Exhibit 4.1
________________________________________________________________________________
APPLETON PAPERS INC.
and each of the Guarantors named herein
12 1/2% SENIOR SUBORDINATED NOTES DUE 2008
____________________
INDENTURE
Dated as of December 14, 2001
____________________
and
U.S. Bank National Association
as Trustee
____________________
________________________________________________________________________________
CROSS-REFERENCE TABLE*
Trust Indenture
Act Section Indenture Section
310(a)(1)......................................... 7.10
(a)(2)......................................... 7.10
(a)(3)......................................... N.A.
(a)(4)......................................... N.A.
(a)(5)......................................... 7.10
(b)............................................ 7.10
(c)............................................ N.A.
311(a)............................................ 7.11
(b)............................................ 7.11
(c)............................................ N.A.
312(a)............................................ 2.05
(b)............................................ 13.03
(c)............................................ 13.03
313(a)............................................ 7.06
(b)(1)......................................... N.A.
(b)(2)......................................... 7.07
(c)............................................ 7.06;13.02
(d)............................................ 7.06
314(a)............................................ 4.03;13.02
(b)............................................ N.A.
(c)(1)......................................... 13.04
(c)(2)......................................... 13.04
(c)(3)......................................... N.A.
(d)............................................ N.A.
(e)............................................ 13.05
(f)............................................ N.A.
315(a)............................................ 7.01
(b)............................................ 7.05,13.02
(c)............................................ 7.01
(d)............................................ 7.01
(e)............................................ 6.11
316(a) (last sentence)............................ 2.09
(a)(1)(A)...................................... 6.05
(a)(1)(B)...................................... 6.04
(a)(2)......................................... N.A.
(b)............................................ 6.07
(c)............................................ 2.12
317(a)(1)......................................... 6.08
(a)(2)......................................... 6.09
(b)............................................ 2.04
318(a)............................................ 13.01
(b)............................................ N.A.
(c)............................................ 13.01
N.A. means not applicable.
* This Cross Reference Table is not part of the Indenture.
TABLE OF CONTENTS
Page
ARTICLE 1.
DEFINITIONS AND INCORPORATION
BY REFERENCE
Section 1.01. Definitions..................................................................... 1
Section 1.02. Other Definitions............................................................... 21
Section 1.03. Incorporation by Reference of Trust Indenture Act............................... 22
Section 1.04. Rules of Construction........................................................... 22
ARTICLE 2.
THE NOTES
Section 2.01. Form and Dating................................................................. 22
Section 2.02. Execution and Authentication.................................................... 24
Section 2.03. Registrar and Paying Agent...................................................... 24
Section 2.04. Paying Agent to Hold Money in Trust............................................. 24
Section 2.05. Holder Lists.................................................................... 25
Section 2.06. Transfer and Exchange........................................................... 25
Section 2.07. Replacement Notes............................................................... 36
Section 2.08. Outstanding Notes............................................................... 36
Section 2.09. Treasury Notes.................................................................. 36
Section 2.10. Temporary Notes................................................................. 37
Section 2.11. Cancellation.................................................................... 37
Section 2.12. Defaulted Interest.............................................................. 37
ARTICLE 3.
REDEMPTION AND PREPAYMENT
Section 3.01. Notices to Trustee.............................................................. 37
Section 3.02. Selection of Notes to Be Redeemed............................................... 38
Section 3.03. Notice of Redemption............................................................ 38
Section 3.04. Effect of Notice of Redemption.................................................. 39
Section 3.05. Deposit of Redemption Price..................................................... 39
Section 3.06. Notes Redeemed in Part.......................................................... 39
Section 3.07. Optional Redemption............................................................. 39
Section 3.08. Mandatory Redemption............................................................ 40
Section 3.09. Offer to Purchase by Application of Excess Proceeds............................. 40
ARTICLE 4.
COVENANTS
Section 4.01. Payment of Notes................................................................ 42
Section 4.02. Maintenance of Office or Agency................................................. 42
Section 4.03. Reports......................................................................... 42
Section 4.04. Compliance Certificate.......................................................... 43
Section 4.05. Taxes........................................................................... 44
Section 4.06. Stay, Extension and Usury Laws.................................................. 44
Section 4.07. Restricted Payments............................................................. 44
Section 4.08. Dividend and Other Payment Restrictions Affecting Restricted Subsidiaries....... 46
Section 4.09. Incurrence of Indebtedness and Issuance of Preferred Stock...................... 47
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Section 4.10. Asset Sales................................................................. 50
Section 4.11. Transactions with Affiliates................................................ 51
Section 4.12. Liens....................................................................... 51
Section 4.13. Line of Business............................................................ 52
Section 4.14. Corporate Existence......................................................... 52
Section 4.15. Offer to Repurchase Upon Change of Control.................................. 52
Section 4.16. No Senior Subordinated Debt................................................. 53
Section 4.17. No Amendment to Deferred Payment Obligation, Fox River Indemnity
Arrangements, Security Holders Agreements, Intercompany Acquisition
Loan or ESOP Documentation.................................................. 53
Section 4.18. Limitation on Sale and Leaseback Transactions............................... 56
Section 4.19. Limitation on Issuances and Sales of Equity Interests in Wholly Owned
Subsidiaries................................................................ 56
Section 4.20. Payments for Consent........................................................ 56
Section 4.21. Additional Subsidiary Guarantees or Parent Guarantees....................... 56
Section 4.22. Designation of Restricted and Unrestricted Subsidiaries..................... 57
Section 4.23. Excess Cash Flow............................................................ 57
Section 4.24. Actions Related to Debt Arbiter Determination............................... 58
Section 4.25. S Corporation Status........................................................ 59
Section 4.26. Independent Directors....................................................... 59
Section 4.27. Capital Expenditures........................................................ 59
ARTICLE 5.
SUCCESSORS
Section 5.01. Merger, Consolidation, or Sale of Assets.................................... 59
Section 5.02. Successor Corporation Substituted........................................... 60
ARTICLE 6.
DEFAULTS AND REMEDIES
Section 6.01. Events of Default........................................................... 61
Section 6.02. Acceleration................................................................ 62
Section 6.03. Other Remedies.............................................................. 63
Section 6.04. Waiver of Past Defaults..................................................... 63
Section 6.05. Control by Majority......................................................... 63
Section 6.06. Limitation on Suits......................................................... 64
Section 6.07. Rights of Holders of Notes to Receive Payment............................... 64
Section 6.08. Collection Suit by Trustee.................................................. 64
Section 6.09. Trustee May File Proofs of Claim............................................ 64
Section 6.10. Priorities.................................................................. 65
Section 6.11. Undertaking for Costs....................................................... 65
Section 6.12. Trustee or Holders May Issue DPO Payment Blockage Notice.................... 65
ARTICLE 7.
TRUSTEE
Section 7.01. Duties of Trustee........................................................... 66
Section 7.02. Rights of Trustee........................................................... 68
Section 7.03. Individual Rights of Trustee................................................ 68
Section 7.04. Trustee's Disclaimer........................................................ 68
Section 7.05. Notice of Defaults.......................................................... 68
Section 7.06. Reports by Trustee to Holders of the Notes.................................. 69
Section 7.07. Compensation and Indemnity.................................................. 69
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Section 7.08. Replacement of Trustee.................................................. 70
Section 7.09. Successor Trustee by Merger, etc........................................ 71
Section 7.10. Eligibility; Disqualification........................................... 71
Section 7.11. Preferential Collection of Claims Against Company....................... 71
ARTICLE 8.
LEGAL DEFEASANCE AND COVENANT DEFEASANCE
Section 8.01. Option to Effect Legal Defeasance or Covenant Defeasance................ 71
Section 8.02. Legal Defeasance and Discharge.......................................... 71
Section 8.03. Covenant Defeasance..................................................... 72
Section 8.04. Conditions to Legal or Covenant Defeasance.............................. 72
Section 8.05. Deposited Money and Government Securities to be Held in Trust; Other
Miscellaneous Provisions................................................ 73
Section 8.06. Repayment to Company.................................................... 74
Section 8.07. Reinstatement........................................................... 74
ARTICLE 9.
AMENDMENT, SUPPLEMENT AND WAIVER
Section 9.01. Without Consent of Holders of Notes..................................... 74
Section 9.02. With Consent of Holders of Notes........................................ 75
Section 9.03. Compliance with Trust Indenture Act..................................... 76
Section 9.04. Revocation and Effect of Consents....................................... 77
Section 9.05. Notation on or Exchange of Notes........................................ 77
Section 9.06. Trustee to Sign Amendments, etc......................................... 77
ARTICLE 10.
SUBORDINATION
Section 10.01. Agreement to Subordinate................................................ 77
Section 10.02. Certain Definitions..................................................... 77
Section 10.03. Liquidation; Dissolution; Bankruptcy.................................... 78
Section 10.04. Default on Designated Senior Debt....................................... 78
Section 10.05. Acceleration of Notes................................................... 79
Section 10.06. When Distribution Must Be Paid Over..................................... 79
Section 10.07. Notice by Company....................................................... 80
Section 10.08. Subrogation............................................................. 80
Section 10.09. Relative Rights......................................................... 80
Section 10.10. Subordination May Not Be Impaired by Company............................ 80
Section 10.11. Distribution or Notice to Representative................................ 81
Section 10.12. Rights of Trustee and Paying Agent...................................... 81
Section 10.13. Authorization to Effect Subordination................................... 81
Section 10.14. Amendments.............................................................. 81
ARTICLE 11.
PARENT GUARANTEES AND SUBSIDIARY GUARANTEES
Section 11.01. Guarantees.............................................................. 81
Section 11.02. Subordination of Parent Guarantees and Subsidiary Guarantees............ 82
Section 11.03. Limitation on Guarantor Liability....................................... 83
Section 11.04. Execution and Delivery of Parent Guarantee and Subsidiary Guarantee..... 83
Section 11.05. Guarantors May Consolidate, etc., on Certain Terms...................... 83
Section 11.06. Releases Following Sale of Assets....................................... 84
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ARTICLE 12.
SATISFACTION AND DISCHARGE
Section 12.01. Satisfaction and Discharge................................................... 85
Section 12.02. Application of Trust Money................................................... 86
ARTICLE 13.
MISCELLANEOUS
Section 13.01. Trust Indenture Act Controls................................................. 86
Section 13.02. Notices...................................................................... 86
Section 13.03. Communication by Holders of Notes with Other Holders of Notes................ 87
Section 13.04. Certificate and Opinion as to Conditions Precedent........................... 87
Section 13.05. Statements Required in Certificate or Opinion................................ 88
Section 13.06. Rules by Trustee and Agents.................................................. 88
Section 13.07. No Personal Liability of Directors, Officers, Employees and Stockholders..... 88
Section 13.08. Governing Law................................................................ 88
Section 13.09. No Adverse Interpretation of Other Agreements................................ 88
Section 13.10. Successors................................................................... 89
Section 13.11. Severability................................................................. 89
Section 13.12. Counterpart Originals........................................................ 89
Section 13.13. Table of Contents, Headings, etc............................................. 89
Section 13.14. PDC Capital Corporation...................................................... 89
EXHIBITS
Exhibit A1 FORM OF NOTE
Exhibit A2 FORM OF REGULATION S TEMPORARY GLOBAL NOTE
Exhibit B FORM OF CERTIFICATE OF TRANSFER
Exhibit C FORM OF CERTIFICATE OF EXCHANGE
Exhibit D FORM OF CERTIFICATE OF ACQUIRING INSTITUTIONAL ACCREDITED INVESTOR
Exhibit E FORM OF PARENT/SUBSIDIARY GUARANTEE
Exhibit F FORM OF SUPPLEMENTAL INDENTURE
iv
INDENTURE dated as of December 14, 2001 by and among Appleton Papers Inc.,
a Delaware corporation (the "Company"), Paperweight Development Corp., a
Wisconsin corporation (sometimes referred to herein as a "Parent Guarantor"),
WTA Inc., a Delaware Corporation (a "Subsidiary Guarantor") and U.S. Bank
National Association, as trustee (the "Trustee").
The Company and the Trustee agree as follows for the benefit of each other
and for the equal and ratable benefit of the Holders of the 12 1/2% Senior
Subordinated Notes due 2008 (the "Notes"):
ARTICLE 1.
DEFINITIONS AND INCORPORATION
BY REFERENCE
Section 1.01. Definitions.
"144A Global Note" means a global note substantially in the form of Exhibit
A1 hereto bearing the Global Note Legend and the Private Placement Legend and
deposited with or on behalf of, and registered in the name of, the Depositary or
its nominee that will be issued in a denomination equal to the outstanding
principal amount of the Notes sold in reliance on Rule 144A.
"Acquired Debt" means, with respect to any specified Person, (i)
Indebtedness of any other Person existing at the time such other Person is
merged with or into or became a Subsidiary of such specified Person, whether or
not such Indebtedness is incurred in connection with, or in contemplation of,
such other Person merging with or into, or becoming a Subsidiary of, such
specified Person and (ii) Indebtedness secured by a Lien encumbering any asset
acquired by such specified Person.
"Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For purposes of this definition, "control,"
as used with respect to any Person, means the possession, directly or
indirectly, of the power to direct or cause the direction of the management or
policies of such Person, whether through the ownership of voting securities, by
agreement or otherwise; provided that beneficial ownership of 10% or more of the
Voting Stock of a Person shall be deemed to be control. For purposes of this
definition, the terms "controlling," "controlled by" and "under common control
with" have correlative meanings.
"Agent" means any Registrar, Paying Agent or co-registrar.
"Applicable Procedures" means, with respect to any transfer or exchange of
or for beneficial interests in any Global Note, the rules and procedures of the
Depositary, Euroclear and Clearstream that apply to such transfer or exchange.
"Asset Sale" means:
(1) the sale, lease, conveyance or other disposition of any assets or rights,
other than sales of inventory in the ordinary course of business consistent
with past practices; provided that the sale, conveyance or other
disposition of all or substantially all of the assets of the Company and
its Subsidiaries taken as a whole shall be governed by Section 4.15 and/or
Section 5.01 hereof and not by the provisions of Section 4.10 hereof; and
(2) the issuance of Equity Interests in any of the Company's Restricted
Subsidiaries or the sale of Equity Interests in any of its Subsidiaries.
Notwithstanding the preceding, the following items shall not be deemed to
be Asset Sales:
1
(1) any single transaction or series of related transactions that involves
assets having a fair market value of less than $1.0 million;
(2) a transfer of assets between or among the Company and one or more of its
Subsidiary Guarantors,
(3) an issuance of Equity Interests by a Restricted Subsidiary to the Company,
the Parent Entity or to another Restricted Subsidiary or any issuance by
Paperweight Development Corp. of its Capital Stock to the ESOP;
(4) the sale or lease of equipment, inventory, accounts receivable or other
assets in the ordinary course of business;
(5) the sale or other disposition of cash or Cash Equivalents;
(6) a Restricted Payment or Permitted Investment that is permitted by Section
4.07 hereof;
(7) the disposition, in the ordinary course of business, of obsolete, worn-out,
damaged or otherwise unusable or no longer useful equipment or assets; or
(8) the licensing of intellectual property in the ordinary course of business.
"Assignment and Assumption Deed" means the Assignment and Assumption Deed,
dated as of November 9, 2001, between AWA and Arjo Xxxxxxx Appleton (Bermuda)
Limited.
"Attributable Debt" in respect of a sale and leaseback transaction means,
at the time of determination, the present value of the obligation of the lessee
for net rental payments during the remaining term of the lease included in such
sale and leaseback transaction including any period for which such lease has
been extended or may, at the option of the lessor, be extended. Such present
value shall be calculated using a discount rate equal to the rate of interest
implicit in such transaction, determined in accordance with GAAP.
"Available ESOP Contributions" means, with respect to any period, the sum
of (a) the aggregate amount of cash received by Paperweight Development Corp. in
respect of ESOP Stock Issuances during such period, which cash has been, in
turn, contributed to the Parent Entity and then to the Company during such
period, and (b) any Carryover Contributions for such period.
"AWA" means Arjo Xxxxxxx Appleton p.l.c. (now known as Arjo Xxxxxxx
Appleton Limited).
"Bankruptcy Law" means Title 11, U.S. Code or any similar federal or state
law for the relief of debtors.
"Beneficial Owner" has the meaning assigned to such term in Rule 13d-3 and
Rule 13d-5 under the Exchange Act, except that in calculating the beneficial
ownership of any particular "person" (as that term is used in Section 13(d)(3)
of the Exchange Act), such "person" shall be deemed to have beneficial ownership
of all securities that such "person" has the right to acquire by conversion or
exercise of other securities, whether such right is currently exercisable or is
exercisable only upon the occurrence of a subsequent condition. The terms
"Beneficially Owns" and "Beneficially Owned" have a corresponding meaning.
"Bermuda Company Agreements" means the collective reference to (a) the
Relationship Agreement, (b) the Assignment and Assumption Deed, (c) the by-laws
and memorandum of association
2
of Arjo Xxxxxxx Appleton (Bermuda) Limited, (d) the certificate of incorporation
and by-laws of PDC Capital Corporation and (e) the Bermuda Security Agreement.
"Bermuda Security Agreement" means the Collateral Assignment, dated as of
November 9, 2001 by Arjo Xxxxxxx Appleton (Bermuda) Limited in favor of the
Company.
"Board of Directors" means (i) with respect to a corporation, the board of
directors of the corporation; (ii) with respect to a partnership, the Board of
Directors of the general partner of the partnership; and (iii) with respect to
any other Person, the board or committee of such Person serving a similar
function.
"Broker-Dealer" has the meaning set forth in the Registration Rights
Agreement.
"Business Day" means any day other than a Legal Holiday.
"Capital Expenditures" means for any period, with respect to any Person,
the aggregate of all expenditures by such Person and its Subsidiaries for the
acquisition or leasing (pursuant to Capital Lease Obligations) of fixed or
capital assets or additions to equipment (including replacements, capitalized
repairs and improvements during such period).
"Capital Lease Obligation" means, at the time any determination is to be
made, the amount of the liability in respect of a capital lease that would at
that time be required to be capitalized on a balance sheet in accordance with
GAAP.
"Capital Stock" means:
(1) in the case of a corporation, corporate stock;
(2) in the case of an association or business entity, any and all shares,
interests, participations, rights or other equivalents (however designated)
of corporate stock;
(3) in the case of a partnership or limited liability company, partnership or
membership interests (whether general or limited); and
(4) any other interest or participation that confers on a Person the right to
receive a share of the profits and losses of, or distributions of assets
of, the issuing Person.
"Carryover Contributions" means with respect to any period, the amount (if
any) by which the aggregate amount of cash received by Paperweight Development
Corp., in respect of ESOP Stock Issuances during the period from November 9,
2001 to the day immediately preceding the first day of such period exceeds ESOP
Related Distributions during the period from November 9, 2001 to the day
immediately preceding the first day of such period.
"Cash Equivalents" means:
(1) United States dollars;
(2) securities issued or directly and fully guaranteed or insured by the United
States government or any agency or instrumentality of the United States
government (provided that the full faith and credit of the United States is
pledged in support of those securities) having maturities of not more than
one year from the date of acquisition;
3
(3) certificates of deposit and eurodollar time deposits with maturities of one
year or less from the date of acquisition, bankers' acceptances with
maturities not exceeding six months and overnight bank deposits, in each
case, with any lender party to the Credit Agreement or with any domestic
commercial bank having capital and surplus in excess of $500.0 million and
a Thomson Bank Watch Rating of "B" or better;
(4) repurchase obligations with a term of not more than seven days for
underlying securities of the types described in clauses (2) and (3) above
entered into with any financial institution meeting the qualifications
specified in clause (3) above;
(5) commercial paper of an issuer rated at least P-1 by Xxxxx'x Investors
Service, Inc. or A-1 by Standard & Poor's Rating Services or carrying an
equivalent rating by a nationally recognized rating agency, if both the two
named rating agencies cease publishing ratings of commercial paper issuers
generally, and in each case maturing within six months after the date of
acquisition; and
(6) money market funds at least 95% of the assets of which constitute Cash
Equivalents of the kinds described in clauses (1) through (5) of this
definition.
"Change of Control" means the occurrence of any of the following:
(1) the direct or indirect sale, transfer, conveyance or other disposition
(other than by way of merger or consolidation), in one or a series of
related transactions, of all or substantially all of the properties or
assets of the Company and its Restricted Subsidiaries taken as a whole to
any "person" (as that term is used in Section 13(d)(3) of the Exchange
Act);
(2) the adoption of a plan relating to the liquidation or dissolution of the
Company;
(3) the consummation of any transaction (including, without limitation, any
merger or consolidation) the result of which is that any "person" (as
defined above) becomes the Beneficial Owner, directly or indirectly, of
more than 50% of the Voting Stock of the Company, measured by voting power
rather than number of shares;
(4) the first day on which a majority of the members of the Board of Directors
of the Company and Paperweight Development Corp. are not Continuing
Directors;
(5) the first day on which the Parent Entity ceases to own 100% of the
outstanding Equity Interests of the Company; or
(6) the failure of the ESOP to own 100% of Paperweight Development Corp.
"Clearstream" means Clearstream Banking, S.A.
"Code" means the Internal Revenue Code of 1986, as amended.
"Company" means Appleton Papers Inc., and any and all successors thereto.
"Consolidated Cash Flow" means, with respect to any specified Person for
any period, the Consolidated Net Income of such Person for such period plus:
4
(1) an amount equal to any extraordinary loss plus any net loss realized by
such Person or any of its Restricted Subsidiaries in connection with an
Asset Sale, to the extent such losses were deducted in computing such
Consolidated Net Income; plus
(2) provision for taxes based on income or profits of such Person and its
Restricted Subsidiaries for such period, to the extent that such provision
for taxes was deducted in computing such Consolidated Net Income; plus
(3) Consolidated Interest Expense of such Person and its Restricted
Subsidiaries for such period, whether paid or accrued and whether or not
capitalized to the extent that any such expense was deducted in computing
such Consolidated Net Income; plus
(4) depreciation, amortization (including amortization of goodwill and other
intangibles but excluding amortization of prepaid cash expenses that were
paid in a prior period) and other non-cash expenses (excluding any such
non-cash expense to the extent that it represents an accrual of or reserve
for cash expenses in any future period or amortization of a prepaid cash
expense that was paid in a prior period) of such Person and its Restricted
Subsidiaries for such period to the extent that such depreciation,
amortization and other non-cash expenses were deducted in computing such
Consolidated Net Income, the foregoing being referred to as "Non-Cash
Charges;" plus
(5) other non-cash charges from employee compensation expenses arising from the
issuance of stock, options to purchase stock, deferrals and stock
appreciation rights, employer matching contributions pursuant to the ESOP
(excluding any such expenses which relate to options or rights which, at
the option of the holder thereof, may be settled in cash); plus
(6) restructuring and relocation expenses related to the Company's Harrisburg,
Pennsylvania facility closure incurred prior to the date of this Indenture
and not exceeding $12,900,000 in the aggregate; plus
(7) losses in respect of the Company's investment in Xxxxxxxx.xxx to the extent
recognized on or prior to the date of this Indenture and not exceeding
$6,500,000 in the aggregate; minus
(8) non-cash items increasing such Consolidated Net Income for such period,
other than the accrual of revenue in the ordinary course of business,
in each case, on a consolidated basis and determined in accordance with GAAP.
"Consolidated Current Assets" means, at any date, all amounts (other than
cash and Cash Equivalents) that would, in conformity with GAAP, be set forth
opposite the caption "total current assets" (or any like caption) on a
consolidated balance sheet of any Person and its Subsidiaries at such date.
"Consolidated Current Liabilities" means, at any date, all amounts that
would, in conformity with GAAP, be set forth opposite the caption "total current
liabilities" (or any like caption) on a consolidated balance sheet of any Person
and its Subsidiaries at such date, but excluding the current portion of any
Indebtedness of any Person and its Subsidiaries.
"Consolidated Indebtedness" means, with respect to any Person as of any
date of determination, the sum, without duplication, of:
(1) the total amount of Indebtedness of such Person and its Subsidiaries; plus
5
(2) the total amount of Indebtedness of any other Person, to the extent that
such Indebtedness has been Guaranteed by the referent Person or one or more
of its Subsidiaries; plus
(3) the aggregate liquidation value of all Disqualified Stock of such Person
and all preferred stock of Subsidiaries of such Person,
in each case, determined on a consolidated basis in accordance with GAAP.
"Consolidated Interest Expense" means, with respect to any Person for any
period, the sum of:
(1) the consolidated interest expense of such Person and its Subsidiaries for
such period, whether paid or accrued (including, without limitation,
amortization of original issue discount, non-cash interest payments, the
interest component of any deferred payment obligations (including the
Deferred Payment Obligation), the interest component of all payments
associated with Capital Lease Obligations, imputed interest with respect to
Attributable Debt, commissions, discounts and other fees and charges
incurred in respect of letter of credit or bankers' acceptance financings,
and net payments (if any) pursuant to Hedging Obligations); and
(2) the consolidated interest expense of such Person and its Subsidiaries that
was capitalized during such period; and
(3) any interest expense on Indebtedness of another Person that is guaranteed
by such Person or one of its Subsidiaries or secured by a Lien on assets of
such Person or one of its Subsidiaries (whether or not such Guarantee or
Lien is called upon); and
(4) the product of (a) all dividend payments on any series of preferred stock
of such Person or any of its Subsidiaries, times (b) a fraction, the
numerator of which is one and the denominator of which is one minus the
then current combined federal, state and local statutory tax rate of such
Person, expressed as a decimal, in each case, on a consolidated basis and
in accordance with GAAP.
"Consolidated Net Income" means, with respect to any specified Person for
any period, the aggregate of the Net Income of such Person and its Restricted
Subsidiaries for such period, on a consolidated basis, determined in accordance
with GAAP; provided that:
(1) the Net Income (but not loss) of any Unrestricted Subsidiary shall be
excluded whether or not distributed to the specified Person or a Wholly
Owned Restricted Subsidiary of the Person;
(2) the Net Income of any Restricted Subsidiary shall be excluded to the extent
that the declaration or payment of dividends or similar distributions by
that Restricted Subsidiary of that Net Income is not at the date of
determination permitted without any prior governmental approval (that has
not been obtained) or, directly or indirectly, by operation of the terms of
its charter or any agreement, instrument, judgment, decree, order, statute,
rule or governmental regulation applicable to that Restricted Subsidiary or
its stockholders;
(3) the Net Income of any Person acquired in a pooling of interests transaction
for any period prior to the date of such acquisition shall be excluded;
(4) the Net Income of any Person which is not a Subsidiary or is accounted for
by the equity method of accounting shall be excluded except to the extent
of the amount of dividends or distributions actually paid in cash by such
Person to the specified Person; and
6
(5) the cumulative effect of a change in accounting principles shall be
excluded.
"Consolidated Net Worth" means, with respect to any specified Person as
of any date, the sum of:
(1) the consolidated equity of the common stockholders of such Person and its
consolidated Subsidiaries as of such date; plus
(2) the respective amounts reported on such Person's balance sheet as of such
date with respect to any series of preferred stock (other than Disqualified
Stock) that by its terms is not entitled to the payment of dividends unless
such dividends may be declared and paid only out of net earnings in respect
of the year of such declaration and payment, but only to the extent of any
cash received by such Person upon issuance of such preferred stock.
"Consolidated Working Capital" means, at any date, the excess of
Consolidated Current Assets on such date over Consolidated Current Liabilities
on such date.
"Continuing Directors" means, as of any date of determination, any member
of the Board of Directors of the Company or Paperweight Development Corp., as
the case may be, who (i) was a member of such Board of Directors of such company
on the date of this Indenture or (ii) was nominated for election or elected to
such Board of Directors in accordance with the Security Holders Agreements, or,
if inapplicable, with the approval of a majority of the Continuing Directors who
were members of such Board at the time of such nomination or election.
"Corporate Trust Office of the Trustee" shall be at the address of the
Trustee specified in Section 13.02 hereof or such other address as to which the
Trustee may give notice to the Company.
"Credit Agreement" means that certain Credit Agreement, dated as of
November 8, 2001 by and among Paperweight Development Corp., the Company, the
several lenders party thereto, Bear, Xxxxxxx & Co. Inc., 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 La Salle Bank
National Association, as documentation agents, M&I Xxxxxxxx & Xxxxxx Bank, as
managing agent, Associated Bank, N.A. as co-agent and Toronto Dominion (Texas),
Inc., as administrative agent, providing for a senior secured credit facility
for up to $340.0 million consisting of a $75.0 million four-year revolving
credit facility, a $115.0 million four-year term loan A and a $150.0 million
five-year term loan B including any related notes, guarantees, collateral
documents, instruments and agreements executed in connection therewith, and in
each case as amended, modified, renewed, refunded, replaced or refinanced,
whether by the same lender or any other lender or group of lenders, from time to
time.
"Credit Enhancement" means the indemnity claim insurance policy issued by
Commerce and Industry Insurance Company, substantially in the form of Schedule
6.1.5.1 to the AWA Environmental Indemnity Agreement, issued on November 9, 2001
in favor of Arjo Xxxxxxx Appleton (Bermuda) Limited, a company limited by shares
organized under the Companies Act of 1981 of the Island of Bermuda.
"Custodian" means the Trustee, as custodian with respect to the Notes in
global form, or any successor entity thereto.
"Default" means any event that is, or with the passage of time or the
giving of notice or both would be, an Event of Default.
7
"Deferred Payment Obligation" means the obligation of Paperweight
Development Corp. to pay Arjo Xxxxxxx North American Investments Ltd.
approximately $321 million on the terms and conditions set forth in Schedule 2.3
of the Purchase Agreement by and among AWA, Arjo Xxxxxxx US Holdings Ltd., Arjo
Xxxxxxx North American Investments Ltd., Paperweight Development Corp. and New
Appleton LLC, dated as of July 5, 2001, excluding any refinancings thereof.
"Definitive Note" means a certificated Note registered in the name of the
Holder thereof and issued in accordance with Section 2.06 hereof, substantially
in the form of Exhibit A1 hereto except that such Note shall not bear the Global
Note Legend and shall not have the "Schedule of Exchanges of Interests in the
Global Note" attached thereto.
"Depositary" means, with respect to the Notes issuable or issued in whole
or in part in global form, the Person specified in Section 2.03 hereof as the
Depositary with respect to the Notes, and any and all successors thereto
appointed as depositary hereunder and having become such pursuant to the
applicable provision of this Indenture.
"Disposition" means, with respect to any property, any sale, lease, sale
and leaseback, assignment, conveyance, transfer or other disposition thereof.
"Disqualified Stock" means any Capital Stock that, by its terms (or by the
terms of any security into which it is convertible, or for which it is
exchangeable, in each case at the option of the holder of the Capital Stock), or
upon the happening of any event, matures or is mandatorily redeemable, pursuant
to a sinking fund obligation or otherwise, or redeemable at the option of the
holder of the Capital Stock, in whole or in part, on or prior to the date that
is 91 days after the date on which the Notes mature. Notwithstanding the
preceding sentence, any Capital Stock that would constitute Disqualified Stock
solely because the holders of the Capital Stock have the right to require the
Company to repurchase such Capital Stock upon the occurrence of a change of
control or an asset sale shall not constitute Disqualified Stock if the terms of
such Capital Stock provide that the Company may not repurchase or redeem any
such Capital Stock pursuant to such provisions unless such repurchase or
redemption complies with Section 4.07 hereof and any Capital Stock that would
constitute Disqualified Stock solely because the holders of that Capital Stock
have the right to require Paperweight Development Corp. or Paperweight
Development Corp. has the obligation to repurchase such Capital Stock pursuant
to the terms of the ESOP will not constitute "Disqualified Stock."
"Domestic Subsidiary" means any Subsidiary of the Company that was formed
under the laws of the United States or any state of the United States or the
District of Columbia or that guarantees or otherwise provides direct credit
support for any Indebtedness of the Company.
"Environmental Indemnity Agreements" means the Fox River AWA Environmental
Indemnity Agreement and the Fox River PDC Environmental Indemnity Agreement.
"Equity Interests" means Capital Stock and all warrants, options or other
rights to acquire Capital Stock (but excluding any debt security that is
convertible into, or exchangeable for, Capital Stock).
"ESOP" means the Appleton Papers Retirement Savings and Employee Stock
Ownership Plan.
"ESOP Documentation" means the collective reference to (a) the ESOP, (b)
the Trust and (c) all amendments, supplements or other modifications to any of
the foregoing, all schedules, exhibits and annexes thereto and all agreements
affecting the terms thereof or entered into in connection therewith.
8
"ESOP Related Distributions" means all payments, loans, advances,
distributions or dividends made by the Company to the Parent Entity to permit
the Parent Entity to satisfy its obligations to repurchase its common stock
pursuant to the ESOP Documentation.
"ESOP Stock Issuances" means with respect to any period, any issuance of
common stock by Paperweight Development Corp. to the ESOP during such period.
"Euroclear" means Euroclear Bank, S.A./N.V., as operator of the Euroclear
system.
"Excess Cash Flow" means for any fiscal year of Paperweight Development
Corp., the excess, if any, of (a) the sum, without duplication, of (i)
Consolidated Net Income for such fiscal year, (ii) the amount of all Non-Cash
Charges (including depreciation and amortization) deducted in arriving at such
Consolidated Net Income, (iii) decreases in Consolidated Working Capital for
such fiscal year, and (iv) the aggregate net amount of non-cash loss on the
Disposition of property by the Company and its Subsidiaries during such fiscal
year (other than sales of inventory in the ordinary course of business), to the
extent deducted in arriving at such Consolidated Net Income over (b) the sum,
without duplication, of (i) the amount of all non-cash credits included in
arriving at such Consolidated Net Income, (ii) the aggregate amount actually
paid by the Company and its Subsidiaries in cash during such fiscal year on
account of Capital Expenditures (excluding the principal amount of Indebtedness
incurred to finance such expenditures (but including repayments of any such
Indebtedness incurred during such period or any prior period and any such
expenditures financed with the proceeds of any Reinvestment Deferred Amount)),
(iii) the aggregate amount of all prepayments of revolving and swingline loans
under the Credit Agreement during such fiscal year to the extent accompanying
permanent optional reductions of the revolving commitments are made thereunder
and all optional prepayments of the term loans under the Credit Agreement during
such fiscal year, (iv) the aggregate amount of all regularly scheduled principal
payments of all Indebtedness for money borrowed (including the term loans under
the Credit Agreement) of the Company and its Subsidiaries made during such
fiscal year (other than in respect of any revolving credit facility to the
extent there is not an equivalent permanent reduction in commitments
thereunder), (v) increases in Consolidated Working Capital for such fiscal year,
and (vi) the aggregate net amount of non-cash gain on the Disposition of
property by the Company and its Subsidiaries during such fiscal year (other than
sales of inventory in the ordinary course of business), to the extent included
in arriving at such Consolidated Net Income and (vii) the excess (if any) of (A)
ESOP Related Distributions during such fiscal year, over (B) Available ESOP
Contributions during such fiscal year.
"Excess Cash Flow Amount" means 75% of Excess Cash Flow.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Exchange Notes" means the Notes issued in the Exchange Offer pursuant to
Section 2.06(f) hereof.
"Exchange Offer" has the meaning set forth in the Registration Rights
Agreement.
"Exchange Offer Registration Statement" has the meaning set forth in the
Registration Rights Agreement.
"Excluded Restricted Subsidiaries" means Appleton Papers Canada Ltd. and
Appleton Papers de Mexico, S.A. de C.V.
"Existing Indebtedness" means up to $13.3 million in aggregate principal
amount of Indebtedness of the Company and its Subsidiaries (other than
Indebtedness under the Credit Agreement
9
but including $8.7 million pursuant to the IRB and $4.6 million of Capital Lease
Obligations), until such amounts are repaid.
"Fox River AWA Environmental Indemnity Agreement" means the Fox River AWA
Environmental Indemnity Agreement by and among Paperweight Development Corp.,
New Appleton, LLC, the Company and AWA dated as of November 9, 2001, as amended,
modified or supplemented from time to time.
"Fox River Indemnity Arrangements" means the collective reference to the
Fox River PDC Environmental Indemnity Agreement, the Fox River AWA Environmental
Indemnity Agreement, the Credit Enhancement, the Fox River Security Agreement
and the Bermuda Company Agreements.
"Fox River PDC Environmental Indemnity Agreement" means the Fox River PDC
Environmental Indemnity Agreement by and among Paperweight Development Corp.,
New Appleton, LLC and the Company dated as of November 9, 2001, as amended,
modified or supplemented from time to time.
"Fox River Security Agreement" means the Security Agreement, substantially
in the form attached as Exhibit B to the Fox River AWA Environmental Indemnity
Agreement, by and among the Company, Paperweight Development Corp., New
Appleton, LLC and AWA.
"GAAP" means generally accepted accounting principles set forth in the
opinions and pronouncements of the Accounting Principles Board of the American
Institute of Certified Public Accountants and statements and pronouncements of
the Financial Accounting Standards Board or in such other statements by such
other entity as have been approved by a significant segment of the accounting
profession, which are in effect from time to time.
"Global Notes" means, individually and collectively, each of the Restricted
Global Notes and the Unrestricted Global Notes, substantially in the form of
Exhibit A1 hereto issued in accordance with Section 2.01, 2.06(b)(iv),
2.06(d)(ii) or 2.06(f) hereof.
"Global Note Legend" means the legend set forth in Section 2.06(g)(ii),
which is required to be placed on all Global Notes issued under this Indenture.
"Government Securities" means direct obligations (or certificates
representing an ownership interest in such obligations) of the United States of
America (including any agency or instrumentality thereof) for the payment of
which the full faith and credit of the United States of America is pledged and
which are not callable or redeemable at the issuer's option.
"Guarantee" means a guarantee other than by endorsement of negotiable
instruments for collection in the ordinary course of business, direct or
indirect, in any manner including, without limitation, by way of a pledge of
assets or through letters of credit or reimbursement agreements in respect
thereof, of all or any part of any Indebtedness.
"Guarantors" means each of:
(1) the Parent Entity;
(2) the Company's Restricted Subsidiaries, other than the Excluded Restricted
Subsidiaries, on the date of this Indenture; and
10
(3) any other subsidiary that executes a Subsidiary Guarantee in accordance
with the provisions of this Indenture,
and their respective successors and assigns provided that any Person
constituting a Guarantor as described above shall cease to constitute a
Guarantor if its respective Guarantee is released in accordance with this
Indenture.
"Hedging Obligations" means, with respect to any specified Person, the
obligations of such Person under:
(1) interest rate swap agreements, interest rate cap agreements and interest
rate collar agreements;
(2) other agreements or arrangements designed to protect such Person against
fluctuations in interest rates; and
(3) agreements or arrangements designed to protect such Person against currency
fluctuations or fluctuations in the cost of raw materials,
in each case, in amounts reasonably related to such Person's business and
operations and not for speculative purposes.
"Holder" means a Person in whose name a Note is registered.
"Indebtedness" means, with respect to any specified Person, any
indebtedness of such Person, whether or not contingent:
(1) in respect of borrowed money;
(2) evidenced by bonds, notes, debentures or similar instruments or letters of
credit (or reimbursement agreements in respect thereof);
(3) in respect of banker's acceptances;
(4) representing Capital Lease Obligations;
(5) representing the balance deferred and unpaid of the purchase price of any
property, except any such balance that constitutes an accrued expense or
trade payable provided that the Deferred Payment Obligation shall be
excluded from the calculation of Indebtedness with respect to Paperweight
Development Corp.; or
(6) representing any Hedging Obligations,
if and to the extent any of the preceding items (other than letters of credit
and Hedging Obligations) would appear as a liability upon a balance sheet of the
specified Person prepared in accordance with GAAP. In addition, the term
"Indebtedness" includes all Indebtedness of others secured by a Lien on any
asset of the specified Person (whether or not such Indebtedness is assumed by
the specified Person) and, to the extent not otherwise included, the Guarantee
by the specified Person of any indebtedness of any other Person.
11
The amount of any Indebtedness outstanding as of any date shall be:
(1) the accreted value of the Indebtedness, in the case of any Indebtedness
issued with original issue discount; and
(2) the principal amount of the Indebtedness, together with any interest on the
Indebtedness that is more than 30 days past due, in the case of any other
Indebtedness.
"Indenture" means this Indenture, as amended, modified or supplemented from
time to time.
"Independent Director" means a director that would qualify as an
independent director for purposes of a company's audit committee pursuant to
Nasdaq Stock Market Listing Requirements; provided however, that in lieu of
having the applicable financial expertise required by such requirements, such
director may have operational business expertise.
"Indirect Participant" means a Person who holds a beneficial interest in a
Global Note through a Participant.
"Institutional Accredited Investor" means an institution that is an
"accredited investor" as defined in Rule 501(a)(1), (2), (3) or (7) under the
Securities Act, who are not also QIBs.
"Intercompany Acquisition Loan" means the loan by the Company to
Paperweight Development Corp. in the aggregate of $546.0 million using the
proceeds of the Senior Subordinated Note due 2008 issued to AWA on November 9,
2001, $265.0 million of term loans under the Credit Agreement and $31.0 million
of the Company's cash available immediately prior to November 9, 2001.
"Investments" means, with respect to any Person, all direct or indirect
investments by such Person in other Persons (including Affiliates) in the forms
of loans (including Guarantees or other obligations), advances or capital
contributions (excluding commission, travel and similar advances to directors,
officers and employees made in the ordinary course of business), purchases or
other acquisitions for consideration of Indebtedness, Equity Interests or other
securities, together with all items that are or would be classified as
investments on a balance sheet prepared in accordance with GAAP. If the Company
or any Subsidiary of the Company sells or otherwise disposes of any Equity
Interests of any direct or indirect Subsidiary of the Company such that, after
giving effect to any such sale or disposition, such Person is no longer a
Subsidiary of the Company, the Company shall be deemed to have made an
Investment on the date of any such sale or disposition equal to the fair market
value of the Equity Interests of such Subsidiary not sold or disposed of in an
amount determined as provided in the final paragraph of Section 4.07 hereof. The
acquisition by the Company or any Subsidiary of the Company of a Person that
holds an Investment in a third Person shall be deemed to be an Investment by the
Company or such Subsidiary in such third Person in an amount equal to the fair
market value of the Investment held by the acquired Person in such third Person
in an amount determined as provided in the final paragraph of Section 4.07
hereof.
"IRB" means the unsecured variable rate industrial revenue bonds due 2013
and 2027 existing on the date of this Indenture.
"Legal Holiday" means a Saturday, a Sunday or a day on which banking
institutions in the City of New York or at a place of payment are authorized by
law, regulation or executive order to remain closed. If a payment date is a
Legal Holiday at a place of payment, payment may be made at that place on the
next succeeding day that is not a Legal Holiday, and no interest shall accrue on
such payment for the intervening period.
12
"Letter of Transmittal" means the letter of transmittal to be prepared by
the Company and sent to all Holders of the Notes for use by such Holders in
connection with the Exchange Offer.
"Leverage Ratio" means, as of any date of determination, the ratio of (a)
the Consolidated Indebtedness of Paperweight Development Corp., excluding the
Deferred Payment Obligation, as of such date to (b) the Consolidated Cash Flow
of Paperweight Development Corp. for the most recent four full fiscal quarters
ending immediately prior to such date for which internal financial statements
are available, determined on a pro forma basis after giving effect to all
acquisitions or Dispositions of assets made by the Parent Entity, the Company or
its Restricted Subsidiaries from the beginning of such four quarter period
through and including such date of determination (including any related
financing transactions) as if such acquisitions and Dispositions had occurred at
the beginning of such four quarter period. In addition, for purposes of making
the computation referred to above, (i) acquisitions that have been made by the
Parent Entity, the Company or its Restricted Subsidiaries, including through
mergers or consolidations and including any related financing transactions,
during the four-quarter reference period or subsequent to such reference period
and on or prior to the calculation date shall be deemed to have occurred on the
first day of the four quarter reference period and Consolidated Cash Flow for
such reference period shall be calculated without giving effect to clause (3) of
the proviso set forth in the definition of Consolidated Net Income, and (ii) the
Consolidated Cash Flow attributable to discontinued operations, as determined in
accordance with GAAP, and operations or businesses disposed of prior to the
calculation date, shall be excluded.
"Lien" means, with respect to any asset, any mortgage, lien, pledge,
charge, security interest or encumbrance of any kind in respect of such asset,
whether or not filed, recorded or otherwise perfected under applicable law,
including any conditional sale or other title retention agreement, any lease in
the nature thereof, any option or other agreement to sell or give a security
interest in and any filing of or agreement to give any financing statement under
the Uniform Commercial Code (or equivalent statutes) of any jurisdiction.
"Liquidated Damages" means all liquidated damages then owing pursuant to
Section 5 of the Registration Rights Agreement.
"Net Income" means, with respect to any specified Person, the net income
(loss) of such Person, determined in accordance with GAAP and before any
reduction in respect of preferred stock dividends, excluding, however (i) any
gain (but not loss), together with any related provision for taxes on such gain
(but not loss), realized in connection with: (a) any Asset Sale; or (b) the
disposition of any securities by such Person or any of its Restricted
Subsidiaries or the extinguishment of any Indebtedness of such Person or any of
its Restricted Subsidiaries and (ii) any extraordinary gain (but not loss),
together with any related provision for taxes on such extraordinary gain (but
not loss).
"Net Proceeds" means the aggregate cash proceeds received by the Company or
any of its Restricted Subsidiaries or the Parent Entity in respect of
any Asset Sale (including, without limitation, any cash received upon the sale
or other disposition of any non-cash consideration received in any Asset Sale),
net of (i) the direct costs relating to such Asset Sale, including, without
limitation, legal, accounting and investment banking fees, and sales
commissions, and any relocation expenses incurred as a result of the Asset Sale,
(ii) payments required to be made to holders of minority interests in Restricted
Subsidiaries as a result of such Asset Sale, (iii) taxes paid or payable as a
result of the Asset Sale, in each case, after taking into account any available
tax credits or deductions and any tax sharing arrangements and (iv) any reserve
for adjustment in respect of the sale price of such asset or assets established
in accordance with GAAP.
13
"Non-Cash Charges" shall have the meaning set forth in clause (4) under the
definition of "Consolidated Cash Flow."
"Non-Recourse Debt" means Indebtedness:
(1) as to which neither the Company nor any of its Restricted Subsidiaries (a)
provides credit support of any kind (including any undertaking, agreement
or instrument that would constitute Indebtedness), (b) is directly or
indirectly liable as a guarantor or otherwise, or (c) constitutes the
lender;
(2) no default with respect to which (including any rights that the holders of
the Indebtedness may have to take enforcement action against an
Unrestricted Subsidiary) would permit upon notice, lapse of time or both
any holder of any other Indebtedness (other than the Notes) of the Company
or any of its Restricted Subsidiaries to declare a default on such other
Indebtedness or cause the payment of the Indebtedness to be accelerated or
payable prior to its stated maturity; and
(3) as to which the lenders have been notified in writing that they will not
have any recourse to the stock or assets of the Company or any of its
Restricted Subsidiaries.
"Non-U.S. Person" means a Person who is not a U.S. Person.
"Notes" has the meaning assigned to it in the preamble to this Indenture.
The Notes shall be treated as a single class for all purposes under this
Indenture.
"Obligations" means any principal, interest, penalties, fees,
indemnifications, reimbursements, damages and other liabilities payable under
the documentation governing any Indebtedness.
"Offering" means the offering of the Notes by the Company.
"Officer" means, with respect to any Person, the Chairman of the Board, the
Chief Executive Officer, the President, the Chief Operating Officer, the Chief
Financial Officer, the Treasurer, any Assistant Treasurer, the Controller, the
Secretary, any Assistant Secretary or any Vice-President of such Person.
"Officers' Certificate" means a certificate signed on behalf of the Company
by two Officers of the Company, one of whom must be the principal executive
officer, the principal financial officer, the treasurer or the principal
accounting officer of the Company, that meets the requirements of Section 13.05
hereof.
"Opinion of Counsel" means an opinion from legal counsel who is reasonably
acceptable to the Trustee, that meets the requirements of Section 13.05 hereof.
Such counsel may be an employee of or counsel to the Company, any Subsidiary of
the Company or the Trustee.
"Parent Entity" means Paperweight Development Corp. and any future direct
or indirect parent of the Company.
"Parent Guarantee" means a Guarantee of the Notes by the Parent Entity or
any future Parent Entity that executes a supplemental Indenture.
"Parent Guarantors" means Paperweight Development Corp. and any future
Parent Entity that executes a Parent Guarantee in accordance with the terms of
this Indenture.
14
"Participant" means, with respect to the Depositary, Euroclear or
Clearstream, a Person who has an account with the Depositary, Euroclear or
Clearstream, respectively (and, with respect to DTC, shall include Euroclear and
Clearstream).
"Permitted Business" means any business engaged in by the Company or its
Restricted Subsidiaries as of the date of this Indenture or any business
reasonably related, ancillary or complementary thereto.
"Permitted Investments" means:
(1) any Investment in the Company or in a Restricted Subsidiary that is a
Guarantor;
(2) any Investment in Cash Equivalents;
(3) any Investment existing on the date of this Indenture;
(4) any Investment by the Company or any Restricted Subsidiary in a Person, if
as a result of such Investment:
(a) such Person becomes a Restricted Subsidiary of the Company and a
Guarantor; or
(b) such Person is merged, consolidated or amalgamated with or into,
or transfers or conveys substantially all of its assets to, or is
liquidated into, the Company or a Restricted Subsidiary that is a
Guarantor;
(5) any Investment made as a result of the receipt of non-cash consideration
from an Asset Sale that was made pursuant to and in compliance with Section
4.10 hereof;
(6) any Investment solely in exchange for the issuance of Equity Interests
(other than Disqualified Stock) of Paperweight Development Corp.;
(7) any Investments received in compromise of obligations of such persons
incurred in the ordinary course of trade creditors or customers that were
incurred in the ordinary course of business, including pursuant to any plan
of reorganization or similar arrangement upon the bankruptcy or insolvency
of any trade creditor or customer;
(8) Hedging Obligations;
(9) other Investments in any Person having an aggregate fair market value
(measured on the date each such Investment was made and without giving
effect to subsequent changes in value), when taken together with all other
Investments made pursuant to this clause (9) that are at the time
outstanding not to exceed $5.0 million;
(10) loans and advances to employees and officers of the Company, the Restricted
Subsidiaries and the Parent Entity (or guarantees of third party loans to
such persons) in the ordinary course of business for bona fide business
purposes not in excess of $2.0 million at any time outstanding; and
(11) extensions of trade credit (including accounts receivable) by the Company
and its Restricted Subsidiaries on commercially reasonable terms in the
ordinary course of business.
15
"Permitted Liens" means:
(1) Liens of the Company and any Guarantor that are securing Indebtedness and
other Obligations under the Credit Agreement or that are securing Senior
Debt that was permitted by the terms of this Indenture to be incurred;
(2) Liens in favor of the Company or the Guarantors;
(3) Liens on property of a Person existing at the time such Person is merged
with or into or consolidated with the Company or any Subsidiary of the
Company; provided that such Liens were in existence prior to the
contemplation of such merger or consolidation and do not extend to any
assets other than those of the Person merged into or consolidated with the
Company or the Subsidiary;
(4) Liens on property existing at the time of acquisition of the property by
the Company or any Subsidiary of the Company, provided that such Liens were
in existence prior to the contemplation of such acquisition;
(5) Liens to secure Indebtedness (including Capital Lease Obligations)
permitted by clause (iv) of the second paragraph of Section 4.09 hereof
covering only the assets acquired with such Indebtedness;
(6) Liens existing on the date of this Indenture and any extensions or renewals
thereof otherwise permitted by the terms of this Indenture;
(7) Liens for taxes, assessments or governmental charges or claims that are not
yet delinquent or that are being contested in good faith by appropriate
proceedings promptly instituted and diligently concluded, provided that any
reserve or other appropriate provision as is required in conformity with
GAAP has been made therefor;
(8) Liens incurred in the ordinary course of business of the Company or any
Subsidiary of the Company with respect to Obligations that do not exceed
$10.0 million at any one time outstanding;
(9) Liens on assets of Unrestricted Subsidiaries that secure Non-Recourse Debt
of Unrestricted Subsidiaries;
(10) Liens on rights of "Recovery" in favor of AWA pursuant to and as defined in
the Fox River Indemnity Arrangements;
(11) statutory Liens of landlords and Liens of carriers, warehouseman,
mechanics, suppliers, materialmen, repairmen and other Liens imposed by law
incurred in the ordinary course of business for sums not yet delinquent or
being contested in good faith, if such reserve or other appropriate
provisions, if any, shall be required by GAAP shall have been made in
respect thereof;
(12) Liens to secure the performance of statutory obligations, surety or appeal
bonds, performance bonds or other obligations of a like nature incurred in
the ordinary course of business; and
(13) Liens incurred or deposits made in the ordinary course of business in
connection with workers' compensation, unemployment insurance and other
types of social security.
16
"Permitted Refinancing Indebtedness" means any Indebtedness of the Company
or any of its Restricted Subsidiaries issued in exchange for, or the net
proceeds of which are used to extend, refinance, renew, replace, defease or
refund other Indebtedness of the Company or any of its Restricted Subsidiaries
(other than intercompany Indebtedness) or any Indebtedness of the Parent Entity
in the form of Guarantees of the Credit Agreement; provided that:
(1) the principal amount (or accreted value, if applicable) of such Permitted
Refinancing Indebtedness does not exceed the principal amount (or accreted
value, if applicable) of the Indebtedness extended, refinanced, renewed,
replaced, defeased or refunded (plus all accrued interest on the
Indebtedness and the amount of all expenses and premiums incurred in
connection therewith);
(2) such Permitted Refinancing Indebtedness has a final maturity date later
than the final maturity date of, and has a Weighted Average Life to
Maturity equal to or greater than the Weighted Average Life to Maturity of,
the Indebtedness being extended, refinanced, renewed, replaced, defeased or
refunded;
(3) if the Indebtedness being extended, refinanced, renewed, replaced, defeased
or refunded is subordinated in right of payment to the Notes, such
Permitted Refinancing Indebtedness has a final maturity date later than the
final maturity date of, and is subordinated in right of payment to, the
Notes on terms at least as favorable to the Holders of Notes as those
contained in the documentation governing the Indebtedness being extended,
refinanced, renewed, replaced, defeased or refunded; and
(4) such Indebtedness is incurred either by the Company or by the Restricted
Subsidiary who is the obligor on the Indebtedness being extended,
refinanced, renewed, replaced, defeased or refunded.
"Person" means any individual, corporation, partnership, joint venture,
association, joint-stock company, trust, unincorporated organization, limited
liability company or government or other entity.
"Private Placement Legend" means the legend set forth in Section 2.06(g)(i)
to be placed on all Notes issued under this Indenture except where otherwise
permitted by the provisions of this Indenture.
"QIB" means a "qualified institutional buyer" as defined in Rule 144A.
"Recovery Event" means any settlement of or payment in respect of any
property or casualty insurance claim or any condemnation proceeding relating to
any asset of any Person.
"Registration Rights Agreement" means the Registration Rights Agreement,
dated as of the date of this Indenture, by and among the Company and the other
parties named on the signature pages thereof, as such agreement may be amended,
modified or supplemented from time to time.
"Regulation S" means Regulation S promulgated under the Securities Act.
"Regulation S Global Note" means a Regulation S Temporary Global Note or
Regulation S Permanent Global Note, as appropriate.
"Regulation S Permanent Global Note" means a permanent global Note in the
form of Exhibit A1 hereto bearing the Global Note Legend and the Private
Placement Legend and deposited with or on behalf of and registered in the name
of the Depositary or its nominee, issued in a denomination equal to
17
the outstanding principal amount of the Regulation S Temporary Global Note upon
expiration of the Restricted Period.
"Regulation S Temporary Global Note" means a temporary global Note in the
form of Exhibit A2 hereto bearing the Private Placement Legend and deposited
with or on behalf of and registered in the name of the Depositary or its
nominee, issued in a denomination equal to the outstanding principal amount of
the Notes initially sold in reliance on Rule 903 of Regulation S.
"Reinvestment Deferred Amount" means with respect to any Reinvestment
Event, the aggregate net cash proceeds received by a Person in connection
therewith that are not applied to prepay term loans under the Credit Agreement
or reduce the revolving commitments under the Credit Agreement as a result of
the delivery of a Reinvestment Notice.
"Reinvestment Event" means any Asset Sale or Recovery Event in respect of
which the Company has delivered a Reinvestment Notice.
"Reinvestment Notice" means a written notice executed by an officer stating
that no Event of Default has occurred and is continuing and that the Company
(directly or indirectly through a Subsidiary) intends and expects to use all or
a specified portion of the net cash proceeds of an Asset Sale or Recovery Event
to make a capital expenditure or acquire or make capitalized repairs to fixed or
capital assets that are used or useful in a Permitted Business.
"Relationship Agreement" means the Agreement dated as of November 9, 2001
by and among AWA, Arjo Xxxxxxx (Bermuda) Holdings Limited, Paperweight
Development Corp., PDC Capital Corporation and Arjo Xxxxxxx Appleton (Bermuda)
Limited.
"Responsible Officer," when used with respect to the Trustee, means any
officer within the Corporate Trust Administration department of the Trustee (or
any successor group of the Trustee) or any other officer of the Trustee
customarily performing functions similar to those performed by any of the above
designated officers and also means, with respect to a particular corporate trust
matter, any other officer to whom such matter is referred because of his
knowledge of and familiarity with the particular subject.
"Restricted Definitive Note" means a Definitive Note bearing the Private
Placement Legend.
"Restricted Global Note" means a Global Note bearing the Private Placement
Legend.
"Restricted Investment" means an Investment other than a Permitted
Investment.
"Restricted Period" means the 40-day restricted period as defined in
Regulation S.
"Restricted Subsidiary" of a Person means any Subsidiary of the referent
Person that is not an Unrestricted Subsidiary.
"Rule 144" means Rule 144 promulgated under the Securities Act.
"Rule 144A" means Rule 144A promulgated under the Securities Act.
"Rule 903" means Rule 903 promulgated under the Securities Act.
"Rule 904" means Rule 904 promulgated the Securities Act.
18
"SEC" means the Securities and Exchange Commission.
"Securities Act" means the Securities Act of 1933, as amended.
"Security Holders Agreements" means, collectively, the Security Holders
Agreement by and between Paperweight Development Corp. and the Trust dated as of
November 9, 2001 and the Security Holders Agreement by and between Appleton
Papers and the Trust dated as of November 9, 2001.
"Shelf Registration Statement" means the Shelf Registration Statement as
defined in the Registration Rights Agreement.
"Significant Subsidiary" means any Subsidiary that would be a "significant
subsidiary" as defined in Article 1, Rule 1-02 of Regulation S-X, promulgated
pursuant to the Securities Act, as such Regulation is in effect on the date of
this Indenture.
"Stated Maturity" means, with respect to any installment of interest or
principal on any series of Indebtedness, the date on which the payment of
interest or principal was scheduled to be paid in the original documentation
governing such Indebtedness, and shall not include any contingent obligations to
repay, redeem or repurchase any such interest or principal prior to the date
originally scheduled for the payment thereof.
"Subsidiary" means, with respect to any specified Person:
(1) any corporation, association or other business entity of which more than
50% of the total voting power of shares of Capital Stock entitled (without
regard to the occurrence of any contingency) to vote in the election of
directors, managers or trustees of the corporation, association or other
business entity is at the time owned or controlled, directly or indirectly,
by that Person or one or more of the other Subsidiaries of that Person (or
a combination thereof); and
(2) any partnership (a) the sole general partner or the managing general
partner of which is such Person or a Subsidiary of such Person or (b) the
only general partners of which are that Person or one or more Subsidiaries
of that Person (or any combination thereof).
"Subsidiary Guarantee" means the Guarantee of the Notes by each Subsidiary
Guarantor.
"Subsidiary Guarantors" means any Subsidiary of the Company that is a
Guarantor of the Notes and any future Subsidiary of the Company that executes a
Subsidiary Guarantee in accordance with the terms of this Indenture.
"TIA" means the Trust Indenture Act of 1939 (15 U.S.C. (S)(S) 77aaa-77bbbb)
as in effect on the date on which this Indenture is qualified under the TIA,
except as provided by Section 9.03 hereof.
"Trust" means the Appleton Papers Inc. Employee Stock Ownership Trust
adopted July 19, 2001.
"Trustee" means the party named as such above until a successor replaces it
in accordance with the applicable provisions of this Indenture and thereafter
means the successor serving hereunder.
"Unrestricted Definitive Note" means one or more Definitive Notes that do
not bear and are not required to bear the Private Placement Legend.
19
"Unrestricted Global Note" means a permanent Global Note substantially in
the form of Exhibit A1 attached hereto that bears the Global Note Legend and
that has the "Schedule of Exchanges of Interests in the Global Note" attached
thereto, and that is deposited with or on behalf of and registered in the name
of the Depositary, representing a series of Notes that do not bear the Private
Placement Legend.
"Unrestricted Subsidiary" means Appleton Recycled Fibers, Inc. and any
Subsidiary of the Company (other than Appleton Papers Canada Ltd. and Appleton
Papers de Mexico, S.A. de C.V. or any successor to either of them) that is
designated by the Board of Directors of the Company as an Unrestricted
Subsidiary pursuant to a board resolution, but only to the extent that such
Subsidiary:
(1) has no Indebtedness other than Non-Recourse Debt;
(2) is not party to any agreement, contract, arrangement or understanding with
the Company or any Restricted Subsidiary of the Company unless the terms of
any such agreement, contract, arrangement or understanding are no less
favorable to the Company or such Restricted Subsidiary than those that
might be obtained at the time from Persons who are not Affiliates of the
Company;
(3) is a Person with respect to which neither the Company nor any of its
Restricted Subsidiaries has any direct or indirect obligation (a) to
subscribe for additional Equity Interests or (b) to maintain or preserve
such Person's financial condition or to cause such Person to achieve any
specified levels of operating results;
(4) has not guaranteed or otherwise directly or indirectly provided credit
support for any Indebtedness of the Company or any of its Restricted
Subsidiaries; and
(5) has at least one director on its Board of Directors that is not a director
or executive officer of the Company or any of its Restricted Subsidiaries
and has at least one executive officer that is not a director or executive
officer of the Company or any of its Restricted Subsidiaries.
Any designation of a Subsidiary of the Company as an Unrestricted
Subsidiary shall be evidenced to the Trustee by filing with the Trustee a
certified copy of the Board Resolution giving effect to such designation and an
officers' certificate certifying that such designation complied with the
preceding conditions and was permitted by Section 4.07 hereof. If, at any time,
any Unrestricted Subsidiary would fail to meet the preceding requirements as an
Unrestricted Subsidiary, it shall thereafter cease to be an Unrestricted
Subsidiary for purposes of this Indenture and any Indebtedness of such
Subsidiary shall be deemed to be incurred by a Restricted Subsidiary of the
Company as of such date and, if such Indebtedness is not permitted to be
incurred as of such date under Section 4.09 hereof, the Company shall be in
default of such covenant. The Board of Directors of the Company may at any time
designate any Unrestricted Subsidiary to be a Restricted Subsidiary; provided
that such designation shall be deemed to be an incurrence of Indebtedness by a
Restricted Subsidiary of the Company of any outstanding Indebtedness of such
Unrestricted Subsidiary and such designation shall only be permitted if (1) such
Indebtedness is permitted under Section 4.09 hereof, calculated on a pro forma
basis as if such designation had occurred at the beginning of the four-quarter
reference period; and (2) no Default or Event of Default would be in existence
following such designation.
"U.S. Person" means a U.S. person as defined in Rule 902(o) under the
Securities Act.
"Voting Stock" of any Person as of any date means the Capital Stock of such
Person that is at the time entitled to vote in the election of the Board of
Directors of such Person.
20
"Weighted Average Life to Maturity" means, when applied to any Indebtedness
at any date, the number of years obtained by dividing:
(1) the sum of the products obtained by multiplying (a) the amount of each then
remaining installment, sinking fund, serial maturity or other required
payments of principal, including payment at final maturity, in respect of
the Indebtedness, by (b) the number of years (calculated to the nearest
one-twelfth) that will elapse between such date and the making of such
payment; by
(2) the then outstanding principal amount of such Indebtedness.
"Wholly Owned Restricted Subsidiary" of any specified Person means a
Restricted Subsidiary of such Person all of the outstanding Capital Stock or
other ownership interests of which (other than directors' qualifying shares)
will at the time be owned by such Person or by one or more Wholly Owned
Restricted Subsidiaries of such Person and one or more Wholly Owned Subsidiaries
of such Person.
Section 1.02. Other Definitions.
Defined in
Term Section
---- -------
"Affiliate Transaction"..................................... 4.11
"Asset Sale Offer".......................................... 3.09
"Authentication Order"...................................... 2.02
"Change of Control Offer"................................... 4.15
"Change of Control Payment"................................. 4.15
"Change of Control Payment Date"............................ 4.15
"Covenant Defeasance"....................................... 8.03
"Designated Senior Debt".................................... 10.02
"DPO Payment Blockage Notice"............................... 6.12
"DTC"....................................................... 2.03
"Economic Terms"............................................ 4.17
"Event of Default".......................................... 6.01
"Excess Cash Flow Offer".................................... 4.23
"Excess Cash Flow Offer Period"............................. 4.23
"Excess Cash Flow Payment".................................. 4.23
"Excess Cash Flow Payment Date"............................. 4.23
"Excess Proceeds"........................................... 4.10
"incur"..................................................... 4.09
"Legal Defeasance".......................................... 8.02
"Offer Amount".............................................. 3.09
"Offer Period".............................................. 3.09
"Paying Agent".............................................. 2.03
"Payment Blockage Notice"................................... 10.04
"Payment Default"........................................... 6.01
"Permitted Debt"............................................ 4.09
"Permitted Junior Securities"............................... 10.02
"Purchase Date"............................................. 3.09
"Registrar"................................................. 2.03
"Representative"............................................ 10.02
"Restricted Payments"....................................... 4.07
"Senior Debt"............................................... 10.02
21
Section 1.03. Incorporation by Reference of Trust Indenture Act.
Whenever this Indenture refers to a provision of the TIA, the provision is
incorporated by reference in and made a part of this Indenture.
The following TIA terms used in this Indenture have the following meanings:
"indenture securities" means the Notes;
"indenture security Holder" means a Holder of a Note;
"indenture to be qualified" means this Indenture;
"indenture trustee" or "institutional trustee" means the Trustee; and
"obligor" on the Notes and the Parent Guarantee and Subsidiary Guarantee
means the Company and the Guarantors, respectively, and any successor obligor
upon the Notes and the Parent Guarantee and Subsidiary Guarantee, respectively.
All other terms used in this Indenture that are defined by the TIA, defined
by TIA reference to another statute or defined by SEC rule under the TIA have
the meanings so assigned to them.
Section 1.04. Rules of Construction.
Unless the context otherwise requires:
(a) a term has the meaning assigned to it;
(b) an accounting term not otherwise defined has the meaning assigned
to it in accordance with GAAP;
(c) "or" is not exclusive;
(d) words in the singular include the plural, and in the plural
include the singular;
(e) provisions apply to successive events and transactions; and
(f) references to sections of or rules under the Securities Act shall
be deemed to include substitute, replacement of successor sections or rules
adopted by the SEC from time to time.
ARTICLE 2.
THE NOTES
Section 2.01. Form and Dating.
(a) General. The Notes and the Trustee's certificate of
authentication shall be substantially in the form of Exhibit A1 and A2 hereto.
The Notes may have notations, legends or endorsements required by law, stock
exchange rule or usage. Each Note shall be dated the date of its authentication.
The Notes shall be in denominations of $1,000 and integral multiples thereof.
22
The terms and provisions contained in the Notes shall constitute, and are
hereby expressly made, a part of this Indenture and the Company, the Guarantors
and the Trustee, by their execution and delivery of this Indenture, expressly
agree to such terms and provisions and to be bound thereby. However, to the
extent any provision of any Note conflicts with the express provisions of this
Indenture, the provisions of this Indenture shall govern and be controlling.
(b) Global Notes. Notes issued in global form shall be substantially in the
form of Exhibit A1 or A2 attached hereto (including the Global Note Legend
thereon and the "Schedule of Exchanges of Interests in the Global Note" attached
thereto) which shall be deposited on behalf of the purchasers of the Notes
represented thereby with the Trustee, at its St. Xxxx, Minnesota office, as
custodian for the Depositary, and registered in the name of the Depositary or
the nominee of the Depositary for the accounts of designated agents holding on
behalf of Euroclear or Clearstream, duly executed by the Company and
authenticated by the Trustee as hereinafter provided. Notes issued in definitive
form shall be substantially in the form of Exhibit A1 attached hereto (but
without the Global Note Legend thereon and without the "Schedule of Exchanges of
Interests in the Global Note" attached thereto). Each Global Note shall
represent such of the outstanding Notes as shall be specified therein and each
shall provide that it shall represent the aggregate principal amount of
outstanding Notes from time to time endorsed thereon and that the aggregate
principal amount of outstanding Notes represented thereby may from time to time
be reduced or increased, as appropriate, to reflect exchanges and redemptions.
Any endorsement of a Global Note to reflect the amount of any increase or
decrease in the aggregate principal amount of outstanding Notes represented
thereby shall be made by the Trustee or the Custodian, at the direction of the
Trustee, in accordance with instructions given by the Holder thereof as required
by Section 2.06 hereof.
(c) Temporary Global Notes. Notes offered and sold in reliance on
Regulation S shall be issued initially in the form of the Regulation S Temporary
Global Note, which shall be deposited on behalf of the purchasers of the Notes
represented thereby with the Trustee, at its New York office, as custodian for
the Depositary, and registered in the name of the Depositary or the nominee of
the Depositary for the accounts of designated agents holding on behalf of
Euroclear or Clearstream, duly executed by the Company and authenticated by the
Trustee as hereinafter provided. The Restricted Period shall be terminated upon
the receipt by the Trustee of (i) a written certificate from the Depositary,
together with copies of certificates from Euroclear and Clearstream certifying
that they have received certification of non-United States beneficial ownership
of 100% of the aggregate principal amount of the Regulation S Temporary Global
Note (except to the extent of any beneficial owners thereof who acquired an
interest therein during the Restricted Period pursuant to another exemption from
registration under the Securities Act and who will take delivery of a beneficial
ownership interest in a 144A Global Note as contemplated by Section 2.06(b)(ii)
hereof), and (ii) an Officers' Certificate from the Company. Following the
termination of the Restricted Period, beneficial interests in the Regulation S
Temporary Global Note shall be exchanged for beneficial interests in Regulation
S Permanent Global Notes pursuant to the Applicable Procedures. Simultaneously
with the authentication of Regulation S Permanent Global Notes, the Trustee
shall cancel the Regulation S Temporary Global Note. The aggregate principal
amount of the Regulation S Temporary Global Note and the Regulation S Permanent
Global Notes may from time to time be increased or decreased by adjustments made
on the records of the Trustee and the Depositary or its nominee, as the case may
be, in connection with transfers of interest as hereinafter provided.
(d) Euroclear and Clearstream Procedures Applicable. The provisions of the
"Operating Procedures of the Euroclear System" and "Terms and Conditions
Governing Use of Euroclear" and the "General Terms and Conditions of Clearstream
Banking" and "Customer Handbook" of Clearstream Bank shall be applicable to
transfers of beneficial interests in the Regulation S Temporary Global Note and
the Regulation S Permanent Global Notes that are held by Participants through
Euroclear or Clearstream.
23
Section 2.02. Execution and Authentication.
Two Officers shall sign the Notes for the Company by manual or
facsimile signature.
If an Officer whose signature is on a Note no longer holds that office
at the time a Note is authenticated, the Note shall nevertheless be valid.
A Note shall not be valid until authenticated by the manual signature
of the Trustee. The signature shall be conclusive evidence that the Note has
been authenticated under this Indenture.
The Trustee shall, upon a written order of the Company signed by two
Officers (an "Authentication Order"), authenticate Notes for original issue up
to the aggregate principal amount stated in paragraph 4 of the Notes.
The Trustee may appoint an authenticating agent acceptable to the
Company to authenticate Notes. An authenticating agent may authenticate Notes
whenever the Trustee may do so. Each reference in this Indenture to
authentication by the Trustee includes authentication by such agent. An
authenticating agent has the same rights as an Agent to deal with Holders or an
Affiliate of the Company.
Section 2.03. Registrar and Paying Agent.
The Company shall maintain an office or agency where Notes may be
presented for registration of transfer or for exchange ("Registrar") and an
office or agency where Notes may be presented for payment ("Paying Agent"). The
Registrar shall keep a register of the Notes and of their transfer and exchange.
The Company may appoint one or more co-registrars and one or more additional
paying agents. The term "Registrar" includes any co-registrar and the term
"Paying Agent" includes any additional paying agent. The Company may change any
Paying Agent or Registrar without notice to any Holder. The Company shall notify
the Trustee in writing of the name and address of any Agent not a party to this
Indenture. If the Company fails to appoint or maintain another entity as
Registrar or Paying Agent, the Trustee shall act as such. The Company or any of
its Subsidiaries may act as Paying Agent or Registrar.
The Company initially appoints The Depository Trust Company ("DTC") to
act as Depositary with respect to the Global Notes.
The Company initially appoints the Trustee to act as the Registrar and
Paying Agent and to act as Custodian with respect to the Global Notes.
Section 2.04. Paying Agent to Hold Money in Trust.
The Company shall require each Paying Agent other than the Trustee to
agree in writing that the Paying Agent will hold in trust for the benefit of
Holders or the Trustee all money held by the Paying Agent for the payment of
principal, and premium or Liquidated Damages, if any, or interest on the Notes,
and will notify the Trustee of any default by the Company in making any such
payment. While any such default continues, the Trustee may require a Paying
Agent to pay all money held by it to the Trustee. The Company at any time may
require a Paying Agent to pay all money held by it to the Trustee. Upon payment
over to the Trustee, the Paying Agent (if other than the Company or a
Subsidiary) shall have no further liability for the money delivered to the
Trustee. If the Company or a Subsidiary acts as Paying Agent, it shall segregate
and hold in a separate trust fund for the benefit of the Holders all money held
by it as Paying Agent. Upon any bankruptcy or reorganization proceedings
relating to the Company, the Trustee shall serve as Paying Agent for the Notes.
24
Section 2.05. Holder Lists.
The Trustee shall preserve in as current a form as is reasonably
practicable the most recent list available to it of the names and addresses of
all Holders and shall otherwise comply with TIA ss. 312(a). If the Trustee is
not the Registrar, the Company shall furnish to the Trustee at least seven
Business Days before each interest payment date and at such other times as the
Trustee may request in writing, a list in such form and as of such date as the
Trustee may reasonably require of the names and addresses of the Holders of
Notes and the Company shall otherwise comply with TIA (S) 312(a).
Section 2.06. Transfer and Exchange.
(a) Transfer and Exchange of Global Notes. A Global Note may not be
transferred as a whole except by the Depositary to a nominee of the Depositary,
by a nominee of the Depositary to the Depositary or to another nominee of the
Depositary, or by the Depositary or any such nominee to a successor Depositary
or a nominee of such successor Depositary. All Global Notes will be exchanged by
the Company for Definitive Notes if (i) the Company delivers to the Trustee
notice from the Depositary that the Depositary is unwilling or unable to
continue to act as Depositary or that the Depositary is no longer a clearing
agency registered under the Exchange Act and, in either case, a successor
Depositary is not appointed by the Company within 120 days after the date of
such notice from the Depositary, (ii) the Company in its sole discretion
determines that the Global Notes (in whole but not in part) should be exchanged
for Definitive Notes and delivers a written notice to such effect to the Trustee
or (iii) there has occurred and is occurring a Default or an Event of Default
with respect to the Notes; provided that in no event shall the Regulation S
Temporary Global Note be exchanged by the Company for Definitive Notes prior to
(x) the expiration of the Restricted Period and (y) the receipt by the Registrar
of any certificates required pursuant to Rule 903(b)(3)(ii)(B) under the
Securities Act. Upon the occurrence of either of the preceding events in (i) or
(ii) above, Definitive Notes shall be issued in such names as the Depositary
shall instruct the Trustee. Global Notes also may be exchanged or replaced, in
whole or in part, as provided in Sections 2.07 and 2.10 hereof. Every Note
authenticated and delivered in exchange for, or in lieu of, a Global Note or any
portion thereof, pursuant to this Section 2.06 or Section 2.07 or 2.10 hereof,
shall be authenticated and delivered in the form of, and shall be, a Global
Note. A Global Note may not be exchanged for another Note other than as provided
in this Section 2.06(a), however, beneficial interests in a Global Note may be
transferred and exchanged as provided in Section 2.06(b), (c) or (f) hereof.
(b) Transfer and Exchange of Beneficial Interests in the Global
Notes. The transfer and exchange of beneficial interests in the Global Notes
shall be effected through the Depositary, in accordance with the provisions of
this Indenture and the Applicable Procedures. Beneficial interests in the
Restricted Global Notes shall be subject to restrictions on transfer comparable
to those set forth herein to the extent required by the Securities Act.
Transfers of beneficial interests in the Global Notes also shall require
compliance with either subparagraph (i) or (ii) below, as applicable, as well as
one or more of the other following subparagraphs, as applicable:
(i) Transfer of Beneficial Interests in the Same Global Note.
Beneficial interests in any Restricted Global Note may be transferred
to Persons who take delivery thereof in the form of a beneficial
interest in the same Restricted Global Note in accordance with the
transfer restrictions set forth in the Private Placement Legend;
provided, however, that prior to the expiration of the Restricted
Period, transfers of beneficial interests in the Temporary Regulation
S Global Note may not be made to a U.S. Person or for the account or
benefit of a U.S. Person (other than the Initial Purchasers).
Beneficial interests in any Unrestricted Global Note may be
transferred to Persons who take delivery thereof in the form of a
beneficial interest in an Unrestricted Global Note. No written orders
or instructions shall be required to be delivered to the Registrar to
effect the transfers described in this Section 2.06(b)(i).
25
(ii) All Other Transfers and Exchanges of Beneficial Interests in
Global Notes. In connection with all transfers and exchanges of beneficial
interests that are not subject to Section 2.06(b)(i) above, the transferor
of such beneficial interest must deliver to the Registrar either (A) (1) a
written order from a Participant or an Indirect Participant given to the
Depositary in accordance with the Applicable Procedures directing the
Depositary to credit or cause to be credited a beneficial interest in
another Global Note in an amount equal to the beneficial interest to be
transferred or exchanged and (2) instructions given in accordance with the
Applicable Procedures containing information regarding the Participant
account to be credited with such increase or (B) (1) a written order from a
Participant or an Indirect Participant given to the Depositary in
accordance with the Applicable Procedures directing the Depositary to cause
to be issued a Definitive Note in an amount equal to the beneficial
interest to be transferred or exchanged and (2) instructions given by the
Depositary to the Registrar containing information regarding the Person in
whose name such Definitive Note shall be registered to effect the transfer
or exchange referred to in (1) above; provided that in no event shall
Definitive Notes be issued upon the transfer or exchange of beneficial
interests in the Regulation S Temporary Global Note prior to (x) the
expiration of the Restricted Period and (y) the receipt by the Registrar of
any certificates required pursuant to Rule 903. Upon consummation of an
Exchange Offer by the Company in accordance with Section 2.06(f) hereof,
the requirements of this Section 2.06(b)(ii) shall be deemed to have been
satisfied upon receipt by the Registrar of the instructions contained in
the Letter of Transmittal delivered by the Holder of such beneficial
interests in the Restricted Global Notes. Upon satisfaction of all of the
requirements for transfer or exchange of beneficial interests in Global
Notes contained in this Indenture and the Notes or otherwise applicable
under the Securities Act, the Trustee shall adjust the principal amount of
the relevant Global Note(s) pursuant to Section 2.06(h) hereof.
(iii) Transfer of Beneficial Interests to Another Restricted Global
Note. A beneficial interest in any Restricted Global Note may be
transferred to a Person who takes delivery thereof in the form of a
beneficial interest in another Restricted Global Note if the transfer
complies with the requirements of Section 2.06(b)(ii) above and the
Registrar receives the following:
(A) if the transferee will take delivery in the form of a
beneficial interest in the 144A Global Note, then the transferor must
deliver a certificate in the form of Exhibit B hereto, including the
certifications in item (1) thereof;
(B) if the transferee will take delivery in the form of a
beneficial interest in the Regulation S Temporary Global Note or the
Regulation S Global Note, then the transferor must deliver a
certificate in the form of Exhibit B hereto, including the
certifications in item (2) thereof; and
(C) if the transferee is an Institutional Accredited Investor
who will take delivery in the form of a beneficial interest in the
144A Global Note, then the transferor must deliver a certificate in
the form of Exhibit B hereto, including the certifications and
certificates and Opinion of Counsel required by item (3) thereof, if
applicable.
(iv) Transfer and Exchange of Beneficial Interests in a Restricted
Global Note for Beneficial Interests in the Unrestricted Global Note. A
beneficial interest in any Restricted Global Note may be exchanged by any
holder thereof for a beneficial interest in an Unrestricted Global Note or
transferred to a Person who takes delivery thereof in the form of a
beneficial interest in an Unrestricted Global Note if the exchange or
transfer complies with the requirements of Section 2.06(b)(ii) above and:
26
(A) such exchange or transfer is effected pursuant to the
Exchange Offer in accordance with the Registration Rights
Agreement and the holder of the beneficial interest to be
transferred, in the case of an exchange, or the transferee, in
the case of a transfer, certifies in the applicable Letter of
Transmittal that it is not (1) a broker-dealer, (2) a Person
participating in the distribution of the Exchange Notes or (3) a
Person who is an affiliate (as defined in Rule 144) of the
Company;
(B) such transfer is effected pursuant to the Shelf
Registration Statement in accordance with the Registration Rights
Agreement;
(C) such transfer is effected by a Broker-Dealer pursuant
to the Exchange Offer Registration Statement in accordance with
the Registration Rights Agreement; or
(D) the Registrar receives the following:
(1) if the holder of such beneficial interest in a
Restricted Global Note proposes to exchange such beneficial
interest for a beneficial interest in an Unrestricted Global
Note, a certificate from such holder in the form of Exhibit
C hereto, including the certifications in item (1)(a)
thereof; or
(2) if the holder of such beneficial interest in a
Restricted Global Note proposes to transfer such beneficial
interest to a Person who shall take delivery thereof in the
form of a beneficial interest in an Unrestricted Global
Note, a certificate from such holder in the form of Exhibit
B hereto, including the certifications in item (4) thereof;
and, in each such case set forth in this subparagraph (D), if the
Registrar so requests or if the Applicable Procedures so require,
an Opinion of Counsel in form reasonably acceptable to the
Registrar to the effect that such exchange or transfer is in
compliance with the Securities Act and that the restrictions on
transfer contained herein and in the Private Placement Legend are
no longer required in order to maintain compliance with the
Securities Act.
If any such transfer is effected pursuant to subparagraph (B) or (D) above
at a time when an Unrestricted Global Note has not yet been issued, the Company
shall issue and, upon receipt of an Authentication Order in accordance with
Section 2.02 hereof, the Trustee shall authenticate one or more Unrestricted
Global Notes in an aggregate principal amount equal to the aggregate principal
amount of beneficial interests transferred pursuant to subparagraph (B) or (D)
above.
Beneficial interests in an Unrestricted Global Note cannot be exchanged
for, or transferred to Persons who take delivery thereof in the form of, a
beneficial interest in a Restricted Global Note.
(c) Transfer or Exchange of Beneficial Interests for Definitive Notes.
(i) Beneficial Interests in Restricted Global Notes to Restricted
Definitive Notes. If any holder of a beneficial interest in a Restricted
Global Note proposes to exchange such beneficial interest for a Restricted
Definitive Note or to transfer such beneficial interest to a Person who
takes delivery thereof in the form of a Restricted Definitive Note, then,
upon receipt by the Registrar of the following documentation:
27
(A) if the holder of such beneficial interest in a Restricted
Global Note proposes to exchange such beneficial interest for a
Restricted Definitive Note, a certificate from such holder in the form
of Exhibit C hereto, including the certifications in item (2)(a)
thereof;
(B) if such beneficial interest is being transferred to a QIB in
accordance with Rule 144A, a certificate to the effect set forth in
Exhibit B hereto, including the certifications in item (1) thereof;
(C) if such beneficial interest is being transferred to a
Non-U.S. Person in an offshore transaction in accordance with Rule 903
or Rule 904, a certificate to the effect set forth in Exhibit B
hereto, including the certifications in item (2) thereof;
(D) if such beneficial interest is being transferred pursuant to
an exemption from the registration requirements of the Securities Act
in accordance with Rule 144, a certificate to the effect set forth in
Exhibit B hereto, including the certifications in item (3)(a) thereof;
(E) if such beneficial interest is being transferred to an
Institutional Accredited Investor in reliance on an exemption from the
registration requirements of the Securities Act other than those
listed in subparagraphs (B) through (D) above, a certificate to the
effect set forth in Exhibit B hereto, including the certifications,
certificates and Opinion of Counsel required by item (3) thereof, if
applicable;
(F) if such beneficial interest is being transferred to the
Company or any of its Subsidiaries, a certificate to the effect set
forth in Exhibit B hereto, including the certifications in item (3)(b)
thereof; or
(G) if such beneficial interest is being transferred pursuant to
an effective registration statement under the Securities Act, a
certificate to the effect set forth in Exhibit B hereto, including the
certifications in item (3)(c) thereof,
the Trustee shall cause the aggregate principal amount of the applicable
Global Note to be reduced accordingly pursuant to Section 2.06(h) hereof,
and the Company shall execute and the Trustee shall authenticate and
deliver to the Person designated in the instructions a Definitive Note in
the appropriate principal amount. Any Definitive Note issued in exchange
for a beneficial interest in a Restricted Global Note pursuant to this
Section 2.06(c) shall be registered in such name or names and in such
authorized denomination or denominations as the holder of such beneficial
interest shall instruct the Registrar through instructions from the
Depositary and the Participant or Indirect Participant. The Trustee shall
deliver such Definitive Notes to the Persons in whose names such Notes are
so registered. Any Definitive Note issued in exchange for a beneficial
interest in a Restricted Global Note pursuant to this Section 2.06(c)(i)
shall bear the Private Placement Legend and shall be subject to all
restrictions on transfer contained therein.
(ii) Beneficial Interests in Regulation S Temporary Global Note to
Definitive Notes. Notwithstanding Sections 2.06(c)(i)(A) and (C) hereof, a
beneficial interest in the Regulation S Temporary Global Note may not be
exchanged for a Definitive Note or transferred to a Person who takes
delivery thereof in the form of a Definitive Note prior to (x) the
expiration of the Restricted Period and (y) the receipt by the Registrar of
any certificates required pursuant to Rule 903(b)(3)(ii)(B) under the
Securities Act, except in the case of a transfer pursuant to an
28
exemption from the registration requirements of the Securities Act other
than Rule 903 or Rule 904.
(iii) Beneficial Interests in Restricted Global Notes to Unrestricted
Definitive Notes. A holder of a beneficial interest in a Restricted Global
Note may exchange such beneficial interest for an Unrestricted Definitive
Note or may transfer such beneficial interest to a Person who takes
delivery thereof in the form of an Unrestricted Definitive Note only if:
(A) such exchange or transfer is effected pursuant to the
Exchange Offer in accordance with the Registration Rights Agreement
and the holder of such beneficial interest, in the case of an
exchange, or the transferee, in the case of a transfer, certifies in
the applicable Letter of Transmittal that it is not (1) a
broker-dealer, (2) a Person participating in the distribution of the
Exchange Notes or (3) a Person who is an affiliate (as defined in Rule
144) of the Company;
(B) such transfer is effected pursuant to the Shelf Registration
Statement in accordance with the Registration Rights Agreement;
(C) such transfer is effected by a Broker-Dealer pursuant to the
Exchange Offer Registration Statement in accordance with the
Registration Rights Agreement; or
(D) the Registrar receives the following:
(1) if the holder of such beneficial interest in a
Restricted Global Note proposes to exchange such beneficial
interest for a Definitive Note that does not bear the Private
Placement Legend, a certificate from such holder in the form of
Exhibit C hereto, including the certifications in item (1)(b)
thereof; or
(2) if the holder of such beneficial interest in a
Restricted Global Note proposes to transfer such beneficial
interest to a Person who shall take delivery thereof in the form
of a Definitive Note that does not bear the Private Placement
Legend, a certificate from such holder in the form of Exhibit B
hereto, including the certifications in item (4) thereof;
and, in each such case set forth in this subparagraph (D), if the
Registrar so requests or if the Applicable Procedures so require, an
Opinion of Counsel in form reasonably acceptable to the Registrar to
the effect that such exchange or transfer is in compliance with the
Securities Act and that the restrictions on transfer contained herein
and in the Private Placement Legend are no longer required in order to
maintain compliance with the Securities Act.
(iv) Beneficial Interests in Unrestricted Global Notes to
Unrestricted Definitive Notes. If any holder of a beneficial interest in an
Unrestricted Global Note proposes to exchange such beneficial interest for
a Definitive Note or to transfer such beneficial interest to a Person who
takes delivery thereof in the form of a Definitive Note, then, upon
satisfaction of the conditions set forth in Section 2.06(b)(iii) hereof,
the Trustee shall cause the aggregate principal amount of the applicable
Global Note to be reduced accordingly pursuant to Section 2.06(h) hereof,
and the Company shall execute and the Trustee shall authenticate and
deliver to the Person designated in the instructions a Definitive Note in
the appropriate principal amount. Any Definitive Note issued in exchange
for a beneficial interest pursuant to this Section 2.06(c)(iv) shall be
registered in such name or names and in such authorized denomination or
denominations
29
as the holder of such beneficial interest shall instruct the Registrar
through instructions from the Depositary and the Participant or
Indirect Participant. The Trustee shall deliver such Definitive Notes
to the Persons in whose names such Notes are so registered. Any
Definitive Note issued in exchange for a beneficial interest pursuant
to this Section 2.06(c)(iv) shall not bear the Private Placement
Legend.
(d) Transfer and Exchange of Definitive Notes for Beneficial
Interests.
(i) Restricted Definitive Notes to Beneficial Interests in
Restricted Global Notes. If any Holder of a Restricted Definitive Note
proposes to exchange such Note for a beneficial interest in a
Restricted Global Note or to transfer such Restricted Definitive Notes
to a Person who takes delivery thereof in the form of a beneficial
interest in a Restricted Global Note, then, upon receipt by the
Registrar of the following documentation:
(A) if the Holder of such Restricted Definitive Note
proposes to exchange such Note for a beneficial interest in a
Restricted Global Note, a certificate from such Holder in the
form of Exhibit C hereto, including the certifications in item
(2)(b) thereof;
(B) if such Restricted Definitive Note is being transferred
to a QIB in accordance with Rule 144A, a certificate to the
effect set forth in Exhibit B hereto, including the
certifications in item (1) thereof;
(C) if such Restricted Definitive Note is being transferred
to a Non-U.S. Person in an offshore transaction in accordance
with Rule 903 or Rule 904, a certificate to the effect set forth
in Exhibit B hereto, including the certifications in item (2)
thereof;
(D) if such Restricted Definitive Note is being transferred
pursuant to an exemption from the registration requirements of
the Securities Act in accordance with Rule 144, a certificate to
the effect set forth in Exhibit B hereto, including the
certifications in item (3)(a) thereof;
(E) if such Restricted Definitive Note is being transferred
to an Institutional Accredited Investor in reliance on an
exemption from the registration requirements of the Securities
Act other than those listed in subparagraphs (B) through (D)
above, a certificate to the effect set forth in Exhibit B hereto,
including the certifications, certificates and Opinion of Counsel
required by item (3) thereof, if applicable;
(F) if such Restricted Definitive Note is being transferred
to the Company or any of its Subsidiaries, a certificate to the
effect set forth in Exhibit B hereto, including the
certifications in item (3)(b) thereof; or
(G) if such Restricted Definitive Note is being transferred
pursuant to an effective registration statement under the
Securities Act, a certificate to the effect set forth in Exhibit
B hereto, including the certifications in item (3)(c) thereof,
the Trustee shall cancel the Restricted Definitive Note, increase or
cause to be increased the aggregate principal amount of, in the case
of clause (A) above, the appropriate Restricted Global Note, in the
case of clause (C) above, the Regulation S Global Note, and in all
other cases, the 144A Global Note.
30
(ii) Restricted Definitive Notes to Beneficial Interests in Unrestricted
Global Notes. A Holder of a Restricted Definitive Note may exchange such Note
for a beneficial interest in an Unrestricted Global Note or transfer such
Restricted Definitive Note to a Person who takes delivery thereof in the form of
a beneficial interest in an Unrestricted Global Note only if:
(A) such exchange or transfer is effected pursuant to the Exchange
Offer in accordance with the Registration Rights Agreement and the Holder,
in the case of an exchange, or the transferee, in the case of a transfer,
certifies in the applicable Letter of Transmittal that it is not (1) a
broker-dealer, (2) a Person participating in the distribution of the
Exchange Notes or (3) a Person who is an affiliate (as defined in Rule 144)
of the Company;
(B) such transfer is effected pursuant to the Shelf Registration
Statement in accordance with the Registration Rights Agreement;
(C) such transfer is effected by a Broker-Dealer pursuant to the
Exchange Offer Registration Statement in accordance with the Registration
Rights Agreement; or
(D) the Registrar receives the following:
(1) if the Holder of such Definitive Notes proposes to exchange
such Notes for a beneficial interest in the Unrestricted Global Note,
a certificate from such Holder in the form of Exhibit C hereto,
including the certifications in item (1)(c) thereof; or
(2) if the Holder of such Definitive Notes proposes to transfer
such Notes to a Person who shall take delivery thereof in the form of
a beneficial interest in the Unrestricted Global Note, a certificate
from such Holder in the form of Exhibit B hereto, including the
certifications in item (4) thereof;
and, in each such case set forth in this subparagraph (D), if the Registrar
so requests or if the Applicable Procedures so require, an Opinion of
Counsel in form reasonably acceptable to the Registrar to the effect that
such exchange or transfer is in compliance with the Securities Act and that
the restrictions on transfer contained herein and in the Private Placement
Legend are no longer required in order to maintain compliance with the
Securities Act.
Upon satisfaction of the conditions of any of the subparagraphs in this
Section 2.06(d)(ii), the Trustee shall cancel the Definitive Notes and increase
or cause to be increased the aggregate principal amount of the Unrestricted
Global Note.
(iii) Unrestricted Definitive Notes to Beneficial Interests in Unrestricted
Global Notes. A Holder of an Unrestricted Definitive Note may exchange such Note
for a beneficial interest in an Unrestricted Global Note or transfer such
Definitive Notes to a Person who takes delivery thereof in the form of a
beneficial interest in an Unrestricted Global Note at any time. Upon receipt of
a request for such an exchange or transfer, the Trustee shall cancel the
applicable Unrestricted Definitive Note and increase or cause to be increased
the aggregate principal amount of one of the Unrestricted Global Notes.
If any such exchange or transfer from a Definitive Note to a beneficial
interest is effected pursuant to subparagraphs (ii)(B), (ii)(D) or (iii) above
at a time when an Unrestricted Global
31
Note has not yet been issued, the Company shall issue and, upon receipt of
an Authentication Order in accordance with Section 2.02 hereof, the Trustee
shall authenticate one or more Unrestricted Global Notes in an aggregate
principal amount equal to the principal amount of Definitive Notes so
transferred.
(e) Transfer and Exchange of Definitive Notes for Definitive Notes. Upon
request by a Holder of Definitive Notes and such Holder's compliance with the
provisions of this Section 2.06(e), the Registrar shall register the transfer or
exchange of Definitive Notes. Prior to such registration of transfer or
exchange, the requesting Holder shall present or surrender to the Registrar the
Definitive Notes duly endorsed or accompanied by a written instruction of
transfer in form satisfactory to the Registrar duly executed by such Holder or
by its attorney, duly authorized in writing. In addition, the requesting Holder
shall provide any additional certifications, documents and information, as
applicable, required pursuant to the following provisions of this Section
2.06(e).
(i) Restricted Definitive Notes to Restricted Definitive Notes. Any
Restricted Definitive Note may be transferred to and registered in the name
of Persons who take delivery thereof in the form of a Restricted Definitive
Note if the Registrar receives the following:
(A) if the transfer will be made pursuant to Rule 144A under the
Securities Act, then the transferor must deliver a certificate in the
form of Exhibit B hereto, including the certifications in item (1)
thereof;
(B) if the transfer will be made pursuant to Rule 903 or Rule
904, then the transferor must deliver a certificate in the form of
Exhibit B hereto, including the certifications in item (2) thereof;
and
(C) if the transfer will be made pursuant to any other exemption
from the registration requirements of the Securities Act, then the
transferor must deliver a certificate in the form of Exhibit B hereto,
including the certifications, certificates and Opinion of Counsel
required by item (3) thereof, if applicable.
(ii) Restricted Definitive Notes to Unrestricted Definitive Notes. Any
Restricted Definitive Note may be exchanged by the Holder thereof for an
Unrestricted Definitive Note or transferred to a Person or Persons who take
delivery thereof in the form of an Unrestricted Definitive Note if:
(A) such exchange or transfer is effected pursuant to the
Exchange Offer in accordance with the Registration Rights Agreement
and the Holder, in the case of an exchange, or the transferee, in the
case of a transfer, certifies in the applicable Letter of Transmittal
that it is not (1) a broker-dealer, (2) a Person participating in the
distribution of the Exchange Notes or (3) a Person who is an affiliate
(as defined in Rule 144) of the Company;
(B) any such transfer is effected pursuant to the Shelf
Registration Statement in accordance with the Registration Rights
Agreement;
(C) any such transfer is effected by a Broker-Dealer pursuant to
the Exchange Offer Registration Statement in accordance with the
Registration Rights Agreement; or
(D) the Registrar receives the following:
32
(1) if the Holder of such Restricted Definitive Notes
proposes to exchange such Notes for an Unrestricted Definitive
Note, a certificate from such Holder in the form of Exhibit C
hereto, including the certifications in item (1)(d) thereof; or
(2) if the Holder of such Restricted Definitive Notes
proposes to transfer such Notes to a Person who shall take
delivery thereof in the form of an Unrestricted Definitive Note,
a certificate from such Holder in the form of Exhibit B hereto,
including the certifications in item (4) thereof;
and, in each such case set forth in this subparagraph (D), if the
Registrar so requests, an Opinion of Counsel in form reasonably
acceptable to the Company to the effect that such exchange or transfer
is in compliance with the Securities Act and that the restrictions on
transfer contained herein and in the Private Placement Legend are no
longer required in order to maintain compliance with the Securities
Act.
(iii) Unrestricted Definitive Notes to Unrestricted Definitive Notes.
A Holder of Unrestricted Definitive Notes may transfer such Notes to a
Person who takes delivery thereof in the form of an Unrestricted Definitive
Note. Upon receipt of a request to register such a transfer, the Registrar
shall register the Unrestricted Definitive Notes pursuant to the
instructions from the Holder thereof.
(f) Exchange Offer. Upon the occurrence of the Exchange Offer in
accordance with the Registration Rights Agreement, the Company shall issue and,
upon receipt of an Authentication Order in accordance with Section 2.02, the
Trustee shall authenticate (i) one or more Unrestricted Global Notes in an
aggregate principal amount equal to the principal amount of the beneficial
interests in the Restricted Global Notes tendered for acceptance by Persons that
certify in the applicable Letters of Transmittal that (x) they are not
broker-dealers, (y) they are not participating in a distribution of the Exchange
Notes and (z) they are not affiliates (as defined in Rule 144) of the Company,
and accepted for exchange in the Exchange Offer and (ii) Definitive Notes in an
aggregate principal amount equal to the principal amount of the Restricted
Definitive Notes accepted for exchange in the Exchange Offer. Concurrently with
the issuance of such Notes, the Trustee shall cause the aggregate principal
amount of the applicable Restricted Global Notes to be reduced accordingly, and
the Company shall execute and the Trustee shall authenticate and deliver to the
Persons designated by the Holders of Definitive Notes so accepted Definitive
Notes in the appropriate principal amount.
(g) Legends. The following legends shall appear on the face of all Global
Notes and Definitive Notes issued under this Indenture unless specifically
stated otherwise in the applicable provisions of this Indenture.
(i) Private Placement Legend.
(A) Except as permitted by subparagraph (B) below, each Global
Note and each Definitive Note (and all Notes issued in exchange
therefor or substitution thereof) shall bear the legend in
substantially the following form:
"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
33
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 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."
(B) Notwithstanding the foregoing, any Global Note or Definitive
Note issued pursuant to subparagraphs (b)(iv), (c)(iii), (c)(iv),
(d)(ii), (d)(iii), (e)(ii), (e)(iii) or (f) of this Section 2.06 (and
all Notes issued in exchange therefor or substitution thereof) shall
not bear the Private Placement Legend.
(ii) Global Note Legend. Each Global Note shall bear a legend in
substantially the following form:
"THIS GLOBAL NOTE IS HELD BY THE DEPOSITARY (AS DEFINED IN THE INDENTURE
GOVERNING THIS NOTE) OR ITS NOMINEE IN CUSTODY FOR THE BENEFIT OF THE BENEFICIAL
OWNERS HEREOF, AND IS NOT TRANSFERABLE TO ANY PERSON UNDER ANY CIRCUMSTANCES
EXCEPT THAT (I) THE TRUSTEE MAY MAKE SUCH NOTATIONS HEREON AS MAY BE REQUIRED
PURSUANT TO SECTION 2.07 OF THE INDENTURE, (II) THIS GLOBAL NOTE MAY BE
EXCHANGED IN WHOLE BUT NOT IN PART PURSUANT TO SECTION 2.06(a) OF THE INDENTURE,
(III) THIS GLOBAL NOTE MAY BE DELIVERED TO THE TRUSTEE FOR CANCELLATION PURSUANT
TO SECTION 2.11 OF THE INDENTURE AND (IV) THIS GLOBAL NOTE MAY BE TRANSFERRED TO
A SUCCESSOR DEPOSITARY WITH THE PRIOR WRITTEN CONSENT OF APPLETON PAPERS INC."
(iii) Regulation S Temporary Global Note Legend. The Regulation S
Temporary Global Note shall bear a legend in substantially the following
form:
34
"THE RIGHTS ATTACHING TO THIS REGULATION S TEMPORARY GLOBAL NOTE, AND THE
CONDITIONS AND PROCEDURES GOVERNING ITS EXCHANGE FOR CERTIFICATED NOTES, ARE AS
SPECIFIED IN THE INDENTURE (AS DEFINED HEREIN). NEITHER THE HOLDER NOR THE
BENEFICIAL OWNERS OF THIS REGULATION S TEMPORARY GLOBAL NOTE SHALL BE ENTITLED
TO RECEIVE PAYMENT OF INTEREST HEREON."
(h) Cancellation and/or Adjustment of Global Notes. At such time as all
beneficial interests in a particular Global Note have been exchanged for
Definitive Notes or a particular Global Note has been redeemed, repurchased or
canceled in whole and not in part, each such Global Note shall be returned to or
retained and canceled by the Trustee in accordance with Section 2.11 hereof. At
any time prior to such cancellation, if any beneficial interest in a Global Note
is exchanged for or transferred to a Person who will take delivery thereof in
the form of a beneficial interest in another Global Note or for Definitive
Notes, the principal amount of Notes represented by such Global Note shall be
reduced accordingly and an endorsement shall be made on such Global Note by the
Trustee or by the Depositary at the direction of the Trustee to reflect such
reduction; and if the beneficial interest is being exchanged for or transferred
to a Person who will take delivery thereof in the form of a beneficial interest
in another Global Note, such other Global Note shall be increased accordingly
and an endorsement shall be made on such Global Note by the Trustee or by the
Depositary at the direction of the Trustee to reflect such increase.
(i) General Provisions Relating to Transfers and Exchanges.
(i) To permit registrations of transfers and exchanges, the Company
shall execute and the Trustee shall authenticate Global Notes and
Definitive Notes upon the Company's order or at the Registrar's request.
(ii) No service charge shall be made to a holder of a beneficial
interest in a Global Note or to a Holder of a Definitive Note for any
registration of transfer or exchange, but the Company may require payment
of a sum sufficient to cover any transfer tax or similar governmental
charge payable in connection therewith (other than any such transfer taxes
or similar governmental charge payable upon exchange or transfer pursuant
to Sections 2.10, 3.06, 3.09, 4.10, 4.15, 4.23 and 9.05 hereof).
(iii) The Registrar shall not be required to register the transfer of
or exchange any Note selected for redemption in whole or in part, except
the unredeemed portion of any Note being redeemed in part.
(iv) All Global Notes and Definitive Notes issued upon any
registration of transfer or exchange of Global Notes or Definitive Notes
shall be the valid obligations of the Company, evidencing the same debt,
and entitled to the same benefits under this Indenture, as the Global Notes
or Definitive Notes surrendered upon such registration of transfer or
exchange.
(v) The Company shall not be required (A) to issue, to register the
transfer of or to exchange any Notes during a period beginning at the
opening of business 15 days before the day of any selection of Notes for
redemption under Section 3.02 hereof and ending at the close of business on
the day of selection, (B) to register the transfer of or to exchange any
Note so selected for redemption in whole or in part, except the unredeemed
portion of any Note being redeemed in part or (C) to register the transfer
of or to exchange a Note between a record date and the next succeeding
Interest Payment Date.
(vi) Prior to due presentment for the registration of a transfer of
any Note, the Trustee, any Agent and the Company may deem and treat the
Person in whose name any Note is
35
registered as the absolute owner of such Note for the purpose of
receiving payment of principal of and interest on such Notes and for
all other purposes, and none of the Trustee, any Agent or the Company
shall be affected by notice to the contrary.
(vii) The Trustee shall authenticate Global Notes and Definitive
Notes in accordance with the provisions of Section 2.02 hereof.
(viii) All certifications, certificates and Opinions of Counsel
required to be submitted to the Registrar pursuant to this Section
2.06 to effect a registration of transfer or exchange may be submitted
by facsimile.
Section 2.07. Replacement Notes.
If any mutilated Note is surrendered to the Trustee or the Company and
the Trustee receives evidence to its satisfaction of the destruction, loss or
theft of any Note, the Company shall issue and the Trustee, upon receipt of an
Authentication Order, shall authenticate a replacement Note if the Trustee's
requirements are met. If required by the Trustee or the Company, an indemnity
bond must be supplied by the Holder that is sufficient in the judgment of the
Trustee and the Company to protect the Company, the Trustee, any Agent and any
authenticating agent from any loss that any of them may suffer if a Note is
replaced. The Company may charge for its expenses in replacing a Note.
Every replacement Note is an additional obligation of the Company and
shall be entitled to all of the benefits of this Indenture equally and
proportionately with all other Notes duly issued hereunder.
Section 2.08. Outstanding Notes.
The Notes outstanding at any time are all the Notes authenticated by
the Trustee except for those canceled by it, those delivered to it for
cancellation, those reductions in the interest in a Global Note effected by the
Trustee in accordance with the provisions hereof, and those described in this
Section as not outstanding. Except as set forth in Section 2.09 hereof, a Note
does not cease to be outstanding because the Company or an Affiliate of the
Company holds the Note; however, Notes held by the Company or a Subsidiary of
the Company shall not be deemed to be outstanding for purposes of Section
3.07(b) hereof.
If a Note is replaced pursuant to Section 2.07 hereof, it ceases to be
outstanding unless the Trustee receives proof satisfactory to it that the
replaced Note is held by a bona fide purchaser; provided that the aggregate
principal amount stated in paragraph 4 of the Notes shall not increase by reason
of this Section 2.08 or Section 2.07 hereof.
If the principal amount of any Note is considered paid under Section
4.01 hereof, it ceases to be outstanding and interest on it ceases to accrue.
If the Paying Agent (other than the Company, a Subsidiary or an
Affiliate of any thereof) holds, on a redemption date or maturity date, money
sufficient to pay Notes payable on that date, then on and after that date such
Notes shall be deemed to be no longer outstanding and shall cease to accrue
interest.
Section 2.09. Treasury Notes.
In determining whether the Holders of the required principal amount of
Notes have concurred in any direction, waiver or consent, Notes owned by the
Company, or by any Person directly or indirectly controlling or controlled by or
under direct or indirect common control with the Company, shall be
36
considered as though not outstanding, except that for the purposes of
determining whether the Trustee shall be protected in relying on any such
direction, waiver or consent, only Notes that the Trustee knows are so owned
shall be so disregarded.
Section 2.10. Temporary Notes.
Until certificates representing Notes are ready for delivery, the
Company may prepare and the Trustee, upon receipt of an Authentication Order,
shall authenticate temporary Notes. Temporary Notes shall be substantially in
the form of certificated Notes but may have variations that the Company
considers appropriate for temporary Notes and as shall be reasonably acceptable
to the Trustee. Without unreasonable delay, the Company shall prepare and the
Trustee shall authenticate definitive Notes in exchange for temporary Notes.
Holders of temporary Notes shall be entitled to all of the benefits of
this Indenture.
Section 2.11. Cancellation.
The Company at any time may deliver Notes to the Trustee for
cancellation. The Registrar and Paying Agent shall forward to the Trustee any
Notes surrendered to them for registration of transfer, exchange or payment. The
Trustee and no one else shall cancel all Notes surrendered for registration of
transfer, exchange, payment, replacement or cancellation and shall destroy
canceled Notes (subject to the record retention requirement of the Exchange
Act). Certification of the destruction of all canceled Notes shall be delivered
to the Company. The Company may not issue new Notes to replace Notes that it has
paid or that have been delivered to the Trustee for cancellation.
Section 2.12. Defaulted Interest.
If the Company defaults in a payment of interest on the Notes, it shall
pay the defaulted interest in any lawful manner plus, to the extent lawful,
interest payable on the defaulted interest, to the Persons who are Holders on a
subsequent special record date, in each case at the rate provided in the Notes
and in Section 4.01 hereof. The Company shall notify the Trustee in writing of
the amount of defaulted interest proposed to be paid on each Note and the date
of the proposed payment. The Company shall fix or cause to be fixed each such
special record date and payment date, provided that no such special record date
shall be less than 10 days prior to the related payment date for such defaulted
interest. At least 15 days before the special record date, the Company (or, upon
the written request of the Company, the Trustee in the name and at the expense
of the Company) shall mail or cause to be mailed to Holders a notice that states
the special record date, the related payment date and the amount of such
interest to be paid.
ARTICLE 3.
REDEMPTION AND PREPAYMENT
Section 3.01. Notices to Trustee.
If the Company elects to redeem Notes pursuant to the optional
redemption provisions of Section 3.07 hereof, it shall furnish to the Trustee,
at least 30 days but not more than 60 days before a redemption date, an
Officers' Certificate setting forth (i) the clause of this Indenture pursuant to
which the redemption shall occur, (ii) the redemption date, (iii) the principal
amount of Notes to be redeemed and (iv) the redemption price.
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Section 3.02. Selection of Notes to Be Redeemed.
If less than all of the Notes are to be redeemed or purchased in an
offer to purchase at any time, the Trustee shall select the Notes to be redeemed
or purchased among the Holders of the Notes in compliance with the requirements
of the principal national securities exchange, if any, on which the Notes are
listed or, if the Notes are not so listed, on a pro rata basis, by lot or in
accordance with any other method the Trustee considers fair and appropriate. In
the event of partial redemption by lot, the particular Notes to be redeemed
shall be selected, unless otherwise provided herein, not less than 30 nor more
than 60 days prior to the redemption date by the Trustee from the outstanding
Notes not previously called for redemption.
The Trustee shall promptly notify the Company in writing of the Notes
selected for redemption and, in the case of any Note selected for partial
redemption, the principal amount thereof to be redeemed. Notes and portions of
Notes selected shall be in amounts of $1,000 or whole multiples of $1,000;
except that if all of the Notes of a Holder are to be redeemed, the entire
outstanding amount of Notes held by such Holder, even if not a multiple of
$1,000, shall be redeemed. Except as provided in the preceding sentence,
provisions of this Indenture that apply to Notes called for redemption also
apply to portions of Notes called for redemption.
Section 3.03. Notice of Redemption.
Subject to the provisions of Section 3.09 hereof, at least 30 days but
not more than 60 days before a redemption date, the Company shall mail or cause
to be mailed, by first class mail, a notice of redemption to each Holder whose
Notes are to be redeemed at such Holder's registered address, except that
redemption notices may be mailed more than 60 days prior to a redemption date if
the notice is issued in connection with a defeasance of notes or a satisfaction
and discharge of the indenture.
The notice shall identify the Notes to be redeemed and shall state:
(a) the redemption date;
(b) the redemption price;
(c) if any Note is being redeemed in part, the portion of the
principal
amount of such Note to be redeemed and that, after the redemption date upon
surrender of such Note, a new Note or Notes in principal amount equal to the
unredeemed portion shall be issued upon cancellation of the original Note;
(d) the name and address of the Paying Agent;
(e) that Notes called for redemption must be surrendered to the
Paying Agent to collect the redemption price;
(f) that, unless the Company defaults in making such redemption
payment, interest on Notes called for redemption ceases to accrue on and after
the redemption date;
(g) the paragraph of the Notes and/or Section of this Indenture
pursuant to which the Notes called for redemption are being redeemed; and
(h) that no representation is made as to the correctness or
accuracy of the CUSIP number, if any, listed in such notice or printed on the
Notes.
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At the Company's request, the Trustee shall give the notice of
redemption in the Company's name and at its expense; provided, however, that the
Company shall have delivered to the Trustee, at least 45 days prior to the
redemption date, an Officers' Certificate requesting that the Trustee give such
notice and setting forth the information to be stated in such notice as provided
in the preceding paragraph.
Section 3.04. Effect of Notice of Redemption.
Once notice of redemption is mailed in accordance with Section 3.03
hereof, Notes called for redemption become irrevocably due and payable on the
redemption date at the redemption price. A notice of redemption may not be
conditional.
Section 3.05. Deposit of Redemption Price.
On or before the redemption date, the Company shall deposit with the
Trustee or with the Paying Agent money sufficient to pay the redemption price of
and accrued interest and Liquidated Damages, if any, on all Notes to be redeemed
on that date. The Trustee or the Paying Agent shall promptly return to the
Company any money deposited with the Trustee or the Paying Agent by the Company
in excess of the amounts necessary to pay the redemption price of, and accrued
interest on, all Notes to be redeemed.
If the Company complies with the provisions of the preceding paragraph,
on and after the redemption date, interest shall cease to accrue on the Notes or
the portions of Notes called for redemption. If a Note is redeemed on or after
an interest record date but on or prior to the related interest payment date,
then any accrued and unpaid interest shall be paid to the Person in whose name
such Note was registered at the close of business on such record date. If any
Note called for redemption shall not be so paid upon surrender for redemption
because of the failure of the Company to comply with the preceding paragraph,
interest shall be paid on the unpaid principal, from the redemption date until
such principal is paid, and to the extent lawful on any interest not paid on
such unpaid principal, in each case at the rate provided in the Notes and in
Section 4.01 hereof.
Section 3.06. Notes Redeemed in Part.
Upon surrender of a Note that is redeemed in part, the Company shall
issue and, upon the Company's written request, the Trustee shall authenticate
for the Holder at the expense of the Company a new Note equal in principal
amount to the unredeemed portion of the Note surrendered.
Section 3.07. Optional Redemption.
(a) Except as set forth in clause (b) of this Section 3.07, the Company
shall not have the option to redeem the Notes pursuant to this Section 3.07
prior to December 15, 2005. Thereafter, the Company shall have the option to
redeem the Notes, in whole or in part, at the redemption prices (expressed as
percentages of principal amount) set forth below plus accrued and unpaid
interest and Liquidated Damages thereon, if any, to the applicable redemption
date, if redeemed during the twelve-month period beginning on December 15 of the
years indicated below:
Year Percentage
---- ----------
2005 ................................................ 106.250%
2006 ................................................ 103.125%
2007 and thereafter ................................. 100.000%
(b) Notwithstanding the provisions of clause (a) of this Section 3.07,
at any time prior to December 15, 2004, the Company may redeem up to 35% of the
aggregate principal amount of the Notes
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originally issued with the net cash proceeds of an initial public offering of
its common stock or the net cash proceeds from the issuance of Equity Interests,
other than Disqualified Stock, to third parties other than the Parent Entity, at
a redemption price equal to 112.500% of the aggregate principal amount thereof
plus accrued and unpaid interest and Liquidated Damages thereon, if any;
provided that at least 65% in aggregate principal amount of the Notes originally
issued remain outstanding immediately after the occurrence of such redemption
and that such redemption occurs within 60 days of the date of the closing of
such initial public offering or other equity cash investment.
(c) Any redemption pursuant to this Section 3.07 shall be made
pursuant to the provisions of Section 3.01 through 3.06 hereof.
Section 3.08. Mandatory Redemption.
The Company shall not be required to make mandatory redemption or
sinking fund payments with respect to the Notes.
Section 3.09. Offer to Purchase by Application of Excess Proceeds.
In the event that, pursuant to Section 4.10 hereof, the Company shall
be required to commence an offer to all Holders to purchase Notes (an "Asset
Sale Offer"), it shall follow the procedures specified below.
The Asset Sale Offer shall remain open for a period of 20 Business Days
following its commencement and no longer, except to the extent that a longer
period is required by applicable law (the "Offer Period"). No later than five
Business Days after the termination of the Offer Period (the "Purchase Date"),
the Company shall purchase the principal amount of Notes required to be
purchased pursuant to Section 4.10 hereof (the "Offer Amount") or, if less than
the Offer Amount has been tendered, all Notes tendered in response to the Asset
Sale Offer. Payment for any Notes so purchased shall be made in the same manner
as interest payments are made.
If the Purchase Date is on or after an interest record date and on or
before the related interest payment date, any accrued and unpaid interest shall
be paid to the Person in whose name a Note is registered at the close of
business on such record date, and no additional interest shall be payable to
Holders who tender Notes pursuant to the Asset Sale Offer.
Upon the commencement of an Asset Sale Offer, the Company shall send,
by first class mail, a notice to the Trustee and each of the Holders, with a
copy to the Trustee. The notice shall contain all instructions and materials
necessary to enable such Holders to tender Notes pursuant to the Asset Sale
Offer. The Asset Sale Offer shall be made to all Holders. The notice, which
shall govern the terms of the Asset Sale Offer, shall state:
(a) that the Asset Sale Offer is being made pursuant to this
Section 3.09 and Section 4.10 hereof and the length of time the Asset Sale Offer
shall remain open;
(b) the Offer Amount, the purchase price and the Purchase Date;
(c) that any Note not tendered or accepted for payment shall
continue to accrete or accrue interest;
(d) that, unless the Company defaults in making such payment, any
Note accepted for payment pursuant to the Asset Sale Offer shall cease to
accrete or accrue interest after the Purchase Date;
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(e) that Holders electing to have a Note purchased pursuant to an Asset
Sale Offer may elect to have Notes purchased in integral multiples of $1,000
only;
(f) that Holders electing to have a Note purchased pursuant to any Asset
Sale Offer shall be required to surrender the Note, with the form entitled
"Option of Holder to Elect Purchase" on the reverse of the Note completed, or
transfer by book-entry transfer, to the Company, a depositary, if appointed by
the Company, or a Paying Agent at the address specified in the notice at least
three days before the Purchase Date;
(g) that Holders shall be entitled to withdraw their election if the
Company, the depositary or the Paying Agent, as the case may be, receives, not
later than the expiration of the Offer Period, a telegram, telex, facsimile
transmission or letter setting forth the name of the Holder, the principal
amount of the Note the Holder delivered for purchase and a statement that such
Holder is withdrawing his election to have such Note purchased;
(h) that, if the aggregate principal amount of Notes surrendered by Holders
exceeds the Offer Amount, the Company shall select the Notes to be purchased on
a pro rata basis (with such adjustments as may be deemed appropriate by the
Company so that only Notes in denominations of $1,000, or integral multiples
thereof, shall be purchased); and
(i) that Holders whose Notes were purchased only in part shall be issued
new Notes equal in principal amount to the unpurchased portion of the Notes
surrendered (or transferred by book-entry transfer).
On or before the Purchase Date, the Company shall, to the extent lawful,
accept for payment, on a pro rata basis to the extent necessary, the Offer
Amount of Notes or portions thereof tendered pursuant to the Asset Sale Offer,
or if less than the Offer Amount has been tendered, all Notes tendered, and
shall deliver to the Trustee an Officers' Certificate stating that such Notes or
portions thereof were accepted for payment by the Company in accordance with the
terms of this Section 3.09. The Company, the Depositary or the Paying Agent, as
the case may be, shall promptly (but in any case not later than five days after
the Purchase Date) mail or deliver to each tendering Holder an amount equal to
the purchase price of the Notes tendered by such Holder and accepted by the
Company for purchase, and the Company shall promptly issue a new Note, and the
Trustee, upon written request from the Company shall authenticate and mail or
deliver such new Note to such Holder, in a principal amount equal to any
unpurchased portion of the Note surrendered. Any Note not so accepted shall be
promptly mailed or delivered by the Company to the Holder thereof. The Company
shall publicly announce the results of the Asset Sale Offer on the Purchase
Date.
The Company shall comply with the requirements of Rule 14e-1 under the
Exchange Act and any other securities laws and regulations thereunder to the
extent such laws and regulations are applicable in connection with the
repurchase of Notes pursuant to an Asset Sale Offer. To the extent that the
provisions of any securities laws or regulations conflict with this Section 3.09
and/or Section 4.10 hereof, the Company shall comply with the applicable
securities laws and regulations and shall not be deemed to have breached its
obligations under this Section 3.09 and/or Section 4.10 hereof by virtue of such
conflict.
Other than as specifically provided in this Section 3.09, any purchase
pursuant to this Section 3.09 shall be made pursuant to the provisions of
Sections 3.01 through 3.06 hereof.
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ARTICLE 4.
COVENANTS
Section 4.01. Payment of Notes.
The Company shall pay or cause to be paid the principal of, premium, if
any, and interest on the Notes on the dates and in the manner provided in the
Notes. Principal, premium, if any, and interest shall be considered paid on the
date due if the Paying Agent, if other than the Company or a Subsidiary thereof,
holds as of 10:00 a.m. Eastern Time on the due date money deposited by the
Company in immediately available funds and designated for and sufficient to pay
all principal, premium, if any, and interest then due. The Company shall pay all
Liquidated Damages, if any, in the same manner on the dates and in the amounts
set forth in the Registration Rights Agreement.
The Company shall pay interest (including post-petition interest in any
proceeding under any Bankruptcy Law) on overdue principal at the rate equal to
1% per annum in excess of the then applicable interest rate on the Notes to the
extent lawful; it shall pay interest (including post-petition interest in any
proceeding under any Bankruptcy Law) on overdue installments of interest and
Liquidated Damages (without regard to any applicable grace period) at the same
rate to the extent lawful.
Section 4.02. Maintenance of Office or Agency.
The Company shall maintain in the Borough of Manhattan, the City of New
York, an office or agency (which may be an office of the Trustee or an affiliate
of the Trustee, Registrar or co-registrar) where Notes may be surrendered for
registration of transfer or for exchange and where notices and demands to or
upon the Company in respect of the Notes and this Indenture may be served. The
Company shall give prompt written notice to the Trustee of the location, and any
change in the location, of such office or agency. If at any time the Company
shall fail to maintain any such required office or agency or shall fail to
furnish the Trustee with the address thereof, such presentations, surrenders,
notices and demands may be made or served at the Corporate Trust Office of the
Trustee.
The Company may also from time to time designate one or more other
offices or agencies where the Notes may be presented or surrendered for any or
all such purposes and may from time to time rescind such designations; provided,
however, that no such designation or rescission shall in any manner relieve the
Company of its obligation to maintain an office or agency in the Borough of
Manhattan, the City of New York for such purposes. The Company shall give prompt
written notice to the Trustee of any such designation or rescission and of any
change in the location of any such other office or agency.
The Company hereby designates the Corporate Trust Office of the Trustee
as one such office or agency of the Company in accordance with Section 2.03.
Section 4.03. Reports.
(a) Whether or not required by the rules and regulations of the SEC, so
long as any Notes are outstanding, the Company shall furnish to the Holders of
Notes (i) all quarterly and annual financial information that would be required
to be contained in a filing with the SEC on Forms 10-Q and 10-K if the Company
were required to file such Forms, including a "Management's Discussion and
Analysis of Financial Condition and Results of Operations" and, with respect to
the annual information only, a report thereon by the Company's certified
independent accountants and (ii) all current reports that would be required to
be filed with the SEC on Form 8-K if the Company were required to file such
reports, in each case, within the time periods specified in the SEC's rules and
regulations. If the Company or any Guarantor has designated any of its
Subsidiaries as Unrestricted Subsidiaries, then the quarterly and
42
annual financial information required by the preceding sentence shall include a
reasonably detailed presentation, either on the face of the financial statements
or in the footnotes thereto to the same extent that would be required by
Regulation S-X promulgated pursuant to the Securities Act, and in addition, in
"Management's Discussion and Analysis of Financial Condition and Results of
Operations," of the financial condition and results of operations of the Company
and the Restricted Subsidiaries separate from the financial condition and
results of operations of the Unrestricted Subsidiaries. In addition, following
consummation of the Exchange Offer, whether or not required by the rules and
regulations of the SEC, the Company shall file a copy of all such information
and reports referred to in clauses (i) and (ii) of this paragraph with the SEC
for public availability within the time periods specified in the SEC's rules and
regulations (unless the SEC will not accept such a filing) and make such
information available to securities analysts and prospective investors upon
request. The Company shall at all times comply with TIA (S) 314(a).
(b) For so long as any Notes remain outstanding, the Company and
the Parent Guarantors and the Subsidiary Guarantors shall furnish to the Holders
and to securities analysts and prospective investors, upon their request, the
information required to be delivered pursuant to Rule 144A(d)(4) under the
Securities Act.
Section 4.04. Compliance Certificate.
(a) The Company and each Guarantor (to the extent that such
Guarantor is so required under the TIA) shall deliver to the Trustee, within 90
days after the end of each fiscal year, an Officers' Certificate stating that a
review of the activities of the Company and its Subsidiaries during the
preceding fiscal year has been made under the supervision of the signing
Officers with a view to determining whether the Company has kept, observed,
performed and fulfilled its obligations under this Indenture, and further
stating, as to each such Officer signing such certificate, that to the best of
his or her knowledge the Company has kept, observed, performed and fulfilled
each and every covenant contained in this Indenture and is not in default in the
performance or observance of any of the terms, provisions and conditions of this
Indenture (or, if a Default or Event of Default shall have occurred, describing
all such Defaults or Events of Default of which he or she may have knowledge and
what action the Company is taking or proposes to take with respect thereto) and
that to the best of his or her knowledge no event has occurred and remains in
existence by reason of which payments on account of the principal of or interest
or Liquidated Damages, if any, on the Notes is prohibited or if such event has
occurred, a description of the event and what action the Company is taking or
proposes to take with respect thereto.
(b) So long as not contrary to the then current recommendations of
the American Institute of Certified Public Accountants, the year-end financial
statements delivered pursuant to Section 4.03(a) above shall be accompanied by a
written statement of the Company's independent public accountants (who shall be
a firm of established national reputation) that in making the examination
necessary for certification of such financial statements, nothing has come to
their attention that would lead them to believe that the Company has violated
any provisions of Article 4 or Article 5 hereof or, if any such violation has
occurred, specifying the nature and period of existence thereof, it being
understood that such accountants shall not be liable directly or indirectly to
any Person for any failure to obtain knowledge of any such violation.
(c) The Company shall, so long as any of the Notes are
outstanding, deliver to the Trustee, forthwith upon any Officer becoming aware
of any Default or Event of Default, an Officers' Certificate specifying such
Default or Event of Default and what action the Company is taking or proposes to
take with respect thereto.
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Section 4.05. Taxes.
The Company shall pay, and shall cause each of its Subsidiaries to pay,
prior to delinquency, all material taxes, assessments, and governmental levies
except such as are contested in good faith and by appropriate proceedings or
where the failure to effect such payment is not adverse in any material respect
to the Holders of the Notes.
Section 4.06. Stay, Extension and Usury Laws.
The Company and each of the Guarantors covenants (to the extent that it
may lawfully do so) that it shall not at any time insist upon, plead, or in any
manner whatsoever claim or take the benefit or advantage of, any stay, extension
or usury law wherever enacted, now or at any time hereafter in force, that may
affect the covenants or the performance of this Indenture; and the Company and
each of the Guarantors (to the extent that it may lawfully do so) hereby
expressly waives all benefit or advantage of any such law, and covenants that it
shall not, by resort to any such law, hinder, delay or impede the execution of
any power herein granted to the Trustee, but shall suffer and permit the
execution of every such power as though no such law has been enacted.
Section 4.07. Restricted Payments.
The Parent Entity and the Company shall not, and shall not permit any
of the Company's Restricted Subsidiaries to, directly or indirectly: (i) declare
or pay any dividend or make any other payment or distribution on account of the
Company's or any of its Restricted Subsidiaries' or the Parent Entity's Equity
Interests (including, without limitation, any payment in connection with any
merger or consolidation involving the Company or any of its Restricted
Subsidiaries or the Parent Entity) or to the direct or indirect holders of the
Company's or any of its Restricted Subsidiaries' or Parent Entity's Equity
Interests in their capacity as such (other than dividends or distributions
payable in Equity Interests (other than Disqualified Stock) of the Company or
dividends or distributions payable to the Company or a Restricted Subsidiary of
the Company); (ii) purchase, redeem or otherwise acquire or retire for value
(including without limitation, in connection with any merger or consolidation
involving the Company) any Equity Interests of the Company or any direct or
indirect parent of the Company; (iii) make any payment on or with respect to, or
purchase, redeem, defease or otherwise acquire or retire for value any
Indebtedness that is subordinated to the Notes or the Parent Guarantee or the
Subsidiary Guarantee, except a payment of interest or principal at the Stated
Maturity thereof; or (iv) make any Restricted Investment (all such payments and
other actions set forth in clauses (i) through (iv) above being collectively
referred to as "Restricted Payments"), unless, at the time of and after giving
effect to such Restricted Payment:
(a) no Default or Event of Default shall have occurred and
be continuing or would occur as a consequence thereof; and
(b) the Company would, at the time of such Restricted Payment
and after giving pro forma effect thereto as if such Restricted Payment
had been made at the beginning of the applicable four-quarter period,
have been permitted to incur at least $1.00 of additional Indebtedness
pursuant to the Leverage Ratio test set forth in the first paragraph of
Section 4.09 hereof; and
(c) such Restricted Payment, together with the aggregate
amount of all other Restricted Payments made by the Company and its
Restricted Subsidiaries after the date of this Indenture (excluding
Restricted Payments permitted by clauses (ii), (iii), (iv), (vi), (vii)
and (viii) of the next succeeding paragraph), is less than the sum,
without duplication, of (i) 30% of the
44
Consolidated Net Income of Paperweight Development Corp. for the period
(taken as one accounting period) from the beginning of the first fiscal
quarter commencing after the date of this Indenture to the end of
Paperweight Development Corp.'s most recently ended fiscal quarter for
which internal financial statements are available at the time of such
Restricted Payment (or, if such Consolidated Net Income for such period is
a deficit, less 100% of such deficit), plus (ii) 100% of the aggregate net
cash proceeds received by the Company since the date of this Indenture as a
contribution to its common equity capital or from the issue or sale of
Equity Interests of the Company (other than Disqualified Stock) or from the
issue or sale of convertible or exchangeable debt securities of the Company
that have been converted into or exchanged for such Equity Interests (other
than Equity Interests (or Disqualified Stock or debt securities) sold to a
Subsidiary of the Company), plus (iii) to the extent that any Restricted
Investment that was made after the date of this Indenture is sold for cash
or otherwise liquidated or repaid for cash, the lesser of (A) the cash
return of capital with respect to such Restricted Investment (less the cost
of disposition, if any) and (B) the initial amount of such Restricted
Investment, plus (iv) upon the redesignation of an Unrestricted Subsidiary
as a Restricted Subsidiary, the lesser of (A) the fair market value of such
Subsidiary or (B) the Company's initial Investment in such Subsidiary.
Notwithstanding the foregoing, the Parent Entity and the Company shall not, and
shall not permit any of the Restricted Subsidiaries to, make any payment in
respect of the Deferred Payment Obligation prior to its Stated Maturity.
So long as no Default or Event of Default shall have occurred and be
continuing or would occur as a consequence thereof, the foregoing provisions
shall not prohibit (i) the payment of any dividend within 60 days after the date
of declaration thereof, if at said date of declaration such payment would have
complied with the provisions of this Indenture; (ii) the redemption, repurchase,
retirement, defeasance or other acquisition of any subordinated Indebtedness of
the Company or any Guarantor or of any Equity Interests of the Company in
exchange for, or out of the net cash proceeds of the substantially concurrent
sale (other than to a Restricted Subsidiary of the Company) of, Equity Interests
of the Company (other than any Disqualified Stock); provided that the amount of
any such net cash proceeds that are utilized for any such redemption,
repurchase, retirement, defeasance or other acquisition shall be excluded from
clause (c)(ii) of the preceding paragraph; (iii) the defeasance, redemption,
repurchase, retirement or other acquisition of subordinated Indebtedness of the
Company or any Guarantor with the net cash proceeds from an incurrence of
Permitted Refinancing Indebtedness unless otherwise prohibited by the terms of
this Indenture; (iv) the payment of any dividend by a Restricted Subsidiary of
the Company to the holders of its Equity Interests on a pro rata basis; (v) the
payment of loans, advances, dividends or distributions by the Company to the
Parent Entity to permit the Parent Entity to satisfy its legal obligations to
pay taxes and administrative and other expenses incurred in the ordinary course
of business provided that such amounts are promptly used to pay such taxes and
administrative and other expenses and provided further that such amounts may not
exceed, without duplication, $1,000,000 in the aggregate for payments to the
Parent Entity in any twelve month period; (vi) issuances of Capital Stock by
Paperweight Development Corp. to the ESOP in satisfaction of the employer
matching obligation under the ESOP; (vii) investments acquired solely as a
capital contribution; and (viii) distributions by the Company to permit
Paperweight Development Corp. to repay the Intercompany Acquisition Loan so long
as the amount of any such distribution is simultaneously netted against amounts
owing to the Company under the Intercompany Acquisition Loan and no cash is paid
as a result of any such distribution.
The amount of all Restricted Payments (other than cash) shall be the fair
market value on the date of the Restricted Payment of the asset(s) or securities
proposed to be transferred or issued by the Company or such Restricted
Subsidiary, as the case may be, pursuant to the Restricted Payment. The fair
market value of any assets or securities that are required to be valued by this
Section 4.07 shall be determined by the Board of Directors whose resolution with
respect thereto shall be delivered to the
45
Trustee, such determination to be based upon an opinion or appraisal issued by
an accounting, appraisal or investment banking firm of national standing if such
fair market value exceeds $7.5 million. Not later than the date of making any
Restricted Payment, the Company shall deliver to the Trustee an Officers'
Certificate stating that such Restricted Payment is permitted and setting forth
the basis upon which the calculations required by this Section 4.07 were
computed, together with a copy of any fairness opinion or appraisal required by
this Indenture.
Section 4.08. Dividend and Other Payment Restrictions Affecting Restricted
Subsidiaries.
The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, directly or indirectly, create or permit to exist or become
effective any consensual encumbrance or restriction on the ability of any
Restricted Subsidiary to (a) pay dividends or make any other distributions on
its Capital Stock to the Company or any of its Restricted Subsidiaries, or with
respect to any other interest or participation in, or measured by, its profits,
or pay any indebtedness owed to the Company or any of its Restricted
Subsidiaries, (b) make loans or advances to the Company or any of its Restricted
Subsidiaries or (c) transfer any of its properties or assets to the Company or
any of its Restricted Subsidiaries, except for such encumbrances or restrictions
existing under or by reason of (i) agreements governing Existing Indebtedness
and the Credit Agreement as in effect on the date hereof and any amendments,
modifications, restatements, renewals, increases, supplements, refundings,
replacements or refinancings of those agreements, provided that the amendments,
modifications, restatements, renewals, increases, supplements, refundings,
replacements or refinancings are no more restrictive, taken as a whole, with
respect to such dividend and other payment restrictions than those contained in
those agreements on the date of this Indenture; (ii) this Indenture, the Notes
and the Parent Guarantee and the Subsidiary Guarantee; (iii) applicable law;
(iv) any instrument governing Indebtedness or Capital Stock of a Person acquired
by the Company or any of its Restricted Subsidiaries as in effect at the time of
such acquisition (except to the extent such Indebtedness or Capital Stock was
incurred in connection with or in contemplation of such acquisition), which
encumbrance or restriction is not applicable to any Person, or the properties or
assets of any Person, other than the Person, or the property or assets of the
Person, so acquired, provided that, in the case of Indebtedness, such
Indebtedness was permitted by the terms of this Indenture to be incurred; (v)
customary non-assignment provisions in leases, licenses and supply contracts
entered into in the ordinary course of business; (vi) purchase money obligations
for property acquired in the ordinary course of business that impose
restrictions on that property of the nature described in clause (c) of this
Section 4.08; (vii) any agreement for the sale or other disposition of the
assets or Capital Stock of a Restricted Subsidiary that restricts distributions
by that Restricted Subsidiary pending its sale or other disposition; (viii)
Permitted Refinancing Indebtedness, provided that the restrictions contained in
the agreements governing such Permitted Refinancing Indebtedness are no more
restrictive, taken as a whole, than those contained in the agreements governing
the Indebtedness being refinanced; (ix) Liens securing Indebtedness otherwise
permitted to be incurred under Section 4.12 hereof that limit the right of the
debtor to dispose of the assets subject to such Liens; (x) provisions with
respect to the disposition or distribution of assets or property in joint
venture agreements, asset sale agreements, stock sale agreements and other
similar agreements entered into in the ordinary course of business; (xi)
restrictions on cash or other deposits or net worth imposed by customers under
contracts entered into in the ordinary course of business; (xii) any agreement
governing Indebtedness incurred after the date of this Indenture permitted under
Section 4.09 hereof; provided that the restrictions contained in any such
agreement, taken as a whole, are not less favorable to the Holders of the Notes
than those contained in the agreements governing Existing Indebtedness; or
(xiii) any encumbrances or restrictions imposed by amendments, modifications,
restatements, renewals, increases, supplements, refundings, replacements or
refinancings of contracts, instruments or obligations referred to in clauses (i)
through (xii) above; provided that such amendments, modifications, restatements,
renewals, increases, supplements, refundings, replacements or refinancings are
no more restrictive, taken as a whole, with respect to such dividend or other
payment
46
restrictions than those contained in the dividend or other payment restrictions
prior to such amendment, modification, restatement, renewal, increase,
supplement, refunding, replacement or refinancing.
Section 4.09. Incurrence of Indebtedness and Issuance of Preferred Stock.
The Parent Entity and the Company shall not, and shall not permit any
of their Subsidiaries to, directly or indirectly, create, incur, issue, assume,
guarantee or otherwise become directly or indirectly liable, contingently or
otherwise, with respect to (collectively, "incur") any Indebtedness (including
Acquired Debt) and the Company shall not issue any Disqualified Stock and shall
not permit the Parent Entity to issue any Disqualified Stock and shall not
permit any of its Subsidiaries to issue any shares of preferred stock; provided,
however, that the Company may incur Indebtedness (including Acquired Debt) or
issue Disqualified Stock, and the Company's Subsidiary Guarantors may incur
Indebtedness or issue preferred stock, if the Leverage Ratio of Paperweight
Development Corp. at the time of incurrence of such Indebtedness or the issuance
of such Disqualified Stock or such preferred stock, as the case may be, after
giving pro forma effect to such incurrence or issuance as of such date and to
the use of proceeds therefrom as if the same had occurred at the beginning of
the most recently ended four full fiscal quarter period of Paperweight
Development Corp. for which internal financial statements are available, would
have been no greater than:
(a) 3.25 to 1, if such incurrence or issuance is on or
prior to September 30, 2002;
(b) 2.50 to 1, if such incurrence or issuance is after
September 30, 2002 but on or prior to September 30, 2003;
(c) 2.25 to 1, if such incurrence or issuance is after
September 30, 2003 but on or prior to September 30, 2004; or
(d) 1.75 to 1 thereafter.
The provisions of the first paragraph of this Section 4.09 shall not
prohibit the incurrence of any of the following items of Indebtedness
(collectively, "Permitted Debt"):
(i) the incurrence by the Company of additional
Indebtedness and letters of credit, and the incurrence by the
Guarantors of related Guarantees, under the Credit Agreement in an
aggregate principal amount at any one time outstanding under this
clause (i) (with letters of credit being deemed to have a principal
amount equal to the maximum potential liability of the Company and its
Restricted Subsidiaries thereunder) not to exceed $340.0 million (a)
less the aggregate amount of all repayments, optional or mandatory, of
the principal of any term Indebtedness under the Credit Agreement or
the guarantees thereof (other than repayments that are concurrently
reborrowed) that have been made by the Company or any of its Restricted
Subsidiaries since the date hereof and (b) less the aggregate amount of
all commitment reductions with respect to any revolving credit
borrowings under the Credit Agreement or the guarantees thereof that
have been made by the Company or any of its Restricted Subsidiaries
since the date hereof, provided, however, that no repayments or
reductions under the immediately preceding clauses (a) or (b) shall
reduce below $75.0 million the amount of Indebtedness that may be
outstanding at any one time under this clause (i);
(ii) the incurrence by the Company and its Restricted
Subsidiaries of the Existing Indebtedness;
47
(iii) the incurrence by the Parent Entity of the Deferred Payment
Obligation and Intercompany Acquisition Loan;
(iv) the incurrence by the Company and the Guarantors of Indebtedness
represented by the Notes and the related Parent Guarantee and the
Subsidiary Guarantee to be issued on the date hereof and the Exchange Notes
and the related Parent Guarantee and the Subsidiary Guarantee to be issued
pursuant to the Registration Rights Agreement;
(v) the incurrence by the Company or any of its Restricted
Subsidiaries of Indebtedness represented by Capital Lease Obligations,
mortgage financings or purchase money obligations, in each case, incurred
for the purpose of financing all or any part of the purchase price or cost
of construction or improvement of property, plant or equipment used in the
business of the Company or such Restricted Subsidiary, in an aggregate
principal amount, including all Permitted Refinancing Indebtedness incurred
to refund, refinance or replace any Indebtedness incurred pursuant to this
clause (v), not to exceed 3% of the consolidated tangible net assets of the
Company and its Restricted Subsidiaries as of the last day of the most
recently ended full fiscal quarter period of the Company for which internal
financial statements are available, with tangible net assets being
calculated for this purpose as the sum of (a) Consolidated Current Assets
plus (b) consolidated property, plant and equipment (net of accumulated
depreciation) calculated in accordance with GAAP and set forth on the
consolidated balance sheet at such date less (c) Consolidated Current
Liabilities;
(vi) the incurrence by the Company or any of its Restricted
Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or the
net proceeds of which are used to refund, refinance or replace Indebtedness
(other than intercompany Indebtedness) that was permitted by this Indenture
to be incurred under the first paragraph of this Section 4.09 or clauses
(ii), (iv), (v), (vi) or (xi) of this paragraph;
(vii) the incurrence by the Company or any of its Restricted
Subsidiaries of intercompany Indebtedness between or among the Company and
any of its Subsidiaries; provided, however, that:
(A) if the Company or any Guarantor is the obligor on such
Indebtedness, such Indebtedness must be expressly subordinated to the
prior payment in full in cash of all Obligations with respect to the
Notes, in the case of the Company, or the Subsidiary Guarantee or
Parent Guarantee, in the case of a Guarantor; and
(B) (1) any subsequent issuance or transfer of Equity
Interests that results in any such Indebtedness being held by a Person
other than the Company or a Restricted Subsidiary of the Company and
(2) any sale or other transfer of any such Indebtedness to a Person
that is not either the Company or a Restricted Subsidiary of the
Company; shall be deemed, in each case, to constitute an incurrence of
such Indebtedness by the Company or such Restricted Subsidiary, as the
case may be, that was not permitted by this clause (vii);
(viii) the incurrence by the Company or any of its Restricted
Subsidiaries of Hedging Obligations provided, that to the extent such
Hedging Obligations relate to Indebtedness, such Indebtedness is permitted
by the terms of this Indenture to be outstanding;
48
(ix) the guarantee by the Company or any of the Guarantors of
Indebtedness of the Company or a Restricted Subsidiary of the Company that
was permitted to be incurred by another provision of this Section 4.09;
(x) the accrual of interest, the accretion (including the accretion
on the Deferred Payment Obligation) or amortization of original issue
discount, the payment of interest on any Indebtedness in the form of
additional Indebtedness with the same terms, and the payment of dividends
on Disqualified Stock in the form of additional shares of the same class of
Disqualified Stock shall not be deemed to be an incurrence of Indebtedness
or an issuance of Disqualified Stock for purposes of this Section 4.09;
(xi) the incurrence by the Company or any of its Restricted
Subsidiaries of additional Indebtedness in an aggregate principal amount
(or accreted value, as applicable) at any time outstanding, including all
Permitted Refinancing Indebtedness incurred to refund, refinance or replace
any Indebtedness incurred pursuant to this clause (xi), not to exceed $20.0
million;
(xii) the incurrence by the Company of Indebtedness or Obligations
represented by or incurred pursuant to the Environmental Indemnity
Agreements;
(xiii) Indebtedness of the Company or any Restricted Subsidiary
arising from the honoring by a bank or other financial institution of a
check, draft or similar instrument inadvertently (except in the case of
daylight overdrafts) drawn against insufficient funds in the ordinary
course of business, provided that such indebtedness is satisfied within
three business days of incurrence;
(xiv) the incurrence by the Company's Unrestricted Subsidiaries of
Non-Recourse Debt; provided, however, that if any such Indebtedness ceases
to be Non-Recourse Debt of an Unrestricted Subsidiary, such event shall be
deemed to be an incurrence of Indebtedness by a Restricted Subsidiary of
the Company that was not permitted by this clause (xiv);
(xv) Indebtedness arising from agreements of the Company or a
Restricted Subsidiary or the Parent Entity providing for indemnification,
adjustment of purchase price, earn out or other similar obligations, in
each case, incurred or assumed in connection with the disposition of any
business, assets or a Restricted Subsidiary, other than guarantees of
Indebtedness incurred by any person acquiring all or any portion of such
business, assets or Restricted Subsidiary for the purpose of financing such
acquisition; provided that the maximum assumable liability in respect of
all such Indebtedness shall at no time exceed 20% of the gross proceeds
actually received by the Company and its Restricted Subsidiaries in
connection with such disposition;
(xvi) obligations in respect of performance and surety bonds provided
by the Company or any Restricted Subsidiary of the Company in the ordinary
course of business consistent with past practice; and
(xvii) Indebtedness arising under the Intercompany Acquisition Loan,
provided, however, that such Indebtedness must be expressly subordinated to
the Parent Guarantee.
Notwithstanding the foregoing, the Company shall not permit the Parent
Entity to amend, modify, change or refinance the Deferred Payment Obligation.
For purposes of determining compliance with this Section 4.09, in the event
that an item of proposed Indebtedness meets the criteria of more than one of the
categories of Permitted Debt described
49
in clauses (i) through (xvi) above, or is entitled to be incurred pursuant to
the first paragraph of this Section 4.09, the Company shall be permitted to
classify such item of Indebtedness on the date of its incurrence, or later
reclassify all or a portion of such item of Indebtedness, in any manner that
complies with this Section 4.09 and such item of Indebtedness shall be treated
as having been incurred pursuant to only one of such clauses or pursuant to the
first paragraph of this Section 4.09. Indebtedness under the Credit Agreement
outstanding on the date on which Notes are first issued and authenticated under
this Indenture shall be deemed to have been incurred on such date in reliance on
the exception provided by clause (i) of the definition of Permitted Debt.
Accrual of interest shall not be deemed to be an incurrence of Indebtedness for
purposes of this Section 4.09.
Section 4.10. Asset Sales.
The Parent Entity and the Company shall not, and the Company shall not
permit any of its Restricted Subsidiaries to, consummate an Asset Sale unless:
(i) the Company (or the Restricted Subsidiary or Parent Entity, as the case may
be) receives consideration at the time of the Asset Sale at least equal to the
fair market value of the assets or Equity Interests issued or sold or otherwise
disposed of, (ii) the fair market value is determined by the Company's Board of
Directors and evidenced by a resolution of the Board of Directors set forth in
an Officers' Certificate delivered to the Trustee and (iii) at least 75% of the
consideration received therefor by the Company or such Restricted Subsidiary or
Parent Entity is in the form of cash or Cash Equivalents; provided, however,
that the amount of (x) any liabilities, as shown on the Company's or such
Restricted Subsidiary's or Parent Entity's most recent balance sheet, of the
Company or any Restricted Subsidiary or Parent Entity (other than contingent
liabilities and liabilities that are by their terms subordinated to the Notes or
any Guarantee) that are assumed by the transferee of any such assets pursuant to
a customary novation agreement that releases the Company or such Restricted
Subsidiary or Parent Entity from further liability and (y) any securities, notes
or other obligations received by the Company or any such Restricted Subsidiary
or Parent Entity from such transferee that are contemporaneously, subject to
ordinary settlement periods, converted by the Company or such Restricted
Subsidiary or Parent Entity into cash, to the extent of the cash received in
that conversion, shall be deemed to be cash for purposes of this provision. A
transfer of assets by the Company to a Subsidiary Guarantor or by a Subsidiary
Guarantor to the Company or to another Subsidiary Guarantor, and an issuance of
Equity Interests by a Restricted Subsidiary to the Company or to another
Restricted Subsidiary, shall not be deemed to be an Asset Sale. Any Restricted
Payment that is permitted by Section 4.07 hereof shall not be deemed to be an
Asset Sale.
Within 360 days after the receipt of any Net Proceeds from an Asset Sale,
the Company may apply (or cause to be applied) the Net Proceeds from such Asset
Sale, at its option (a) to Repay Senior Debt and, if the Senior Debt repaid is
revolving credit Indebtedness, to correspondingly permanently reduce commitments
with respect to such revolving credit Indebtedness, (b) to acquire all or
substantially all of the assets of, or a majority of the Voting Stock of,
another Permitted Business, (c) to make a Capital Expenditure or (d) to acquire
or make capitalized repairs to other long-term assets that are used or useful in
a Permitted Business. Notwithstanding the foregoing, neither the Company nor one
or more of its Subsidiaries shall engage in an Asset Sale in which the purchaser
or transferee is the Parent Entity. Pending the final application of any such
Net Proceeds, the Company may temporarily reduce revolving credit Indebtedness
or otherwise invest such Net Proceeds in any manner that is not prohibited by
this Indenture. Any Net Proceeds from such Asset Sale that are not finally
applied or invested as provided in the first sentence of this paragraph shall be
deemed to constitute "Excess Proceeds." Within five Business Days of each date
on which the aggregate amount of Excess Proceeds exceeds $5.0 million, the
Company shall commence a pro rata Asset Sale Offer pursuant to Section 3.09
hereof to all Holders of Notes and all holders of other Indebtedness that is
pari passu with the Notes containing provisions similar to those set forth in
this Indenture with respect to offers to purchase or redeem with the proceeds of
sales of assets to purchase the maximum principal amount of Notes and such other
pari passu Indebtedness that
50
may be purchased out of the Excess Proceeds. The offer price in any Asset Sale
Offer will be equal to 100% of the principal amount plus accrued and unpaid
interest and Liquidated Damages, if any, to the date of purchase, in accordance
with the procedures set forth in Section 3.09 hereof, and will be payable in
cash. If any Excess Proceeds remain after consummation of an Asset Sale Offer,
the Company may use those Excess Proceeds for any purpose not otherwise
prohibited by this Indenture. If the aggreate principal amount of Notes and
other pari passu Indebtedness tendered into such Asset Sale Offer exceeds the
amount of Excess Proceeds, the Trustee shall select the Notes and such other
pari passu Indebtedness to be purchased on a pro rata basis. Upon completion of
each Asset Sale Offer, the amount of Excess Proceeds will be deemed to be reset
at zero.
Section 4.11. Transactions with Affiliates.
The Parent Entity and the Company shall not, and shall not permit any of
the Company's Restricted Subsidiaries to, make any payment to, or sell, lease,
transfer or otherwise dispose of any of its properties or assets to, or purchase
any property or assets from, or enter into or make or amend any transaction,
contract, agreement, understanding, loan, advance or guarantee with, or for the
benefit of, any Affiliate (each of the foregoing, an "Affiliate Transaction"),
unless (a) such Affiliate Transaction is on terms that are no less favorable to
the Company or relevant Restricted Subsidiary or the Parent Entity than those
that would have been obtained in a comparable transaction by the Company or such
Restricted Subsidiary or such Parent Entity with an unrelated Person and (b) the
Company delivers to the Trustee (i) with respect to any Affiliate Transaction or
series of related Affiliate Transactions involving aggregate consideration in
excess of $1.0 million, a resolution of the Board of Directors set forth in an
Officers' Certificate certifying that such Affiliate Transaction complies with
clause (a) above and that such Affiliate Transaction has been approved by a
majority of the disinterested members of the Board of Directors and (ii) with
respect to any Affiliate Transaction or series of related Affiliate Transactions
involving aggregate consideration in excess of $5.0 million, an opinion as to
the fairness to the Holders of such Affiliate Transaction from a financial point
of view issued by an accounting, appraisal or investment banking firm of
national standing; provided, however, that the following items shall not be
deemed Affiliate Transactions: (i) any employment, termination protection,
deferred compensation, incentive, non-competition, benefit, indemnification or
similar agreement or plan entered into by the Company or any of its Restricted
Subsidiaries or the Parent Entity in the ordinary course of business with
officers, directors or employees of the Company or such Restricted Subsidiary or
Parent Entity; (ii) transactions between or among the Parent Entity, the Company
and/or one or more of its Restricted Subsidiaries that is a Guarantor; (iii)
transactions with a Person that is an Affiliate of the Company solely because
the Company owns an Equity Interest in, or controls, or is under common control
with, such Person; (iv) payment of reasonable compensation (including
equity-based compensation) and expense reimbursements to members of the Board of
Directors who are not otherwise Affiliates of the Company; (v) sales of Equity
Interests (other than Disqualified Stock) to Affiliates of the Company not
otherwise prohibited by this Indenture; (vi) Restricted Payments or Permitted
Investments that are permitted by Section 4.07 hereof; (vii) the repurchase by
Paperweight Development Corp., or the issuance by Paperweight Development Corp.,
of shares of its Capital Stock, from or to the ESOP, as the case may be,
pursuant to the terms of the ESOP Documentation, not otherwise prohibited by
this Indenture; and (viii) amendments to the ESOP as may, from time to time, be
required by law.
Section 4.12. Liens.
The Company shall not, and shall not permit any of its Subsidiaries to,
create, incur, assume or otherwise cause or suffer to exist or become effective
any Lien of any kind securing Indebtedness, Attributable Debt or trade payables
(other than Permitted Liens) upon any of their property or assets, now owned or
hereafter acquired, unless all payments due under this Indenture and the Notes
are secured on an
51
equal and ratable basis with the obligations so secured until such time as such
obligations are no longer secured by a Lien.
Section 4.13. Line of Business.
The Company shall not, and shall not permit any Restricted Subsidiary
to, engage in any business other than Permitted Businesses, except to such
extent as would not be material to the Company and its Restricted Subsidiaries
taken as a whole.
The Company shall not permit the Parent Entity to conduct, transact or
otherwise engage in, or commit to conduct, transact or otherwise engage in, any
business or operations other than those incidental to its direct or indirect
ownership of the Capital Stock of the Company (including matters related to the
ESOP) and those actions required to be taken under the Deferred Payment
Obligation, Guarantees permitted by this Indenture, the Intercompany Acquisition
Loan, the Environmental Indemnity Agreements and the Credit Enhancement.
Section 4.14. Corporate Existence.
Subject to Article 5 hereof, the Company shall do or cause to be done
all things necessary to preserve and keep in full force and effect (i) its
corporate existence, and the corporate, partnership or other existence of each
of its Restricted Subsidiaries, in accordance with the respective organizational
documents (as the same may be amended from time to time) of the Company or any
such Restricted Subsidiary and (ii) the rights (charter and statutory), licenses
and franchises of the Company and its Restricted Subsidiaries; provided,
however, that the Company shall not be required to preserve any such right,
license or franchise, or the corporate, partnership or other existence of any of
its Restricted Subsidiaries, if the Board of Directors shall determine that the
preservation thereof is no longer desirable in the conduct of the business of
the Company and its Restricted Subsidiaries, taken as a whole, and that the loss
thereof is not adverse in any material respect to the Holders of the Notes.
Section 4.15. Offer to Repurchase Upon Change of Control.
(a) Upon the occurrence of a Change of Control, the Company shall make an offer
(a "Change of Control Offer") to each Holder to repurchase all or any part
(equal to $1,000 or an integral multiple thereof) of each Holder's Notes at a
purchase price equal to 101% of the aggregate principal amount thereof plus
accrued and unpaid interest and Liquidated Damages thereon, if any, to the date
of purchase (the "Change of Control Payment"). Within 20 days following any
Change of Control, the Company shall mail a notice to each Holder describing the
transaction or transactions that constitute a Change of Control and stating: (1)
that the Change of Control Offer is being made pursuant to this Section 4.15 and
that all Notes tendered will be accepted for payment; (2) the purchase price and
the purchase date, which shall be no earlier than 30 days and no later than 60
days from the date such notice is mailed (the "Change of Control Payment Date");
(3) that any Note not tendered will continue to accrue interest; (4) that,
unless the Company defaults in the payment of the Change of Control Payment, all
Notes accepted for payment pursuant to the Change of Control Offer shall cease
to accrue interest after the Change of Control Payment Date; (5) that Holders
electing to have any Notes purchased pursuant to a Change of Control Offer will
be required to surrender the Notes, with the form entitled "Option of Holder to
Elect Purchase" on the reverse of the Notes completed, to the Paying Agent at
the address specified in the notice prior to the close of business on the third
Business Day preceding the Change of Control Payment Date; (6) that Holders will
be entitled to withdraw their election if the Paying Agent receives, not later
than the close of business on the second Business Day preceding the Change of
Control Payment Date, a telegram, telex, facsimile transmission or letter
setting forth the name of the Holder, the principal amount of Notes delivered
for purchase, and a statement that such Holder is withdrawing his election to
52
have the Notes purchased; and (7) that Holders whose Notes are being purchased
only in part will be issued new Notes equal in principal amount to the
unpurchased portion of the Notes surrendered, which unpurchased portion must be
equal to $1,000 in principal amount or an integral multiple thereof. The Company
shall comply with the requirements of Rule 14e-1 under the Exchange Act and any
other securities laws and regulations thereunder to the extent such laws and
regulations are applicable in connection with the repurchase of Notes in
connection with a Change of Control. To the extent that the provisions of any
securities laws or regulations conflict with this Section 4.15, the Company
shall comply with the applicable securities laws and regulations and shall not
be deemed to have breached its obligations under this Section 4.15 by virtue of
such conflict.
(b) On the Change of Control Payment Date, the Company shall, to the
extent lawful, (1) accept for payment all Notes or portions thereof properly
tendered pursuant to the Change of Control Offer, (2) deposit with the Paying
Agent an amount equal to the Change of Control Payment in respect of all Notes
or portions thereof properly tendered and (3) deliver or cause to be delivered
to the Trustee the Notes properly accepted together with an Officers'
Certificate stating the aggregate principal amount of Notes or portions thereof
being purchased by the Company. The Paying Agent shall promptly mail to each
Holder of Notes properly tendered the Change of Control Payment for such Notes,
and the Trustee shall promptly authenticate and mail (or cause to be transferred
by book entry) to each Holder a new Note equal in principal amount to any
unpurchased portion of the Notes surrendered by such Holder, if any; provided,
that each such new Note shall be in a principal amount of $1,000 or an integral
multiple thereof. Prior to complying with any of the provisions of this Section
4.15, but in any event within 90 days following a Change of Control, the Company
shall either repay all outstanding Senior Debt or obtain the requisite consents,
if any, under all agreements governing outstanding Senior Debt to permit the
repurchase of Notes required by this Section 4.15. The Company shall publicly
announce the results of the Change of Control Offer on or as soon as practicable
after the Change of Control Payment Date.
(c) Notwithstanding anything to the contrary in this Section 4.15, the
Company shall not be required to make a Change of Control Offer upon a Change of
Control if a third party makes the Change of Control Offer in the manner, at the
times and otherwise in compliance with the requirements set forth in this
Section 4.15 hereof and all other provisions of this Indenture applicable to a
Change of Control Offer made by the Company and purchases all Notes properly
tendered and not withdrawn under such Change of Control Offer.
Section 4.16. No Senior Subordinated Debt.
Notwithstanding the provisions of Section 4.09 hereof, (i) the Company
shall not incur, create, issue, assume, guarantee or otherwise become liable for
any Indebtedness that is subordinate or junior in right of payment to any Senior
Debt of the Company and senior in any respect in right of payment to the Notes,
and (ii) no Guarantor shall incur, create, issue, assume, guarantee or otherwise
become liable for any Indebtedness that is subordinate or junior in right of
payment to the Senior Debt of such Guarantor and senior in any respect in right
of payment to such Guarantor's Parent Guarantee or Subsidiary Guarantee, as
applicable.
Section 4.17. No Amendment to Deferred Payment Obligation, Fox River Indemnity
Arrangements, Security Holders Agreements, Intercompany
Acquisition Loan or ESOP Documentation.
(a) Without the consent of the Holders of at least a majority in
aggregate principal amount of the Notes then outstanding, the Company shall not
permit Paperweight Development Corp. to amend, modify, waive, assign or
otherwise change, or consent or agree to any amendment, modification, waiver or
other change to, any of the terms of the Deferred Payment Obligation other than
any such amendment, modification, waiver or other change that:
53
(i) would extend the maturity or reduce the amount of any
payment of principal thereof or reduce the rate or extend any date for
payment of interest thereon;
(ii) does not involve the payment of a consent fee; or
(iii) involves a change to a notice address or cures any
ambiguity, defect or inconsistency in a manner not in any respect
adverse to the Holders of the Notes.
(b) Without the consent of the Holders of at least a majority in
aggregate principal amount of the Notes then outstanding, the Company and
Paperweight Development Corp. shall not amend, supplement or otherwise modify,
or permit the amendment, supplement or modification of (pursuant to a waiver,
endorsement or otherwise) the terms and conditions of the Fox River Indemnity
Arrangements other than to the extent necessary to change a notice address or to
cure any ambiguity, defect or inconsistency in a manner not in any respect
adverse to the Holders of the Notes; provided, however, that terms, other than
the Economic Terms (as defined below), of the Relationship Agreement, the
Assignment and Assumption Deed and the Credit Enhancement may be amended with
the prior written consent of the Trustee, which consent shall be given only upon
the receipt of:
(i) 30 days' prior written notice of the proposed amendment,
modification, waiver or alteration, describing the same in reasonable
detail and providing any related documentation for the proposed
implementation thereof;
(ii) an Opinion of Counsel acceptable to the Trustee, to the
effect that the proposed amendment, modification, waiver or alteration
will not have an adverse effect on the legal rights of Arjo Xxxxxxx
Appleton (Bermuda) Limited, which is the policyholder under the Credit
Enhancement, Paperweight Development Corp. and the Company under the
Relationship Agreement or the Assignment and Assumption Deed, and does
not have an adverse effect on the then remoteness of Arjo Xxxxxxx
(Bermuda) Holdings Limited and Arjo Xxxxxxx Appleton (Bermuda) Limited
from AWA and its other Affiliates for bankruptcy, substantive
consolidation or similar purposes;
(iii) an Officer's Certificate on behalf of Paperweight
Development Corp., certifying that it believes that the proposed
amendment, modification, waiver or alteration is not adverse to Arjo
Xxxxxxx Appleton (Bermuda) Limited, Paperweight Development Corp. or
the Company;
(iv) an opinion from an investment bank of recognized national
standing, to the effect that the proposed amendment, modification,
waiver or alteration is not adverse, from a financial point of view, to
Arjo Xxxxxxx Appleton (Bermuda) Limited or to the Holders of the Notes
and would not, in such investment bank's opinion, result in any adverse
effect on the trading or price of the Notes; and
(v) any additional opinions or certificates that the Trustee
determines may reasonably be required given the circumstances of any
proposed amendment, modification, waiver or alteration;
in each case, in form and substance acceptable to the Trustee.
Notwithstanding the foregoing, the Trustee shall not be requested to approve and
shall not approve any amendment, modification, waiver or alteration of Section
2(h) of the Relationship Agreement providing for the conditions for Trustee
consent or any of the following terms (the "Economic Terms") of the Relationship
Agreement, the Assignment and Assumption Deed and the Credit Enhancement:
54
(i) Section I--Insuring Agreement, Section II--Limits of
Insurance, Section III--Conditions (other than Sections 3.d, 8, 9, 18
and 20 thereof) and all related definitions of the Credit Enhancement;
(ii) any provisions of the Assignment and Assumption Deed;
(iii) requirements for certificates of approval from the Trustee
or other lenders contained in the Relationship Agreement or the Credit
Enhancement;
(iv) the identity of the insurer under the Credit Enhancement;
and
(v) changes in the jurisdiction of organization of Arjo Xxxxxxx
Appleton (Bermuda) Limited, which is the policyholder under the Credit
Enhancement, to any jurisdiction other than as specified in Exhibit B
to the Relationship Agreement.
(c) Without the consent of the Holders of at least a majority in
aggregate principal amount of the Notes then outstanding, the Company and
Paperweight Development Corp. shall not amend, supplement or otherwise modify,
or permit the amendment, supplement or modification of (pursuant to a waiver,
endorsement or otherwise) the terms and conditions of the Security Holders
Agreements other than to the extent necessary to change a notice address or to
cure any ambiguity, defect or inconsistency in a manner not in any respect
adverse to the Holders of the Notes.
(d) Without the consent of the Holders of at least a majority in
aggregate principal amount of the Notes then outstanding, Appleton Papers and
the Parent Entity shall not amend, supplement or otherwise modify, or permit the
amendment, supplement or modification of (pursuant to a waiver, endorsement or
otherwise) the terms and conditions of the Intercompany Acquisition Loan except
to change a notice address or to cure any ambiguity, defect or inconsistency in
a manner not in any respect adverse to the Holders of the Notes.
(e) Without the consent of the Holders of at least a majority in
aggregate principal amount of the Notes then outstanding, Appleton Papers and
the Parent Entity shall not amend, supplement or otherwise modify, or permit the
amendment, supplement or modification of (pursuant to a waiver, endorsement or
otherwise) the ESOP Documentation except that the ESOP Documentation may be
amended, supplemented or modified as may be required by law, or to maintain the
tax qualified status of the ESOP or to change a notice address or to cure any
ambiguity, defect or inconsistency in a manner not in any respect adverse to the
Holders of the Notes; provided, however, that certain administrative,
non-economic and other terms of the ESOP Documentation, not including provisions
regarding (i) contributions to the ESOP (Article 3 of the ESOP), (ii)
distributions to participants (Article 7 of the ESOP), (iii) amendment or
termination of the ESOP (Articles 9 and 10 of the ESOP), (iv) eligibility
(Section 2.1(d) of the ESOP), (v) the allowable amount of a participant's
Savings Percentage (as defined in the ESOP) (Section 2.2(a) of the ESOP), (vi)
leased employees (Section 2.6 of the ESOP), (vii) the vesting schedule relating
to specific accounts (Section 4.2 of the ESOP), (viii) special vesting rules
(Section 4.3 of the ESOP), (ix) maximum amounts on annual additions (Section 5.4
of the ESOP), (x) limitation on deduction (Section 5.5 of the ESOP), (xi) the
trust fund (Section 6.1 of the ESOP), (xii) diversification of ESOP accounts
(Section 6.5 of the ESOP), (xiii) adjustment of ESOP accounts (Section 6.9(e) of
the ESOP) and definitions related to items (i) through (xiii) of this subsection
(e) may be amended with the consent of the Trustee upon receipt of (A) an
Officer's Certificate and an Opinion of Counsel, to the general effect that the
proposed amendment is not adverse to Paperweight Development Corp. or the
Company, and (B) an opinion of an ESOP consultant, to the general effect that
the proposed
55
amendment will not accelerate the timing or amount of Paperweight Development
Corp.'s obligations to repurchase common stock from employees terminating their
participation in the ESOP.
Section 4.18. Limitation on Sale and Leaseback Transactions.
The Parent Entity and the Company shall not, and shall not permit any
of the Company's Restricted Subsidiaries to, enter into any sale and leaseback
transaction; provided that the Company or any Subsidiary Guarantor may enter
into a sale and leaseback transaction if (i) the Company or that Subsidiary
Guarantor, as applicable, could have (a) incurred Indebtedness in an amount
equal to the Attributable Debt relating to such sale and leaseback transaction
and (b) incurred a Lien to secure such Indebtedness pursuant to the provisions
of Section 4.12 hereof, (ii) the gross cash proceeds of such sale and leaseback
transaction are at least equal to the fair market value (as determined in good
faith by the Board of Directors and set forth in an Officers' Certificate
delivered to the Trustee) of the property that is the subject of such sale and
leaseback transaction and (iii) the transfer of assets in such sale and
leaseback transaction is permitted by, and the Company applies the proceeds of
such transaction in compliance with, Section 4.10 hereof.
Section 4.19. Limitation on Issuances and Sales of Equity Interests in Wholly
Owned Subsidiaries.
The Company (i) shall not, and shall not permit any of its Subsidiaries
to, transfer, convey, sell, lease or otherwise dispose of any Equity Interests
in any Wholly Owned Restricted Subsidiary of the Company to any Person (other
than the Company or a Wholly Owned Restricted Subsidiary of the Company), unless
(a) such transfer, conveyance, sale, lease or other disposition is of all the
Equity Interests in such Wholly Owned Subsidiary and (b) the cash Net Proceeds
from such transfer, conveyance, sale, lease or other disposition are applied in
accordance with Section 4.10 hereof and (ii) shall not permit any Wholly Owned
Restricted Subsidiary of the Company to issue any of its Equity Interests (other
than, if necessary, shares of its Capital Stock constituting directors'
qualifying shares) to any Person other than to the Company or a Wholly Owned
Restricted Subsidiary of the Company.
Section 4.20. Payments for Consent.
The Company shall not, and shall not permit any of its Subsidiaries or
the Parent Entity to, directly or indirectly, pay or cause to be paid any
consideration, whether by way of interest, fee or otherwise, to or for the
benefit of any Holder of any Notes for or as an inducement to any consent,
waiver or amendment of any of the terms or provisions of this Indenture or the
Notes unless such consideration is offered to be paid and is paid to all Holders
of the Notes that consent, waive or agree to amend in the time frame set forth
in the solicitation documents relating to such consent, waiver or agreement.
Section 4.21. Additional Subsidiary Guarantees or Parent Guarantees.
If the Company or any of its Subsidiaries shall acquire or create
another Domestic Subsidiary after the date of this Indenture, other than a
Subsidiary with less than $2.0 million in total assets at the time of its
creation and thereafter as assessed each quarter based on the most recently
available quarterly balance sheet or a group of Subsidiaries with less than $5.0
million in total assets in the aggregate at the time of their creation and
thereafter as assessed each quarter based on the most recently available
quarterly balance sheet, excluding all Subsidiaries that have been properly
designated as Unrestricted Subsidiaries in accordance with this Indenture for so
long as they continue to constitute Unrestricted Subsidiaries, then each newly
acquired or created Domestic Subsidiary shall become a Guarantor and shall
execute a Supplemental Indenture and deliver an Opinion of Counsel, in
accordance with the terms of this Indenture, within 10 Business Days of the date
on which it was acquired, created or assessed.
56
If the Parent Entity shall acquire or create another entity having a
direct or indirect ownership interest in the Company after the date of this
Indenture, then that newly acquired or created entity shall become a Guarantor
and execute a Supplemental Indenture and deliver an Opinion of Counsel, in
accordance with the terms of this Indenture, within 10 Business Days of the date
on which it was acquired or created.
Section 4.22. Designation of Restricted and Unrestricted Subsidiaries.
The Board of Directors may designate any Restricted Subsidiary to be an
Unrestricted Subsidiary if that designation would not cause a Default. If a
Restricted Subsidiary is designated as an Unrestricted Subsidiary, the aggregate
fair market value of all outstanding Investments owned by the Company and the
Restricted Subsidiaries in the Subsidiary properly designated will be deemed to
be an Investment made as of the time of the designation and will reduce the
amount available for Restricted Payments under the first paragraph of Section
4.07 hereof or Permitted Investments, as determined by the Company. That
designation will only be permitted if the Investment would be permitted at that
time and if the Restricted Subsidiary otherwise meets the definition of an
Unrestricted Subsidiary. The Board of Directors may redesignate any Unrestricted
Subsidiary to be a Restricted Subsidiary if the redesignation would not cause a
Default.
Section 4.23. Excess Cash Flow.
(a) If, for any fiscal year of the Company commencing with the fiscal
year ending December 28, 2002, there is Excess Cash Flow, the Company shall
first apply the Excess Cash Flow Amount to repay Senior Debt and, if the Senior
Debt repaid is revolving credit Indebtedness, to correspondingly permanently
reduce commitments with respect to such revolving credit Indebtedness and
second, permanently reduce revolving credit commitments relating to Senior Debt
in an amount equal to the remaining Excess Cash Flow Amount, if any, not used to
repay Senior Debt, provided that the Company shall not be required in either
case to reduce such revolving credit commitments to less than $50.0 million. If
more than $5.0 million of the Excess Cash Flow Amount remains after such
prepayment and adjustment for such permanent reduction, the Company shall make
an offer (an "Excess Cash Flow Offer") to Holders of the Notes to repurchase in
cash all or any part (equal to $1,000 or an integral multiple thereof) of each
Holder's Notes up to the maximum principal amount of Notes, together with
interest and Liquidated Damages, if any, that may be repurchased with the
remaining Excess Cash Flow Amount at a purchase price equal to 103% of the
aggregate principal amount thereof plus accrued and unpaid interest and
Liquidated Damages thereon, if any, to the date of purchase (the "Excess Cash
Flow Payment"). The application of any Excess Cash Flow amounts towards the
prepayment of Senior Debt and any Excess Cash Flow Offer must occur within 20
days of the earlier to occur of (a) the day on which year end financial
statements first become available or (b) 90 days after the end of the fiscal
year. Upon the commencement of an Excess Cash Flow Offer, the Company shall mail
a notice to each Holder stating: (1) that the Excess Cash Flow Offer is being
made pursuant to this Section 4.23 and the length of time the Excess Cash Flow
Offer shall remain open, which shall be a period of 20 days following its
commencement and no longer, except to the extent that a longer period is
required by applicable law (the "Excess Cash Flow Offer Period"); (2) the
purchase price and the purchase date, which shall be no later than five days
after the termination of the Excess Cash Flow Offer Period (the "Excess Cash
Flow Payment Date"); (3) that any Note not tendered or accepted for payment will
continue to accrue interest; (4) that, unless the Company defaults in the
payment of the Excess Cash Flow Payment, all Notes accepted for payment pursuant
to the Excess Cash Flow Offer shall cease to accrue interest after the Excess
Cash Flow Payment Date; (5) that Holders electing to have any Notes purchased
pursuant to an Excess Cash Flow Offer may elect to have Notes purchased in
integral multiples of $1,000 only, (6) that Holders electing to have any Notes
purchased pursuant to an Excess Cash Flow Offer will be required to surrender
the Notes, with the form entitled "Option of Holder to Elect Purchase" on the
reverse of the
57
Notes completed, or transfer by book-entry transfer, to the Company, a
depositary, if appointed by the Company, or to the Paying Agent at the address
specified in the notice prior to the close of business on the third Business Day
preceding the Excess Cash Flow Payment Date; (7) that Holders will be entitled
to withdraw their election if the Company, the depositary or the Paying Agent,
as the case may be, receives, not later than the expiration of the Excess Cash
Flow Offer Period, a telegram, telex, facsimile transmission or letter setting
forth the name of the Holder, the principal amount of Notes delivered for
purchase and a statement that such Holder is withdrawing his election to have
the Notes purchased; (8) that, if the aggregate principal amount of Notes
surrendered by Holders exceeds the Excess Cash Flow Payment, the Trustee shall
select the Notes to be purchased on a pro rata basis (which such adjustments as
may be deemed appropriate by the Trustee so that only Notes in denominations of
$1,000, or integral multiples thereof, shall be purchased); and (9) that Holders
whose Notes are being purchased only in part will be issued new Notes equal in
principal amount to the unpurchased portion of the Notes surrendered (or
transferred by book-entry transfer), which unpurchased portion must be equal to
$1,000 in principal amount or an integral multiple thereof. The Company shall
comply with the requirements of Rule 14e-1 under the Exchange Act and any other
securities laws and regulations thereunder to the extent such laws and
regulations are applicable in connection with each repurchase of Notes pursuant
to an Excess Cash Flow Offer. To the extent that the provisions of any
securities laws or regulations conflict with this Section 4.23, the Company
shall comply with the applicable securities laws and regulations and shall not
be deemed to have breached its obligations under this Section 4.23 by virtue of
such conflict.
(b) On or before the Excess Cash Flow Payment Date, the Company
shall, to the extent lawful, (1) accept for payment or a pro rata basis to the
extent necessary all Notes or portions thereof properly tendered pursuant to the
Excess Cash Flow Offer, (2) deposit with the Paying Agent an amount equal to the
Excess Cash Flow Payment in respect of all Notes or portions thereof so tendered
and (3) deliver or cause to be delivered to the Trustee the Notes so accepted
together with an Officers' Certificate stating the aggregate principal amount of
Notes or portions thereof being purchased by the Company. The Paying Agent shall
promptly (but in any case not later than five days after the Excess Cash Flow
Payment Date) mail to each Holder of Notes so tendered the Excess Cash Flow
Payment for such Notes, and the Trustee shall promptly authenticate and mail (or
cause to be transferred by book entry) to each Holder a new Note equal in
principal amount to any unpurchased portion of the Notes surrendered by such
Holder, if any; provided, that each such new Note shall be in a principal amount
of $1,000 or an integral multiple thereof. Any Note not so accepted shall be
promptly mailed or delivered by the Company to the Holder thereof. Prior to
complying with any of the provisions of this Section 4.23, the Company shall
obtain the requisite consents, if any, under all agreements governing
outstanding Senior Debt, including revolving credit commitments, to permit the
repurchase of Notes required by this Section 4.23. The Company shall publicly
announce the results of the Excess Cash Flow Offer on or as soon as practicable
after the Excess Cash Flow Payment Date. If any Excess Cash Flow remains after
consummation of an Excess Cash Flow Offer, the Company may use such Excess Cash
Flow for any purpose not otherwise prohibited by this Indenture. If the
aggregate principal amount of Notes tendered into such Excess Cash Flow Offer
exceeds the Excess Cash Flow Payment, the Trustee shall select the Notes to be
purchased on a pro rata basis.
Section 4.24. Actions Related to Debt Arbiter Determination.
If, pursuant to the terms of the Fox River AWA Environmental Indemnity
Agreement, the Designated Debt Arbiter, as defined therein, determines that the
Company will have sufficient internal excess cash to be able to repay the Notes
at their stated maturity, then such internal excess cash shall be deposited for
purposes of such repayment with the Trustee within five days of such
determination but not earlier than 30 days prior to the Stated Maturity of the
Notes, provided, that if the amount initially deposited is not sufficient to
repay the Notes in full at their stated maturity, then the Company shall make
additional deposits promptly and from time to time during the period between the
initial deposit and the
58
stated maturity as additional internal excess cash becomes available until the
total repayment amount has been deposited.
Section 4.25. S Corporation Status.
The Company shall not and shall not permit the Parent Entity to take,
or fail to take, any action that would terminate, or could reasonably be
expected to lead to the termination of, Paperweight Development Corp.'s
qualification as an "S Corporation" or the qualification of any Subsidiary of
Paperweight Development Corp. (other than any such Subsidiary that is an
"Ineligible Corporation" under Section 1361(b)(2) of the Code) as a "qualified
subchapter S subsidiary," in each case, for U.S. federal income tax purposes.
Section 4.26. Independent Directors
The Board of Directors of both the Company and Paperweight Development
Corp. shall include, at all times, at least two Independent Directors.
Section 4.27. Capital Expenditures.
The Company will not and will not permit any of its Subsidiaries to
make or commit to make any Capital Expenditure, except (a) Capital Expenditures
of the Company and its Subsidiaries not exceeding, during any fiscal year of the
Parent Entity (or, in the case of fiscal year 2001, during the fourth fiscal
quarter of 2001) the amount set forth below opposite such fiscal year:
Fiscal Year Amount
----------- ------
2001.............................................. $15,600,000
2002.............................................. $70,000,000
2003.............................................. $60,000,000
2004 and each fiscal year thereafter.............. $55,000,000
; provided, that (i) up to 50% of any such amount referred to above, if not so
expended in the original fiscal year for which it is permitted, may be carried
forward for expenditure in the next succeeding fiscal year and (ii) Capital
Expenditures made pursuant to this clause (a) during any fiscal year shall be
deemed made, first, in respect of amounts permitted for such fiscal year as
provided above, and, second, in respect of amounts carried forward from the
prior fiscal year pursuant to subclause (i) above and (b) Capital Expenditures
made with the proceeds of any Reinvestment Deferred Amount.
ARTICLE 5.
SUCCESSORS
Section 5.01. Merger, Consolidation, or Sale of Assets.
The Company shall not, directly or indirectly, consolidate or merge
with or into another Person (whether or not the Company is the surviving
corporation), or sell, assign, transfer, convey or otherwise dispose of all or
substantially all of the properties or assets of the Company and its Restricted
Subsidiaries taken as a whole, in one or more related transactions, to another
Person, unless (i) either: (A) the Company is the surviving corporation or (B)
the Person formed by or surviving any such consolidation or merger (if other
than the Company) or to which such sale, assignment, transfer, conveyance or
other disposition shall have been made is a corporation organized or existing
under the laws of the United States, any state thereof or the District of
Columbia, (ii) the Person formed by or surviving any such consolidation or
merger (if other than the Company) or the Person to which such sale, assignment,
59
transfer, conveyance or other disposition shall have been made assumes all the
obligations of the Company under the Notes, this Indenture and the Registration
Rights Agreement, pursuant to a supplemental indenture in a form reasonably
satisfactory to the Trustee, (iii) immediately after such transaction, no
Default or Event of Default exists, (iv) except in the case of a merger of the
Company with or into a Wholly Owned Restricted Subsidiary of the Company, the
Company or the Person formed by or surviving any such consolidation or merger
(if other than the Company), or to which such sale, assignment, transfer,
conveyance or other disposition shall have been made (A) shall have Consolidated
Net Worth immediately after the transaction equal to or greater than the
Consolidated Net Worth of the Company immediately preceding the transaction and
(B) shall, on the date of such transaction after giving pro forma effect thereto
and any related financing transactions as if the same had occurred at the
beginning of the applicable four-quarter period, be permitted to incur at least
$1.00 of additional Indebtedness pursuant to the Leverage Ratio test set forth
in the first paragraph of Section 4.09 hereof and (v) all rights afforded to the
Company or Paperweight Development by the Environmental Indemnity Agreements are
effectively assigned, in full, to the Person formed by or surviving any such
consolidation or merger (if other than the Company or Paperweight Development)
or the Person to which such sale, assignment, transfer, conveyance or other
disposition has been made pursuant to agreements reasonably satisfactory to the
Trustee. In addition, the Company shall not, directly or indirectly, lease all
or substantially all of its properties or assets, in one or more related
transactions, to any other Person. The provisions of this Section 5.01 shall not
be applicable to a consolidation, merger, sale, assignment, transfer, conveyance
or other disposition of assets between or among the Company and any of its
Wholly Owned Restricted Subsidiaries. In addition, the Company shall not permit
the Parent Entity to and the Parent Entity shall not consolidate or merge with
any entity other than another Parent Entity and will not permit any merger
between any future Parent Entity unless and until the conditions set forth in
clauses (i) through (v) of this Section 5.01 have been satisfied provided that
with respect to clause (iv)(A), the Consolidated Net Worth immediately after any
such transaction shall be equal to or greater than the Consolidated Net Worth of
such Parent Entity immediately preceding the transaction .
Section 5.02. Successor Corporation Substituted.
Upon any consolidation or merger, or any sale, assignment, transfer,
lease, conveyance or other disposition of all or substantially all of the assets
of the Company, in accordance with Section 5.01 hereof, the successor
corporation formed by such consolidation or into or with which the Company is
merged or to which such sale, assignment, transfer, lease, conveyance or other
disposition is made shall succeed to, and be substituted for (so that, from and
after the date of such consolidation, merger, sale, assignment, transfer, lease,
conveyance or other disposition, the provisions of this Indenture referring to
the "Company" shall refer instead to the successor corporation and not to the
Company), and may exercise every right and power of the Company under this
Indenture with the same effect as if such successor Person had been named as the
Company herein; provided, however, that the predecessor Company shall not be
relieved from the obligation to pay the principal of and interest on the Notes,
except in the case of a sale, assignment, transfer, lease, conveyance or other
disposition of all or substantially all of the predecessor Company's assets that
meets the requirements of Section 5.01 hereof.
60
ARTICLE 6.
DEFAULTS AND REMEDIES
Section 6.01. Events of Default.
An "Event of Default" occurs if:
(a) the Company defaults in the payment when due of interest on, or
Liquidated Damages, if any, with respect to, the Notes whether or not prohibited
by the provisions of Article 10 hereof and such default continues for a period
of 30 days;
(b) the Company defaults in the payment when due of principal of, or
premium, if any, on the Notes when the same becomes due and payable at maturity,
upon redemption (including in connection with an offer to purchase) or
otherwise, whether or not prohibited by the provisions of Article 10 hereof;
(c) the Company fails to comply with any of the provisions of Section
4.07, 4.09, 4.10, 4.15, 4.17, 4.23, 4.24, or 5.01 hereof;
(d) the Company or any of its Restricted Subsidiaries fails to
observe or perform any other covenant, representation, warranty or other
agreement in this Indenture or the Notes for 60 days after notice to the Company
by the Trustee or the Holders of at least 25% in aggregate principal amount of
the Notes then outstanding voting as a single class;
(e) a default occurs under any mortgage, indenture or instrument
under which there may be issued or by which there may be secured or evidenced
any Indebtedness for money borrowed by the Company or any of its Restricted
Subsidiaries (or the payment of which is guaranteed by the Company or any of its
Restricted Subsidiaries), whether such Indebtedness or guarantee now exists, or
is created after the date of this Indenture, if that default (i) is caused by a
failure to pay principal of, or interest or premium, if any, on such
Indebtedness prior to the expiration of the grace period provided in such
Indebtedness on the date of such default (a "Payment Default") or (ii) results
in the acceleration of such Indebtedness prior to its express maturity and, in
each case, the principal amount of such Indebtedness, together with the
principal amount of any other such Indebtedness under which there has been a
Payment Default or the maturity of which has been so accelerated, aggregates
$10.0 million or more;
(f) a final judgment or final judgments for the payment of money are
entered by a court or courts of competent jurisdiction against the Company or
any of its Restricted Subsidiaries and such judgment or judgments are not paid,
discharged, or stayed or the execution of which has not been otherwise postponed
or precluded in accordance with applicable procedures, for a period of 60 days,
provided that the aggregate of all such undischarged judgments exceeds $10.0
million;
(g) the Parent Entity, the Company or any one or more of its
Subsidiaries with, individually or in the aggregate, total assets or liabilities
of greater than or equal to $10.0 million pursuant to or within the meaning of
Bankruptcy Law:
(i) commences a voluntary case,
(ii) consents to the entry of an order for relief against it in
an involuntary case,
(iii) consents to the appointment of a custodian of it or for
all or substantially all of its property,
61
(iv) makes a general assignment for the benefit of its creditors, or
(v) generally is not paying its debts as they become due;
(h) a court of competent jurisdiction enters an order or decree under any
Bankruptcy Law that:
(i) is for relief against the Parent Entity, the Company or any one
or more of its Subsidiaries with, individually or in the aggregate, total
assets or liabilities of greater than or equal to $10.0 million in an
involuntary case;
(ii) appoints a custodian of the Parent Entity, the Company or any
one or more of its Subsidiaries with, individually or in the aggregate,
total assets or liabilities of greater than or equal to $10.0 million or,
for all or substantially all of the property of the Parent Entity, the
Company or any one or more of its Subsidiaries with, individually or in the
aggregate, total assets or liabilities of greater than or equal to $10.0
million; or
(iii) orders the liquidation of the Parent Entity, the Company or any
one or more of its Subsidiaries with, individually or in the aggregate,
total assets or liabilities of greater than or equal to $10.0 million;
and the order or decree remains unstayed and in effect for 60 consecutive days;
(i) except as permitted by this Indenture, any Subsidiary Guarantee or
Parent Guarantee is held in any judicial proceeding to be unenforceable or
invalid or shall cease for any reason to be in full force and effect or any
Guarantor, or any Person acting on behalf of any Guarantor, shall deny or
disaffirm its obligations under such Guarantor's Subsidiary Guarantee or Parent
Guarantee, as applicable; and
(j) the Environmental Indemnity Agreements or the Credit Enhancement are
terminated, held in any judicial proceeding to be unenforceable or invalid or
shall cease for any reason (except in accordance with the terms thereof) to be
in full force and effect or any party thereto, or any Person acting on behalf of
any party thereto, shall deny or disaffirm in writing its obligations under
either the Environmental Indemnity Agreements or the Credit Enhancement.
Section 6.02. Acceleration.
If any Event of Default (other than an Event of Default specified in clause
(g) or (h) of Section 6.01 hereof with respect to the Company, any Restricted
Subsidiary that is a Significant Subsidiary or any group of Restricted
Subsidiaries that, taken as a whole, would constitute a Significant Subsidiary)
occurs and is continuing, the Trustee or the Holders of at least 25% in
principal amount of the then outstanding Notes may declare all the Notes to be
due and payable immediately. Upon any such declaration, the Notes shall become
due and payable immediately. Notwithstanding the foregoing, if an Event of
Default specified in clause (g) or (h) of Section 6.01 hereof occurs with
respect to the Company, any Restricted Subsidiary that is a Significant
Subsidiary or any group of Restricted Subsidiaries that, taken as a whole, would
constitute a Significant Subsidiary, all outstanding Notes shall be due and
payable immediately without further action or notice. The Holders of a majority
in aggregate principal amount of the then outstanding Notes by written notice to
the Trustee may on behalf of all of the Holders rescind an acceleration and its
consequences if the rescission would not conflict with any judgment or decree
and if all existing Events of Default (except nonpayment of principal, interest
or premium that has become due solely because of the acceleration) have been
cured or waived.
62
If an Event of Default occurs on or after December 15, 2005 by reason of
any willful action (or inaction) taken (or not taken) by or on behalf of the
Company or any of its Affiliates with the intention of avoiding payment of the
premium that the Company would have had to pay if the Company then had elected
to redeem the Notes pursuant to Section 3.07 hereof, then, upon acceleration of
the Notes, an equivalent premium shall also become and be immediately due and
payable, to the extent permitted by law, anything in this Indenture or in the
Notes to the contrary notwithstanding. If an Event of Default occurs prior to
December 15, 2005 by reason of any willful action (or inaction) taken (or not
taken) by or on behalf of the Company with the intention of avoiding the
prohibition on redemption of the Notes prior to such date, then, upon
acceleration of the Notes, an additional premium shall also become and be
immediately due and payable in an amount, for each of the years beginning on
December 15 of the years set forth below, as set forth below (expressed as a
percentage of the principal amount of the Notes on the date of payment that
would otherwise be due but for the provisions of this sentence):
Year Percentage
---- ----------
2001.................................................... 12.500%
2002 .................................................. 10.9375%
2003 .................................................. 9.37%
2004 ................................................... 7.8125%
Section 6.03. Other Remedies.
If an Event of Default occurs and is continuing, the Trustee may pursue any
available remedy to collect the payment of principal, premium, if any, and
interest on the Notes or to enforce the performance of any provision of the
Notes or this Indenture.
The Trustee may maintain a proceeding even if it does not possess any of
the Notes or does not produce any of them in the proceeding. A delay or omission
by the Trustee or any Holder of a Note in exercising any right or remedy
accruing upon an Event of Default shall not impair the right or remedy or
constitute a waiver of or acquiescence in the Event of Default. All remedies are
cumulative to the extent permitted by law.
Section 6.04. Waiver of Past Defaults.
Holders of not less than a majority in aggregate principal amount of the
then outstanding Notes by notice to the Trustee may on behalf of the Holders of
all of the Notes waive an existing Default or Event of Default and its
consequences he`reunder, except a continuing Default or Event of Default in the
payment of the principal of, premium and Liquidated Damages, if any, or interest
on, the Notes (including in connection with an offer to purchase) (provided,
however, that the Holders of a majority in aggregate principal amount of the
then outstanding Notes may rescind an acceleration and its consequences,
including any related payment default that resulted from such acceleration).
Upon any such waiver, such Default shall cease to exist, and any Event of
Default arising therefrom shall be deemed to have been cured for every purpose
of this Indenture; but no such waiver shall extend to any subsequent or other
Default or impair any right consequent thereon.
Section 6.05. Control by Majority.
Holders of a majority in principal amount of the then outstanding Notes may
direct the time, method and place of conducting any proceeding for exercising
any remedy available to the Trustee or exercising any trust or power conferred
on it. However, the Trustee may refuse to follow any direction that conflicts
with law or this Indenture that the Trustee determines may be unduly prejudicial
to the rights of other Holders of Notes or that may involve the Trustee in
personal liability.
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Section 6.06. Limitation on Suits.
A Holder of a Note may pursue a remedy with respect to this Indenture
or the Notes only if:
(a) the Holder of a Note gives to the Trustee written notice of a
continuing Event of Default;
(b) the Holders of at least 25% in principal amount of the then
outstanding Notes make a written request to the Trustee to pursue the remedy;
(c) such Holder of a Note or Holders of Notes offer and, if
requested, provide to the Trustee indemnity satisfactory to the Trustee against
any loss, liability or expense;
(d) the Trustee does not comply with the request within 60 days
after receipt of the request and the offer and, if requested, the provision of
indemnity; and
(e) during such 60-day period the Holders of a majority in principal
amount of the then outstanding Notes do not give the Trustee a direction
inconsistent with the request.
A Holder of a Note may not use this Indenture to prejudice the rights
of another Holder of a Note or to obtain a preference or priority over another
Holder of a Note.
Section 6.07. Rights of Holders of Notes to Receive Payment.
Notwithstanding any other provision of this Indenture, the right of any
Holder of a Note to receive payment of principal of, and premium and Liquidated
Damages, if any, and interest on the Note, on or after the respective due dates
expressed in the Note (including in connection with an offer to purchase), or to
bring suit for the enforcement of any such payment on or after such respective
dates, shall not be impaired or affected without the consent of such Holder.
Section 6.08. Collection Suit by Trustee.
If an Event of Default specified in Section 6.01(a) or (b) occurs and
is continuing, the Trustee is authorized to recover judgment in its own name and
as trustee of an express trust against the Company for the whole amount of
principal of, and premium and Liquidated Damages, if any, and interest remaining
unpaid on the Notes and interest on overdue principal and, to the extent lawful,
interest and such further amount as shall be sufficient to cover the costs and
expenses of collection, including the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel.
Section 6.09. Trustee May File Proofs of Claim.
The Trustee is authorized to file such proofs of claim and other papers
or documents as may be necessary or advisable in order to have the claims of the
Trustee (including any claim for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel) and the
Holders of the Notes allowed in any judicial proceedings relative to the Company
(or any other obligor upon the Notes), its creditors or its property and shall
be entitled and empowered to collect, receive and distribute any money or other
property payable or deliverable on any such claims and any custodian in any such
judicial proceeding is hereby authorized by each Holder to make such payments to
the Trustee, and in the event that the Trustee shall consent to the making of
such payments directly to the Holders, to pay to the Trustee any amount due to
it for the reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel, and any other amounts due the Trustee under
Section 7.07 hereof. To the extent that the payment of any such compensation,
expenses, disbursements and advances
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of the Trustee, its agents and counsel, and any other amounts due the Trustee
under Section 7.07 hereof out of the estate in any such proceeding, shall be
denied for any reason, payment of the same shall be secured by a Lien on, and
shall be paid out of, any and all distributions, dividends, money, securities
and other properties that the Holders may be entitled to receive in such
proceeding whether in liquidation or under any plan of reorganization or
arrangement or otherwise. Nothing herein contained shall be deemed to authorize
the Trustee to authorize or consent to or accept or adopt on behalf of any
Holder any plan of reorganization, arrangement, adjustment or composition
affecting the Notes or the rights of any Holder, or to authorize the Trustee to
vote in respect of the claim of any Holder in any such proceeding.
Section 6.10. Priorities.
If the Trustee collects any money pursuant to this Article, it shall
pay out the money in the following order:
First: to the Trustee, its agents and attorneys for amounts due
under Section 7.07 hereof, including payment of all compensation,
expense and liabilities incurred, and all advances made, by the
Trustee and the costs and expenses of collection;
Second: to Holders of Notes for amounts due and unpaid on the
Notes for principal, premium and Liquidated Damages, if any, and
interest, ratably, without preference or priority of any kind,
according to the amounts due and payable on the Notes for principal,
premium and Liquidated Damages, if any and interest, respectively; and
Third: to the Company or to such party as a court of competent
jurisdiction shall direct.
The Trustee may fix a record date and payment date for any payment to
Holders of Notes pursuant to this Section 6.10.
Section 6.11. Undertaking for Costs.
In any suit for the enforcement of any right or remedy under this
Indenture or in any suit against the Trustee for any action taken or omitted by
it as a Trustee, a court in its discretion may require the filing by any party
litigant in the suit of an undertaking to pay the costs of the suit, and the
court in its discretion may assess reasonable costs, including reasonable
attorneys' fees and expenses, against any party litigant in the suit, having due
regard to the merits and good faith of the claims or defenses made by the party
litigant. This Section does not apply to a suit by the Trustee, a suit by a
Holder of a Note pursuant to Section 6.07 hereof, or a suit by Holders of more
than 10% in principal amount of the then outstanding Notes.
Section 6.12. Trustee or Holders May Issue DPO Payment Blockage Notice.
In the event of a type of change of control of either the Parent
Entity or the Company as a result of which the Parent Entity is required to
offer to repurchase the Deferred Payment Obligation, pursuant to the terms
thereof, at a price equal to the price that would have been payable if the
Deferred Payment Obligation had been prepaid on that date, the Trustee or
Holders of 25% of the principal amount of the Notes then outstanding voting as a
single class shall have the right to block any such payments by the Parent
Entity in respect of the Deferred Payment Obligation by delivery of a written
payment blockage notice (the "DPO Payment Blockage Notice"). Any such DPO
Payment Blockage Notice shall last for a period of 179 days from the date of
notice or, if longer, so long as an Event of Default shall have occurred and be
continuing under the terms of this Indenture. No change of control event that
existed or was
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continuing on the date of delivery of any DPO Payment Blockage Notice shall be,
or be made, the basis for a subsequent DPO Payment Blockage Notice.
ARTICLE 7.
TRUSTEE
Section 7.01. Duties of Trustee.
(a) If an Event of Default has occurred and is continuing, the Trustee
shall exercise such of the rights and powers vested in it by this Indenture, and
use the same degree of care and skill in its exercise, as a prudent person would
exercise or use under the circumstances in the conduct of such person's own
affairs.
(b) Except during the continuance of an Event of Default:
(i) the duties of the Trustee shall be determined solely by the
express provisions of this Indenture and the Trustee need perform only
those duties that are specifically set forth in this Indenture and no
others, and no implied covenants or obligations shall be read into this
Indenture against the Trustee; and
(ii) in the absence of bad faith on its part, the Trutee may
conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon certificates or
opinions furnished to the Trustee and conforming to the requirements of
this Indenture. However, the Trustee shall examine the certificates and
opinions to determine whether or not they conform to the requirements
of this Indenture.
(c) The Trustee may not be relieved from liabilities for its own
negligent action, its own negligent failure to act, or its own willful
misconduct, except that:
(i) this paragraph does not limit the effect of paragraph (b)
of this Section;
(ii) the Trustee shall not be liable for any error of judgment
made in good faith by a Responsible Officer, unless it is proved that
the Trustee was negligent in ascertaining the pertinent facts; and
(iii) the Trustee shall not be liable with respect to any action
it takes or omits to take in good faith in accordance with a direction
received by it pursuant to Section 6.05 hereof.
(d) Whether or not therein expressly so provided, every provision of
this Indenture that in any way relates to the Trustee is subject to paragraphs
(a), (b), and (c) of this Section.
(e) No provision of this Indenture shall require the Trustee to expend
or risk its own funds or incur any liability. The Trustee shall be under no
obligation to exercise any of its rights and powers under this Indenture at the
request of any Holders, unless such Holder shall have offered to the Trustee
security and indemnity satisfactory to the Trustee against any loss, liability
or expense.
(f) The Trustee shall not be liable for interest on any money received
by it except as the Trustee may agree in writing with the Company. Money held in
trust by the Trustee need not be segregated from other funds except to the
extent required by law.
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(g) Except with respect to Section 4.04(a), the Trustee shall have no duty
to inquire as to the performance of the Company with respect to the covenants
contained in Article 4. In addition, the Trustee shall not be deemed to have
knowledge of an Event of Default except (i) any Default or Event of Default
occurring pursuant to Sections 6.01(a) and 6.01(b) (defaults in payments on the
Notes) or (ii) any Default or Event of Default of which the Trustee shall have
received written notification or obtained actual knowledge.
(h) Delivery of reports, information and documents to the Trustee under
Section 4.03 is for informational purposes only and the Trustee's receipt of the
foregoing shall not constitute constructive notice of any information contained
therein or determinable from information contained therein, including the
Company's compliance with any of its covenants hereunder (as to which the
Trustee is entitled to rely conclusively on Officers' Certificates).
(i) In the event that the prior written consent of the Trustee is required
pursuant to any of Sections 2(a) through 2(g) or Section 9 of the Relationship
Agreement, the Trustee shall deliver such consent only upon the receipt of
either (A) each of the following:
(i) 30 days' prior written notice of the proposed action, describing
the same in reasonable detail and providing any related documentation for
the proposed implementation thereof;
(ii) an Opinion of Counsel acceptable to the Trustee, to the effect
that the proposed action will not have an adverse effect on the legal
rights of Arjo Xxxxxxx Appleton (Bermuda) Limited, which is the
policyholder under the Credit Enhancement, Paperweight Development Corp.
and the Company under the Relationship Agreement or the Assignment and
Assumption Deed, and does not have an adverse effect on the then remoteness
of Arjo Xxxxxxx (Bermuda) Holdings Limited and Arjo Xxxxxxx Appleton
(Bermuda) Limited from AWA and its other Affiliates for bankruptcy,
substantive consolidation or similar purposes;
(iii) an Officer's Certificate on behalf of Paperweight Development
Corp., certifying that it believes that the proposed action is not adverse
to Arjo Xxxxxxx Appleton (Bermuda) Limited, Paperweight Development Corp.
or the Company;
(iv) an opinion from an investment bank of recognized national
standing, to the effect that the proposed action is not adverse, from a
financial point of view, to Arjo Xxxxxxx Appleton (Bermuda) Limited or to
the Holders of the Notes and would not, in such investment bank's opinion,
result in any adverse effect on the trading or price of the Notes; and
(v) any additional opinions or certificates that the Trustee
determines may reasonably be required given the circumstances of any
proposed action;
in each case, in form and substance acceptable to the Trustee or (B) consent of
the Holders of a majority in principal amount of the Notes then outstanding to
the taking of the proposed action.
(j) Upon repayment of all of the outstanding Notes, the Trustee shall
deliver a certificate to the Company substantially in the form of Exhibit A-2 to
the Relationship Agreement.
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Section 7.02. Rights of Trustee.
(a) The Trustee may conclusively rely upon any document believed by it
to be genuine and to have been signed or presented by the proper Person. The
Trustee need not investigate any fact or matter stated in the document.
(b) Before the Trustee acts or refrains from acting, it may require an
Officers' Certificate or an Opinion of Counsel or both. The Trustee shall not be
liable for any action it takes or omits to take in good faith in reliance on
such Officers' Certificate or Opinion of Counsel. The Trustee may consult with
counsel and the written advice of such counsel or any Opinion of Counsel shall
be full and complete authorization and protection from liability in respect of
any action taken, suffered or omitted by it hereunder in good faith and in
reliance thereon.
(c) The Trustee may act through its attorneys and agents and shall not
be responsible for the misconduct or negligence of any agent appointed with due
care.
(d) The Trustee shall not be liable for any action it takes or omits
to take in good faith that it believes to be authorized or within the rights or
powers conferred upon it by this Indenture.
(e) Unless otherwise specifically provided in this Indenture, any
demand, request, direction or notice from the Company shall be sufficient if
signed by an Officer of the Company.
(f) The Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Indenture at the request or direction of
any of the Holders unless such Holders shall have offered to the Trustee
reasonable security or indemnity against the costs, expenses and liabilities
that might be incurred by it in compliance with such request or direction.
Section 7.03. Individual Rights of Trustee.
The Trustee in its individual or any other capacity may become the owner
or pledgee of Notes and may otherwise deal with the Company or any Affiliate of
the Company with the same rights it would have if it were not Trustee. However,
in the event that the Trustee acquires any conflicting interest it must
eliminate such conflict within 90 days, apply to the SEC for permission to
continue as trustee or resign. Any Agent may do the same with like rights and
duties. The Trustee is also subject to Sections 7.10 and 7.11 hereof.
Section 7.04. Trustee's Disclaimer.
The Trustee shall not be responsible for and makes no representation as
to the validity or adequacy of this Indenture or the Notes, it shall not be
accountable for the Company's use of the proceeds from the Notes or any money
paid to the Company or upon the Company's direction under any provision of this
Indenture, it shall not be responsible for the use or application of any money
received by any Paying Agent other than the Trustee, and it shall not be
responsible for any statement or recital herein or any statement in the Notes or
any other document in connection with the sale of the Notes or pursuant to this
Indenture other than its certificate of authentication.
Section 7.05. Notice of Defaults.
If a Default or Event of Default occurs and is continuing and if it is
known to the Trustee, the Trustee shall mail to Holders of Notes a notice of the
Default or Event of Default within 90 days after it occurs. Except in the case
of a Default or Event of Default in payment of principal of, premium, if any,
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Liquidated Damages, if any, or interest on any Note, the Trustee may withhold
the notice if and so long as a committee of its Responsible Officers in good
faith determines that withholding the notice is in the interests of the Holders
of the Notes.
Section 7.06. Reports by Trustee to Holders of the Notes.
Within 60 days after each May 15 beginning with the May 15 following the
date of this Indenture, and for so long as Notes remain outstanding, the Trustee
shall mail to the Holders of the Notes a brief report dated as of such reporting
date that complies with TIA (S) 313(a) (but if no event described in TIA (S)
313(a) has occurred within the twelve months preceding the reporting date, no
report need be transmitted). The Trustee also shall comply with TIA (S)
313(b)(2). The Trustee shall also transmit by mail all reports as required by
TIA (S) 313(c).
A copy of each report at the time of its mailing to the Holders of Notes
shall be mailed to the Company and filed with the SEC and each stock exchange on
which the Notes are listed in accordance with TIA (S) 313(d). The Company shall
promptly notify the Trustee when the Notes are listed on any stock exchange.
Section 7.07. Compensation and Indemnity.
The Company shall pay to the Trustee from time to time reasonable
compensation for its acceptance of this Indenture and services hereunder. The
Trustee's compensation shall not be limited by any law on compensation of a
trustee of an express trust. The Company shall reimburse the Trustee promptly
upon request for all reasonable disbursements, advances and expenses incurred or
made by the Trustee in addition to the compensation for its services. Such
expenses shall include the reasonable compensation, disbursements and expenses
of the Trustee's agents and counsel.
The Company shall indemnify the Trustee against any and all losses,
liabilities or expenses incurred by it arising out of or in connection with the
acceptance or administration of its duties under this Indenture, including the
costs and expenses of enforcing this Indenture against the Company (including
this Section 7.07) and defending itself against any claim (whether asserted by
the Company or any Holder or any other person) or liability in connection with
the exercise or performance of any of its powers or duties hereunder, except to
the extent any such loss, liability or expense may be attributable to the
Trustee's negligence or bad faith. The Trustee shall notify the Company promptly
of any claim for which the Trustee may seek indemnity. Failure by the Trustee to
so notify the Company shall not relieve the Company of its obligations
hereunder. The Company shall defend the claim and the Trustee shall cooperate in
the defense. The Trustee may have separate counsel and the Company shall pay the
reasonable fees and expenses of such counsel. The Company need not pay for any
settlement made without its consent, which consent shall not be unreasonably
withheld.
The obligations of the Company under this Section 7.07 shall survive the
satisfaction and discharge of this Indenture.
To secure the Company's payment obligations in this Section, the Trustee
shall have a Lien prior to the Notes on all money or property held or collected
by the Trustee, except that held in trust to pay principal and interest on
particular Notes. Such Lien shall survive the satisfaction and discharge of this
Indenture.
When the Trustee incurs expenses or renders services after an Event of
Default specified in Section 6.01(g) or (h) hereof occurs, the expenses and the
compensation for the services (including the
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fees and expenses of its agents and counsel) are intended to constitute expenses
of administration under any Bankruptcy Law.
The Trustee shall comply with the provisions of TIA (S) 313(b)(2) to the
extent applicable.
Section 7.08. Replacement of Trustee.
A resignation or removal of the Trustee and appointment of a successor
Trustee shall become effective only upon the successor Trustee's acceptance of
appointment as provided in this Section.
The Trustee may resign in writing at any time and be discharged from
the trust hereby created by so notifying the Company. The Holders of a majority
in principal amount of the then outstanding Notes may remove the Trustee by so
notifying the Trustee and the Company in writing. The Company may remove the
Trustee if:
(a ) the Trustee fails to comply with Section 7.10 hereof;
(b) the Trustee is adjudged a bankrupt or an insolvent or an order for
relief is entered with respect to the Trustee under any Bankruptcy Law;
(c) a custodian or public officer takes charge of the Trustee or its
property; or
(d) the Trustee becomes incapable of acting.
If the Trustee resigns or is removed or if a vacancy exists in the
office of Trustee for any reason, the Company shall promptly appoint a successor
Trustee. Within one year after the successor Trustee takes office, the Holders
of a majority in principal amount of the then outstanding Notes may appoint a
successor Trustee to replace the successor Trustee appointed by the Company.
If a successor Trustee does not take office within 60 days after the
retiring Trustee resigns or is removed, the retiring Trustee, the Company, or
the Holders of at least 10% in principal amount of the then outstanding Notes
may petition any court of competent jurisdiction for the appointment of a
successor Trustee.
If the Trustee, after written request by any Holder who has been a
Holder for at least six months, fails to comply with Section 7.10, such Holder
may petition any court of competent jurisdiction for the removal of the Trustee
and the appointment of a successor Trustee.
A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Company. Thereupon, the
resignation or removal of the retiring Trustee shall become effective, and the
successor Trustee shall have all the rights, powers and duties of the Trustee
under this Indenture. The successor Trustee shall mail a notice of its
succession to Holders. The retiring Trustee shall promptly transfer all property
held by it as Trustee to the successor Trustee, provided all sums owing to the
Trustee hereunder have been paid and subject to the Lien provided for in Section
7.07 hereof. Notwithstanding replacement of the Trustee pursuant to this Section
7.08, the Company's obligations under Section 7.07 hereof shall continue for the
benefit of the retiring Trustee.
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Section 7.09. Successor Trustee by Merger, etc.
If the Trustee consolidates, merges or converts into, or transfers all
or substantially all of its corporate trust business to, another corporation,
the successor corporation without any further act shall be the successor
Trustee.
Section 7.10. Eligibility; Disqualification.
There shall at all times be a Trustee hereunder that is a corporation
organized and doing business under the laws of the United States of America or
of any state thereof that is authorized under such laws to exercise corporate
trustee power, that is subject to supervision or examination by federal or state
authorities and that has a combined capital and surplus of at least $100 million
as set forth in its most recent published annual report of condition.
This Indenture shall always have a Trustee who satisfies the
requirements of TIA (S) 310(a)(1), (2) and (5). The Trustee is subject to TIA
(S) 310(b).
Section 7.11. Preferential Collection of Claims Against Company.
The Trustee is subject to TIA (S) 311(a), excluding any creditor
relationship listed in TIA (S) 311(b). A Trustee who has resigned or been
removed shall be subject to TIA (S)311(a) to the extent indicated therein.
ARTICLE 8.
LEGAL DEFEASANCE AND COVENANT DEFEASANCE
Section 8.01. Option to Effect Legal Defeasance or Covenant Defeasance.
The Company may, at the option of its Board of Directors evidenced by a
resolution set forth in an Officers' Certificate, at any time, elect to have
either Section 8.02 or 8.03 hereof be applied to all outstanding Notes upon
compliance with the conditions set forth below in this Article Eight.
Section 8.02. Legal Defeasance and Discharge.
Upon the Company's exercise under Section 8.01 hereof of the option
applicable to this Section 8.02, the Company shall, subject to the satisfaction
of the conditions set forth in Section 8.04 hereof, be deemed to have been
discharged from its obligations with respect to all outstanding Notes on the
date the conditions set forth below are satisfied, and each of the Guarantors
shall, subject to the satisfaction of the conditions set forth in Section 8.04
hereof, be deemed to have been discharged from its obligations with respect to
its Parent Guarantee or Subsidiary Guarantee, as applicable (hereinafter, "Legal
Defeasance"). For this purpose, Legal Defeasance means that the Company and each
of the Guarantors shall be deemed to have paid and discharged the entire
Indebtedness represented by the outstanding Notes, which shall thereafter be
deemed to be "outstanding" only for the purposes of Section 8.05 hereof and the
other Sections of this Indenture referred to in (a) and (b) below, the Company
shall be deemed to have satisfied all its other obligations under such Notes and
this Indenture, and each of the Guarantors shall be deemed to have satisfied all
of its obligations under its Parent Guarantee or Subsidiary Guarantee, as
applicable (and the Trustee, on demand of and at the expense of the Company,
shall execute proper instruments acknowledging the same), except for the
following provisions which shall survive until otherwise terminated or
discharged hereunder: (a) the rights of Holders of outstanding Notes to receive
solely from the trust fund described in Section 8.04 hereof, and as more fully
set forth in such Section, payments in respect of the principal of, premium and
Liquidated Damages, if any, and interest on such Notes when
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such payments are due, (b) the Company's obligations with respect to such Notes
under Article 2 and Section 4.02 hereof, (c) the rights, powers, trusts, duties
and immunities of the Trustee hereunder and the Company's and the Guarantors'
obligations in connection therewith and (d) this Article Eight. Subject to
compliance with this Article Eight, the Company may exercise its option under
this Section 8.02 notwithstanding the prior exercise of its option under Section
8.03 hereof.
Section 8.03. Covenant Defeasance.
Upon the Company's exercise under Section 8.01 hereof of the option
applicable to this Section 8.03, the Company shall, subject to the satisfaction
of the conditions set forth in Section 8.04 hereof, be released from its
obligations under the covenants contained in Sections 4.07, 4.08, 4.09, 4.10,
4.11, 4.12, 4.13, 4.15, 4.16, 4.17 (except 4.17(b)), 4.18, 4.19, 4.20, 4.21,
4.22, 4.23, 4.24, 4.25, 4.26 and 4.27 hereof and clause (iv) of Section 5.01
hereof with respect to the outstanding Notes, and each of the Guarantors shall,
subject to the satisfaction of the conditions set forth in Section 8.04 hereof,
be released from its obligations under the covenants contained in Sections 4.07,
4.08, 4.09, 4.10, 4.11, 4.12, 4.13, 4.15, 4.16, 4.17(except 4.17(b)), 4.18,
4.19, 4.20, 4.21, 4.22, 4.23, 4.24, 4.25, 4.26 and 4.27 hereof and clause (iv)
of Section 5.01 hereof with respect to its Parent Guarantee or Subsidiary
Guarantee, as applicable, on and after the date the conditions set forth in
Section 8.04 are satisfied (hereinafter, "Covenant Defeasance"), and the Notes
shall thereafter be deemed not "outstanding" for the purposes of any direction,
waiver, consent or declaration or act of Holders (and the consequences of any
thereof) in connection with such covenants, but shall continue to be deemed
"outstanding" for all other purposes hereunder (it being understood that such
Notes shall not be deemed outstanding for accounting purposes). For this
purpose, Covenant Defeasance means that, with respect to the outstanding Notes,
the Company and each Guarantor may omit to comply with and shall have no
liability in respect of any term, condition or limitation set forth in any such
covenant, whether directly or indirectly, by reason of any reference elsewhere
herein to any such covenant or by reason of any reference in any such covenant
to any other provision herein or in any other document and such omission to
comply shall not constitute a Default or an Event of Default under Section 6.01
hereof, but, except as specified above, the remainder of this Indenture, such
Notes and such Parent Guarantees and Subsidiary Guarantees shall be unaffected
thereby. In addition, upon the Company's exercise under Section 8.01 hereof of
the option applicable to this Section 8.03 hereof, subject to the satisfaction
of the conditions set forth in Section 8.04 hereof, Sections 6.01(c) through
6.01(f) hereof shall not constitute Events of Default.
Section 8.04. Conditions to Legal or Covenant Defeasance.
The following shall be the conditions to the application of either
Section 8.02 or 8.03 hereof to the outstanding Notes:
In order to exercise either Legal Defeasance or Covenant Defeasance:
(a) the Company shall irrevocably deposit with the Trustee, in
trust, for the benefit of the Holders, cash in United States dollars,
non-callable Government Securities, or a combination thereof, in such amounts as
will be sufficient, in the opinion of a nationally recognized firm of
independent public accountants, to pay the principal of, premium and Liquidated
Damages, if any, and interest on the outstanding Notes on the stated date for
payment thereof or on the applicable redemption date, as the case may be, and
the Company shall specify whether the Notes are being defeased to maturity or to
a particular redemption date;
(b) in the case of an election under Section 8.02 hereof, the
Company shall have delivered to the Trustee an Opinion of Counsel in the United
States reasonably acceptable to the Trustee confirming that (A) the Company has
received from, or there has been published by, the Internal Revenue Service a
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ruling or (B) since the date of this Indenture, there has been a change in the
applicable federal income tax law, in either case to the effect that, and based
thereon such Opinion of Counsel shall confirm that, the Holders of the
outstanding Notes will not recognize income, gain or loss for federal income tax
purposes as a result of such Legal Defeasance and will be subject to federal
income tax on the same amounts, in the same manner and at the same times as
would have been the case if such Legal Defeasance had not occurred;
(c) in the case of an election under Section 8.03 hereof, the Company
shall have delivered to the Trustee an Opinion of Counsel in the United States
reasonably acceptable to the Trustee confirming that the Holders of the
outstanding Notes will not recognize income, gain or loss for federal income tax
purposes as a result of such Covenant Defeasance and will be subject to federal
income tax on the same amounts, in the same manner and at the same times as
would have been the case if such Covenant Defeasance had not occurred;
(d) no Default or Event of Default shall have occurred and be
continuing on the date of such deposit (other than a Default or Event of Default
resulting from the incurrence of Indebtedness all or a portion of the proceeds
of which will be used to defease the Notes pursuant to this Article Eight
concurrently with such incurrence) or insofar as Sections 6.01(g) or 6.01(h)
hereof is concerned, at any time in the period commencing on the date of deposit
and ending on the 91st day after the date of deposit;
(e) such Legal Defeasance or Covenant Defeasance shall not result in
a breach or violation of, or constitute a default under, any material agreement
or instrument (other than this Indenture) to which the Company or any of its
Subsidiaries is a party or by which the Company or any of its Subsidiaries is
bound;
(f) the Company shall have delivered to the Trustee an Opinion of
Counsel (which may be subject to customary exceptions) to the effect that on the
91st day following the deposit, the trust funds will not be subject to the
effect of any applicable bankruptcy, insolvency, reorganization or similar laws
affecting creditors' rights generally;
(g) the Company shall have delivered to the Trustee an Officers'
Certificate stating that the deposit was not made by the Company with the intent
of preferring the Holders over any other creditors of the Company or with the
intent of defeating, hindering, delaying or defrauding any other creditors of
the Company; and
(h) the Company shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent provided for or relating to the Legal Defeasance or the Covenant
Defeasance have been complied with.
Section 8.05. Deposited Money and Government Securities to be Held in Trust;
Other Miscellaneous Provisions.
Subject to Section 8.06 hereof, all money and non-callable Government
Securities (including the proceeds thereof) deposited with the Trustee (or other
qualifying trustee, collectively for purposes of this Section 8.05, the
"Trustee") pursuant to Section 8.04 hereof in respect of the outstanding Notes
shall be held in trust and applied by the Trustee, in accordance with the
provisions of such Notes and this Indenture, to the payment, either directly or
through any Paying Agent (including the Company acting as Paying Agent) as the
Trustee may determine, to the Holders of such Notes of all sums due and to
become due thereon in respect of principal, premium and Liquidated Damages, if
any, and interest, but such money need not be segregated from other funds except
to the extent required by law.
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The Company shall pay and indemnify the Trustee against any tax, fee or
other charge imposed on or assessed against the cash or non-callable Government
Securities deposited pursuant to Section 8.04 hereof or the principal and
interest received in respect thereof other than any such tax, fee or other
charge which by law is for the account of the Holders of the outstanding Notes.
Anything in this Article Eight to the contrary notwithstanding, the
Trustee shall deliver or pay to the Company from time to time upon the request
of the Company any money or non-callable Government Securities held by it as
provided in Section 8.04 hereof which, in the opinion of a nationally recognized
firm of independent public accountants expressed in a written certification
thereof delivered to the Trustee (which may be the opinion delivered under
Section 8.04(a) hereof), are in excess of the amount thereof that would then be
required to be deposited to effect an equivalent Legal Defeasance or Covenant
Defeasance.
Section 8.06. Repayment to Company.
Any money deposited with the Trustee or any Paying Agent, or then held
by the Company, in trust for the payment of the principal of, premium and
Liquidated Damages, if any, or interest on any Note and remaining unclaimed for
two years after such principal, premium and Liquidated Damages, if any, or
interest has become due and payable shall be paid to the Company on its request
or (if then held by the Company) shall be discharged from such trust; and the
Holder of such Note shall thereafter look only to the Company for payment
thereof, and all liability of the Trustee or such Paying Agent with respect to
such trust money, and all liability of the Company as trustee thereof, shall
thereupon cease; provided, however, that the Trustee or such Paying Agent,
before being required to make any such repayment, may at the expense of the
Company cause to be published once, in the New York Times and The Wall Street
Journal (national edition), notice that such money remains unclaimed and that,
after a date specified therein, which shall not be less than 30 days from the
date of such notification or publication, any unclaimed balance of such money
then remaining will be repaid to the Company.
Section 8.07. Reinstatement.
If the Trustee or Paying Agent is unable to apply any United States
dollars or non-callable Government Securities in accordance with Section 8.02 or
8.03 hereof, as the case may be, by reason of any order or judgment of any court
or governmental authority enjoining, restraining or otherwise prohibiting such
application, then the Company's obligations under this Indenture and the Notes
shall be revived and reinstated as though no deposit had occurred pursuant to
Section 8.02 or 8.03 hereof until such time as the Trustee or Paying Agent is
permitted to apply all such money in accordance with Section 8.02 or 8.03
hereof, as the case may be; provided, however, that, if the Company makes any
payment of principal of, premium and Liquidated Damages, if any, or interest on
any Note following the reinstatement of its obligations, the Company shall be
subrogated to the rights of the Holders of such Notes to receive such payment
from the money held by the Trustee or Paying Agent.
ARTICLE 9.
AMENDMENT, SUPPLEMENT AND WAIVER
Section 9.01. Without Consent of Holders of Notes.
Notwithstanding Section 9.02 of this Indenture, the Company, the
Guarantors and the Trustee may amend or supplement this Indenture, the Notes,
the Parent Guarantee or the Subsidiary Guarantee without the consent of any
Holder of a Note:
(a) to change a notice address or to cure any ambiguity, defect or
inconsistency;
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(b) to provide for uncertificated Notes in addition to or in
place of certificated Notes or to alter the provisions of Article 2 hereof
(including the related definitions) in a manner that does not materially
adversely affect any Holder;
(c) to provide for the assumption of the Company's or a
Guarantor's obligations to the Holders of the Notes by a successor to the
Company pursuant to Article 5 hereof;
(d) to make any change that would provide any additional rights
or benefits to the Holders of the Notes or that does not adversely affect the
legal rights hereunder of any Holder of the Note;
(e) to comply with requirements of the SEC in order to effect or
maintain the qualification of this Indenture under the TIA;
(f) to provide for the acceptance of appointment under this
Indenture of a successor Trustee with respect to the Notes issued hereunder; or
(g) to allow any Guarantor to execute a supplemental indenture
and/or a Parent Guarantee or Subsidiary Guarantee, as applicable, with respect
to the Notes.
Upon the request of the Company accompanied by a resolution of
its Board of Directors authorizing the execution of any such amended or
supplemental indenture, and upon receipt by the Trustee of the documents
described in Section 7.02 hereof, the Trustee shall join with the Company and
the Guarantors in the execution of any amended or supplemental indenture
authorized or permitted by the terms of this Indenture and to make any further
appropriate agreements and stipulations that may be therein contained, but the
Trustee shall not be obligated to enter into such amended or supplemental
indenture that affects its own rights, duties or immunities under this Indenture
or otherwise.
Section 9.02. With Consent of Holders of Notes.
Except as provided below in this Section 9.02, the Company and
the Trustee may amend or supplement this Indenture (including Section 3.09,
4.10, 4.15 and 4.23 hereof), the Notes, the Parent Guarantee and the Subsidiary
Guarantee with the consent of the Holders of at least a majority in principal
amount of the Notes then outstanding voting as a single class (including,
without limitation, consents obtained in connection with a tender offer or
exchange offer for, or purchase of, the Notes), and, subject to Sections 6.04
and 6.07 hereof, any existing Default or Event of Default (other than a Default
or Event of Default in the payment of the principal of, premium and Liquidated
Damages, if any, or interest on the Notes, except a payment default resulting
from an acceleration that has been rescinded) or compliance with any provision
of this Indenture, the Notes, the Parent Guarantee or the Subsidiary Guarantee
may be waived with the consent of the Holders of a majority in principal amount
of the then outstanding Notes voting as a single class (including consents
obtained in connection with a tender offer or exchange offer for, or purchase
of, the Notes). Section 2.08 hereof shall determine which Notes are considered
to be "outstanding" for purposes of this Section 9.02.
Upon the request of the Company accompanied by a resolution of
its Board of Directors authorizing the execution of any such amended or
supplemental indenture, and upon the filing with the Trustee of evidence
satisfactory to the Trustee of the consent of the Holders of Notes as aforesaid,
and upon receipt by the Trustee of the documents described in Section 7.02
hereof, the Trustee shall join with the Company in the execution of such amended
or supplemental indenture unless such amended or supplemental indenture directly
affects the Trustee's own rights, duties or immunities under this Indenture or
otherwise, in which case the Trustee may in its discretion, but shall not be
obligated to, enter into such amended or supplemental indenture.
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It shall not be necessary for the consent of the Holders of Notes under
this Section 9.02 to approve the particular form of any proposed amendment or
waiver, but it shall be sufficient if such consent approves the substance
thereof.
After an amendment, supplement or waiver under this Section becomes
effective, the Company shall mail to the Holders of Notes affected thereby a
notice briefly describing the amendment, supplement or waiver. Any failure of
the Company to mail such notice, or any defect therein, shall not, however, in
any way impair or affect the validity of any such amended or supplemental
indenture or waiver. Subject to Sections 6.04 and 6.07 hereof, the Holders of a
majority in aggregate principal amount of the Notes then outstanding voting as a
single class may waive compliance in a particular instance by the Company with
any provision of this Indenture or the Notes. However, without the consent of
each Holder affected, an amendment or waiver under this Section 9.02 may not
(with respect to any Notes held by a non-consenting Holder):
(a) reduce the principal amount of Notes whose Holders must consent
to an amendment, supplement or waiver;
(b) reduce the principal of or change the fixed maturity of any Note
or alter or waive any of the provisions with respect to the redemption of the
Notes except as provided above with respect to Sections 3.09, 4.10, 4.15 and
4.23 hereof;
(c) reduce the rate of or change the time for payment of interest,
including default interest, on any Note;
(d) waive a Default or Event of Default in the payment of principal
of or premium or Liquidated Damages, if any, or interest on the Notes (except a
rescission of acceleration of the Notes by the Holders of at least a majority in
aggregate principal amount of the then outstanding Notes and a waiver of the
payment default that resulted from such acceleration);
(e) make any Note payable in money other than that stated in the
Notes;
(f) make any change in the provisions of this Indenture relating to
waivers of past Defaults or the rights of Holders of Notes to receive payments
of principal of or premium or Liquidated Damages, if any, or interest on the
Notes;
(g) waive redemption payment with respect to any Note (other than a
payment required by Section 3.09, 4.10, 4.15 or 4.23);
(h) make any change in Section 6.04 or 6.07 hereof or in the
foregoing amendment and waiver provisions; or
(i) release any Guarantor from any of its obligations under its
Parent Guarantee or its Subsidiary Guarantee or this Indenture, except in
accordance with the terms of this Indenture.
Section 9.03. Compliance with Trust Indenture Act.
Every amendment or supplement to this Indenture or the Notes
shall be set forth in an amended or supplemental indenture that complies with
the TIA as then in effect.
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Section 9.04. Revocation and Effect of Consents.
Until an amendment, supplement or waiver becomes effective, a consent
to it by a Holder of a Note is a continuing consent by the Holder of a Note and
every subsequent Holder of a Note or portion of a Note that evidences the same
debt as the consenting Holder's Note, even if notation of the consent is not
made on any Note. However, any such Holder of a Note or subsequent Holder of a
Note may revoke the consent as to its Note if the Trustee receives written
notice of revocation before the date the waiver, supplement or amendment becomes
effective. An amendment, supplement or waiver becomes effective in accordance
with its terms and thereafter binds every Holder.
Section 9.05. Notation on or Exchange of Notes.
The Trustee may place an appropriate notation about an amendment,
supplement or waiver on any Note thereafter authenticated. The Company in
exchange for all Notes may issue and the Trustee shall, upon receipt of an
Authentication Order, authenticate new Notes that reflect the amendment,
supplement or waiver.
Failure to make the appropriate notation or issue a new Note shall not
affect the validity and effect of such amendment, supplement or waiver.
Section 9.06. Trustee to Sign Amendments, etc.
The Trustee shall sign any amended or supplemental indenture authorized
pursuant to this Article 9 if the amendment or supplement does not adversely
affect the rights, duties, liabilities or immunities of the Trustee. The Company
may not sign an amendment or supplemental indenture until the Board of Directors
approves it. In executing any amended or supplemental indenture, the Trustee
shall be entitled to receive and (subject to Section 7.01 hereof) shall be fully
protected in relying upon, in addition to the documents required by Section
13.04 hereof, an Officer's Certificate and an Opinion of Counsel stating that
the execution of such amended or supplemental indenture is authorized or
permitted by this Indenture.
ARTICLE 10.
SUBORDINATION
Section 10.01. Agreement to Subordinate.
The Company agrees, and each Holder by accepting a Note agrees, that
the Indebtedness evidenced by the Notes is subordinated in right of payment, to
the extent and in the manner provided in this Article 10, to the prior payment
in full of all Senior Debt of the Company and of the Guarantors (whether
outstanding on the date hereof or hereafter created, incurred, assumed or
guaranteed), and that the subordination is for the benefit of the holders of
Senior Debt.
Section 10.02. Certain Definitions.
"Designated Senior Debt" means (i) any Indebtedness outstanding under
the Credit Agreement and (ii) after payment in full of all Obligations under the
Credit Agreement, any other Senior Debt permitted hereunder to be incurred, the
principal amount of which is $25.0 million or more, and that has been designated
by the Company as "Designated Senior Debt."
"Permitted Junior Securities" means Equity Interests in the Company or
any Guarantor or debt securities that are subordinated to all Senior Debt (and
any debt securities issued in exchange for Senior
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Debt) to substantially the same extent as, or to a greater extent than, the
Notes and the Parent Guarantee and the Subsidiary Guarantee are subordinated to
Senior Debt pursuant to the Indenture.
"Representative" means the indenture trustee or other trustee, agent or
representative for any Senior Debt.
"Senior Debt" means (i) all Indebtedness of the Company or any
Guarantor outstanding under the Credit Agreement and all Hedging Obligations
with respect thereto, (ii) any other Indebtedness of the Company or any
Guarantor that is permitted to be incurred by the Company or such Guarantor
pursuant to this Indenture unless the instrument under which such Indebtedness
is incurred expressly provides that it is on a parity with or subordinated in
right of payment to the Notes or any Parent Guarantee or Subsidiary Guarantee,
and (iii) all Obligations with respect to any of the foregoing. Notwithstanding
anything to the contrary in the foregoing, Senior Debt shall not include (w) any
liability for federal, state, local or other taxes owed or owing by the Company,
(x) any intercompany Indebtedness of the Company or any of its Subsidiaries to
the Company or any of its Affiliates, (y) any trade payables and (z) any
Indebtedness that is incurred in violation of this Indenture.
Section 10.03. Liquidation; Dissolution; Bankruptcy.
Upon any distribution to creditors of the Company or any Guarantor in a
liquidation or dissolution of the Company or such Guarantor, in a bankruptcy,
reorganization, insolvency, receivership or similar proceeding relating to the
Company or such Guarantor or their respective property, in an assignment for the
benefit of creditors of the Company or such Guarantor or any marshaling of the
Company's or such Guarantor's assets and liabilities:
(i) holders of Senior Debt shall be entitled to receive
payment in full of all Obligations due in respect of such Senior Debt
by the Company or such Guarantor (including interest after the
commencement of any such proceeding at the rate specified in the
applicable Senior Debt) before Holders of the Notes shall be entitled
to receive any payment with respect to the Notes (except that Holders
may receive and retain (A) Permitted Junior Securities and (B) payments
and other distributions made from any defeasance trust created pursuant
to Section 8.01 hereof); and
(ii) until all Obligations with respect to Senior Debt (as
provided in clause (i) above) are paid in full, any distribution to
which Holders would be entitled but for this Article 10 shall be made
to holders of Senior Debt (except that Holders of Notes may receive (A)
Permitted Junior Securities and (B) payments and other distributions
made from any defeasance trust created pursuant to Section 8.01
hereof), as their interests may appear.
A distribution may consist of cash, securities or other property, by set-off or
otherwise.
Section 10.04. Default on Designated Senior Debt.
(a) The Company may not make any payment or distribution to the
Trustee or any Holder in respect of Obligations with respect to the Notes and
may not acquire from the Trustee or any Holder any Notes for cash or property
(other than (A) Permitted Junior Securities and (B) payments and other
distributions made from any defeasance trust created pursuant to Section 8.01
hereof) and may not make any deposits with the Trustee pursuant to Article 8 or
Section 4.24 until all principal and other Obligations with respect to the
Senior Debt have been paid in full if:
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(i) a default in the payment of any principal or other
Obligations with respect to Designated Senior Debt occurs and is
continuing beyond any applicable grace period in the agreement,
indenture or other document governing such Designated Senior Debt; or
(ii) a default, other than a payment default, on Designated
Senior Debt occurs and is continuing that then permits holders of the
Designated Senior Debt to accelerate its maturity and the Trustee
receives a notice of the default (a "Payment Blockage Notice") from a
Person who may give it pursuant to Section 10.12 hereof. If the Trustee
receives any such Payment Blockage Notice, no subsequent Payment
Blockage Notice shall be effective for purposes of this Section unless
and until (A) 360 days shall have elapsed since the effectiveness of
the immediately prior Payment Blockage Notice and (B) all scheduled
payments of principal, premium and Liquidated Damages, if any, and
interest on the Notes that have come due have been paid in full in
cash. No nonpayment default that existed or was continuing on the date
of delivery of any Payment Blockage Notice to the Trustee shall be, or
be made, the basis for a subsequent Payment Blockage Notice unless such
default shall have been cured or waived for a period of not less than
90 days.
(b) The Company may and shall resume payments on and distributions
in respect of the Notes and may acquire them upon the earlier of:
(i) in the case of a payment default, the date upon which
the default is cured or waived, or
(ii) in the case of a default referred to in clause (ii) of
Section 10.04(a) hereof, upon the earliest of (A) the date on which
such default is cured or waived, (B) 179 days after the date on which
the applicable Payment Blockage Notice is received, if the maturity of
such Designated Senior Debt has not been accelerated or (C) the date on
which the Trustee receives notice from the holder of such Designated
Senior Debt rescinding such Payment Blockage Notice,
if this Article 10 otherwise permits the payment, distribution or acquisition at
the time of such payment, distribution or acquisition.
Section 10.05. Acceleration of Notes.
If payment of the Notes is accelerated because of an Event of Default,
the Company shall promptly notify holders of Senior Debt of the acceleration.
Section 10.06. When Distribution Must Be Paid Over.
In the event that the Trustee or any Holder receives any payment of any
Obligations with respect to the Notes (other than (A) Permitted Junior
Securities and (B) payments and other distributions made from any defeasance
trust created pursuant to Section 8.01 hereof) at a time when the Trustee or
such Holder, as applicable, has actual knowledge that such payment is prohibited
by Section 10.04 hereof, such payment shall be held by the Trustee or such
Holder, in trust for the benefit of, and shall be paid forthwith over and
delivered, upon written request, to, the holders of Senior Debt as their
interests may appear or their Representative under the indenture or other
agreement (if any) pursuant to which Senior Debt may have been issued, as their
respective interests may appear, for application to the payment of all
Obligations with respect to Senior Debt remaining unpaid to the extent necessary
to pay such Obligations in full in accordance with their terms, after giving
effect to any concurrent payment or distribution to or for the holders of Senior
Debt.
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With respect to the holders of Senior Debt, the Trustee undertakes to
perform only such obligations on the part of the Trustee as are specifically set
forth in this Article 10, and no implied covenants or obligations with respect
to the holders of Senior Debt shall be read into this Indenture against the
Trustee. The Trustee shall not be deemed to owe any fiduciary duty to the
holders of Senior Debt, and shall not be liable to any such holders if the
Trustee shall pay over or distribute to or on behalf of Holders or the Company
or any other Person money or assets to which any holders of Senior Debt shall be
entitled by virtue of this Article 10, except if such payment is made as a
result of the willful misconduct or gross negligence of the Trustee.
Section 10.07. Notice by Company.
The Company shall promptly notify the Trustee and the Paying Agent of
any facts known to the Company that would cause a payment of any Obligations
with respect to the Notes to violate this Article 10, but failure to give such
notice shall not affect the subordination of the Notes to the Senior Debt as
provided in this Article 10.
Section 10.08. Subrogation.
After all Senior Debt is paid in full and until the Notes are paid in
full, Holders of Notes shall be subrogated (equally and ratably with all other
Indebtedness pari passu with the Notes) to the rights of holders of Senior Debt
to receive distributions applicable to Senior Debt to the extent that
distributions otherwise payable to the Holders of Notes have been applied to the
payment of Senior Debt. A distribution made under this Article 10 to holders of
Senior Debt that otherwise would have been made to Holders of Notes is not, as
between the Company and Holders, a payment by the Company on the Notes.
Section 10.09. Relative Rights.
This Article 10 defines the relative rights of Holders of Notes and
holders of Senior Debt. Nothing in this Indenture shall:
(i) impair, as between the Company and Holders of Notes, the
obligation of the Company, which is absolute and unconditional, to pay
principal of and interest on the Notes in accordance with their terms;
(ii) affect the relative rights of Holders of Notes and
creditors of the Company other than their rights in relation to holders
of Senior Debt; or
(iii) prevent the Trustee or any Holder of Notes from
exercising its available remedies upon a Default or Event of Default,
subject to the rights of holders and owners of Senior Debt to receive
distributions and payments otherwise payable to Holders of Notes.
If the Company fails because of this Article 10 to pay principal of or
interest on a Note on the due date, the failure is still a Default or Event of
Default.
Section 10.10. Subordination May Not Be Impaired by Company.
No right of any holder of Senior Debt to enforce the subordination of
the Indebtedness evidenced by the Notes shall be impaired by any act or failure
to act by the Company or any Holder or by the failure of the Company or any
Holder to comply with this Indenture.
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Section 10.11. Distribution or Notice to Representative.
Whenever a distribution is to be made or a notice given to holders of
Senior Debt, the distribution may be made and the notice given to their
Representative.
Upon any payment or distribution of assets of the Company referred to
in this Article 10, the Trustee and the Holders of Notes shall be entitled to
rely upon any order or decree made by any court of competent jurisdiction or
upon any certificate of such Representative or of the liquidating trustee or
agent or other Person making any distribution to the Trustee or to the Holders
of Notes for the purpose of ascertaining the Persons entitled to participate in
such distribution, the holders of the Senior Debt and other Indebtedness of the
Company, the amount thereof or payable thereon, the amount or amounts paid or
distributed thereon and all other facts pertinent thereto or to this Article 10.
Section 10.12. Rights of Trustee and Paying Agent.
Notwithstanding the provisions of this Article 10 or any other
provision of this Indenture, the Trustee shall not be charged with knowledge of
the existence of any facts that would prohibit the making of any payment or
distribution by the Trustee, and the Trustee and the Paying Agent may continue
to make payments on the Notes, unless the Trustee shall have received at its
Corporate Trust Office at least five Business Days prior to the date of such
payment written notice of facts that would cause the payment of any Obligations
with respect to the Notes to violate this Article 10. Only the Company or a
Representative may give the notice. Nothing in this Article 10 shall impair the
claims of, or payments to, the Trustee under or pursuant to Section 7.07 hereof.
The Trustee in its individual or any other capacity may hold Senior
Debt with the same rights it would have if it were not Trustee. Any Agent may do
the same with like rights.
Section 10.13. Authorization to Effect Subordination.
Each Holder of Notes, by the Holder's acceptance thereof, authorizes
and directs the Trustee on such Holder's behalf to take such action as may be
necessary or appropriate to effectuate the subordination as provided in this
Article 10, and appoints the Trustee to act as such Holder's attorney-in-fact
for any and all such purposes. If the Trustee does not file a proper proof of
claim or proof of debt in the form required in any proceeding referred to in
Section 6.09 hereof at least 30 days before the expiration of the time to file
such claim, the Representatives are hereby authorized to file an appropriate
claim for and on behalf of the Holders of the Notes.
Section 10.14. Amendments.
The provisions of this Article 10 shall not be amended or modified
without the written consent of the holders of all Senior Debt.
ARTICLE 11.
PARENT GUARANTEES AND SUBSIDIARY GUARANTEES
Section 11.01. Guarantees.
Subject to this Article 11, each of the Guarantors hereby, jointly and
severally, unconditionally guarantees to each Holder of a Note authenticated and
delivered by the Trustee and to the Trustee and its successors and assigns,
irrespective of the validity and enforceability of this Indenture, the Notes or
the obligations of the Company hereunder or thereunder, that: (a) the principal
of and interest on the Notes
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will be promptly paid in full when due, whether at maturity, by acceleration,
redemption or otherwise, and interest on the overdue principal of and interest
on the Notes, if any, if lawful, and all other obligations of the Company to the
Holders or the Trustee hereunder or thereunder will be promptly paid in full or
performed, all in accordance with the terms hereof and thereof; and (b) in case
of any extension of time of payment or renewal of any Notes or any of such other
obligations, that same will be promptly paid in full when due or performed in
accordance with the terms of the extension or renewal, whether at stated
maturity, by acceleration or otherwise. Failing payment when due of any amount
so guaranteed or any performance so guaranteed for whatever reason, the
Guarantors shall be jointly and severally obligated to pay the same immediately.
Each Guarantor agrees that this is a guarantee of payment and not a guarantee of
collection.
The Guarantors hereby agree that their obligations hereunder shall be
unconditional, irrespective of the validity, regularity or enforceability of the
Notes or this Indenture, the absence of any action to enforce the same, any
waiver or consent by any Holder of the Notes with respect to any provisions
hereof or thereof, the recovery of any judgment against the Company, any action
to enforce the same or any other circumstance which might otherwise constitute a
legal or equitable discharge or defense of a guarantor. Each Guarantor hereby
waives diligence, presentment, demand of payment, filing of claims with a court
in the event of insolvency or bankruptcy of the Company, any right to require a
proceeding first against the Company, protest, notice and all demands whatsoever
and covenant that this Parent Guarantee or Subsidiary Guarantee, as applicable,
shall not be discharged except by complete performance of the obligations
contained in the Notes and this Indenture.
If any Holder or the Trustee is required by any court or otherwise to
return to the Company, the Guarantors or any custodian, trustee, liquidator or
other similar official acting in relation to either the Company or the
Guarantors, any amount paid by either to the Trustee or such Holder, this Parent
Guarantee and this Subsidiary Guarantee, to the extent theretofore discharged,
shall be reinstated in full force and effect.
Each Guarantor agrees that it shall not be entitled to any right of
subrogation in relation to the Holders in respect of any obligations guaranteed
hereby until payment in full of all obligations guaranteed hereby. Each
Guarantor further agrees that, as between the Guarantors, on the one hand, and
the Holders and the Trustee, on the other hand, (x) the maturity of the
obligations guaranteed hereby may be accelerated as provided in Article 6 hereof
for the purposes of this Parent Guarantee and this Subsidiary Guarantee,
notwithstanding any stay, injunction or other prohibition preventing such
acceleration in respect of the obligations guaranteed hereby, and (y) in the
event of any declaration of acceleration of such obligations as provided in
Article 6 hereof, such obligations (whether or not due and payable) shall
forthwith become due and payable by the Guarantors for the purpose of this
Parent Guarantee and this Subsidiary Guarantee. The Guarantors shall have the
right to seek contribution from any non-paying Guarantor so long as the exercise
of such right does not impair the rights of the Holders under the Guarantee.
Section 11.02. Subordination of Parent Guarantees and Subsidiary Guarantees.
The Obligations of each Guarantor under its Parent Guarantee or
Subsidiary Guarantee, as applicable, pursuant to this Article 11 shall be junior
and subordinated to the Senior Debt of such Guarantor on the same basis as the
Notes are junior and subordinated to Senior Debt of the Company. For the
purposes of the foregoing sentence, the Trustee and the Holders shall have the
right to receive and/or retain payments by any of the Guarantors only at such
times as they may receive and/or retain payments in respect of the Notes
pursuant to this Indenture, including Article 10 hereof.
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Section 11.03. Limitation on Guarantor Liability.
Each Guarantor, and by its acceptance of Notes, each Holder, hereby
confirms that it is the intention of all such parties that the Parent Guarantee
or Subsidiary Guarantee, as applicable, of such Guarantor not constitute a
fraudulent transfer or conveyance for purposes of Bankruptcy Law, the Uniform
Fraudulent Conveyance Act, the Uniform Fraudulent Transfer Act or any similar
federal or state law to the extent applicable to any Parent Guarantee or
Subsidiary Guarantee, as applicable. To effectuate the foregoing intention, the
Trustee, the Holders and the Guarantors hereby irrevocably agree that the
obligations of such Guarantor will, after giving effect to such maximum amount
and all other contingent and fixed liabilities of such Guarantor that are
relevant under such laws, and after giving effect to any collections from,
rights to receive contribution from or payments made by or on behalf of any
other Guarantor in respect of the obligations of such other Guarantor under this
Article 11, result in the obligations of such Guarantor under its Parent
Guarantee or Subsidiary Guarantee, as applicable, not constituting a fraudulent
transfer or conveyance.
Section 11.04. Execution and Delivery of Parent Guarantee and Subsidiary
Guarantee.
To evidence its Parent Guarantee or Subsidiary Guarantee, as
applicable, set forth in Section 11.01, each Guarantor hereby agrees that a
notation of such Parent Guarantee or Subsidiary Guarantee, as applicable,
substantially in the form included in Exhibit E shall be endorsed by an Officer
of such Guarantor on each Note authenticated and delivered by the Trustee and
that this Indenture shall be executed on behalf of such Guarantor by one of its
Officers.
Each Guarantor hereby agrees that its Parent Guarantee or Subsidiary
Guarantee, as applicable, set forth in Section 11.01 shall remain in full force
and effect notwithstanding any failure to endorse on each Note a notation of
such Parent Guarantee or Subsidiary Guarantee, as applicable.
If an Officer whose signature is on this Indenture or on the Parent
Guarantee or Subsidiary Guarantee, as applicable, no longer holds that office at
the time the Trustee authenticates the Note on which a Parent Guarantee or
Subsidiary Guarantee, as applicable, is endorsed, the Parent Guarantee or
Subsidiary Guarantee, as applicable, shall be valid nevertheless.
The delivery of any Note by the Trustee, after the authentication
thereof hereunder, shall constitute due delivery of the Parent Guarantee and
Subsidiary Guarantee set forth in this Indenture on behalf of the Guarantors.
In the event that the Company creates or acquires any new Domestic
Subsidiaries or Parent Entities subsequent to the date of this Indenture, if
required by Section 4.21 hereof, the Company shall cause such Domestic
Subsidiaries or Parent Entities to execute supplemental indentures to this
Indenture and Parent Guarantees or Subsidiary Guarantees, as applicable, in
accordance with Section 4.21 hereof and this Article 11, to the extent
applicable.
Section 11.05. Guarantors May Consolidate, etc., on Certain Terms.
Except as otherwise provided in Section 11.06, no Guarantor may sell or
otherwise dispose of all or substantially all of its assets to, or consolidate
with or merge with or into (whether or not such Guarantor is the surviving
Person) another Person, other than the Company or another Guarantor, unless:
(a) subject to Section 11.06 hereof, the Person formed by or
surviving any such consolidation or merger (if other than a Guarantor or the
Company) unconditionally assumes all the obligations of such Guarantor, pursuant
to a supplemental indenture in form and substance reasonably
83
satisfactory to the Trustee, under this Indenture, its Parent Guarantee or
Subsidiary Guarantee, as applicable, and the Registration Rights Agreement on
the terms set forth herein or therein; and
(b) immediately after giving effect to such transaction, no Default
or Event of Default exists; and
(c) if the Guarantor is a party to the Environmental Indemnity
Agreements, all rights afforded to such Guarantor are effectively assigned in
full to the Person formed by or surviving any consolidation or merger (if other
than the Company or another Guarantor) or the Person to which such sale,
assignment, transfer, conveyance or other disposition has been made, pursuant to
agreements reasonably satisfactory to the Trustee.
In case of any such consolidation, merger, sale or conveyance and upon
the assumption by the successor Person, by supplemental indenture, executed and
delivered to the Trustee and satisfactory in form to the Trustee, of the Parent
Guarantee or Subsidiary Guarantee, as applicable, endorsed upon the Notes and
the due and punctual performance of all of the covenants and conditions of this
Indenture to be performed by the Guarantor, such successor Person shall succeed
to and be substituted for the Guarantor with the same effect as if it had been
named herein as a Guarantor. Such successor Person thereupon may cause to be
signed any or all of the Parent Guarantees or Subsidiary Guarantees, as
applicable, to be endorsed upon all of the Notes issuable hereunder which
theretofore shall not have been signed by the Company and delivered to the
Trustee. All Parent Guarantees and all Subsidiary Guarantees so issued shall in
all respects have the same legal rank and benefit under this Indenture as the
Parent Guarantee and Subsidiary Guarantee theretofore and thereafter issued in
accordance with the terms of this Indenture as though all of such Parent
Guarantees and Subsidiary Guarantees had been issued at the date of the
execution hereof.
Except as set forth in Articles 4 and 5 hereof, and notwithstanding
clauses (a) and (b) above, nothing contained in this Indenture or in any of the
Notes shall prevent any consolidation or merger of a Guarantor with or into the
Company or another Guarantor, or shall prevent any sale or conveyance of the
property of a Guarantor as an entirety or substantially as an entirety to the
Company or another Guarantor.
Section 11.06. Releases Following Sale of Assets.
In the event of a sale or other disposition of all or substantially all
of the assets of any Guarantor, by way of merger, consolidation, sale or
otherwise, or a sale or other disposition of all of the Capital Stock of any
Guarantor, in each case to a Person that is not (either before or after giving
effect to such transaction) a Subsidiary of the Company, then such Guarantor (in
the event of a sale or other disposition, by way of merger, consolidation or
otherwise, of all of the Capital Stock of such Guarantor) or the corporation
acquiring the property (in the event of a sale or other disposition of all or
substantially all of the assets of such Guarantor) will be released and relieved
of any obligations under its Parent Guarantee or Subsidiary Guarantee, as
applicable; provided that (i) the Net Proceeds of such sale or other disposition
are applied in accordance with the applicable provisions of this Indenture,
including without limitation Section 4.10 hereof and (ii) if the Guarantor is a
party to the Environmental Indemnity Agreements, all rights afforded to such
Guarantor are effectively assigned in full to the Person formed by or surviving
any consolidation or merger (if other than the Company or another Guarantor) or
the Person to which such sale, assignment, transfer, conveyance or other
disposition has been made, pursuant to agreements reasonably satisfactory to the
Trustee. Upon delivery by the Company to the Trustee of an Officers' Certificate
and an Opinion of Counsel to the effect that such sale or other disposition was
made in accordance with the provisions of this Indenture, including without
limitation Section 4.10 hereof, and the Trustee's satisfaction with the
agreements described in clause (ii) above, if applicable, the Trustee shall
84
execute any documents reasonably required in order to evidence the release of
such Guarantor from its obligations under its Parent Guarantee or Subsidiary
Guarantee, as applicable.
Any Guarantor not released from its obligations under its Parent
Guarantee or Subsidiary Guarantee, as applicable, shall remain liable for the
full amount of principal of and interest on the Notes and for the other
obligations of such Guarantor under this Indenture as provided in this Article
11.
ARTICLE 12.
SATISFACTION AND DISCHARGE
Section 12.01. Satisfaction and Discharge.
This Indenture will be discharged and will cease to be of further
effect as to all Notes issued hereunder, when:
(1) either:
(a) all Notes that have been authenticated (except lost, stolen or
destroyed Notes that have been replaced or paid and Notes for
whose payment money has theretofore been deposited in trust
and thereafter repaid to the Company) have been delivered to
the Trustee for cancellation; or
(b) all Notes that have not been delivered to the Trustee for
cancellation have become due and payable by reason of the
mailing of a notice of redemption or otherwise or will become
due and payable within one year and the Company or any
Guarantor has irrevocably deposited or caused to be deposited
with the Trustee as trust funds in trust solely for the
benefit of the Holders, cash in U.S. dollars, non-callable
Government Securities, or a combination thereof, in such
amounts as will be sufficient without consideration of any
reinvestment of interest, to pay and discharge the entire
indebtedness on the Notes not delivered to the Trustee for
cancellation for principal, premium and Liquidated Damages, if
any, and accrued interest to the date of maturity or
redemption;
(2) no Default or Event of Default shall have occurred and be continuing on
the date of such deposit or shall occur as a result of such deposit and
such deposit will not result in a breach or violation of, or constitute
a default under, any other instrument to which the Company or any
Guarantor is a party or by which the Company or any Guarantor is bound;
(3) the Company or any Guarantor has paid or caused to be paid all sums
payable by it under this Indenture; and
(4) the Company has delivered irrevocable instructions to the Trustee under
this Indenture to apply the deposited money toward the payment of the
Notes at maturity or the redemption date, as the case may be.
In addition, the Company must deliver an Officers' Certificate and an Opinion of
Counsel to the Trustee stating that all conditions precedent to satisfaction and
discharge have been satisfied.
Notwithstanding the satisfaction and discharge of this Indenture, if
money shall have been deposited with the Trustee pursuant to subclause (b) of
clause (1) of this Section, the provisions of Section 12.02 and Section 8.06
shall survive.
85
Section 12.02. Application of Trust Money.
Subject to the provisions of Section 8.06, all money deposited with the
Trustee pursuant to Section 12.01 shall be held in trust and applied by it, in
accordance with the provisions of the Notes and this Indenture, to the payment,
either directly or through any Paying Agent (including the Company acting as its
own Paying Agent) as the Trustee may determine, to the Persons entitled thereto,
of the principal (and premium and Liquidated Damages, if any) and interest for
whose payment such money has been deposited with the Trustee; but such money
need not be segregated from other funds except to the extent required by law.
If the Trustee or Paying Agent is unable to apply any money or
Government Securities in accordance with Section 12.01 by reason of any legal
proceeding or by reason of any order or judgment of any court or governmental
authority enjoining, restraining or otherwise prohibiting such application, the
Company's and any Guarantor's obligations under this Indenture and the Notes
shall be revived and reinstated as though no deposit had occurred pursuant to
Section 12.01; provided that if the Company has made any payment of principal
of, premium and Liquidated Damages, if any, or interest on any Notes because of
the reinstatement of its obligations, the Company shall be subrogated to the
rights of the Holders of such Notes to receive such payment from the money or
Government Securities held by the Trustee or Paying Agent.
ARTICLE 13.
MISCELLANEOUS
Section 13.01. Trust Indenture Act Controls.
If any provision of this Indenture limits, qualifies or conflicts with
the duties imposed by TIA ss.318(c), the imposed duties shall control.
Section 13.02. Notices.
Any notice or communication by the Company, any Guarantor or the
Trustee to the others is duly given if in writing and delivered in Person or
mailed by first class mail (registered or certified, return receipt requested),
telex, telecopier or overnight air courier guaranteeing next day delivery, to
the others' address:
If to the Company and/or any Guarantor:
Appleton Papers Inc.
000 X. Xxxxxxxxx Xxx.
X.X. Xxx 000
Xxxxxxxx, XX 00000-0000
Telecopier No.: (000) 000-0000
Attention: Chief Financial Officer
With a copy to:
Xxxxxxx & Xxxx, S.C.
000 Xxxxx Xxxxx Xxxxxx
Xxxxxxxxx, XX 00000-0000
Telecopier No.: (000) 000-0000
Attention: Xxxxxxxxxxx X. Xxxxx, Esq.
86
If to the Trustee:
U.S. Bank National Association
000 Xxxx Xxxxx Xxxxxx
Xxxxx Xxxx, XX 00000
Telecopier No.: (000) 000-0000
Attention: Corporate Trust Administration
The Company, any Guarantor or the Trustee, by notice to the others may
designate additional or different addresses for subsequent notices or
communications.
All notices and communications (other than those sent to Holders) shall
be deemed to have been duly given: at the time delivered by hand, if personally
delivered; five Business Days after being deposited in the mail, postage
prepaid, if mailed; when answered back, if telexed; when receipt acknowledged,
if telecopied; and the next Business Day after timely delivery to the courier,
if sent by overnight air courier guaranteeing next day delivery.
Any notice or communication to a Holder shall be mailed by first class
mail, certified or registered, return receipt requested, or by overnight air
courier guaranteeing next day delivery to its address shown on the register kept
by the Registrar. Any notice or communication shall also be so mailed to any
Person described in TIA (S) 313(c), to the extent required by the TIA. Failure
to mail a notice or communication to a Holder or any defect in it shall not
affect its sufficiency with respect to other Holders.
If a notice or communication is mailed in the manner provided above
within the time prescribed, it is duly given, whether or not the addressee
receives it.
If the Company mails a notice or communication to Holders, it shall
mail a copy to the Trustee and each Agent at the same time.
Section 13.03. Communication by Holders of Notes with Other Holders of Notes.
Holders may communicate pursuant to TIA (S) 312(b) with other Holders
with respect to their rights under this Indenture or the Notes. The Company, the
Trustee, the Registrar and anyone else shall have the protection of TIA (S)
312(c).
Section 13.04. Certificate and Opinion as to Conditions Precedent.
Upon any request or application by the Company to the Trustee to take
any action under this Indenture, the Company shall furnish to the Trustee:
(a) an Officers' Certificate in form and substance reasonably
satisfactory to the Trustee (which shall include the statements set forth in
Section 13.05 hereof) stating that, in the opinion of the signers, all
conditions precedent and covenants, if any, provided for in this Indenture
relating to the proposed action have been satisfied; and
(b) an Opinion of Counsel in form and substance reasonably
satisfactory to the Trustee (which shall include the statements set forth in
Section 13.05 hereof) stating that, in the opinion of such counsel, all such
conditions precedent and covenants have been satisfied.
87
Section 13.05. Statements Required in Certificate or Opinion.
Each certificate or opinion with respect to compliance with a condition
or covenant provided for in this Indenture (other than a certificate provided
pursuant to TIA (S) 314(a)(4)) shall comply with the provisions of TIA (S)
314(e) and shall include:
(c) a statement that the Person making such certificate or opinion
has read such covenant or condition;
(d) a brief statement as to the nature and scope of the examination
or investigation upon which the statements or opinions contained in such
certificate or opinion are based;
(e) a statement that, in the opinion of such Person, he or she has
made such examination or investigation as is necessary to enable him to express
an informed opinion as to whether or not such covenant or condition has been
satisfied; and
(f) a statement as to whether or not, in the opinion of such Person,
such condition or covenant has been satisfied.
Section 13.06. Rules by Trustee and Agents.
The Trustee may make reasonable rules for action by or at a meeting of
Holders. The Registrar or Paying Agent may make reasonable rules and set
reasonable requirements for its functions.
Section 13.07. No Personal Liability of Directors, Officers, Employees and
Stockholders.
No past, present or future director, officer, employee, incorporator or
stockholder of the Company or any Guarantor, as such, shall have any liability
for any obligations of the Company or such Guarantor under the Notes, the Parent
Guarantee or the Subsidiary Guarantee, this Indenture or for any claim based on,
in respect of, or by reason of, such obligations or their creation. Each Holder
by accepting a Note waives and releases all such liability. The waiver and
release are part of the consideration for issuance of the Notes.
Section 13.08. Governing Law.
THE INTERNAL LAW OF THE STATE OF NEW YORK SHALL GOVERN AND BE USED TO
CONSTRUE THIS INDENTURE, THE NOTES, THE PARENT GUARANTEE AND THE SUBSIDIARY
GUARANTEE WITHOUT GIVING EFFECT TO APPLICABLE PRINCIPLES OF CONFLICTS OF LAW TO
THE EXTENT THAT THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION WOULD BE
REQUIRED THEREBY.
Section 13.09. No Adverse Interpretation of Other Agreements.
This Indenture may not be used to interpret any other indenture, loan
or debt agreement of the Company or its Subsidiaries or of any other Person. Any
such indenture, loan or debt agreement may not be used to interpret this
Indenture.
88
Section 13.10. Successors.
All agreements of the Company in this Indenture and the Notes shall
bind its successors. All agreements of the Trustee in this Indenture shall bind
its successors. All agreements of each Guarantor in this Indenture shall bind
its successors, except as otherwise provided in Section 11.05.
Section 13.11. Severability.
In case any provision in this Indenture or in the Notes shall be
invalid, illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions shall not in any way be affected or impaired thereby.
Section 13.12. Counterpart Originals.
The parties may sign any number of copies of this Indenture. Each
signed copy shall be an original, but all of them together represent the same
agreement.
Section 13.13. Table of Contents, Headings, etc.
The Table of Contents, Cross-Reference Table and Headings of the
Articles and Sections of this Indenture have been inserted for convenience of
reference only, are not to be considered a part of this Indenture and shall in
no way modify or restrict any of the terms or provisions hereof.
Section 13.14. PDC Capital Corporation.
Notwithstanding any other provisions of this Indenture, PDC Capital
Corporation, a Delaware Corporation, shall not be subject to the terms and
conditions of this Indenture provided that it has no assets other than nominal
assets and its Common Stock ownership of Arjo Xxxxxxx Appleton (Bermuda)
Limited.
[Signatures on following page]
89
SIGNATURES
Dated as of December 14, 2001
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: Asst. Secretary
U.S. Bank National Association
By: /s/ X. Xxxxxxxx
Name: Xxxxxxx X. Xxxxxxxx
Title: Vice President
90
EXHIBIT A1
[Face of Note]
_______________________________________________________________________________
CUSIP/CINS ____________
12 1/2% Senior Subordinated Notes due 2008
No. ___ $____________
APPLETON PAPERS INC.
promises to pay to Cede & Co., or registered assigns, the principal sum of _____
___________
Dollars on December 15, 2008.
Interest Payment Dates: June 15 and December 15
Record Dates: June 1 and December 1
Dated: December 14, 2001
APPLETON PAPERS INC.
By:________________________________________
Name:
Title:
By:________________________________________
Name:
Title:
This is one of the Notes referred to
in the within-mentioned Indenture:
U.S. BANK NATIONAL ASSOCIATION,
as Trustee
By:__________________________________________
Authorized Signatory
_______________________________________________________________________________
A1-1
[Back of Note]
12 1/2% Senior Subordinated Notes due 2008
[Insert the Global Note Legend if applicable pursuant to the provisions of the
Indenture]
[Insert the Private Placement Legend if applicable pursuant to the provisions of
the Indenture]
Capitalized terms used herein shall have the meanings assigned to them
in the Indenture referred to below unless otherwise indicated.
1. Interest. Appleton Papers Inc., a Delaware corporation (the
"Company"), promises to pay interest on the principal amount of this Note at 12
1/2% per annum from December 14, 2001 until maturity and shall pay the
Liquidated Damages payable pursuant to Section 5 of the Registration Rights
Agreement referred to below. The Company will pay interest and Liquidated
Damages semi-annually in arrears on June 15 and December 15 of each year, or if
any such day is not a Business Day, on the next succeeding Business Day (each an
"Interest Payment Date"). Interest on the Notes will accrue from the most recent
date to which interest has been paid or, if no interest has been paid, from the
date of issuance; provided that if there is no existing Default in the payment
of interest, and if this Note is authenticated between a record date referred to
on the face hereof and the next succeeding Interest Payment Date, interest shall
accrue from such next succeeding Interest Payment Date; provided, further, that
the first Interest Payment Date shall be June 15, 2002. The Company shall pay
interest (including post-petition interest in any proceeding under any
Bankruptcy Law) on overdue principal and premium, if any, from time to time on
demand at a rate that is 1% per annum in excess of the rate then in effect; it
shall pay interest (including post-petition interest in any proceeding under any
Bankruptcy Law) on overdue installments of interest and Liquidated Damages
(without regard to any applicable grace periods) from time to time on demand at
the same rate to the extent lawful. Interest will be computed on the basis of a
360-day year of twelve 30-day months.
2. Method of Payment. The Company will pay interest on the Notes
(except defaulted interest) and Liquidated Damages to the Persons who are
registered Holders of Notes at the close of business on the June 1 or December 1
next preceding the Interest Payment Date, even if such Notes are canceled after
such record date and on or before such Interest Payment Date, except as provided
in Section 2.12 of the Indenture with respect to defaulted interest. The Notes
will be payable as to principal, premium and Liquidated Damages, if any, and
interest at the office or agency of the Company maintained for such purpose
within or without the City and State of New York, or, at the option of the
Company, payment of interest and Liquidated Damages may be made by check mailed
to the Holders at their addresses set forth in the register of Holders, and
provided that payment by wire transfer of immediately available funds will be
required with respect to principal of and interest, premium and Liquidated
Damages on, all Global Notes and all other Notes the Holders of which shall have
provided wire transfer instructions to the Company or the Paying Agent. Such
payment shall be in such coin or currency of the United States of America which
at the time of payment is legal tender for payment of public and private debts.
3. Paying agent and Registrar. Initially, U.S. Bank National
Association, the Trustee under the Indenture, will act as Paying Agent and
Registrar. The Company may change any Paying Agent or Registrar without notice
to any Holder. The Company or any of its Subsidiaries may act in any such
capacity.
4. Indenture. The Company issued the Notes under an Indenture dated
as of December 14, 2001 ("Indenture") by and among the Company, the guarantors
party thereto and the Trustee. The terms of the Notes include those stated in
the Indenture and those made part of the Indenture by reference to the
A1-2
Trust Indenture Act of 1939, as amended (15 U.S. Code (S)(S) 77aaa-77bbbb). The
Notes are subject to all such terms, and Holders are referred to the Indenture
and such Act for a statement of such terms. To the extent any provision of this
Note conflicts with the express provisions of the Indenture, the provisions of
the Indenture shall govern and be controlling. The Notes are obligations of the
Company limited to $250 million in aggregate principal amount.
5. Optional Redemption.
(a) Except as set forth in subparagraph (b) of this Paragraph 5, the
Company shall not have the option to redeem the Notes prior to December 15,
2005. Thereafter, the Company shall have the option to redeem the Notes, in
whole or in part, upon not less than 30 nor more than 60 days' notice, at the
redemption prices (expressed as percentages of principal amount) set forth below
plus accrued and unpaid interest and Liquidated Damages thereon, if any, to the
applicable redemption date, if redeemed during the twelve-month period beginning
on December 15 of the years indicated below:
Year Percentage
---- ----------
2005................................................... 106.250%
2006................................................... 103.125%
2007 and thereafter.................................... 100.000%
(b) Notwithstanding the provisions of subparagraph (a) of this
Paragraph 5, at any time prior to December 15, 2004, the Company may redeem up
to 35% of the aggregate principal amount of the Notes originally issued with the
net cash proceeds of an initial public offering of its common stock or the net
cash proceeds from the issuance of Equity Interests, other than Disqualified
Stock, to third parties other than the Parent Entity at a redemption price equal
to 112.500% of the aggregate principal amount thereof plus accrued and unpaid
interest and Liquidated Damages thereon, if any; provided that at least 65% in
aggregate principal amount of the Notes originally issued remain outstanding
immediately after the occurrence of such redemption and that such redemption
occurs within 60 days of the date of the closing of such initial public
offering, the issuance of such Equity Interests or other equity cash investment.
6. Mandatory Redemption.
Except as set forth in paragraph 7 below, the Company shall not be
required to make mandatory redemption payments or sinking fund payments with
respect to the Notes.
7. Repurchase at the Option of Holder.
(a) If there is a Change of Control, the Company shall be required to
make an offer (a "Change of Control Offer") to repurchase all or any part (equal
to $1,000 or an integral multiple thereof) of each Holder's Notes at a purchase
price equal to 101% of the aggregate principal amount thereof plus accrued and
unpaid interest and Liquidated Damages thereon, if any, to the date of purchase
(the "Change of Control Payment"). Within 20 days following any Change of
Control, the Company shall mail a notice to each Holder setting forth the
procedures governing the Change of Control Offer as required by the Indenture.
(b) If the Company, the Parent Entity or a Restricted Subsidiary
consummates any Asset Sales, within five days of each date on which the
aggregate amount of Excess Proceeds exceeds $5 million, the Company shall
commence a pro rata offer to all Holders of Notes and all holders of other
Indebtedness that is pari passu with the Notes containing provisions similar to
those set forth in the Indenture with respect to offers to purchase and or
redeem with the proceeds of sales of assets (an "Asset Sale Offer")
A1-3
pursuant to Section 3.09 of the Indenture to purchase the maximum principal
amount of Notes and such other pari passu Indebtedness that may be purchased out
of the Excess Proceeds at an offer price in cash in an amount equal to 100% of
the principal amount thereof plus accrued and unpaid interest and Liquidated
Damages thereon, if any, to the date fixed for the closing of such offer, in
accordance with the procedures set forth in the Indenture. If any Excess
Proceeds remain after the consummation of the Asset Sale Offer, the Company (or
such Subsidiary) may use those Excess Proceeds for any purpose not otherwise
prohibited by the Indenture. If the aggregate principal amount of Notes and
other pari passu Indebtedness tendered into such Asset Sale Offer exceeds the
amount of Excess Proceeds, the Trustee shall select the Notes and other pari
passu Indebtedness to be purchased on a pro rata basis. Holders of Notes that
are the subject of an offer to purchase will receive an Asset Sale Offer from
the Company prior to any related purchase date and may elect to have such Notes
purchased by completing the form entitled "Option of Holder to Elect Purchase"
on the reverse of the Notes.
(c) If, for any fiscal year of the Company commencing with the fiscal
year ending December 28, 2002, there is any Excess Cash Flow, the Company shall
first apply the Excess Cash Flow Amount to repay Senior Debt and, if the Senior
Debt repaid is revolving credit Indebtedness, to correspondingly permanently
reduce commitments with respect to such revolving credit Indebtedness and
second, permanently reduce revolving credit commitments relating to Senior Debt
in an amount equal to the remaining Excess Cash Flow Amount, if any, not used to
repay Senior Debt, provided that the Company shall not be required in either
case to reduce such revolving credit commitments to less than $50.0 million. If
more than $5.0 million of the Excess Cash Flow Amount remains after such
prepayment and adjustment for such permanent reduction, the Company shall be
required to make an offer (an "Excess Cash Flow Offer") to repurchase all or any
part (equal to $1,000 or an integral multiple thereof) of each Holder's Notes at
a purchase price equal to 103% of the aggregate principal amount thereof plus
accrued and unpaid interest and Liquidated Damages thereon, if any, to the date
of purchase. Upon the commencement of an Excess Cash Flow Offer, the Company
shall mail a notice to each Holder setting forth the procedures governing the
Excess Cash Flow Offer as required by the Indenture.
8. Notice of Redemption. Notice of redemption will be mailed at least
30 days but not more than 60 days before the redemption date to each Holder
whose Notes are to be redeemed at its registered address. Notes in denominations
larger than $1,000 may be redeemed in part but only in whole multiples of
$1,000, unless all of the Notes held by a Holder are to be redeemed. On and
after the redemption date interest ceases to accrue on Notes or portions thereof
called for redemption.
9. Denominations, Transfer, Exchange. The Notes are in registered
form without coupons in denominations of $1,000 and integral multiples of
$1,000. The transfer of Notes may be registered and Notes may be exchanged as
provided in the Indenture. The Registrar and the Trustee may require a Holder,
among other things, to furnish appropriate endorsements and transfer documents
and the Company may require a Holder to pay any taxes and fees required by law
or permitted by the Indenture. The Company need not exchange or register the
transfer of any Note or portion of a Note selected for redemption, except for
the unredeemed portion of any Note being redeemed in part. Also, the Company
need not exchange or register the transfer of any Notes for a period of 15 days
before a selection of Notes to be redeemed or during the period between a record
date and the corresponding Interest Payment Date.
10. Persons Deemed Owners. The registered Holder of a Note may be
treated as its owner for all purposes.
11. Amendment, Supplement and Waiver. Subject to certain exceptions,
the Indenture, the Subsidiary Guarantee, the Parent Guarantee or the Notes may
be amended or supplemented with the consent of the Holders of at least a
majority in principal amount of the then outstanding Notes voting as a single
class, and any existing default or compliance with any provision of the
Indenture, the Subsidiary
A1-4
Guarantee, the Parent Guarantee or the Notes may be waived with the consent of
the Holders of a majority in principal amount of the then outstanding Notes
voting as a single class. Without the consent of any Holder of a Note, the
Indenture, the Subsidiary Guarantee, the Parent Guarantee or the Notes may be
amended or supplemented to change a notice address, to cure any ambiguity,
defect or inconsistency, to provide for uncertificated Notes in addition to or
in place of certificated Notes or to alter the provisions of Article 2 of the
Indenture (including the related definitions) in a manner that does not
materially adversely affect any Holder of the Notes, to provide for the
assumption of the Company's or any Guarantor's obligations to Holders of the
Notes in case of a merger or consolidation, to make any change that would
provide any additional rights or benefits to the Holders of the Notes or that
does not adversely affect the legal rights under the Indenture of any such
Holder, to comply with the requirements of the SEC in order to effect or
maintain the qualification of the Indenture under the Trust Indenture Act, to
provide for the acceptance of appointment under the Indenture of a successor
Trustee with respect to the Notes, or to allow any Guarantor to execute a
supplemental indenture to the Indenture and/or a Subsidiary Guarantee or a
Parent Guarantee with respect to the Notes.
12. Defaults and Remedies. Events of Default include: (i) default for
30 days in the payment when due of interest or Liquidated Damages, if any, on
the Notes; (ii) default in payment when due of principal of or premium, if any,
on the Notes when the same becomes due and payable at maturity, upon redemption
(including in connection with an offer to purchase) or otherwise, (iii) failure
by the Company to comply with Section 4.07, 4.09, 4.10, 4.15, 4.17, 4.23, 4.24
or 5.01 of the Indenture; (iv) failure by the Company for 60 days after notice
to the Company by the Trustee or the Holders of at least 25% in principal amount
of the Notes then outstanding voting as a single class to comply with certain
other agreements in the Indenture or the Notes; (v) default under certain other
agreements relating to Indebtedness of the Company which default is caused by a
failure to pay principal of, or interest or premium, if any, on such
Indebtedness prior to the expiration of the grace period provided in such
Indebtedness or results in the acceleration of such Indebtedness prior to its
express maturity and the amount of any such Indebtedness which is defaulted or
accelerated aggregates $10.0 million or more; (vi) failure by the Company or any
of its Restricted Subsidiaries to pay certain final judgments exceeding $10.0
million in the aggregate for the payment of money that are not paid, discharged,
or stayed or the execution of which has not been otherwise postponed or
precluded in accordance with applicable procedures, for a period of 60 days;
(vii) certain events of bankruptcy or insolvency with respect to the Parent
Entity, the Company or one or more of any of their Subsidiaries with,
individually or in the aggregate, total assets or liabilities of greater than or
equal to $10.0 million; (viii) except as permitted by the Indenture, any
Subsidiary Guarantee or Parent Guarantee shall be held in any judicial
proceeding to be unenforceable or invalid or shall cease for any reason to be in
full force and effect or any Guarantor or any Person acting on its behalf shall
deny or disaffirm its obligations under such Guarantor's Subsidiary Guarantee or
Parent Guarantee, as applicable; and (ix) the Environmental Indemnity Agreements
or the Credit Enhancement is terminated, held in any judicial proceeding to be
unenforceable or invalid or shall cease for any reason (except in accordance
with the terms thereof) to be in full force and effect or any party thereto, or
any Person acting on behalf of any party thereto, shall deny or disaffirm in
writing its obligations under either the Environmental Indemnity Agreements or
the Credit Enhancement. If any Event of Default occurs and is continuing, the
Trustee or the Holders of at least 25% in principal amount of the then
outstanding Notes may declare all the Notes to be due and payable.
Notwithstanding the foregoing, in the case of an Event of Default arising from
certain events of bankruptcy or insolvency, all outstanding Notes will become
due and payable without further action or notice. Holders may not enforce the
Indenture or the Notes except as provided in the Indenture. Subject to certain
limitations, Holders of a majority in principal amount of the then outstanding
Notes may direct the Trustee in its exercise of any trust or power. The Trustee
may withhold from Holders of the Notes notice of any continuing Default or Event
of Default (except a Default or Event of Default relating to the payment of
principal or interest) if it determines that withholding notice is in their
interest. The Holders of a majority in aggregate principal amount of the Notes
then outstanding by notice to the Trustee may on behalf of the
A1-5
Holders of all of the Notes waive any existing Default or Event of Default and
its consequences under the Indenture except a continuing Default or Event of
Default in the payment of interest on, or the principal of, the Notes. The
Company is required to deliver to the Trustee annually a statement regarding
compliance with the Indenture, and the Company is required upon becoming aware
of any Default or Event of Default, to deliver to the Trustee a statement
specifying such Default or Event of Default.
13. Trustee Dealings with Company. The Trustee, in its individual or
any other capacity, may make loans to, accept deposits from, and perform
services for the Company or its Affiliates, and may otherwise deal with the
Company or its Affiliates, as if it were not the Trustee.
14. No Recourse Against Others. A past, present or future director,
officer, employee, incorporator or stockholder, of the Company or any of the
Guarantors, as such, shall not have any liability for any obligations of the
Company or such Guarantor under the Notes, the Subsidiary Guarantee or Parent
Guarantee, as applicable or the Indenture or for any claim based on, in respect
of, or by reason of, such obligations or their creation. Each Holder by
accepting a Note waives and releases all such liability. The waiver and release
are part of the consideration for the issuance of the Notes.
15. Authentication. This Note shall not be valid until authenticated
by the manual signature of the Trustee or an authenticating agent.
16. Abbreviations. Customary abbreviations may be used in the name of
a Holder or an assignee, such as: TEN COM (= tenants in common), TEN ENT (=
tenants by the entireties), JT TEN (= joint tenants with right of survivorship
and not as tenants in common), CUST (= Custodian), and U/G/M/A (= Uniform Gifts
to Minors Act).
17. Additional Rights of Holders of Restricted Global Notes and
Restricted Definitive Notes. In addition to the rights provided to Holders of
Notes under the Indenture, Holders of Restricted Global Notes and Restricted
Definitive Notes shall have all the rights set forth in the A/B Exchange
Registration Rights Agreement dated as of December 14, 2001, between the Company
and the parties named on the signature pages thereof (the "Registration Rights
Agreement").
18. Cusip Numbers. Pursuant to a recommendation promulgated by the
Committee on Uniform Security Identification Procedures, the Company has caused
CUSIP numbers to be printed on the Notes and the Trustee may use CUSIP numbers
in notices of redemption as a convenience to Holders. No representation is made
as to the accuracy of such numbers either as printed on the Notes or as
contained in any notice of redemption and reliance may be placed only on the
other identification numbers placed thereon.
The Company will furnish to any Holder upon written request and without
charge a copy of the Indenture and/or the Registration Rights Agreement.
Requests may be made to:
Appleton Papers Inc.
000 X. Xxxxxxxxx Xxx.
X.X. Xxx 000
Xxxxxxxx, XX 00000-0000
Telecopier No.: (000) 000-0000
Attention: Chief Financial Officer
A1-6
Assignment Form
To assign this Note, fill in the form below:
(I) or (we) assign and transfer this Note to: __________________________________
(Insert assignee's legal name)
________________________________________________________________________________
(Insert assignee's soc. sec. or tax I.D. no.)
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Print or type assignee's name, address and zip code)
and irrevocably appoint ________________________________________________________
to transfer this Note on the books of the Company. The agent may substitute
another to act for him.
Date: _______________
Your Signature: ____________________
(Sign exactly as your name appears
on the face of this Note)
Signature Guarantee*: ________________________
* Participant in a recognized Signature Guarantee Medallion Program (or other
signature guarantor acceptable to the Trustee).
A1-7
Option of Holder to Elect Purchase
If you want to elect to have this Note purchased by the Company
pursuant to Section 4.10, 4.15 or 4.23 of the Indenture, check the appropriate
box below:
-Section 4.10 -Section 4.15 -Section 4.23
If you want to elect to have only part of the Note purchased by the
Company pursuant to Section 4.10, 4.15 or 4.23 of the Indenture, state the
amount you elect to have purchased:
$______________
Date: _______________
Your Signature: ____________________________
(Sign exactly as your name appears
on the face of this Note)
Tax Identification No.:_____________________
Signature Guarantee*: ___________________
* Participant in a recognized Signature Guarantee Medallion Program (or other
signature guarantor acceptable to the Trustee).
A1-8
SCHEDULE OF EXCHANGES OF INTERESTS IN THE GLOBAL NOTE
The following exchanges of a part of this Global Note for an interest in
another Global Note or for a Definitive Note, or exchanges of a part of another
Global Note or Definitive Note for an interest in this Global Note, have been
made:
Principal Amount
Amount of decrease Amount of increase in of this Global Note Signature of
in Principal Amount Principal Amount following such authorized officer
of of decrease of Trustee or
Date of Exchange this Global Note this Global Note (or increase) Note Custodian
---------------- ---------------- ---------------- ------------- --------------
* This schedule should be included only if the Note is issued in global form.
A1-9
EXHIBIT A2
[Face of Regulation S Temporary Global Note]
--------------------------------------------------------------------------------
CUSIP/CINS __________
12 1/2% Senior Subordinated Notes due 2008
No. ___ $__________
APPLETON PAPERS INC.
promises to pay to Cede & Co., or registered assigns, the principal sum of
_________________________________
Dollars on December 15, 2008.
Interest Payment Dates: June 15 and December 15
Record Dates: June 1, and December 1
Dated: December 14, 2001
APPLETON PAPERS INC.
By: ______________________
Name:
Title:
By: ______________________
Name:
Title:
This is one of the Notes referred to
in the within-mentioned Indenture:
U.S. BANK NATIONAL ASSOCIATION,
as Trustee
By: __________________________________________
Authorized Signatory
--------------------------------------------------------------------------------
A2-1
[Back of Regulation S Temporary Global Note]
12 1/2% Senior Subordinated Notes due 2008
[Insert the Regulation S Temporary Global Note Legend]
UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR NOTES IN DEFINITIVE
FORM, THIS NOTE MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARY TO A
NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR
ANOTHER NOMINEE OF THE DEPOSITARY OR BY THE DEPOSITARY OR ANY SUCH NOMINEE TO A
SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITARY. UNLESS THIS
CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST
COMPANY (55 XXXXX XXXXXX, XXX XXXX, XXX XXXX) ("XXX"), TO THE COMPANY OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS MAY BE
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR SUCH OTHER ENTITY AS MAY BE REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
[Insert the Private Placement Legend]
Capitalized terms used herein shall have the meanings assigned to them in
the Indenture referred to below unless otherwise indicated.
1. Interest. Appleton Papers Inc., a Delaware corporation (the "Company"),
promises to pay interest on the principal amount of this Note at 12 1/2% per
annum from December 14, 2001 until maturity and shall pay the Liquidated Damages
payable pursuant to Section 5 of the Registration Rights Agreement referred to
below. The Company will pay interest and Liquidated Damages semi-annually on
June 15 and December 15 of each year, or if any such day is not a Business Day,
on the next succeeding Business Day (each an "Interest Payment Date"). Interest
on the Notes will accrue from the most recent date to which interest has been
paid or, if no interest has been paid, from the date of issuance; provided that
if there is no existing Default in the payment of interest, and if this Note is
authenticated between a record date referred to on the face hereof and the next
succeeding Interest Payment Date, interest shall accrue from such next
succeeding Interest Payment Date; provided, further, that the first Interest
Payment Date shall be June 15, 2002. The Company shall pay interest (including
post-petition interest in any proceeding under any Bankruptcy Law) on overdue
principal and premium, if any, from time to time on demand at a rate that is 1%
per annum in excess of the rate then in effect; it shall pay interest (including
post-petition interest in any proceeding under any Bankruptcy Law) on overdue
installments of interest and Liquidated Damages (without regard to any
applicable grace periods) from time to time on demand at the same rate to the
extent lawful. Interest will be computed on the basis of a 360-day year of
twelve 30-day months.
Until this Regulation S Temporary Global Note is exchanged for one or more
Regulation S Permanent Global Notes, the Holder hereof shall not be entitled to
receive payments of interest hereon; until so exchanged in full, this Regulation
S Temporary Global Note shall in all other respects be entitled to the same
benefits as other Senior Subordinated Notes under the Indenture.
A2-2
2. Method of Payment. The Company will pay interest on the Notes (except
defaulted interest) and Liquidated Damages to the Persons who are registered
Holders of Notes at the close of business on the June 1 or December 1 next
preceding the Interest Payment Date, even if such Notes are canceled after such
record date and on or before such Interest Payment Date, except as provided in
Section 2.12 of the Indenture with respect to defaulted interest. The Notes will
be payable as to principal, premium, interest and Liquidated Damages at the
office or agency of the Company maintained for such purpose within or without
the City and State of New York, or, at the option of the Company, payment of
interest and Liquidated Damages may be made by check mailed to the Holders at
their addresses set forth in the register of Holders, and provided that payment
by wire transfer of immediately available funds will be required with respect to
principal of and interest, premium and Liquidated Damages on, all Global Notes
and all other Notes the Holders of which shall have provided wire transfer
instructions to the Company or the Paying Agent. Such payment shall be in such
coin or currency of the United States of America which at the time of payment is
legal tender for payment of public and private debts.
3. Paying Agent and Registrar. Initially, U.S. Bank National Association,
the Trustee under the Indenture, will act as Paying Agent and Registrar. The
Company may change any Paying Agent or Registrar without notice to any Holder.
The Company or any of its Subsidiaries may act in any such capacity.
4. Indenture. The Company issued the Notes under an Indenture dated as of
December 14, 2001 ("Indenture") by and among the Company, the guarantors party
thereto and the Trustee. The terms of the Notes include those stated in the
Indenture and those made part of the Indenture by reference to the Trust
Indenture Act of 1939, as amended (15 U.S. Code (S)(S) 77aaa-77bbbb). The Notes
are subject to all such terms, and Holders are referred to the Indenture and
such Act for a statement of such terms. To the extent any provision of this Note
conflicts with the express provisions of the Indenture, the provisions of the
Indenture shall govern and be controlling. The Notes are obligations of the
Company limited to $250 million in aggregate principal amount.
5. Optional Redemption.
(a) Except as set forth in subparagraph (b) of this Paragraph 5, the
Company shall not have the option to redeem the Notes prior to December 15,
2005. Thereafter, the Company shall have the option to redeem the Notes, in
whole or in part, upon not less than 30 nor more than 60 days' notice, at the
redemption prices (expressed as percentages of principal amount) set forth below
plus accrued and unpaid interest and Liquidated Damages thereon, if any, to the
applicable redemption date, if redeemed during the twelve-month period beginning
on December 15 of the years indicated below:
Year Percentage
---- ----------
2005................................................... 106.250%
2006 .................................................. 103.125%
2007 and thereafter ................................... 100.000%
(b) Notwithstanding the provisions of subparagraph (a) of this Paragraph 5,
at any time prior to December 15, 2004, the Company may redeem up to 35% of the
aggregate principal amount of the Notes originally issued with the net cash
proceeds of an initial public offering of its common stock or the net cash
proceeds from the issuance of Equity Interests, other than Disqualified Stock,
to third parties other than the Parent Entity at a redemption price equal to
112.500% of the aggregate principal amount thereof plus accrued and unpaid
interest and Liquidated Damages thereon, if any; provided that at least 65% in
aggregate principal amount of the Notes originally issued remain outstanding
immediately after the
A2-3
occurrence of such redemption and that such redemption occurs within 60 days of
the date of the closing of such initial public offering, the issuance of such
Equity Interests or other equity cash investment.
6. Mandatory Redemption.
Except as set forth in paragraph 7 below, the Company shall not be required
to make mandatory redemption payments or sinking fund payments with respect to
the Notes.
7. Repurchase at Option of Holder.
(a) If there is a Change of Control, the Company shall be required to make
an offer (a "Change of Control Offer") to repurchase all or any part (equal to
$1,000 or an integral multiple thereof) of each Holder's Notes at a purchase
price equal to 101% of the aggregate principal amount thereof plus accrued and
unpaid interest and Liquidated Damages thereon, if any, to the date of purchase
(the "Change of Control Payment"). Within 20 days following any Change of
Control, the Company shall mail a notice to each Holder setting forth the
procedures governing the Change of Control Offer as required by the Indenture.
(b) If the Company, the Parent Entity or a Restricted Subsidiary
consummates any Asset Sales, within five days of each date on which the
aggregate amount of Excess Proceeds exceeds $5 million, the Company shall
commence a pro rata offer to all Holders of Notes and all holders of other
Indebtedness that is pari passu with the Notes containing provisions similar to
those set forth in the Indenture with respect to offers to purchase and or
redeem with the proceeds of sales of assets (an "Asset Sale Offer") pursuant to
Section 3.09 of the Indenture to purchase the maximum principal amount of Notes
and such other pari passu Indebtedness that may be purchased out of the Excess
Proceeds at an offer price in cash in an amount equal to 100% of the principal
amount thereof plus accrued and unpaid interest and Liquidated Damages thereon,
if any, to the date fixed for the closing of such offer, in accordance with the
procedures set forth in the Indenture. If any Excess Proceeds remain after the
consummation of the Asset Sale Offer, the Company (or such Subsidiary) may use
those Excess Proceeds for any purpose not otherwise prohibited by the Indenture.
If the aggregate principal amount of Notes and other pari passu Indebtedness
tendered into such Asset Sale Offer exceeds the amount of Excess Proceeds , the
Trustee shall select the Notes and other pari passu Indebtedness to be purchased
on a pro rata basis. Holders of Notes that are the subject of an offer to
purchase will receive an Asset Sale Offer from the Company prior to any related
purchase date and may elect to have such Notes purchased by completing the form
entitled "Option of Holder to Elect Purchase" on the reverse of the Notes.
(c) If, for any fiscal year of the Company commencing with the fiscal year
ending December 28, 2002, there is any Excess Cash Flow, the Company shall first
apply the Excess Cash Flow Amount to repay Senior Debt and, if the Senior Debt
repaid is revolving credit Indebtedness, to correspondingly permanently reduce
commitments with respect to such revolving credit Indebtedness and second,
permanently reduce revolving credit commitments relating to Senior Debt in an
amount equal to the remaining Excess Cash Flow Amount, if any, not used to repay
Senior Debt, provided that the Company shall not be required in either case to
reduce such revolving credit commitments to less than $50.0 million. If more
than $5.0 million of the Excess Cash Flow Amount remains after such prepayment
and adjustment for such permanent reduction, the Company shall be required to
make an offer (an "Excess Cash Flow Offer") to repurchase all or any part (equal
to $1,000 or an integral multiple thereof) of each Holder's Notes at a purchase
price equal to 103% of the aggregate principal amount thereof plus accrued and
unpaid interest and Liquidated Damages thereon, if any, to the date of purchase.
Upon the commencement of an Excess Cash Flow Offer, the Company shall mail a
notice to each Holder setting forth the procedures governing the Excess Cash
Flow Offer as required by the Indenture.
A2-4
8. Notice of Redemption. Notice of redemption will be mailed at least 30
days but not more than 60 days before the redemption date to each Holder whose
Notes are to be redeemed at its registered address. Notes in denominations
larger than $1,000 may be redeemed in part but only in whole multiples of
$1,000, unless all of the Notes held by a Holder are to be redeemed. On and
after the redemption date interest ceases to accrue on Notes or portions thereof
called for redemption.
9. Denominations, Transfer, Exchange. The Notes are in registered form
without coupons in denominations of $1,000 and integral multiples of $1,000. The
transfer of Notes may be registered and Notes may be exchanged as provided in
the Indenture. The Registrar and the Trustee may require a Holder, among other
things, to furnish appropriate endorsements and transfer documents and the
Company may require a Holder to pay any taxes and fees required by law or
permitted by the Indenture. The Company need not exchange or register the
transfer of any Note or portion of a Note selected for redemption, except for
the unredeemed portion of any Note being redeemed in part. Also, it need not
exchange or register the transfer of any Notes for a period of 15 days before a
selection of Notes to be redeemed or during the period between a record date and
the corresponding Interest Payment Date.
This Regulation S Temporary Global Note is exchangeable in whole or in part
for one or more Global Notes only (i) on or after the termination of the 40-day
restricted period (as defined in Regulation S) and (ii) upon presentation of
certificates (accompanied by an Opinion of Counsel, if applicable) required by
Article 2 of the Indenture. Upon exchange of this Regulation S Temporary Global
Note for one or more Global Notes, the Trustee shall cancel this Regulation S
Temporary Global Note.
10. Persons Deemed Owners. The registered Holder of a Note may be treated
as its owner for all purposes.
11. Amendment, Supplement and Waiver. Subject to certain exceptions, the
Indenture, the Subsidiary Guarantee, the Parent Guarantee or the Notes may be
amended or supplemented with the consent of the Holders of at least a majority
in principal amount of the then outstanding Notes voting as a single class, and
any existing default or compliance with any provision of the Indenture, the
Subsidiary Guarantee, the Parent Guarantee or the Notes may be waived with the
consent of the Holders of a majority in principal amount of the then outstanding
Notes voting as a single class. Without the consent of any Holder of a Note, the
Indenture, the Subsidiary Guarantee, the Parent Guarantee or the Notes may be
amended or supplemented to change a notice address, to cure any ambiguity,
defect or inconsistency, to provide for uncertificated Notes in addition to or
in place of certificated Notes or to alter the provisions of Article 2 of the
Indenture (including the related definitions) in a manner that does not
materially adversely affect any Holder of the Notes, to provide for the
assumption of the Company's or any Guarantor's obligations to Holders of the
Notes in case of a merger or consolidation, to make any change that would
provide any additional rights or benefits to the Holders of the Notes or that
does not adversely affect the legal rights under the Indenture of any such
Holder, to comply with the requirements of the SEC in order to effect or
maintain the qualification of the Indenture under the Trust Indenture Act, to
provide for the acceptance of appointment under the Indenture of a successor
Trustee with respect to the Notes, or to allow any Guarantor to execute a
supplemental indenture to the Indenture and/or a Subsidiary Guarantee or a
Parent Guarantee with respect to the Notes.
12. Defaults and Remedies. Events of Default include: (i) default for 30
days in the payment when due of interest or Liquidated Damages, if any, on the
Notes; (ii) default in payment when due of principal of or premium, if any, on
the Notes when the same becomes due and payable at maturity, upon redemption
(including in connection with an offer to purchase) or otherwise, (iii) failure
by the Company to comply with Section 4.07, 4.09, 4.10, 4.15, 4.17, 4.23, 4.24
or 5.01 of the Indenture; (iv) failure by the Company for 60 days after notice
to the Company by the Trustee or the Holders of at least 25% in principal amount
of the Notes then outstanding voting as a single class to comply with certain
other
A2-5
agreements in the Indenture or the Notes; (v) default under certain other
agreements relating to Indebtedness of the Company which default is caused by a
failure to pay principal of, or interest or premium, if any, on such
Indebtedness prior to the expiration of the grace period provided in such
Indebtedness or results in the acceleration of such Indebtedness prior to its
express maturity and the amount of any such Indebtedness which is defaulted or
accelerated aggregates $10.0 million or more; (vi) failure by the Company or any
of its Restricted Subsidiaries to pay certain final judgments exceeding $10.0
million in the aggregate for the payment of money that are not paid, discharged,
or stayed or the execution of which has not been otherwise postponed or
precluded in accordance with applicable procedures, for a period of 60 days;
(vii) certain events of bankruptcy or insolvency with respect to the Parent
Entity, the Company or one or more of any of their Subsidiaries with,
individually or in the aggregate, total assets or liabilities of greater than or
equal to $10.0 million; (viii) except as permitted by the Indenture, any
Subsidiary Guarantee or Parent Guarantee shall be held in any judicial
proceeding to be unenforceable or invalid or shall cease for any reason to be in
full force and effect or any Guarantor or any Person acting on its behalf shall
deny or disaffirm its obligations under such Guarantor's Subsidiary Guarantee or
Parent Guarantee, as applicable; and (ix) the Environmental Indemnity Agreements
or the Credit Enhancement is terminated, held in any judicial proceeding to be
unenforceable or invalid or shall cease for any reason (except in accordance
with the terms thereof) to be in full force and effect or any party thereto, or
any Person acting on behalf of any party thereto, shall deny or disaffirm in
writing its obligations under either the Environmental Indemnity Agreements or
the Credit Enhancement. If any Event of Default occurs and is continuing, the
Trustee or the Holders of at least 25% in principal amount of the then
outstanding Notes may declare all the Notes to be due and payable.
Notwithstanding the foregoing, in the case of an Event of Default arising from
certain events of bankruptcy or insolvency, all outstanding Notes will become
due and payable without further action or notice. Holders may not enforce the
Indenture or the Notes except as provided in the Indenture. Subject to certain
limitations, Holders of a majority in principal amount of the then outstanding
Notes may direct the Trustee in its exercise of any trust or power. The Trustee
may withhold from Holders of the Notes notice of any continuing Default or Event
of Default (except a Default or Event of Default relating to the payment of
principal or interest) if it determines that withholding notice is in their
interest. The Holders of a majority in aggregate principal amount of the Notes
then outstanding by notice to the Trustee may on behalf of the Holders of all of
the Notes waive any existing Default or Event of Default and its consequences
under the Indenture except a continuing Default or Event of Default in the
payment of interest on, or the principal of, the Notes. The Company is required
to deliver to the Trustee annually a statement regarding compliance with the
Indenture, and the Company is required upon becoming aware of any Default or
Event of Default, to deliver to the Trustee a statement specifying such Default
or Event of Default.
13. Trustee Dealings With Company. The Trustee, in its individual or any
other capacity, may make loans to, accept deposits from, and perform services
for the Company or its Affiliates, and may otherwise deal with the Company or
its Affiliates, as if it were not the Trustee.
14. No Recourse Against Others. A past, present or future director,
officer, employee, incorporator or stockholder, of the Company or any of the
Guarantors, as such, shall not have any liability for any obligations of the
Company or such Guarantor under the Notes, the Subsidiary Guarantee or the
Parent Guarantee or for any claim based on, in respect of, or by reason of, such
obligations or their creation. Each Holder by accepting a Note waives and
releases all such liability. The waiver and release are part of the
consideration for the issuance of the Notes.
15. Authentication. This Note shall not be valid until authenticated by the
manual signature of the Trustee or an authenticating agent.
16. Abbreviations. Customary abbreviations may be used in the name of a
Holder or an assignee, such as: TEN COM (= tenants in common), TEN ENT (=
tenants by the entireties), JT TEN (=
A2-6
joint tenants with right of survivorship and not as tenants in common), CUST (=
Custodian), and U/G/M/A (= Uniform Gifts to Minors Act).
17. Additional Rights of Holders of Restricted Global Notes and Restricted
Definitive Notes. In addition to the rights provided to Holders of Notes under
the Indenture, Holders of Restricted Global Notes and Restricted Definitive
Notes shall have all the rights set forth in the A/B Exchange Registration
Rights Agreement dated as of December 14, 2001, between the Company and the
parties named on the signature pages thereof (the "Registration Rights
Agreement").
18. Cusip Numbers. Pursuant to a recommendation promulgated by the
Committee on Uniform Security Identification Procedures, the Company has caused
CUSIP numbers to be printed on the Notes and the Trustee may use CUSIP numbers
in notices of redemption as a convenience to Holders. No representation is made
as to the accuracy of such numbers either as printed on the Notes or as
contained in any notice of redemption and reliance may be placed only on the
other identification numbers placed thereon.
The Company will furnish to any Holder upon written request and without
charge a copy of the Indenture and/or the Registration Rights Agreement.
Requests may be made to:
Appleton Papers Inc.
000 X. Xxxxxxxxx Xxx.
X.X. Xxx 000
Xxxxxxxx, XX 00000-0000
Telecopier No.: (000) 000-0000
Attention: Chief Financial Officer
A2-7
Assignment Form
To assign this Note, fill in the form below:
(I) or (we) assign and transfer this Note to:
_________________________________
(Insert assignee's legal name)
________________________________________________________________________________
(Insert assignee's soc. sec. or tax I.D. no.)
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Print or type assignee's name, address and zip code)
and irrevocably appoint
_______________________________________________________
to transfer this Note on the books of the Company. The agent may substitute
another to act for him.
Date: _______________
Your Signature:
______________________________________
(Sign exactly as your name appears on the face of this Note)
Signature Guarantee*: _________________________
* Participant in a recognized Signature Guarantee Medallion
Program (or other signature guarantor acceptable to the Trustee).
A2-8
Option of Holder to Elect Purchase
If you want to elect to have this Note purchased by the Company
pursuant to Section 4.10, 4.15 or 4.23 of the Indenture, check the appropriate
box below:
-| Section 4.10 -| Section 4.15 -| Section 4.23
If you want to elect to have only part of the Note purchased by the
Company pursuant to Section 4.10, 4.15 or 4.23 of the Indenture, state the
amount you elect to have purchased:
$_______________
Date: _______________
Your Signature:
_______________________________
(Sign exactly as your name appears on
the face of this Note)
Tax Identification No.:_______________________
Signature Guarantee*: _________________________
* Participant in a recognized Signature Guarantee Medallion Program (or
other signature guarantor acceptable to the Trustee).
A2-9
SCHEDULE OF EXCHANGES OF REGULATION S TEMPORARY GLOBAL NOTE
The following exchanges of a part of this Regulation S Temporary Global
Note for an interest in another Global Note, or of other Restricted Global Notes
for an interest in this Regulation S Temporary Global Note, have been made:
Principal Amount
of this Global Note Signature of
Amount of decrease Amount of increase in following such authorized officer
in Principal Amount Principal Amount decrease (or of Trustee or Note
Date of Exchange of this Global Note of this Global Note increase) Custodian
---------------- -------------------- ------------------- --------- ---------
A2-10
EXHIBIT B
FORM OF CERTIFICATE OF TRANSFER
Appleton Papers Inc.
000 X. Xxxxxxxxx Xxx.
X.X. Xxx 000
Xxxxxxxx, XX 00000-0000
[Registrar address block]
Re: 12 1/2% Senior Subordinated Notes due 2008
Reference is hereby made to the Indenture, dated as of December 14,
2001 (the "Indenture"), between Appleton Papers Inc., as issuer (the "Company"),
and U.S. Bank National Assocation, as trustee. Capitalized terms used but not
defined herein shall have the meanings given to them in the Indenture.
___________________, (the "Transferor") owns and proposes to transfer
the Note[s] or interest in such Note[s] specified in Annex A hereto, in the
principal amount of $___________ in such Note[s] or interests (the "Transfer"),
to ___________________________ (the "Transferee"), as further specified in Annex
A hereto. In connection with the Transfer, the Transferor hereby certifies that:
[CHECK ALL THAT APPLY]
1. [_] Check if Transferee will take delivery of a beneficial
------------------------------------------------------
interest in the 144A Global Note or a Definitive Note Pursuant to Rule 144A. The
---------------------------------------------------------------------------
Transfer is being effected pursuant to and in accordance with Rule 144A under
the United States Securities Act of 1933, as amended (the "Securities Act"),
and, accordingly, the Transferor hereby further certifies that the beneficial
interest or Definitive Note is being transferred to a Person that the Transferor
reasonably believed and believes is purchasing the beneficial interest or
Definitive Note for its own account, or for one or more accounts with respect to
which such Person exercises sole investment discretion, and such Person and each
such account is a "qualified institutional buyer" within the meaning of Rule
144A in a transaction meeting the requirements of Rule 144A and such Transfer is
in compliance with any applicable blue sky securities laws of any state of the
United States. Upon consummation of the proposed Transfer in accordance with the
terms of the Indenture, the transferred beneficial interest or Definitive Note
will be subject to the restrictions on transfer enumerated in the Private
Placement Legend printed on the 144A Global Note and/or the Definitive Note and
in the Indenture and the Securities Act.
2. [_] Check if Transferee will take delivery of a beneficial
-------------------------------------------------------
interest in the Temporary Regulation S Global Note, the Regulation S Global Note
--------------------------------------------------------------------------------
or a Definitive Note pursuant to Regulation S. The Transfer is being effected
---------------------------------------------
pursuant to and in accordance with Rule 903 or Rule 904 or Rule 144 (if
applicable) under the Securities Act and, accordingly, the Transferor hereby
further certifies that (i) the Transfer is not being made to a person in the
United States and (x) at the time the buy order was originated, the Transferee
was outside the United States or such Transferor and any Person acting on its
behalf reasonably believed and believes that the Transferee was outside the
United States or (y) the transaction was executed in, on or through the
facilities of a designated offshore securities market and neither such
Transferor nor any Person acting on its behalf knows that the transaction was
prearranged with a buyer in the United States, (ii) no directed selling efforts
have been made in contravention of the requirements of Rule 903(b) or Rule
904(b) of Regulation S under the Securities Act, (iii) the transaction is not
part of a plan or scheme to evade the registration requirements of the
Securities Act and (iv) if the proposed transfer is being made prior to the
expiration of the Restricted Period, the interest transferred will be held
immediately thereafter through Euroclear or Clearstream. Upon consummation of
the proposed transfer in accordance with the terms of the Indenture, the
transferred beneficial interest or
B-1
Definitive Note will be subject to the restrictions on Transfer enumerated in
the Private Placement Legend printed on the Regulation S Global Note, the
Temporary Regulation S Global Note and/or the Definitive Note and in the
Indenture and the Securities Act.
3. [_] Check and complete if Transferee will take delivery of a
--------------------------------------------------------
beneficial interest in the 144A Global Note or a Definitive Note pursuant to any
--------------------------------------------------------------------------------
provision of the Securities Act other than Rule 144A or Regulation S. The
--------------------------------------------------------------------
Transfer is being effected in compliance with the transfer restrictions
applicable to beneficial interests in Restricted Global Notes and Restricted
Definitive Notes and pursuant to and in accordance with the Securities Act and
any applicable blue sky securities laws of any state of the United States, and
accordingly the Transferor hereby further certifies that (check one):
(a) [_] such Transfer is being effected pursuant to and in
accordance with Rule 144 under the Securities Act;
or
(b) [_] such Transfer is being effected to the Company or a
subsidiary thereof;
or
(c) [_] such Transfer is being effected pursuant to an
effective registration statement under the Securities Act and in
compliance with the prospectus delivery requirements of the Securities
Act;
or
(d) [_] such Transfer is being effected to an Institutional
Accredited Investor and pursuant to an exemption from the registration
requirements of the Securities Act other than Rule 144A, Rule 144 or
Rule 904, and the Transferor hereby further certifies that it has not
engaged in any general solicitation within the meaning of Regulation D
under the Securities Act and the Transfer complies with the transfer
restrictions applicable to beneficial interests in a Restricted Global
Note or Restricted Definitive Notes and the requirements of the
exemption claimed, which certification is supported by (1) a
certificate executed by the Transferee in the form of Exhibit D to the
Indenture and (2) if such Transfer is in respect of a principal amount
of Notes at the time of transfer of less than $250,000, an Opinion of
Counsel provided by the Transferor or the Transferee (a copy of which
the Transferor has attached to this certification), to the effect that
such Transfer is in compliance with the Securities Act. Upon
consummation of the proposed transfer in accordance with the terms of
the Indenture, the transferred beneficial interest or Definitive Note
will be subject to the restrictions on transfer enumerated in the
Private Placement Legend printed on the 144A Global Note and/or the
Definitive Notes and in the Indenture and the Securities Act.
4. [_] Check if Transferee will take delivery of a beneficial interest
------------------------------------------------------
in an Unrestricted Global Note or of an Unrestricted Definitive Note.
--------------------------------------------------------------------
(a) [_] Check if Transfer is pursuant to Rule 144. (i) The Transfer is
being effected pursuant to and in accordance with Rule 144 under the Securities
Act and in compliance with the transfer restrictions contained in the Indenture
and any applicable blue sky securities laws of any state of the United States
and (ii) the restrictions on transfer contained in the Indenture and the Private
Placement Legend are not required in order to maintain compliance with the
Securities Act. Upon consummation of the proposed Transfer in accordance with
the terms of the Indenture, the transferred beneficial interest or
B-2
Definitive Note will no longer be subject to the restrictions on transfer
enumerated in the Private Placement Legend printed on the Restricted Global
Notes, on Restricted Definitive Notes and in the Indenture.
(b)[_] Check if Transfer is Pursuant to Regulation S. (i) The Transfer
is being effected pursuant to and in accordance with Rule 903 or Rule 904 under
the Securities Act and in compliance with the transfer restrictions contained in
the Indenture and any applicable blue sky securities laws of any state of the
United States and (ii) the restrictions on transfer contained in the Indenture
and the Private Placement Legend are not required in order to maintain
compliance with the Securities Act. Upon consummation of the proposed Transfer
in accordance with the terms of the Indenture, the transferred beneficial
interest or Definitive Note will no longer be subject to the restrictions on
transfer enumerated in the Private Placement Legend printed on the Restricted
Global Notes, on Restricted Definitive Notes and in the Indenture.
(c)[_] Check if Transfer is Pursuant to Other Exemption. (i) The
Transfer is being effected pursuant to and in compliance with an exemption from
the registration requirements of the Securities Act other than Rule 144, Rule
903 or Rule 904 and in compliance with the transfer restrictions contained in
the Indenture and any applicable blue sky securities laws of any State of the
United States and (ii) the restrictions on transfer contained in the Indenture
and the Private Placement Legend are not required in order to maintain
compliance with the Securities Act. Upon consummation of the proposed Transfer
in accordance with the terms of the Indenture, the transferred beneficial
interest or Definitive Note will not be subject to the restrictions on transfer
enumerated in the Private Placement Legend printed on the Restricted Global
Notes or Restricted Definitive Notes and in the Indenture.
This certificate and the statements contained herein are made for your
benefit and the benefit of the Company.
______________________________
[Insert Name of Transferor]
By:___________________________
Name:
Title:
Dated: _______________________
B-3
ANNEX A TO CERTIFICATE OF TRANSFER
1. The Transferor owns and proposes to transfer the following:
[CHECK ONE OF (a) OR (b)]
a) [_] a beneficial interest in the:
(i) [_] 144A Global Note (CUSIP _________), or
(ii) [_] Regulation S Global Note (CUSIP _________), or
(b) [_] a Restricted Definitive Note.
2. After the Transfer the Transferee will hold:
[CHECK ONE]
(a) [_] a beneficial interest in the:
(i) 144A Global Note (CUSIP _________), or
(ii) Regulation S Global Note (CUSIP _________), or
(iii) Temporary Regulation S Global Note (CUSIP __), or
(iv) Unrestricted Global Note (CUSIP _________); or
(b) a Restricted Definitive Note; or
(c) an Unrestricted Definitive Note,
in accordance with the terms of the Indenture.
B-4
EXHIBIT C
Appleton Papers Inc.
000 X. Xxxxxxxxx Xxx.
X.X. Xxx 000
Xxxxxxxx, XX 00000-0000
[Registrar address block]
Re: 12 1/2% Senior Subordinated Notes due 2008
(CUSIP ____________)
Reference is hereby made to the Indenture, dated as of December 14,
2001 (the "Indenture"), between Appleton Papers Inc. as issuer (the "Company"),
and U.S. Bank National Association, as trustee. Capitalized terms used but not
defined herein shall have the meanings given to them in the Indenture.
__________________________, (the "Owner") owns and proposes to exchange
the Note[s] or interest in such Note[s] specified herein, in the principal
amount of $____________ in such Note[s] or interests (the "Exchange"). In
connection with the Exchange, the Owner hereby certifies that:
1. Exchange of Restricted Definitive Notes or Beneficial
-----------------------------------------------------
Interests in a Restricted Global Note for Unrestricted Definitive Notes or
---------------------------------------------------------------------------
Beneficial Interests in an Unrestricted Global Note
---------------------------------------------------
(a) [_] Check if Exchange is from beneficial interest in a Restricted
Global Note to beneficial interest in an Unrestricted Global Note. In connection
with the Exchange of the Owner's beneficial interest in a Restricted Global Note
for a beneficial interest in an Unrestricted Global Note in an equal principal
amount, the Owner hereby certifies (i) the beneficial interest is being acquired
for the Owner's own account without transfer, (ii) such Exchange has been
effected in compliance with the transfer restrictions applicable to the Global
Notes and pursuant to and in accordance with the United States Securities Act of
1933, as amended (the "Securities Act"), (iii) the restrictions on transfer
contained in the Indenture and the Private Placement Legend are not required in
order to maintain compliance with the Securities Act and (iv) the beneficial
interest in an Unrestricted Global Note is being acquired in compliance with any
applicable blue sky securities laws of any state of the United States.
(b) [_] Check if Exchange is from beneficial interest in a Restricted
Global Note to Unrestricted Definitive Note. In connection with the Exchange of
the Owner's beneficial interest in a Restricted Global Note for an Unrestricted
Definitive Note, the Owner hereby certifies (i) the Definitive Note is being
acquired for the Owner's own account without transfer, (ii) such Exchange has
been effected in compliance with the transfer restrictions applicable to the
Restricted Global Notes and pursuant to and in accordance with the Securities
Act, (iii) the restrictions on transfer contained in the Indenture and the
Private Placement Legend are not required in order to maintain compliance with
the Securities Act and (iv) the Definitive Note is being acquired in compliance
with any applicable blue sky securities laws of any state of the United States.
(c) [_] Check if Exchange is from Restricted Definitive Note to
beneficial interest in an Unrestricted Global Note. In connection with the
Owner's Exchange of a Restricted Definitive Note for a beneficial interest in an
Unrestricted Global Note, the Owner hereby certifies (i) the beneficial interest
is being acquired for the Owner's own account without transfer, (ii) such
Exchange has been effected in compliance with the transfer restrictions
applicable to Restricted Definitive Notes and pursuant to and in accordance with
the Securities Act, (iii) the restrictions on transfer contained in the
Indenture and the
C-1
Private Placement Legend are not required in order to maintain compliance with
the Securities Act and (iv) the beneficial interest is being acquired in
compliance with any applicable blue sky securities laws of any state of the
United States.
(d) [_] Check if Exchange is from Restricted Definitive Note to
Unrestricted Definitive Note. In connection with the Owner's Exchange of a
Restricted Definitive Note for an Unrestricted Definitive Note, the Owner hereby
certifies (i) the Unrestricted Definitive Note is being acquired for the Owner's
own account without transfer, (ii) such Exchange has been effected in compliance
with the transfer restrictions applicable to Restricted Definitive Notes and
pursuant to and in accordance with the Securities Act, (iii) the restrictions on
transfer contained in the Indenture and the Private Placement Legend are not
required in order to maintain compliance with the Securities Act and (iv) the
Unrestricted Definitive Note is being acquired in compliance with any applicable
blue sky securities laws of any state of the United States.
2. Exchange of Restricted Definitive Notes or Beneficial Interests
---------------------------------------------------------------
in Restricted Global Notes for Restricted Definitive Notes or Beneficial
------------------------------------------------------------------------
Interests in Restricted Global Notes
------------------------------------
(a) [_] Check if Exchange is from beneficial interest in a Restricted
Global Note to Restricted Definitive Note. In connection with the Exchange of
the Owner's beneficial interest in a Restricted Global Note for a Restricted
Definitive Note with an equal principal amount, the Owner hereby certifies that
the Restricted Definitive Note is being acquired for the Owner's own account
without transfer. Upon consummation of the proposed Exchange in accordance with
the terms of the Indenture, the Restricted Definitive Note issued will continue
to be subject to the restrictions on transfer enumerated in the Private
Placement Legend printed on the Restricted Definitive Note and in the Indenture
and the Securities Act.
(b) [_] Check if Exchange is from Restricted Definitive Note to
beneficial interest in a Restricted Global Note. In connection with the Exchange
of the Owner's Restricted Definitive Note for a beneficial interest in the
[CHECK ONE] 144A Global Note, Regulation S Global Note or Temporary Regulation S
Global Note, with an equal principal amount, the Owner hereby certifies (i) the
beneficial interest is being acquired for the Owner's own account without
transfer and (ii) such Exchange has been effected in compliance with the
transfer restrictions applicable to the Restricted Global Notes and pursuant to
and in accordance with the Securities Act, and in compliance with any applicable
blue sky securities laws of any state of the United States. Upon consummation of
the proposed Exchange in accordance with the terms of the Indenture, the
beneficial interest issued will be subject to the restrictions on transfer
enumerated in the Private Placement Legend printed on the relevant Restricted
Global Note and in the Indenture and the Securities Act.
This certificate and the statements contained herein are made for your
benefit and the benefit of the Company.
____________________________________
[Insert Name of Transferor]
By: ________________________________
Name:
Title:
Dated: ______________________
C-2
EXHIBIT D
FORM OF CERTIFICATE FROM
ACQUIRING INSTITUTIONAL ACCREDITED INVESTOR
[Registrar address block]
Appleton Papers Inc.
000 X. Xxxxxxxxx Xxx.
X.X. Xxx 000
Xxxxxxxx, XX 00000-0000
Re: 12 1/2% Senior Subordinated Notes due 2008
Reference is hereby made to the Indenture, dated as of December 14,
2001 (the "Indenture"), between Appleton Papers Inc., as issuer (the "Company"),
and U.S. Bank National Association, as trustee. Capitalized terms used but not
defined herein shall have the meanings given to them in the Indenture.
In connection with our proposed purchase of $____________ aggregate
principal amount of:
(a) [_] a beneficial interest in a Global Note, or
(b) [_] a Definitive Note,
we confirm that:
1. We understand that any subsequent transfer of the Notes or any
interest therein is subject to certain restrictions and conditions set forth in
the Indenture and the undersigned agrees to be bound by, and not to resell,
pledge or otherwise transfer the Notes or any interest therein except in
compliance with, such restrictions and conditions and the United States
Securities Act of 1933, as amended (the "Securities Act").
2. We understand that the offer and sale of the Notes have not been
registered under the Securities Act, and that the Notes and any interest therein
may not be offered or sold except as permitted in the following sentence. We
agree, on our own behalf and on behalf of any accounts for which we are acting
as hereinafter stated, that if we should sell the Notes or any interest therein,
we will do so only (A) to the Company or any subsidiary thereof, (B) in
accordance with Rule 144A under the Securities Act to a "qualified institutional
buyer" (as defined therein), (C) to an institutional "accredited investor" (as
defined below) that, prior to such transfer, furnishes (or has furnished on its
behalf by a U.S. broker-dealer) to you and to the Company a signed letter
substantially in the form of this letter and, if such transfer is in respect of
a principal amount of Notes, at the time of transfer of less than $250,000, an
Opinion of Counsel in form reasonably acceptable to the Company to the effect
that such transfer is in compliance with the Securities Act, (D) outside the
United States in accordance with Rule 904 of Regulation S under the Securities
Act, (E) pursuant to the provisions of Rule 144(k) under the Securities Act or
(F) pursuant to an effective registration statement under the Securities Act,
and we further agree to provide to any person purchasing the Definitive Note or
beneficial interest in a Global Note from us in a transaction meeting the
requirements of clauses (A) through (E) of this paragraph a notice advising such
purchaser that resales thereof are restricted as stated herein.
3. We understand that, on any proposed resale of the Notes or
beneficial interest therein, we will be required to furnish to you and the
Company such certifications, legal opinions and other
D-1
EXHIBIT D
information as you and the Company may reasonably require to confirm that the
proposed sale complies with the foregoing restrictions. We further understand
that the Notes purchased by us will bear a legend to the foregoing effect.
4. We are an institutional "accredited investor" (as defined in Rule
501(a)(1), (2), (3) or (7) of Regulation D under the Securities Act) and have
such knowledge and experience in financial and business matters as to be capable
of evaluating the merits and risks of our investment in the Notes, and we and
any accounts for which we are acting are each able to bear the economic risk of
our or its investment.
5. We are acquiring the Notes or beneficial interest therein purchased
by us for our own account or for one or more accounts (each of which is an
institutional "accredited investor") as to each of which we exercise sole
investment discretion.
You and the Company are entitled to rely upon this letter and are
irrevocably authorized to produce this letter or a copy hereof to any interested
party in any administrative or legal proceedings or official inquiry with
respect to the matters covered hereby.
___________________________________
[Insert Name of Accredited Investor]
By: _______________________________
Name:
Title:
Dated: _______________________
D-2
EXHIBIT E
[FORM OF SUBSIDIARY/PARENT GUARANTEE]
For value received, each Guarantor (which term includes any successor
Person under the Indenture) has, jointly and severally, unconditionally
guaranteed, to the extent set forth in the Indenture and subject to the
provisions in the Indenture dated as of December 14, 2001 (the "Indenture")
among Appleton Papers Inc., the Guarantors listed on Schedule I thereto and U.S.
Bank National Association, as trustee (the "Trustee"), (a) the due and punctual
payment of the principal of, premium, if any, and interest on the Notes (as
defined in the Indenture), whether at maturity, by acceleration, redemption or
otherwise, the due and punctual payment of interest on overdue principal and
premium, and, to the extent permitted by law, interest, and the due and punctual
performance of all other obligations of the Company to the Holders or the
Trustee all in accordance with the terms of the Indenture and (b) in case of any
extension of time of payment or renewal of any Notes or any of such other
obligations, that the same will be promptly paid in full when due or performed
in accordance with the terms of the extension or renewal, whether at stated
maturity, by acceleration or otherwise. The obligations of the Guarantors to the
Holders of Notes and to the Trustee pursuant to the Parent Guarantee, the
Subsidiary Guarantee and the Indenture are expressly set forth in Article 11 of
the Indenture and reference is hereby made to the Indenture for the precise
terms of the Parent Guarantee and the Subsidiary Guarantee. Each Holder of a
Note, by accepting the same, (a) agrees to and shall be bound by such
provisions, (b) authorizes and directs the Trustee, on behalf of such Holder, to
take such action as may be necessary or appropriate to effectuate the
subordination as provided in the Indenture and (c) appoints the Trustee
attorney-in-fact of such Holder for such purpose; provided, however, that the
Indebtedness evidenced by this [Parent/Subsidiary] Guarantee shall cease to be
so subordinated and subject in right of payment upon any defeasance of this Note
in accordance with the provisions of the Indenture.
[Name of [Parent/Subsidiary]Guarantor(s)]
By:_______________________________________
Name:
Title:
E-1
EXHIBIT F
[FORM OF SUPPLEMENTAL INDENTURE
TO BE DELIVERED BY SUBSEQUENT GUARANTORS]
Supplemental Indenture (this "Supplemental Indenture"), dated as of
________________, among __________________ (the "Guaranteeing
Parent/Subsidiary"), a [parent entity/subsidiary] of Appleton Papers Inc. (or
its permitted successor), a Delaware corporation (the "Company"), the Company,
the other Guarantors (as defined in the Indenture referred to herein) and U.S.
Bank National Association, as trustee under the indenture referred to below (the
"Trustee").
W I T N E S S E T H
WHEREAS, the Company has heretofore executed and delivered to the
Trustee an indenture (the "Indenture"), dated as of December 14, 2001 providing
for the issuance of an aggregate principal amount of up to $250 million of 12
1/2% Senior Subordinated Notes due 2008 (the "Notes");
WHEREAS, the Indenture provides that under certain circumstances the
Guaranteeing Parent or Guaranteeing Subsidiary shall execute and deliver to the
Trustee a supplemental indenture pursuant to which the Guaranteeing Subsidiary
or Guaranteeing Parent, as the case may be, shall unconditionally guarantee all
of the Company's Obligations under the Notes and the Indenture on the terms and
conditions set forth herein (the "Parent Guarantee" or "Subsidiary Guarantee");
and
WHEREAS, pursuant to Section 9.01 of the Indenture, the Trustee is
authorized to execute and deliver this Supplemental Indenture.
NOW THEREFORE, in consideration of the foregoing and for other good and
valuable consideration, the receipt of which is hereby acknowledged, the
Guaranteeing [Parent/Subsidiary] and the Trustee mutually covenant and agree for
the equal and ratable benefit of the Holders of the Notes as follows:
1. Capitalized Terms. Capitalized terms used herein without
definition shall have the meanings assigned to them in the Indenture.
2. Agreement to Guarantee. The Guaranteeing [Parent/Subsidiary]
hereby agrees as follows:
(a) Along with all Guarantors named in the Indenture, to
jointly and severally Guarantee to each Holder of a Note authenticated
and delivered by the Trustee and to the Trustee and its successors and
assigns, the Notes or the obligations of the Company hereunder or
thereunder, that:
(i) the principal of and interest on the Notes will
be promptly paid in full when due, whether at maturity, by
acceleration, redemption or otherwise, and interest on the overdue
principal of and interest on the Notes, if any, if lawful, and all
other obligations of the Company to the Holders or the Trustee
hereunder or thereunder will be promptly paid in full or
performed, all in accordance with the terms hereof and thereof;
and
(ii) in case of any extension of time of payment or renewal
of any Notes or any of such other obligations, that same will be
promptly paid in full when due or
F-1
performed in accordance with the terms of the extension or
renewal, whether at stated maturity, by acceleration or otherwise.
Failing payment when due of any amount so guaranteed or any performance so
guaranteed for whatever reason, the Guarantors shall be jointly and severally
obligated to pay the same immediately.
(b) The obligations hereunder shall be unconditional,
irrespective of the validity, regularity or enforceability of the Notes
or the Indenture, the absence of any action to enforce the same, any
waiver or consent by any Holder of the Notes with respect to any
provisions hereof or thereof, the recovery of any judgment against the
Company, any action to enforce the same or any other circumstance which
might otherwise constitute a legal or equitable discharge or defense of
a guarantor.
(c) The following is hereby waived: diligence, presentment,
demand of payment, filing of claims with a court in the event of
insolvency or bankruptcy of the Company, any right to require a
proceeding first against the Company, protest, notice and all demands
whatsoever.
(d) This [Parent/Subsidiary] Guarantee shall not be discharged
except by complete performance of the obligations contained in the
Notes and the Indenture, and the Guaranteeing [Parent/Subsidiary]
accepts all obligations of a Guarantor under the Indenture.
(e) If any Holder or the Trustee is required by any court or
otherwise to return to the Company, the Guarantors, or any Custodian,
Trustee, liquidator or other similar official acting in relation to
either the Company or the Guarantors, any amount paid by either to the
Trustee or such Holder, this [Parent/Subsidiary] Guarantee, to the
extent theretofore discharged, shall be reinstated in full force and
effect.
(f) The Guaranteeing [Parent/Subsidiary] shall not be entitled to
any right of subrogation in relation to the Holders in respect of any
obligations guaranteed hereby until payment in full of all obligations
guaranteed hereby.
(g) As between the Guarantors, on the one hand, and the Holders
and the Trustee, on the other hand, (x) the maturity of the obligations
guaranteed hereby may be accelerated as provided in Article 6 of the
Indenture for the purposes of this [Parent/Subsidiary] Guarantee,
notwithstanding any stay, injunction or other prohibition preventing
such acceleration in respect of the obligations guaranteed hereby, and
(y) in the event of any declaration of acceleration of such obligations
as provided in Article 6 of the Indenture, such obligations (whether or
not due and payable) shall forthwith become due and payable by the
Guarantors for the purpose of this [Parent/Subsidiary] Guarantee.
(h) The Guarantors shall have the right to seek contribution from
any non-paying Guarantor so long as the exercise of such right does not
impair the rights of the Holders under the Guarantee.
(i) Pursuant to Section 11.03 of the Indenture, after giving
effect to any maximum amount and any other contingent and fixed
liabilities that are relevant under any applicable Bankruptcy or
fraudulent conveyance laws, and after giving effect to any collections
from, rights to receive contribution from or payments made by or on
behalf of any other Guarantor in respect of the obligations of such
other Guarantor under Article 11 of the Indenture, this new
[Parent/Subsidiary] Guarantee shall be limited to the maximum amount
permissible such that the
F-2
obligations of such Guarantor under this [Parent/Subsidiary]
Guarantee will not constitute a fraudulent transfer or conveyance.
3. Execution and Delivery. Each Guaranteeing [Parent/Subsidiary]
agrees that the Parent Guarantee and Subsidiary Guarantee shall remain in full
force and effect notwithstanding any failure to endorse on each Note a notation
of such Guarantees.
4. Guaranteeing [Parent/Subsidiary] May Consolidate, Etc. on
Certain Terms.
(a) The Guaranteeing [Parent/Subsidiary] may not consolidate
with or merge with or into (whether or not such Guarantor is the
surviving Person) another corporation, Person or entity whether or not
affiliated with such Guarantor unless:
(i) subject to Sections 11.05 and 11.06 of the
Indenture, the Person formed by or surviving any such
consolidation or merger (if other than a Guarantor or the
Company) unconditionally assumes all the obligations of such
Guarantor, pursuant to a supplemental indenture in form and
substance reasonably satisfactory to the Trustee, under the
Indenture and its [Parent/Subsidiary] Guarantee on the terms
set forth herein or therein;
(ii) immediately after giving effect to such
transaction, no Default or Event of Default exists; and
(iii) if the Guarantor is a party to the
Environmental Indemnity Agreements, all rights afforded to
such Guarantor are effectively assigned in full to the Person
formed by or surviving any consolidation or merger (if other
than the Company or another Guarantor) or the Person to which
such sale, assignment, transfer, conveyance or other
disposition has been made, pursuant to agreements reasonably
satisfactory to the Trustee.
(b) In case of any such consolidation, merger, sale or
conveyance and upon the assumption by the successor person, by
supplemental indenture, executed and delivered to the Trustee and
satisfactory in form to the Trustee, of the Parent Guarantee or
Subsidiary Guarantee, as applicable, endorsed upon the Notes and the
due and punctual performance of all of the covenants and conditions of
the Indenture to be performed by the Guarantor, such successor person
shall succeed to and be substituted for the Guarantor with the same
effect as if it had been named herein as a Guarantor. Such successor
person thereupon may cause to be signed any or all of the Parent
Guarantees or Subsidiary Guarantees, as applicable, to be endorsed upon
all of the Notes issuable hereunder which theretofore shall not have
been signed by the Company and delivered to the Trustee. All Parent
Guarantees and all Subsidiary Guarantees so issued shall in all
respects have the same legal rank and benefit under the Indenture as
the Parent Guarantee and Subsidiary Guarantee theretofore and
thereafter issued in accordance with the terms of the Indenture as
though all of such Parent Guarantees and Subsidiary Guarantees had been
issued at the date of the execution hereof.
(c) Except as set forth in Articles 4 and 5 and Section
11.06 of Article 11 of the Indenture, and notwithstanding clauses (a)
and (b) above, nothing contained in the Indenture or in any of the
Notes shall prevent any consolidation or merger of a Guarantor with or
into the Company or another Guarantor, or shall prevent any sale or
conveyance of the property of a Guarantor as an entirety or
substantially as an entirety to the Company or another Guarantor.
5. Releases.
F-3
(a) In the event of a sale or other disposition of all of the
assets of any Guarantor, by way of merger, consolidation or otherwise,
or a sale or other disposition of all to the Capital Stock of any
Guarantor, in each case to a Person that is not (either before or after
giving effect to such transaction) a Subsidiary of the Company, then
such Guarantor (in the event of a sale or other disposition, by way of
merger, consolidation or otherwise, of all of the capital stock of such
Guarantor) or the corporation acquiring the property (in the event of a
sale or other disposition of all or substantially all of the assets of
such Guarantor) will be released and relieved of any obligations under
its Parent Guarantee or Subsidiary Guarantee, as applicable; provided
that (i) the Net Proceeds of such sale or other disposition are applied
in accordance with the applicable provisions of the Indenture,
including without limitation Section 4.10 of the Indenture and (ii) if
the Guarantor is a party to the Environmental Indemnity Agreements, all
rights afforded to such Guarantor are effectively assigned in full to
the Person formed by or surviving any consolidation or merger (if other
than the Company or another Guarantor) or the Person to which such
sale, assignment, transfer, conveyance or other disposition has been
made, pursuant to agreements reasonably satisfactory to the Trustee.
Upon delivery by the Company to the Trustee of an Officers' Certificate
and an Opinion of Counsel to the effect that such sale or other
disposition was made in accordance with the provisions of the
Indenture, including without limitation Section 4.10 of the Indenture,
and the Trustee's satisfaction with the agreements described in clause
(ii) above, if applicable, the Trustee shall execute any documents
reasonably required in order to evidence the release of such Guarantor
from its obligations under its Parent Guarantee or Subsidiary
Guarantee, as applicable.
(b) Any Guarantor not released from its obligations under its
Parent Guarantee or Subsidiary Guarantee, as applicable, shall remain
liable for the full amount of principal of and interest on the Notes
and for the other obligations of any Guarantor under the Indenture as
provided in Article 11 of the Indenture.
6. No Recourse Against Others. No past, present or future director,
officer, employee, incorporator or stockholder of the Guaranteeing
[Parent/Subsidiary], as such, shall have any liability for any obligations of
the Company or any Guaranteeing Parent or Guaranteeing Subsidiary under the
Notes, any Parent Guarantees, any Subsidiary Guarantee, the Indenture or this
Supplemental Indenture or for any claim based on, in respect of, or by reason
of, such obligations or their creation. Each Holder of the Notes by accepting a
Note waives and releases all such liability. The waiver and release are part of
the consideration for issuance of the Notes.
7. NEW YORK LAW TO GOVERN. THE INTERNAL LAW OF THE STATE OF NEW YORK
SHALL GOVERN AND BE USED TO CONSTRUE THIS SUPPLEMENTAL INDENTURE BUT WITHOUT
GIVING EFFECT TO APPLICABLE PRINCIPLES OF CONFLICTS OF LAW TO THE EXTENT THAT
THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY.
8. Counterparts. The parties may sign any number of copies of this
Supplemental Indenture. Each signed copy shall be
an original, but all of them together represent the same agreement.
9. Effect of Headings. The Section headings herein are for convenience
only and shall not affect the construction hereof.
10. The Trustee. The Trustee shall not be responsible in any manner
whatsoever for or in respect of the validity or sufficiency of this Supplemental
Indenture or for or in respect of the recitals contained herein, all of which
recitals are made solely by the Guaranteeing [Parent/Subsidiary] and the
Company.
F-4
IN WITNESS WHEREOF, the parties hereto have caused this Supplemental
Indenture to be duly executed and attested, all as of the date first above
written.
Dated: _______________, ____
[Guaranteeing Parent/Subsidiary]
By: _______________________________
Name:
Title:
[Appleton Papers Inc.]
By: _______________________________
Name:
Title:
[Existing Guarantors]
By: _______________________________
Name:
Title:
U.S. Bank National Association,
as Trustee
By: _______________________________
Authorized Signatory
F-5
Schedule I
SCHEDULE OF GUARANTORS
The following schedule lists each Guarantor under the Indenture as of
the Issue Date:
Paperweight Development Corp.
WTA Inc.
