement to the
Preliminary Offering Memorandum or the Offering Memorandum that may be
necessary or advisable in connection with such Exempt Resales or such
market making activities.
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(d) If, during the period referred to in 4(c) above, any
event shall occur as a result of which, in the judgment of the Company
and the Guarantors or in the reasonable opinion of counsel for the
Company and the Guarantors or counsel for the Initial Purchasers, it
becomes necessary or advisable to amend or supplement the Preliminary
Offering Memorandum or the Offering Memorandum in order to make the
statements therein, in the light of the circumstances when such
Offering Memorandum is delivered to an Eligible Purchaser, not
misleading, or if it is necessary or advisable to amend or supplement
the Preliminary Offering Memorandum or the Offering Memorandum to
comply with applicable law, (i) to notify the Initial Purchasers and
(ii) forthwith to prepare an appropriate amendment or supplement to
such Preliminary Offering Memorandum or the Offering Memorandum so that
the statements therein as so amended or supplemented will not, in the
light of the circumstances when it is so delivered, be misleading, or
so that such Preliminary Offering Memorandum or the Offering Memorandum
will comply with applicable law.
(e) To cooperate with the Initial Purchasers and counsel for
the Initial Purchasers in connection with the qualification or
registration of the Series A Notes and the Guarantees thereof under the
securities or Blue Sky laws of such jurisdictions as the Initial
Purchasers may reasonably request and to continue such qualification in
effect so long as required for the Exempt Resales; provided, however,
that neither the Company nor any Guarantor shall be required in
connection therewith to register or qualify as a foreign entity where
it is not now so qualified or to take any action that would subject it
to service of process in suits or taxation, in each case, other than as
to matters and transactions relating to the Preliminary Offering
Memorandum, the Offering Memorandum or Exempt Resales, in any
jurisdiction where it is not now so subject.
(f) Whether or not the transactions contemplated by this
Agreement including, but not limited to, the transactions described in
the Operative Documents, are consummated or this Agreement becomes
effective or is terminated, to pay all costs, expenses, fees and taxes
incident to the performance of the obligations of the Company and the
Guarantors hereunder, including in connection with: (i) the
preparation, printing, filing and distribution of the Preliminary
Offering Memorandum and the Offering Memorandum (including, without
limitation, financial statements) and all amendments and supplements
thereto required pursuant hereto, (ii) the preparation (including,
without limitation, duplication costs) and delivery of all agreements,
correspondence and all other documents prepared and delivered in
connection herewith and with the Exempt Resales, (iii) the issuance,
transfer and delivery of the Series A Notes and the Guarantees endorsed
thereon to the Initial Purchasers, (iv) the qualification or
registration of the Notes and the related Guarantees for offer and sale
under the securities or Blue Sky laws of the several states (including,
without limitation, the cost of printing and mailing a preliminary and
final Blue Sky Memorandum and the reasonable fees and disbursements of
one counsel for the Initial Purchasers relating thereto), (v)
furnishing such copies of the Preliminary Offering Memorandum and the
Offering Memorandum, and all amendments and supplements thereto, as may
be requested for use in connection with Exempt Resales, (vi) the
preparation of certificates for the Notes (including, without
limitation, printing and engraving thereof), (vii) the fees,
disbursements and expenses of the Company's and the Guarantors' counsel
and accountants, (viii) all fees and expenses (including fees and
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expenses of counsel) of the Company and the Guarantors in connection
with the approval of the Notes by DTC for "book-entry" transfer, (ix)
rating the Notes by rating agencies, (x) the reasonable fees and
expenses of the Trustee and its counsel, (xi) the performance by the
Company and the Guarantors of their other obligations under this
Agreement and the other Operative Documents and (xii) "roadshow" travel
and other expenses incurred in connection with the marketing and sale
of the Notes upon presentation of reasonably satisfactory
documentation.
(g) To use the proceeds from the sale of the Series A Notes
in the manner described in the Offering Memorandum under the caption
"Use of Proceeds."
(h) Not to voluntarily claim, and to resist actively any
attempts to claim, the benefit of any usury laws against the holders of
any Notes.
(i) To do and perform all things required or necessary to be
done and performed by them under this Agreement and the other Operative
Documents prior to or after the Closing Date and to satisfy all
conditions precedent on their part to the delivery of the Series A
Notes and the Guarantees thereof.
(j) Not to sell, offer for sale or solicit offers to buy or
otherwise negotiate in respect of any security (as defined in the Act)
that would be integrated with the sale of the Series A Notes in a
manner that would require the registration under the Act of the sale to
the Initial Purchasers or the Eligible Purchasers of the Series A Notes
or to take any other action that would result in the Exempt Resales not
being exempt from registration under the Act.
(k) For so long as any of the Notes remain outstanding and
during any period in which the Company and the Guarantors are not
subject to Section 13 or 15(d) of the Securities Exchange Act of 1934,
as amended (the "Exchange Act"), to make available to any holder or
beneficial owner of Series A Notes in connection with any sale thereof
and any prospective purchaser of such Series A Notes from such holder
or beneficial owner, the information required by Rule 144A(d)(4) under
the Act.
(l) To cause the Exchange Offer to be made in the
appropriate form to permit registered Series B Notes and the Guarantees
thereof to be offered in exchange for the Series A Notes and the
Guarantees thereof and to comply with all applicable federal and state
securities laws in connection with the Exchange Offer.
(m) To comply with all of its agreements set forth in the
Registration Rights Agreement and all of its agreements set forth in
the representation letters to DTC relating to the approval of the Notes
by DTC for "book-entry" transfer.
(n) To effect the inclusion of the Notes in PORTAL and to
obtain approval of the Series A Notes by DTC for "book-entry" transfer.
(o) During a period of three years following the Closing
Date, to deliver without charge to the Initial Purchasers, as they may
reasonably request, promptly upon their becoming available, copies of
(i) all reports or other publicly available information
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that the Company and the Guarantors shall mail or otherwise make
available to their securityholders (except for communications which
relate to employment matters and other communications customarily
provided by the Company to its employees in their capacity as
employees) and (ii) all reports, financial statements and proxy or
information statements filed by the Company with the Commission or any
national securities exchange and such other publicly available
information concerning the Company, any of its subsidiaries or any of
the Guarantors, including without limitation, press releases.
(p) Prior to the Closing Date, to furnish to the Initial
Purchasers, as soon as they have been prepared in the ordinary course
by the Company, copies of any unaudited interim financial statements
for any period subsequent to the periods covered by the financial
statements appearing in the Offering Memorandum.
(q) Not to take, directly or indirectly, any action designed
to, or that might reasonably be expected to, cause or result in
stabilization or manipulation of the price of any security of the
Company to facilitate the sale or resale of the Notes. Except as
permitted by the Act, neither the Company nor any Guarantor will
distribute any (i) preliminary offering memorandum, including, without
limitation, the Preliminary Offering Memorandum, (ii) offering
memorandum, including, without limitation, the Offering Memorandum, or
(iii) other offering material in connection with the offering and sale
of the Notes.
(r) To take all reasonable action necessary to enable
Investors Services, Inc. (Moody's) and Standard & Poor's Ratings
Services to provide their respective initial credit ratings on the
Series A Notes.
(s) To represent the Series A Notes sold in reliance on
Regulation S upon issuance by temporary global securities that may not
be exchanged for definitive securities until the expiration of the
40-day distribution compliance period referred to in Rule 903(b)(3) of
the Act and only upon certification of beneficial ownership of such
Series A Notes by non-U.S. persons or U.S. persons who purchased such
Series A Notes in transactions that were exempt from the registration
requirements of the Act.
(t) During the period from the date hereof until 90 days
after the Closing Date, not to offer, sell, contract to sell or
otherwise dispose of any debt securities of the Company or any
Guarantor or warrants to purchase debt securities of the Company or any
Guarantor substantially similar to the Notes (other than (i) the Notes,
(ii) the Guarantees and (iii) intercompany debt between the Company and
its affiliates permitted by the Indenture to be incurred) or to
announce any intention to do any of the foregoing, without the prior
written consent of Bear Xxxxxxx, on behalf of the Initial Purchasers.
5. Representations and Warranties. (a) The Company and the
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Guarantors, jointly and severally, represent and warrant to the Initial
Purchasers that:
(i) The Preliminary Offering Memorandum as of its date does
not, and the Offering Memorandum as of its date and as of the Closing
Date does not and will not, and any supplement or amendment to them
will not, contain any untrue statement of a
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material fact or omit to state any material fact required to be stated
therein or necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading,
except that the representations and warranties contained in this
paragraph shall not apply to statements in or omissions from the
Preliminary Offering Memorandum and the Offering Memorandum (or any
supplement or amendment thereto) made in reliance upon and in
conformity with information relating to the Initial Purchasers
furnished to the Company and the Guarantors in writing by the Initial
Purchasers expressly for use therein. No stop order preventing the use
of the Preliminary Offering Memorandum or the Offering Memorandum, or
any amendment or supplement thereto, or any order asserting that any of
the transactions contemplated by this Agreement are subject to the
registration requirements of the Act, has been issued.
(ii) Each of the Company and its subsidiaries (A) has been
duly incorporated and is validly existing as a corporation in good
standing (or in active status, as the case may be) under the laws of
its jurisdiction of incorporation, (B) has all requisite corporate
power and authority to carry on its business as it is currently being
conducted and as described in the Offering Memorandum and to own, lease
and operate its properties and (C) is duly qualified and is in good
standing (or in active status, as the case may be) as a foreign
corporation, authorized to do business in each jurisdiction in which
the nature of its business or its ownership or leasing of property
requires such qualification, except where the failure to be so
qualified could not reasonably be expected to (x) result, individually
or in the aggregate, in a material adverse effect on the properties,
business, results of operations, condition (financial or otherwise),
affairs or prospects of the Company, its subsidiaries and the
Guarantors, taken as a whole (y) interfere with or adversely affect the
issuance or marketability of the Notes or (z) in any manner draw into
question the validity of this Agreement or any other Operative Document
or the transactions described in the Offering Memorandum under the
caption "Use of Proceeds" (any of the events set forth in clauses (x),
(y) or (z), a "Material Adverse Effect").
(iii) Paperweight Development Corp. (A) has been duly
incorporated and is validly existing as a corporation in active status
under the laws of Wisconsin, (B) has all requisite corporate power and
authority to carry on its business as it is currently being conducted
and as described in the Offering Memorandum and to own, lease and
operate its properties and (C) is duly qualified and is in good
standing (or in active status, as the case may be) as a foreign
corporation, authorized to do business in each jurisdiction in which
the nature of its business or its ownership or leasing of property
requires such qualification, except where the failure to be so
qualified could not reasonably be expected to have a Material Adverse
Effect.
(iv) Each of PDC Capital Corporation and AWA Bermuda (A) has
been duly incorporated or formed and is validly existing as a
corporation or limited liability company in good standing under the
laws of Delaware and the Islands of Bermuda, respectively, (B) has all
requisite corporate or limited liability company power and authority to
carry on its business and to own, lease and operate its properties and
(C) is duly qualified and in good standing (or in active status, as the
case may be) as a foreign corporation or limited liability company,
authorized to do business in each jurisdiction where the nature of its
business or its ownership or leasing of property requires such
10
qualification, except where the failure to be so qualified could not
reasonably be expected to have a Material Adverse Effect.
(v) All of the outstanding capital stock of each subsidiary
of the Company is owned, directly or indirectly, by the Company; all
such capital stock is owned free and clear of any security interest,
claim, lien, limitation on voting rights or encumbrance, except for any
such security interest, claim, lien, limitation on voting rights or
encumbrance pursuant to the Credit Agreement; and all such securities
have been duly authorized, and validly issued, and are fully paid and
nonassessable (except as provided by Section 180.0622(2)(b) of the
Wisconsin Business Corporation Law and successor statutes and judicial
interpretations thereof) and were not issued in violation of any
preemptive or similar rights.
(vi) Paperweight Development Corp. has no subsidiaries other
than the entities listed on Exhibit B attached hereto and all of the
---------
issued and outstanding capital stock of Paperweight Development Corp.
has been duly authorized, and validly issued, and is fully paid and
nonassessable (except as provided by Section 180.0622(2)(b) of the
Wisconsin Business Corporation Law and successor statutes and judicial
interpretations thereof) and was not issued in violation of any
preemptive or similar rights and is owned of record by the Company's
Retirement Savings and Employee Stock Ownership Plan (the "Plan").
(vii) Each of (a) the liquidation of Appleton International
Sales Inc. into the Company, (b) the liquidation of Appleton
Investments L.L.C. into AWDGP, (c) the merger of AWDGP into the Company
and (d) the liquidation of New Appleton LLC into Paperweight
Development Corp. was duly and validly authorized by all applicable
corporate, limited liability company or general partnership action, as
the case may be, and consummated in accordance with all applicable
laws, rules and regulations.
(viii) There are not currently any outstanding subscriptions,
rights, warrants, calls, commitments of sale or options to acquire, or
instruments convertible into or exchangeable for, any capital stock or
other equity interest of the Company, any subsidiary of the Company,
any of the Guarantors, PDC Capital Corporation or AWA Bermuda, except
as disclosed in the Offering Memorandum.
(ix) When the Series A Notes and the Guarantees thereof are
issued and delivered pursuant to this Agreement, no Series A Note or
Guarantee thereof will be of the same class (within the meaning of Rule
144A under the Act) as securities of the Company or any Guarantor that
are listed on a national securities exchange registered under Section 6
of the Exchange Act or that are quoted in a United States automated
inter-dealer quotation system.
(x) Each of the Company and the Guarantors has all requisite
corporate or limited liability company power and authority to execute,
deliver and perform its obligations under this Agreement and each of
the other Operative Documents to which it is a party and to consummate
the transactions contemplated hereby and thereby, including, without
limitation, the corporate or limited liability company power and
11
authority to issue, sell and deliver the Notes and to issue and deliver
the related Guarantees as provided herein and therein.
(xi) The Acquisition has been duly authorized by all
necessary corporate or limited liability company action, as applicable,
on the part of the Company and each of the Buyers, including, to the
extent required by applicable law, all action by their respective
boards of directors or members and stockholders or holders of
membership interests.
(xii) The amendment to the Plan which formed the ESOP
component of the Plan has been duly authorized by the Company.
(xiii) The ESOP has been established, operated and maintained
at all times in compliance with the Employee Retirement Income Security
Act of 1974, as amended ("ERISA"), the Internal Revenue Code (the
"Code") and all other applicable laws, except for such noncompliance
which could not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect.
(xiv) The ESOP is qualified pursuant to Section 401(a) of the
Code and the trust pursuant thereto is tax exempt under Section 501(a)
of the Code. The ESOP constitutes an "employee stock ownership plan"
within the meaning of Section 4975(e) of the Code which is primarily
invested in qualifying employer securities within the meaning of
Section 409(l) of the Code.
(xv) Paperweight Development Corp. qualifies as a "small
business corporation" under Section 1361(b)(1) of the Code and has made
a valid election to be treated as an "S Corporation" under Subchapter S
of the Code, and has filed all forms and taken all other actions
necessary to qualify and elect that each of its domestic subsidiaries
(other than any such subsidiary that is an "Ineligible Corporation"
under Section 1361(b)(2) of the Code) be treated as a "qualified
subchapter S subsidiary," and each such entity so qualifies and such
elections are effective in each case for U.S. federal income tax
purposes and in accordance with all applicable laws.
(xvi) The Equity Financing has been duly authorized by all
necessary corporate action on the part of the Company and Paperweight
Development Corp., including, to the extent required by applicable law,
all action by their respective boards of directors and stockholders;
the ESOP validly obtained elections to transfer, and did transfer,
$106,843,717.13 to the ESOP in compliance with applicable law; and upon
completion of the Equity Financing the ESOP became the owner of 100% of
the common stock of Paperweight Development Corp. as described in the
Offering Memorandum. The Offering Memorandum contains a summary of the
terms of the Equity Financing which summary is accurate in all material
respects.
(xvii) This Agreement has been duly and validly authorized,
executed and delivered by the Company and each Guarantor and, assuming
it has been duly authorized, executed and delivered by the Initial
Purchasers, is the legal, valid and binding agreement of the Company
and each Guarantor, enforceable against each of them in accordance with
12
its terms, subject to applicable bankruptcy, insolvency, fraudulent
conveyance, reorganization or similar laws affecting the rights of
creditors generally and subject to general principles of equity.
(xviii) The Indenture has been duly and validly authorized by
the Company and each Guarantor and, when duly executed and delivered by
the Company and each Guarantor, assuming it is duly authorized,
executed and delivered by the Trustee, will be the legal, valid and
binding agreement of the Company and each Guarantor, enforceable
against each of them in accordance with its terms, subject to
applicable bankruptcy, insolvency, fraudulent conveyance,
reorganization or similar laws affecting the rights of creditors
generally and subject to general principles of equity. On the Closing
Date, the Indenture will conform in all material respects to the
requirements of the Trust Indenture Act of 1939, as amended (the "Trust
Indenture Act"), and the rules and regulations of the Commission
applicable to an indenture which is qualified thereunder. The Offering
Memorandum contains a summary of the terms of the Indenture, which
summary is accurate in all material respects.
(xix) The Registration Rights Agreement has been duly and
validly authorized by the Company and each Guarantor and, when duly
executed and delivered by the Company and each Guarantor, assuming it
is duly authorized, executed and delivered by the Initial Purchasers,
will be the legal, valid and binding obligation of the Company and each
Guarantor, enforceable against each of them in accordance with its
terms, subject to applicable bankruptcy, insolvency, fraudulent
conveyance, reorganization or similar laws affecting the rights of
creditors generally and subject to general principles of equity. The
Offering Memorandum contains a summary of the terms of the Registration
Rights Agreement which summary is accurate in all material respects.
(xx) The Credit Agreement has been duly and validly
authorized, executed and delivered by the Company and Paperweight
Development Corp., assuming it has been duly authorized, executed and
delivered by the other parties thereto, is the legal, valid and binding
obligation of the Company and Paperweight Development Corp.,
enforceable against each of them in accordance with its terms, subject
to applicable bankruptcy, insolvency, fraudulent conveyance,
reorganization or similar laws affecting the rights of creditors
generally and subject to general principles of equity. The Offering
Memorandum contains a summary of the terms of the Credit Agreement
which summary is accurate in all material respects.
(xxi) The Guarantee Agreement has been duly and validly
authorized, executed and delivered by the Company, Paperweight
Development Corp., New Appleton LLC, AWDGP, Appleton Investments L.L.C.
and WTA Inc. and, assuming it has been duly authorized, executed and
delivered by the administrative agent thereto, is the legal, valid and
binding obligation of the Company (both as a party thereto and, as a
result of the Restructuring, as a successor in interest to AWDGP and
Appleton Investments L.L.C.) and Paperweight Development Corp. (both as
a party thereto and, as a result of the Restructuring, as the successor
in interest to New Appleton LLC), enforceable against each of them in
accordance with its terms, subject to applicable bankruptcy,
insolvency, fraudulent conveyance, reorganization or similar laws
affecting the rights of creditors
13
generally and subject to general principles of equity. The Offering
Memorandum contains a summary of the terms of the Credit Agreement
which summary is accurate in all material respects.
(xxii) The Acquisition Agreement and all attachments thereto,
including the Deferred Payment Obligation, have been duly and validly
authorized, executed and delivered by each of the Buyers and, assuming
they have been duly authorized, executed and delivered by the other
parties thereto, are the legal, valid and binding obligations of
Paperweight Development Corp. (both as a party thereto and, as a result
of the Restructuring, as the successor in interest to New Appleton
LLC), enforceable against it in accordance with its terms, subject to
applicable bankruptcy, insolvency, fraudulent conveyance,
reorganization or similar laws affecting the rights of creditors
generally and subject to general principles of equity. The Offering
Memorandum contains a summary of the terms of the Acquisition Agreement
and all attachments thereto, including the Deferred Payment Obligation,
which summary is accurate in all material respects.
(xxiii) The Assumption Agreement has been duly authorized,
executed and delivered by AWA Bermuda and, assuming it has been duly
authorized, executed and delivered by AWA, is the legal, valid and
binding obligation of AWA Bermuda, enforceable against it in accordance
with its terms, subject to applicable bankruptcy, insolvency,
fraudulent conveyance, reorganization or similar laws affecting the
rights of creditors generally and subject to general principals of
equity. The Offering Memorandum contains a summary of the terms of the
Assumption Agreement which summary is accurate in all material
respects.
(xxiv) Each of the Fox River AWA Environmental Indemnity
Agreement and the Fox River PDC Environmental Indemnity Agreement has
been duly and validly authorized, executed and delivered by the
Company, Paperweight Development Corp. and New Appleton LLC, as the
case may be, and, assuming the due authorization, execution and
delivery by AWA of the Fox River AWA Environmental Indemnity Agreement,
is the legal, valid and binding obligation of the Company and
Paperweight Development Corp. (both as a party thereto and, as a result
of the Restructuring, as the successor in interest to New Appleton
LLC), enforceable against each of them in accordance with its terms,
subject to applicable bankruptcy, insolvency, fraudulent conveyance,
reorganization or similar laws affecting the rights of creditors
generally and subject to general principles of equity. The Offering
Memorandum contains a summary of the terms of the Fox River AWA
Environmental Indemnity Agreement and the Fox River PDC Environmental
Indemnity Agreement and such summaries are accurate in all material
respects.
(xxv) The Policy has been duly and validly authorized,
executed and delivered by AWA Bermuda, and, assuming it has been duly
authorized, executed and delivered by CIIC, AWA Bermuda is entitled to
the benefits thereof.
(xxvi) The Fox River Security Agreement has been duly
authorized, executed and delivered by the Company, Paperweight
Development Corp. and New Appleton LLC and, assuming it has been duly
authorized, executed and delivered by AWA, is the legal,
14
valid and binding obligation of each of the Company and Paperweight
Development Corp. (both as a party thereto and, as a result of the
Restructuring, as a successor in interest to New Appleton LLC),
enforceable against each of them in accordance with its terms, subject
to applicable bankruptcy, insolvency, fraudulent conveyance,
reorganization or similar laws affecting the rights of creditors
generally and subject to general principles of equity. The Offering
Memorandum contains a summary of the terms of the Fox River Security
Agreement which summary is accurate in all material respects.
(xxvii) The Relationship Agreement has been duly and validly
authorized, executed and delivered by Paperweight Development Corp., PDC
Capital Corporation and AWA Bermuda and, assuming it has been duly
authorized, executed and delivered by AWA and Arjo Xxxxxxx (Bermuda)
Holdings Limited, is the legal, valid and binding obligation of
Paperweight Development Corp., PDC Capital Corporation and AWA Bermuda,
enforceable against each of them in accordance with its terms, subject
to applicable bankruptcy, insolvency, fraudulent conveyance,
reorganization or similar laws affecting the rights of creditors
generally and subject to general principles of equity. The Offering
Memorandum contains a summary of the terms of the Relationship Agreement
which summary is accurate in all material respects.
(xxviii) The Bermuda Security Agreement has been duly and
validly authorized, executed and delivered by AWA Bermuda and the
Company and is the legal, valid and binding obligation of AWA Bermuda
and the Company, enforceable against each of them in accordance with its
terms, subject to applicable bankruptcy, insolvency, fraudulent
conveyance, reorganization or similar laws affecting the rights of
creditors generally and subject to general principles of equity. The
Offering Memorandum contains a summary of the terms of the Bermuda
Security Agreement which summary is accurate in all material respects.
(xxix) Each of the Security Holders Agreement dated November
9, 2001 by and among Paperweight Development Corp. and the Appleton
Papers Inc. Employee Stock Ownership Trust, which is the funding vehicle
of the employee stock ownership component of the Appleton Papers
Retirement Savings and Employee Stock Ownership Plan (the "PDC Security
Holders Agreement") and the Security Holders Agreement dated November 9,
2001 by and among Paperweight Development Corp., Appleton Investments
L.L.C. and the Company (the "API Security Holders Agreement," together
with the PDC Security Holders Agreement, the "Security Holders
Agreements") has been duly and validly authorized, executed and
delivered by the Company, the Appleton Papers Inc. Employee Stock
Ownership Trust, Paperweight Development Corp. and Appleton Investments,
L.L.C., as the case may be, and is the legal, valid and binding
agreement of the Company (both as a party thereto and, as a result of
the Restructuring, as a successor in interest to Appleton Investments
L.L.C. and AWDGP), the Appleton Papers Inc. Employee Stock Ownership
Trust and Paperweight Development Corp., as the case may be, enforceable
against each of them in accordance with its terms, subject to applicable
bankruptcy, insolvency, fraudulent conveyance, reorganization or similar
laws affecting the rights of creditors generally and subject to general
principles of equity. The Offering Memorandum contains a summary of the
terms of each of the PDC Security
15
Holders Agreement and the API Security Holders Agreement which summaries
are accurate in all material respects.
(xxx) The Acquisition was consummated substantially as
described in the Offering Memorandum.
(xxxi) The Series A Notes have been duly and validly
authorized by the Company for issuance and sale to the Initial
Purchasers pursuant to this Agreement and, when issued and authenticated
in accordance with the terms of the Indenture and delivered against
payment therefor in accordance with the terms hereof and thereof, will
be the legal, valid and binding obligations of the Company, enforceable
against it in accordance with their terms and entitled to the benefits
of the Indenture, subject to applicable bankruptcy, insolvency,
fraudulent conveyance, reorganization or similar laws affecting the
rights of creditors generally and subject to general principles of
equity. The Offering Memorandum contains a summary of the terms of the
Notes which summary is accurate in all material respects.
(xxxii) The Guarantees of the Series A Notes have been duly
and validly authorized by each Guarantor and, when executed and
delivered in accordance with the terms of the Indenture and when the
Series A Notes have been issued and authenticated in accordance with the
terms of the Indenture and delivered against payment therefor in
accordance with the terms hereof and thereof, will be the legal, valid
and binding obligations of each Guarantor, enforceable against each of
them in accordance with their terms and entitled to the benefits of the
Indenture, subject to applicable bankruptcy, insolvency, fraudulent
conveyance, reorganization or similar laws affecting the rights of
creditors generally and subject to general principles of equity. The
Offering Memorandum contains a summary of the terms of the Guarantees
which summary is accurate in all material respects.
(xxxiii) The Series B Notes have been duly and validly
authorized for issuance by the Company and, when issued and
authenticated in accordance with the terms of the Exchange Offer and the
Indenture, will be the legal, valid and binding obligations of the
Company, enforceable against it in accordance with their terms and
entitled to the benefits of the Indenture, subject to applicable
bankruptcy, insolvency, fraudulent conveyance, reorganization or similar
laws affecting the rights of creditors generally and subject to general
principles of equity.
(xxxiv) The Guarantees of the Series B Notes have been duly
and validly authorized by each Guarantor and, when executed and
delivered in accordance with the terms of the Indenture and when the
Series B Notes have been issued and authenticated in accordance with the
terms of the Exchange Offer and the Indenture, will be the legal, valid
and binding obligations of each Guarantor, enforceable against each of
them in accordance with their terms and entitled to the benefits of the
Indenture, subject to applicable bankruptcy, insolvency, fraudulent
conveyance, reorganization or similar laws affecting the rights of
creditors generally and subject to general principles of equity.
16
(xxxv) Each of the Company, its subsidiaries, the Guarantors,
PDC Capital Corporation and AWA Bermuda is not and, after giving effect
to the Offering and the transactions described in the Operative
Documents, will not be, (A) in violation of its charter, bylaws or
comparable governing documents, (B) in default in the performance of any
bond, debenture, note, indenture, mortgage, deed of trust or other
agreement or instrument to which it is a party or by which it is bound
or to which any of its properties is subject, which singly or in the
aggregate, could reasonably be expected to have a Material Adverse
Effect or (C) except as disclosed in the Offering Memorandum and
assuming that the representations of the Initial Purchasers in Sections
5(b)(i), 5(b)(ii) and 5(b)(iii) hereof are correct, in violation of any
local, state, federal or foreign law, statute, ordinance, rule,
regulation, requirement, judgment or court decree (including, without
limitation, environmental laws, statutes, ordinances, rules,
regulations, judgments or court decrees) applicable to it or any of its
assets or properties (whether owned or leased), which singly or in the
aggregate, could reasonably be expected to have a Material Adverse
Effect. To the knowledge of the Company and the Guarantors, there exists
no condition that, with notice, the passage of time or otherwise, would
constitute a default under any such document or instrument that could
reasonably be expected to have a Material Adverse Effect.
(xxxvi) None of (A) the execution, delivery or performance by
the Company, any of its subsidiaries, any Guarantor, PDC Capital
Corporation, AWA Bermuda or any of the Restructured Entities of this
Agreement or any of the other Operative Documents to which it is a
party, (B) the issuance and sale of the Notes and the issuance of the
Guarantees and (C) consummation by the Company, the Guarantors, PDC
Capital Corporation, AWA Bermuda and the Restructured Entities of the
transactions described in the Operative Documents (to the extent that it
is a party thereto) and the Restructuring violates or violated,
conflicts or conflicted with or constitutes or constituted a breach of
any of the terms or provisions of, or will violate, conflict with or
constitute a breach of any of the terms or provisions of, or a default
under (or an event that with notice or the lapse of time, or both, would
constitute a default under), or require consent under, or result in the
imposition of a lien or encumbrance on any properties of the Company,
any of its subsidiaries, any of the Guarantors, PDC Capital Corporation,
AWA Bermuda or any of the Restructured Entities except for such lien or
encumbrance pursuant to the Credit Agreement, the Guarantee Agreement,
the Environmental Indemnity Agreements, the Fox River Security Agreement
or the Bermuda Security Agreement or an acceleration of any indebtedness
of the Company, any of its subsidiaries, any of the Guarantors, PDC
Capital Corporation, AWA Bermuda or any of the Restructured Entities
pursuant to, (1) the charter, bylaws or comparable governing documents
of the Company, any of its subsidiaries, any of the Guarantors, PDC
Capital Corporation, AWA Bermuda or any of the Restructured Entities,
(2) any bond, debenture, note, indenture, mortgage, deed of trust or
other agreement or instrument to which the Company, any of its
subsidiaries, any of the Guarantors, PDC Capital Corporation, AWA
Bermuda or any of the Restructured Entities is (or was in the case of
the Restructured Entities) a party or by which any of them or their
property is (or was in the case of the Restructured Entities) or may be
bound, (3) any statute, rule or regulation applicable to the Company,
any of its subsidiaries, any of the Guarantors, PDC Capital Corporation,
AWA Bermuda or any of the Restructured Entities or any of their assets
or properties or (4) any judgment, order or
17
decree of any court or governmental agency or authority having
jurisdiction over the Company, any of its subsidiaries, any of the
Guarantors, PDC Capital Corporation, AWA Bermuda or any of the
Restructured Entities or any of their assets or properties. No consent,
approval, authorization or order of, or filing, registration,
qualification, license or permit of or with, (A) any court or
governmental agency, body or administrative agency or (B) any other
person is required for (1) the execution, delivery and performance by
each of the Company, the Guarantors, PDC Capital Corporation, AWA
Bermuda and the Restructured Entities of this Agreement or any of the
other Operative Documents to which it is a party, (2) the issuance and
sale of the Notes, the issuance of the Guarantees and the transactions
contemplated hereby and thereby, or (3) the consummation of the
Restructuring, except such as have been or will be obtained and made on
or prior to the Closing Date (or, in the case of the Registration Rights
Agreement, will be obtained and made under the Act, the Trust Indenture
Act, and state securities or Blue Sky laws and regulations).
(xxxvii) There is (A) no action, suit, investigation or
proceeding before or by any court, arbitrator or governmental agency,
body or official, domestic or foreign, now pending or, to the knowledge
of the Company and the Guarantors, threatened or contemplated to which
the Company, any of its subsidiaries, any of the Guarantors, PDC Capital
Corporation or AWA Bermuda is or may be a party or to which the business
or property of the Company, any of its subsidiaries, any of the
Guarantors, PDC Capital Corporation or AWA Bermuda is or may be subject,
(B) no statute, rule, regulation or order that has been enacted, adopted
or issued by any governmental agency or that has been proposed by any
governmental body and (C) no injunction, restraining order or order of
any nature by a federal or state court or foreign court of competent
jurisdiction to which the Company, any of its subsidiaries, any of the
Guarantors, PDC Capital Corporation or AWA Bermuda is or may be subject
or to which the business, assets or property of the Company, any of its
subsidiaries, any of the Guarantors, PDC Capital Corporation or AWA
Bermuda is or may be subject, that, in the case of clauses (A), (B) and
(C) above, (1) is required to be disclosed in the Preliminary Offering
Memorandum or the Offering Memorandum and that is not so disclosed or
(2) could reasonably be expected to have a Material Adverse Effect.
(xxxviii) To the knowledge of the Company and the Guarantors, no
action has been taken and no statute, rule, regulation or order has been
enacted, adopted or issued by any governmental agency that prevents the
issuance of the Notes or the Guarantees or prevents or suspends the use
of the Offering Memorandum; no injunction, restraining order or order of
any nature by a federal or state court of competent jurisdiction has
been issued that prevents the issuance of the Notes or the Guarantees or
prevents or suspends the sale of the Notes or the Guarantees in any
jurisdiction referred to in Section 4(e) hereof; and every request of
any securities authority or agency of any jurisdiction for additional
information has been complied with in all material respects.
(xxxix) There is (A) no significant unfair labor practice
complaint pending against the Company, any of its subsidiaries or any of
the Guarantors nor, to the knowledge of the Company and the Guarantors,
threatened against any of them, before the National Labor Relations
Board, any state or local labor relations board or any foreign labor
18
relations board, and no significant grievance or significant arbitration
proceeding arising out of or under any collective bargaining agreement
is so pending against the Company, any of its subsidiaries or any of the
Guarantors or, to the knowledge of the Company and the Guarantors,
threatened against any of them, (B) no significant strike, labor
dispute, slowdown or stoppage pending against the Company, any of its
subsidiaries or any of the Guarantors nor, to the knowledge of the
Company and the Guarantors, threatened against any of them and (C) to
the knowledge of the Company and the Guarantors, no union has taken
action since January 1, 1996 to organize those employees of the Company,
any of its subsidiaries or any of the Guarantors who are not currently
represented by unions. To the knowledge of the Company and the
Guarantors, no collective bargaining organizing activities are taking
place with respect to the Company, any of its subsidiaries or any of the
Guarantors. None of the Company, any of its subsidiaries or any of the
Guarantors has violated (A) any federal, state or local law or foreign
law relating to discrimination in hiring, promotion or pay of employees,
(B) any applicable wage or hour laws or (C) any provision of ERISA, or
the rules and regulations thereunder, except those violations that could
not reasonably be expected to have a Material Adverse Effect.
(xl) Except as described in the Offering Memorandum, none of
the Company, any of its subsidiaries or any of the Guarantors has
violated any foreign, federal, state or local law or regulation relating
to the protection of human health and safety, the environment or
hazardous or toxic substances or wastes, pollutants or contaminants
(collectively, "Environmental Laws"), which violation could reasonably
be expected to have a Material Adverse Effect.
(xli) Except as described in the Offering Memorandum, there is
no alleged liability, or to the knowledge of the Company and the
Guarantors, potential liability (including, without limitation, alleged
or potential liability or investigatory costs, cleanup costs,
governmental response costs, natural resource damages, property damages,
personal injuries or penalties) of the Company, any of its subsidiaries
or any of the Guarantors arising out of, based on or resulting from (A)
the presence or release into the environment of any Hazardous Material
(as defined) at any location, whether or not owned by the Company, such
subsidiary or such Guarantor, as the case may be, or (B) any violation
or alleged violation of any Environmental Law, which alleged or
potential liability is required to be disclosed in the Offering
Memorandum, other than as disclosed therein, or could reasonably be
expected to have a Material Adverse Effect. The term "Hazardous
Material" means (i) any "hazardous substance" as defined by the
Comprehensive Environmental Response, Compensation and Liability Act of
1980, as amended, (ii) any "hazardous waste" as defined by the Resource
Conservation and Recovery Act, as amended, (iii) any petroleum or
petroleum product, (iv) any polychlorinated biphenyl, and (v) any
pollutant or contaminant or hazardous, dangerous or toxic chemical,
material, waste or substance regulated under or within the meaning of
any other law relating to protection of human health or the environment
or imposing liability or standards of conduct concerning any such
chemical material, waste or substance.
(xlii) Each of the Company, its subsidiaries and the Guarantors
has such permits, licenses, franchises and authorizations of
governmental or regulatory authorities
19
("permits"), including, without limitation, under any applicable
Environmental Laws, as are necessary to own, lease and operate its
respective properties and to conduct its businesses, except where the
failure to have such permits could not reasonably be expected to have a
Material Adverse Effect; each of the Company, its subsidiaries and the
Guarantors has fulfilled and performed all of its obligations with
respect to such permits and no event has occurred which allows, or after
notice or lapse of time would allow, revocation or termination thereof
or results in any other material impairment of the rights of the holder
of any such permit; and, except as described in the Offering Memorandum,
such permits contain no restrictions that are materially burdensome to
the Company, such subsidiary or such Guarantor, as the case may be.
(xliii) Each of the Company, its subsidiaries and the Guarantors
has (A) good and marketable title to all of the properties and assets
described in the Offering Memorandum as owned by it, free and clear of
all liens, charges, encumbrances and restrictions (except for Permitted
Liens and taxes not yet payable), (B) peaceful and undisturbed
possession under all material leases to which any of them is a party as
lessee and each of which lease is valid and binding and no default
exists thereunder, except for defaults that could not reasonably be
expected to have a Material Adverse Effect, (C) all licenses,
certificates, permits, authorizations, approvals, franchises and other
rights from, and has made all declarations and filings with, all
federal, state and local authorities, all self-regulatory authorities
and all courts and other tribunals (each, an "Authorization") necessary
to engage in the business conducted by any of them in the manner
described in the Offering Memorandum except where the failure to have
any such authorization could not reasonably be expected to have a
Material Adverse Effect and (D) no reason to believe that any
governmental body or agency is considering limiting, suspending or
revoking any such Authorization. All such Authorizations are valid and
in full force and effect and each of the Company, its subsidiaries and
the Guarantors is in compliance in all material respects with the terms
and conditions of all such Authorizations and with the rules and
regulations of the regulatory authorities having jurisdiction with
respect thereto. All material leases to which the Company, any of its
subsidiaries or any of the Guarantors is a party are valid and binding
and no default by the Company, such subsidiary or such Guarantor, as the
case may be, has occurred and is continuing thereunder and, to the
knowledge of the Company and the Guarantors, no material defaults by the
landlord are existing under any such lease, except those defaults that
could not reasonably be expected to have a Material Adverse Effect.
(xliv) Each of the Company, its subsidiaries and the Guarantors
owns, possesses or has the right to employ all patents, patent rights,
licenses, inventions, copyrights, know-how (including trade secrets and
other unpatented and/or unpatentable proprietary or confidential
information, software, systems or procedures), trademarks, service marks
and trade names, inventions, computer programs, technical data and
information (collectively, the "Intellectual Property") presently
employed by it in connection with the businesses now operated by it or
that are proposed to be operated by it, free and clear of and without
violating any right, claimed right, charge, encumbrance, pledge,
security interest, restriction or lien of any kind of any other person
(except for such right, claimed right, charge, encumbrance, pledge,
security interest, restriction or lien pursuant to the Credit Agreement
or such ordinary and customary right, claimed right, charge,
20
encumbrance, pledge, security interest, restriction or lien that does
not substantially interfere with the Company's, such subsidiary's or
such Guarantor's ability to use such Intellectual Property), and none of
the Company, any of its subsidiaries or any of the Guarantors has
received any written notice of infringement of or conflict with asserted
rights of others with respect to any of the foregoing, except those
infringements of or conflicts with asserted rights of others that could
not reasonably be expected to have a Material Adverse Effect. The use of
the Intellectual Property in connection with the business and operations
of the Company, any of its subsidiaries or any of the Guarantors does
not infringe on the rights of any person, except such infringements as
could not reasonably be expected to have a Material Adverse Effect.
(xlv) All material tax returns required to be filed by the
Company, any of its subsidiaries or any of the Guarantors in all
jurisdictions have been so filed. All taxes, including withholding
taxes, penalties and interest, assessments, fees and other charges due
or claimed to be due from such entities or that are due and payable have
been paid, other than those being contested in good faith and for which
adequate reserves have been provided or those currently payable without
penalty or interest. To the knowledge of the Company and the Guarantors,
there are no material proposed additional tax assessments against the
Company, any of its subsidiaries or any of the Guarantors, or the assets
or property of the Company, any of its subsidiaries or any of the
Guarantors, except those tax assessments for which adequate reserves
have been established.
(xlvi) Each of the Company, its subsidiaries and the
Guarantors maintains a system of internal accounting controls sufficient
to provide reasonable assurance that: (A) transactions are executed in
accordance with management's general or specific authorizations; (B)
transactions are recorded as necessary to permit preparation of
financial statements in conformity with generally accepted accounting
principles and to maintain accountability for assets; (C) access to
assets is permitted only in accordance with management's general or
specific authorization; and (D) the recorded accountability for assets
is compared with the existing assets at reasonable intervals and
appropriate action is taken with respect thereto.
(xlvii) Each of the Company, its subsidiaries and the
Guarantors maintains insurance covering its properties, operations,
personnel and businesses, insuring against such losses and risks as are,
in the reasonable belief of Company's management, consistent with
industry practice to protect the Company, its subsidiaries and the
Guarantors and their respective businesses. None of the Company, any of
its subsidiaries or any of the Guarantors has received notice from any
insurer or agent of such insurer that material capital improvements or
other material expenditures will have to be made in order to continue
such insurance.
(xlviii) Except as disclosed in the Offering Memorandum, no
relationship, direct or indirect, exists between or among the Company,
any of its subsidiaries or any of the Guarantors on the one hand, and
the directors, officers, stockholders, customers or suppliers of the
Company, any of its subsidiaries or any of the Guarantors on the other
hand, which would be required by the Act to be described in the Offering
Memorandum
21
if the Offering Memorandum were a prospectus included in a registration
statement on Form S-1 filed with the Commission.
(xlix) None of the Company, any of its subsidiaries or any of
the Guarantors is, or after giving effect to the offering of the Notes
and application of the proceeds will be, an "investment company" or a
company "controlled" by an "investment company" within the meaning of
the Investment Company Act of 1940, as amended (the "Investment Company
Act").
(l) There are no holders of securities of the Company, any
of its subsidiaries or any of the Guarantors who, by reason of the
execution by the Company or any of the Guarantors of this Agreement or
any other Operative Document to which it is a party or the consummation
by the Company or any of the Guarantors of the transactions contemplated
hereby and thereby or otherwise, have the right to request or demand
that the Company, any of its subsidiaries or any of the Guarantors
register under the Act or analogous foreign laws and regulations
securities held by them other than pursuant to the Registration Rights
Agreement.
(li) None of the Company, any of its subsidiaries or any of
the Guarantors has (A) taken, directly or indirectly, any action
designed to, or that might reasonably be expected to, cause or result in
stabilization or manipulation of the price of any security of the
Company, any of its subsidiaries or any of the Guarantors to facilitate
the sale or resale of the Notes or (B) since the date of the Preliminary
Offering Memorandum (1) sold, bid for, purchased or paid any person any
compensation for soliciting purchases of the Notes or (2) paid or agreed
to pay to any person any compensation for soliciting another to purchase
any other securities of the Company, any of its subsidiaries or any of
the Guarantors.
(lii) The accountants who have certified or will certify the
financial statements included or to be included as part of the Offering
Memorandum are independent accountants as required by the Act. The
historical financial statements, including the related schedules and
notes thereto, comply as to form in all material respects with the
requirements applicable to registration statements on Form S-1 under the
Act, except as expressly stated in the Offering Memorandum, and present
fairly in all material respects the financial position and results of
operations of the Company and its subsidiaries at the dates and for the
periods indicated. Such financial statements have been prepared in
accordance with generally accepted accounting principles applied on a
consistent basis throughout the periods presented. The pro forma
financial statements included in the Offering Memorandum have been
prepared on a basis consistent with such historical statements of the
Company, except for the pro forma adjustments specified therein, and
give effect to assumptions made on a reasonable basis and present fairly
in all material respects the historical and proposed transactions
contemplated by this Agreement and the other Operative Documents; and
such pro forma financial statements comply as to form in all material
respects with the requirements applicable to pro forma financial
statements included in registration statements on Form S-1 under the
Act, except as expressly stated therein. The other financial and
statistical information and data included in the Offering Memorandum
derived from the historical and pro forma financial statements, are
22
accurately presented in all material respects and prepared on a basis
consistent with the financial statements, historical and pro forma,
included in the Offering Memorandum and the books and records of the
Company and its subsidiaries.
(liii) No registration under the Act of the Series A Notes or
the Guarantees thereof is required for the sale of the Series A Notes to
the Initial Purchasers as contemplated hereby or for the Exempt Resales
assuming (A) that the purchasers who buy the Series A Notes in the
Exempt Resales are Eligible Purchasers and (B) the accuracy of the
Initial Purchasers' representations regarding the absence of general
solicitation in connection with the sale of Series A Notes to the
Initial Purchasers and the Exempt Resales contained herein. No form of
general solicitation or general advertising (as defined in Regulation D
under the Act) was used by the Company or any of the Guarantors or any
of their representatives (other than the Initial Purchasers, as to which
the Company and the Guarantors make no representation or warranty) in
connection with the offer and sale of any of the Series A Notes or the
Guarantees thereof or in connection with Exempt Resales, including, but
not limited to, articles, notices or other communications published in
any newspaper, magazine, or similar medium or broadcast over television
or radio, or any seminar or meeting whose attendees have been invited by
any general solicitation or general advertising. No securities of the
same class as the Notes have been issued and sold by the Company, any of
its subsidiaries or any of the Guarantors within the six-month period
immediately prior to the date hereof.
(liv) The execution and delivery of this Agreement, the other
Operative Documents and the sale of the Series A Notes to be purchased
by Eligible Purchasers will not involve any prohibited transaction
within the meaning of Section 406 of ERISA or Section 4975 of the
Internal Revenue Code of 1986. The representation made by the Company
and the Guarantors in the preceding sentence is made in reliance upon
and subject to the accuracy of, and compliance with, the representations
and covenants made or deemed made by Eligible Purchasers as set forth in
the Offering Memorandum under the caption "Notice to Investors."
(lv) The statistical and market-related data included in the
Offering Memorandum are based on or derived from sources which the
Company and the Guarantors believe to be reliable and accurate in all
material respects.
(lvi) Since the respective dates as of which information is
given in the Offering Memorandum, (i) there has not been any material
adverse change, or any development that is reasonably likely to result
in a material adverse change, in the capital stock or limited liability
company interests or the long-term debt, or material increase in the
short-term debt, of the Company, any of its subsidiaries or any of the
Guarantors from that set forth in the Offering Memorandum, (ii) no
dividend or distribution of any kind shall have been declared, paid or
made by the Company, any of its subsidiaries or any of the Guarantors on
any class of its capital stock and (iii) none of the Company, any of its
subsidiaries or any of the Guarantors shall have incurred any
liabilities or obligations, direct or contingent, that are material,
individually or in the aggregate, to the Company and its subsidiaries,
taken as a whole, or to the Guarantors, and that are required to be
disclosed on a balance sheet or notes thereto in accordance with
generally accepted
23
accounting principles and are not disclosed on the latest balance sheet
or notes thereto included in the Offering Memorandum. Since the date
hereof and since the dates as of which information is given in the
Offering Memorandum, there shall not have occurred any material adverse
change, or any development that is reasonably likely to result in a
Material Adverse Effect.
(lvii) Each of the Preliminary Offering Memorandum and the
Offering Memorandum, as of its date, and each amendment or supplement
thereto, as of its date, contains the information specified in, and
meets the requirements of, Rule 144A(d)(4) under the Act.
(lviii) Prior to the effectiveness of any Registration
Statement, the Indenture is not required to be qualified under the Trust
Indenture Act.
(lix) None of the Company, the Guarantors or any of their
respective affiliates or any person acting on its or their behalf (other
than the Initial Purchasers, as to whom the Company and the Guarantors
make no representation) has engaged or will engage in any "directed
selling efforts" as defined in Regulation S with respect to the Series A
Notes.
(lx) None of the Company, the Guarantors or any of their
respective affiliates or any person acting on its or their behalf will
offer or sell the Series A Notes which are being offered and sold in
reliance on Regulation S to anyone other than the Initial Purchasers as
contemplated by this Agreement.
(lxi) The sale of the Series A Notes pursuant to Regulation S
is not part of a plan or scheme to evade the registration provisions of
the Act.
(lxii) The Company, the Guarantors and their respective
affiliates and all persons acting on their behalf (other than the
Initial Purchasers, as to whom the Company and the Guarantors make no
representation) have complied with and will comply with the offering
restrictions requirements of Regulation S in connection with the
offering of the Series A Notes outside the United States and, in
connection therewith, the Offering Memorandum will contain the
disclosure required by Rule 902(g)(2).
(lxiii) None of the execution, delivery and performance of this
Agreement, the issuance and sale of the Notes, the application of the
proceeds from the issuance and sale of the Notes and the consummation of
the transactions contemplated thereby as set forth in the Offering
Memorandum, will violate Regulations T, U or X promulgated by the Board
of Governors of the Federal Reserve System or analogous foreign laws and
regulations.
(lxiv) Neither the Company nor any Guarantor intends to, nor
believes that it will, incur debts beyond its ability to pay such debts
as they mature. The present fair saleable value of the assets of the
Company and each Guarantor exceeds the amount that will be required to
be paid on or in respect of its existing debts and other liabilities
(including contingent liabilities) as they become absolute and matured.
The assets of the Company and each Guarantor do not constitute
unreasonably small capital to carry out its
24
business as conducted or as proposed to be conducted. Upon the issuance
of the Notes and the Guarantees, the present fair saleable value of the
assets of the Company and each Guarantor will exceed the amount that
will be required to be paid on or in respect of its existing debts and
other liabilities (including contingent liabilities) as they become
absolute and matured. Upon the issuance of the Notes and the Guarantees,
the assets of the Company and each Guarantor will not constitute
unreasonably small capital to carry out its business as now conducted,
including the capital needs of the Company and such Guarantor, taking
into account the projected capital requirements and capital
availability.
(lxv) Except pursuant to this Agreement, there are no
contracts, agreements or understandings between the Company and its
subsidiaries and/or the Guarantors and any other person that would give
rise to a valid claim against the Company, any of its subsidiaries or
any of the Guarantors or the Initial Purchasers for a brokerage
commission, finder's fee or like payment in connection with the
issuance, purchase and sale of the Notes.
(lxvi) There exist no conditions that would constitute a
default (or an event which with notice or the lapse of time, or both,
would constitute a default) under any of the Operative Documents.
(lxvii) All representations and warranties of the Company and
its affiliates set forth in the Credit Agreement, the Acquisition
Agreement and all attachments thereto, including the Deferred Payment
Obligation, the Relationship Agreement, the Fox River Security
Agreement, the Assumption Agreement, the Bermuda Security Agreement, the
Policy, the Security Holders Agreements and the Environmental Indemnity
Agreements, as applicable, were true and correct in all material
respects on the date thereof and are true and correct in all material
respects on the date hereof.
(lxviii) Each certificate signed by any officer of the Company
or any Guarantor and delivered to the Initial Purchasers or counsel for
the Initial Purchasers shall be deemed to be a representation and
warranty by the Company or such Guarantor, as the case may be, to the
Initial Purchasers as to the matters covered thereby.
Each of the Company and the Guarantors acknowledges that the Initial
Purchasers and, for purposes of the opinions to be delivered to the Initial
Purchasers pursuant to Section 8 hereof, counsel for the Company and the
Guarantors and counsel for the Initial Purchasers, will rely upon the accuracy
and truth of the foregoing representations and hereby consent to such reliance.
(b) Each of the Initial Purchasers, severally and not jointly,
represents, warrants and covenants to the Company and the Guarantors and agrees
that:
(i) Such Initial Purchaser is a QIB, with such knowledge and
experience in financial and business matters as are necessary in order
to evaluate the merits and risks of an investment in the Series A Notes.
(ii) Such Initial Purchaser (A) is not acquiring the Series A
Notes with a view to any distribution thereof that would violate the Act
or the securities laws of any state of the United States or any other
applicable jurisdiction and (B) will be reoffering and
25
reselling the Series A Notes only to QIBs in reliance on the exemption
from the registration requirements of the Act provided by Rule 144A and
in offshore transactions in reliance upon Regulation S under the Act.
(iii) No form of general solicitation or general advertising
(within the meaning of Regulation D under the Act) has been or will be
used by such Initial Purchaser or any of its representatives in
connection with the offer and sale of any of the Series A Notes,
including, but not limited to, articles, notices or other communications
published in any newspaper, magazine, or similar medium or broadcast
over television or radio, or any seminar or meeting whose attendees have
been invited by any general solicitation or general advertising.
(iv) Such Initial Purchaser agrees that, in connection with
the Exempt Resales, it will solicit offers to buy the Series A Notes
only from, and will offer to sell the Series A Notes only to, Eligible
Purchasers. Such Initial Purchaser further (A) agrees that it will offer
to sell the Series A Notes only to, and will solicit offers to buy the
Series A Notes only from (1) Eligible Purchasers that the Initial
Purchaser reasonably believes are QIBs and (2) Reg S Investors and (B)
acknowledges and agrees that, in the case of such QIBs and such Reg S
Investors, that such Series A Notes will not have been registered under
the Act and may be resold, pledged or otherwise transferred only (x)(I)
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, (II) in an offshore transaction (as defined
in Rule 902 under the Act) meeting the requirements of Rule 904 under
the Act, (III) in a transaction meeting the requirements of Rule 144
under the Act, if available, (IV) to an Accredited Investor that, prior
to such transfer, furnishes the Trustee a signed letter containing
certain representations and agreements relating to the registration of
transfer of such Series A Notes (the form of which can be obtained from
the Trustee) and, if such transfer is in respect of an aggregate
principal amount of Series A Notes less than $250,000, an opinion of
counsel acceptable to the Company and the Guarantors that such transfer
is in compliance with the Act or (V) in accordance with another
exemption from the registration requirements of the Act (and based upon
an opinion of counsel if the Company and the Guarantors so request), (y)
to the Company, any of its subsidiaries or any of the Guarantors, (z)
pursuant to an effective registration statement under the Act and, in
each case, in accordance with any applicable securities laws of any
state of the United States or any other applicable jurisdiction and (C)
acknowledges that it will, and each subsequent holder is required to,
notify any purchaser of the security evidenced thereby of the resale
restrictions set forth in (B) above.
(v) Such Initial Purchaser and its affiliates or any person
acting on its or their behalf have not engaged or will not engage in any
"directed selling efforts" as defined in Regulation S with respect to
the Series A Notes or the Guarantees thereof.
(vi) The Series A Notes offered and sold by such Initial
Purchaser pursuant hereto in reliance on Regulation S, if any, have been
and will be offered and sold only in offshore transactions.
26
(vii) The sale of Series A Notes offered and sold by such
Initial Purchaser pursuant hereto in reliance on Regulation S, if any,
is not part of a plan or scheme to evade the registration provisions of
the Act.
(viii) Such Initial Purchaser agrees that it has not offered or
sold and will not offer or sell the Series A Notes in the United States
or to, or for the benefit or account of, a U.S. Person (other than a
distributor), in each case, as defined in Rule 902 under the Act (i) as
part of its distribution at any time and (ii) otherwise until 40 days
after the later of the commencement of the offering of the Series A
Notes pursuant hereto and the Closing Date, other than in accordance
with Regulation S of the Act or another exemption from the registration
requirements of the Act. Such Initial Purchaser agrees that, during such
40-day distribution compliance period, it will not cause any
advertisement with respect to the Series A Notes (including any
"tombstone" advertisement) to be published in any newspaper or
periodical or posted in any public place and will not issue any circular
relating to the Series A Notes, except such advertisements as permitted
by and include the statements required by Regulation S.
(ix) Such Initial Purchaser agrees that, at or prior to
confirmation of a sale of Series A Notes by it to any distributor,
dealer or person receiving a selling concession, fee or other
remuneration during the 40-day distribution compliance period referred
to in Rule 903(b)(3) under the Act, it will send to such distributor,
dealer or person receiving a selling concession, fee or other
remuneration a confirmation or notice to substantially the following
effect:
"The Series A Notes covered hereby have not been registered
under the U.S. Securities Act of 1933, as amended (the
"Securities Act"), and may not be offered and sold within the
United States or to, or for the account or benefit of, U.S.
persons (i) as part of your distribution at any time or (ii)
otherwise until 40 days after the later of the commencement of
the Offering and the Closing Date, except in either case in
accordance with Regulation S under the Securities Act (or Rule
144A or to Accredited Institutions in transactions that are
exempt from the registration requirements of the Securities
Act), and in connection with any subsequent sale by you of the
Series A Notes covered hereby in reliance on Regulation S during
the period referred to above to any distributor, dealer or
person receiving a selling concession, fee or other
remuneration, you must deliver a notice to substantially the
foregoing effect. Terms used above have the meanings assigned to
them in Regulation S."
(x) Such Initial Purchaser agrees that the Series A Notes
offered and sold in reliance on Regulation S will be represented upon
issuance by a global security that may not be exchanged for definitive
securities until the expiration of the 40-day distribution compliance
period referred to in Rule 903(b)(3) of the Act and only upon
certification of beneficial ownership of such Series A Notes by non-U.S.
persons or U.S. persons who purchased such Series A Notes in
transactions that were exempt from the registration requirements of the
Act.
27
The Initial Purchasers acknowledge that the Company and the Guarantors
and, for purposes of the opinions to be delivered to the Initial Purchasers
pursuant to Section 8 hereof, counsel for the Company and the Guarantors and
counsel for the Initial Purchasers will rely upon the accuracy and truth of the
foregoing representations and hereby consents to such reliance.
6. Indemnification.
---------------
(a) The Company and the Guarantors, jointly and severally,
agree to indemnify and hold harmless (i) each Initial Purchaser, (ii)
each person, if any, who controls an Initial Purchaser within the
meaning of Section 15 of the Act or Section 20(a) of the Exchange Act
and (iii) the respective officers, directors, partners, employees,
representatives and agents of the Initial Purchasers or any controlling
person to the fullest extent lawful, from and against any and all
losses, liabilities, claims, damages and expenses whatsoever (including
but not limited to reasonable attorneys' fees and any and all expenses
whatsoever incurred in investigating, preparing or defending against any
investigation or litigation, commenced or threatened, or any claim
whatsoever, and any and all amounts paid in settlement of any claim or
litigation), joint or several, to which they or any of them may become
subject under the Act, the Exchange Act or otherwise, insofar as such
losses, liabilities, claims, damages or expenses (or actions in respect
thereof) arise out of or are based upon any untrue statement or alleged
untrue statement of a material fact contained in the Preliminary
Offering Memorandum or the Offering Memorandum, or in any supplement
thereto or amendment thereof, or arise out of or are based upon the
omission or alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements therein, in the
light of the circumstances under which they were made, not misleading;
provided, however, that neither the Company nor any Guarantor will be
liable in any such case to the extent, but only to the extent, that any
such loss, liability, claim, damage or expense arises out of or is based
upon any such untrue statement or alleged untrue statement or omission
or alleged omission made therein in reliance upon and in conformity with
information relating to the Initial Purchasers furnished to the Company
and the Guarantors in writing by or on behalf of the Initial Purchasers
expressly for use therein. This indemnity agreement will be in addition
to any liability which the Company and the Guarantors may otherwise
have, including under this Agreement.
(b) Each Initial Purchaser agrees, severally and not
jointly, to indemnify and hold harmless (i) the Company and the
Guarantors, (ii) each person, if any, who controls the Company or any of
the Guarantors within the meaning of Section 15 of the Act or Section
20(a) of the Exchange Act, and (iii) the respective officers, directors,
partners, employees, representatives and agents of the Company and the
Guarantors, from and against any losses, liabilities, claims, damages
and expenses whatsoever (including but not limited to reasonable
attorneys' fees and any and all expenses whatsoever incurred in
investigating, preparing or defending against any investigation or
litigation, commenced or threatened, or any claim whatsoever and any and
all amounts paid in settlement of any claim or litigation), joint or
several, to which they or any of them may become subject under the Act,
the Exchange Act or otherwise, insofar as such losses, liabilities,
claims, damages or expenses (or actions in respect thereof) arise out of
or are based upon any untrue statement or alleged untrue statement of a
material fact contained in the
28
Preliminary Offering Memorandum or the Offering Memorandum, or in any
amendment thereof or supplement thereto, or arise out of or are based
upon the omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements
therein, in the light of the circumstances under which they were made,
not misleading, in each case to the extent, but only to the extent, that
any such loss, liability, claim, damage or expense arises out of or is
based upon any untrue statement or alleged untrue statement or omission
or alleged omission made therein in reliance upon and in conformity with
information relating to such Initial Purchaser furnished to the Company
and the Guarantors in writing by or on behalf of such Initial Purchaser
expressly for use therein; provided, however, that in no case shall any
Initial Purchaser be liable or responsible for any amount in excess of
the discounts and commissions received by such Initial Purchaser, as set
forth in this Agreement. This indemnity will be in addition to any
liability which the Initial Purchasers may otherwise have, including
under this Agreement.
(c) Promptly after receipt by an indemnified party under
subsection (a) or (b) above of notice of the commencement of any action,
such indemnified party shall, if a claim in respect thereof is to be
made against the indemnifying party under such subsection, notify each
party against whom indemnification is to be sought in writing of the
commencement thereof (but the failure so to notify an indemnifying party
shall not relieve it from any liability which it may have under this
Section 6 except to the extent that it has been prejudiced in any
material respect by such failure or from any liability which it may
otherwise have). In case any such action is brought against any
indemnified party, and it notifies an indemnifying party of the
commencement thereof, the indemnifying party will be entitled to
participate therein, and to the extent it may elect by written notice
delivered to the indemnified party promptly after receiving the
aforesaid notice from such indemnified party, to assume the defense
thereof with counsel reasonably satisfactory to such indemnified party.
Notwithstanding the foregoing, the indemnified party or parties shall
have the right to employ its or their own counsel in any such case, but
the fees and expenses of such counsel shall be at the expense of such
indemnified party or parties unless (i) the employment of such counsel
shall have been authorized in writing by the indemnifying parties in
connection with the defense of such action, (ii) the indemnifying
parties shall not have employed counsel to take charge of the defense of
such action within a reasonable time after notice of commencement of the
action, or (iii) such indemnified party or parties shall have reasonably
concluded that there may be defenses available to it or them which are
different from or additional to those available to one or all of the
indemnifying parties (in which case the indemnifying party or parties
shall not have the right to direct the defense of such action on behalf
of the indemnified party or parties), in any of which events such fees
and expenses of counsel shall be borne by the indemnifying parties;
provided, however, that the indemnifying party under subsection (a) or
(b) above shall only be liable for the fees and expenses of one counsel
(in addition to any local counsel) for all indemnified parties in each
jurisdiction in which any claim or action is brought. Anything in this
subsection to the contrary notwithstanding, an indemnifying party shall
not be liable for any settlement of any claim or action effected without
its prior written consent, provided that such consent was not
unreasonably withheld.
29
7. Contribution. In order to provide for contribution in
------------
circumstances in which the indemnification provided for in Section 6 is for any
reason held to be unavailable from an indemnifying party or is insufficient to
hold harmless a party indemnified thereunder, the Company and the Guarantors, on
the one hand, and the Initial Purchasers, on the other hand, shall contribute to
the aggregate losses, liabilities, claims, damages and expenses of the nature
contemplated by such indemnification provision (including any investigation,
legal and other expenses incurred in connection with, and any amount paid in
settlement of, any action, suit or proceeding or any claims asserted, but after
deducting in the case of losses, liabilities, claims, damages and expenses
suffered by the Company or any Guarantor, any contribution received by the
Company and the Guarantors from persons, other than the Initial Purchasers, who
may also be liable for contribution, including persons who control the Company
or any of the Guarantors within the meaning of Section 15 of the Act or Section
20(a) of the Exchange Act) to which the Company, the Guarantors and the Initial
Purchasers may be subject, in such proportion as is appropriate to reflect the
relative benefits received by the Company and the Guarantors, on the one hand,
and the Initial Purchasers, on the other hand, from the offering of the Series A
Notes or, if such allocation is not permitted by applicable law or
indemnification is not available as a result of the indemnifying party not
having received notice as provided in Section 6, in such proportion as is
appropriate to reflect not only the relative benefits referred to above but also
the relative fault of the Company and the Guarantors, on the one hand, and the
Initial Purchasers, on the other hand, in connection with the statements or
omissions which resulted in such losses, liabilities, claims, damages or
expenses, as well as any other relevant equitable considerations. The relative
benefits received by the Company and the Guarantors, on the one hand, and the
Initial Purchasers, on the other hand, shall be deemed to be in the same
proportion as (i) the total proceeds from the offering of Series A Notes (net of
discounts but before deducting expenses) received by the Company and the
Guarantors and (ii) the discounts and commissions received by the Initial
Purchasers, respectively, in each case as set forth in the Offering Memorandum.
The relative fault of the Company and the Guarantors, on the one hand, and of
the Initial Purchasers, on the other hand, shall be determined by reference to,
among other things, whether the untrue or alleged untrue statement of a material
fact or the omission or alleged omission to state a material fact relates to
information supplied by the Company, any Guarantor or any Initial Purchaser and
the parties' relative intent, knowledge, access to information and opportunity
to correct or prevent such statement or omission. The Company, the Guarantors
and the Initial Purchasers agree that it would not be just and equitable if
contribution pursuant to this Section 7 were determined by pro rata allocation
(even if the Initial Purchasers were treated as one entity for such purpose) or
by any other method of allocation which does not take into account the equitable
considerations referred to above. Notwithstanding the provisions of this Section
7, (i) in no case shall any Initial Purchaser be required to contribute any
amount in excess of the amount by which the discounts and commissions applicable
to the Series A Notes purchased by such Initial Purchaser pursuant to this
Agreement exceeds the amount of any damages which such Initial Purchaser has
otherwise been required to pay by reason of any untrue or alleged untrue
statement or omission or alleged omission and (ii) no person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. For purposes of this Section 7, (A) each person,
if any, who controls any Initial Purchaser within the meaning of Section 15 of
the Act or Section 20(a) of the Exchange Act and (B) the respective officers,
directors, partners, employees, representatives and agents of any Initial
Purchaser or any
30
controlling person shall have the same rights to contribution as any Initial
Purchaser, and (A) each person, if any, who controls the Company or any
Guarantor within the meaning of Section 15 of the Act or Section 20(a) of the
Exchange Act and (B) the respective officers, directors, partners, employees,
representatives and agents of the Company and the Guarantors shall have the same
rights to contribution as the Company and the Guarantors, subject in each case
to clauses (i) and (ii) of this Section 7. Any party entitled to contribution
will, promptly after receipt of notice of commencement of any action, suit or
proceeding against such party in respect of which a claim for contribution may
be made against another party or parties under this Section 7, notify such party
or parties from whom contribution may be sought, but the failure to so notify
such party or parties shall not relieve the party or parties from whom
contribution may be sought from any obligation it or they may have under this
Section 7 or otherwise. No party shall be liable for contribution with respect
to any action or claim settled without its prior written consent, provided that
such written consent was not unreasonably withheld. The Initial Purchasers'
obligations to contribute pursuant to this Section 7 are several in proportion
to the respective principal amount of Series A Notes purchased by each of the
Initial Purchasers hereunder and not joint.
8. Conditions of Initial Purchasers' Obligations. The obligations
---------------------------------------------
of the Initial Purchasers to purchase and pay for the Series A Notes, as
provided herein, shall be subject to the satisfaction of the following
conditions:
(a) All of the representations and warranties of the Company
and the Guarantors contained in this Agreement shall be true and correct
on the date hereof and on the Closing Date with the same force and
effect as if made on and as of the date hereof and the Closing Date,
respectively. The Company and each Guarantor shall have performed or
complied with all of the agreements herein contained and required to be
performed or complied with by it at or prior to the Closing Date.
(b) The Offering Memorandum shall have been printed and
copies distributed to the Initial Purchasers not later than 6:00 p.m.,
New York City time, on the day following the date of this Agreement or
at such later date and time as to which the Initial Purchasers may
agree, and no stop order suspending the qualification or exemption from
qualification of the Series A Notes or the Guarantees thereof in any
jurisdiction referred to in Section 4(e) shall have been issued and no
proceeding for that purpose shall have been commenced or shall be
pending or threatened.
(c) No action shall have been taken and no statute, rule,
regulation or order shall have been enacted, adopted or issued by any
governmental agency which would, as of the Closing Date, prevent the
issuance of the Series A Notes or the Guarantees thereof; no action,
suit or proceeding shall have been commenced and be pending against or
affecting or, to the knowledge of the Company and the Guarantors,
threatened against, the Company, any of its subsidiaries or any of the
Guarantors before any court or arbitrator or any governmental body,
agency or official that, if adversely determined, could reasonably be
expected to result in a Material Adverse Effect; and no stop order shall
have been issued preventing the use of the Offering Memorandum, or any
amendment or supplement thereto, or which could reasonably be expected
to have a Material Adverse Effect.
31
(d) Since the respective dates as of which information is
given in the Offering Memorandum, (i) there shall not have been any
material adverse change, or any development that is reasonably likely to
result in a material adverse change, in the capital stock or limited
liability company interests or the long-term debt, or material increase
in the short-term debt, of the Company, any of its subsidiaries or any
of the Guarantors from that set forth in the Offering Memorandum, (ii)
no dividend or distribution of any kind shall have been declared, paid
or made by the Company, any of its subsidiaries or any of the Guarantors
on any class of its capital stock or limited liability company interests
and (iii) none of the Company, any of its subsidiaries or any of the
Guarantors shall have incurred any liabilities or obligations, direct or
contingent, that are material, individually or in the aggregate, to the
Company, its subsidiaries and the Guarantors, taken as a whole, and that
are required to be disclosed on a balance sheet or notes thereto in
accordance with generally accepted accounting principles and are not
disclosed on the latest balance sheet or notes thereto included in the
Offering Memorandum. Since the date hereof and since the dates as of
which information is given in the Offering Memorandum, there shall not
have occurred any Material Adverse Effect, or any development that is
reasonably likely to result in a Material Adverse Effect.
(e) The Initial Purchasers shall have received certificates,
dated the Closing Date, signed on behalf of the Company and each
Guarantor, in form and substance satisfactory to the Initial Purchasers,
confirming, as of the Closing Date, the matters set forth in paragraphs
(a), (b), (c) and (d) of this Section 8 and that, as of the Closing
Date, the obligations of the Company and such Guarantor, as the case may
be, to be performed hereunder on or prior thereto have been duly
performed.
(f) The Initial Purchasers shall have received on the
Closing Date an opinion, dated the Closing Date, in form and substance
satisfactory to the Initial Purchasers and counsel for the Initial
Purchasers, of Xxxxxxx & Xxxx, S.C., counsel for the Company and the
Guarantors, to the effect set forth in Exhibit C hereto.
---------
(g) The Initial Purchasers shall have received on the
Closing Date an opinion, dated the Closing Date, in form and substance
satisfactory to the Initial Purchasers and counsel for the Initial
Purchasers, of White & Case, counsel for the Company and the Guarantors,
to the effect set forth in Exhibit D hereto.
---------
(h) At the time this Agreement is executed and at the
Closing Date, the Initial Purchasers shall have received from
PricewaterhouseCoopers LLP, independent public accountants, dated as of
the date of this Agreement and as of the Closing Date, customary comfort
letters addressed to the Initial Purchasers and in form and substance
satisfactory to the Initial Purchasers and counsel for the Initial
Purchasers with respect to the financial statements and certain
financial information of the Company and its subsidiaries contained in
the Offering Memorandum.
(i) The Initial Purchasers shall have received an opinion,
dated the Closing Date, in form and substance reasonably satisfactory to
the Initial Purchasers, of Xxxxxx & Xxxxxxx, counsel for the Initial
Purchasers, covering such matters as are customarily covered in such
opinions.
32
(j) The Initial Purchasers shall have received an opinion,
dated the Closing Date, in form and substance satisfactory to the
Initial Purchasers, of Xxxxxxx Xxxxxxxx & Xxxxx to the effect set forth
in Exhibit E hereto.
---------
(k) The Initial Purchasers shall have received on the
Closing Date an opinion, dated the Closing Date, in form and substance
satisfactory to the Initial Purchasers and counsel for the Initial
Purchasers, of Xxxx X. Xxxxx, Vice President, Law & Public Affairs,
Secretary and General Counsel of the Company, to the effect set forth in
Exhibit F hereto.
---------
(l) Xxxxxx & Xxxxxxx shall have been furnished with such
documents, in addition to those set forth above, as they may reasonably
require for the purpose of enabling them to review or pass upon the
matters referred to in this Section 8 and in order to evidence the
accuracy, completeness or satisfaction in all material respects of any
of the representations, warranties or conditions herein contained.
(m) Prior to the Closing Date, the Company and the
Guarantors shall have furnished to the Initial Purchasers such further
information, certificates and documents as the Initial Purchasers may
reasonably request.
(n) Prior to the Closing Date, there shall have been no
change in law or published Internal Revenue Service interpretation
respecting S Corporation status that, in the reasonable opinion of the
Initial Purchasers, could have a material adverse effect on the
Company's anticipated cash flows in the period following the Closing
Date.
(o) The Company, the Guarantors and the Trustee shall have
entered into the Indenture and the Initial Purchasers shall have
received counterparts, conformed as executed, thereof.
(p) The Company, the Guarantors and the Initial Purchasers
shall have entered into the Registration Rights Agreement and the
Initial Purchasers shall have received counterparts, conformed as
executed, thereof.
(q) On or after the date hereof, (i) there shall not have
occurred any downgrading, suspension or withdrawal of, nor shall any
notice have been given of any potential or intended downgrading,
suspension or withdrawal of, or of any review (or of any potential or
intended review) for a possible change that does not indicate the
direction of the possible change in, any rating of the Company or any
Guarantor or any securities of the Company or any Guarantor (including,
without limitation, the placing of any of the foregoing ratings on
credit watch with negative or developing implications or under review
with an uncertain direction) by any "nationally recognized statistical
rating organization" as such term is defined for purposes of Rule
436(g)(2) under the Act, (ii) there shall not have occurred any change,
nor shall any notice have been given of any potential or intended
change, in the outlook for any rating of the Company or any Guarantor or
any securities of the Company or any Guarantor by any such rating
organization and (iii) no such rating organization shall have given
notice that it has assigned (or is considering assigning) a lower rating
to the Notes than that on which the Notes were marketed.
33
(r) The Notes shall have been approved for trading on
PORTAL.
(s) All opinions, certificates, letters and other documents
required by this Section 8 to be delivered by the Company and the
Guarantors will be in compliance with the provisions hereof only if they
are reasonably satisfactory in form and substance to the Initial
Purchasers. The Company and the Guarantors shall furnish the Initial
Purchasers with such conformed copies of such opinions, certificates,
letters and other documents as they shall reasonably request.
(t) The Initial Purchasers shall have received an executed
copy of the receipt delivered by AWA to the Company pursuant to which
AWA acknowledges receipt of payment in full of the principal of, and
accrued interest on, the Company's Senior Subordinated Note due 2008
payable to AWA and agrees to surrender such original note for
cancellation.
(u) The Company, Arjo Xxxxxxx US Holdings Ltd. and
Paperweight Development Corp. shall have entered into the subordination
agreement related to the Deferred Payment Obligation (the "Subordination
Agreement") prior to or simultaneous with the Offering in form and
substance satisfactory to the Initial Purchasers and counsel to the
Initial Purchasers and the Initial Purchasers shall have received
executed copies thereof.
(v) The Restructuring shall be consummated and be effective
in accordance with applicable law and the Initial Purchasers shall have
received such documents as they deem necessary to evidence the
consummation and effectiveness thereof.
9. Initial Purchasers' Information. The Company and the Guarantors
-------------------------------
acknowledge that the statements with respect to the offering of the Series A
Notes set forth in the fifth sentence of the fourth paragraph and in the fifth
paragraph under "Plan of Distribution" in the Offering Memorandum constitute the
only information relating to any of the Initial Purchasers furnished to the
Company and the Guarantors in writing by or on behalf of the Initial Purchasers
expressly for use in the Offering Memorandum.
10. Survival of Representations and Agreements. All representations
------------------------------------------
and warranties, covenants and agreements of the Initial Purchasers, the Company
and the Guarantors contained in this Agreement, including the agreements
contained in Sections 4(f) and 11(d), the indemnity agreements contained in
Section 6 and the contribution agreements contained in Section 7, shall remain
operative and in full force and effect regardless of any investigation made by
or on behalf of an Initial Purchaser, any controlling person thereof, or by or
on behalf of the Company, the Guarantors or any controlling person thereof, and
shall survive delivery of and payment for the Series A Notes to and by the
Initial Purchasers. The representations contained in Section 5 and the
agreements contained in Sections 4(f), 6, 7 and 11(d) shall survive the
termination of this Agreement, including any termination pursuant to Section 11.
11. Effective Date of Agreement; Termination.
----------------------------------------
(a) This Agreement shall become effective upon execution and
delivery of a counterpart hereof by each of the parties hereto.
34
(b) The Initial Purchasers shall have the right to terminate
this Agreement at any time prior to the Closing Date by notice to the
Company from the Initial Purchasers, without liability (other than with
respect to Sections 6 and 7) on the Initial Purchasers' part to the
Company or any of the Guarantors if, on or prior to such date, (i) the
Company or any of the Guarantors shall have failed, refused or been
unable to perform in any material respect any agreement on its part to
be performed hereunder, (ii) any other condition to the obligations of
the Initial Purchasers hereunder as provided in Section 8 is not
fulfilled when and as required in any material respect, (iii) in the
reasonable judgment of the Initial Purchasers, any material adverse
change shall have occurred since the respective dates as of which
information is given in the Offering Memorandum in the condition
(financial or otherwise), business, properties, assets, liabilities,
prospects, net worth, results of operations or cash flows of the Company
and its subsidiaries, taken as a whole, other than as set forth in the
Offering Memorandum, or (iv)(A) any domestic or international event or
act or occurrence has materially disrupted, or in the opinion of the
Initial Purchasers will in the immediate future materially disrupt, the
market for the Company's or any Guarantor's securities or for securities
in general; or (B) trading in securities generally on the New York Stock
Exchange, the American Stock Exchange, the Chicago Board of Options
Exchange, the Chicago Mercantile Exchange, the Chicago Board of Trade or
the Nasdaq National Market shall have been suspended or materially
limited, or minimum or maximum prices for trading shall have been
established, or maximum ranges for prices for securities shall have been
required, on such exchange or the Nasdaq National Market, or by such
exchange or other regulatory body or governmental authority having
jurisdiction; or (C) a banking moratorium shall have been declared by
federal or state authorities, or a moratorium in foreign exchange
trading by major international banks or persons shall have been
declared; or (D) there has occurred any outbreak or escalation of
hostilities or act of terrorism involving the United States or Canada,
or there is a declaration of a national emergency or war by the United
States or Canada such that the effect of any such event in the sole
judgment of the majority in interest of the Initial Purchasers judgment
makes it impossible or inadvisable to proceed with the offering, sale or
delivery of the Series A Notes on the terms and in the manner
contemplated in the Offering Memorandum; or (E) there shall have been
such a material adverse change in general economic, political or
financial conditions or if the effect of international conditions on the
financial markets in the United States shall be such as, in the sole
judgment of the majority in interest of the Initial Purchasers, makes it
inadvisable or impracticable to proceed with the delivery of the Series
A Notes as contemplated hereby.
(c) Any notice of termination pursuant to this Section 11
shall be by telephone or facsimile and, in either case, confirmed in
writing by letter.
(d) If this Agreement shall be terminated pursuant to any of
the provisions hereof (otherwise than pursuant to clause (iv) of Section
11(b), in which case each party will be responsible for its own
expenses), or if the sale of the Series A Notes provided for herein is
not consummated because any condition to the obligations of the Initial
Purchasers set forth herein is not satisfied or because of any refusal,
inability or failure on the part of the Company or any Guarantor to
perform any agreement herein or comply with any provision hereof, the
Company and the Guarantors shall reimburse the Initial
35
Purchasers for all out-of-pocket expenses (including the reasonable fees
and expenses of the Initial Purchasers' counsel), incurred by the
Initial Purchasers in connection herewith.
(e) If on the Closing Date any one or more of the Initial
Purchasers shall fail or refuse to purchase the Series A Notes which it
or they have agreed to purchase hereunder on such date and the aggregate
principal amount of the Series A Notes which such defaulting Initial
Purchaser or Initial Purchasers, as the case may be, agreed but failed
or refused to purchase is not more than one-tenth of the aggregate
principal amount of the Series A Notes to be purchased on such date by
all Initial Purchasers, each non-defaulting Initial Purchaser shall be
obligated severally, in the proportion which the principal amount of the
Series A Notes set forth opposite its name in Schedule I bears to the
----------
aggregate principal amount of the Series A Notes which all the
non-defaulting Initial Purchasers, as the case may be, have agreed to
purchase, or in such other proportion as Bear, Xxxxxxx & Co. Inc. ("Bear
Xxxxxxx") may specify, to purchase the Series A Notes which such
defaulting Initial Purchaser or Initial Purchasers, as the case may be,
agreed but failed or refused to purchase on such date; provided that in
no event shall the aggregate principal amount of the Series A Notes
which any Initial Purchaser has agreed to purchase pursuant to Section 3
hereof be increased pursuant to this Section 11 by an amount in excess
of one-ninth of such principal amount of the Series A Notes without the
written consent of such Initial Purchaser. If on the Closing Date any
Initial Purchaser or Initial Purchasers shall fail or refuse to purchase
the Series A Notes and the aggregate principal amount of the Series A
Notes with respect to which such default occurs is more than one-tenth
of the aggregate principal amount of the Series A Notes to be purchased
by all Initial Purchasers and arrangements satisfactory to the Initial
Purchasers and the Company for purchase of such the Series A Notes are
not made within 48 hours after such default, this Agreement will
terminate without liability on the part of any non-defaulting Initial
Purchaser and the Company or any Guarantor. In any such case which does
not result in termination of this Agreement, either Bear Xxxxxxx or the
Company shall have the right to postpone the Closing Date, but in no
event for longer than seven days, in order that the required changes, if
any, in the Offering Memorandum or any other documents or arrangements
may be effected. Any action taken under this paragraph shall not relieve
any defaulting Initial Purchaser from liability in respect of any
default of any such Initial Purchaser under this Agreement.
12. Notice. All communications hereunder, except as may be
------
otherwise specifically provided herein, shall be in writing and, if sent to the
Initial Purchasers shall be mailed, delivered, telecopied and confirmed in
writing or sent by a nationally recognized overnight courier service
guaranteeing delivery on the next business day to Bear, Xxxxxxx & Co. Inc., 000
Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Corporate Finance Department,
telecopy number: (000) 000-0000, with a copy to Xxxxxx & Xxxxxxx, 000 Xxxxx
Xxxxxx, Xxxxx 0000, Xxx Xxxx, Xxx Xxxx 00000, Attention: Xxxxxx X. Xxxxxxx,
telecopy number: (000) 000-0000; and if sent to the Company and the Guarantors,
shall be mailed, delivered, telecopied and confirmed in writing or sent by a
nationally recognized overnight courier service guaranteeing delivery on the
next business day to Appleton Papers Inc., Attention: Chief Financial Officer,
telecopy number: (000) 000-0000, with a copy to Xxxxxxx & Xxxx, S.C., Attention:
Xxxxxxxxxxx X. Xxxxx, telecopy number: (000) 000-0000.
36
13. Parties. This Agreement shall inure solely to the benefit of,
-------
and shall be binding upon, the Initial Purchasers, the Company, the Guarantors
and the controlling persons and agents referred to in Sections 6 and 7, and
their respective successors and assigns, and no other person shall have or be
construed to have any legal or equitable right, remedy or claim under or in
respect of or by virtue of this Agreement or any provision herein contained. The
term "successors and assigns" shall not include a purchaser, in its capacity as
such, of Notes from the Initial Purchasers.
14. Construction. This Agreement shall be construed in accordance
------------
with the internal laws of the State of New York. TIME IS OF THE ESSENCE IN THIS
AGREEMENT.
15. Captions. The captions included in this Agreement are included
--------
solely for convenience of reference and are not to be considered a part of this
Agreement.
16. Counterparts. This Agreement may be executed in various
------------
counterparts which together shall constitute one and the same instrument.
[Signature page to follow]
37
If the foregoing correctly sets forth the understanding among the
Initial Purchasers, the Company and the Guarantors please so indicate in the
space provided below for that purpose, whereupon this letter shall constitute a
binding agreement among us.
Very truly yours,
Appleton Papers Inc.
By: /s/ Xxxx X. Xxxxx
Name: Xxxx X. Xxxxx
Title: Secretary
Paperweight Development Corp.
By: /s/ Xxxx X. Xxxxx
Name: Xxxx X. Xxxxx
Title: Secretary
WTA Inc.
By: /s/ Xxxx X. Xxxxx
Name: Xxxx X. Xxxxx
Title: Secretary
38
Accepted and agreed to as of
the date first above written:
Bear, Xxxxxxx & Co. Inc.
By: /s/ Xxxx Xxxxxxxxx
Name: Xxxx Xxxxxxxxx
Title: Senior Managing Director
TD Securities (USA) Inc.
By: /s/ [Signature Illegible]
Name:
Title:
ABN AMRO Incorporated
By: /s/ Xxxxx X. Xxxxxx
Name: Xxxxx X. Xxxxxx
Title: Managing Director
U.S. Bancorp Xxxxx Xxxxxxx Inc.
By: /s/ Xxxxx X. Xxxxxx
Name: Xxxxx X. Xxxxxx
Title: Managing Director
39
