Attached files
EXECUTION VERSION
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INDENTURE
Dated as of February 8, 2010
Among
APPLETON PAPERS INC.
as Issuer,
THE GUARANTORS NAMED HEREIN
and
U.S. BANK NATIONAL ASSOCIATION,
as Trustee and Collateral Agent
10.50% SENIOR SECURED NOTES DUE 2015
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CROSS-REFERENCE TABLE*
Trust Indenture Indenture
Act Section Section
------------------------ ------------------------
310(a)(1) 7.10
(a)(2) 7.10
(a)(3) N.A.
(a)(4) N.A.
(a)(5) 7.10
(b) 7.10
(c) N.A.
311(a) 7.11
(b) 7.11
(c) N.A.
312(a) 2.05
(b) 12.03
(c) 12.03
313(a) 7.06
(b) 7.06; 7.07
(c) 7.06; 12.02
(d) 7.06
314(a) 4.03; 12.02; 12.05
(b)(1) N.A.
(b)(2) 13.04
(c) 12.04
(d) N.A.
(e) 12.05
(f) N.A.
315(a) 7.01
(b) 7.05; 12.02
(c) 7.01
(d) 7.01
(e) 6.11
316(a) (last sentence) 2.09
(a)(1)(A) 6.05
(a)(1)(B) 6.04
(a)(2) N.A.
(b) 6.07
(c) 2.12
317(a)(1) 6.08
(a)(2) 6.09
(b) 2.04
318(a) 12.01
(b) N.A.
(c) 12.01
N.A. means not applicable.
* This Cross Reference Table is not part of the Indenture.
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Table of Contents
Page
ARTICLE I Definitions and Incorporation by Reference.......................1
Section 1.01 Definitions................................................1
Section 1.02 Other Definitions.........................................27
Section 1.03 Incorporation by Reference of Trust Indenture Act.........28
Section 1.04 Rules of Construction.....................................28
ARTICLE II The Notes.......................................................28
Section 2.01 Form and Dating...........................................28
Section 2.02 Execution and Authentication..............................30
Section 2.03 Registrar and Paying Agent................................30
Section 2.04 Paying Agent to Hold Money in Trust.......................31
Section 2.05 Holder Lists..............................................31
Section 2.06 Transfer and Exchange.....................................31
Section 2.07 Replacement Notes.........................................44
Section 2.08 Outstanding Notes.........................................44
Section 2.09 Treasury Notes............................................45
Section 2.10 Temporary Notes...........................................45
Section 2.11 Cancellation..............................................45
Section 2.12 Defaulted Interest........................................45
Section 2.13 Issuance of Additional Notes..............................46
ARTICLE III Redemption and Prepayment.......................................46
Section 3.01 Notices to Trustee........................................46
Section 3.02 Selection of Notes to Be Redeemed or Purchased............46
Section 3.03 Notice of Redemption......................................47
Section 3.04 Effect of Notice of Redemption............................48
Section 3.05 Deposit of Redemption or Purchase Price...................48
Section 3.06 Notes Redeemed or Purchased in Part.......................48
Section 3.07 Optional Redemption.......................................48
Section 3.08 Mandatory Redemption......................................49
Section 3.09 Offer to Purchase by Application of Excess Proceeds.......49
ARTICLE IV Covenants.......................................................51
Section 4.01 Payment of Notes..........................................51
Section 4.02 Maintenance of Office or Agency...........................51
Section 4.03 Reports...................................................52
Section 4.04 Compliance Certificate....................................53
Section 4.05 Taxes.....................................................53
Section 4.06 Stay, Extension and Usury Laws............................53
Section 4.07 Restricted Payments.......................................54
Section 4.08 Dividend and Other Payment Restrictions Affecting
Subsidiaries. ............................................58
Section 4.09 Incurrence of Indebtedness and Issuance of Preferred
Stock. ...................................................59
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Table of Contents
(continued)
Page
Section 4.10 Asset Sales...............................................63
Section 4.11 Transactions with Affiliates..............................66
Section 4.12 Liens.....................................................68
Section 4.13 Business Activities.......................................68
Section 4.14 Corporate Existence.......................................68
Section 4.15 Offer to Repurchase Upon Change of Control................69
Section 4.16 Amendment of Fox River Indemnity Arrangements, Security
Holders Agreements or ESOP Documentation..................70
Section 4.17 Limitation on Sale and Leaseback Transactions.............71
Section 4.18 Payments for Consent......................................72
Section 4.19 Additional Note Guarantees................................72
Section 4.20 Designation of Restricted and Unrestricted Subsidiaries...72
Section 4.21 Amendment of Security Documents, Intercreditor Agreements.73
Section 4.22 Impairment of Security Interest...........................73
Section 4.23 After-Acquired Property...................................73
ARTICLE V Successors......................................................74
Section 5.01 Merger, Consolidation, or Sale of Assets..................74
Section 5.02 Successor Corporation Substituted.........................75
ARTICLE VI Defaults and Remedies...........................................75
Section 6.01 Events of Default.........................................75
Section 6.02 Acceleration..............................................78
Section 6.03 Other Remedies............................................78
Section 6.04 Waiver of Past Defaults...................................78
Section 6.05 Control by Majority.......................................78
Section 6.06 Limitation on Suits.......................................79
Section 6.07 Rights of Holders of Notes to Receive Payment.............79
Section 6.08 Collection Suit by Trustee................................79
Section 6.09 Trustee May File Proofs of Claim..........................79
Section 6.10 Priorities................................................80
Section 6.11 Undertaking for Costs.....................................80
ARTICLE VII Trustee.........................................................81
Section 7.01 Duties of Trustee.........................................81
Section 7.02 Rights of Trustee.........................................82
Section 7.03 Individual Rights of Trustee..............................83
Section 7.04 Trustee's Disclaimer......................................83
Section 7.05 Notice of Defaults........................................84
Section 7.06 Reports by Trustee to Holders of the Notes................84
Section 7.07 Compensation and Indemnity................................84
Section 7.08 Replacement of Trustee....................................85
Section 7.09 Successor Trustee by Merger, etc..........................86
Section 7.10 Eligibility; Disqualification.............................86
Section 7.11 Preferential Collection of Claims Against Company.........86
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Table of Contents
(continued)
Page
ARTICLE VIII Legal Defeasance and Covenant Defeasance........................87
Section 8.01 Option to Effect Legal Defeasance or Covenant Defeasance..87
Section 8.02 Legal Defeasance and Discharge............................87
Section 8.03 Covenant Defeasance.......................................87
Section 8.04 Conditions to Legal or Covenant Defeasance................88
Section 8.05 Deposited Money and Government Securities to be Held in
Trust; Other Miscellaneous Provisions.....................89
Section 8.06 Repayment to Company......................................90
Section 8.07 Reinstatement.............................................90
ARTICLE IX Amendment, Supplement and Waiver................................90
Section 9.01 Without Consent of Holders of Notes.......................90
Section 9.02 With Consent of Holders of Notes..........................92
Section 9.03 Compliance with Trust Indenture Act.......................93
Section 9.04 Revocation and Effect of Consents.........................93
Section 9.05 Notation on or Exchange of Notes..........................93
Section 9.06 Trustee to Sign Amendments, etc...........................94
ARTICLE X Note Guarantees.................................................94
Section 10.01 Guarantee.................................................94
Section 10.02 Limitation on Guarantor Liability.........................95
Section 10.03 Execution and Delivery of Note Guarantee..................95
Section 10.04 Guarantors May Consolidate, etc., on Certain Terms........96
Section 10.05 Releases..................................................97
ARTICLE XI Satisfaction and Discharge......................................98
Section 11.01 Satisfaction and Discharge................................98
Section 11.02 Application of Trust Money................................99
ARTICLE XII Miscellaneous...................................................99
Section 12.01 Trust Indenture Act Controls..............................99
Section 12.02 Notices...................................................99
Section 12.03 Communication by Holders of Notes with Other Holders
of Notes.................................................100
Section 12.04 Certificate and Opinion as to Conditions Precedent.......100
Section 12.05 Statements Required in Certificate or Opinion............101
Section 12.06 Rules by Trustee and Agents..............................101
Section 12.07 No Personal Liability of Directors, Officers, Employees
and Stockholders.........................................101
Section 12.08 Governing Law............................................101
Section 12.09 Waiver of Trial by Jury..................................102
Section 12.10 No Adverse Interpretation of Other Agreements............102
Section 12.11 Successors...............................................102
Section 12.12 Severability.............................................102
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Table of Contents
(continued)
Page
Section 12.13 Counterpart Originals....................................102
Section 12.14 Table of Contents, Headings, etc.........................102
ARTICLE XIII Collateral and Security........................................102
Section 13.01 Security Interest........................................102
Section 13.02 Intercreditor Agreements.................................103
Section 13.03 Collateral Agent.........................................103
Section 13.04 Recording and Opinions...................................104
Section 13.05 Specified Releases of Collateral.........................104
Section 13.06 Release of Collateral upon Satisfaction or Defeasance
of all Outstanding Obligations...........................105
Section 13.07 Post-Closing Collateral Requirement......................105
Section 13.08 Purchaser Protected......................................106
Section 13.09 Form and Sufficiency of Release..........................106
Section 13.10 Insurance................................................106
EXHIBITS
Exhibit A -- Form of Note
Exhibit B -- Form of Certificate of Transfer
Exhibit C -- Form of Certificate of Exchange
Exhibit D -- Form of Certificate from Acquiring Institutional Accredited
Investor
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INDENTURE, dated as of February 8, 2010 among Appleton Papers Inc., a
Delaware corporation (the "Company"), the Guarantors (as defined herein) and
U.S. Bank National Association, as trustee (in such capacity, the "Trustee") and
as Collateral Agent (as defined herein).
The Company, the Guarantors and the Trustee agree as follows for the
benefit of each other and for the equal and ratable benefit of the Holders (as
defined herein) of the 10.50% Senior Secured Notes due 2015 (the "Notes"):
ARTICLE I
Definitions and Incorporation by Reference
Section 1.01 Definitions.
"144A Global Note" means a Global Note substantially in the form of
Exhibit A 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:
(1) 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
Restricted Subsidiary of, such specified Person; and
(2) Indebtedness secured by a Lien encumbering any asset acquired by
such specified Person.
"Additional Notes" means additional Notes (other than the Initial
Notes) issued under this Indenture in accordance with Sections 2.02 and 4.09
hereof, as part of the same series as the Initial Notes.
"Administrative Agent" means Fifth Third Bank, as administrative agent
under the Credit Agreement and any successor or replacement thereof (including
under any other Credit Facilities).
"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 will 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, co-registrar, Paying Agent or additional
paying agent.
"Appleton Canada" means Appleton Papers Canada Ltd., a corporation
organized under the laws of Ontario, Canada.
"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; provided that the sale, lease, conveyance or other Disposition of all or
substantially all of the assets of the Company and its Subsidiaries taken as a
whole will 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 Restricted
Subsidiaries.
Notwithstanding the preceding, none of the following items will be deemed to be
an Asset Sale:
(1) any single transaction or series of related transactions that
involves assets having a Fair Market Value of less than $2.0 million;
(2) a sale or transfer of assets between or among the Company and its
Restricted Subsidiaries;
(3) an issuance of Equity Interests by a Restricted Subsidiary of the
Company to the Company, any Parent Entity or to a Restricted Subsidiary of the
Company or the issuance by the Parent Entity of its Capital Stock to the ESOP;
(4) the sale or lease of equipment, products, services or accounts
receivable in the ordinary course of business and any Disposition of damaged,
worn-out or obsolete assets in the ordinary course of business;
(5) the licensing of intellectual property in the ordinary course of
business;
(6) the Disposition of cash or Cash Equivalents;
(7) a Restricted Payment that does not violate Section 4.07 hereof or
a Permitted Investment;
(8) the granting of Liens that is permitted by Section 4.12 hereof;
(9) surrender or waiver of contract rights or the settlement, release
or surrender of contract, tort or other claims; and
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(10) the sale, lease, conveyance, transfer or other Disposition of the
black liquor producing property, plant, and equipment, together with all related
assets (tangible and intangible), located at the Company's Roaring Spring,
Pennsylvania facility.
"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; provided,
however, that if such sale and leaseback transaction results in a Capital Lease
Obligation, the amount of Indebtedness represented thereby will be determined in
accordance with the definition of "Capital Lease Obligation."
"Authentication Order" means a written request or order signed by one
Officer of the Company on behalf of the Company and delivered to the Trustee.
"AWA" means Arjo Wiggins Appleton p.l.c., a corporation incorporated
in England and Wales with company number 2454830.
"AWA Bermuda" means Arjo Wiggins Appleton (Bermuda) Limited, a company
limited by shares organized under the Companies Act of 1981 of Bermuda.
"Bank Indebtedness" means any and all amounts payable under or in
respect of the Credit Agreement and the other Senior Credit Documents as
amended, restated, supplemented, waived, replaced, restructured, repaid,
refunded, refinanced or otherwise modified from time to time (including after
termination of the Credit Agreement), which may be in the form of bank loans,
debt securities or any other Indebtedness, including principal, premium (if
any), interest (including interest accruing on or after the filing of any
petition in bankruptcy or for reorganization relating to the Company whether or
not a claim for post-filing interest is allowed in such proceedings), fees,
charges, expenses, reimbursement Obligations, guarantees and all other amounts
payable thereunder or in respect thereof.
"Bankruptcy Law" means Title 11, U.S. Code or any similar federal or
state law for the relief of debtors.
"Beneficial Owner" has the meaning assigned to such term in Rule 13d-3
and Rule 13d-5 under the Exchange Act, except that in calculating the beneficial
ownership of any particular "person" (as that term is used in Section 13(d)(3)
of the Exchange Act), such "person" will be deemed to have beneficial ownership
of all securities that such "person" has the right to acquire by conversion or
exercise of other securities, whether such right is currently exercisable or is
exercisable only after the passage of time. The terms "Beneficially Owns" and
"Beneficially Owned" have a corresponding meaning.
"Bermuda Company Agreements" means the collective reference to (a) the
Relationship Agreement, (b) the Assignment and Assumption Deed, dated as of
November 9, 2001, between AWA and AWA Bermuda, (c) the by-laws and memorandum of
association of AWA Bermuda, (d) the certificate of incorporation and by-laws of
PDC Capital Corporation, and (e) the Bermuda Security Agreement.
3
"Bermuda Security Agreement" means the Collateral Assignment, dated as
of November 9, 2001 by AWA Bermuda in favor of the Company.
"Board of Directors" means:
(1) with respect to a corporation, the board of directors of the
corporation or any committee thereof duly authorized to act on behalf of such
board;
(2) with respect to a partnership, the board of directors of the
general partner of the partnership;
(3) with respect to a limited liability company, the managing member
or members, any controlling committee of managing members or other governing
body thereof; and
(4) with respect to any other Person, the board or committee of such
Person serving a similar function.
"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 a capital lease) of fixed or capital
assets or additions to equipment (including replacements, capitalized repairs
and improvements during such period) that should be capitalized under GAAP on a
consolidated balance sheet of such Person and its Subsidiaries.
"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 prepared in
accordance with GAAP, and the Stated Maturity thereof shall be the date of the
last payment of rent or any other amount due under such lease prior to the first
date upon which such lease may be prepaid by the lessee without payment of a
penalty.
"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 interests (whether general or limited) or membership interests; 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, but excluding from all of the foregoing any debt
securities convertible into Capital Stock, whether or not such debt securities
include any right of participation with Capital Stock.
4
"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) 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 one year 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 having one of the two highest ratings obtainable
from Moody's Investors Service, Inc. or Standard & Poor's Rating Services and,
in each case, maturing within one year 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.
"Casualty Event" means any involuntary loss of title to, any
involuntary loss of, damage to or any destruction of, or any expropriation or
other taking of, any Notes Priority Collateral of the Parent Entity, the Company
or any of the Guarantors.
"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 Subsidiaries taken as a whole to any "person" (as that
term is used in Section 13(d) 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 in clause (1) of this definition) becomes the
Beneficial Owner, other than the ESOP and its Subsidiaries, 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 the Parent Entity are not Continuing Directors; or
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(5) the first day on which the Parent Entity ceases to own at least
50% of the outstanding Equity Interests of the Company.
Notwithstanding anything to the contrary above, (i) if the Company
converts to a limited liability company, such a conversion of corporate form
alone shall not be deemed to result in a "Change of Control" for purposes of
this definition and (ii) the consummation of a Parent Entity Transaction will
not result in a Change of Control.
"Clearstream" means Clearstream Banking, S.A.
"Code" means the Internal Revenue Code of 1986, as amended (or any
successor thereto).
"Collateral" means, collectively, all Collateral and Mortgaged
Property, each as defined in the Security Documents.
"Collateral Agent" means the Trustee in its capacity as Collateral
Agent hereunder, under the Security Documents and under the First Lien
Intercreditor Agreement and any successor thereto in such capacity.
"Company" has meaning set forth in the preamble to this Indenture.
"Consolidated EBITDA" means, for any Person for any period, the sum of
(i) Consolidated Net Income for such Person for such period plus (ii) without
duplication and to the extent reflected as a charge in the statement of such
Consolidated Net Income for such period, the sum of (a) income tax expense, (b)
interest expense, amortization or writeoff of debt discount and debt issuance
costs and commissions, discounts and other fees and charges associated with
Indebtedness (including Bank Indebtedness) including any premium paid in
connection with the repayment thereof, (c) depreciation and amortization expense
(including, but not limited to, goodwill), (d) any extraordinary charges or
losses determined in accordance with GAAP, (e) non-cash charges from employee
compensation deferrals and employer matching contributions pursuant to the ESOP
Documentation relating to ESOP Stock Issuances, (f) cash losses from Asset
Sales, (g) cash restructuring charges and/or non-recurring cash charges or
losses and (h) any other non-cash charges, non-cash expenses or non-cash losses
of such Person or any of its Subsidiaries (Restricted Subsidiaries, in the case
of the Parent Entity or the Company); provided that cash payments made in any
future period in respect of such non-cash charges added back in determining
Consolidated EBITDA for periods ending after the Issue Date (as with any other
non-cash charge, expense or loss added to Consolidated Net Income pursuant to
this clause (h)) shall be subtracted from Consolidated Net Income in calculating
Consolidated EBITDA in the period when such payments are made) minus (iii) to
the extent included in the statement of such Consolidated Net Income for such
period, the sum of, without duplication, (a) interest income, (b) any
extraordinary income or gains determined in accordance with GAAP, (c) any
cancellation-of-debt income resulting from repurchases of Indebtedness after the
Issue Date, (d) cash gains from Asset Sales and (e) any other non-cash income
(excluding any items that represent the reversal of any accrual of, or cash
reserve for, anticipated cash charges in any prior period that are described in
the parenthetical to clause (h) above), all as determined on a consolidated
basis.
6
"Consolidated First Lien Leverage Ratio" means, at any date, the ratio
of (a) Consolidated Total Debt of the Parent Entity, the Company and their
Restricted Subsidiaries as of such date, excluding (i) the Second Lien Notes and
Existing Indebtedness (other than Indebtedness in respect of the Notes or the
Credit Facilities) and Permitted Refinancing Indebtedness in respect thereof,
(ii) unsecured Indebtedness and (iii) secured Indebtedness permitted under this
Indenture that is subordinated in Lien priority to the Obligations under the
Security Documents and this Indenture in a manner no less favorable in all
material respects to the Holders of the Notes than the Lien subordination
provisions of the Second Lien Intercreditor Agreement (it being understood that
Indebtedness, including Indebtedness secured by Liens granted pursuant to clause
(1) of the definition of "Permitted Liens," for which only a portion of the
Liens securing such Indebtedness is subordinated are subordinate to the Liens
securing the Obligations are not excluded pursuant to this clause (iii)) to (b)
Consolidated EBITDA of the Parent Entity, the Company and their Restricted
Subsidiaries for the relevant Reference Period as determined in accordance with
the definition of Consolidated Fixed Charge Coverage Ratio; provided that, for
purposes of clause (a) above, Indebtedness under any revolving credit facility
will be included in Consolidated Total Debt in an amount equal to the average
daily balance thereunder for the most recent full fiscal quarter for which
internal financial statements are available prior to the date of such
determination.
"Consolidated Fixed Charge Coverage Ratio" means, for any Person as of
any date of determination, the ratio of the aggregate amount of Consolidated
EBITDA to Fixed Charges of such Person for the four most recent full fiscal
quarters for which internal financial statements are available ending prior to
the date of such determination (the "Reference Period"). For purposes of this
definition, "Consolidated EBITDA" and "Fixed Charges" will be calculated after
giving effect on a pro forma basis as calculated by a financial officer of the
Company in accordance with Regulation S-X under the Securities Act of 1933
("Regulation S-X") for the period of such calculation to:
(1) the incurrence, repayment or redemption of any Indebtedness
(including Acquired Debt) of such Person or any of its Subsidiaries (Restricted
Subsidiaries, in the case of the Parent Entity or the Company), and the
application of the proceeds thereof, including the incurrence of any
Indebtedness (including Acquired Debt), and the application of the proceeds
thereof, giving rise to the need to make such determination, occurring during
the relevant Reference Period or at any time subsequent to the last day of such
Reference Period and on or prior to such date of determination, to the extent,
in the case of an incurrence, such Indebtedness is outstanding on the date of
determination, as if such incurrence, and the application of the proceeds
thereof, repayment or redemption occurred on the first day of such Reference
Period; and
(2) (i) if at any time during such Reference Period such Person or
any Subsidiary of such Person (Restricted Subsidiary, in the case of the Parent
Entity or the Company) shall have made any Material Disposition (as defined
below) or designated any Restricted Subsidiary as an Unrestricted Subsidiary in
accordance with the requirements of this Indenture, the Consolidated EBITDA for
such Reference Period shall be reduced by an amount equal to the Consolidated
EBITDA (if positive) attributable to the property that is the subject of such
Material Disposition or the Restricted Subsidiary so designated for such
Reference Period or increased by an amount equal to the Consolidated EBITDA (if
negative) attributable thereto for such Reference Period and (ii) if during such
Reference Period such Person or any Subsidiary
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(Restricted Subsidiary, in the case of the Parent Entity or the Company) shall
have made a Material Acquisition (as defined below) or re-designated an
Unrestricted Subsidiary as a Restricted Subsidiary in accordance with the
requirements of this Indenture, Consolidated EBITDA for such Reference Period
shall be calculated after giving pro forma effect thereto as if such Material
Acquisition or re-designation occurred on the first day of such Reference
Period. As used in this definition, "Material Acquisition" means any acquisition
of property or series of related acquisitions of property that (a) constitutes
assets comprising all or substantially all of an operating unit of a business or
constitutes all or substantially all of the common stock of a Person and (b)
involves the payment of consideration by such Person and its Subsidiaries
(Restricted Subsidiaries, in the case of the Parent Entity or the Company) in
excess of $5.0 million; and "Material Disposition" means any Disposition of
property or series of related Dispositions of property that yields gross
proceeds to such Person or any of its Subsidiaries (Restricted Subsidiaries, in
the case of the Parent Entity or the Company) in excess of $5.0 million.
"Consolidated Net Income" means, with respect to any Person for any
period, the aggregate of the Net Income of such Person and its Subsidiaries
(Restricted Subsidiaries, in the case of the Parent Entity or the Company) for
such period, on a consolidated basis, determined in accordance with GAAP;
provided that:
(1) the Net Income (but not loss) of any Person that is not a
Subsidiary (Restricted Subsidiary, in the case of the Parent Entity or the
Company) or that is accounted for by the equity method of accounting will be
included only to the extent of the amount of dividends or similar distributions
paid in cash to such Person or a Subsidiary of such Person (Restricted
Subsidiary, in the case of the Parent Entity or the Company);
(2) the Net Income of any Subsidiary (Restricted Subsidiary, in the
case of the Parent Entity or the Company) will be excluded to the extent that
the declaration or payment of dividends or similar distributions by that
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 Subsidiary or its stockholders;
(3) the cumulative effect of a change in accounting principles will be
excluded; and
(4) notwithstanding clause (1) above, the Net Income of any
Unrestricted Subsidiary will be excluded, whether or not distributed to such
Person or one of its Subsidiaries.
Notwithstanding anything to the contrary contained above, to the
extent that Consolidated Net Income for any period is reduced by fees, expenses,
costs and/or charges incurred in connection with consents, amendments,
modifications, waivers, repayments and/or refinancings of Indebtedness, such
amounts shall be added back for purposes of determining Consolidated Net Income
for the respective period.
"Consolidated Tangible Assets" means, with respect to the Company as
of any date, the aggregate of the assets of the Parent Entity, the Company and
their Restricted Subsidiaries excluding goodwill, environmental indemnification
receivables, patents, trade names, trade marks, copyrights, franchises,
experimental expense, organization expense and any
8
other assets properly classified as intangible assets in accordance with GAAP,
as of such date on a consolidated basis, determined in accordance with GAAP. In
the event that information relating to Consolidated Tangible Assets is not
available as of any date, then the most recently available information will be
used.
"Consolidated Total Debt" means at any date, the aggregate principal
amount of all Indebtedness of the Parent Entity, the Company and their
Restricted Subsidiaries at such date, as the same would be shown on a
consolidated balance sheet of the Parent Entity, the Company and their
Restricted Subsidiaries as at such date in accordance with GAAP, but in any
event excluding Indebtedness permitted under clauses (8) and (11) of Section
4.09(b).
"Continuing Directors" means, as of any date of determination, any
member of the Board of Directors of the Company or the Parent Entity, as the
case may be, who:
(1) was a member of such Board of Directors of such company on the
Issue Date; or
(2) 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 of Directors at the time of such nomination or election.
"Corporate Trust Office of the Trustee" means the address of the
Trustee specified in Section 12.02 hereof or such other address as to which the
Trustee may give notice to the Company.
"Credit Agreement" means that certain Credit Agreement, entered into
as of the Issue Date, among the Company, the guarantors and the lenders from
time to time party thereto and Fifth Third Bank, as Administrative Agent, swing
line lender and L/C issuer.
"Credit Enhancement" shall mean the indemnity claim insurance policy
issued by Commerce and Industry Insurance Company, substantially in the form of
Schedule 6.1.5.1 to the Fox River AWA Environmental Indemnity Agreement, issued
on November 9, 2001 and amended effective as of June 11, 2004 in favor of AWA
Bermuda.
"Credit Facilities" means, one or more debt facilities (including,
without limitation, the Credit Agreement) or commercial paper facilities, in
each case with banks or other institutional lenders providing for revolving
credit loans, term loans, receivables financing (including through the sale of
receivables to such lenders or to special purpose entities formed to borrow from
such lenders against such receivables) or letters of credit, in each case, as
amended, restated, modified, renewed, refunded, replaced (whether upon or after
termination or otherwise) or refinanced whether by the same lenders or group of
lenders or any other lender or group of lenders (including by means of sales of
debt securities to institutional investors) in whole or in part from time to
time.
"Custodian" means the Trustee, as custodian with respect to the Notes
in global form, or any successor entity thereto.
9
"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.
"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 A 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 provisions of this Indenture.
"Disposition" means the sale, transfer or other disposition (including
any sale and leaseback transaction, but excluding the granting of Liens
permitted by this Indenture and any exercise of remedies in connection
therewith, leases, licenses, sub-leases, sub-licenses and transfers pursuant to
condemnation and similar proceedings) of any property by any Person, including
any such sale, assignment, transfer or other disposal, with or without recourse,
of any notes or accounts receivable or any rights and claims associated
therewith. "Dispose" has a corresponding meaning.
"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 will 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 the Parent Entity or the Parent Entity has the
obligation to repurchase such Capital Stock pursuant to the terms of the ESOP
will not constitute "Disqualified Stock." The amount of Disqualified Stock
deemed to be outstanding at any time for purposes of this Indenture will be the
maximum amount that the Company and its Restricted Subsidiaries may become
obligated to pay upon the maturity of, or pursuant to any mandatory redemption
provisions of, such Disqualified Stock, exclusive of accrued dividends.
"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).
10
"Equity Offering" means any issuance or sale of Equity Interests
(other than Disqualified Stock or stock issued or sold to employees or directors
of the Company) of the Company.
"ESOP" means the Appleton Papers Retirement Savings and Employee Stock
Ownership Plan.
"ESOP Component" has the meaning set forth in the ESOP.
"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.
"ESOP Stock Issuances" means with respect to any period, any issuance
of common stock by the Parent Entity to the ESOP during such period.
"Euroclear" means Euroclear Bank, S.A./N.V., as operator of the
Euroclear system.
"Excess Proceeds" means (i) any Net Proceeds from Asset Sales (1) that
are not applied or invested as provided in Section 4.10(b) or 4.10(c) hereof or
(2) that the Company decides not to apply or invest as provided in Section
4.10(b) or 4.10(c) hereof, as the case may be, within 364 days of the receipt
thereof, or (ii) any Net Casualty Proceeds not applied in accordance with
Section 4.10(c) within the time period specified therein.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Excluded Restricted Subsidiaries" means PDC Capital Corporation,
provided that it shall become a Guarantor under the circumstances described in
Section 4.19 hereof, and any Foreign Subsidiary (a) in respect of which the
guaranteeing by such Subsidiary of the Obligations, would, in the good faith
judgment of the Company, result in adverse tax consequences to the Company or
(b) that, together with its Subsidiaries, has, on any date of determination, (i)
total assets constituting less than five percent (5%) of the consolidated total
assets of the Parent Entity, the Company and their respective Subsidiaries and
(ii) for the twelve month period most recently ended, revenues constituting less
than five percent (5%) of the consolidated revenues of the Parent Entity, the
Company and their respective Subsidiaries for such period, in each case based
upon the financial statements most recently delivered to the Trustee pursuant to
the terms of this Indenture. Notwithstanding the provisions set forth above,
Appleton Canada shall not constitute an Excluded Restricted Subsidiary so long
as it guarantees any material Indebtedness.
"Existing Indebtedness" means any and all Indebtedness of the Parent
Entity, the Company and its Subsidiaries (other than Indebtedness under the
Credit Agreement and the Second Lien Notes) in existence on the Issue Date,
until such amounts are repaid.
"Fair Market Value" means the value that would be paid by a willing
buyer to an unaffiliated willing seller in a transaction not involving distress
or necessity of either party,
11
determined in good faith by the Board of Directors of the Company (unless
otherwise provided in this Indenture).
"First Lien Intercreditor Agreement" means, as the context may
require, (i) the intercreditor agreement, dated as of the Issue Date, among the
Administrative Agent, the Collateral Agent, the First Lien Representative, the
Company and each Guarantor, as it may be amended, restated, supplemented and/or
otherwise modified from time to time in accordance with this Indenture and (ii)
any other intercreditor agreement entered into in connection with Credit
Facilities not otherwise prohibited by this Indenture substantially in the form
of the intercreditor agreement referred to in clause (i) of this definition,
entered into by the Collateral Agent, the Company or any Guarantor following the
termination of the intercreditor agreement referred to in clause (i) of this
definition, in each case, as it may be amended, restated, supplemented and/or
otherwise modified from time to time in accordance with this Indenture.
"First Lien Representative" has the meaning given to it in the First
Lien Intercreditor Agreement.
"Fixed Charges" means, with respect to any specified Person for any
period, the sum, without duplication, of:
(1) the consolidated interest expense of such Person and its
Subsidiaries (Restricted Subsidiaries, in the case of the Parent Entity or the
Company) for such period, whether paid or accrued, including, without
limitation, amortization of debt issuance costs and original issue discount,
non-cash interest payments, the interest component of any deferred payment
Obligations, the interest component of all payments associated with Capital
Lease Obligations, 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 of the effect of all
payments made or received pursuant to Hedging Obligations in respect of interest
rates; plus
(2) the consolidated interest expense of such Person and its
Subsidiaries (Restricted Subsidiaries, in the case of the Parent Entity or the
Company) that was capitalized during such period; plus
(3) any interest accruing on Indebtedness of another Person that is
guaranteed by such Person or one of its Subsidiaries (Restricted Subsidiaries,
in the case of the Parent Entity or the Company) or secured by a Lien on assets
of such Person or one of its Subsidiaries (Restricted Subsidiaries, in the case
of the Parent Entity or the Company), whether or not such Guarantee or Lien is
called upon; plus
(4) the product of (a) all dividends, whether paid or accrued and
whether or not in cash, on any series of preferred stock of such Person or any
of its Subsidiaries (Restricted Subsidiaries, in the case of the Parent Entity
or the Company), other than dividends on Equity Interests payable solely in
Equity Interests of such Person (other than Disqualified Stock) or to such
Person or a Subsidiary of such Person (Restricted Subsidiary, in the case of the
Parent Entity or the Company), times (b) a fraction, the numerator of which is
one and the denominator of which is one minus the then current combined federal,
state and local statutory tax rate of such Person, expressed as a decimal, in
each case, determined on a consolidated basis in accordance with GAAP.
12
Notwithstanding anything to the contrary contained in this definition,
to the extent Fixed Charges for any period would otherwise include any
amortization of fees or expenses paid to obtain consents, modifications or
waivers to outstanding Indebtedness or the documentation relating thereto, then
the amortization of such amounts shall be deducted (and excluded) from Fixed
Charges for such period.
"Foreign Subsidiary" means a Subsidiary that is organized under the
laws of a jurisdiction other than the United States or any state thereof or the
StateDistrict of Columbia.
"Fox River AWA Environmental Indemnity Agreement" means the Fox River
AWA Environmental Indemnity Agreement by and among the Parent Entity, 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 the Parent Entity, 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, the Parent Entity,
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 Note Legend" means the legend set forth in Section 2.06(g)(2)
hereof, which is required to be placed on all Global Notes issued under this
Indenture.
"Global Notes" means, individually and collectively, each of the
Restricted Global Notes and the Unrestricted Global Notes deposited with or on
behalf of and registered in the name of the Depository or its nominee,
substantially in the form of Exhibit A hereto and that bears the Global Note
Legend and that has the "Schedule of Exchanges of Interests in the Global Note"
attached thereto, issued in accordance with Section 2.01, 2.06(b)(3), 2.06(b)(4)
or 2.06(d)(2) hereof.
"Government Securities" means direct Obligations of, or Obligations
guaranteed by (or certificates representing an ownership interest in such
Obligations), 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.
13
"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 (whether arising by virtue of
partnership arrangements, or by agreements to keep-well, to purchase assets,
goods, securities or services, to take or pay or to maintain financial statement
conditions or otherwise).
"Guarantors" means each of:
(1) the Parent Entity;
(2) the Company's direct and indirect Restricted Subsidiaries, other
than the Excluded Restricted Subsidiaries, existing on the Issue Date; and
(3) any other Subsidiary of the Company that executes a supplemental
indenture evidencing its Note Guarantee in accordance with the provisions of
this Indenture;
and their respective successors and assigns, in each case, until the Note
Guarantee of such Person has been released in accordance with the provisions of
this Indenture.
"Hedging Obligations" means, with respect to any specified Person, the
Obligations of such Person under:
(1) interest rate swap agreements (whether from fixed to floating or
from floating to fixed), interest rate cap agreements and interest rate collar
agreements;
(2) other agreements or arrangements designed to manage interest
rates or interest rate risk; and
(3) other agreements or arrangements designed to protect such Person
against fluctuations in currency exchange rates or commodity prices.
"Holder" means the Person in whose name a Note is registered on the
Registrar's books.
"IAI Global Note" means a Global Note substantially in the form of
Exhibit A hereto bearing the Global Note Legend and the Private Placement Legend
and deposited with or on behalf of and registered in the name of the Depositary
or its nominee that will be issued in a denomination equal to the outstanding
principal amount of the Notes sold to Institutional Accredited Investors.
"Immaterial Subsidiary" means, as of any date, any Restricted
Subsidiary whose total assets, as of that date, are less than $2.0 million and
whose total revenues for the most recent fiscal year do not exceed $2.0 million;
provided that a Restricted Subsidiary will not be considered to be an Immaterial
Subsidiary if it, directly or indirectly, guarantees or otherwise provides
direct credit support for any Indebtedness of the Company.
14
"Indebtedness" with respect to any specified Person, means, without
duplication, any indebtedness of such Person (excluding accrued expenses and
trade payables), 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 or Attributable Debt in
respect of sale and leaseback transactions;
(5) representing the balance deferred and unpaid of the purchase
price of any property or services due more than six months after such property
is acquired or such services are completed; or
(6) representing net Obligations under any Hedging Obligations, if
and to the extent any of the preceding items (other than letters of credit,
Attributable Debt 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.
"Indenture" means this Indenture, as amended, supplemented or
otherwise modified from time to time.
"Indirect Participant" means a Person who holds a beneficial interest
in a Global Note through a Participant.
"Initial Notes" means the $305,000,000 aggregate principal amount of
Notes initially issued under this Indenture and any Notes issued in replacement
or substitution therefor in accordance with the provisions of this Indenture.
"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, that is not also a QIB.
"Intercreditor Agreements" means the First Lien Intercreditor
Agreement and the Second Lien Intercreditor Agreement.
"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 but excluding
receivables owing to the Company or any Restricted Subsidiary created in the
ordinary course of business), 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
15
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
Disposition, such Person is no longer a Subsidiary of the Company, the Company
will be deemed to have made an Investment on the date of any such Disposition
equal to the Fair Market Value of the Company's Investments in such Subsidiary
that were 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
will 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 Investments held
by the acquired Person in such third Person in an amount determined as provided
in the final paragraph of Section 4.07 hereof. Except as otherwise provided in
this Indenture, the amount of an Investment will be determined at the time the
Investment is made and without giving effect to subsequent changes in value.
"Issue Date" means the date on which the Notes are originally issued
pursuant to 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.
"Lien" means, with respect to any asset, any mortgage, deed of trust,
lien, pledge, charge, security interest or encumbrance of any kind in respect of
such asset, whether or not filed, recorded or otherwise perfected under
applicable law, including any conditional sale or other title retention
agreement, any lease in the nature thereof, any option or other agreement to
sell or give a security interest in and any filing of or agreement to give any
financing statement under the Uniform Commercial Code (or equivalent statutes)
of any jurisdiction.
"Mortgages" means the mortgages, deeds of trust or similar instruments
entered into from time to time creating security interests in the Collateral as
contemplated by this Indenture, including, without limitation, those certain
Notes Open-End Mortgage & Security Agreements, dated as of the Issue Date, made
by the Company and the Guarantors, as the case may be, in favor of the
Collateral Agent.
"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:
(1) any gain or loss, together with any related provision for taxes
on such gain or 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
16
(2) any extraordinary gain or loss, together with any related
provision for taxes on such extraordinary gain or 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
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, (iv) amounts required to be applied
to the repayment of Indebtedness secured by a Permitted Lien on the asset or
assets that were the subject of such Asset Sale that is not subordinate to any
Lien on such asset or assets securing the Notes or the Note Guarantees, and (v)
any reserve for adjustment in respect of the sale price of such asset or assets
established in accordance with GAAP.
"Non-Recourse Debt" means Indebtedness:
(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 other than the pledge
of stock of an Unrestricted Subsidiary), (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.
"Note Documents" means this Indenture, the Notes and the Security
Documents.
"Note Guarantee" means the Guarantee by each Guarantor of the
Company's Obligations under this Indenture and the Notes, pursuant to the
provisions of Article X hereof.
"Notes" has the meaning assigned to it in the preamble to this
Indenture. The Initial Notes and the Additional Notes, if any, shall be treated
as a single class for all purposes under this Indenture, and unless the context
otherwise requires, all references to the Notes shall include the Initial Notes
and any Additional Notes.
"Notes Priority Collateral" has the meaning assigned to it in the
First Lien Intercreditor Agreement.
17
"Obligations" means any principal, interest (including, without
limitation, with respect to interest on the Notes, interest accruing after the
commencement of any bankruptcy, insolvency, or similar proceeding, whether or
not a claim for post-filing or post-petition interest is allowed in such
proceeding), penalties, fees, indemnifications, reimbursements, damages and
other liabilities payable under the documentation governing any Indebtedness.
"Officer" means, with respect to any Person, the chairman of the
board, chief executive officer, chief financial officer, president, any
executive vice president, senior vice president or vice president, the treasurer
or the secretary 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 12.05 hereof.
"Opinion of Counsel" means an opinion from legal counsel who is
reasonably acceptable to the Trustee, that meets the requirements of Section
12.05 hereof. The 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 Entity Transaction" means the consummation of a merger or
consolidation by the Parent Entity with a Specified Person or the acquisition of
Capital Stock of the Parent Entity by a Specified Person; provided that such
transaction does not result in any "person" (as defined in clause (1) of the
definition of "Change of Control") other than a Specified Person becoming 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. In
respect of a Parent Entity Transaction, "Specified Person" means (a) a Person
with no material operations immediately prior to such Parent Entity Transaction,
(b) a special purpose acquisition company or (c) a "Morris Trust" vehicle or
reverse "Morris Trust" vehicle.
"Pari Passu Indebtedness" means:
(1) the Notes and any Indebtedness which ranks equally in right of
payment to the Notes and, in respect of any Asset Sale involving Collateral,
with an equal ranking Lien on the assets disposed of in such Asset Sale; and
(2) with respect to any Guarantor, its Note Guarantee and any
Indebtedness which ranks equally in right of payment to such Guarantor's Note
Guarantee and, in respect of any Asset Sale involving Collateral, with an equal
ranking Lien on the assets disposed of in such Asset Sale.
"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).
"PDC Capital Corporation" means PDC Capital Corporation, a
StateDelaware corporation.
18
"Permitted Business" means any of the lines of business conducted by
the Company and its Subsidiaries on the Issue Date and any businesses similar,
related, incidental or ancillary thereto or that constitutes a reasonable
extension or expansion thereof.
"Permitted Investments" means:
(1) any Investment in the Company or in a Restricted Subsidiary of
the Company;
(2) any Investment in Cash Equivalents;
(3) any Investment existing on the Issue Date;
(4) any Investment by the Company or any Restricted Subsidiary of the
Company in a Person, if as a result of such Investment:
(a) such Person becomes a Restricted Subsidiary of the Company; 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 of the Company;
(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 acquisition of assets or Capital Stock solely in exchange for
the issuance of Equity Interests (other than Disqualified Stock) of the Company;
(7) any Investments received in compromise or resolution of (A)
Obligations of trade creditors or customers that were incurred in the ordinary
course of business of the Company or any of its Restricted Subsidiaries,
including pursuant to any plan of reorganization or similar arrangement upon the
bankruptcy or insolvency of any trade creditor or customer; or (B) litigation,
arbitration or other disputes with Persons who are not Affiliates;
(8) Investments represented by Hedging Obligations;
(9) loans or advances to employees made in the ordinary course of
business of the Company or the Restricted Subsidiary of the Company in an
aggregate principal amount not to exceed $2.0 million at any one time
outstanding;
(10) repurchases of the Notes;
(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;
(12) 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
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(12) that are at the time outstanding not to exceed the greater of (x) $25.0
million and (y) 3.0% of Consolidated Tangible Assets;
(13) Investments in any Person consisting of the black liquor
producing property, plant, and equipment, together with all related assets
(tangible and intangible), located at the Company's Roaring Spring,
StatePennsylvania facility. Not in limitation of the foregoing, and
notwithstanding any other provision of this Indenture to the contrary, any sale,
lease, conveyance, transfer or other Disposition of such property, plant and
equipment and related assets to any Person shall be considered a Permitted
Investment for all purposes under this Indenture; and
(14) Equity Interests or other Investments received by the Parent
Entity, the Company or any Restricted Subsidiary in respect of Permitted
Investments of the type described in clause (13) above, so long as such
Investment is held by the Company or a Guarantor.
"Permitted Liens" means:
(1) Liens on assets of the Company or any Restricted Subsidiary
securing Indebtedness and other Obligations under Credit Facilities incurred
under clause (1) of the definition of "Permitted Debt" and/or securing Hedging
Obligations and Obligations in respect of cash management services, in each
case, specified in the definition of "RCF/Hedging Obligations," and in each
case, which are subject to the First Lien Intercreditor Agreement as RCF/Hedging
Obligations;
(2) Liens in favor of the Company or any Guarantor;
(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 (including Capital Stock) 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, such acquisition, and not
incurred in contemplation of, such acquisition;
(5) 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;
(6) Liens to secure Indebtedness (including Capital Lease
Obligations) permitted by clause (4) of Section 4.09(b) hereof covering only the
assets acquired with or financed by such Indebtedness;
(7) Liens existing on the Issue Date and any extensions or renewals
thereof otherwise permitted by the terms of this Indenture;
20
(8) 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 conducted; provided
that any reserve or other appropriate provision as is required in conformity
with GAAP has been made therefor;
(9) Liens imposed by law, such as carriers', warehousemen's,
landlord's and mechanics' Liens, in each case, incurred in the ordinary course
of business or good faith deposits in connection with bids, tenders, contracts
or leases to which the Company or any Restricted Subsidiary is a party;
(10) survey exceptions, easements or reservations of, or rights of
others for, licenses, rights-of-way, sewers, electric lines, telegraph and
telephone lines and other similar purposes, or zoning or other restrictions as
to the use of real property that were not incurred in connection with
Indebtedness and that do not in the aggregate materially adversely affect the
value of said properties or materially impair their use in the operation of the
business of such Person;
(11) Liens created for the benefit of (or to secure) (a) the Initial
Notes or (b) Additional Notes incurred pursuant to Section 4.09(a) or Section
4.09(b)(14) hereof, so long as, at the time of any incurrence thereof, the
Consolidated First Lien Leverage Ratio is not greater than 3.50 to 1.00;
provided, that until such time as all obligations to repurchase common stock of
the Parent Entity pursuant to the ESOP Documentation have been terminated, the
aggregate amount of Additional Notes that may be secured by Liens pursuant to
sub-clause (b) of this clause (11) shall be limited to $75.0 million in the
aggregate; provided, further, that no Liens may be created for the benefit of
(or to secure) Additional Notes pursuant to sub-clause (b) of this clause (11)
to the extent the proceeds of which are applied to repurchase common stock of
the Parent Entity, or to make other payments (including payment of expenses) in
connection with the termination of the ESOP.
(12) Liens to secure any Permitted Refinancing Indebtedness permitted
to be incurred under this Indenture; provided, however, that:
(A) the new Lien shall be limited to all or part of the same
property and assets that secured or, under the written agreements pursuant
to which the original Lien arose, could secure the original Lien (plus
improvements and accessions to, such property or proceeds or distributions
thereof);
(B) the Indebtedness secured by the new Lien is not increased to any
amount greater than the sum of (x) the outstanding principal amount or, if
greater, committed amount, of the Permitted Refinancing Indebtedness and
(y) an amount necessary to pay any fees and expenses, including premiums,
related to such renewal, refunding, refinancing, replacement, defeasance or
discharge; and
(C) if applicable, the new Liens will be subordinated to the Liens
securing the Notes on the same basis as the original Lien, including, if
applicable, pursuant to intercreditor arrangements not materially less
favorable to the Holders of the Notes than those with respect to the
original Lien.
21
(13) Liens on rights of "Recovery" in favor of AWA pursuant to and as
defined in the Fox River Indemnity Arrangements;
(14) Liens incurred or deposits made in the ordinary course of
business in connection with workers' compensation, unemployment insurance and
other types of social security;
(15) licenses of intellectual property in the ordinary course of
business;
(16) Liens arising out of judgments, decrees, orders or awards in
respect of which the Company shall in good faith be prosecuting on appeal or
proceeding for review, which appeal or proceeding shall not have been finally
terminated or if the period within such appeal or proceeding may be initiated
shall not have expired;
(17) Liens on Capital Stock of an Unrestricted Subsidiary that secure
Indebtedness or other Obligations of such Unrestricted Subsidiary;
(18) leases, subleases, licenses or sublicenses to third parties
entered into in the ordinary course of business;
(19) any interest or title of a lessor under any lease entered into by
the Company or any of its Subsidiaries in the ordinary course of its business
and covering only the assets so leased;
(20) Liens in favor of customs or revenue authorities arising as a
matter of law to secure payment of customs duties in connection with the
importation of goods so long as such Lien covers only the goods being imported;
(21) Liens on assets of the Company or any Restricted Subsidiary
securing Indebtedness up to 5% of Consolidated Tangible Assets that was
permitted by the terms of this Indenture to be incurred so long as such Liens,
to the extent covering any Collateral, are junior to the Liens securing the
Notes and the Note Guarantees;
(22) Liens securing Indebtedness permitted by clause (15) of the
definition of "Permitted Debt" to the extent such Liens are subject to the
provisions of the Second Lien Intercreditor Agreement; and
(23) Liens on assets of the Company or any Restricted Subsidiary
securing Indebtedness that was permitted to be incurred under the terms of this
Indenture in an amount not to exceed $5.0 million.
"Permitted Refinancing Indebtedness" means any Indebtedness of the
Company or any of its Restricted Subsidiaries issued in exchange for, or the net
proceeds of which are used to renew, refund, refinance, replace, defease or
discharge other Indebtedness of the Company or any of its Restricted
Subsidiaries (other than intercompany Indebtedness); provided that:
(1) the principal amount (or accreted value, if applicable) of such
Permitted Refinancing Indebtedness does not exceed the principal amount (or
accreted value, if applicable) of the Indebtedness renewed, refunded,
refinanced, replaced, defeased or discharged (plus all
22
accrued interest on the Indebtedness and the amount of all fees and expenses,
including premiums incurred in connection therewith);
(2) such Permitted Refinancing Indebtedness has a final maturity date
later than the final maturity date of, and has a Weighted Average Life to
Maturity equal to or greater than the Weighted Average Life to Maturity of, the
Indebtedness being renewed, refunded, refinanced, replaced, defeased or
discharged;
(3) if the Indebtedness being refinanced, renewed, replaced,
defeased, discharged 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, taken as a whole, to the Holders of Notes
as those contained in the documentation governing the Indebtedness being
renewed, refunded, refinanced, replaced, defeased or discharged; and
(4) such Permitted Refinancing Indebtedness is incurred either by the
Company or by the Restricted Subsidiary who is the obligor on the Indebtedness
being renewed, refunded, refinanced, replaced, defeased or discharged.
"Person" means any individual, corporation, partnership, joint
venture, association, joint-stock company, trust, unincorporated organization,
limited liability company or government or other entity.
"Private Placement Legend" means the legend set forth in Section
2.06(g)(1) hereof 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.
"RCF/Hedging Obligations" means (i) all Secured Bank Indebtedness,
(ii) all other Obligations (not constituting Indebtedness) of the Company and
its Subsidiaries under the agreements governing Secured Bank Indebtedness and
(iii) all other Obligations of the Company or any of its Subsidiaries in respect
of Hedging Obligations or Obligations in respect of cash management services in
each case owing to a Person that is a holder of Indebtedness described in clause
(i) or Obligations described in clause (ii) or an Affiliate of such holder at
the time of entry into such Hedging Obligations or Obligations in respect of
cash management services.
"RCF/Hedging Priority Collateral" has the meaning assigned to it in
the First Lien Intercreditor Agreement.
"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 applicable.
"Regulation S Permanent Global Note" means a permanent Global Note in
the form of Exhibit A 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
23
in a denomination equal to the outstanding principal amount of the Regulation S
Temporary Global Note upon expiration of the Restricted Period.
"Regulation S Temporary Global Note" means a temporary Global Note in
the form of Exhibit A hereto bearing the Global Note Legend, the Private
Placement Legend and the Regulation S Temporary Global Note 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.
"Regulation S Temporary Global Note Legend" means the legend set forth
in Section 2.06(g)(3) hereof.
"Relationship Agreement" means the Agreement dated as of November 9,
2001 (as amended), by and among AWA, Arjo Wiggins (Bermuda) Holdings Limited,
the Parent Entity, PDC Capital Corporation and AWA Bermuda.
"Responsible Officer" when used with respect to the Trustee, means any
officer within the Corporate Trust Office of the Trustee (or any successor group
of the Trustee) or any other officer of the Trustee customarily performing
functions similar to those performed by any of the above designated officers and
also means, with respect to a particular corporate trust matter, any other
officer to whom such matter is referred because of such officer's knowledge of
and familiarity with the particular subject and who shall have direct
responsibility for the administration of this Indenture.
"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 distribution compliance period as
defined in Regulation S.
"Restricted Subsidiary" of a Person means any Subsidiary of the
referent Person that is not an Unrestricted Subsidiary.
"Rule 144" means Rule 144 promulgated under the Securities Act.
"Rule 144A" means Rule 144A promulgated under the Securities Act.
"Rule 903" means Rule 903 promulgated under the Securities Act.
"Rule 904" means Rule 904 promulgated under the Securities Act.
"SEC" means the U.S. Securities and Exchange Commission.
"Second Lien Intercreditor Agreement" means the intercreditor
agreement, dated as of September 30, 2009, among Bank of America, N.A., the
Trustee, as collateral agent for the
24
Second Lien Notes, the Company and each Guarantor, as it may be amended,
restated, supplemented and/or otherwise modified from time to time, including
the second lien notice to be entered into in connection with the Notes and the
Credit Agreement to replace Bank of America N.A. as First Lien Collateral Agent
thereunder with the First Lien Representative as a party.
"Second Lien Notes" means the 11.25% second lien notes of the Company
due 2015.
"Secured Bank Indebtedness" means any Bank Indebtedness that is
secured by a Permitted Lien incurred or deemed incurred pursuant to clause (1)
of the definition of "Permitted Liens."
"Securities Act" means the Securities Act of 1933, as amended.
"Security Agreements" means (i) in connection with Appleton Canada,
the Collateral Agreement, dated as of the Issue Date, made by the Company and
Appleton Canada in favor of the Collateral Agent, and (ii) in connection with
any other Guarantor, the Collateral Agreement, dated as of the Issue Date, made
by the Company and the Guarantors (other than Appleton Canada) in favor of the
Collateral Agent, each as amended, supplemented or otherwise modified from time
to time.
"Security Documents" means the security agreements (including the
Security Agreements), Mortgages, pledge agreements, collateral assignments,
account control agreements and related agreements, as amended, supplemented,
restated, renewed, refunded, replaced, restructured, repaid, refinanced or
otherwise modified from time to time, creating the security interests in the
Collateral as contemplated by this Indenture.
"Security Holders Agreements" means, collectively, the Security
Holders Agreement by and between the Parent Entity and the Trust dated as of
November 9, 2001 and the Security Holders Agreement by and between the Company
and the Trust dated as of November 9, 2001.
"Senior Credit Documents" means the collective reference to the Credit
Agreement, any notes issued pursuant thereto and the guarantees thereof, and the
collateral documents relating thereto, as amended, supplemented, restated,
renewed, refunded, replaced, restructured, repaid, refinanced or otherwise
modified from time to time.
"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 Issue Date.
"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 documentation governing
such Indebtedness as of the Issue Date, and will 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:
25
(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 and after giving effect to
any voting agreement or stockholders' agreement that effectively transfers
voting power) 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).
"TIA" means the Trust Indenture Act of 1939, as amended (15 U.S.C.
Sections 77aaa-77bbbb).
"Trust" means the Appleton Papers Inc. Employee Stock Ownership Trust
adopted July 19, 2001, as amended, effective June 20, 2004.
"Trustee" means the party named as such in the preamble to this
Indenture until a successor replaces it in accordance with the applicable
provisions of this Indenture and thereafter means the successor serving
hereunder.
"Unrestricted Definitive Note" means a Definitive Note that does not
bear and is not required to bear the Private Placement Legend.
"Unrestricted Global Note" means a Global Note that does not bear and
is not required to bear the Private Placement Legend.
"Unrestricted Subsidiary" means any Subsidiary of the Company
designated by the Board of Directors of the Company as an Unrestricted
Subsidiary pursuant to a resolution of the Board of Directors of the Company,
but only to the extent that such Subsidiary:
(1) has no Indebtedness other than Non-Recourse Debt;
(2) except as permitted by Section 4.11 hereof, 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, taken as a whole, 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; and
(4) has not guaranteed or otherwise directly or indirectly provided
credit support for any Indebtedness of the Company or any of its Restricted
Subsidiaries.
26
"U.S. Person" means a U.S. Person as defined in Rule 902(k)
promulgated under the Securities Act.
"Voting Stock" of any specified Person as of any date means the
Capital Stock of such Person that is at the time entitled to vote in the
election of the Board of Directors of such Person.
"Weighted Average Life to Maturity" means, when applied to any
Indebtedness at any date, the number of years obtained by dividing:
(1) the 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.
Section 1.02 Other Definitions.
Term Defined in Section
----------------------------------- ------------------
"Affiliate Transaction" 4.11
"Article 9 Collateral" 13.04
"Asset Sale Offer" 3.09
"Calculation Time" 4.09
"Change of Control Offer" 4.15
"Change of Control Payment" 4.15
"Change of Control Payment Date" 4.15
"Covenant Defeasance" 8.03
"Equivalent Property" 4.24
"Event of Default" 6.01
"Hazardous Materials" 7.07
"incur" 4.09
"Legal Defeasance" 8.02
"Material Acquisition" 1.01
"Material Disposition" 1.01
"Net Casualty Proceeds" 4.10
"Notes Priority Collateral Account" 4.10
"Offer Amount" 3.09
"Offer Period" 3.09
"Offering Memorandum" 9.01
"Paying Agent" 2.03
"Payment Default" 6.01
"Permitted Debt" 4.09
"Purchase Date" 3.09
"Reference Period" 1.01
"Registrar" 2.03
"Restricted Payments" 4.07
27
"Specified Person" 1.01
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 Note Guarantees means the Company and
the Guarantors, respectively, and any successor obligor upon the Notes and the
Note Guarantees, respectively.
All other terms used in this Indenture that are defined by the TIA,
defined by TIA reference to another statute or defined by SEC rule under the TIA
have the meanings so assigned to them.
Section 1.04 Rules of Construction. Unless the context otherwise
requires:
(1) a term has the meaning assigned to it;
(2) an accounting term not otherwise defined has the meaning assigned
to it in accordance with GAAP;
(3) "or" is not exclusive;
(4) words in the singular include the plural, and in the plural
include the singular;
(5) "will" shall be interpreted to express a command;
(6) the term "including" is not limiting;
(7) provisions apply to successive events and transactions; and
(8) references to sections of or rules under the Securities Act will
be deemed to include substitute, replacement of successor sections or rules
adopted by the SEC from time to time.
28
ARTICLE II
The Notes
Section 2.01 Form and Dating.
(a) General. The Notes and the Trustee's certificate of
authentication will be substantially in the form of Exhibit A hereto. The Notes
may have notations, legends or endorsements required by law, stock exchange rule
or usage; provided, that any such notations, legends or endorsements are in a
form acceptable to the Company. Each Note will be dated the date of its
authentication. The Notes shall be in minimum denominations of $2,000 and
integral multiples of $1,000 in excess thereof.
The terms and provisions contained in the Notes will constitute, and
are hereby expressly made, a part of this Indenture and the Company, the
Guarantors and the Trustee, by their execution and delivery of this Indenture,
expressly agree to such terms and provisions and to be bound thereby. However,
to the extent any provision of any Note conflicts with the express provisions of
this Indenture, the provisions of this Indenture shall govern and be
controlling.
(b) Global Notes. Notes issued in global form will be substantially
in the form of Exhibit A hereto (including the Global Note Legend thereon and
the "Schedule of Exchanges of Interests in the Global Note" attached thereto).
Notes issued in definitive form will be substantially in the form of Exhibit A
hereto (but without the Global Note Legend thereon and without the "Schedule of
Exchanges of Interests in the Global Note" attached thereto). Each Global Note
will represent such of the outstanding Notes as will be specified therein and
each shall provide that it represents the aggregate principal amount of
outstanding Notes from time to time endorsed thereon and that the aggregate
principal amount of outstanding Notes represented thereby may from time to time
be reduced or increased, as appropriate, to reflect exchanges and redemptions.
Any endorsement of a Global Note to reflect the amount of any increase or
decrease in the aggregate principal amount of outstanding Notes represented
thereby will be made by the Trustee or the Custodian, at the direction of the
Trustee, in accordance with instructions given by the Holder thereof as required
by Section 2.06 hereof.
(c) Temporary Global Notes. Notes offered and sold in reliance on
Regulation S will be issued initially in the form of a Regulation S Temporary
Global Note, which will 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 will be terminated upon
the receipt by the Trustee of:
(1) a written certificate from the Depositary, together with copies
of certificates from Euroclear and Clearstream, certifying that they have
received certification of non-United States beneficial ownership of 100% of
the aggregate principal amount of the Regulation S Temporary Global Note
(except to the extent of any beneficial owners thereof who acquired an
interest therein during the Restricted Period pursuant to another exemption
from registration under the Securities Act and who will take delivery of a
beneficial ownership interest in a 144A Global Note or an IAI Global
29
Note bearing a Private Placement Legend, all as contemplated by Section
2.06(b) hereof); and
(2) an Officers' Certificate from the Company.
Following the termination of the Restricted Period, beneficial
interests in the Regulation S Temporary Global Note will be exchanged for
beneficial interests in the Regulation S Permanent Global Note pursuant to the
Applicable Procedures. Simultaneously with the authentication of the Regulation
S Permanent Global Note, the Trustee will cancel the Regulation S Temporary
Global Note. The aggregate principal amount of the Regulation S Temporary Global
Note and the Regulation S Permanent Global Note may from time to time be
increased or decreased by adjustments made on the records of the Trustee and the
Depositary or its nominee, as the case may be, in connection with transfers of
interest as hereinafter provided.
(3) Euroclear and Clearstream Procedures Applicable. The provisions
of the "Operating Procedures of the Euroclear System" and "Terms and
Conditions Governing Use of Euroclear" and the "General Terms and
Conditions of Clearstream Banking" and "Customer Handbook" of Clearstream
will be applicable to transfers of beneficial interests in the Regulation S
Temporary Global Note and the Regulation S Permanent Global Note that are
held by Participants through Euroclear or Clearstream.
Section 2.02 Execution and Authentication. At least one Officer must
sign the Notes for the Company by manual or facsimile signature.
If an Officer whose signature is on a Note no longer holds that office
at the time a Note is authenticated, the Note will nevertheless be valid.
A Note will not be valid until authenticated by the manual signature
of the Trustee. The signature will be conclusive evidence that the Note has been
authenticated under this Indenture.
The Trustee will, upon receipt of an Authentication Order,
authenticate Notes for original issue that may be validly issued under this
Indenture, including any Additional Notes. Such Authentication Order shall
specify the principal amount of the Notes to be authenticated, the date on which
the issue of the Notes is to be authenticated, the number of separate Notes
certificates to be authenticated, the registered Holder of each such Note and
delivery instructions, and, in the case of an issuance of Additional Notes after
the Issue Date, shall certify that such issuance is in compliance with Sections
4.09 and 4.12 hereof. The aggregate principal amount of Notes outstanding at any
time may not exceed the aggregate principal amount of Notes authorized for
issuance by the Company pursuant to one or more Authentication Orders, except as
provided in Section 2.07 hereof.
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.
30
Section 2.03 Registrar and Paying Agent. The Company will maintain an
office or agency where Notes may be presented for registration of transfer or
for exchange ("Registrar") and an office or agency where Notes may be presented
for payment ("Paying Agent"). The Registrar will keep a register of the Notes
and of their transfer and exchange. The Company may appoint one or more
co-registrars and one or more additional paying agents. The term "Registrar"
includes any co-registrar and the term "Paying Agent" includes any additional
paying agent. The Company may change any Paying Agent or Registrar without
notice to any Holder. The Company will notify the Trustee in writing of the name
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 to act as
Depositary with respect to the Global Notes.
The Company initially appoints the Trustee to act as the Registrar and
Paying Agent and to act as Custodian with respect to the Global Notes.
Section 2.04 Paying Agent to Hold Money in Trust. The Company will
require each Paying Agent other than the Trustee to agree in writing that the
Paying Agent will hold in trust for the benefit of Holders or the Trustee all
money held by the Paying Agent for the payment of principal, premium, 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 of all amounts that it is obligated to
pay, the Paying Agent (if other than the Company or a Subsidiary) will have no
further liability for the money. If the Company or a Subsidiary acts as Paying
Agent, it will segregate and hold in a separate trust fund for the benefit of
the Holders all money held by it as Paying Agent. Upon any bankruptcy or
reorganization proceedings relating to the Company, the Trustee will serve as
Paying Agent for the Notes.
Section 2.05 Holder Lists. The Trustee will preserve in as current a
form as is reasonably practicable the most recent list available to it of the
names and addresses of all Holders and shall otherwise comply with TIA Section
312(a). If the Trustee is not the Registrar, the Company will furnish to the
Trustee at least two 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 Section
312(a).
Section 2.06 Transfer and Exchange.
(a) Transfer and Exchange of Global Notes. A Global Note may not be
transferred except as a whole by the Depositary to a nominee of the Depositary,
by a nominee of the Depositary to the Depositary or to another nominee of the
Depositary, or by the Depositary or any such nominee to a successor Depositary
or a nominee of such successor Depositary. All Global Notes will be exchanged by
the Company for Definitive Notes if:
(1) the Company delivers to the Trustee notice from the Depositary
that it is unwilling or unable to continue to act as Depositary or that it
has ceased to be a clearing
31
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;
(2) the Company, at its option, notifies the Trustee in writing that
it elects to cause the issuance of Definitive Notes; provided that in no
event shall the Regulation S Temporary Global Note be exchanged by the
Company for Definitive Notes prior to (A) the expiration of the Restricted
Period and (B) the receipt by the Registrar of any certificates required
pursuant to Rule 903(b)(3)(ii)(B) under the Securities Act; or
(3) there has occurred and is continuing a Default or Event of
Default with respect to the Notes.
Upon the occurrence of any of the preceding events in (1), (2) or (3)
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); provided, however, that beneficial interests in a
Global Note may be transferred and exchanged as provided in Section 2.06(b) or
(c) hereof.
(b) Transfer and Exchange of Beneficial Interests in the Global
Notes. The transfer and exchange of beneficial interests in the Global Notes
will be effected through the Depositary, in accordance with the provisions of
this Indenture and the Applicable Procedures. None of the Company, the Trustee,
the Paying Agent, nor any agent of the Company shall have any responsibility or
liability for any aspect of the records relating to or payments made on account
of beneficial ownership interests in a Global Note, or for maintaining,
supervising or reviewing any records relating to such beneficial ownership
interests. Beneficial interests in the Restricted Global Notes will be subject
to restrictions on transfer comparable to those set forth herein to the extent
required by the Securities Act. Transfers of beneficial interests in the Global
Notes also will require compliance with either subparagraph (1) or (2) below, as
applicable, as well as one or more of the other following subparagraphs, as
applicable:
(1) Transfer of Beneficial Interests in the Same Global Note.
Beneficial interests in any Restricted Global Note may be transferred to
Persons who take delivery thereof in the form of a beneficial interest in
the same Restricted Global Note in accordance with the transfer
restrictions set forth in the Private Placement Legend; provided, however,
that prior to the expiration of the Restricted Period, transfers of
beneficial interests in the Regulation S Temporary Global Note may not be
made to a U.S. Person or for the account or benefit of a U.S. Person.
Beneficial interests in any Unrestricted Global Note may be transferred to
Persons who take delivery thereof in the form of a beneficial interest in
an Unrestricted Global Note. No written orders or instructions shall be
required to be delivered to the Registrar to effect the transfers described
in this Section 2.06(b)(1).
(2) All Other Transfers and Exchanges of Beneficial Interests in
Global Notes. In connection with all transfers and exchanges of beneficial
interests that are not
32
subject to Section 2.06(b)(1) above, the transferor of such beneficial
interest must deliver to the Registrar either:
(A) both:
(i) a written order from a Participant or an Indirect
Participant given to the Depositary in accordance with the Applicable
Procedures directing the Depositary to credit or cause to be credited
a beneficial interest in another Global Note in an amount equal to the
beneficial interest to be transferred or exchanged; and
(ii) instructions given in accordance with the Applicable
Procedures containing information regarding the Participant account to
be credited with such increase; or
(B) both:
(i) a written order from a Participant or an Indirect
Participant given to the Depositary in accordance with the Applicable
Procedures directing the Depositary to cause to be issued a Definitive
Note in an amount equal to the beneficial interest to be transferred
or exchanged; and
(ii) instructions given by the Depositary to the Registrar
containing information regarding the Person in whose name such
Definitive Note shall be registered to effect the transfer or exchange
referred to in Section 2.06(b)(1) above; provided that in no event
shall Definitive Notes be issued upon the transfer or exchange of
beneficial interests in the Regulation S Temporary Global Note prior
to (A) the expiration of the Restricted Period and (B) the receipt by
the Registrar of any certificates required pursuant to Rule 903 under
the Securities Act.
Upon 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(i)
hereof.
(3) Transfer of Beneficial Interests to Another Restricted Global
Note. A beneficial interest in any Restricted Global Note may be
transferred to a Person who takes delivery thereof in the form of a
beneficial interest in another Restricted Global Note if the transfer
complies with the requirements of Section 2.06(b)(2) above and the
Registrar receives the following:
(A) if the transferee will take delivery in the form of a
beneficial interest in the 144A Global Note, then the transferor must
deliver a certificate in the form of Exhibit B hereto, including the
certifications in item (1) thereof;
(B) if the transferee will take delivery in the form of a
beneficial interest in the Regulation S Temporary Global Note or the
Regulation S
33
Permanent Global Note, then the transferor must deliver a certificate
in the form of Exhibit B hereto, including the certifications in item
(2) thereof; and
(C) if the transferee will take delivery in the form of a
beneficial interest in the IAI Global Note, then the transferor must
deliver a certificate in the form of Exhibit B hereto, including the
certifications, certificates and Opinion of Counsel required by item
(3)(a) thereof, if applicable.
(4) Transfer and Exchange of Beneficial Interests in a Restricted
Global Note for Beneficial Interests in an Unrestricted Global Note. A
beneficial interest in any Restricted Global Note may be exchanged by any
holder thereof for a beneficial interest in an Unrestricted Global Note or
transferred to a Person who takes delivery thereof in the form of a
beneficial interest in an Unrestricted Global Note if the exchange or
transfer complies with the requirements of Section 2.06(b)(2) above and the
Registrar receives the following:
(A) 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
(B) 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, 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 this clause (4) 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 this clause (4).
Beneficial interests in an Unrestricted Global Note cannot be
exchanged for, or transferred to Persons who take delivery thereof in the form
of, a beneficial interest in a Restricted Global Note.
(c) Transfer or Exchange of Beneficial Interests for Definitive
Notes.
(1) Beneficial Interests in Restricted Global Notes to Restricted
Definitive Notes. If any holder of a beneficial interest in a Restricted
Global Note proposes to exchange such beneficial interest for a Restricted
Definitive Note or to transfer such
34
beneficial interest to a Person who takes delivery thereof in the form of a
Restricted Definitive Note, then, upon receipt by the Registrar of the
following documentation:
(A) if the holder of such beneficial interest in a Restricted
Global Note proposes to exchange such beneficial interest for a
Restricted Definitive Note, a certificate from such holder in the form
of Exhibit C hereto, including the certifications in item (2)(a)
thereof;
(B) if such beneficial interest is being transferred to a QIB in
accordance with Rule 144A, a certificate to the effect set forth in
Exhibit B hereto, including the certifications in item (1) thereof;
(C) if such beneficial interest is being transferred to a
Non-U.S. Person in an offshore transaction in accordance with Rule 903
or Rule 904, a certificate to the effect set forth in Exhibit B
hereto, including the certifications in item (2) thereof;
(D) if such beneficial interest is being transferred pursuant to
an exemption from the registration requirements of the Securities Act
in accordance with Rule 144, a certificate to the effect set forth in
Exhibit B hereto, including the certifications in item (3)(b) 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)(a) 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)(c)
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)(d) thereof,
the Trustee shall cause the aggregate principal amount of the applicable
Global Note to be reduced accordingly pursuant to Section 2.06(i) hereof,
and the Company shall execute and the Trustee shall authenticate and
deliver to the Person designated in the instructions a Definitive Note in
the appropriate principal amount. Any Definitive Note issued in exchange
for a beneficial interest in a Restricted Global Note pursuant to this
Section 2.06(c) shall be registered in such name or names and in such
authorized denomination or denominations as the holder of such beneficial
interest shall instruct the Registrar through instructions from the
Depositary and the Participant or Indirect Participant. The Trustee shall
deliver such Definitive Notes to the Persons in whose names such Notes are
so registered. Any Definitive Note issued in exchange for a beneficial
interest in a Restricted Global Note pursuant to this Section 2.06(c)(1)
shall
35
bear the Private Placement Legend and shall be subject to all restrictions
on transfer contained therein.
(2) Beneficial Interests in Regulation S Temporary Global Note to
Definitive Notes. Notwithstanding Sections 2.06(c)(1)(A) and (C) hereof, a
beneficial interest in the Regulation S Temporary Global Note may not be
exchanged for a Definitive Note or transferred to a Person who takes
delivery thereof in the form of a Definitive Note prior to (A) the
expiration of the Restricted Period and (B) the receipt by the Registrar of
any certificates required pursuant to Rule 903(b)(3)(ii)(B) under the
Securities Act, except in the case of a transfer pursuant to an exemption
from the registration requirements of the Securities Act other than Rule
903 or Rule 904.
(3) Beneficial Interests in Restricted Global Notes to Unrestricted
Definitive Notes. A holder of a beneficial interest in a Restricted Global
Note may exchange such beneficial interest for an Unrestricted Definitive
Note or may transfer such beneficial interest to a Person who takes
delivery thereof in the form of an Unrestricted Definitive Note only if the
Registrar receives the following:
(A) if the holder of such beneficial interest in a Restricted
Global Note proposes to exchange such beneficial interest for an
Unrestricted Definitive Note, a certificate from such holder in the
form of Exhibit C hereto, including the certifications in item (1)(b)
thereof; or
(B) if the holder of such beneficial interest in a Restricted
Global Note proposes to transfer such beneficial interest to a Person
who shall take delivery thereof in the form of an Unrestricted
Definitive Note, a certificate from such holder in the form of Exhibit
B hereto, including the certifications in item (4) thereof;
and, if the Registrar so requests or if the Applicable Procedures so
require, an Opinion of Counsel in form reasonably acceptable to the
Registrar to the effect that such exchange or transfer is in compliance
with the Securities Act and that the restrictions on transfer contained
herein and in the Private Placement Legend are no longer required in order
to maintain compliance with the Securities Act.
(4) Beneficial Interests in Unrestricted Global Notes to Unrestricted
Definitive Notes. If any holder of a beneficial interest in an Unrestricted
Global Note proposes to exchange such beneficial interest for a Definitive
Note or to transfer such beneficial interest to a Person who takes delivery
thereof in the form of a Definitive Note, then, upon satisfaction of the
conditions set forth in Section 2.06(b)(2) hereof, the Trustee will cause
the aggregate principal amount of the applicable Unrestricted Global Note
to be reduced accordingly pursuant to Section 2.06(i) hereof, and the
Company will execute and the Trustee will authenticate and deliver to the
Person designated in the instructions a Definitive Note in the appropriate
principal amount. Any Definitive Note issued in exchange for a beneficial
interest pursuant to this Section 2.06(c)(4) will be registered in such
name or names and in such authorized denomination or denominations as the
holder of such beneficial interest requests through instructions to the
Registrar from or through the Depositary and the Participant or Indirect
Participant. The Trustee will deliver such Definitive Notes to the Persons
in whose names such Notes are so registered. Any
36
Definitive Note issued in exchange for a beneficial interest pursuant to
this Section 2.06(c)(4) will not bear the Private Placement Legend.
(d) Transfer and Exchange of Definitive Notes for Beneficial
Interests.
(1) Restricted Definitive Notes to Beneficial Interests in Restricted
Global Notes. If any Holder of a Restricted Definitive Note proposes to
exchange such Note for a beneficial interest in a Restricted Global Note or
to transfer such Restricted Definitive Notes to a Person who takes delivery
thereof in the form of a beneficial interest in a Restricted Global Note,
then, upon receipt by the Registrar of the following documentation:
(A) if the Holder of such Restricted Definitive Note proposes to
exchange such Note for a beneficial interest in a Restricted Global
Note, a certificate from such Holder in the form of Exhibit C hereto,
including the certifications in item (2)(b) thereof;
(B) if such Restricted Definitive Note is being transferred to a
QIB in accordance with Rule 144A, a certificate to the effect set
forth in Exhibit B hereto, including the certifications in item (1)
thereof;
(C) if such Restricted Definitive Note is being transferred to a
Non-U.S. Person in an offshore transaction in accordance with Rule 903
or Rule 904, a certificate to the effect set forth in Exhibit B
hereto, including the certifications in item (2) thereof;
(D) if such Restricted Definitive Note is being transferred
pursuant to an exemption from the registration requirements of the
Securities Act in accordance with Rule 144, a certificate to the
effect set forth in Exhibit B hereto, including the certifications in
item (3)(b) 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)(a) 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)(c) 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)(d) thereof,
the Trustee will cancel the Restricted Definitive Note, increase or cause
to be increased the aggregate principal amount of, in the case of clause
(A) above, the appropriate
37
Restricted Global Note, in the case of clause (B) above, the 144A Global
Note, in the case of clause (C) above, the Regulation S Global Note, and in
all other cases, the IAI Global Note.
(2) Restricted Definitive Notes to Beneficial Interests in
Unrestricted Global Notes. A Holder of a Restricted Definitive Note may
exchange such Note for a beneficial interest in an Unrestricted Global Note
or transfer such Restricted Definitive Note to a Person who takes delivery
thereof in the form of a beneficial interest in an Unrestricted Global Note
only if the Registrar receives the following:
(A) 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
(B) 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 clause (2), if the Registrar so
requests or if the Applicable Procedures so require, an Opinion of Counsel
in form reasonably acceptable to the Registrar to the effect that such
exchange or transfer is in compliance with the Securities Act and that the
restrictions on transfer contained herein and in the Private Placement
Legend are no longer required in order to maintain compliance with the
Securities Act.
Upon satisfaction of the conditions of any of the subparagraphs in
this Section 2.06(d)(2), the Trustee will cancel the Definitive Notes and
increase or cause to be increased the aggregate principal amount of the
Unrestricted Global Note.
(3) Unrestricted Definitive Notes to Beneficial Interests in
Unrestricted Global Notes. A Holder of an Unrestricted Definitive Note may
exchange such Note for a beneficial interest in an Unrestricted Global Note
or transfer such Definitive Notes to a Person who takes delivery thereof in
the form of a beneficial interest in an Unrestricted Global Note at any
time. Upon receipt of a request for such an exchange or transfer, the
Trustee will cancel the applicable Unrestricted Definitive Note and
increase or cause to be increased the aggregate principal amount of one of
the Unrestricted Global Notes.
If any such exchange or transfer from a Definitive Note to a
beneficial interest is effected pursuant to clause (2) above or this clause (3)
at a time when an Unrestricted Global Note has not yet been issued, the Company
will issue and, upon receipt of an Authentication Order in accordance with
Section 2.02 hereof, the Trustee will authenticate one or more Unrestricted
Global Notes in an aggregate principal amount equal to the principal amount of
Definitive Notes so transferred.
(e) Transfer and Exchange of Definitive Notes for Definitive Notes.
Upon request by a Holder of Definitive Notes and such Holder's compliance with
the provisions of this Section 2.06(e), the Registrar will register the transfer
or exchange of Definitive Notes. Prior to
38
such registration of transfer or exchange, the requesting Holder must present or
surrender to the Registrar the Definitive Notes duly endorsed or accompanied by
a written instruction of transfer in form satisfactory to the Registrar duly
executed by such Holder or by its attorney, duly authorized in writing. In
addition, the requesting Holder must provide any additional certifications,
documents and information, as applicable, required pursuant to the following
provisions of this Section 2.06(e).
(1) Restricted Definitive Notes to Restricted Definitive Notes. Any
Restricted Definitive Note may be transferred to and registered in the name
of Persons who take delivery thereof in the form of a Restricted Definitive
Note if the Registrar receives the following:
(A) if the transfer will be made pursuant to Rule 144A, then the
transferor must deliver a certificate in the form of Exhibit B hereto,
including the certifications in item (1) thereof;
(B) if the transfer will be made pursuant to Rule 903 or Rule
904, then the transferor must deliver a certificate in the form of
Exhibit B hereto, including the certifications in item (2) thereof;
and
(C) if the transfer will be made pursuant to any other exemption
from the registration requirements of the Securities Act, then the
transferor must deliver a certificate in the form of Exhibit B hereto,
including the certifications, certificates and Opinion of Counsel
required by item (3) thereof, if applicable.
(2) Restricted Definitive Notes to Unrestricted Definitive Notes. Any
Restricted Definitive Note may be exchanged by the Holder thereof for an
Unrestricted Definitive Note or transferred to a Person or Persons who take
delivery thereof in the form of an Unrestricted Definitive Note if the
Registrar receives the following:
(A) 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
(B) 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, if the Registrar so requests, an Opinion of Counsel in form reasonably
acceptable to the Registrar to the effect that such exchange or transfer is
in compliance with the Securities Act and that the restrictions on transfer
contained herein and in the Private Placement Legend are no longer required
in order to maintain compliance with the Securities Act.
(3) Unrestricted Definitive Notes to Unrestricted Definitive Notes. A
Holder of Unrestricted Definitive Notes may transfer such Notes to a Person
who takes delivery thereof in the form of an Unrestricted Definitive Note.
Upon receipt of a request to
39
register such a transfer, the Registrar shall register the Unrestricted
Definitive Notes pursuant to the instructions from the Holder thereof.
(f) [Intentionally Omitted]
(g) Legends. The following legends will appear on the face of all
Global Notes and Definitive Notes issued under this Indenture unless
specifically stated otherwise in the applicable provisions of this Indenture.
(1) Private Placement Legend.
(A) Except as permitted by subparagraph (B) below, each Global
Note and each Definitive Note (and all Notes issued in exchange
therefor or substitution thereof) shall bear the legend in
substantially the following form:
"THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE SECURITIES LAWS. NEITHER
THIS SECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE REOFFERED, SOLD,
ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE
ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT
SUBJECT TO, REGISTRATION.
THE HOLDER OF THIS SECURITY BY ITS ACCEPTANCE HEREOF (1) REPRESENTS
THAT (A) IT IS A "QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER
THE SECURITIES ACT) OR (B) IT IS A NON-U.S. PERSON AND IS ACQUIRING THIS
SECURITY IN AN OFFSHORE TRANSACTION WITHIN THE MEANING OF REGULATION S UNDER THE
SECURITIES ACT, AND (2) AGREES TO OFFER, SELL OR OTHERWISE TRANSFER SUCH
SECURITY, PRIOR TO THE DATE (THE "RESALE RESTRICTION TERMINATION DATE") WHICH IS
ONE YEAR AFTER THE LATER OF THE ORIGINAL ISSUE DATE HEREOF AND THE LAST DATE ON
WHICH THE ISSUER OR ANY AFFILIATE THEREOF WAS THE OWNER OF THIS SECURITY (OR ANY
PREDECESSOR OF SUCH SECURITY) ONLY (A) TO THE ISSUER OR ANY SUBSIDIARY THEREOF,
(B) PURSUANT TO A REGISTRATION STATEMENT WHICH HAS BEEN DECLARED EFFECTIVE UNDER
THE SECURITIES ACT, (C) FOR SO LONG AS THE SECURITIES ARE ELIGIBLE FOR RESALE
PURSUANT TO RULE 144A, TO A PERSON IT REASONABLY BELIEVES IS A "QUALIFIED
INSTITUTIONAL BUYER" AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT THAT
PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL
BUYER TO WHICH NOTICE IS GIVEN THAT THE TRANSFER IS BEING MADE IN RELIANCE ON
RULE 144A, (D) PURSUANT TO OFFERS AND SALES TO NON-U.S. PERSONS IN OFFSHORE
TRANSACTIONS WITHIN THE MEANING OF REGULATION S UNDER THE SECURITIES ACT, (E) TO
AN INSTITUTIONAL "ACCREDITED INVESTOR" WITHIN THE MEANING OF SUBPARAGRAPH
(A)(1), (2), (3) OR (7) OF RULE 501 UNDER THE SECURITIES ACT THAT IS ACQUIRING
THE SECURITY FOR ITS OWN ACCOUNT, OR FOR THE ACCOUNT OF SUCH AN INSTITUTIONAL
ACCREDITED INVESTOR, FOR INVESTMENT PURPOSES AND NOT WITH A VIEW TO, OR FOR
OFFER OR SALE IN CONNECTION WITH, ANY DISTRIBUTION IN VIOLATION OF THE
SECURITIES ACT, OR (F) PURSUANT TO
40
ANOTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES
ACT, SUBJECT TO THE ISSUER'S AND THE TRUSTEE'S, OR TRANSFER AGENT'S, AS
APPLICABLE, RIGHT PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER PURSUANT TO CLAUSES
(E) OR (F) TO REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATION
AND/OR OTHER INFORMATION SATISFACTORY TO EACH OF THEM, AND IN EACH OF THE
FOREGOING CASES, A CERTIFICATE OF TRANSFER IN THE FORM APPEARING ON THE OTHER
SIDE OF THIS SECURITY COMPLETED AND DELIVERED BY THE TRANSFEROR TO THE TRUSTEE
OR TRANSFER AGENT. THIS LEGEND WILL BE REMOVED UPON THE REQUEST OF THE HOLDER
AFTER THE RESALE RESTRICTION TERMINATION DATE."
(B) Notwithstanding the foregoing, any Global Note or Definitive
Note issued pursuant to subparagraphs (b)(4), (c)(3), (c)(4), (d)(2),
(d)(3), (e)(2) or (e)(3) of this Section 2.06 (and all Notes issued in
exchange therefor or substitution thereof) will not bear the Private
Placement Legend.
(2) Global Note Legend. Each Global Note will bear a legend in
substantially the following form:
"THIS GLOBAL NOTE IS HELD BY THE DEPOSITARY (AS DEFINED IN THE
INDENTURE GOVERNING THIS NOTE) OR ITS NOMINEE IN CUSTODY FOR THE BENEFIT OF THE
BENEFICIAL OWNERS HEREOF, AND IS NOT TRANSFERABLE TO ANY PERSON UNDER ANY
CIRCUMSTANCES EXCEPT THAT (1) THE TRUSTEE MAY MAKE SUCH NOTATIONS HEREON AS MAY
BE REQUIRED PURSUANT TO SECTION 2.06 OF THE INDENTURE, (2) THIS GLOBAL NOTE MAY
BE EXCHANGED IN WHOLE BUT NOT IN PART PURSUANT TO SECTION 2.06(a) OF THE
INDENTURE, (3) THIS GLOBAL NOTE MAY BE DELIVERED TO THE TRUSTEE FOR CANCELLATION
PURSUANT TO SECTION 2.11 OF THE INDENTURE AND (4) THIS GLOBAL NOTE MAY BE
TRANSFERRED TO A SUCCESSOR DEPOSITARY WITH THE PRIOR WRITTEN CONSENT OF THE
COMPANY.
UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR NOTES IN
DEFINITIVE FORM, THIS NOTE MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE
DEPOSITARY TO A NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO
THE DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY OR BY THE DEPOSITARY OR ANY
SUCH NOMINEE TO A SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR
DEPOSITARY. UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE
OF THE DEPOSITORY TRUST COMPANY (55 WATER STREET, NEW YORK, NEW YORK) ("DTC"),
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
41
INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN."
(3) Regulation S Temporary Global Note Legend. The Regulation S
Temporary Global Note will bear a legend in substantially the following
form:
"THE RIGHTS ATTACHING TO THIS REGULATION S TEMPORARY GLOBAL NOTE, AND
THE CONDITIONS AND PROCEDURES GOVERNING ITS EXCHANGE FOR DEFINITIVE 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) Applicable Procedures for Removal of Legends.
(1) After one year has elapsed following (A) the Issue Date or (B)
if the Company has issued any Additional Notes with the same terms and the
same CUSIP number as the Notes pursuant to this Indenture within one year
following the date of original issuance of the Notes, the date of original
issuance of such Additional Notes, Restricted Definitive Notes and
beneficial interests in Restricted Global Notes may be exchanged for
beneficial interests in an Unrestricted Global Note. Any Restricted
Definitive Note or Restricted Global Note (or security issued in exchange
or substitution therefor) as to which such restrictions on transfer shall
have expired in accordance with their terms may, upon surrender of such
Restricted Definitive Note or Restricted Global Note for exchange to the
Registrar in accordance with the provisions of this Article II, be
exchanged for a new Note or Notes, of like tenor and aggregate principal
amount, which shall not bear the Private Placement Legend. To accomplish
the exchange of beneficial interests in any Restricted Global Note for
beneficial interests in an Unrestricted Global Note following the
expiration referred to above, the Company may, without requiring any action
or consent by the Holder of such Restricted Global Note:
(A) instruct the Trustee in writing to remove the Private
Placement Legend from the Notes, and upon such instruction the Private
Placement Legend shall be deemed removed from any Notes without
further action on the part of Holders;
(B) notify the Holders that the Private Placement Legend has
been removed or deemed removed; and
(C) instruct the Depositary to change the CUSIP number for the
Notes to the unrestricted CUSIP number for the Notes;
provided that, if the Trustee so requests, the Company will deliver an
Opinion of Counsel in form reasonably acceptable to the Trustee to the
effect that such exchange 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.
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(2) Notwithstanding any provision of this Section 2.06(h) to the
contrary, in the event that Rule 144 is amended to change the one-year
holding period thereunder (or the corresponding period under any successor
rule), (i) each reference in this Section 2.06(h) to "one year" shall be
deemed for all purposes hereof to be references to such changed period, and
(ii) all corresponding references in the Notes shall be deemed for all
purposes hereof to be references to such changed period, provided that such
changes shall not become effective if they are otherwise prohibited by, or
would otherwise cause a violation of, the then-applicable federal
securities laws. This Section 2.06(h)(2) shall apply to successive
amendments to Rule 144 (or any successor rule) changing the holding period
thereunder.
(i) Cancellation and/or Adjustment of Global Notes. At such time as
all beneficial interests in a particular Global Note have been exchanged for
Definitive Notes or a particular Global Note has been redeemed, repurchased or
canceled in whole and not in part, each such Global Note will be returned to or
retained and canceled by the Trustee in accordance with Section 2.11 hereof. At
any time prior to such cancellation, if any beneficial interest in a Global Note
is exchanged for or transferred to a Person who will take delivery thereof in
the form of a beneficial interest in another Global Note or for Definitive
Notes, the principal amount of Notes represented by such Global Note will be
reduced accordingly and an endorsement will be made on such Global Note by the
Trustee or by the Depositary at the direction of the Trustee to reflect such
reduction; and if the beneficial interest is being exchanged for or transferred
to a Person who will take delivery thereof in the form of a beneficial interest
in another Global Note, such other Global Note will be increased accordingly and
an endorsement will be made on such Global Note by the Trustee or by the
Depositary at the direction of the Trustee to reflect such increase.
(j) General Provisions Relating to Transfers and Exchanges.
(1) To permit registrations of transfers and exchanges, the Company
will execute and the Trustee will authenticate Global Notes and Definitive Notes
upon receipt of an Authentication Order in accordance with Section 2.02 hereof
or at the Registrar's request.
(2) No service charge will be made to a holder of a beneficial
interest in a Global Note or to a Holder of a Definitive Note for any
registration of transfer or exchange, but the Company may require payment of a
sum sufficient to cover any transfer tax or similar governmental charge payable
in connection therewith (other than any such transfer taxes or similar
governmental charge payable upon exchange or transfer pursuant to Sections 2.10,
3.06, 3.09, 4.10, 4.15 and 9.05 hereof).
(3) The Registrar will not be required to register the transfer of or
exchange of any Note selected for redemption in whole or in part, except the
unredeemed portion of any Note being redeemed in part.
(4) All Global Notes and Definitive Notes issued upon any
registration of transfer or exchange of Global Notes or Definitive Notes will be
the valid obligations of the Company, evidencing the same debt, and entitled to
the same benefits under this Indenture, as the Global Notes or Definitive Notes
surrendered upon such registration of transfer or exchange.
(5) Neither the Registrar nor the Company will be required:
43
(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 selected
for redemption in whole or in part, except the unredeemed portion of
any Note being redeemed in part; or
(C) to register the transfer of or to exchange a Note between a
record date and the next succeeding interest payment date.
(6) Prior to due presentment for the registration of a transfer of
any Note, the Trustee, any Agent and the Company may deem and treat the Person
in whose name any Note is registered as the absolute owner of such Note for the
purpose of receiving payment of principal of and interest on such Notes and for
all other purposes, and none of the Trustee, any Agent or the Company shall be
affected by notice to the contrary.
(7) The Trustee will authenticate Global Notes and Definitive Notes
in accordance with the provisions of Section 2.02 hereof.
(8) All certifications, certificates and Opinions of Counsel required
to be submitted to the Registrar pursuant to this Section 2.06 to effect a
registration of transfer or exchange may be submitted by facsimile or email,
with originals thereof to be delivered to the Registrar thereafter in a timely
manner.
Section 2.07 Replacement Notes. If any mutilated Note is surrendered
to the Trustee or the Company and the Trustee receives evidence to its
satisfaction of the destruction, loss or theft of any Note, the Company will
issue and the Trustee, upon receipt of an Authentication Order, will
authenticate a replacement Note if the Trustee's requirements are met. If
required by the Trustee or the Company, an indemnity bond must be supplied by
the Holder that is sufficient in the judgment of the Trustee and the Company to
protect the Company, the Trustee, any Agent and any authenticating agent from
any loss or liability 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 a contractual obligation of the Company and
will be entitled to all of the benefits of this Indenture equally and
proportionately with all other Notes duly issued hereunder.
Section 2.08 Outstanding Notes. The Notes outstanding at any time are
all the Notes authenticated by the Trustee except for those canceled by it,
those delivered to it for cancellation, those reductions in the interest in a
Global Note effected by the Trustee in accordance with the provisions hereof,
and those described in this Section 2.08 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(a) hereof.
44
If a Note is replaced pursuant to Section 2.07 hereof, it ceases to be
outstanding unless a Responsible Officer of the Trustee receives proof
satisfactory to it that the replaced Note is held by a protected purchaser.
If the principal amount of any Note is considered paid under Section
4.01 hereof, it ceases to be outstanding and interest on it ceases to accrue.
If the Paying Agent (other than the Company, a Subsidiary or an
Affiliate of any thereof) holds, on a redemption date or maturity date, money
sufficient to pay Notes payable on that date, then on and after that date such
Notes will be deemed to be no longer outstanding and will cease to accrue
interest.
Section 2.09 Treasury Notes. In determining whether the Holders of
the required principal amount of Notes have concurred in any direction, waiver
or consent, Notes owned by the Company or any Guarantor, or by any Person
directly or indirectly controlling or controlled by or under direct or indirect
common control with the Company or any Guarantor, will be considered as though
not outstanding, except that for the purposes of determining whether the Trustee
will be protected in relying on any such direction, waiver or consent, only
Notes that a Responsible Officer of the Trustee knows are so owned will be so
disregarded.
Section 2.10 Temporary Notes. Until certificates representing Notes
are ready for delivery, the Company may prepare and the Trustee, upon receipt of
an Authentication Order, will authenticate temporary Notes. Temporary Notes will
be substantially in the form of certificated Notes but may have variations that
the Company considers appropriate for temporary Notes and as may be reasonably
acceptable to the Trustee. Without unreasonable delay, the Company will prepare
and the Trustee will authenticate definitive Notes in exchange for temporary
Notes.
Holders of temporary Notes will be entitled to all of the benefits of
this Indenture.
Section 2.11 Cancellation. The Company at any time may deliver Notes
to the Trustee for cancellation. The Registrar and Paying Agent will forward to
the Trustee any Notes surrendered to them for registration of transfer, exchange
or payment. The Trustee and no one else will cancel all Notes surrendered for
registration of transfer, exchange, payment, replacement or cancellation and
will destroy canceled Notes (subject to the record retention requirement of the
Exchange Act). Certification of the destruction of all canceled Notes will be
delivered to the Company. The Company may not issue new Notes to replace Notes
that it has paid or that have been delivered to the Trustee for cancellation.
Section 2.12 Defaulted Interest. If the Company defaults in a payment
of interest on the Notes, it will pay the defaulted interest in any lawful
manner plus, to the extent lawful, interest payable on the defaulted interest,
to the Persons who are Holders on a subsequent special record date, in each case
at the rate provided in the Notes and in Section 4.01 hereof. The Company will
notify the Trustee in writing of the amount of defaulted interest proposed to be
paid on each Note and the date of the proposed payment. The Company will fix or
cause to be fixed each such special record date and payment date; provided that
no such special record date may be less than 10 days prior to the related
payment date for such defaulted interest. At least 15 days before the special
record date, the Company (or, upon the written request of the Company, the
Trustee in the name and at the expense of the Company) will mail or cause to be
mailed to
45
Holders a notice that states the special record date, the related payment date
and the amount of such interest to be paid.
Section 2.13 Issuance of Additional Notes. The Company shall be
entitled, from time to time, subject to its compliance with Sections 4.09 and
4.12 hereof, without consent of the Holders, to issue Additional Notes under
this Indenture with identical terms as the Initial Notes other than with respect
to (i) the date of issuance, (ii) the issue price, (iii) the amount of interest
payable on the first interest payment date and (iv) any adjustments in order to
conform to and ensure compliance with the Securities Act (or other applicable
securities laws) or to reflect differences with respect to original issue
discount for U.S. federal income tax purposes. The Initial Notes and any
Additional Notes shall be treated as a single class for all purposes under this
Indenture.
With respect to any Additional Notes, the Company shall set forth in
an Officers' Certificate pursuant to a resolution of the Board of Directors of
the Company, copies of which shall be delivered to the Trustee, the following
information:
(1) the aggregate principal amount of such Additional Notes to be
authenticated and delivered pursuant to this Indenture; and
(2) the issue price, the issue date and the CUSIP number of such
Additional Notes and the date on which interest on such Additional Notes
shall begin to accrue.
ARTICLE III
Redemption and Prepayment
Section 3.01 Notices to Trustee. If the Company elects to redeem
Notes pursuant to the optional redemption provisions of Section 3.07 hereof, it
must furnish to the Trustee, at least 30 days but not more than 60 days before a
redemption date, an Officers' Certificate setting forth:
(1) the clause of this Indenture pursuant to which the redemption
shall occur;
(2) the redemption date;
(3) the principal amount of Notes to be redeemed; and
(4) the redemption price.
Section 3.02 Selection of Notes to Be Redeemed or Purchased. If less
than all of the Notes are to be redeemed or purchased in an offer to purchase at
any time, the Trustee will select Notes for redemption or purchase on a pro rata
basis except:
(1) if the Notes are listed on any national securities exchange, in
compliance with the requirements of the principal national securities
exchange on which the Notes are listed; or
(2) if otherwise required by law.
46
In the event of partial redemption, the particular Notes to be
redeemed or purchased will be selected, unless otherwise provided herein, not
less than 30 nor more than 60 days prior to the redemption or purchase date by
the Trustee from the outstanding Notes not previously called for redemption or
purchase.
The Trustee will promptly notify the Company in writing of the Notes
selected for redemption or purchase and, in the case of any Note selected for
partial redemption or purchase, the principal amount thereof to be redeemed or
purchased. Notes and portions of Notes selected will be in minimum amounts of
$2,000 or whole multiples of $1,000 in excess thereof; except that if all of the
Notes of a Holder are to be redeemed or purchased, the entire outstanding amount
of Notes held by such Holder, even if not a multiple of $1,000, shall be
redeemed or purchased. Except as provided in the preceding sentence, provisions
of this Indenture that apply to Notes called for redemption or purchase also
apply to portions of Notes called for redemption or purchase.
Section 3.03 Notice of Redemption. Subject to the provisions of
Section 3.09 hereof, at least 30 days but not more than 60 days before a
redemption date, the Company will mail or cause to be mailed, by first class
mail, a notice of redemption to each Holder whose Notes are to be redeemed at
its registered address, except that redemption notices may be mailed more than
60 days prior to a redemption date if the notice is issued in connection with a
defeasance of the Notes or a satisfaction and discharge of this Indenture
pursuant to Articles VIII or XI hereof.
The notice will identify the Notes to be redeemed and will state:
(1) the redemption date;
(2) the redemption price;
(3) if any Note is being redeemed in part, the portion of the
principal amount of such Note to be redeemed and that, after the redemption date
upon surrender of such Note, a new Note or Notes in principal amount equal to
the unredeemed portion will be issued upon cancellation of the original Note;
(4) the name and address of the Paying Agent;
(5) that Notes called for redemption must be surrendered to the
Paying Agent to collect the redemption price and the CUSIP numbers for such
Notes;
(6) that, unless the Company defaults in making such redemption
payment, interest on Notes called for redemption ceases to accrue on and after
the redemption date;
(7) the paragraph of the Notes and/or Section of this Indenture
pursuant to which the Notes called for redemption are being redeemed; and
(8) that no representation is made as to the correctness or accuracy
of the CUSIP number, if any, listed in such notice or printed on the Notes.
47
At the Company's request, the Trustee will give the notice of
redemption in the Company's name and at its expense; provided, however, that the
Company has delivered to the Trustee, at least 45 days prior to the redemption
date, an Officers' Certificate requesting that the Trustee give such notice,
which shall include a form of the notice setting forth the information to be
stated in such notice as provided in the preceding paragraph.
Section 3.04 Effect of Notice of Redemption. Once notice of
redemption is mailed in accordance with Section 3.03 hereof, Notes called for
redemption become irrevocably due and payable on the redemption date at the
redemption price. A notice of redemption may not be conditional.
Section 3.05 Deposit of Redemption or Purchase Price. Prior to 11:00
a.m. New York City time on the redemption or purchase date, the Company will
deposit with the Trustee or with the Paying Agent money sufficient to pay the
redemption or purchase price of and accrued interest on all Notes to be redeemed
or purchased on that date. The Trustee or the Paying Agent will promptly return
to the Company any money deposited with the Trustee or the Paying Agent by the
Company in excess of the amounts necessary to pay the redemption or purchase
price of, and accrued interest on, all Notes to be redeemed or purchased.
If the Company complies with the provisions of the preceding
paragraph, on and after the redemption or purchase date, interest will cease to
accrue on the Notes or the portions of Notes called for redemption or purchase.
If a Note is redeemed or purchased on or after an interest record date but on or
prior to the related interest payment date, then any accrued and unpaid interest
shall be paid to the Person in whose name such Note was registered at the close
of business on such record date. If any Note called for redemption or purchase
is not so paid upon surrender for redemption or purchase because of the failure
of the Company to comply with the preceding paragraph, interest shall be paid on
the unpaid principal, from the redemption or purchase date until such principal
is paid, and to the extent lawful on any interest not paid on such unpaid
principal, in each case at the rate provided in the Notes and in Section 4.01
hereof.
Section 3.06 Notes Redeemed or Purchased in Part. Upon surrender and
cancellation of a Note that is redeemed or purchased in part, the Company will
issue and, upon receipt of an Authentication Order, the Trustee will
authenticate for the Holder at the expense of the Company a new Note equal in
principal amount to the unredeemed or unpurchased portion of the Note
surrendered.
Section 3.07 Optional Redemption.
(a) The Company may on any one or more occasions on or prior to
February 7, 2013 redeem up to 35% of the aggregate principal amount of Notes
issued under this Indenture, upon not less than 30 nor more than 60 days' prior
notice, at a redemption price of 110.50% of the principal amount thereof, plus
accrued and unpaid interest to the redemption date (subject to the rights of
Holders of Notes on the relevant record date to receive interest due on the
relevant interest payment date) with the net cash proceeds of one or more Equity
Offerings; provided that:
(1) at least 65% of the aggregate principal amount of Notes
originally issued under this Indenture (excluding Notes held by the Company
and its Subsidiaries) remains outstanding immediately after the occurrence
of such redemption; and
48
(2) the redemption occurs within 90 days of the date of the closing
of such Equity Offering.
(b) On or after February 8, 2013, the Company may redeem the Notes,
in whole or in part, upon not less than 30 nor more than 60 days' prior notice,
at the redemption prices (expressed as percentages of principal amount) set
forth below, plus accrued and unpaid interest to the applicable redemption date,
if redeemed during the twelve-month period beginning on February 8 of the years
indicated below (subject to the rights of Holders of Notes on the relevant
record date to receive interest due on the relevant interest payment date):
Year Percentage
----------------------------------------------------------------- ------------
2013 105.25%
2014 and thereafter 100.00%
(c) Any redemption pursuant to this Section 3.07 shall be made
pursuant to the provisions of Sections 3.01 through 3.06 hereof.
Section 3.08 Mandatory Redemption. The Company is not required to
make mandatory redemption or sinking fund payments with respect to the Notes.
Section 3.09 Offer to Purchase by Application of Excess Proceeds. In
the event that, pursuant to Section 4.10 hereof, the Company is required to
commence an offer to all Holders to purchase Notes (an "Asset Sale Offer"), it
will follow the procedures specified below.
The Asset Sale Offer shall be made to all Holders of Notes and all
holders of Pari Passu Indebtedness (other than RCF/Hedging Obligations)
containing provisions similar to those set forth in this Indenture with respect
to offers to purchase or redeem with the proceeds of sales of assets. The Asset
Sale Offer will remain open for a period of at least 20 Business Days following
its commencement and not more than 30 Business Days, except to the extent that a
longer period is required by applicable law (the "Offer Period"). No later than
three Business Days after the termination of the Offer Period (the "Purchase
Date"), the Company will apply all Excess Proceeds (the "Offer Amount") to the
purchase of Notes and such other Pari Passu Indebtedness (on a pro rata basis,
if applicable) or, if less than the Offer Amount has been tendered, all Notes
and other Indebtedness tendered in response to the Asset Sale Offer. Payment for
any Notes so purchased will be made in the same manner as interest payments are
made.
If the Purchase Date is on or after an interest record date and on or
before the related interest payment date, any accrued and unpaid interest will
be paid to the Person in whose name a Note is registered at the close of
business on such record date, and no additional interest will be payable to
Holders who tender Notes pursuant to the Asset Sale Offer.
49
Upon the commencement of an Asset Sale Offer, the Company will send,
by first class mail, a notice to the Trustee and each of the Holders, with a
copy to the Trustee. The notice will contain all instructions and materials
necessary to enable such Holders to tender Notes pursuant to the Asset Sale
Offer. The notice, which will govern the terms of the Asset Sale Offer, will
state:
(1) that the Asset Sale Offer is being made pursuant to this Section
3.09 and Section 4.10 hereof and the length of time the Asset Sale Offer will
remain open;
(2) the Offer Amount, the purchase price and the Purchase Date;
(3) that any Note not tendered or accepted for payment will continue
to accrue interest;
(4) that, unless the Company defaults in making such payment, any
Note accepted for payment pursuant to the Asset Sale Offer will cease to accrue
interest after the Purchase Date;
(5) that Holders electing to have a Note purchased pursuant to an
Asset Sale Offer may elect to have Notes purchased in minimum principal amounts
of $2,000 and integral multiples of $1,000 in excess thereof;
(6) that Holders electing to have Notes purchased pursuant to any
Asset Sale Offer will be required to surrender the Note, with the form entitled
"Option of Holder to Elect Purchase" attached to the Notes completed, or
transfer by book-entry transfer, to the Company, a Depositary, if appointed by
the Company, or a Paying Agent at the address specified in the notice at least
three days before the Purchase Date;
(7) that Holders will be entitled to withdraw their election if the
Company, the Depositary or the Paying Agent, as the case may be, receives, not
later than the expiration of the Offer Period, a telegram, telex, facsimile
transmission or letter setting forth the name of the Holder, the principal
amount of the Note the Holder delivered for purchase and a statement that such
Holder is withdrawing his election to have such Note purchased;
(8) that, if the aggregate principal amount of Notes and other Pari
Passu Indebtedness surrendered by holders thereof exceeds the Offer Amount, the
Trustee will select the Notes and other Pari Passu Indebtedness to be purchased
on a pro rata basis based on the principal amount of Notes and such other Pari
Passu Indebtedness surrendered (with such adjustments as may be deemed
appropriate by the Trustee so that only Notes in denominations of $1,000, or
integral multiples thereof, will be purchased); and
(9) that Holders whose Notes were purchased only in part will be
issued new Notes equal in principal amount to the unpurchased portion of the
Notes surrendered (or transferred by book-entry transfer).
On or before the Purchase Date, the Company will, to the extent
lawful, accept for payment, on a pro rata basis to the extent necessary, the
Offer Amount of Notes or portions thereof tendered pursuant to the Asset Sale
Offer, or if less than the Offer Amount has been tendered, all Notes tendered,
and will deliver or cause to be delivered to the Trustee the Notes
50
properly accepted together with an Officers' Certificate stating that such Notes
or portions thereof were accepted for payment by the Company in accordance with
the terms of this Section 3.09. The Company, the Depositary or the Paying Agent,
as the case may be, will promptly (but in any case not later than five days
after the Purchase Date) mail or deliver to each tendering Holder an amount
equal to the purchase price of the Notes tendered by such Holder and accepted by
the Company for purchase, and the Company will promptly issue a new Note, and
the Trustee, upon written request from the Company, will authenticate and mail
or deliver (or cause to be transferred by book entry) such new Note to such
Holder, in a principal amount equal to any unpurchased portion of the Note
surrendered. Any Note not so accepted shall be promptly mailed or delivered by
the Company to the Holder thereof. The Company will publicly announce the
results of the Asset Sale Offer on the Purchase Date.
Other than as specifically provided in this Section 3.09, any purchase
pursuant to this Section 3.09 shall be made pursuant to the provisions of
Sections 3.01 through 3.06 hereof.
ARTICLE IV
Covenants
Section 4.01 Payment of Notes. The Company will 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 will be considered paid on the date due if the Paying Agent, if other
than the Company or a Subsidiary thereof, holds as of 12:00 p.m. New York City
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.
Such Paying Agent shall return to the Company promptly, and in any
event, no later than two Business Days following the date of payment, any money
(including accrued interest) that exceeds such amount of principal, premium, if
any, and interest paid on the Notes. 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.
The Company will pay interest (including post-petition interest in any
proceeding under any Bankruptcy Law) on overdue principal at the rate equal to
1% per annum in excess of the then applicable interest rate on the Notes to the
extent lawful; it will pay interest (including post-petition interest in any
proceeding under any Bankruptcy Law) on overdue installments of interest
(without regard to any applicable grace period) at the same rate to the extent
lawful.
Interest will be computed on the basis of a 360-day year comprised of
twelve 30-day months.
Section 4.02 Maintenance of Office or Agency. The Company will
maintain in the Borough of Manhattan, the City of New York, an office or agency
(which may be an office of the Trustee or an affiliate of the Trustee, Registrar
or co-registrar) where Notes may be surrendered for registration of transfer or
for exchange and where notices and demands to or upon the Company in respect of
the Notes and this Indenture may be served. The Company will give prompt written
notice to the Trustee of the location, and any change in the location, of such
office or agency. If at any time the Company fails to maintain any such required
office or
51
agency or fails to furnish the Trustee with the address thereof, such
presentations, surrenders, notices and demands may be made or served at the
Corporate Trust Office of the Trustee.
The Company may also from time to time designate one or more other
offices or agencies where the Notes may be presented or surrendered for any or
all such purposes and may from time to time rescind such designations; provided,
however, that no such designation or rescission will in any manner relieve the
Company of its obligation to maintain an office or agency in the Borough of
Manhattan, the City of New York for such purposes. The Company will give prompt
written notice to the Trustee of any such designation or rescission and of any
change in the location of any such other office or agency.
The Company hereby designates the Corporate Trust Office of the
Trustee as one such office or agency of the Company in accordance with Section
2.03 hereof.
Section 4.03 Reports.
(a) Whether or not required by the rules and regulations of the SEC,
so long as any Notes are outstanding, the Company will furnish to the Trustee
and the Holders of Notes, or cause the Trustee to furnish to the Holders of
Notes, within the time periods specified in the rules and regulations of the
SEC:
(1) all quarterly and annual reports that would be required to be
filed with the SEC on Forms 10-Q and 10-K if the Parent Entity were
required to file such reports; and
(2) all current reports that would be required to be filed with or
furnished to the SEC on Form 8-K if the Parent Entity were required to file
or furnish such reports.
All such reports will be prepared in all material respects in
accordance with all of the rules and regulations applicable to such reports.
Each annual report on Form 10-K will include a report on the Company's
consolidated financial statements by the Company's certified independent
accountants. In addition, the Company will file or furnish a copy of each of the
reports referred to in clauses (1) and (2) above with or to the SEC for public
availability within the time periods specified in the rules and regulations
applicable to such reports (unless the SEC will not accept such a filing) and
will post the reports on its website within those time periods. The availability
of the reports referred to in clauses (1) and (2) on the SEC's EDGAR service or
on the Company's website shall be deemed to satisfy the Company's delivery
obligation hereunder; provided that, the Company will notify (including, without
limitation, by email or facsimile) the Trustee of such availability of the
reports referred to in clause (1) within ten Business Days after the date such
reports are so available, which notification shall include, if applicable, any
access instructions or password necessary to access such reports.
If, at any time, the Company is no longer subject to the periodic
reporting requirements of the Exchange Act for any reason, the Company will
nevertheless continue filing the reports specified in clause (a) of this Section
4.03 with the SEC within the time periods specified in clause (a) of this
Section 4.03 unless the SEC will not accept such a filing. The Company agrees
that it will not take any action for the purpose of causing the SEC not to
accept any such filings. If, notwithstanding the foregoing, the SEC will not
accept the Company's filings for any reason, the Company will post the reports
referred to in the preceding paragraph
52
on its website within the time periods that would apply if the Company were
required to file those reports with the SEC.
(b) If the Company has designated any of its Subsidiaries as
Unrestricted Subsidiaries, then the quarterly and annual financial information
required by clause (a) of this Section 4.03 will include a reasonably detailed
presentation, either on the face of the financial statements or in the footnotes
thereto, and in Management's Discussion and Analysis of Financial Condition and
Results of Operations, of the financial condition and results of operations of
the Company and its Restricted Subsidiaries separate from the financial
condition and results of operations of the Unrestricted Subsidiaries of the
Company.
(c) For so long as any Notes remain outstanding, if at any time they
are not required to file with the SEC the reports required by clauses (a) and
(b) of this Section 4.03, the Company and the Guarantors will furnish to the
Holders and to securities analysts and prospective investors, upon their
request, the information required to be delivered pursuant to Rule 144A(d)(4)
under the Securities Act.
Section 4.04 Compliance Certificate.
(a) The Company and each Guarantor (to the extent that such Guarantor
is so required under the TIA) shall deliver to the Trustee, within 90 days after
the end of each fiscal year, an Officers' Certificate stating that a review of
the activities of the Company and its Subsidiaries during the preceding fiscal
year has been made under the supervision of the signing Officers with a view to
determining whether the Company has complied with 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 complied
with each and every covenant contained in this Indenture applicable to it 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 has
occurred, describing all such Defaults or Events of Default of which he or she
may have knowledge and what action the Company is taking or proposes to take
with respect thereto) and that to the best of his or her knowledge no event has
occurred and remains in existence by reason of which payments on account of the
principal of or interest, if any, on the Notes is prohibited or if such event
has occurred, a description of the event and what action the Company is taking
or proposes to take with respect thereto.
(b) So long as not contrary to the then current recommendations of the
American Institute of Certified Public Accountants, the year-end financial
statements delivered pursuant to Section 4.03 above shall be accompanied by a
written statement of the Company's independent public accountants (who shall be
a firm of established national reputation) that in making the examination
necessary for certification of such financial statements, nothing has come to
their attention that would lead them to believe that the Company has violated
any provisions of Article IV or Article V 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 and that
such certification may be limited by such accountants to accounting matters.
(c) So long as any of the Notes are outstanding, the Company will
deliver to the Trustee, forthwith upon any Officer becoming aware of any Default
or Event of Default, an
53
Officers' Certificate specifying such Default or Event of Default and what
action the Company is taking or proposes to take with respect thereto.
Section 4.05 Taxes. The Company will pay, and will cause each of its
Subsidiaries to pay, prior to delinquency, all material taxes, assessments, and
governmental levies except such as are contested in good faith and by
appropriate negotiations or 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. Each of the Company and
the Guarantors covenants (to the extent that it may lawfully do so) that it will
not at any time insist upon, plead, or in any manner whatsoever claim or take
the benefit or advantage of, any stay, extension or usury law wherever enacted,
now or at any time hereafter in force, that may affect the covenants or the
performance of this Indenture; and each of the Company and the Guarantors (to
the extent that it may lawfully do so) hereby expressly waives all benefit or
advantage of any such law, and covenants that it will not, by resort to any such
law, hinder, delay or impede the execution of any power herein granted to the
Trustee, but will suffer and permit the execution of every such power as though
no such law has been enacted.
Section 4.07 Restricted Payments.
(a) The Parent Entity and the Company will not, and the Company will
not permit any of its Restricted Subsidiaries to, directly or indirectly:
(1) 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 the 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);
(2) 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
the Parent Entity;
(3) make any payment on or with respect to, or purchase, redeem,
defease or otherwise acquire or retire for value any Indebtedness of the
Company or any Guarantor that is contractually subordinated to the Notes or
to any Note Guarantee (excluding any intercompany Indebtedness between or
among the Company and any of its Restricted Subsidiaries), except a payment
of interest or principal at the Stated Maturity thereof; or
(4) make any Restricted Investment;
(all such payments and other actions set forth in these clauses (1) through (4)
above being collectively referred to as "Restricted Payments"),
54
unless, at the time of and after giving effect to such Restricted Payment:
(1) no Default or Event of Default has occurred and is continuing or
would occur as a consequence of such Restricted Payment;
(2) 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, satisfy the
Consolidated Fixed Charge Coverage Ratio test set forth in Section 4.09(a)
hereof; and
(3) such Restricted Payment, together with the aggregate amount of
all other Restricted Payments made by the Company and its Restricted
Subsidiaries since the Issue Date (excluding Restricted Payments made pursuant
to clauses (2), (3), (4), (5), (6), (7), (8), (9), (10), (11), (12), (13), (14)
and (15) of paragraph (b) of this Section 4.07), is less than the sum, without
duplication of:
(A) 50% of the Consolidated Net Income of the Parent Entity for the
period (taken as one accounting period) from the beginning of the fiscal
quarter during which the Issue Date occurred to the end of the Parent
Entity'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
(B) 100% of the aggregate net cash and non-cash proceeds received by
the Parent Entity (excluding any such proceeds received by the Parent
Entity from the ESOP after the Issue Date to the extent same constitute
proceeds of employee deferrals which are invested by the ESOP in common
equity of the Parent Entity) since the Issue Date 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 Disqualified Stock or 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
(C) to the extent that any Restricted Investment that was made after
the Issue Date is sold for cash or otherwise liquidated or repaid for cash,
the cash return of capital with respect to such Restricted Investment (less
the cost of Disposition, if any); plus
(D) to the extent that any Unrestricted Subsidiary of the Company
designated as such after the Issue Date is redesignated as a Restricted
Subsidiary after the Issue Date, the Fair Market Value of the Company's
Investment in such Subsidiary as of the date of such redesignation; plus
(E) 50% of any dividends received by the Company or a Restricted
Subsidiary of the Company that is a Guarantor after the Issue Date from an
Unrestricted Subsidiary of the Company, to the extent that such dividends
were not otherwise included in the Consolidated Net Income of the Company
for such period.
55
(b) So long as no Default has occurred and is continuing or would be
caused thereby (except in the case of Restricted Payments made pursuant to
clauses (14) and (15) of this Section 4.07(b)), the provisions of Section
4.07(a) hereof will not prohibit:
(1) the payment of any dividend or the consummation of any
irrevocable dividend within 60 days after the date of declaration of the
dividend or the giving of notice, as the case may be, if at the date of
declaration or notice the dividend or redemption payment would have
complied with the provisions of this Indenture;
(2) the making of any Restricted Payment in exchange for, or out of
the net cash proceeds of the substantially concurrent sale (other than to a
Subsidiary of the Company) of, Equity Interests of the Company or the
Parent Entity (other than Disqualified Stock) or from the substantially
concurrent contribution of common equity capital to the Company or the
Parent Entity; provided that the amount of any such net cash proceeds that
are utilized for any such Restricted Payment will be excluded from clause
(3)(B) of Section 4.07(a) hereof;
(3) the repurchase, redemption, defeasance or other acquisition or
retirement for value of Indebtedness of the Company or any Guarantor that
is contractually subordinated to the Notes or to any Note Guarantee with
the net cash proceeds from a substantially concurrent incurrence of
Permitted Refinancing Indebtedness;
(4) the payment of any dividend (or, in the case of any partnership
or limited liability company, any similar distribution) by a Restricted
Subsidiary of the Company to the holders of its Equity Interests on a pro
rata basis;
(5) the repurchase, redemption or other acquisition or retirement for
value of any Equity Interests of the Company or any Restricted Subsidiary
of the Company held by any current or former officer, director or employee
of the Company or any of its Restricted Subsidiaries pursuant to any equity
subscription agreement, stock option agreement, shareholders' agreement or
similar agreement; provided that the aggregate price paid for all such
repurchased, redeemed, acquired or retired Equity Interests may not exceed
$5.0 million in any twelve-month period;
(6) the repurchase of Equity Interests deemed to occur upon the
exercise of stock options to the extent such Equity Interests represent a
portion of the exercise price of those stock options;
(7) the declaration and payment of regularly scheduled or accrued
dividends to holders of any class or series of Disqualified Stock of the
Company or any Restricted Subsidiary of the Company issued on or after the
Issue Date in accordance with the Consolidated Fixed Charge Coverage Ratio
test set forth in Section 4.09(a) hereof;
(8) 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
56
exceed, without duplication, $1.0 million in the aggregate for payments to
the Parent Entity in any twelve-month period;
(9) issuances of Capital Stock by the Parent Entity to the ESOP in
satisfaction of the employer matching obligation under the ESOP;
(10) the repayment of intercompany debt, the incurrence of which was
permitted pursuant to Section 4.09 hereof;
(11) satisfaction of change of control and/or asset sale obligations
on subordinated obligations once the Company has fulfilled its obligations
relating to a Change of Control and/or Asset Sale under this Indenture;
(12) distributions by the Company to permit the Parent Entity to repay
intercompany loans so long as the amount of any such distribution is
simultaneously netted against amounts owing to the Company under such loans
and no cash is paid as a result of any such distribution;
(13) other Restricted Payments in an aggregate amount not to exceed
$20.0 million since the Issue Date;
(14) the Parent Entity may make Restricted Payments to satisfy its
obligations to repurchase its common stock pursuant to the ESOP
Documentation from accounts allocated to participants in the ESOP to the
extent representing hardship (with "hardship" being determined in
accordance with the Code and the ESOP Documentation) distributions to the
participants in the ESOP in accordance with the Code and the ESOP
Documentation; provided that the aggregate amount of all Restricted
Payments made pursuant to this clause (14) shall not exceed $2.0 million in
any fiscal year of the Parent Entity; and the Company and its Restricted
Subsidiaries may make Restricted Payments to (or on behalf of) the Parent
Entity to enable it to make Restricted Payments permitted above in this
clause (14); and
(15) the Parent Entity may make Restricted Payments to satisfy its
obligations to repurchase its common stock pursuant to the ESOP
Documentation from accounts allocated to participants in the ESOP upon (x)
the election of such participants to diversify a portion of the common
stock held in the account eligible for diversification under Section
401(a)(28) of the Code (or any relevant successor provision) and/or (y) the
death, disability, resignation, dismissal or permanent layoff of such
participants; so long as the aggregate amount of the Restricted Payments
then being made pursuant to this clause (15), when aggregated with all
other such Restricted Payments made pursuant to this clause (15) during the
same fiscal quarter and during the three immediately preceding fiscal
quarters, would not exceed $45.0 million; and the Company and its
Restricted Subsidiaries may make Restricted Payments to (or on behalf of)
the Parent Entity to enable it to make Restricted Payments permitted above
in this clause (15).
For purposes of determining compliance with this Section 4.07, in the
event that an item meets the criteria of more than one of the categories of
permitted Restricted Payments pursuant to clauses (1) through (15) above, or may
be made pursuant to Section 4.07(a) hereof or as a Permitted Investment, the
Company shall be permitted to classify such item on the date of
57
the respective payment and will only be required to include the amount in the
relevant clause or pursuant to the relevant defined term, although the Company
may divide and classify an item in more than one category in any manner that
complies with this Section 4.07.
The amount of all Restricted Payments (other than cash) will 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 will be determined by the Board of Directors of the Company
whose resolution with respect thereto shall be delivered to the Trustee. The
Board of Directors' determination must be based upon an opinion or appraisal
issued by an accounting, appraisal or investment banking firm of national
standing if the Fair Market Value exceeds $15.0 million.
Section 4.08 Dividend and Other Payment Restrictions Affecting
Subsidiaries.
(a) The Company will not, and will 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:
(1) 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;
(2) make loans or advances to the Company or any of its Restricted
Subsidiaries; or
(3) sell, lease or transfer any of its properties or assets to the
Company or any of its Restricted Subsidiaries.
(b) The restrictions in Section 4.08(a) hereof will not apply to
encumbrances or restrictions existing under or by reason of:
(1) agreements governing Existing Indebtedness, Credit Facilities and
the Second Lien Notes as in effect on the Issue Date and any amendments,
restatements, modifications, renewals, increases, supplements, refundings,
replacements or refinancings of those agreements; provided that the
amendments, restatements, modifications, renewals, increases, supplements,
refundings, replacements or refinancings are not materially more
restrictive, taken as a whole, with respect to such dividend and other
payment restrictions than those contained in those agreements on the Issue
Date;
(2) this Indenture, the Notes, the Note Guarantees, the Security
Documents and the Intercreditor Agreements;
(3) applicable law, rule, regulation or order, approval, license,
permit or similar restriction;
58
(4) 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;
(5) customary non-assignment provisions in contracts, leases and
licenses entered into in the ordinary course of business;
(6) purchase money obligations for property acquired in the ordinary
course of business and Capital Lease Obligations that impose restrictions
on the property purchased or leased of the nature described in clause (3)
of Section 4.08(a) hereof;
(7) any agreement for the Disposition of a Restricted Subsidiary that
restricts distributions by that Restricted Subsidiary pending the
Disposition;
(8) Permitted Refinancing Indebtedness; provided that the
restrictions contained in the agreements governing such Permitted
Refinancing Indebtedness are not materially more restrictive, taken as a
whole, than those contained in the agreements governing the Indebtedness
being refinanced;
(9) Liens permitted to be incurred under the provisions of Section
4.12 hereof;
(10) provisions limiting the Disposition or distribution of assets or
property in joint venture agreements, asset sale agreements, sale-leaseback
agreements, stock sale agreements and other similar agreements entered into
with the approval of the Company's Board of Directors, which limitation is
applicable only to the assets that are the subject of such agreements;
(11) restrictions on cash or other deposits or net worth imposed by
customers under contracts entered into in the ordinary course of business;
(12) any agreement governing Indebtedness incurred after the Issue
Date 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;
(13) encumbrances on property that exist at the time the property was
acquired by the Company or a Restricted Subsidiary, provided such
encumbrances were not contemplated as part of the acquisition thereof; or
(14) any encumbrances or restrictions imposed by amendments,
restatements, modifications, renewals, supplements, refundings, replacement
or refinancings of contracts, instruments or Obligations referred to in
clauses (1) through (13) above; provided that such amendments,
restatements, modifications, renewals, supplements, refundings, replacement
or refinancings are not materially more restrictive, taken as a
59
whole, with respect to such dividend or other payment restrictions than
those contained in the dividend or other payment restrictions prior to such
amendments, restatements, modifications, renewals, supplements, refundings,
replacement or refinancings.
Section 4.09 Incurrence of Indebtedness and Issuance of Preferred
Stock.
(a) The Parent Entity and the Company will not, and the Company will
not permit any of its Restricted Subsidiaries to, directly or indirectly,
create, incur, issue, assume, guarantee or otherwise become directly or
indirectly liable, contingently or otherwise, with respect to (collectively,
"incur") any Indebtedness (including Acquired Debt), and the Company will not
and will not permit the Parent Entity to issue any Disqualified Stock and the
Parent Entity and the Company will not permit any of its Restricted 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 Guarantors may incur Indebtedness or issue preferred stock, if at the time
(the "Calculation Time") on which such additional Indebtedness is incurred or
such Disqualified Stock or such preferred stock is issued, as the case may be,
the Consolidated Fixed Charge Coverage Ratio of the Parent Entity at the
Calculation Time would have been no less than 2.25 to 1.00 determined on a pro
forma basis (including a pro forma application of the net proceeds therefrom),
as if the additional Indebtedness had been incurred or the Disqualified Stock or
preferred stock had been issued, as the case may be, at the beginning of the
Parent Entity's most recently ended four fiscal quarters for which internal
financial statements are available immediately preceding the Calculation Time.
(b) The provisions of Section 4.09(a) hereof will not prohibit the
incurrence of any of the following items of Indebtedness (collectively,
"Permitted Debt"):
(1) the incurrence by the Company and any Guarantor of Indebtedness
and letters of credit under Credit Facilities in an aggregate principal
amount at any one time outstanding under this clause (1) (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 the greater of (a) $125.0 million and (b) 75% of
the net book value of the inventory and 85% of the net book value of the
accounts receivables of the Company and the Guarantors determined on a
consolidated basis;
(2) the incurrence by the Parent Entity, the Company and its
Restricted Subsidiaries of the Existing Indebtedness;
(3) the incurrence by the Company and the Guarantors of Indebtedness
represented by the Initial Notes and the related Note Guarantees;
(4) 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 design, construction, installation or improvement of property, plant or
equipment used in the business of the Company or any of its Restricted
Subsidiaries, in each case incurred no later than 180 days after the date
of such acquisition or the date of completion of such construction,
installation or improvement, in an aggregate principal amount, including
all Permitted Refinancing Indebtedness incurred to renew, refund,
refinance, replace, defease or discharge any Indebtedness incurred
60
pursuant to this clause (4), not to exceed the greater of $25.0 million and
3.0% of Consolidated Tangible Assets at any time outstanding;
(5) 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 renew, refund, refinance, replace,
defease or discharge Indebtedness (other than intercompany Indebtedness)
that was permitted by this Indenture to be incurred under Section 4.09(a)
hereof or clauses (2), (3), (4), (5), (14) or (15) of this Section 4.09(b);
(6) the incurrence by the Company or any of its Restricted
Subsidiaries of intercompany Indebtedness between or among the Company and
any of its Restricted Subsidiaries; provided, however, that:
(a) if the Company or any Guarantor is the obligor on such
Indebtedness and the payee is not the Company or a Guarantor, such
Indebtedness must be unsecured (or if secured, such security interest
must be expressly subordinated and junior to the Liens securing the
Notes and the Note Guarantees on terms no less favorable to the
Holders than the terms under the Second Lien Intercreditor Agreement)
and expressly subordinated to the prior payment in full in cash of all
Obligations then due with respect to the Notes, in the case of the
Company, or the Note Guarantee, in the case of a Guarantor; and
(b) (i) 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 (ii)
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;
will 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 (6);
(7) the issuance by any of the Company's Restricted Subsidiaries to
the Company or to any of its Restricted Subsidiaries of shares of preferred
stock; provided, however, that:
(a) any subsequent issuance or transfer of Equity Interests that
results in any such preferred stock being held by a Person other than
the Company or a Restricted Subsidiary of the Company; and
(b) any sale or other transfer of any such preferred stock to a
Person that is not either the Company or a Restricted Subsidiary of
the Company;
will be deemed, in each case, to constitute an issuance of such preferred
stock by such Restricted Subsidiary that was not permitted by this clause
(7);
(8) the incurrence by the Company or any of its Restricted
Subsidiaries of Hedging Obligations in the ordinary course of business;
61
(9) the guarantee by the Company or any of the Guarantors of
Indebtedness of the Company or a Restricted Subsidiary of the Company that
is permitted to be incurred by another provision of this Section 4.09;
provided that if the Indebtedness being guaranteed is subordinated to or
pari passu with the Notes, then the Guarantee shall be subordinated or pari
passu to the same extent as the Indebtedness guaranteed;
(10) the incurrence by the Company or any of its Restricted
Subsidiaries of Indebtedness in respect of workers' compensation claims,
self-insurance obligations, bankers' acceptances, performance and surety
bonds, completion guarantees or similar arrangements in the ordinary course
of business;
(11) the incurrence by the Company of Indebtedness or Obligations
represented by or incurred pursuant to the Environmental Indemnity
Agreements;
(12) 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 drawn against insufficient funds,
provided that such Indebtedness is satisfied within five Business Days of
incurrence;
(13) Indebtedness arising from agreements of the Company or a
Restricted Subsidiary or any 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 acquisition or
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 a Disposition;
(14) the incurrence by the Company or any of the Guarantors of
additional Indebtedness in an aggregate principal amount (or accreted
value, as applicable) at any time outstanding, including all Permitted
Refinancing Indebtedness incurred to renew, refund, refinance, replace,
defease or discharge any Indebtedness incurred pursuant to this clause
(14), not to exceed $20.0 million; and
(15) Indebtedness of the Parent Entity, the Company and its Restricted
Subsidiaries in existence on the date of this Indenture represented by the
Second Lien Notes and the related note guarantees.
The Company will not incur, and will not permit any Guarantor to
incur, any Indebtedness (including Permitted Debt) that is contractually
subordinated in right of payment to any other Indebtedness of the Company or
such Guarantor unless such Indebtedness is also contractually subordinated in
right of payment to the Notes and the applicable Note Guarantee on substantially
identical terms; provided, however, that no Indebtedness shall be deemed to be
contractually subordinated in right of payment to any other Indebtedness of the
Company solely by virtue of being secured on a junior Lien basis.
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
62
Permitted Debt described in clauses (1) through (15) above, or is entitled to be
incurred pursuant to Section 4.09(a) hereof, the Company will be permitted to
classify such item of Indebtedness on the date of its incurrence and will only
be required to include the amount and type of such Indebtedness in one of the
above clauses, although the Company may divide and classify an item of
Indebtedness in more than one of the types of Indebtedness, or later reclassify
all or a portion of such item of Indebtedness, in any manner that complies with
this Section 4.09. Indebtedness under Credit Facilities outstanding on the Issue
Date will initially be deemed to have been incurred on the Issue Date in
reliance on the exception provided by clause (1) of the definition of "Permitted
Debt." Indebtedness represented by the Second Lien Notes and the related
Guarantees will be deemed to have been incurred in reliance on the exception
provided by clause (15) of the definition of Permitted Debt. The accrual of
interest, the accretion or amortization of original issue discount, the payment
of interest on any Indebtedness in the form of additional Indebtedness with the
same terms, the reclassification of Equity Interests as Indebtedness due to a
change in accounting principles, and the payment of dividends on Disqualified
Stock in the form of additional shares of the same class of Disqualified Stock
will not be deemed to be an incurrence of Indebtedness or an issuance of
Disqualified Stock for purposes of this Section 4.09; provided, in each such
case, that the amount of any such accrual, accretion or payment is included in
Fixed Charges of the Company as accrued. Notwithstanding any other provision of
this Section 4.09, the maximum amount of Indebtedness that the Company or any
Restricted Subsidiary may incur pursuant to this Section 4.09 shall not be
deemed to be exceeded solely as a result of fluctuations in exchange rates or
currency values.
The amount of any Indebtedness outstanding as of any date will be:
(1) the accreted value of the Indebtedness, in the case of any
Indebtedness issued with original issue discount;
(2) the principal amount of the Indebtedness, in the case of any
other Indebtedness; and
(3) in respect of Indebtedness of another Person secured by a Lien on
the assets of the specified Person, the lesser of:
(A) the Fair Market Value of such assets at the date of determination,
and
(B) the amount of the Indebtedness of the other Person.
Section 4.10 Asset Sales.
(a) The Parent Entity and the Company will not, and the Company will
not permit any of its Restricted Subsidiaries to, consummate an Asset Sale
unless:
(1) the Company (or the Restricted Subsidiary or the 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; and
(2) at least 75% of the consideration received in the Asset Sale by
the Company or such Restricted Subsidiary or Parent Entity is in the form
of cash or Cash
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Equivalents. For purposes of this provision, each of the following shall be
deemed to be cash:
(A) any liabilities that would be classified as a liability on a
balance sheet prepared in accordance with GAAP 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 Note Guarantee) that are assumed by the transferee of
any such assets that releases the Company or such Restricted
Subsidiary or Parent Entity from further liability;
(B) any securities, notes or other Obligations received by the
Company or any such Restricted Subsidiary or Parent Entity from such
transferee that are within 90 days, converted by the Company or such
Restricted Subsidiary or Parent Entity into cash or Cash Equivalents,
to the extent of the cash or Cash Equivalents received in that
conversion; and
(C) any stock or assets of the kind referred to in clauses (2)
or (4) of paragraph (b) of this Section 4.10, which in the case of an
Asset Sale to the extent relating to Notes Priority Collateral, become
Notes Priority Collateral (it being understood that in the case of an
Asset Sale to the extent relating to Notes Priority Collateral
pursuant to which stock is received by the Company or such Restricted
Subsidiary or the Parent Entity, the value of any assets of the issuer
of such stock which is received as consideration from the sale of
Notes Priority Collateral and become Notes Priority Collateral, shall
be deemed to be cash for purposes of this covenant).
In the case of an Asset Sale to the extent relating to Notes Priority
Collateral, the Company shall deposit the Net Proceeds therefrom (to the extent
such Net Proceeds are attributable to the Notes Priority Collateral sold
pursuant to such Asset Sale) as Notes Priority Collateral in a segregated
account or accounts (each, a "Notes Priority Collateral Account") held by or
under the control of (for purposes of the Uniform Commercial Code) the
Collateral Agent or its agent to secure the Notes (and, in accordance with the
First Lien Intercreditor Agreement, the RCF/Hedging Obligations) pursuant to
arrangements reasonably satisfactory to the Collateral Agent which shall, in any
event, allow for the Company (or the Restricted Subsidiary or the Parent Entity,
as the case may be) to draw upon and direct the application of such Net Proceeds
at its option prior to the application of such Net Proceeds for the any of the
purposes set forth in clauses (1)-(4) of paragraph (c) of this Section 4.10;
provided, that no such deposit shall be required, except to the extent that the
aggregate Net Proceeds from all such sales to the extent relating to Notes
Priority Collateral (to the extent such Net Proceeds are attributable to the
Notes Priority Collateral sold pursuant to such Asset Sales) that are not held
in a Notes Priority Collateral Account and have not previously been applied in
accordance with the provisions of this covenant, exceed $25 million. For the
avoidance of doubt, Note Equity Sale Proceeds (as defined in the First Lien
Intercreditor Agreement) will be treated as Net Proceeds relating to Notes
Priority Collateral.
(b) Within 365 days after the receipt of any Net Proceeds from an
Asset Sale where such Net Proceeds are not attributable to Notes Priority
Collateral, the Company (or the applicable Restricted Subsidiary or the Parent
Entity, as the case may be) may apply (or cause to be applied) such Net Proceeds
at its option:
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(1) (i) to the extent the assets sold pursuant to such Asset Sale
constitute RCF/Hedging Priority Collateral, to repay RCF/Hedging Obligations,
(ii) to repay Pari Passu Indebtedness (other than RCF/Hedging Obligations);
provided that if the Company or any Guarantor shall so reduce Obligations under
Pari Passu Indebtedness (other than RCF/Hedging Obligations) with respect to an
Asset Sale involving Collateral, the Company will equally and ratably reduce
Obligations under the Notes by making an offer (in accordance with the
procedures set forth in Section 3.09 hereof and in this Section 4.10 for an
Asset Sale Offer) to all Holders to purchase at a purchase price equal to 100%
of the principal amount thereof, plus accrued and unpaid interest, the pro rata
principal amount of Notes or (iii) except in the case of an Asset Sale involving
Collateral, to repay Indebtedness of a Restricted Subsidiary that is not a
Guarantor;
(2) to acquire all or substantially all of the assets of, or any
Capital Stock of, another Permitted Business, if, after giving effect to any
such acquisition of Capital Stock, the Permitted Business is or becomes a
Restricted Subsidiary of the Company;
(3) to make Capital Expenditures; or
(4) to acquire or make capitalized repairs to other assets that are
not classified as current assets under GAAP and that are used or useful in a
Permitted Business,
or enter into a binding commitment regarding clauses (2), (3) or (4) above;
provided that such binding commitment shall be treated as a permitted
application of Net Proceeds from the date of such commitment until the earlier
of (x) the date on which such acquisition or expenditure is consummated and (y)
the 180th day following the expiration of the aforementioned 365 day period. If
such acquisition or expenditure is not consummated on or before such 180th day
and the Company or such Restricted Subsidiary shall not have applied such Net
Proceeds pursuant to clauses (1)-(4) of this paragraph on or before such 180th
day, such commitment shall be deemed not to have been a permitted application of
Net Proceeds.
(c) Within 365 days after the receipt of any Net Proceeds from an
Asset Sale where such Net Proceeds are attributable to Notes Priority
Collateral, the Company (or the applicable Restricted Subsidiary or the Parent
Entity, as the case may be) may apply (or cause to be applied) such Net Proceeds
at its option:
(1) to redeem the Notes in accordance with this Indenture;
(2) to acquire all or substantially all of the assets of, or any
Capital Stock of, another Permitted Business, if, after giving effect to any
such acquisition of Capital Stock, the Permitted Business is or becomes a
Restricted Subsidiary of the Company;
(3) to make Capital Expenditures with respect to assets that
constitute Notes Priority Collateral; or
(4) to acquire or make capitalized repairs to other assets that are
not classified as current assets under GAAP, that are used or useful in a
Permitted Business and that constitute Notes Priority Collateral,
65
or enter into a binding commitment regarding clauses (2), (3) or (4) above;
provided that such binding commitment shall be treated as a permitted
application of Net Proceeds from the date of such commitment until the earlier
of (x) the date on which such acquisition or expenditure is consummated and (y)
the 180th day following the expiration of the aforementioned 365 day period. If
such acquisition or expenditure is not consummated on or before such 180th day
and the Company or such Restricted Subsidiary shall not have applied such Net
Proceeds pursuant to clauses (1)-(4) of this paragraph on or before such 180th
day, such commitment shall be deemed not to have been a permitted application of
Net Proceeds. The Company (or the applicable Restricted Subsidiary or the Parent
Entity, as the case may be) will cause any assets acquired or otherwise invested
in pursuant to clauses (2), (3) or (4) of this paragraph to secure the Notes and
constitute Notes Priority Collateral.
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 Net Proceeds, the Company may
temporarily reduce revolving credit borrowings or otherwise invest the Net
Proceeds in any manner that is not prohibited by this Indenture.
(d) Any Net Proceeds from Asset Sales (i) that are not applied or
invested as provided in paragraphs (b) or (c) of this Section 4.10, as the case
may be, or (ii) that the Company decides not to apply or invest as provided in
paragraphs (b) or (c) of this Section 4.10, as the case may be, within 364 days
of the receipt thereof, will constitute Excess Proceeds. When the aggregate
amount of Excess Proceeds exceeds $15.0 million, within ten days thereof, the
Company will make an Asset Sale Offer to all Holders of Notes and all holders of
Pari Passu Indebtedness (other than RCF/Hedging Indebtedness) containing
provisions similar to those set forth in this Indenture with respect to offers
to purchase or redeem with the proceeds of sales of assets in accordance with
Section 3.09 hereof to purchase the maximum principal amount of Notes and such
other Pari Passu Indebtedness that may be purchased out of the Excess Proceeds;
provided, however, that the Company may, but shall not be required to, make an
Asset Sale Offer regardless of whether the aggregate amount of the Excess
Proceeds exceeds $15.0 million. The offer price in any Asset Sale Offer will be
equal to 100% of the principal amount plus accrued and unpaid interest to the
date of purchase 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
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 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 reset at zero.
(e) The Company will comply with the requirements of Rule 14e-1 under
the Exchange Act and any other securities laws and regulations thereunder to the
extent such laws and regulations are applicable in connection with each
repurchase of Notes pursuant to an Asset Sale Offer. To the extent that the
provisions of any securities laws or regulations conflict with the provisions of
Section 3.09 hereof or this Section 4.10, the Company will comply with the
applicable securities laws and regulations and will not be deemed to have
breached its obligations under Section 3.09 hereof or this Section 4.10 by
virtue of such compliance.
66
(f) The Parent Entity, the Company and the Guarantors may apply the
cash insurance proceeds (excluding proceeds in respect of business interruption
insurance), condemnation awards and other compensation any of them receives in
respect of a Casualty Event to the extent relating to Notes Priority Collateral,
net of all reasonable costs and expenses incurred in connection with the
collection thereof ("Net Casualty Proceeds"), in the same manner and in the same
time periods (measured from the date of receipt thereof in the case of Net
Casualty Proceeds) as Net Proceeds from Asset Sales of Notes Priority Collateral
pursuant to paragraph (c) of this Section 4.10. Net Casualty Proceeds not
applied in accordance with such paragraph within the specified time period will
constitute Excess Proceeds. The Parent Entity, the Company and the Guarantors
will deposit Net Casualty Proceeds in a Notes Priority Collateral Account to the
same extent required for Net Proceeds from Asset Sales to the extent relating to
Notes Priority Collateral and Net Proceeds from Asset Sales to the extent
relating to Notes Priority Collateral and Net Casualty Proceeds will be
aggregated for purposes of the $25.0 million threshold specified in paragraph
(a) of this Section 4.10.
Section 4.11 Transactions with Affiliates.
(a) The Parent Entity and the Company will not, and the Company will
not permit any of its Restricted Subsidiaries to, make any payment to, or sell,
lease, transfer or otherwise dispose of any of its properties or assets to, or
purchase any property or assets from, or enter into or make or amend any
transaction, contract, agreement, understanding, loan, advance or guarantee
with, or for the benefit of, any Affiliate of the Company (each an "Affiliate
Transaction"), unless:
(1) the Affiliate Transaction is on terms that are no less favorable
to the Company or the relevant Restricted Subsidiary or Parent Entity,
taken as a whole, 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
(2) the Company delivers to the Trustee:
(A) with respect to any Affiliate Transaction or series of
related Affiliate Transactions involving aggregate consideration in
excess of $5.0 million, a resolution of the Board of Directors of the
Company set forth in an Officers' Certificate certifying that such
Affiliate Transaction complies with clause (1) of this Section 4.11(a)
and that such Affiliate Transaction has been approved by a majority of
the disinterested members of the Board of Directors of the Company;
and
(B) with respect to any Affiliate Transaction or series of
related Affiliate Transactions involving aggregate consideration in
excess of $15.0 million, an opinion as to the fairness to the Company
or such Restricted Subsidiary of such Affiliate Transaction from a
financial point of view issued by an accounting, appraisal or
investment banking firm of national standing.
(b) The following items will not be deemed to be Affiliate
Transactions and, therefore, will not be subject to the provisions of Section
4.11(a) hereof:
67
(1) any employment, termination protection, deferred
compensation, incentive, non-competition, consulting, 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, such Restricted Subsidiary or such Parent Entity;
(2) transactions (including a merger otherwise in compliance
with the terms hereof) between or among the Parent Entity, the Company
and one or more of the Company's Restricted Subsidiaries;
(3) transactions with a Person (other than an Unrestricted
Subsidiary of the Company) that is an Affiliate of the Company solely
because the Company owns, directly or through a Restricted Subsidiary,
an Equity Interest in, or controls, or is under common control with,
such Person;
(4) payment of reasonable compensation (including equity-based
compensation) and expense reimbursement to members of the Board of
Directors who are not otherwise Affiliates of the Company;
(5) any issuance of Equity Interests (other than Disqualified
Stock) of the Company to Affiliates of the Company;
(6) Restricted Payments or Permitted Investments that do not
violate the provisions of Section 4.07 hereof;
(7) loans or advances to employees in the ordinary course of
business not to exceed $2.0 million in the aggregate at any one time
outstanding;
(8) the repurchase by the Parent Entity, or the issuance by the
Parent Entity, 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;
(9) amendments to the ESOP that do not violate the provisions of
Section 4.16 hereof; and
(10) the Parent Entity Transaction and any related transactions
and documentation in connection therewith.
Section 4.12 Liens. The Company will not, and will not permit any of
its Restricted Subsidiaries to, directly or indirectly, create, incur, assume or
otherwise cause or suffer to exist or become effective any Lien of any kind
(other than Permitted Liens (excluding clause (2) of the definition thereof))
upon any of their property or assets constituting Collateral. The Company will
not and will not permit any of its Restricted Subsidiaries to, create, incur,
assume or otherwise cause or suffer to exist or become effective any Lien of any
kind (other than Permitted Liens) upon any of their property or assets, now
owned or hereafter acquired (other than Collateral), unless all payments due
under this Indenture and the Notes are secured on an equal and ratable basis
with the Obligations so secured until such time as such Obligations are no
longer secured by a Lien.
68
Section 4.13 Business Activities. The Company will not, and will not
permit any of its Restricted Subsidiaries 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 will 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 their direct or indirect
ownership of the Capital Stock of each other or of the Company (including
matters related to the ESOP) and those actions required to be taken under
intercompany Indebtedness, Guarantees permitted by this Indenture, the
Intercreditor Agreements, the Security Documents, the Environmental Indemnity
Agreements and the Credit Enhancement.
Section 4.14 Corporate Existence. Subject to Article V hereof, the
Company shall do or cause to be done all things necessary to preserve and keep
in full force and effect:
(1) its corporate existence, and the corporate, partnership or other
existence of each of its Subsidiaries, in accordance with the respective
organizational documents (as the same may be amended from time to time) of
the Company or any such Subsidiary; and
(2) the rights (charter and statutory), licenses and franchises of the
Company and its Subsidiaries; provided, however, that the Company shall not
be required to preserve any such right, license or franchise, or the
corporate, partnership or other existence of any of its Subsidiaries, if
the Board of Directors shall determine that the preservation thereof is no
longer desirable in the conduct of the business of the Company and its
Subsidiaries, taken as a whole, and that the loss thereof is not adverse in
any material respect to the Holders of the Notes.
Section 4.15 Offer to Repurchase Upon Change of Control.
(a) Upon the occurrence of a Change of Control, the Company will make
an offer (a "Change of Control Offer") to each Holder to repurchase all or any
part (equal to $2,000 or an integral multiple of $1,000 in excess thereof) of
that Holder's Notes at a purchase price in cash equal to 101% of the aggregate
principal amount of Notes repurchased plus accrued and unpaid interest on the
Notes repurchased to the date of purchase, subject to the rights of Holders on
the relevant record date to receive interest due on the relevant interest
payment date (the "Change of Control Payment"). Within 30 days following any
Change of Control, the Company will mail a notice to each Holder describing the
transaction or transactions that constitute the Change of Control and stating:
(1) that the Change of Control Offer is being made pursuant to this
Section 4.15 and that all Notes tendered will be accepted for payment;
(2) the purchase price and the purchase date, which shall be no
earlier than 30 days and no later than 60 days from the date such notice is
mailed (the "Change of Control Payment Date");
(3) that any Note not tendered will continue to accrue interest;
69
(4) that, unless the Company defaults in the payment of the Change of
Control Payment, all Notes accepted for payment pursuant to the Change of
Control Offer will cease to accrue interest after the Change of Control
Payment Date;
(5) that Holders electing to have any Notes purchased pursuant to a
Change of Control Offer will be required to surrender the Notes, with the
form entitled "Option of Holder to Elect Purchase" attached to the Notes
completed, or transfer by book-entry transfer, to the Paying Agent at the
address specified in the notice prior to the close of business on the third
Business Day preceding the Change of Control Payment Date;
(6) that Holders will be entitled to withdraw their election if the
Paying Agent receives, not later than the close of business on the second
Business Day preceding the Change of Control Payment Date, a telegram,
telex, facsimile transmission or letter setting forth the name of the
Holder, the principal amount of Notes delivered for purchase, and a
statement that such Holder is withdrawing his election to have the Notes
purchased; and
(7) that Holders whose Notes are being purchased only in part will be
issued new Notes equal in principal amount to the unpurchased portion of
the Notes surrendered, which unpurchased portion must be equal to $2,000 in
principal amount or an integral multiple of $1,000 in excess thereof.
The Company will comply with the requirements of Rule 14e-1 under the
Exchange Act and any other securities laws and regulations thereunder to the
extent those laws and regulations are applicable in connection with the
repurchase of the Notes as a result of a Change of Control. To the extent that
the provisions of any securities laws or regulations conflict with the
provisions of this Section 4.15, the Company will comply with the applicable
securities laws and regulations and will not be deemed to have breached its
obligations under this Section 4.15 by virtue of such compliance.
(b) On the Change of Control Payment Date, the Company will, to the
extent lawful:
(1) accept for payment all Notes or portions of Notes properly
tendered pursuant to the Change of Control Offer;
(2) deposit with the Paying Agent an amount equal to the Change of
Control Payment in respect of all Notes or portions of Notes properly
tendered; and
(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 of Notes being purchased by the
Company.
The Paying Agent will promptly mail (but in any case not later than
five days after the Change of Control Payment Date) to each Holder of Notes
properly tendered the Change of Control Payment for such Notes, and the Trustee
will promptly authenticate and mail (or cause to be transferred by book entry)
to each Holder a new Note equal in principal amount to any unpurchased portion
of the Notes surrendered, if any; provided that each new Note will be in a
principal amount of $2,000 or an integral multiple of $1,000 in excess thereof.
The
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Company will publicly announce the results of the Change of Control Offer on
or as soon as practicable after the Change of Control Payment Date.
(c) Notwithstanding anything to the contrary in this Section 4.15,
the Company will not be required to make a Change of Control Offer upon a Change
of Control if (1) a third party makes the Change of Control Offer in the manner,
at the times and otherwise in compliance with the requirements set forth in this
Section 4.15 and purchases all Notes properly tendered and not withdrawn under
the Change of Control Offer, or (2) notice of redemption has been given pursuant
to Section 3.07 hereof, unless and until there is a default in payment of the
applicable redemption price.
Section 4.16 Amendment of Fox River Indemnity Arrangements, Security
Holders Agreements or ESOP Documentation. Without the consent of the Holders of
at least a majority in aggregate principal amount of the Notes then outstanding,
the Company and the Parent Entity will not amend, supplement or otherwise
modify, or permit the amendment, supplement or modification of (pursuant to a
waiver, endorsement or otherwise):
(a) the terms and conditions of the Fox River Indemnity Arrangements
in a manner that is materially adverse to the Holders of the Notes;
(b) the terms and conditions of the Security Holders Agreements in a
manner that is materially adverse to the Holders of the Notes; or
(c) the ESOP Documentation relating to the ESOP Component in a manner
that is materially adverse to the Holders of the Notes; provided, however, that
certain administrative, non-economic and other terms of the ESOP Documentation
relating to the ESOP Component (not including the following provisions as they
relate to the ESOP Component: (i) contributions to the ESOP (Article III of the
ESOP), (ii) distributions to participants (Article VII of the ESOP), (iii)
amendment or termination of the ESOP (Articles IX and X 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(d) of the ESOP) and definitions related to items (i) through (xiii)
of this subsection (c) as they relate to the ESOP Component) may be amended with
the consent of the Trustee upon receipt of an Officers' Certificate and an
Opinion of Counsel, to the general effect that the proposed amendment is not
adverse to the Parent Entity or the Company, and an opinion of an ESOP
consultant, to the general effect that the proposed amendment will not
accelerate the timing or amount of the Parent Entity's obligations to repurchase
common stock from employees terminating their participation in the ESOP
Component; provided further, however, that amendments, supplements or other
modifications to the ESOP Documentation in connection with a Parent Entity
Transaction or a termination of the ESOP shall not be limited by or subject to
this paragraph.
Notwithstanding anything to the contrary contained in the paragraph
above in this Section 4.16(c), amendments, supplements or other modifications of
the ESOP Documentation shall be permitted so long as the Board of Directors or
an Officer of the Company determines in
71
good faith on, or within five Business Days of, the date the respective
amendment, supplement or modification becomes effective, that the respective
such amendment, supplement or modification is not reasonably likely to result in
a material adverse change in the business, financial condition or results of
operations of the Company and its Subsidiaries taken as whole.
Section 4.17 Limitation on Sale and Leaseback Transactions. The
Company will not, and will not permit any of its Restricted Subsidiaries to,
enter into any sale and leaseback transaction; provided that the Company or any
Restricted Subsidiary may enter into a sale and leaseback transaction if:
(1) the Company or that Restricted Subsidiary, as applicable, could
have (a) incurred Indebtedness in an amount equal to the Attributable Debt
relating to such sale and leaseback transaction under Section 4.09 hereof
and (b) incurred a Lien to secure such Indebtedness pursuant to the
provisions of Section 4.12 hereof;
(2) the gross cash proceeds of that sale and leaseback transaction
are at least equal to the Fair Market Value, as determined in good faith by
the Board of Directors of the Company and set forth in an Officers'
Certificate delivered to the Trustee, of the property that is the subject
of that sale and leaseback transaction; and
(3) the transfer of assets in that sale and leaseback transaction is
permitted by, and the Company applies the proceeds of such transaction in
compliance with, Section 4.10 hereof.
Section 4.18 Payments for Consent. The Parent Entity and the Company
will not, and the Company will not permit any of its Restricted Subsidiaries to,
directly or indirectly, pay or cause to be paid any consideration to or for the
benefit of any Holder of 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 4.19 Additional Note Guarantees. In the event that:
(1) the Company or any of its Restricted Subsidiaries acquires or
creates another Restricted Subsidiary (other than a Foreign Subsidiary that
constitutes an Excluded Restricted Subsidiary) after the Issue Date;
(2) the Parent Entity acquires or creates another entity having a
direct or indirect ownership interest in the Company after the Issue Date;
or
(3) PDC Capital Corporation (A) owns any assets other than nominal
assets and its common stock ownership of AWA Bermuda after the Issue Date
and (B) is not prohibited from guaranteeing the Notes by any applicable
law, regulation or contractual restriction at such time,
then, in each case, such newly acquired or created Restricted Subsidiary, such
newly acquired or created entity having a direct or indirect ownership interest
in the Company or PDC Capital Corporation, as the case may be, will: (i) become
a Guarantor and execute a supplemental
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indenture and an amendment, supplement or other instrument in respect of the
Intercreditor Agreements and the Security Documents reasonably satisfactory to
the Trustee and the Collateral Agent (if not then the Trustee) and deliver it to
the Trustee under the Security Documents, and in connection therewith shall
cause such instruments to be filed and recorded in such jurisdictions and take
such other actions as may be required by applicable law to perfect or continue
the perfection of the Lien created under the Security Documents on the
Collateral; and (ii) deliver an Opinion of Counsel relating to the foregoing
reasonably satisfactory to the Trustee within ten Business Days of the
occurrence of any event described in clauses (1) through (3) of this Section
4.19; provided that any Restricted Subsidiary that constitutes an Immaterial
Subsidiary need not become a Guarantor and will not be subject to this Section
4.19 until such time as it ceases to be an Immaterial Subsidiary.
Section 4.20 Designation of Restricted and Unrestricted Subsidiaries.
The Board of Directors of the Company 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 its Restricted Subsidiaries in the Subsidiary designated as an Unrestricted
Subsidiary will be deemed to be an Investment made as of the time of the
designation and will reduce the amount available for Restricted Payments under
Section 4.07 hereof or under one or more clauses of the definition of "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 of the Company may redesignate any
Unrestricted Subsidiary to be a Restricted Subsidiary if that redesignation
would not cause a Default.
Any designation of a Subsidiary of the Company as an Unrestricted
Subsidiary will be evidenced to the Trustee by filing with the Trustee a
certified copy of a resolution of the Board of Directors 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 will thereafter cease to be an
Unrestricted Subsidiary for purposes of this Indenture and any Indebtedness of
such Subsidiary will be deemed to be incurred by a Restricted Subsidiary of the
Company as of such date and, if such Indebtedness is not permitted to be
incurred as of such date under Section 4.09 hereof, the Company will 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 will be deemed to be an incurrence of Indebtedness by a
Restricted Subsidiary of the Company of any outstanding Indebtedness of such
Unrestricted Subsidiary and such designation will only be permitted if (1) 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.
Section 4.21 Amendment of Security Documents, Intercreditor
Agreements. The Company will not amend, modify or supplement, or permit or
consent to any amendment, modification or supplement of, the Intercreditor
Agreements or the Security Documents in any way that would be adverse to the
Holders of the Notes in any material respect, except as permitted by this
Indenture, the Intercreditor Agreements or the Security Documents.
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Section 4.22 Impairment of Security Interest. Subject to the rights
of the holders of Permitted Liens, the Company will not, and will not permit any
of its Restricted Subsidiaries to, take or knowingly or negligently omit to
take, any action that would or could reasonably be expected to have the result
of materially impairing the security interest with respect to the Collateral for
the benefit of the Collateral Agent on behalf of the Holders of the Notes,
subject to limited exceptions provided in the Security Documents.
Section 4.23 After-Acquired Property. Upon the acquisition by the
Company or any Guarantor of any property or asset of the kind required to secure
the Notes under the Security Documents, or in the case of real property, of the
kind included in the initial Collateral (collectively, "Equivalent Property")),
the Company or such Guarantor shall execute and deliver such Mortgages, security
instruments, financing statements and certificates and opinions of counsel as
shall be reasonably necessary to vest in the Collateral Agent for the benefit of
the Holders a perfected security interest, subject only to Permitted Liens, in
such Equivalent Property and to have such Equivalent Property added to the
Collateral, and thereupon all provisions of this Indenture relating to the
Collateral and the Intercreditor Agreements shall be deemed to relate to such
Equivalent Property to the same extent and with the same force and effect;
provided, however, that if granting such security interest in Equivalent
Property requires the consent of a third party, the Company will use
commercially reasonable efforts to obtain such consent with respect to the
security interest for the benefit of the Collateral Agent on behalf of the
Holders of the Notes; provided further, however, that if such third party does
not consent to the granting of such security interest after the use of such
commercially reasonable efforts, the Company or such Guarantor, as the case may
be, will not be required to provide such security interest.
ARTICLE V
Successors
Section 5.01 Merger, Consolidation, or Sale of Assets. The Company
shall not, directly or indirectly: (1) consolidate or merge with or into another
Person (whether or not the Company is the surviving corporation); or (2) 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:
(1) 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 has been made is a
corporation organized or existing under the laws of the United States,
any state of the United States or the District of Columbia;
(2) the Person formed by or surviving any such consolidation or
merger (if other than the Company) or the Person to which such sale,
assignment, transfer, conveyance or other Disposition has been made assumes
all the Obligations of the
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Company under the Security Documents, the Intercreditor Agreements, the
Notes and this Indenture pursuant to agreements reasonably satisfactory to
the Trustee;
(3) immediately after such transaction, no Default or Event of
Default exists;
(4) 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 has been made, will,
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 Consolidated Fixed
Charge Coverage Ratio test set forth in Section 4.09(a) hereof; and
(5) all rights afforded to the Company or the Parent Entity 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 the Parent Entity) 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 may not, directly or indirectly, lease all or
substantially all of the properties and assets of the Company and its Restricted
Subsidiaries taken as a whole, in one or more related transactions, to any other
Person, and the Parent Entity will not consolidate or merge with any entity
other than another Parent Entity and will not permit any merger by any future
Parent Entity unless and until the conditions set forth in clauses (1) through
(5) above have been satisfied.
This Section 5.01 will not apply to:
(A) a merger of the Company with an Affiliate solely for the purpose
of reincorporating the Company in another jurisdiction;
(B) any consolidation or merger or any sale, assignment, transfer,
conveyance, lease or other Disposition of assets between or among the Company
and its Restricted Subsidiaries; or
(C) a Parent Entity 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 properties or assets of the
Company in a transaction that is subject to, and that complies with the
provisions of, Section 5.01 hereof, the successor Person 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 Person 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
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not be relieved from the obligation to pay the principal of and interest on the
Notes except in the case of a sale of all of the Company's assets in a
transaction that is subject to, and that complies with the provisions of,
Section 5.01 hereof.
ARTICLE VI
Defaults and Remedies
Section 6.01 Events of Default. Each of the following is an "Event of
Default":
(1) default for 30 days in the payment when due of interest on the
Notes;
(2) default in the payment when due (at maturity, upon redemption or
otherwise) of the principal of, or premium, if any, on the Notes;
(3) failure by the Company or any of its Restricted Subsidiaries to
comply with the provisions of Sections 4.10, 4.15, 4.16 or 5.01 hereof;
(4) failure by the Company or any of its Restricted Subsidiaries to
comply with the provisions of Sections 4.07 and 4.09 hereof for 30 days
after notice by the Trustee to comply with such provisions;
(5) failure by the Company or any of its Restricted Subsidiaries 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 to comply with any of the other agreements in this
Indenture;
(6) default under any mortgage, indenture or instrument under which
there may be issued or by which there may be secured or evidenced any
Indebtedness for money borrowed by the Company or any of its Restricted
Subsidiaries (or the payment of which is guaranteed by the Company or any
of its Restricted Subsidiaries), whether such Indebtedness or Guarantee now
exists, or is created after the Issue Date, if that default:
(A) is caused by a failure to pay principal of, or interest or
premium, if any, on such Indebtedness prior to the expiration of the
grace period provided in such Indebtedness on the date of such default
(a "Payment Default"); or
(B) results in the acceleration of such Indebtedness prior to its
express maturity,
and, in each case, the principal amount of any such Indebtedness, together
with the principal amount of any other such Indebtedness under which there
has been a Payment Default or the maturity of which has been so
accelerated, aggregates $15.0 million or more;
(7) failure by the Company or any of its Restricted Subsidiaries to
pay final judgments entered by a court or courts of competent jurisdiction
aggregating in excess of $15.0 million, which judgments are not paid,
discharged or stayed for a period of 60 days;
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(8) the Company or any of its Restricted Subsidiaries that is a
Significant Subsidiary or any group of Restricted Subsidiaries of the
Company that, taken together, would constitute a Significant Subsidiary
pursuant to or within the meaning of Bankruptcy Law:
(A) commences a voluntary case;
(B) consents to the entry of an order for relief against it in an
involuntary case;
(C) consents to the appointment of a custodian of it or for all
or substantially all of its property;
(D) makes a general assignment for the benefit of its creditors;
or
(E) generally is not paying its debts as they become due;
(9) a court of competent jurisdiction enters an order or decree under
any Bankruptcy Law that:
(A) is for relief against the Company or any of its Restricted
Subsidiaries that is a Significant Subsidiary or any group of
Restricted Subsidiaries of the Company that, taken together, would
constitute a Significant Subsidiary in an involuntary case;
(B) appoints a custodian of the Company or any of its Restricted
Subsidiaries that is a Significant Subsidiary or any group of
Restricted Subsidiaries of the Company that, taken together, would
constitute a Significant Subsidiary or for all or substantially all of
the property of the Company or any of its Restricted Subsidiaries that
is a Significant Subsidiary or any group of Restricted Subsidiaries of
the Company that, taken together, would constitute a Significant
Subsidiary; or
(C) orders the liquidation of the Company or any of its
Restricted Subsidiaries that is a Significant Subsidiary or any group
of Restricted Subsidiaries of the Company that, taken together, would
constitute a Significant Subsidiary;
and the order or decree remains undischarged, unstayed or unremedied and in
effect for 60 consecutive days;
(10) except as permitted by this Indenture, any Note Guarantee of a
Guarantor that is a Significant Subsidiary or a group of Guarantors that,
taken as a whole would constitute a Significant Subsidiary, 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 that is a
Significant Subsidiary, or any Person acting on behalf of any Guarantor
that is a Significant Subsidiary, denies or disaffirms its Obligations
under its Note Guarantee;
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(11) 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;
(12) unless all of the Collateral has been released as security for
the Notes in accordance with the provisions of the Security Documents with
respect to the Notes, (a) except as permitted by this Indenture or the
relevant Security Documents, any Lien purported to be granted under any
Security Document individually, or in the aggregate, having a Fair Market
Value in excess of $40.0 million ceases to be an enforceable and perfected
Lien and such Default continues for 30 days or (b) the Company or any
Guarantor shall assert, in any pleading in any court of competent
jurisdiction, that any such security interest is invalid or unenforceable
and, in the case of any such Person that is a Subsidiary of the Parent
Entity or the Company, the Parent Entity or the Company fails to cause such
Subsidiary to rescind such assertions within 30 days after the Parent
Entity or the Company has actual knowledge of such assertions; and
(13) the failure by the Company or any Guarantor to comply for 60 days
after notice by the Trustee or the Collateral Agent with its agreements
contained in the Security Documents, except for a failure that would not be
material to the Holders of the Notes and would not materially affect the
value of the Collateral taken as a whole.
Section 6.02 Acceleration. In the case of an Event of Default
specified in clauses (8) or (9) of Section 6.01 hereof, with respect to the
Company, any Restricted Subsidiary of the Company that is a Significant
Subsidiary or any group of Restricted Subsidiaries of the Company that, taken
together, would constitute a Significant Subsidiary, all outstanding Notes will
become due and payable immediately without further action or notice. If any
other Event of Default occurs and is continuing, the Trustee or the Holders of
at least 25% in aggregate principal amount of the then outstanding Notes may
declare all the Notes to be due and payable immediately. Upon any such
declaration, the Notes shall become due and payable immediately.
The Holders of a majority in aggregate principal amount of the then
outstanding Notes by written notice to the Trustee may, on behalf of all of the
Holders, rescind an acceleration 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, if any, that has become
due solely because of the acceleration) have been cured or waived.
Section 6.03 Other Remedies. Subject to the terms of the Intercreditor
Agreements, 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.
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Section 6.04 Waiver of Past Defaults. Holders of not less than a
majority in aggregate principal amount of the then outstanding Notes by notice
to the Trustee may on behalf of the Holders of all of the Notes waive an
existing Default or Event of Default and its consequences hereunder, except a
continuing Default or Event of Default in the payment of the principal of,
premium, 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 aggregate
principal amount of the then outstanding Notes may direct the time, method and
place of conducting any proceeding for exercising any remedy available to the
Trustee or exercising any trust or power conferred on it. However, the Trustee
may refuse to follow any direction that conflicts with law or this Indenture
that the Trustee determines may be unduly prejudicial to the rights of other
Holders of Notes or that may involve the Trustee in personal liability.
Section 6.06 Limitation on Suits. A Holder may pursue a remedy with
respect to this Indenture or the Notes only if:
(1) such Holder gives to the Trustee written notice that an Event of
Default is continuing;
(2) Holders of at least 25% in aggregate principal amount of the then
outstanding Notes make a written request to the Trustee to pursue the
remedy;
(3) such Holder or Holders offer and, if requested, provide to the
Trustee security or indemnity reasonably satisfactory to the Trustee
against any loss, liability or expense;
(4) the Trustee does not comply with the request within 60 days after
receipt of the request and the offer of security or indemnity; and
(5) during such 60-day period, Holders of a majority in aggregate
principal amount of the then outstanding Notes do not give the Trustee a
direction inconsistent with such 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, premium, 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; provided that a Holder shall not
have the right to institute any such suit for the enforcement of payment if and
to the extent that the institution or
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prosecution thereof or the entry of judgment therein would, under applicable
law, result in the surrender, impairment, waiver or loss of the Lien of this
Indenture upon any property subject to such Lien.
Section 6.08 Collection Suit by Trustee. If an Event of Default
specified in Section 6.01(1) or (2) hereof occurs and is continuing, the Trustee
is authorized to recover judgment in its own name and as trustee of an express
trust against the Company for the whole amount of principal of, premium, if any,
and interest remaining unpaid on, the Notes and interest on overdue principal
and, to the extent lawful, on overdue interest and such further amount as shall
be sufficient to cover the costs and expenses of collection, including the
reasonable compensation, expenses, disbursements and advances of the Trustee,
its agents and counsel.
Section 6.09 Trustee May File Proofs of Claim. The Trustee is
authorized to file such proofs of claim and other papers or documents as may be
necessary or advisable in order to have the claims of the Trustee (including any
claim for the reasonable compensation, expenses, disbursements and advances of
the Trustee, its agents and counsel) and the Holders of the Notes allowed in any
judicial proceedings relative to the Company (or any other obligor upon the
Notes), its creditors or its property and shall be entitled and empowered to
collect, receive and distribute any money or other property payable or
deliverable on any such claims and any custodian in any such judicial proceeding
is hereby authorized by each Holder to make such payments to the Trustee, and in
the event that the Trustee shall consent to the making of such payments directly
to the Holders, to pay to the Trustee any amount due to it for the reasonable
compensation, expenses, disbursements and advances of the Trustee, its agents
and counsel, and any other amounts due the Trustee under Section 7.07 hereof. To
the extent that the payment of any such compensation, expenses, disbursements
and advances of the Trustee, its agents and counsel, and any other amounts due
the Trustee under Section 7.07 hereof out of the estate in any such proceeding,
shall be denied for any reason, payment of the same shall be secured by a Lien
on, and shall be paid out of, any and all distributions, dividends, money,
securities and other properties that the Holders may be entitled to receive in
such proceeding whether in liquidation or under any plan of reorganization or
arrangement or otherwise. Nothing herein contained shall be deemed to authorize
the Trustee to authorize or consent to or accept or adopt on behalf of any
Holder any plan of reorganization, arrangement, adjustment or composition
affecting the Notes or the rights of any Holder, or to authorize the Trustee to
vote in respect of the claim of any Holder in any such proceeding.
Section 6.10 Priorities. Any money or other property collected by the
Trustee pursuant to this Article VI, or otherwise distributable in respect of
the Company's obligations under this Indenture shall be paid in the following
order:
First: to the Trustee and Collateral Agent, and their respective
agents and attorneys for amounts due the Trustee under Section 7.07 hereof and
the applicable Security Documents, including payment of all compensation,
expenses and liabilities incurred, and all advances made, by the Trustee and the
Collateral Agent, and the costs and expenses of collection;
Second: to Holders of Notes for amounts due and unpaid on the Notes
for principal, premium, 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, if any, and interest, respectively; and
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Third: to the Company or the applicable Guarantor, as the case may be,
their respective successors or assigns, or to whosoever may be lawfully
entitled to receive the same, or as a court of competent jurisdiction may
direct.
The Trustee may, upon written notice to the Company, fix a record date
and payment date for any payment to Holders of Notes pursuant to this Section
6.10.
Section 6.11 Undertaking for Costs. In any suit for the enforcement of
any right or remedy under this Indenture or in any suit against the Trustee for
any action taken or omitted by it as a Trustee, a court in its discretion may
require the filing by any party litigant in the suit of an undertaking to pay
the costs of the suit, and the court in its discretion may assess reasonable
costs, including reasonable attorneys' fees, against any party litigant in the
suit, having due regard to the merits and good faith of the claims or defenses
made by the party litigant. This Section 6.11 does not apply to a suit by the
Trustee, a suit by a Holder of a Note pursuant to Section 6.07 hereof, or a suit
by Holders of more than 10% in aggregate principal amount of the then
outstanding Notes.
ARTICLE VII
Trustee
Section 7.01 Duties of Trustee.
(a) If an Event of Default has occurred and is continuing, the Trustee
will exercise such of the rights and powers vested in it by this Indenture, and
use the same degree of care and skill in its exercise, as a prudent person would
exercise or use under the circumstances in the conduct of such person's own
affairs.
(b) Except during the continuance of an Event of Default:
(1) the duties of the Trustee will be determined solely by the express
provisions of this Indenture and the Trustee need perform only those duties
that are specifically set forth in this Indenture and no others, and no
implied covenants or obligations shall be read into this Indenture against
the Trustee; and
(2) in the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the correctness of
the opinions expressed therein, upon certificates or opinions furnished to
the Trustee and conforming to the requirements of this Indenture. However,
the Trustee will examine the certificates and opinions to determine whether
or not they conform to the requirements of this Indenture (but need not
confirm or investigate the accuracy of mathematical calculations or other
facts stated therein).
(c) The Trustee may not be relieved from liabilities for its own
negligent action, its own negligent failure to act, or its own willful
misconduct, except that:
(1) this clause (c) does not limit the effect of clause (b) of this
Section 7.01;
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(2) the Trustee will not be liable for any error of judgment made in
good faith by a Responsible Officer, unless it is proved that the Trustee
was negligent in ascertaining the pertinent facts; and
(3) the Trustee will not be liable with respect to any action it takes
or omits to take in good faith in accordance with a direction received by
it pursuant to Section 6.05 hereof.
(d) Whether or not therein expressly so provided, every provision of
this Indenture that in any way relates to the Trustee is subject to paragraphs
(a), (b), and (c) of this Section 7.01.
(e) No provision of this Indenture will require the Trustee to expend
or risk its own funds or incur any liability. The Trustee will be under no
obligation to exercise any of its rights and powers under this Indenture at the
request of any Holders, unless such Holder has offered to the Trustee security
and indemnity satisfactory to it against any loss, liability or expense.
(f) The Trustee will not be liable for interest on any money received
by it except as the Trustee may agree in writing with the Company. Money held in
trust by the Trustee need not be segregated from other funds except to the
extent required by law.
(g) The Trustee agrees to accept and act upon facsimile or electronic
transmission (including Adobe Acrobat format) of documents hereunder, it being
understood that originals of such documents shall be provided to the Trustee in
a timely manner.
Section 7.02 Rights of Trustee.
(a) The Trustee may conclusively rely upon any document believed by it
to be genuine and to have been signed or presented by the proper Person. The
Trustee need not investigate any fact or matter stated in the document.
(b) Before the Trustee acts or refrains from acting, it may require an
Officers' Certificate or an Opinion of Counsel or both. The Trustee will not be
liable for any action it takes or omits to take in good faith in reliance on
such Officers' Certificate or Opinion of Counsel. The Trustee may consult with
counsel and the written advice of such counsel or any Opinion of Counsel will be
full and complete authorization and protection from liability in respect of any
action taken, suffered or omitted by it hereunder in good faith and in reliance
thereon.
(c) The Trustee may act through its attorneys, accountants, experts
and such other professionals as the Trustee deems necessary, advisable or
appropriate and shall not be responsible for the misconduct or negligence of any
attorney, accountant, expert or other such professional appointed with due care.
(d) The Trustee will not be liable for any action it takes or omits to
take in good faith that it believes to be authorized or within the rights or
powers conferred upon it by this Indenture, including, without limitation, any
action it takes or omits to take in good faith
82
pursuant to and in accordance with Section 9.02 hereof; provided that any such
action or omission does not constitute willful misconduct or negligence.
(e) The Trustee may consult with counsel, and the advice or opinion of
counsel with respect to legal matters relating to this Indenture and the Notes
will be full and complete authorization and protection from liability in respect
to any action taken, omitted or suffered by it hereunder in good faith and in
accordance with the advice or opinion of such counsel.
(f) Unless otherwise specifically provided in this Indenture, any
demand, request, direction or notice from the Company will be sufficient if
signed by an Officer of the Company, and any resolution of the Board of
Directors shall be sufficient if evidenced by a copy of such resolution
certified by an Officers' Certificate to have been duly adopted and in full
force and effect on the date thereof.
(g) The Trustee will be under no obligation to exercise any of the
rights or powers vested in it by this Indenture at the request or direction of
any of the Holders unless such Holders have offered to the Trustee indemnity or
security reasonably satisfactory to the Trustee against the losses, liabilities
and expenses that might be incurred by it in compliance with such request or
direction.
(h) Except with respect to Section 4.01, the Trustee shall have no
duty to inquire as to the performance of the Company with respect to the
covenants contained in Article IV. 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 Section 4.01, 6.01(1) or 6.01(2) or (ii) any
Default or Event of Default of which a Responsible Officer of the Trustee shall
have received written notice thereof in accordance with Section 12.02 hereof,
and such notice references the Notes and this Indenture.
(i) 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 their covenants hereunder (as to which the
Trustee is entitled to rely exclusively on Officers' Certificates). The Trustee
is under no duty to examine such reports, information or documents to ensure
compliance with the provisions of this Indenture or to ascertain the correctness
or otherwise of the information or the statements contained therein. The Trustee
is entitled to assume such compliance and correctness unless a Responsible
Officer of the Trustee is informed in writing otherwise. With respect to Section
4.04, except with respect to receipt of payments of interest and principal on
the Notes required under this Indenture and any Default or Event of Default
information contained in the Officers' Certificate delivered to it pursuant to
Section 4.04, the Trustee shall have no duty to review, ascertain or confirm the
Company's compliance with, or the breach of any covenant made in this Indenture.
(j) The rights, privileges, protections, immunities and benefits given
to the Trustee, including, without limitation, its right to be indemnified, are
extended to, and shall be enforceable by, the Trustee in each of its capacities
hereunder.
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(k) In no event shall the Trustee be responsible or liable for
special, indirect, or consequential loss or damage of any kind whatsoever
(including, but not limited to, loss of profit) irrespective of whether the
Trustee has been advised of the likelihood of such loss or damage and regardless
of the form of action.
Section 7.03 Individual Rights of Trustee. The Trustee in its
individual or any other capacity may become the owner or pledgee of Notes and
may otherwise deal with the Company or any Affiliate of the Company with the
same rights it would have if it were not Trustee. However, in the event that the
Trustee acquires any conflicting interest it must eliminate such conflict within
90 days, apply to the SEC for permission to continue as trustee (if this
Indenture has been qualified under the TIA) or resign. Any Agent may do the same
with like rights and duties. The Trustee is also subject to Sections 7.10 and
7.11 hereof.
Section 7.04 Trustee's Disclaimer. The Trustee will not be responsible
for and makes no representation as to the validity or adequacy of this Indenture
or the Notes, it shall not be accountable for the Company's use of the proceeds
from the Notes or any money paid to the Company or upon the Company's direction
under any provision of this Indenture, it will not be responsible for the use or
application of any money received by any Paying Agent other than the Trustee,
and it will not be responsible for any statement or recital herein or any
statement in the Notes or any other document in connection with the sale of the
Notes or pursuant to this Indenture other than its certificate of
authentication.
Section 7.05 Notice of Defaults. If a Default or Event of Default
occurs and is continuing and the Trustee has received written notice thereof,
the Trustee will mail to Holders of Notes a notice of the Default or Event of
Default within 90 days after it occurs. Except in the case of a Default or Event
of Default in payment of principal of, premium, if any, or interest on, any
Note, the Trustee may withhold the notice if and so long as a committee of its
Responsible Officers in good faith determines that withholding the notice is in
the interests of the Holders of the Notes.
Section 7.06 Reports by Trustee to Holders of the Notes.
(a) Within 60 days after each February 1 beginning with February 1,
2011, and for so long as Notes remain outstanding, the Trustee will mail to the
Holders of the Notes a brief report dated as of such reporting date that
complies with TIA Section 313(a) (but if no event described in TIA Section
313(a) has occurred within the twelve months preceding the reporting date, no
report need be transmitted). The Trustee also will comply with TIA Section
313(b)(2). The Trustee will also transmit by mail all reports as required by TIA
Section 313(c).
(b) A copy of each report at the time of its mailing to the Holders of
Notes will be mailed by the Trustee to the Company and filed by the Trustee with
the SEC and each stock exchange on which the Notes are listed in accordance with
TIA Section 313(d). The Company will promptly notify the Trustee when the Notes
are listed on any stock exchange.
Section 7.07 Compensation and Indemnity.
(a) The Company will pay to the Trustee from time to time reasonable
compensation for its acceptance of this Indenture and services hereunder. The
Trustee's compensation will not be limited by any law on compensation of a
trustee of an express trust.
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The Company will reimburse the Trustee promptly upon request for all reasonable
disbursements, advances and expenses incurred or made by it in addition to the
compensation for its services, except any such disbursement, advance or expense
as may be attributable to the Trustee's misconduct, negligence or bad faith.
Such expenses will include the reasonable compensation, disbursements and
expenses of the Trustee's agents and counsel.
(b) The Company and the Guarantors will indemnify and hold harmless
the Trustee and its officers, directors, employees and agents against any and
all losses, liabilities or expenses incurred by it or them arising out of or in
connection with the acceptance or administration of the Trustee's duties under
this Indenture, including, without limitation, all losses, liabilities or
expenses incurred by the Trustee, as Collateral Agent, arising out of or in
connection with the presence, disposal or release of any Hazardous Materials in
or on any of the Collateral and the reasonable costs and expenses of enforcing
this Indenture against the Company and the Guarantors (including this Section
7.07) and defending itself or themselves against any claim (whether asserted by
the Company, the Guarantors, any Holder or any other Person) or liability in
connection with the acceptance or administration of this Indenture or the
exercise or performance of any of the Trustee's powers or duties hereunder,
except to the extent any such loss, liability or expense may be attributable to
its or any of their negligence or willful misconduct. The Trustee will notify
the Company promptly of any claim for which it may seek indemnity. Failure by
the Trustee to so notify the Company will not relieve the Company or any of the
Guarantors of their obligations hereunder. The Company or such Guarantor will
defend the claim and the Trustee will, and will cause its officers, directors,
employees and agents to, cooperate in the defense. The Trustee may have separate
counsel and the Company will pay the reasonable fees and expenses of such
counsel. Neither the Company nor any Guarantor need pay for any settlement made
without its consent, which consent will not be unreasonably withheld. For
purposes of this Section 7.07(b), "Hazardous Materials" means any flammable
explosives, radioactive materials, hazardous materials, hazardous wastes,
hazardous or toxic substances, or related materials as defined in the
Comprehensive Environmental Response, Compensation, and Liability Act of 1980,
as amended (42 U.S.C. Section 9601, et seq.), the Hazardous Materials
Transportation Act of 1975, as amended (49 U.S.C. Section 1801, et seq.), the
Resource Conservation and Recovery Act of 1976, as amended (42 U.S.C. Section
6901, et seq.), and in the regulations adopted and publications promulgated
pursuant thereto, or in any other applicable federal, state or local
environmental law, ordinance, rule or regulation.
(c) The obligations of the Company and the Guarantors under this
Section 7.07 will survive the satisfaction and discharge of this Indenture.
(d) To secure the Company's and the Guarantors' payment obligations in
this Section 7.07, the Trustee will have a Lien prior to the Notes on all money
or property held or collected by the Trustee, except that held in trust to pay
principal and interest on particular Notes. Such Lien will survive the
satisfaction and discharge of this Indenture.
(e) When the Trustee incurs expenses or renders services after an
Event of Default specified in Section 6.01(8) or (9) hereof occurs, the expenses
and the compensation for the services (including the fees and expenses of its
agents and counsel) are intended to constitute expenses of administration under
any Bankruptcy Law.
(f) The Trustee will comply with the provisions of TIA Section
313(b)(2) to the extent applicable.
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Section 7.08 Replacement of Trustee.
(a) A resignation or removal of the Trustee and appointment of a
successor Trustee will become effective only upon the successor Trustee's
acceptance of appointment as provided in this Section 7.08.
(b) The Trustee may, upon 30 days' written notice to the Company,
resign and be discharged from the trust hereby created by so notifying the
Company. The Holders of a majority in aggregate principal amount of the then
outstanding Notes may remove the Trustee by so notifying the Trustee and the
Company in writing. The Company may remove the Trustee if:
(1) the Trustee fails to comply with Section 7.10 hereof;
(2) the Trustee is adjudged a bankrupt or an insolvent or an order for
relief is entered with respect to the Trustee under any Bankruptcy Law;
(3) a custodian or public officer takes charge of the Trustee or its
property; or
(4) the Trustee becomes incapable of acting.
(c) If the Trustee resigns or is removed or if a vacancy exists in the
office of Trustee for any reason, the Company will promptly appoint a successor
Trustee. Within one year after the successor Trustee takes office, the Holders
of a majority in aggregate principal amount of the then outstanding Notes may
appoint a successor Trustee to replace the successor Trustee appointed by the
Company.
(d) If a successor Trustee does not take office within 60 days after
the retiring Trustee resigns or is removed, the retiring Trustee, the Company,
or the Holders of at least 10% in aggregate principal amount of the then
outstanding Notes may petition any court of competent jurisdiction for the
appointment of a successor Trustee.
(e) If the Trustee, after written request by any Holder who has been a
Holder for at least six months, fails to comply with Section 7.10 hereof, such
Holder may petition any court of competent jurisdiction for the removal of the
Trustee and the appointment of a successor Trustee.
(f) A successor Trustee will deliver a written acceptance of its
appointment to the retiring Trustee and to the Company. Thereupon, the
resignation or removal of the retiring Trustee will become effective, and the
successor Trustee will have all the rights, powers and duties of the Trustee
under this Indenture. The successor Trustee will mail a notice of its succession
to Holders. The retiring Trustee will promptly transfer all property held by it
as Trustee to the successor Trustee; provided all sums owing to the Trustee
hereunder have been paid and subject to the Lien provided for in Section 7.07
hereof. Notwithstanding replacement of the Trustee pursuant to this Section
7.08, the Company's obligations under Section 7.07 hereof will continue for the
benefit of the retiring Trustee.
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 or assets
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to, another corporation or banking association, the successor corporation
without any further act will be the successor Trustee.
Section 7.10 Eligibility; Disqualification. There will at all times be
a Trustee hereunder that is a corporation organized and doing business under the
laws of the United States of America or of any state thereof that is authorized
under such laws to exercise corporate trustee power, that is subject to
supervision or examination by federal or state authorities and that has a
combined capital and surplus of at least $100.0 million as set forth in its most
recent published annual report of condition.
This Indenture will always have a Trustee who satisfies the
requirements of TIA Section 310(a)(1), (2) and (5). The Trustee is subject to
TIA Section 310(b).
Section 7.11 Preferential Collection of Claims Against Company. The
Trustee is subject to TIA Section 311(a), excluding any creditor relationship
listed in TIA Section 311(b). A Trustee who has resigned or been removed shall
be subject to TIA Section 311(a) to the extent indicated therein.
ARTICLE VIII
Legal Defeasance and Covenant Defeasance
Section 8.01 Option to Effect Legal Defeasance or Covenant Defeasance.
The Company may, at the option of its Board of Directors evidenced by a
resolution set forth in an Officers' Certificate, and at any time, elect to have
either Section 8.02 or 8.03 hereof applied to all outstanding Notes upon
compliance with the conditions set forth below in this Article VIII.
Section 8.02 Legal Defeasance and Discharge. Upon the Company's
exercise under Section 8.01 hereof of the option applicable to this Section
8.02, the Company and each of the Guarantors will, subject to the satisfaction
of the conditions set forth in Section 8.04 hereof, be deemed to have been
discharged from their obligations with respect to all outstanding Notes
(including the Note Guarantees) on the date the conditions set forth below are
satisfied (hereinafter, "Legal Defeasance"). For this purpose, Legal Defeasance
means that the Company and the Guarantors will be deemed to have paid and
discharged the entire Indebtedness represented by the outstanding Notes
(including the Note Guarantees), which will thereafter be deemed to be
"outstanding" only for the purposes of Section 8.05 hereof and the other
Sections of this Indenture referred to in clauses (1) and (2) of this Section
8.02, and to have satisfied all their other obligations under such Notes, the
Note Guarantees and this Indenture (and the Trustee, on demand of and at the
expense of the Company, shall execute proper instruments acknowledging the
same), except for the following provisions which will survive until otherwise
terminated or discharged hereunder:
(1) the rights of Holders of outstanding Notes to receive payments in
respect of the principal of, or interest or premium, if any, on, such Notes
when such payments are due from the trust referred to in Section 8.04
hereof;
(2) the Company's Obligations with respect to such Notes under Article
II (other than Section 2.12) and Section 4.02 hereof;
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(3) the rights, powers, trusts, duties and immunities of the Trustee
hereunder and the Company's and the Guarantors' Obligations in connection
therewith; and
(4) this Article VIII.
Subject to compliance with this Article VIII, the Company may exercise
its option under this Section 8.02 notwithstanding the prior exercise of its
option under Section 8.03 hereof.
Section 8.03 Covenant Defeasance. Upon the Company's exercise under
Section 8.01 hereof of the option applicable to this Section 8.03, the Company
and each of the Guarantors will, subject to the satisfaction of the conditions
set forth in Section 8.04 hereof, be released from each of their Obligations
under the covenants contained in Sections 3.09, 4.03, 4.07, 4.08, 4.09, 4.10,
4.11, 4.12, 4.13, 4.15, 4.16, 4.17, 4.18, 4.19, 4.20, 4.21, 4.22, 4.23 and 5.01
and Article XIII hereof and the covenants contained in the Security Documents
with respect to the outstanding Notes on and after the date the conditions set
forth in Section 8.04 hereof are satisfied (hereinafter, "Covenant Defeasance"),
and the Notes will thereafter be deemed not "outstanding" for the purposes of
any direction, waiver, consent or declaration or act of Holders (and the
consequences of any thereof) in connection with such covenants, but will
continue to be deemed "outstanding" for all other purposes hereunder (it being
understood that such Notes will not be deemed outstanding for accounting
purposes). For this purpose, Covenant Defeasance means that, with respect to the
outstanding Notes and Note Guarantees, the Company and the Guarantors may omit
to comply with and will have no liability in respect of any term, condition or
limitation set forth in any such covenant, whether directly or indirectly, by
reason of any reference elsewhere herein to any such covenant or by reason of
any reference in any such covenant to any other provision herein or in any other
document and such omission to comply will not constitute a Default or an Event
of Default under Section 6.01 hereof, but, except as specified above, the
remainder of this Indenture and such Notes and Note Guarantees will be
unaffected thereby. Upon the Company's exercise under Section 8.01 hereof of the
option applicable to this Section 8.03, subject to the satisfaction of the
conditions set forth in Section 8.04 hereof, clauses (3), (4), (5), (6), (7),
(10), (11), (12) and (13) of Section 6.01 hereof will not constitute Events of
Default.
Section 8.04 Conditions to Legal or Covenant Defeasance. In order to
exercise either Legal Defeasance or Covenant Defeasance under either Section
8.02 or 8.03 hereof:
(1) the Company must irrevocably deposit with the Trustee, in trust,
for the benefit of the Holders, cash in U.S. dollars, non-callable
Government Securities, or a combination thereof, in such amounts as will be
sufficient, in the opinion of a nationally recognized independent
investment bank, appraisal firm, or firm of independent public accountants,
to pay the principal of, premium, 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 must specify whether
the Notes are being defeased to such stated date for payment or to a
particular redemption date;
(2) in the case of an election under Section 8.02 hereof, the Company
must deliver to the Trustee an Opinion of Counsel confirming
that:
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(A) the Company has received from, or there has been published
by, the Internal Revenue Service a ruling; or
(B) since the Issue Date, there has been a change in the
applicable federal income tax law,
in either case to the effect that, and based thereon such Opinion of
Counsel shall confirm that, the Holders of the outstanding Notes will not
recognize income, gain or loss for federal income tax purposes as a result
of such Legal Defeasance and will be subject to federal income tax on the
same amounts, in the same manner and at the same times as would have been
the case if such Legal Defeasance had not occurred;
(3) in the case of an election under Section 8.03 hereof, the Company
must deliver to the Trustee an Opinion of Counsel confirming that the
Holders of the outstanding Notes will not recognize income, gain or loss
for federal income tax purposes as a result of such Covenant Defeasance and
will be subject to federal income tax on the same amounts, in the same
manner and at the same times as would have been the case if such Covenant
Defeasance had not occurred;
(4) no Default or Event of Default shall have occurred and be
continuing on the date of such deposit (other than a Default or Event of
Default resulting from the borrowing of funds to be applied to such deposit
or the granting of any Lien to secure such borrowing) and the deposit will
not result in a breach or violation of, or constitute a default under, any
other instrument to which the Company or any Guarantor is a party or by
which the Company or any Guarantor is bound;
(5) such Legal Defeasance or Covenant Defeasance will not result in a
breach or violation of, or constitute a default under, any material
agreement or instrument (other than this Indenture) to which the Company or
any of its Subsidiaries is a party or by which the Company or any of its
Subsidiaries is bound;
(6) the Company must deliver to the Trustee an Officers' Certificate
stating that the deposit was not made by the Company with the intent of
preferring the Holders of Notes over the other creditors of the Company
with the intent of defeating, hindering, delaying or defrauding any
creditors of the Company or others; and
(7) the Company must deliver to the Trustee an Officers' Certificate
and an Opinion of Counsel, each stating that all conditions precedent
relating to the Legal Defeasance or the Covenant Defeasance have been
complied with.
The Collateral will be released from the Liens securing the Notes and
the Note Guarantees, as provided under Article XIII hereof, upon a Legal
Defeasance or Covenant Defeasance in accordance with the provisions of this
Article described above.
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 will be held in trust and applied by the
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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, if any, and interest, but such money need not be segregated from other
funds except to the extent required by law.
The Company will pay and indemnify the Trustee against any tax, fee or
other charge imposed on or assessed against the cash or 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.
Notwithstanding anything in this Article VIII to the contrary, the
Trustee will deliver or pay to the Company from time to time upon the request of
the Company any money or 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(1) hereof), are in excess of the amount thereof that would then be
required to be deposited to effect an equivalent Legal Defeasance or Covenant
Defeasance.
Section 8.06 Repayment to Company. Any money deposited with the
Trustee or any Paying Agent, or then held by the Company, in trust for the
payment of the principal of, premium, if any, or interest on, any Note and
remaining unclaimed for two years after such principal, premium, if any, or
interest has become due and payable shall be paid to the Company on its request
or (if then held by the Company) will be discharged from such trust; and the
Holder of such Note will thereafter be permitted to look only to the Company for
payment thereof, and all liability of the Trustee or such Paying Agent with
respect to such trust money, and all liability of the Company as trustee
thereof, will thereupon cease; provided, however, that the Trustee or such
Paying Agent, before being required to make any such repayment, may at the
expense of the Company cause to be published once, in the New York Times and The
Wall Street Journal (national edition), notice that such money remains unclaimed
and that, after a date specified therein, which will not be less than 30 days
from the date of such notification or publication, any unclaimed balance of such
money then remaining will be repaid to the Company.
Section 8.07 Reinstatement. If the Trustee or Paying Agent is unable
to apply any U.S. 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 and the Guarantors'
Obligations under this Indenture and the Notes and the Note Guarantees will be
revived and reinstated as though no deposit had occurred pursuant to Section
8.02 or 8.03 hereof until such time as the Trustee or Paying Agent is permitted
to apply all such money in accordance with Section 8.02 or 8.03 hereof, as the
case may be; provided, however, that, if the Company makes any payment of
principal of, premium, if any, or interest on, any Note following the
reinstatement of its Obligations, the Company will be subrogated to the rights
of the Holders of such Notes to receive such payment from the money held by the
Trustee or Paying Agent.
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ARTICLE IX
Amendment, Supplement and Waiver
Section 9.01 Without Consent of Holders of Notes. Notwithstanding
Section 9.02 hereof, without the consent of any Holder of Notes, the Company,
the Guarantors and the Trustee (and the Collateral Agent, as applicable) may, to
the extent any such change would not adversely affect the Holders of Notes,
amend or supplement this Indenture, the Notes, the Note Guarantees, the
Intercreditor Agreements or the Security Documents:
(1) to cure any ambiguity, defect or inconsistency;
(2) to provide for uncertificated Notes in addition to or in place of
certificated Notes;
(3) to provide for the assumption of the Company's or a Guarantor's
Obligations to the Holders of the Notes and Note Guarantees in the case of
a merger or consolidation or sale of all or substantially all of the
Company's or such Guarantor's assets, as applicable;
(4) to make any change that would provide any additional rights or
benefits to the Holders of the Notes or that does not adversely affect the
legal rights hereunder of any Holder;
(5) to comply with the requirements of the SEC in order to effect or
maintain the qualification of this Indenture under the TIA;
(6) to provide for the issuance of Additional Notes in accordance with
the limitations set forth in this Indenture as of the Issue Date;
(7) to allow any Guarantor to execute a supplemental indenture
(including, without limitation, to evidence its Note Guarantee) with
respect to the Notes or to release any Guarantor from its Note Guarantee as
provided or permitted by the terms hereof;
(8) to provide for the acceptance of appointment under this Indenture
of a successor Trustee with respect to the Notes issued hereunder;
(9) to make, complete or confirm any Note Guarantee or any grant of
Collateral permitted or required by this Indenture or any of the Security
Documents or any discharge or release of any Note Guarantee or any
Collateral that is permitted by this Indenture, the Intercreditor
Agreements or any of the Security Documents;
(10) to conform the text of this Indenture or the Notes to any
provision of the "Description of Notes" section of the Offering Memorandum
dated January 29, 2010, relating to the offering of the Initial Notes
issued on the Issue Date (the "Offering Memorandum"), to the extent that
such provision in that "Description of Notes" was intended (as detailed in
an Officers' Certificate delivered by the Company to the Trustee) to be a
verbatim recitation of a provision of this Indenture or the Notes; or
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(11) (a) to allow Hedging Obligations and Obligations in respect of
cash management services owing to Persons other than holders of Secured
Bank Indebtedness or their Affiliates to be treated as "First Priority Lien
Obligations" under the Second Lien Intercreditor Agreement and "RCF/Hedging
Obligations" under the First Lien Intercreditor Agreement; or (b) to
conform any limits on the amount of "First Lien Obligations" and "Second
Lien Obligations" specified in the Second Lien Intercreditor Agreement and
of "Note Obligations" and "RCF Obligations" specified in the First Lien
Intercreditor Agreement to the amounts permitted for such Obligations
pursuant to the definition of "Permitted Liens" in this Indenture.
Upon the request of the Company accompanied by a resolution of its
Board of Directors authorizing the execution of any such amended or supplemental
indenture, and upon receipt by the Trustee of the documents described in Section
7.02 hereof, the Trustee will join with the Company and the Guarantors in the
execution of any amended or supplemental indenture authorized or permitted by
the terms of this Indenture and to make any further appropriate agreements and
stipulations that may be therein contained, but the Trustee will not be
obligated to enter into such amended or supplemental indenture that affects its
own rights, duties or immunities under this Indenture or otherwise.
Section 9.02 With Consent of Holders of Notes. Except as provided
below in this Section 9.02, the Company and the Trustee may amend or supplement
this Indenture (including, without limitation, Section 3.09, 4.10 and 4.15
hereof), the Notes, the Note Guarantees, the Intercreditor Agreements and the
Security Documents with the consent of the Holders of at least a majority in
aggregate principal amount of the Notes (including, without limitation,
Additional Notes, if any) then outstanding voting as a single class (including,
without limitation, consents obtained in connection with a tender offer or
exchange offer for, or purchase of, the Notes), and, subject to Sections 6.04
and 6.07 hereof, any existing Default or Event of Default (other than a Default
or Event of Default in the payment of the principal of, premium, 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 or
the Notes or the Note Guarantees may be waived with the consent of the Holders
of a majority in aggregate principal amount of the then outstanding Notes
(including, without limitation, Additional Notes, if any) 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). 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 reasonably
satisfactory to the Trustee of the consent of the Holders of Notes as aforesaid,
and upon receipt by the Trustee of the documents described in Section 7.02
hereof, the Trustee will join with the Company and the Guarantors in the
execution of such amended or supplemental indenture unless such amended or
supplemental indenture directly affects the Trustee's own rights, duties or
immunities under this Indenture or otherwise, in which case the Trustee may in
its discretion, but will not be obligated to, enter into such amended or
supplemental Indenture.
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It is not necessary for the consent of the Holders of Notes under this
Section 9.02 to approve the particular form of any proposed amendment,
supplement or waiver, but it is sufficient if such consent approves the
substance thereof.
After an amendment, supplement or waiver under this Section 9.02
becomes effective, the Company will mail to the Holders of Notes affected
thereby a notice briefly describing the amendment, supplement or waiver. Any
failure of the Company to mail such notice, or any defect therein, will not,
however, in any way impair or affect the validity of any such amended or
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 and the Guarantors with any provision of this Indenture,
the Notes or the Note Guarantees. However, without the consent of each Holder
affected, an amendment, supplement or waiver under this Section 9.02 may not
(with respect to any Notes held by a non-consenting Holder):
(1) reduce the principal amount of Notes whose Holders must consent to
an amendment, supplement or waiver;
(2) reduce the principal of or change the fixed maturity of any Note
or alter any of the provisions with respect to the redemption of the Notes
(except as provided above with respect to Sections 3.09, 4.10 and 4.15 hereof);
(3) reduce the rate of or change the time for payment of interest,
including defaulted interest, on any Note;
(4) waive a Default or Event of Default in the payment of principal
of, or premium, 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);
(5) make any Note payable in money other than that stated in the
Notes;
(6) make any change in the provisions of this Indenture relating to
waivers of past Defaults or the rights of Holders of Notes to receive payments
of principal of, or interest or premium, if any, on, the Notes;
(7) waive a redemption payment with respect to any Note (other than a
payment required by Sections 3.09, 4.10 or 4.15 hereof);
(8) release any Guarantor from any of its Obligations under its Note
Guarantee or this Indenture, except in accordance with the terms of this
Indenture; or
(9) make any change in the preceding amendment and waiver provisions.
In addition, any amendment to, or waiver of, any provision of this Indenture,
the Intercreditor Agreements or any Security Document (i) that has the effect of
releasing all or substantially all of the Collateral from the Liens securing the
Notes and the Note Guarantees or (ii) relating to the application of proceeds of
Collateral that would materially adversely affect the Holders of Notes,
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in each case, shall require the consent of the Holders of at least 66?% in
aggregate principal amount of the Notes then outstanding.
Section 9.03 Compliance with Trust Indenture Act. Every amendment or
supplement to this Indenture or the Notes will be set forth in an amended or
supplemental indenture that complies with the TIA as then in effect.
Section 9.04 Revocation and Effect of Consents. Until an amendment,
supplement or waiver becomes effective, a consent to it by a Holder of a Note is
a continuing consent by the Holder of a Note and every subsequent Holder of a
Note or portion of a Note that evidences the same debt as the consenting
Holder's Note, even if notation of the consent is not made on any Note. However,
any such Holder of a Note or subsequent Holder of a Note may revoke the consent
as to its Note if the Trustee receives written notice of revocation before the
date the amendment, supplement or waiver becomes effective. An amendment,
supplement or waiver becomes effective in accordance with its terms and
thereafter binds every Holder.
Section 9.05 Notation on or Exchange of Notes. The Trustee may place
an appropriate notation about an amendment, supplement or waiver on any Note
thereafter authenticated. The Company in exchange for all Notes may issue and
the Trustee shall, upon receipt of an Authentication Order, authenticate new
Notes that reflect the amendment, supplement or waiver.
Failure to make the appropriate notation or issue a new Note will not
affect the validity and effect of such amendment, supplement or waiver.
Section 9.06 Trustee to Sign Amendments, etc. The Trustee (or
Collateral Agent, as applicable) will sign any amended or supplemental indenture
authorized pursuant to this Article IX (or any amendments under the Security
Documents or the Intercreditor Agreements duly authorized thereunder) if the
amendment or supplement does not adversely affect the rights, duties,
liabilities or immunities of the Trustee (or the Collateral Agent, as the case
may be). The Company may not sign an amended or supplemental indenture until the
Board of Directors of the Company approves it. In executing any amended or
supplemental indenture, the Trustee will be entitled to receive and (subject to
Section 7.01 hereof) will be fully protected in relying upon, in addition to the
documents required by Section 12.04 hereof, an Officers' Certificate and an
Opinion of Counsel stating that the execution of such amended or supplemental
indenture is authorized or permitted by this Indenture (and the Security
Documents and the Intercreditor Agreements, if applicable).
ARTICLE X
Note Guarantees
Section 10.01 Guarantee.
(a) Subject to this Article X, 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:
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(1) the principal of, premium, if any, and interest on, the Notes will
be promptly paid in full when due, whether at maturity, by acceleration,
redemption or otherwise, and interest on the overdue principal of and
interest on the Notes, if any, if lawful, and all other obligations of the
Company to the Holders or the Trustee hereunder or thereunder will be
promptly paid in full or performed, all in accordance with the terms hereof
and thereof; and
(2) in case of any extension of time of payment or renewal of any
Notes or any of such other obligations, that same will be promptly paid in
full when due or performed in accordance with the terms of the extension or
renewal, whether at stated maturity, by acceleration or otherwise.
Failing payment when due of any amount so guaranteed or any
performance so guaranteed for whatever reason, the Guarantors will be jointly
and severally obligated to pay the same immediately. Each Guarantor agrees that
this is a guarantee of payment and not a guarantee of collection.
(b) The Guarantors hereby agree that their obligations hereunder are
unconditional, irrespective of the validity, regularity or enforceability of the
Notes or this Indenture, the absence of any action to enforce the same, any
waiver or consent by any Holder of the Notes with respect to any provisions
hereof or thereof, the recovery of any judgment against the Company, any action
to enforce the same or any other circumstance which might otherwise constitute a
legal or equitable discharge or defense of a guarantor. Each Guarantor hereby
waives diligence, presentment, demand of payment, filing of claims with a court
in the event of insolvency or bankruptcy of the Company, any right to require a
proceeding first against the Company, protest, notice and all demands whatsoever
and covenant that this Note Guarantee will not be discharged except by complete
performance of the obligations contained in the Notes and this Indenture.
(c) If any Holder or the Trustee is required by any court or otherwise
to return to the Company, the Guarantors or any custodian, trustee, liquidator
or other similar official acting in relation to either the Company or the
Guarantors, any amount paid by either to the Trustee or such Holder, this Note
Guarantee, to the extent theretofore discharged, will be reinstated in full
force and effect.
(d) Each Guarantor agrees that it will not be entitled to any right of
subrogation in relation to the Holders in respect of any obligations guaranteed
hereby until payment in full of all obligations guaranteed hereby. Each
Guarantor further agrees that, as between the Guarantors, on the one hand, and
the Holders and the Trustee, on the other hand, (1) the maturity of the
obligations guaranteed hereby may be accelerated as provided in Article VI
hereof for the purposes of this Note Guarantee, notwithstanding any stay,
injunction or other prohibition preventing such acceleration in respect of the
obligations guaranteed hereby, and (2) in the event of any declaration of
acceleration of such obligations as provided in Article VI hereof, such
obligations (whether or not due and payable) will forthwith become due and
payable by the Guarantors for the purpose of this Note Guarantee. The Guarantors
will have the right to seek contribution from any non-paying Guarantor so long
as the exercise of such right does not impair the rights of the Holders under
the Note Guarantee.
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Section 10.02 Limitation on Guarantor Liability. Each Guarantor, and
by its acceptance of Notes, each Holder, hereby confirms that it is the
intention of all such parties that the Note Guarantee 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 Note Guarantee.
To effectuate the foregoing intention, the Trustee, the Holders and the
Guarantors hereby irrevocably agree that the obligations of such Guarantor will
be limited to the maximum amount that will, after giving effect to such maximum
amount and all other contingent and fixed liabilities of such Guarantor that are
relevant under such laws, and after giving effect to any collections from,
rights to receive contribution from or payments made by or on behalf of any
other Guarantor in respect of the obligations of such other Guarantor under this
Article X, result in the obligations of such Guarantor under its Note Guarantee
not constituting a fraudulent transfer or conveyance.
Section 10.03 Execution and Delivery of Note Guarantee. Each Guarantor
hereby agrees that its execution and delivery of this Indenture or, if
applicable, any supplemental indenture pursuant to Section 4.19 hereof and this
Section 10.03 shall evidence its Note Guarantee set forth in Section 10.01
hereof without the need for notation on the Notes. If required by Section 4.19
hereof, the Company will cause the relevant entity to comply with the provisions
of Section 4.19 hereof and this Article X, to the extent applicable.
Section 10.04 Guarantors May Consolidate, etc., on Certain Terms.
Except as otherwise provided in Section 10.05 hereof, no Guarantor may sell or
otherwise Dispose of all or substantially all of its assets to, or consolidate
with or merge with or into (whether or not such Guarantor is the surviving
Person) another Person, other than the Company or another Guarantor, unless:
(1) except with respect to a Parent Entity Transaction, immediately
after giving effect to such transaction, no Default or Event of Default
exists; and
(2) either:
(a) subject to Section 10.05 hereof, the Person acquiring the
property in any such Disposition or the Person formed by or surviving
any such consolidation or merger assumes all the Obligations of that
Guarantor under (i) this Indenture and its Note Guarantee on the terms
set forth herein or therein, pursuant to a supplemental indenture in
form and substance reasonably satisfactory to the Trustee and the
Collateral Agent (if not then the Trustee) and (ii) the Security
Documents to which that Guarantor was a party by amendment, supplement
or other instrument reasonably satisfactory to the Trustee and the
Collateral Agent, and in connection therewith shall cause such
instruments to be filed and recorded in such jurisdictions and take
such other actions as may be required by applicable law to perfect or
continue the perfection of the Lien created under the Security
Documents on the Collateral owned by or transferred to the surviving
entity; or
(b) the Net Proceeds of such Disposition are applied in
accordance with the applicable provisions of this Indenture, including
without limitation, Section 4.10 hereof; and
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(3) if the Guarantor is a party to the Environmental Indemnity
Agreements, all rights afforded to such Guarantor under the Environmental
Indemnity Agreements 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 Note
Guarantee and the due and punctual performance of all of the covenants and
conditions of this Indenture to be performed by the Guarantor, such successor
Person will succeed to and be substituted for the Guarantor with the same effect
as if it had been named herein as a Guarantor. All Note Guarantees so evidenced
will in all respects have the same legal rank and benefit under this Indenture
as the Note Guarantees theretofore and thereafter issued in accordance with the
terms of this Indenture as though all of such Note Guarantees had been executed
at the Issue Date.
Except as set forth in Articles IV and V hereof, and notwithstanding
clauses 2(a) and (b) above, nothing contained in this Indenture or in any of the
Notes will prevent any consolidation or merger of a Guarantor with or into the
Company or another Guarantor, or will prevent any sale or conveyance of the
property of a Guarantor as an entirety or substantially as an entirety to the
Company or another Guarantor.
Section 10.05 Releases.
(a) In the event of any Disposition of all or substantially all of the
assets of any Guarantor, by way of merger, consolidation or otherwise, to a
Person that is not (either before or after giving effect to such transaction)
the Company or a Restricted Subsidiary of the Company, then such Guarantor will
be released and relieved of any obligations under its Note Guarantee; provided
that the Net Proceeds of such Disposition are applied in accordance with the
applicable provisions of this Indenture, including without limitation Section
4.10 hereof.
(b) In the event of any Disposition of Capital Stock of a Guarantor to
a Person that is not (either before or after giving effect to such transaction)
the Company or a Restricted Subsidiary of the Company, then such Guarantor will
be released and relieved of any obligations under its Note Guarantee; provided
that (i) the Net Proceeds of such Disposition are applied in accordance with the
applicable provisions of this Indenture, including without limitation Section
4.10 hereof, (ii) such Guarantor ceases to be a Restricted Subsidiary as a
result of such Disposition and (iii) such Guarantor no longer guarantees the
Second Lien Notes (or any Permitted Refinancing Indebtedness in respect thereof
in reliance on clause (12) of the definition of "Permitted Liens").
(c) Upon designation of any Guarantor as an Unrestricted Subsidiary in
accordance with the terms of this Indenture, such Guarantor will be released and
relieved of any obligations under its Note Guarantee.
(d) Upon Legal Defeasance in accordance with Article VIII hereof or
satisfaction and discharge of this Indenture in accordance with Article XI
hereof, each Guarantor will be released and relieved of any obligations under
its Note Guarantee.
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(e) If any Guarantor ceases to be a Subsidiary of the Company as a
result of any foreclosure of any pledge or security interest securing
RCF/Hedging Obligations such Guarantor will be released and relieved of any
obligations under its Note Guarantee; provided that the proceeds, including
Proceeds of Notes Priority Collateral (after giving effect to the last sentence
of Section 4.10(a) hereof and Section 4.1(d) of the First Lien Intercreditor
Agreement), of such foreclosure have been applied in accordance with the
provisions of this Indenture, the Security Documents and the First Lien
Intercreditor Agreement.
(f) Upon the release of any Guarantor from its Note Guarantee with the
consent of the Holders of the requisite percentage of Notes in accordance with
Article IX hereof, such Guarantor will be automatically released and relieved of
any obligations under its Note Guarantee.
(g) Upon the release of StateAppleton StateCanada from its guarantee
of all other material Indebtedness, StateAppleton StateStateCanada shall
automatically be released and relieved of any obligations under its Note
Guarantee.
At the Company's request and expense, the Trustee will execute and
deliver any instrument evidencing the release of any Guarantor from its
obligations under its Note Guarantee pursuant to clauses (a), (b), (c), (d),
(e), (f) and (g) of this Section 10.05; provided that, for any release of a
Guarantor from its obligations under its Note Guarantee pursuant clause (a), the
Company shall deliver to the Trustee an Officers' Certificate and an Opinion of
Counsel to the effect that such Disposition was made by the Company in
accordance with the provisions of this Indenture, including without limitation
Section 4.10 hereof.
Any Guarantor not released from its obligations under its Note
Guarantee as provided in this Section 10.05 will remain liable for the full
amount of principal of and interest and premium, if any, on the Notes and for
the other obligations of any Guarantor under this Indenture as provided in this
Article X.
ARTICLE XI
Satisfaction and Discharge
Section 11.01 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
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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, if any, and accrued interest to
the date of maturity or redemption;
(2) no Default or Event of Default has occurred and is continuing on
the date of such deposit (other than a Default or Event of Default
resulting from the borrowing of funds to be applied to such deposit) and
the deposit will not result in a breach or violation of, or constitute a
default under, any other instrument to which the Company or any Guarantor
is a party or by which the Company or any Guarantor is bound;
(3) the Company or any Guarantor has paid or caused to be paid all
sums payable by it under this Indenture; and
(4) the Company has delivered irrevocable instructions to the Trustee
under this Indenture to apply the deposited money toward the payment of the
Notes at maturity or on 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. The Collateral will be released
from the Liens securing the Notes, and the Note Guarantees and the Security
Documents will be terminated, as provided in Article XIII hereof, upon a
satisfaction and discharge in accordance with the provisions of this Article
described above.
Notwithstanding the satisfaction and discharge of this Indenture, if
money has been deposited with the Trustee pursuant to subclause (b) of clause
(1) of this Section 11.01, the provisions of Sections 11.02 and 8.06 hereof will
survive. In addition, nothing in this Section 11.01 will be deemed to discharge
those provisions of Section 7.07 hereof, that, by their terms, survive the
satisfaction and discharge of this Indenture.
Section 11.02 Application of Trust Money. Subject to the provisions of
Section 8.06 hereof, all money deposited with the Trustee pursuant to Section
11.01 hereof shall be held in trust and applied by it, in accordance with the
provisions of the Notes and this Indenture, to the payment, either directly or
through any Paying Agent (including the Company acting as its own Paying Agent)
as the Trustee may determine, to the Persons entitled thereto, of the principal
(and premium, if any) and interest for whose payment such money has been
deposited with the Trustee; but such money need not be segregated from other
funds except to the extent required by law.
If the Trustee or Paying Agent is unable to apply any money or
Government Securities in accordance with Section 11.01 hereof by reason of any
legal proceeding or by reason of any order or judgment of any court or
governmental authority enjoining, restraining or otherwise prohibiting such
application, the Company's and any Guarantor's obligations under this Indenture
and the Notes shall be revived and reinstated as though no deposit had occurred
pursuant to Section 11.01 hereof; provided that if the Company has made any
payment of principal of, premium, if any, or interest on, any Notes because of
the reinstatement of its obligations, the Company shall be subrogated to the
rights of the Holders of such Notes to
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receive such payment from the money or Government Securities held by the Trustee
or Paying Agent.
ARTICLE XII
Miscellaneous
Section 12.01 Trust Indenture Act Controls. If any provision of this
Indenture limits, qualifies or conflicts with the duties imposed by TIA Section
318(c), the imposed duties will control.
Section 12.02 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 by first class mail (registered or certified, return receipt
requested), facsimile transmission or overnight air courier guaranteeing next
day delivery, to the others' address:
if to the Company and/or any Guarantor:
Appleton Papers Inc.
825 East Wisconsin Avenue
P.O. Box 359
Appleton, WI 54912
Facsimile No.: (920) 991-7256
Attention: Chief Financial Officer
if to the Trustee:
U.S. Bank National Association
60 Livingston Avenue
St. Paul, MN 55107
Facsimile No.: (651) 495-8097
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) will
be deemed to have been duly given: at the time delivered by hand, if personally
delivered; five Business Days after being deposited in the mail, postage
prepaid, if mailed; when receipt acknowledged, if transmitted by facsimile; 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 will be mailed by first class
mail, certified or registered, return receipt requested, or by overnight air
courier guaranteeing next day delivery to its address shown on the register kept
by the Registrar. Any notice or communication will also be so mailed to any
Person described in TIA Section 313(c), to the extent required by the TIA.
Failure to mail a notice or communication to a Holder or any defect in it will
not affect its sufficiency with respect to other Holders.
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If a notice or communication is mailed in the manner provided above
within the time prescribed, it is duly given, whether or not the addressee
receives it.
If the Company mails a notice or communication to Holders, it will
mail a copy to the Trustee and each Agent at the same time.
Section 12.03 Communication by Holders of Notes with Other Holders of
Notes. Holders may communicate pursuant to TIA Section 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 Section
312(c).
Section 12.04 Certificate and Opinion as to Conditions Precedent. Upon
any request or application by the Company to the Trustee to take any action
under this Indenture, the Company shall furnish to the Trustee:
(1) an Officers' Certificate in form and substance reasonably
satisfactory to the Trustee (which must include the statements set forth in
Section 12.05 hereof) stating that, in the opinion of the signers, all
conditions precedent and covenants, if any, provided for in this Indenture
relating to the proposed action have been satisfied; and
(2) an Opinion of Counsel in form and substance reasonably
satisfactory to the Trustee (which must include the statements set forth in
Section 12.05 hereof) stating that, in the opinion of such counsel, all
such conditions precedent and covenants have been satisfied.
Section 12.05 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 Section 314(a)(4)) must comply with the provisions of TIA Section 314(e) and
must include:
(1) a statement that the Person making such certificate or opinion has
read such covenant or condition;
(2) a brief statement as to the nature and scope of the examination or
investigation upon which the statements or opinions contained in such
certificate or opinion are based;
(3) a statement that, in the opinion of such Person, he or she has
made such examination or investigation as is necessary to enable him or her
to express an informed opinion as to whether or not such covenant or
condition has been satisfied; and
(4) a statement as to whether or not, in the opinion of such Person,
such condition or covenant has been satisfied;
provided that an issuer of an Opinion of Counsel may rely as to matters of fact
on an Officers' Certificate or a certificate of a public official.
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Section 12.06 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 12.07 No Personal Liability of Directors, Officers, Employees
and Stockholders. No past, present or future director, officer, employee,
incorporator or stockholder of the Company or any Guarantor, as such, will have
any liability for any Obligations of the Company or the Guarantors under the
Notes, this Indenture, the Note Guarantees or for any claim based on, in respect
of, or by reason of, such Obligations or their creation. Each Holder of Notes by
accepting a Note waives and releases all such liability. The waiver and release
are part of the consideration for issuance of the Notes. The waiver may not be
effective to waive liabilities under the federal securities laws.
Section 12.08 Governing Law. THE INTERNAL LAW OF THE STATE OF NEW YORK
SHALL GOVERN AND BE USED TO CONSTRUE THIS INDENTURE, THE NOTES AND THE NOTE
GUARANTEES 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 12.09 Waiver of Trial by Jury. EACH OF THE COMPANY, THE
GUARANTORS, THE TRUSTEE AND THE COLLATERAL AGENT HEREBY IRREVOCABLY WAIVES, TO
THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL BY
JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS INDENTURE, THE
NOTES, THE NOTE GUARANTEES OR THE TRANSACTIONS CONTEMPLATED HEREBY.
Section 12.10 No Adverse Interpretation of Other Agreements. This
Indenture may not be used to interpret any other indenture, loan or debt
agreement of the Company or its Subsidiaries or of any other Person. Any such
indenture, loan or debt agreement may not be used to interpret this Indenture.
Section 12.11 Successors. All agreements of the Company in this
Indenture and the Notes will bind its successors. All agreements of the Trustee
in this Indenture will bind its successors. All agreements of each Guarantor in
this Indenture will bind its successors, except as otherwise provided in Section
10.04 hereof.
Section 12.12 Severability. In case any provision in this Indenture or
in the Notes is invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions will not in any way be affected or
impaired thereby.
Section 12.13 Counterpart Originals. The parties may sign any number
of copies or counterparts of this Indenture. Each signed copy or counterpart
will be an original, but all of them together represent the same agreement. The
exchange of copies of this Indenture and of signature pages by facsimile or PDF
transmission shall constitute effective execution and delivery of this Indenture
as to the parties hereto and may be used in lieu of the original Indenture for
all purposes. Signatures of the parties hereto transmitted by facsimile or PDF
shall be deemed to be their original signatures for all purposes.
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Section 12.14 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 will in no way modify or restrict any of
the terms or provisions hereof.
ARTICLE XIII
Collateral and Security
Section 13.01 Security Interest.
(a) To secure the due and punctual payment of the principal of,
premium, if any, and interest on the Notes and amounts due hereunder and under
the Note Guarantees and the Security Documents when and as the same shall be due
and payable, whether on an interest payment date, at maturity, by acceleration,
purchase, repurchase, redemption or otherwise, and interest on the overdue
principal of, premium, if any, and interest, if any, on the Notes and the
performance of all other Obligations of the Company and the Guarantors to the
Holders, the Collateral Agent or the Trustee under this Indenture, the Notes,
the Note Guarantees and the Security Documents, the Company and the Guarantors
hereby covenant to cause the Security Documents (other than account control
agreements for the Deposit Accounts and Securities Accounts, each as defined in
the Security Agreement, which shall be executed in accordance with the terms
thereunder) and the First Lien Intercreditor Agreement and the second lien
notice described in the definition of "Second Lien Intercreditor Agreement" to
be delivered concurrently with this Indenture. Subject to the terms of the
Intercreditor Agreements, the Security Documents shall provide for the grant by
the Company and the Guarantors party thereto to the Collateral Agent of senior
first-priority security interests (subject to Permitted Liens) in the respective
assets that would constitute Notes Priority Collateral under the First Lien
Intercreditor Agreement and junior first-priority security interests (subject to
Permitted Liens) in the respective assets that would constitute RCF/Hedging
Priority Collateral under the First Lien Intercreditor Agreement.
(b) Each Holder, by its acceptance of a Note, consents and agrees to
the terms of the Intercreditor Agreements and each Security Document, as the
same may be in effect or may be amended, restated, replaced, supplemented or
otherwise modified from time to time in accordance with their respective terms,
and authorizes and directs the Collateral Agent to enter into this Indenture,
the Security Documents and the Intercreditor Agreements and to perform its
obligations and exercise its rights hereunder and thereunder (including
appointment of the First Lien Representative) in accordance herewith and
therewith. The Company and the Parent Entity shall, and the Company shall cause
each other Guarantor to, do or cause to be done all such actions and things as
may be reasonably required by the provisions of the Security Documents or the
Intercreditor Agreements, to assure and confirm to the Collateral Agent the
security interests in the Collateral contemplated hereby and by the Security
Documents, as from time to time constituted, so as to render the same available
for the security and benefit of this Indenture, the Notes, the Note Guarantees
and the Security Documents secured hereby, according to the intent and purpose
herein and therein expressed and, subject to the Intercreditor Agreements,
including taking all commercially reasonable actions required to cause the
Security Documents to create and maintain, as security for the Notes and the
Note Guarantees, valid and enforceable, perfected (to the extent required in the
Security Documents) security interests in and on all the Collateral,
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in favor of the Collateral Agent, superior to and prior to the rights of all
third Persons except as set forth in the Security Documents and the
Intercreditor Agreements, and subject to no other Liens, in each case, except as
expressly permitted or provided herein or therein.
Section 13.02 Intercreditor Agreements. This Article XIII, the
Security Agreement and the other Security Documents are subject to the terms,
limitations and conditions set forth in the Intercreditor Agreements.
Section 13.03 Collateral Agent.
(a) Each Holder, by its acceptance of a Note, authorizes the Trustee
to appoint the Collateral Agent and the First Lien Representative. The Trustee
hereby appoints the Collateral Agent and the Collateral Agent hereby accepts
such appointment. The Collateral Agent shall be authorized to appoint
co-collateral agents or the First Lien Representative or any successors as
necessary in its sole discretion. In the event the Trustee and the Collateral
Agent shall at any time not be the same Person, the Collateral Agent shall take
such actions under the Intercreditor Agreements and the Security Documents as
are requested by the Trustee and as are not inconsistent with or contrary to the
provisions of any Security Document or the Intercreditor Agreements. Except as
otherwise explicitly provided herein or in the Security Documents, neither the
Collateral Agent nor any of its respective officers, directors, employees or
agents shall be liable for failure to demand, collect or realize upon any of the
Collateral or for any delay in doing so or shall be under any obligation to sell
or otherwise dispose of any Collateral upon the request of any other Person or
to take any other action whatsoever with regard to the Collateral or any part
thereof, except for its own willful misconduct or negligence. The Collateral
Agent shall be accountable only for amounts that it actually receives as a
result of the exercise of such powers, and neither the Collateral Agent nor any
of its officers, directors, employees or agents shall be responsible for any act
or failure to act hereunder, except for its own willful misconduct or
negligence.
(b) Each Holder, by its acceptance of a Note, authorizes and directs
the Collateral Agent to (1) enter into the Security Documents and the
Intercreditor Agreements, (2) bind the Holders of the Notes on the terms as set
forth in the Security Documents and the Intercreditor Agreements and (3) perform
and observe its obligations under the Security Documents and the Intercreditor
Agreements.
Section 13.04 Recording and Opinions. The Company shall furnish to the
Collateral Agent and the Trustee (if the Trustee is not then the Collateral
Agent) on or within one month after August 15 of each year, commencing August
15, 2010, an Opinion of Counsel either (A) stating that, in the opinion of such
counsel, such action has been taken with respect to the recording, filing,
re-recording and refiling of Liens under the Security Documents on Article 9
Collateral as necessary to maintain the perfection of such Liens, and reciting
the details of such action or (B) stating that, in the Opinion of such Counsel,
no such action is necessary to maintain the perfection of such Liens. For
purposes of the foregoing, the term "Article 9 Collateral" means Collateral with
respect to which a Lien thereon may be perfected by the filing of a UCC-1
financing statement pursuant to the Uniform Commercial Code as adopted in any
applicable jurisdiction or filing of a PPSA financing statement pursuant to the
Personal Property Security Act as adopted in Canada.
Section 13.05 Specified Releases of Collateral.
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(a) Collateral securing the Notes may be released from the Lien and
security interest created by the Security Documents at any time or from time to
time in accordance with the provisions of the Security Documents and the
Intercreditor Agreements, or as provided hereby.
(1) The Company and each Guarantor, as applicable, will be entitled to
releases of property and other assets included in its Collateral from the
Liens securing the Obligations under the Notes and the Note Guarantees
under any one or more of the following circumstances:
(A) to enable the Company or such Guarantor, as the case may be,
to sell, exchange or otherwise Dispose of any of the Collateral to the
extent not prohibited under Section 4.10 hereof;
(B) if such Guarantor is released from its Note Guarantee in
accordance with the terms of this Indenture; or
(C) if required in accordance with the terms of the First Lien
Intercreditor Agreement.
(2) The Company and each Guarantor will be entitled to releases of
assets included in the Collateral from the Liens securing the Obligations
under this Indenture, the Notes, the Note Guarantees and the Security
Documents with the consent of Holders in compliance with the amendment and
waiver provisions of this Indenture as described under Section 9.02 hereof.
(b) Upon receipt of an Officers' Certificate and Opinion of Counsel
certifying that all conditions precedent under this Indenture, the Security
Documents and the Intercreditor Agreements have been satisfied and any necessary
or proper instruments of termination, satisfaction or release prepared by the
Company or a Guarantor, as the case may be, the Collateral Agent shall execute,
deliver or acknowledge such instruments or releases to evidence the release of
any Collateral permitted to be released pursuant to this Indenture, the Security
Documents and the Intercreditor Agreements.
Section 13.06 Release of Collateral upon Satisfaction or Defeasance of
all Outstanding Obligations. The Liens on all Collateral securing the Notes and
the Note Guarantees will be terminated and released upon (i) payment in full of
the principal of, premium, if any, and accrued and unpaid interest on the Notes
and all other Obligations under this Indenture, the Notes, the Note Guarantees
and the Security Documents that are due and payable at or prior to the time such
principal, premium, if any, and accrued and unpaid interest are paid (including
pursuant to clause (ii) of this Section 13.06), (ii) a satisfaction and
discharge of this Indenture pursuant to Section 11.01 hereof and (iii) the
occurrence of a Legal Defeasance or Covenant Defeasance pursuant to Section 8.02
or 8.03 hereof.
Section 13.07 Post-Closing Collateral Requirement. To the extent the
Company and the Guarantors are not able to execute and deliver all Security
Documents required in connection with the creation and perfection of the Liens
of the Collateral Agent on the Collateral (to the extent required by this
Indenture and the Security Documents) on or prior to the date of this Indenture,
the Company and the Guarantors will use their commercially reasonable efforts to
105
complete such actions as soon as reasonably practicable, and in no event later
than (i) for account control agreements, 30 days following the date of this
Indenture, extended up to an additional 60 days to the extent the Administrative
Agent provides extensions therefor under the Credit Agreement and (ii) for all
other Security Documents, 90 days following the date of this Indenture;
provided, however, that the period for such compliance shall be automatically
extended for an additional 90 days for items of Collateral having an aggregate
book value of less than $15.0 million if the Company delivers to the Collateral
Agent a notice prior to the expiration of the initial 90 day period stating that
the Company has not completed all actions necessary to create and perfect Liens
on such Collateral (it being understood that for account control agreements,
such extensions shall be permitted only to the extent that the Administrative
Agent provides extensions therefor under the Credit Agreement). Notwithstanding
anything to the contrary set forth in this Indenture or any Security Document,
no Default or Event of Default will result from any failure to provide or
perfect a Lien (or to perfect on any property or asset owned by the Company or
the Guarantors) so long as the requirements of this Section 13.07 are otherwise
satisfied.
Section 13.08 Purchaser Protected. In no event shall any purchaser in
good faith of any property purported to be released hereunder be bound to
ascertain the authority of the Collateral Agent or the Trustee to execute the
release or to inquire as to the satisfaction of any conditions required by the
provisions hereof for the exercise of such authority or to see to the
application of any consideration given by such purchaser or other transferee;
nor shall any purchaser or other transferee of any property or rights permitted
by this Article XIII to be sold be under any obligation to ascertain or inquire
into the authority of the Company or the applicable Guarantor to make any such
sale or other transfer.
Section 13.09 Form and Sufficiency of Release. In the event that the
Company or any Guarantor has sold, exchanged, or otherwise disposed of or
proposes to sell, exchange or otherwise dispose of any portion of the Collateral
that may be sold, exchanged or otherwise disposed of by the Company or such
Guarantor, and the Company or such Guarantor requests the Trustee or the
Collateral Agent to furnish a written disclaimer, release or quit-claim of any
interest in such property under this Indenture and the Security Documents, the
Collateral Agent or the Trustee, as applicable, shall execute, acknowledge and
deliver to the Company or such Guarantor (in proper form) such an instrument
(prepared by the Company or such Guarantor) promptly after satisfaction of the
conditions set forth herein for delivery of any such release. Notwithstanding
the preceding sentence, all purchasers and grantees of any property or rights
purporting to be released herefrom shall be entitled to rely upon any release
executed by the Collateral Agent or the Trustee, as the case may be, hereunder
as sufficient for the purpose of this Indenture and as constituting a good and
valid release of the property therein described from the Lien of this Indenture
or of the Collateral Agreements.
Section 13.10 Insurance. The Company and the Guarantors will maintain
with financially sound and reputable insurance companies (as reasonably
determined by the Company at the time the insurance is obtained) insurance on
all their property in at least such amounts (after giving effect to any
self-insurance compatible with the following standards) and against at least
such risks (but including in any event general liability, product liability and
business interruption) as are usually insured against in the same general area
by companies engaged in the same or a similar business. Holders, as a class,
shall be named as additional insureds on all insurance policies of the Company
and the Guarantors, and the Collateral Agent will be named
106
as loss payee as its interests may appear, with 30 days' notice of cancellation
or material change, on all property and casualty insurance policies of the
Company and the Guarantors.
[signature pages follow]
107
SIGNATURES
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to
be duly executed, all as of the date first written above.
APPLETON PAPERS INC.
By: /s/ Jeffrey J. Fletcher
----------------------------------
Name: Jeffrey J. Fletcher
Title: Controller
PAPERWEIGHT DEVELOPMENT CORP., as
a Guarantor
By: /s/ Jeffrey J. Fletcher
----------------------------------
Name: Jeffrey J. Fletcher
Title: Controller
AMERICAN PLASTICS COMPANY, INC., as a
Guarantor
By: /s/ Jeffrey J. Fletcher
----------------------------------
Name: Jeffrey J. Fletcher
Title: Treasurer
NEW ENGLAND EXTRUSION INC., as a
Guarantor
By: /s/ Jeffrey J. Fletcher
----------------------------------
Name: Jeffrey J. Fletcher
Title: Treasurer
APPLETON PAPERS CANADA LTD., as a
Guarantor
By: /s/ Jeffrey J. Fletcher
----------------------------------
Name: Jeffrey J. Fletcher
Title: Treasurer
Appleton Papers Inc. - Indenture
U.S. BANK NATIONAL ASSOCIATION, as
Trustee and as Collateral Agent
By: /s/ Richard Prokosch
----------------------------------
Name:
Title:
Appleton Papers Inc. - Indenture
EXHIBIT A
[Form of Face of Note]
[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]
[Insert the Regulation S Temporary Global Note Legend, if applicable
pursuant to the provisions of the Indenture]
A-1
CUSIP [__________]
ISIN [__________]
APPLETON PAPERS INC.
10.50% SENIOR SECURED NOTE DUE 2015
No. [144A][Reg. S][IAI]-[___] $[__________]
Appleton Papers Inc., a Delaware corporation (the "Company," which term
includes any successor entity), for value received promises to pay to
_________________ or its registered assigns, the principal sum of
_____________________ (or such principal amount as may be set forth in the
records of the Trustee hereinafter referred to in accordance with the Indenture)
on June 15, 2015, and to pay interest thereon as hereinafter set forth.
Interest Payment Dates: June 15 and December 15
Record Dates: June 1 and December 1
Dated: [__________ __], 20[__]
Reference is made to the further provisions of this Note contained on the
reverse side of this Note, which will for all purposes have the same effect as
if set forth at this place.
A-2
IN WITNESS HEREOF, the Company has caused this instrument to be duly
executed.
APPLETON PAPERS INC.
By:
----------------------------------
Name:
Title:
A-3
TRUSTEE CERTIFICATE OF AUTHENTICATION
This Note is one of the 10.50% Senior Secured Notes due 2015 referred to in the
within-mentioned Indenture.
U.S. BANK NATIONAL ASSOCIATION, as
Trustee
By:
----------------------------------
Name:
Title:
Dated: [__________ __], 20[__]
A-4
[Form of Back of Note]
10.50% Senior Secured Note due 2015
Capitalized terms used herein 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
10.50% per annum from [___________], 20[__] until maturity. The Company will pay
interest 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 [___________], 20[__]. The
Company will pay interest (including post-petition interest in any proceeding
under any Bankruptcy Law) on overdue principal at a rate equal to 1% per annum
in excess of the then applicable interest rate on the Notes to the extent
lawful; it will pay interest (including post-petition interest in any proceeding
under any Bankruptcy Law) on overdue installments of interest (without regard to
any applicable grace period) at the same rate to the extent lawful. Interest
will be computed on the basis of a 360-day year comprised 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 Notes under the Indenture.]
2. Method of Payment. The Company will pay interest on the Notes (except
defaulted interest) to the Persons who are registered Holders of Notes at the
close of business on the June 1 or December 1 (whether or not a Business Day),
as the case may be, next preceding the Interest Payment Date, even if such Notes
are cancelled 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, 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 may be made by check mailed to the Holders at their
addresses set forth in the register of Holders; provided that payment by wire
transfer of immediately available funds will be required with respect to
principal of and interest and premium, if any, on, all Global Notes and all
other Notes the Holders of which will have provided wire transfer instructions
to the Company or the Paying Agent. Such payment will be in such coin or
currency of the United States of America as at the time of payment is legal
tender for payment of public and private debts.
3. Paying Agent and Registrar. Initially, U.S. Bank National Association,
the Trustee under the Indenture, will act as Paying Agent and Registrar. The
Company may change
A-5
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 February 8, 2010 (the "Indenture"), among the Company, the Guarantors, the
Trustee and the Collateral Agent. This Note is one of a duly authorized issue of
notes of the Company designated as its 10.50% Senior Secured Notes due 2015. 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.C. Sections 77aaa-77bbbb) (the "TIA"). The Notes are subject to all such
terms, and Holders are referred to the Indenture and the TIA 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.
5. Optional Redemption.
(a) The Company may on any one or more occasions on or prior to
February 7, 2013 redeem up to 35% of the aggregate principal amount of Notes
issued under the Indenture, upon not less than 30 nor more than 60 days' prior
notice, at a redemption price of 110.50% of the principal amount thereof, plus
accrued and unpaid interest to the redemption date (subject to the rights of
Holders of Notes on the relevant record date to receive interest due on the
relevant interest payment date) with the net cash proceeds of one or more Equity
Offerings; provided that:
(1) at least 65% of the aggregate principal amount of Notes
originally issued under the Indenture (excluding Notes held by the Company
and its Subsidiaries) remains outstanding immediately after the occurrence
of such redemption; and
(2) the redemption occurs within 90 days of the date of the closing
of such Equity Offering.
(b) On or after February 8, 2013, the Company may redeem the Notes,
in whole or in part, upon not less than 30 nor more than 60 days' prior notice,
at the redemption prices (expressed as percentages of principal amount) set
forth below, plus accrued and unpaid interest to the applicable redemption date,
if redeemed during the twelve-month period beginning on February 8 of the years
indicated below (subject to the rights of Holders of Notes on the relevant
record date to receive interest due on the relevant interest payment date);
Year Percentage
----------------------------------------------------------------- ------------
2013 105.25%
2014 and thereafter 100.00%
(c) Any redemption pursuant to this Section 5 shall be made pursuant
to the provisions of Sections 3.01 through 3.06 of the Indenture.
6. Mandatory Redemption. The Company is not required to make mandatory
redemption or sinking fund payments with respect to the Notes.
A-6
7. Notice of Redemption. Subject to Section 3.03 of the Indenture, notice
of redemption will be mailed by first-class mail at least 30 days but not more
than 60 days before the redemption date to each Holder whose Notes are to be
redeemed at its registered address, except that redemption notices may be mailed
more than 60 days prior to a redemption date if the notice is issued in
connection with a defeasance of the Notes or a satisfaction and discharge of the
Indenture pursuant to Article VIII or Article XI, respectively, of the
Indenture. Notes in denominations larger than $2,000 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 or purchase date, interest will
cease to accrue on Notes or portions thereof called for redemption or purchase.
A-7
8. Offer to Purchase. (a) Upon the occurrence of a Change of Control, the
Company will make an offer (a "Change of Control Offer") to each Holder to
repurchase all or any part (equal to $2,000 or an integral multiple of $1,000 in
excess thereof) of that Holder's Notes at a purchase price in cash equal to 101%
of the aggregate principal amount of Notes repurchased plus accrued and unpaid
interest on the Notes repurchased to the date of purchase, subject to the rights
of Holders on the relevant record date to receive interest due on the relevant
interest payment date (the "Change of Control Payment"). Within 30 days
following any Change of Control, the Company will mail a notice to each Holder
describing the transaction or transactions that constitute the Change of Control
and setting forth the procedures governing the Change of Control Offer as
required by the Indenture.
(b) If the Parent Entity, the Company or any of the Company's Restricted
Subsidiaries consummates an Asset Sale, any Net Proceeds therefrom (i) that are
not applied or invested as provided in paragraphs (b) or (c) of Section 4.10 of
the Indenture, as the case may be, or (ii) that the Company decides not to apply
or invest as provided in paragraphs (b) or (c) of Section 4.10 of the Indenture,
as the case may be, within 364 days of the receipt thereof, will constitute
Excess Proceeds. When the aggregate amount of Excess Proceeds exceeds $15.0
million, within ten days thereof the Company will make an Asset Sale Offer to
all Holders of Notes and all holders of Pari Passu Indebtedness (other than
RCF/Hedging Indebtedness) containing provisions similar to those set forth in
the Indenture with respect to offers to purchase or redeem with the proceeds of
sales of assets in accordance with 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; provided, however, that the Company
may, but shall not be required to, make an Asset Sale Offer regardless of
whether the aggregate amount of the Excess Proceeds exceeds $15.0 million. The
offer price in any Asset Sale Offer will be equal to 100% of the principal
amount plus accrued and unpaid interest to the date of purchase 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 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
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 reset
at zero. 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 their respective Notes purchased by completing the form
entitled "Option of Holder to Elect Purchase" attached hereto.
9. Denominations, Transfer, Exchange. The Notes are in registered form
without coupons in minimum denominations of $2,000 and integral multiples of
$1,000 in excess thereof. 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. Each of the Registrar and
the Company need not exchange or register the transfer of (i) any Note or
portion of a Note selected for redemption, except for the unredeemed portion of
any Note being redeemed in part, (ii) any Notes for a period of 15 days before a
selection of Notes to be redeemed or (iii) any Notes during the period between a
record date and the corresponding Interest Payment Date.
A-8
[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 Restricted Period
and (ii) upon presentation of certificates (accompanied by an Opinion of
Counsel, if applicable) required by Article II 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. Unclaimed Money. If 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, if any, or interest on any Note remains unclaimed for two years,
the Trustee or Paying Agent will pay the money back to the Company at its
request or, if then held by the Company, will be discharged from such trust.
After any such payment, any Holder of a Note entitled to the money must look
only to the Company and not the Trustee or Paying Agent for payment.
12. Discharge and Defeasance. Subject to the conditions set forth in the
Indenture, the Company and the Guarantors at any time shall be entitled to
terminate some or all of their obligations under the Indenture and the Notes or
the Note Guarantees, as applicable, if the Company deposits with the Trustee
cash in U.S. dollars or Government Securities for the payment of the principal
of, premium, if any, and accrued interest on the Notes to redemption or
maturity, as the case may be.
13. Amendment, Supplement and Waiver. Subject to the exceptions set forth
in the Indenture, the Indenture, the Notes, the Note Guarantees, the
Intercreditor Agreements and the Security Documents may be amended or
supplemented with the consent of the Holders of at least a majority in aggregate
principal amount of the then outstanding Notes (including, without limitation,
Additional Notes, if any) voting as a single class, and any existing Default or
Event of Default or compliance with any provision of the Indenture, the Notes or
the Note Guarantees may be waived with the consent of the Holders of a majority
in aggregate principal amount of the Notes (including, without limitation,
Additional Notes, if any) then outstanding voting as a single class. Without the
consent of any Holder of Notes, the Company, the Guarantors and the Trustee (and
the Collateral Agent, as applicable) may, to the extent any such change would
not adversely affect the Holders of Notes, amend or supplement the Indenture,
the Notes, the Note Guarantees, the Intercreditor Agreements or the Security
Documents: (1) to cure any ambiguity, defect or inconsistency; (2) to provide
for uncertificated Notes in addition to or in place of certificated Notes; (3)
to provide for the assumption of the Company's or a Guarantor's Obligations to
the Holders of the Notes and Note Guarantees in the case of a merger or
consolidation or sale of all or substantially all of the Company's or such
Guarantor's assets, as applicable; (4) to make any change that would provide any
additional rights or benefits to the Holders of the Notes or that does not
adversely affect the legal rights under the Indenture of any Holder; (5) to
comply with the requirements of the SEC in order to effect or maintain the
qualification of the Indenture under the TIA; (6) to provide for the issuance of
Additional Notes in accordance with the limitations set forth in the Indenture
as of the Issue Date; (7) to allow any Guarantor to execute a supplemental
indenture to the Indenture (including, without limitation, to evidence its Note
Guarantee) with respect to the Notes or to release any Guarantor from its Note
Guarantee as provided or permitted by the terms of the Indenture; (8) to provide
for the
A-9
acceptance of appointment under the Indenture of a successor Trustee with
respect to the Notes issued under the Indenture; (9) to make, complete or
confirm any Note Guarantee or any grant of Collateral permitted or required by
the Indenture or any of the Security Documents or any discharge or release of
any Note Guarantee or any Collateral that is permitted by the Indenture, the
Intercreditor Agreements or any of the Security Documents; (10) to conform the
text of the Indenture or the Notes to any provision of the "Description of
Notes" section of the Offering Memorandum dated January 29, 2010, relating to
the offering of the Initial Notes issued on the Issue Date, to the extent that
such provision in that Description of Notes was intended (as detailed in an
Officers' Certificate delivered by the Company to the Trustee) to be a verbatim
recitation of a provision of the Indenture or the Notes; or (11) (a) to allow
Hedging Obligations and Obligations in respect of cash management services owing
to Persons other than holders of Secured Bank Indebtedness or their Affiliates
to be treated as "First Priority Lien Obligations" under the Second Lien
Intercreditor Agreement and "RCF/Hedging Obligations" under the First Lien
Intercreditor Agreement; or (b) to conform any limits on the amount of "First
Lien Obligations" and "Second Lien Obligations" specified in the Second Lien
Intercreditor Agreement and of "Note Obligations" and "RCF Obligations"
specified in the First Lien Intercreditor Agreement to the amounts permitted for
such Obligations pursuant to the definition of "Permitted Liens" in the
Indenture.
Any amendment to, or waiver of, any provision of the Indenture, the
Intercreditor Agreements or any Security Document (i) that has the effect of
releasing all or substantially all of the Collateral from the Liens securing the
Notes and the Note Guarantees or (ii) relating to the application of proceeds of
Collateral that would materially adversely affect the Holders of Notes, in each
case, shall require the consent of the Holders of at least 66?% in aggregate
principal amount of the Notes then outstanding.
14. Defaults and Remedies. Under the Indenture, Events of Default include
(1) default for 30 days in the payment when due of interest on the Notes; (2)
default in the payment when due (at maturity, upon redemption or otherwise) of
the principal of, or premium, if any, on the Notes; (3) failure by the Company
or any of its Restricted Subsidiaries to comply with the provisions of Sections
4.10, 4.15, 4.16 or 5.01 of the Indenture; (4) failure by the Company or any of
its Restricted Subsidiaries to comply with the provisions of Sections 4.07 and
4.09 of the Indenture for 30 days after notice by the Trustee to comply with
such provisions; (5) failure by the Company or any of its Restricted
Subsidiaries 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 to comply with any of the other agreements
in the Indenture; (6) default under any mortgage, indenture or instrument under
which there may be issued or by which there may be secured or evidenced any
Indebtedness for money borrowed by the Company or any of its Restricted
Subsidiaries (or the payment of which is guaranteed by the Company or any of its
Restricted Subsidiaries), whether such Indebtedness or Guarantee now exists, or
is created after the Issue Date, if that default: (A) is caused by a failure to
pay principal of, or interest or premium, if any, on, such Indebtedness prior to
the expiration of the grace period provided in such Indebtedness on the date of
such default (a "Payment Default") or (B) results in the acceleration of such
Indebtedness prior to its express maturity, and, in each case, the principal
amount of any such Indebtedness, together with the principal amount of any other
such Indebtedness under which there has been a Payment Default or the maturity
of which has been so accelerated, aggregates $15.0 million or more; (7) failure
by the Company or any of
A-10
its Restricted Subsidiaries to pay final judgments entered by a court or courts
of competent jurisdiction aggregating in excess of $15.0 million, which
judgments are not paid, discharged or stayed for a period of 60 days; (8) the
Company or any of its Restricted Subsidiaries that is a Significant Subsidiary
or any group of Restricted Subsidiaries of the Company that, taken together,
would constitute a Significant Subsidiary pursuant to or within the meaning of
Bankruptcy Law: (A) commences a voluntary case, (B) consents to the entry of an
order for relief against it in an involuntary case, (C) consents to the
appointment of a custodian of it or for all or substantially all of its
property, (D) makes a general assignment for the benefit of its creditors or (E)
generally is not paying its debts as they become due; (9) a court of competent
jurisdiction enters an order or decree under any Bankruptcy Law that: (A) is for
relief against the Company or any of its Restricted Subsidiaries that is a
Significant Subsidiary or any group of Restricted Subsidiaries of the Company
that, taken together, would constitute a Significant Subsidiary in an
involuntary case, (B) appoints a custodian of the Company or any of its
Restricted Subsidiaries that is a Significant Subsidiary or any group of
Restricted Subsidiaries of the Company that, taken together, would constitute a
Significant Subsidiary or for all or substantially all of the property of the
Company or any of its Restricted Subsidiaries that is a Significant Subsidiary
or any group of Restricted Subsidiaries of the Company that, taken together,
would constitute a Significant Subsidiary or (C) orders the liquidation of the
Company or any of its Restricted Subsidiaries that is a Significant Subsidiary
or any group of Restricted Subsidiaries of the Company that, taken together,
would constitute a Significant Subsidiary, and the order or decree remains
undischarged, unstayed or unremedied and in effect for 60 consecutive days; (10)
except as permitted by the Indenture, any Note Guarantee of a Guarantor that is
a Significant Subsidiary or a group of Guarantors that, taken as a whole would
constitute a Significant Subsidiary, 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 that is a Significant Subsidiary, or any Person
acting on behalf of any Guarantor that is a Significant Subsidiary, denies or
disaffirms its Obligations under its Note Guarantee; (11) 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; (12) unless all of the
Collateral has been released as security for the Notes in accordance with the
provisions of the Security Documents with respect to the Notes: (a) except as
permitted by the Indenture or the relevant Security Documents, any Lien
purported to be granted under the Security Document individually, or in the
aggregate, having a Fair Market Value in excess of $40.0 million ceases to be an
enforceable and perfected Lien and such Default continues for 30 days or (b) the
Company or any Guarantor shall assert, in any pleading in any court of competent
jurisdiction, that any such security interest is invalid or unenforceable and,
in the case of any such Person that is a Subsidiary of the Parent Entity or the
Company, the Parent Entity or the Company fails to cause such Subsidiary to
rescind such assertions within 30 days after the Parent Entity or the Company
has actual knowledge of such assertions; and (13) the failure by the Company or
any Guarantor to comply for 60 days after notice by the Trustee or the
Collateral Agent with its agreements contained in the Security Documents, except
for a failure that would not be material to the Holders of the Notes and would
not materially affect the value of the Collateral taken as a whole.
A-11
In the case of an Event of Default specified in clauses (8) and (9) of
this Section 14, all outstanding Notes will become due and payable immediately
without further action or notice. If any other Event of Default occurs and is
continuing, the Trustee or the Holders of at least 25% in aggregate 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.
Holders of the Notes may not enforce the Indenture or the Notes except
as provided in the Indenture. Subject to the limitations set forth in the
Indenture, Holders of a majority in aggregate 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 the principal of, premium, if any, or interest on, any Note) if
and so long as a committee of its Responsible Officers determines in good faith
that withholding the notice is in the interests of the Holders of the Notes. The
Holders of a majority in aggregate principal amount of the then outstanding
Notes by notice to the Trustee may, on behalf of all of the Holders of the
Notes, 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, if any, that has become
due solely because of the acceleration) have been cured or waived (or waive an
existing Default or Event of Default and its consequences under the Indenture,
except a continuing Default or Event of Default in the payment of the principal
of, premium, if any, or interest on, the Notes). The Company and each Guarantor
(to the extent that such Guarantor is so required under the TIA) are required to
deliver to the Trustee annually an Officers' Certificate regarding compliance
with the Indenture, and the Company is required upon any Officer becoming aware
of any Default or Event of Default, to deliver to the Trustee an Officers'
Certificate specifying such Default or Event of Default and what action the
Company is taking or proposes to take with respect thereto.
15. No Recourse Against Others. No past, present or future director,
officer, employee, incorporator or stockholder of the Company or any Guarantor,
as such, will have any liability for any Obligations of the Company or the
Guarantors under the Indenture, the Notes or the Note Guarantees 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. The waiver may not be effective to waive liabilities under the
federal securities laws.
16. Authentication. This Note will not be valid until authenticated by the
manual signature of the Trustee or an authenticating agent.
17. Trustee Dealings with Company. The Trustee, in its individual or any
other capacity, may become the owner or pledgee of Notes and may otherwise deal
with the Company or any Affiliate of the Company with the same rights it would
have if it were not Trustee. However, in the event that the Trustee acquires any
conflicting interest it must eliminate such conflict within 90 days, apply to
the SEC for permission to continue as trustee (if the Indenture has been
qualified under the TIA) or resign.
A-12
18. Governing Law. THE INTERNAL LAW OF THE STATE OF NEW YORK SHALL GOVERN
AND BE USED TO CONSTRUE THE INDENTURE, THIS NOTE AND THE NOTE GUARANTEES 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.
19. 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).
20. 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 correctness or 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.
21. Guarantees. The payment of the principal of, premium, if any, and
interest on the Notes, is unconditionally guaranteed, jointly and severally, by
the Guarantors to the extent set forth in and subject to the provisions of the
Indenture.
22. Security. Subject to the terms of the Intercreditor Agreements, the
Obligations of the Company and the Guarantors under the Notes and the Note
Guarantees are secured by Liens on the Collateral pursuant to the terms of the
Security Documents. The actions of the Trustee, the Collateral Agent and the
Holders and the application of proceeds from the enforcement of any remedies
with respect to such Collateral are limited pursuant to the terms of the
Security Documents and the Intercreditor Agreements.
23. Communications. The Company will furnish to any Holder upon written
request and without charge a copy of the Indenture. Requests may be made to the
Company at the following address:
Appleton Papers Inc.
825 East Wisconsin Avenue
P.O. Box 359
Appleton, WI 54912
Attention: Chief Financial Officer
A-13
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 it.
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).
A-14
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Note purchased by the Company pursuant to
Section 4.10 or 4.15 of the Indenture, check the appropriate box below:
[ ] Section 4.10 [ ]Section 4.15
If you want to elect to have only part of this Note purchased by the
Company pursuant to Section 4.10 or 4.15 of the Indenture, state the amount you
elect to have purchased:
$____________
Date: ____________________
Your Signature:
----------------------------------
(Sign exactly as your name appears
on the face of this Note)
Tax Identification No.: _________________________
Signature Guarantee*:
---------------------
* Participant in a recognized Signature Guarantee Medallion Program (or other
signature guarantor acceptable to the Trustee).
A-15
SCHEDULE OF EXCHANGES OF INTERESTS
IN THE [REGULATION S TEMPORARY] GLOBAL NOTE*
The initial outstanding principal amount of this Global Note is $______.
The following exchanges of a part of this [Regulation S Temporary] 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
[Regulation S Temporary] Global Note, have been made:
Principal
Amount of Amount of Amount of this Signature of
Decrease in Increase in Global Note Authorized
Principal Principal Following such Signatory of
Date of Amount of this Amount of this Decrease or Trustee or
Exchange Global Note Global Note Increase Custodian
---------- ---------------- --------------- ---------------- --------------
* This schedule should be included only if the Note is issued in global form.
A-16
EXHIBIT B
FORM OF CERTIFICATE OF TRANSFER
Appleton Papers Inc.
825 East Wisconsin Avenue
P.O. Box 359
Appleton, WI 54912
Attention: Chief Financial Officer
[Registrar address block]
Re: 10.50% Senior Secured Notes due 2015
Reference is hereby made to the Indenture, dated as of February 8,
2010 (the "Indenture"), among Appleton Papers Inc., a Delaware corporation (the
"Company"), the Guarantors and U.S. Bank National Association, as Trustee and as
Collateral Agent. Capitalized terms used but not defined herein shall have the
meanings given to them in the Indenture.
___________________ (the "Transferor") owns and proposes to transfer
the Note[s] or interest in such Note[s] specified in Annex A hereto, in the
principal amount of $_________ in such Note[s] or interests (the "Transfer"), to
_________________ (the "Transferee"), as further specified in Annex A hereto. In
connection with the Transfer, the Transferor hereby certifies that:
[CHECK ALL THAT APPLY]
1. [ ] Check if Transferee will take delivery of a beneficial interest in
the 144A Global Note or a Restricted Definitive Note pursuant to Rule 144A. The
Transfer is being effected pursuant to and in accordance with Rule 144A under
the Securities Act of 1933, as amended (the "Securities Act"), and, accordingly,
the Transferor hereby further certifies that the beneficial interest or
Definitive Note is being transferred to a Person that the Transferor reasonably
believes is purchasing the beneficial interest or Definitive Note for its own
account, or for one or more accounts with respect to which such Person exercises
sole investment discretion, and such Person and each such account is a
"qualified institutional buyer" within the meaning of Rule 144A in a transaction
meeting the requirements of Rule 144A and such Transfer is in compliance with
any applicable blue sky securities laws of any state of the United States. Upon
consummation of the proposed Transfer in accordance with the terms of the
Indenture, the transferred beneficial interest or Definitive Note will be
subject to the restrictions on transfer enumerated in the Private Placement
Legend printed on the 144A Global Note and/or the Restricted Definitive Note and
in the Indenture and the Securities Act.
2. [ ] Check if Transferee will take delivery of a beneficial interest in
the Regulation S Global Note or a Restricted Definitive Note pursuant to
Regulation S. The Transfer is being effected pursuant to and in accordance with
Rule 903 or Rule 904 under the Securities Act and, accordingly, the Transferor
hereby further certifies that (i) the
B-1
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
Transfer is not being made to a U.S. Person or for the account or benefit of a
U.S. Person. Upon consummation of the proposed Transfer in accordance with the
terms of the Indenture, the transferred beneficial interest or Definitive Note
will be subject to the restrictions on transfer enumerated in the Private
Placement Legend printed on the Regulation S Global Note and/or the Restricted
Definitive Note and in the Indenture and the Securities Act.
3. [ ] Check and complete if Transferee will take delivery of a
beneficial interest in the IAI Global Note or a Restricted Definitive Note
pursuant to any provision of the Securities Act other than Rule 144A or
Regulation S. The Transfer is being effected in compliance with the transfer
restrictions applicable to beneficial interests in Restricted Global Notes and
Restricted Definitive Notes and pursuant to and in accordance with the
Securities Act and any applicable blue sky securities laws of any state of the
United States, and accordingly the Transferor hereby further certifies that
(check one):
(a) [ ] such Transfer is being effected to an Institutional
Accredited Investor and pursuant to an exemption from the registration
requirements of the Securities Act other than Rule 144A, Rule 144, Rule 903 or
Rule 904, and the Transferor hereby further certifies that it has not engaged in
any general solicitation within the meaning of Regulation D under the Securities
Act and the Transfer complies with the transfer restrictions applicable to
beneficial interests in a Restricted Global Note or Restricted Definitive Notes
and the requirements of the exemption claimed, which certification is supported
by (1) a certificate executed by the Transferee in the form of Exhibit D to the
Indenture and (2) an Opinion of Counsel provided by the Transferor or the
Transferee (a copy of which the Transferor has attached to this certification),
to the effect that such Transfer is in compliance with the Securities Act. Upon
consummation of the proposed transfer in accordance with the terms of the
Indenture, the transferred beneficial interest or Definitive Note will be
subject to the restrictions on transfer enumerated in the Private Placement
Legend printed on the IAI Global Note and/or the Restricted Definitive Notes and
in the Indenture and the Securities Act;
or
(b) [ ] such Transfer is being effected pursuant to and in accordance
with Rule 144 under the Securities Act;
B-2
or
(c) [ ] such Transfer is being effected to the Company or a
Subsidiary thereof;
or
(d) [ ] 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.
4. [ ] Check if Transferee will take delivery of a beneficial interest
in an Unrestricted Global Note or of an Unrestricted Definitive Note.
(a) [ ] Check if Transfer is pursuant to Rule 144. (i) The Transfer
is being effected pursuant to and in accordance with Rule 144 under the
Securities Act and in compliance with the transfer restrictions contained in the
Indenture and any applicable blue sky securities laws of any state of the United
States and (ii) the restrictions on transfer contained in the Indenture and the
Private Placement Legend are not required in order to maintain compliance with
the Securities Act. Upon consummation of the proposed Transfer in accordance
with the terms of the Indenture, the transferred beneficial interest or
Definitive Note will no longer be subject to the restrictions on transfer
enumerated in the Private Placement Legend printed on the Restricted Global
Notes, on Restricted Definitive Notes and in the Indenture.
(b) [ ] Check if Transfer is Pursuant to Regulation S. (i) The
Transfer is being effected pursuant to and in accordance with Rule 903 or Rule
904 under the Securities Act and in compliance with the transfer restrictions
contained in the Indenture and any applicable blue sky securities laws of any
state of the United States and (ii) the restrictions on transfer contained in
the Indenture and the Private Placement Legend are not required in order to
maintain compliance with the Securities Act. Upon consummation of the proposed
Transfer in accordance with the terms of the Indenture, the transferred
beneficial interest or Definitive Note will no longer be subject to the
restrictions on transfer enumerated in the Private Placement Legend printed on
the Restricted Global Notes, on Restricted Definitive Notes and in the
Indenture.
(c) [ ] Check if Transfer is Pursuant to Other Exemption. (i) The
Transfer is being effected pursuant to and in compliance with an exemption from
the registration requirements of the Securities Act other than Rule 144, Rule
903 or Rule 904 and in compliance with the transfer restrictions contained in
the Indenture and any applicable blue sky securities laws of any State of the
United States and (ii) the restrictions on transfer contained in the Indenture
and the Private Placement Legend are not required in order to maintain
compliance with the Securities Act. Upon consummation of the proposed Transfer
in accordance with the terms of the Indenture, the transferred beneficial
interest or Definitive Note will not be subject to the restrictions on transfer
enumerated in the Private Placement Legend printed on the Restricted Global
Notes or Restricted Definitive Notes and in the Indenture.
B-3
This certificate and the statements contained herein are made for your
benefit and the benefit of the Company.
[Insert Name of Transferor]
By:
------------------------
Name:
Title:
Dated: _________________
B-4
ANNEX A TO CERTIFICATE OF TRANSFER
1. The Transferor owns and proposes to transfer the following:
[CHECK ONE OF (a) OR (b)]
(a) [ ] a beneficial interest in the:
(i) [ ] 144A Global Note (CUSIP _________), or
(ii) [ ] Regulation S Global Note (CUSIP _________); or
(iii) [ ] IAI Global Note (CUSIP _________); or
(b) [ ] a Restricted Definitive Note.
2. After the Transfer the Transferee will hold:
[CHECK ONE]
(a) [ ] a beneficial interest in the:
(i) [ ] 144A Global Note (CUSIP _________), or
(ii) [ ] Regulation S Global Note (CUSIP _________), or
(iii) [ ] IAI Global Note (CUSIP _________); or
(iv) [ ] Unrestricted Global Note (CUSIP _________); or
(b) [ ] a Restricted Definitive Note; or
(c) [ ] an Unrestricted Definitive Note,
in accordance with the terms of the Indenture.
EXHIBIT C
FORM OF CERTIFICATE OF EXCHANGE
Appleton Papers Inc.
825 East Wisconsin Avenue
P.O. Box 359
Appleton, WI 54912
Attention: Chief Financial Officer
[Registrar address block]
Re: 10.50% Senior Secured Notes due 2015
(CUSIP _______)
Reference is hereby made to the Indenture, dated as of February 8, 2010
(the "Indenture"), among Appleton Papers Inc., a Delaware corporation (the
"Company"), the Guarantors and U.S. Bank National Association, as Trustee and as
Collateral Agent. Capitalized terms used but not defined herein shall have the
meanings given to them in the Indenture.
________________ (the "Owner") owns and proposes to exchange the Note[s] or
interest in such Note[s] specified herein, in the principal amount of $_________
in such Note[s] or interests (the "Exchange"). In connection with the Exchange,
the Owner hereby certifies that:
1. Exchange of Restricted Definitive Notes or Beneficial Interests in a
Restricted Global Note for Unrestricted Definitive Notes or Beneficial Interests
in an Unrestricted Global Note
(a) [ ] Check if Exchange is from beneficial interest in a Restricted
Global Note to beneficial interest in an Unrestricted Global Note. In
connection with the Exchange of the Owner's beneficial interest in a
Restricted Global Note for a beneficial interest in an Unrestricted Global
Note in an equal principal amount, the Owner hereby certifies (i) the
beneficial interest is being acquired for the Owner's own account without
transfer, (ii) such Exchange has been effected in compliance with the
transfer restrictions applicable to the Global Notes and pursuant to and in
accordance with the Securities Act of 1933, as amended (the "Securities
Act"), (iii) the restrictions on transfer contained in the Indenture and
the Private Placement Legend are not required in order to maintain
compliance with the Securities Act and (iv) the beneficial interest in an
Unrestricted Global Note is being acquired in compliance with any
applicable blue sky securities laws of any state of the United States.
(b) [ ] Check if Exchange is from beneficial interest in a Restricted
Global Note to Unrestricted Definitive Note. In connection with the
Exchange of the Owner's beneficial interest in a Restricted Global Note for
an Unrestricted Definitive Note, the Owner hereby certifies (i) the
Definitive Note is being acquired for the Owner's own account without
transfer, (ii) such Exchange has
C-1
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 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.
C-2
(b) [ ] Check if Exchange is from Restricted Definitive Note to
beneficial interest in a Restricted Global Note. In connection with the
Exchange of the Owner's Restricted Definitive Note for a beneficial
interest in the [CHECK ONE] 144A Global Note, Regulation S Global Note, IAI
Global Note with an equal principal amount, the Owner hereby certifies
(i) the beneficial interest is being acquired for the Owner's own account
without transfer and (ii) such Exchange has been effected in compliance
with the transfer restrictions applicable to the Restricted Global Notes
and pursuant to and in accordance with the Securities Act, and in
compliance with any applicable blue sky securities laws of any state of the
United States. Upon consummation of the proposed Exchange in accordance
with the terms of the Indenture, the beneficial interest issued will be
subject to the restrictions on transfer enumerated in the Private Placement
Legend printed on the relevant Restricted Global Note and in the Indenture
and the Securities Act.
This certificate and the statements contained herein are made for your
benefit and the benefit of the Company.
[Insert Name of Transferor]
By:
------------------------
Name:
Title:
Dated: _______________
C-3
EXHIBIT D
FORM OF CERTIFICATE FROM
ACQUIRING INSTITUTIONAL ACCREDITED INVESTOR
Appleton Papers Inc.
825 E. Wisconsin Ave.
P.O. Box 359
Appleton, WI 54912-0359
[Registrar address block]
Re: 10.50% Senior Secured Notes due 2015
Reference is hereby made to the Indenture, dated as of February 8,
2010 (the "Indenture"), among Appleton Papers Inc., a Delaware corporation (the
"Company"), the Guarantors and U.S. Bank National Association, as Trustee and as
Collateral Agent. Capitalized terms used but not defined herein shall have the
meanings given to them in the Indenture.
In connection with our proposed purchase of $_______________ aggregate
principal amount of:
(a) [ ] a beneficial interest in a Global Note, or
(b) [ ] a Definitive Note,
we confirm that:
1. We understand that any subsequent transfer of the Notes or any
interest therein is subject to certain restrictions and conditions set forth in
the Indenture and the undersigned agrees to be bound by, and not to resell,
pledge or otherwise transfer the Notes or any interest therein except in
compliance with, such restrictions and conditions and the Securities Act of
1933, as amended (the "Securities Act").
2. We understand that the offer and sale of the Notes have not been
registered under the Securities Act, and that the Notes and any interest therein
may not be offered or sold except as permitted in the following sentence. We
agree, on our own behalf and on behalf of any accounts for which we are acting
as hereinafter stated, that if we should sell the Notes or any interest therein,
we will do so only (A) to the Company or any subsidiary thereof, (B) in
accordance with Rule 144A under the Securities Act to a "qualified institutional
buyer" (as defined therein), (C) to an institutional "accredited investor" (as
defined below) that, prior to such transfer, furnishes (or has furnished on its
behalf by a U.S. broker-dealer) to you and to the Company a signed letter
substantially in the form of this letter and an Opinion of Counsel in form
reasonably acceptable to the Company to the effect that such transfer is in
compliance with the Securities Act, (D) outside the United States in accordance
with Rule 904 of Regulation S under the Securities Act, (E) pursuant to the
provisions of Rule 144 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
D-1
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 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-
