EXHIBIT 10.4
NOTE PURCHASE
AGREEMENT
Dated as of July 2 ,
2008
Between
CELLU TISSUE
HOLDINGS, INC.
Issuer of the
Notes
and
Claren Road Credit
Master Fund, Ltd.
$10,000,000
AGGREGATE PRINCIPAL AMOUNT
OF 9 3/4% SENIOR
SECURED NOTES
DUE
2010
NOTE PURCHASE
AGREEMENT
This NOTE PURCHASE
AGREEMENT is dated as of July 2, 2008, by and between Cellu
Tissue Holdings, Inc. (the “ Company ”) and
Claren Road Credit Master Fund, Ltd. (the “ Purchaser
”).
RECITALS
WHEREAS, the
Company and certain of its Subsidiaries have entered into an
Indenture dated as of March 12, 2004 with The Bank of New York
as Trustee (as supplemented and in effect on the date hereof, the
“ Indenture ”), relating to its 9 3/4% Senior
Secured Notes due 2010 (the “ Senior Secured Notes
”) pursuant to which the Company is authorized to issue
additional Senior Secured Notes subject to the terms and conditions
specified in the Indenture.
WHEREAS, the
Company desires to issue pursuant to the Indenture and sell to the
Purchaser, and the Purchaser has agreed to purchase, subject to the
terms and conditions herein, $10,000,000 aggregate principal amount
of Senior Secured Notes (the “ Notes
”).
WHEREAS, the
Company will use the proceeds of the issuance and sale of the Notes
to provide a portion of the financing for the purchase by the
Company of certain assets (the “ Acquisition ”)
pursuant to the Acquisition Agreement.
AGREEMENT
In consideration
of the foregoing, and the representations, warranties, covenants
and conditions set forth below, the parties hereto, intending to be
legally bound, hereby agree as follows:
ARTICLE 1
DEFINITIONS
1.1.
Certain Defined Terms . Capitalized terms used and not
otherwise defined in this Agreement are defined in Appendix
I.
ARTICLE 2
PURCHASE AND SALE OF THE NOTES
2.1.
Purchase and Sale of Notes . Subject to the terms and
conditions of this Agreement and on the basis of the
representations and warranties set forth herein, the Company hereby
agrees to issue and to sell to the Purchaser, and by its acceptance
hereof the Purchaser agrees to purchase from the Company at the
Closing, $10,000,000 aggregate principal amount of the Notes for
the purchase price of $9,225,000.
2.2.
Closing
. The purchase and
sale of the Notes pursuant to Section 2.1 shall occur at a
closing (the “ Closing ”) to be held on
July 2, 2008, at 10:00 a.m. (Boston time), at the offices
of Ropes & Gray LLP, One International Place, Boston, MA
02110, or at such other date, time and/or location as may be agreed
upon by the parties hereto.
2.3.
Delivery of
Notes .
Notes will be in substantially the form of Exhibit A.
The Company will deliver the Notes to the Purchaser, against
payment by or on behalf of the Purchaser of the purchase price
therefor by wire transfer of Federal (same day) funds to
JPMorgan/Chase Bank, New York, New York, ABA #021000021, Account
Name: Cellu Tissue Corp., Account #114-733805.
2.4.
Use of Proceeds . The proceeds of the sale by the
Company of the Notes hereunder shall be used to provide a portion
of the financing for the Acquisition.
ARTICLE 3
TERMS OF THE NOTES
3.1.
Notes Under
Indenture . The Notes shall be issued under the
Indenture and shall be subject to all the terms and conditions
thereof and entitled to all the benefits thereof.
3.2.
CUSIP
. The Purchaser
understands that because the Notes are issued at a discount the
Notes will have a CUSIP number through the maturity of the Notes
which is different from the CUSIP number of the Senior Secured
Notes previously issued under the Indenture. The Purchaser
further understands that the Notes will not either now or in the
future be entitled to share the same CUSIP number as the notes
previously issued under the Indenture.
3.3.
Registration
Rights .
The Purchaser understands and agrees that the Company is and will
be under no obligation to effect any registration of the Notes
under the Securities Act.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF THE
PURCHASER
The Purchaser
represents and warrants to and for the benefit of the Company
that:
4.1.
Legal Capacity; Due Authorization . The Purchaser has
full legal capacity, power and authority to execute and deliver
this Agreement and to perform its obligations hereunder. This
Agreement has been duly authorized, executed and delivered by the
Purchaser and is the legal, valid and binding obligation of the
Purchaser enforceable against the Purchaser in accordance with its
terms subject to bankruptcy and general principles of
equity.
4.2.
Restrictions on Transfer . The Purchaser has been
advised that the Notes have not been registered under the
Securities Act or any state securities laws and cannot be resold
unless registered under the Securities Act and applicable state
securities laws or unless an exemption from such registration
requirements is available, and that accordingly the Notes may have
to be held by the Purchaser for an indefinite period of time.
The Purchaser is purchasing the Notes for its own account and not
with a view to, or for resale in connection with, the distribution
thereof; provided , however , that subject to
compliance with the restrictions contained or referred to in the
Indenture, the Notes and this Agreement, the disposition of such
Purchaser’s property shall at all times be and remain under
its sole discretion and control. The Purchaser acknowledges
and agrees that each Note will bear a legend (or a substantially
similar indication) indicating that the Notes have not been
registered under the Securities Act or under any state securities
laws and may not be sold, offered for sale or otherwise transferred
in the absence of an effective registration statement under the
Securities Act and applicable state securities laws or an exemption
from registration thereunder, in addition to any other legends
required by applicable state blue sky laws.
4.3.
Accredited Investor,
etc . The
Purchaser has such knowledge and experience in financial and
business matters so as to be capable of evaluating the merits and
risks of its investment in the Notes, is able to incur a complete
loss of such investment and to bear the economic risk of such
investment for an indefinite period of time. Such Purchaser
has been given access to all information with respect to the
Company requested by the Purchaser and has had access to, and
adequate opportunity to ask questions of and request additional
information from, officers and representatives of the Company
concerning the Company’s business, operations and financial
condition. Such Purchaser (i) is an “accredited
investor” as
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that term is
defined in Regulation D under the Securities Act and (ii) has
been represented by counsel in the purchase of the Notes and has
been advised with respect to the restrictions imposed by state and
federal securities laws with respect to the disposition of the
Notes.
4.4.
Independent Decision . The Purchaser has independently
and without reliance on the Company, and based on such information
as the Purchaser has deemed appropriate, made its own analysis and
decision to enter into this Agreement and the transaction
contemplated hereby, except that the Purchaser has relied upon the
Company’s express representations, warranties and covenants
made herein. The Purchaser acknowledges that the Company has
not given the Purchaser any investment advice, credit information
or opinion on whether the purchase of the Notes is a prudent
investment decision.
4.5.
Brokerage Fees, etc . The Purchaser represents and
warrants to the Company that no broker’s, finder’s or
placement fee or commission will be payable to any Person alleged
to have been retained by the Purchaser with respect to any of the
transactions contemplated by this Agreement.
ARTICLE 5
REPRESENTATIONS AND WARRANTIES OF THE
COMPANY
In order to induce
the Purchaser to enter into this Agreement and to purchase the
Notes hereunder, the Company represents and warrants for the
benefit of the Purchaser that, as of the Closing Date (unless
otherwise stated, both before and after giving effect to the
issuance of the Notes):
5.1.
Organization, Good
Standing and Qualification . The Company is a corporation, duly
organized and validly existing under the laws of the State of
Delaware and has all requisite power and authority to conduct its
business as now conducted. The Company is duly qualified as a
foreign entity and in good standing in all states or other
jurisdictions where the nature and extent of the business
transacted by it or the ownership of assets makes such
qualification necessary, except for those jurisdictions in which
the failure to so qualify would not reasonably be expected to
result in a Material Adverse Effect. Certified copies of the
Governing Documents of the Company have been delivered to the
Purchaser and such copies of the Governing Documents are correct
and complete.
5.2.
Authorization . The Company has taken all necessary
corporate action to authorize the execution and delivery of this
Agreement and the Notes and the performance of its obligations
hereunder and thereunder. This Agreement constitutes the
valid and legally binding obligation of the Company enforceable in
accordance with its terms subject to bankruptcy laws and general
principles of equity.
5.3.
Valid Issuance of the Notes . The Notes, when issued,
sold and delivered in accordance with the terms hereof for the
consideration expressed herein, will be duly and validly authorized
and issued, fully paid, free of restrictions on transfer, other
than restrictions contained or referred to in the Indenture, the
Notes or this Agreement and enforceable in accordance with their
terms subject to bankruptcy laws and general principles of
equity. Based in part upon the representations of the
Purchaser in Article 4 of this Agreement, the Notes will be
issued in compliance with all applicable United States securities
laws.
5.4.
Financial Statements and Other Information .
5.4.1.
The Company has previously furnished to the Purchaser copies of
t he
Company’s filing on Form 10-K for the fiscal year ended
February 29, 2008 (the “ Company SEC Filings
”).
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5.4.2.
As of the time it was
filed with the SEC (or, if amended or superseded by a filing prior
to the date of this Agreement, then on the date of such
filing): (i) each of the Company SEC Filings complied in
all material respects with such requirements of the Securities Act
or the Exchange Act as were applicable thereto; and (ii) none
of the Company SEC Filings contained any untrue statement of a
material fact or omitted to state a material fact required to be
stated therein or necessary in order to make the statements
therein, in the light of the circumstances under which they were
made, not misleading.
5.4.3.
The financial statements
(including any related notes) contained in the Company SEC Filings
fairly present, in all material respects, the consolidated
financial position of the Company and its Subsidiaries as of the
respective dates thereof and the consolidated results of operations
of the Company and its Subsidiaries for the periods covered thereby
in accordance with GAAP applied on a consistent basis throughout
the periods covered (except as may be indicated in the notes to
such financial statements or, in the case of unaudited statements,
as permitted by Form 10-Q of the SEC, and except that
unaudited financial statements may not contain footnotes and are
subject to year-end adjustments).
5.4.4.
As of the date of this
Agreement, neither the Company nor any of its Subsidiaries has any
liabilities of the type required to be disclosed in the liabilities
column of a balance sheet prepared in accordance with GAAP, except
for: (i) liabilities disclosed in the financial
statements (including any related notes) contained in the Company
SEC Filings; (ii) liabilities incurred in the ordinary course
of business since the date included in the financial statements of
the Company SEC Filings; and (iii) liabilities that are not
material in the aggregate to the Company and its Subsidiaries on a
consolidated basis.
5.4.5.
The information with
respect to the Company and its Subsidiaries contained in the
Private Placement Memorandum dated April 2008 relating to
$37,500,000 9 3/4% Senior Secured Notes (the “ Secured
Notes ”) of the Company due 2010 (the “
Placement Memorandum ”) when taken as a whole with the
Company SEC Filings did not as of the date thereof contain an
untrue statement of material fact or omit to state a material fact
necessary in order to make the statements contained therein not
materially misleading in light of the circumstances under which
such statements were made. The information contained in the
Placement Memorandum with respect to Atlantic was prepared in good
faith by the Company based on information obtained from
Atlantic. Notwithstanding the foregoing, no representation
regarding projections or forward looking statements is being made
in this Section 5.4.5 and the disclaimers and cautionary
statements with respect thereto set forth in the Placement
Memorandum are incorporated herein by reference.
5.4.6.
The Company maintains an
effective system of “disclosure controls and
procedures” (as defined in Rule 13a-15(e) of the
Exchange Act) that is designed to ensure that information required
to be disclosed by the Company in reports that it files or submits
under the Exchange Act is recorded, processed, summarized and
reported within the time periods specified in the SEC’s
rules and forms, including controls and procedures designed to
ensure that such information is accumulated and communicated to the
Company’s management as appropriate to allow timely decisions
regarding required disclosure. The Company has carried out
evaluations of the effectiveness of its disclosure controls and
procedures as required by Rule 13a-15 of the Exchange
Act.
5.4.7.
The Company maintains
systems of “internal control over financial reporting”
(as defined in Rule 13a-15(f) of the Exchange Act) that
comply with the requirements of the Exchange Act and have been
designed by, or under the supervision of, its principal
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executive and principal financial officers, or
persons performing similar functions, to provide reasonable
assurance regarding the reliability of financial reporting and the
preparation of financial statements for external purposes in
accordance with generally accepted accounting principles. The
Company maintains a system of internal accounting controls
sufficient to provide reasonable assurances that
(i) transactions are executed in accordance with
management’s general or specific authorization,
(ii) transactions are recorded as necessary to permit
preparation of financial statements in conformity with generally
accepted accounting principles and to maintain accountability for
assets, (iii) access to assets is permitted only in accordance
with management’s general or specific authorization and
(iv) the recorded accountability for assets is compared with
existing assets at reasonable intervals and appropriate action is
taken with respect to any differences. There are no material
weaknesses in the Company’s internal controls.
5.5.
Material Adverse
Effect .
Since February 29, 2008, no event or condition has occurred
which affects the Company or its Subsidiaries which has had or
could be reasonably expected to have a Material Adverse
Effect.
5.6.
Consents . No consent, approval, order or
authorization of, or registration, qualification, designation,
declaration or filing with, any federal, state or local
governmental authority, or any third party in connection with any
agreement to which the Company or any of its Subsidiaries is party
or by which its properties are bound, is required to be obtained or
made by the Company or any of its Subsidiaries in connection with
the issuance of the Notes or the execution and delivery of the
Subsidiary Guarantee other than such of the foregoing as have been
or will be obtained prior to the Closing or where the failure to
obtain the consent of a third party would not affect the ability of
the Company to enter into the Agreement, to issue the Notes and
perform its obligations under the Notes.
5.7.
Litigation . Except as disclosed with the Company SEC
Filings, there is no action, suit, proceeding or investigation
pending or, to the Company’s knowledge, currently threatened
that questions the validity of this Agreement or the right of the
Company or any of its Subsidiaries to enter into this Agreement and
to issue the Notes or the Subsidiary Guarantee or that would
reasonably be expected to result, either individually or in the
aggregate, in a Material Adverse Effect.
5.8.
Compliance with Other Instruments . The
execution, delivery and performance of this Agreement and the
issuance of the Notes will not result in the violation of any
instrument, judgment, order, writ, decree or contract to which the
Company is a party or by which it is bound or, of any provision of
federal or state statute, rule or regulation applicable to it
or be in conflict with or constitute, with or without the passage
of time and giving of notice, either a default under any such
provision, instrument, judgment, order, writ, decree or contract or
an event which results in the creation of any Lien, charge or
encumbrance upon any assets of the Company or any of its
Subsidiaries, except for a violation, conflict or default that does
not affect the ability of the Company or any of its Subsidiaries to
enter into this Agreement, to issue the Notes and perform its
obligation under the Notes or the Subsidiary Guarantee.
5.9.
Delivery of Acquisition Documents . T
he Company has delivered
to the Purchaser true, accurate and complete copies of each of the
Acquisition Documents which are the only agreements of the Company
relating to the Acquisition.
5.10.
No Governmental Approval Necessary . Assuming the
truth and accuracy of the Purchaser’s representations set
forth in Article 4 of this Agreement, no consent by, approval
of, giving of notice to, registration with, or taking of any other
action with respect to or by any federal, state, or local
governmental authority or organization is required for any of the
Company’s execution, delivery, or
5
performance of
this Agreement or the issuance of the Notes and the execution and
delivery of the Subsidiary Guaranty by the Subsidiary
Guarantors.
5.11.
Private
Placement . Assuming the truth and accuracy of the
Purchaser’s representations set forth in Article 4 of
this Agreement, the offer, sale and issuance of the Notes as
contemplated by this Agreement is exempt from the registration
requirements of the Securities Act. Neither the Company nor
any authorized agent acting on behalf of it will take any action
hereafter that would cause the loss of such exemption
5.12.
The Notes
. The Notes are
being issued as Additional Securities (as defined in the Indenture)
under the Indenture, and the Company has satisfied all the
conditions set forth in Section 2.1(a) of the Indenture
for the issuance of the Notes as Additional Securities. The
Notes are secured by the Collateral (as defined in the Indenture)
pursuant to the Collateral Documents (as defined in the
Indenture). The Notes constitute Note Company Obligations
under the Intercreditor Agreement (as defined in the
Indenture).
ARTICLE 6
CLOSING CONDITIONS
6.1
Purchaser’s Conditions . The obligation of the
Purchaser to purchase and pay for the Notes provided for hereunder
on the Closing Date is subject to the satisfaction of the following
conditions, each as of the Closing Date:
6.1.1
Representations and Warranties; No Default . After
giving effect to the issuance of the Notes and the Acquisition, all
representations and warranties of the Company contained in this
Agreement shall be true and correct in all material
respects, and there
shall exist no continuing Default or Event of Default under the
Indenture and no default or event of default under any Credit
Facility.
6.1.2
Delivery of Documents . The Purchaser shall have
received the following items, each of which shall be in form and
substance reasonably satisfactory to the Purchaser and, unless
otherwise noted, dated as of the Closing Date:
6.1.2.1
Resolutions of the board of directors of the Company authorizing the execution,
delivery and performance of this Agreement and authorizing the
issuance and sale of the Notes certified as of the Closing Date by
its secretary or an assistant secretary as being in full force and
effect.
6.1.2.2 A
copy of a certificate of the Secretary of State of the State of
Delaware, dated as of a recent date prior to the Closing Date and
listing all Governing Documents of the Company on file with such
Secretary, including any amendments thereto, and copies of all such
Governing Documents and certifying that the Company is duly
organized and in good standing under the laws of the State of
Delaware.
6.1.2.3. A
certificate of the Company, signed on its behalf by a duly
authorized officer and dated the Closing Date, certifying as to
(i) the absence of any amendment to the Governing Documents of
the Company since the date of the applicable secretary of
state’s certificate referred to in Section 6.1.2.2,
(ii) its bylaws as in effect on the Closing Date
and (iii) the
completeness and accuracy of the representations and warranties
contained in this Agreement as of the Closing Date, including the
absence of any event occurring and continuing, or resulting from
the transactions contemplated under this Agreement, that
constitutes a Default or an Event of Default under the
Indenture.
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6.1.2.4. A
certificate of the secretary or an assistant secretary of the
Company certifying the names and true signatures of the officers of
the Company executing this Agreement.
6.1.2.5. A legal
opinion of Ropes & Gray, LLP, counsel for the Company,
addressed to the Purchaser in substantially the form attached as
Exhibit B.
6.1.2.6. A
certificate signed by a duly authorized officer of the Company
certifying that the conditions specified in this Section 6
have been fulfilled.
6.1.3.
Working Capital Facility Amendment . The Company and
the other parties thereto shall have executed an amendment to the
documents governing the Working Capital Facility to permit the
Company to fulfill its obligations under the Notes and the seller
debt described in the Acquisition Agree ment.
6.1.4.
Intercreditor Acknowledgement . The agent for the
Working Capital Facility shall have executed an acknowledgement
with respect to the Intercreditor Agreement in form and substance
satisfactory to the Purchaser.
6.1.5.
Co-Investor Notes . The Co-Investors shall have paid
for the Co-Investor Notes as provided in Section 2.3 of each
of the Co-Investor Purchase Agreements.
6.1.6.
Acquisition Closed . The Acquisition shall be
consummated substantially simultaneously with the
Closing.
6.1.7.
Issues of Notes . The Company shall
have issued and delivered the Notes to the Purchaser against
payment therefor as contemplated by Section 2.3.
6.1.8.
New Subsidiary Guarantors . Each of Cellu Tissue
– Hauppauge, LLC, a Delaware limited liability company, and
Cellu Tissue – Thomaston, LLC, a Delaware limited liability
company, shall have executed a supplemental indenture pursuant to
Section 3.12 of the Indenture and the Subsidiary Guarantee
executed by each Subsidiary Guarantor.
6.2.
Company Conditions . The obligation of the Company to
issue the Notes on the Closing Date as provided herein is subject
to the satisfaction of the following conditions, each as of the
Closing Date:
6.2.1.
Purchase Price . The Purchaser shall have paid for the
Notes as provided in Section 2.3.
6.2.2.
Co-Investor Notes . The Co-Investors shall have paid
for the Co-Investor Notes as provided in Section 2.3 of each
of the Co-Investor Purchase Agreements.
6.2.3.
Representations and Warranties . The representations
and warranties of the Purchaser set forth in Article 4 shall
be true and correct.
6.2.4.
Acquisition Closed . The Acquisition shall be
consummated substantially simultaneously with the
Closing.
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ARTICLE 7
RESTRICTIONS ON TRANSFER;
LEGENDS
7.1.
Assignments
. After the Closing
and subject to the restrictions referred to in Section 7.2,
the Purchaser may sell, assign, transfer or negotiate all or any
part of their Notes.
7.2.
Restrictive Notes
Legend .
Each Note shall bear legends in substantially the forms contained
in Exhibit A and shall be subject to the restrictions on
transfer contained in the Indenture for as long as such
restrictions shall be applicable.
7.3.
Other Note Legends . Each Note shall bear a legend in
substantially the following form:
“THIS NOTE BEARS ORIGINAL ISSUE
DISCOUNT. UPON WRITTEN REQUEST TO CELLU TISSUE HOLDINGS,
INC. 1855 LOCKEWAY DRIVE, STE. 501, ALPHARETTA, GEORGIA
30004, ATTENTION: CHIEF EXECUTIVE OFFICER, INFORMATION REGARDING
THE ISSUE PRICE, AMOUNT OF ORIGINAL ISSUE DISCOUNT, ISSUE DATE AND
YIELD TO MATURITY WILL BE MADE AVAILABLE.”
ARTICLE 8
MISCELLANEOUS
8.1.
Amendments and Waivers . No amendment, modification,
termination or waiver of any provision of this Agreement, shall in
any event be effective without the written consent of the Purchaser
and the Company.
8.2.
Expenses . Each of the Company and the Purchaser shall
bear its own expenses incurred in connection with the execution and
delivery of this Agreement and the issuance of the
Notes.
8.3.
Notices . All notices, demands or other communications
to be given or delivered under or by reason of the provisions of
this Agreement shall be in writing and delivered personally or sent
via a nationally recognized overnight courier. Such notices,
demands and other communications will be delivered or sent to the
address indicated below:
If to the
Company:
1855 Lockeway Drive, Ste. 501
Alpharetta, Georgia 30004
Attention: Chief Executive
Officer
with a copy
to:
Ropes & Gray LLP
One
International Place
Boston, Massachusetts 02110
Fax: (617) 951-7050
Attention: Lawrence D. Bragg
III, Esq.
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If
to Purchaser:
Claren Road Credit Master Fund, Ltd.
c/o
Claren Road Asset Management, LLC
900
Third Avenue, Suite 1401
New
York, NY 10022
Fax: 212.888.1033
Attention: Wendy
Ruberti, General Counsel
or such other
address or to the attention of such other Person as the recipient
party shall have specified by prior written notice to the sending
party. Any such communication shall be deemed to have been
received when actually delivered or refused.
8.4.
Survival of Warranties
and Certain Agreements . Any liability of the Company for any
breach of, or inaccuracy in, the representations and warranties
made by it herein shall survive the execution and delivery of this
Agreement and the sale and delivery of the Notes but shall expire
one year after the date of the Closing.
8.5.
Heading . Section and subsection headings in this
Agreement are included herein for convenience of reference only and
shall not constitute a part of this Agreement for any other purpose
or be given any substantive effect.
8.6.
Applicable Law . This Agreement shall be governed by,
and shall be construed and enforced in accordance with, the
internal laws of the State of New York.
8.7.
Successors and Assigns; Subsequent Holders . This
Agreement shall be binding upon the parties hereto and their
respective successors and assigns and shall inure to the benefit of
the parties hereto and the successors and assigns of the Purchaser;
provided , however , that the Company’s
rights hereunder may not be assigned without the written consent of
Purchaser.
8.8.
Consent to Jurisdiction and Service of Process . All
judicial proceedings with respect to this Agreement or any Notes
may be brought in any state or federal court of competent
jurisdiction in the State of New York and by execution and delivery
of this Agreement the Company accepts for itself and in connection
with its properties, generally and unconditionally, the
jurisdiction of the aforesaid courts, and irrevocably agrees to be
bound by any judgment rendered thereby in connection with this
Agreement subject, however, to rights of appeal. The Company
hereby agrees that service upon it in the manner provided for the
giving of notices in Section 8.3 shall constitute sufficient
notice. Nothing herein shall affect the right to serve
process in any other manner permitted by law or shall limit the
right of the Purchaser to bring proceedings against the Company in
the courts of any other jurisdiction.
8.9.
Waiver of Jury Trial . Each of the parties hereto
waives, to the full extent permitted by applicable law, trial by
jury in any litigation in any court with respect to, in connection
with, or arising out of this Agreement or any other Document or the
validity, protection, interpretation, collection or enforcement
thereof.
8.10.
Counterparts; Effectiveness . This Agreement and any
amendments, waivers, consents or supplements may be executed in any
number of counterparts and by different parties hereto in separate
counterparts, each of which when so executed and delivered shall be
deemed an original, but all such counterparts together shall
constitute but one and the same instrument. This Agreement
shall become effective upon the execution of a counterpart hereof
by each of the parties hereto, and when written or telephonic
notification of such execution and authorization of delivery
thereof has been received by the Company and the
Purchaser.
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8.11.
USA PATRIOT ACT . The Purchaser is subject to the USA
PATRIOT ACT (Title III of Pub. L. 107-56 (signed into law
October 26, 2001)) (the “ Act ”) and hereby
notifies the Company that pursuant to the requirements of the Act,
it may be required to obtain, verify and record information that
identifies the Company, which information includes the name
and address of the Company and other information that will allow
such Purchaser to identify the Company in accordance with the
Act. The Company hereby agrees to provide any such
information upon request, and to the disclosure of such information
pursuant to the requirements of the Act and notwithstanding any
other provision hereof.
8.12.
Entirety . This Agreement embodies the entire
agreement among the parties and supersede all prior agreements and
understandings, if any, relating to the subject matter hereof and
thereof.
[Remainder of
Page Intentionally Left Blank.]
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IN WITNESS
WHEREOF, the parties hereto have caused this Agreement to be
executed by the respective duly authorized officers of the
undersigned and by the undersigned as of the date first written
above.
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COMPANY
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CELLU TISSUE HOLDINGS, INC.
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By:
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/s/David J. Morris
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Name:
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David J. Morris
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Title:
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Senior Vice President and
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Chief Financial Officer
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Signature page to Note Purchase
Agreement
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PURCHASER:
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CLAREN ROAD CREDIT MASTER FUND, LTD. BY
ITS INVESTMENT MANAGER, CLAREN ROAD
ASSET MANAGEMENT, LLC
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By:
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/s/Kenneth J. Weiller
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Name:
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Kenneth J. Weiller
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Title:
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Chief Operating Officer
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Signature page to Note
Purchase Agreement
APPENDIX
I
TO NOTE PURCHASE AGREEMENT
“
Acquisition ” has the meaning set forth in the
Recitals to the Agreement.
“
Acquisition Agreement ” means the Asset Purchase
Agreement dated as of July 2, 2008 among the Company and
Atlantic.
“
Acquisition Documents ” means (i) the Acquisition
Agreement; (ii) the 12% subordinated unsecured note due 2011
issued by the Company to Atlantic Paper & Foil Corp. of
N.Y.; (iii) the Escrow Agreement, among Atlantic, Shaun
Gabbay, as the sellers’ representative, the Company and The
Bank of New York Trust Company, N.A.; (iv) the Guaranty
Agreements, by and among the Company, the individual guarantors
named therein and Atlantic; (v) the Support Agreement, by and
among the individual owners named therein and the Company;
(vi) the Non-Competition, Non-Solicitation and Non-Disclosure
Agreements, by and between each of the individual owners named
therein and the Company; (vii) the Assignment of Purchase
Agreement, between the Company and Cellu Tissue – Hauppauge,
LLC; (viii) the Assignment of Purchase Agreement, between the
Company and Cellu Tissue – Thomaston, LLC;
(ix) Assignment and Assumption Agreement, between Atlantic and
Cellu Tissue – Thomaston, LLC; (x) Assignment and
Assumption Agreement, between Atlantic and Cellu Tissue –
Hauppauge, LLC; (xi) Bill of Sale, between Atlantic and Cellu
Tissue – Thomaston, LLC; (xii) Bill of Sale, between Atlantic
and Cellu Tissue - Hauppauge, LLC; (xiii) the Lease between
Atlantic Paper & Foil, Corp. of N.Y. and Cellu Tissue
– Hauppauge, LLC with respect to the real property located at
325 Kennedy Drive, Hauppauge, New York 11788; (xiv) the Lease
between Atlantic Long Island Properties, Inc. and Cellu Tissue
– Hauppauge, LLC with respect to the real property located at
50 Gilpin Avenue, Hauppauge, New York 11788; and (xv) the Lease
between Atlantic Lakeside Properties, LLC and Cellu Tissue –
Thomaston, LLC with respect to the property located at 1201
Barnesville Street, Thomaston, Georgia 30286.
“
Agreement ” means the Note Purchase Agreement dated as
of July 2, 2008 among the Company and the Purchaser, as from
time to time in effect, of which this Appendix is a
part.
“
Atlantic ” means, collectively, Atlantic
Paper & Foil Corp. of N.Y., Atlantic Lakeside Properties,
LLC, Atlantic Paper & Foil, LLC, Atlantic Paper &
Foil of Georgia, LLC and Consumer Licensing Corporation.
“
Closing ” shall have the meaning set forth in
Section 2.2 of the Agreement.
“ Closing
Date ” means the date of the Closing on which the Notes
are issued and sold to the Purchaser pursuant to the
Agreement.
“
Co-Investors ” means DDJ and UBS High Yield
Relationship Fund, a series of the UBS Relationship
Funds.
“
Co-Investor Notes ” means the Senior Secured Notes
issued to the Co-Investors pursuant to each of the Co-Investor
Purchase Agreements.
“
Co-Investor Purchase Agreements ” means the Note
Purchase Agreements, dated as of the Closing Date, between the
Company and each of the Co-Investors.
“
Company ” shall have the meaning set forth in the
preamble to the Agreement.
“ Company
SEC Filings ” has the meaning set forth in
Section 5.4.1 of the Agreement.
“DDJ”
means, collectively, GMAM Investment Funds Trust II, for the
account of the Promark Alternative High Yield Bond Fund (Account
No. 7M2E), GMAM Investment Funds Trust, General Motors Welfare
Benefit Trust (VEBA), GMAM Investment Funds Trust II for the
account of the Promark Alternative High Yield Bond Fund (Account
No. 7MWD), DDJ High Yield Fund, Multi-Style, Multi-Manager
Funds PLC The Global Strategic Yield Fund (f/k/a Multi-Style,
Multi-Manager Funds PLC The Global High Yie
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