exv4w1






Exhibit 4.1




EXECUTION COPY




 


P. H. GLATFELTER COMPANY

Issuer



71/8% Senior Notes due 2016




 






INDENTURE



Dated as of February 5, 2010




 






HSBC BANK USA, NATIONAL ASSOCIATION

Trustee




 






 









 








CROSS-REFERENCE TABLE




		 	 	 	 	 	 	 
	TIA 

Section

	 	 	 	Indenture

Section

	 	 

	 	 	 	 	 	 
	310	(a)(1)

	 	 
	 	 	7.10	 
		(a)(2)

	 	 	 	 	7.10	 
		(a)(3)

	 	 	 	 	N.A.	 
		(a)(4)

	 	 	 	 	N.A.	 
		(b)

	 	 	 	 	7.08; 7.10

		(c)

	 	 	 	 	N.A.	 
	311	(a)

	 	 	 	 	7.11	 
		(b)

	 	 	 	 	7.11	 
		(c)

	 	 	 	 	N.A.	 
	312	(a)

	 	 	 	 	2.05	 
		(b)

	 	 	 	 	10.03	 
		(c)

	 	 	 	 	10.03	 
	313	(a)

	 	 	 	 	7.06	 
		(b)(1)

	 	 	 	 	N.A.	 
		(b)(2)

	 	 	 	 	7.06	 
		(c)

	 	 	 	 	10.02	 
		(d)

	 	 	 	 	7.06	 
	314	(a)

	 	 	 	 	4.02;	 
		 

	 	 	 	 	4.08; 10.02

		(b)

	 	 	 	 	N.A.	 
		(c)(1)

	 	 	 	 	10.04	 
		(c)(2)

	 	 	 	 	10.04	 
		(c)(3)

	 	 	 	 	N.A.	 
		(d)

	 	 	 	 	N.A.	 
		(e)

	 	 	 	 	10.05	 
		(f)

	 	 	 	 	4.08	 
	315	(a)

	 	 	 	 	7.01	 
		(b)

	 	 	 	 	7.02; 10.02

		(c)

	 	 	 	 	7.01	 
		(d)

	 	 	 	 	7.01	 
		(e)

	 	 	 	 	6.11	 
	316	(a)(last sentence)

	 	 	 	 	10.0	 
		(a)(1)(A)

	 	 	 	 	6.05	 
		(a)(1)(B)

	 	 	 	 	6.04	 
		(a)(2)

	 	 	 	 	N.A.	 
		(b)

	 	 	 	 	6.07	 
	317	(a)(1)

	 	 	 	 	6.08	 
		(a)(2)

	 	 	 	 	6.09	 
		(b)

	 	 	 	 	2.04	 
	318	(a)

	 	 	 	 	10.01	 





N.A. means Not Applicable.





 




			
	Note:	 	This Cross-Reference Table shall not, for any purpose, be deemed to be part of the
Indenture.




 









 










TABLE OF CONTENTS




	 	 	 	 	 	 	 
	 	 	 	 	Page
	 

	 	ARTICLE ONE	 	 	 	 
	 
	 	 	 	 	 	 
	SECTION 1.01.

	 	Definitions
	 	 	1	 
	SECTION 1.02.

	 	Other Definitions
	 	 	28	 
	SECTION 1.03.

	 	Incorporation by Reference of Trust Indenture Act
	 	 	29	 
	SECTION 1.04.

	 	Rules of Construction
	 	 	30	 






	 	 	 	 	 	 	 
	 

	 	ARTICLE TWO	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	THE NOTES	 	 	 	 
	 
	 	 	 	 	 	 
	SECTION 2.01.

	 	Form and Dating
	 	 	31	 
	SECTION 2.02.

	 	Execution and Authentication
	 	 	31	 
	SECTION 2.03.

	 	Registrar and Paying Agent
	 	 	32	 
	SECTION 2.04.

	 	Paying Agent To Hold Money in Trust
	 	 	32	 
	SECTION 2.05.

	 	Noteholder Lists
	 	 	32	 
	SECTION 2.06.

	 	Transfer and Exchange
	 	 	32	 
	SECTION 2.07.

	 	Replacement Notes
	 	 	33	 
	SECTION 2.08.

	 	Outstanding Notes
	 	 	33	 
	SECTION 2.09.

	 	Treasury Notes
	 	 	33	 
	SECTION 2.10.

	 	Temporary Notes
	 	 	33	 
	SECTION 2.11.

	 	Cancellation
	 	 	34	 
	SECTION 2.12.

	 	Defaulted Interest
	 	 	34	 
	SECTION 2.13.

	 	CUSIP Numbers, ISINs, etc
	 	 	34	 
	SECTION 2.14.

	 	Issuance of Additional Notes
	 	 	34	 
	 
	 	 	 	 	 	 
	 

	 	ARTICLE THREE	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	REDEMPTION	 	 	 	 
	 
	 	 	 	 	 	 
	SECTION 3.01.

	 	Notices to Trustee
	 	 	36	 
	SECTION 3.02.

	 	Selection of Notes To Be Redeemed
	 	 	36	 
	SECTION 3.03.

	 	Notice of Redemption
	 	 	36	 
	SECTION 3.04.

	 	Effect of Notice of Redemption
	 	 	37	 
	SECTION 3.05.

	 	Deposit of Redemption Price
	 	 	37	 
	SECTION 3.06.

	 	Notes Redeemed in Part
	 	 	37	 
	SECTION 3.07.

	 	Special Mandatory Redemption
	 	 	38	 






	 	 	 	 	 	 	 
	 

	 	ARTICLE FOUR	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	COVENANTS	 	 	 	 
	 
	 	 	 	 	 	 
	SECTION 4.01.

	 	Payment of Notes
	 	 	40	 
	SECTION 4.02.

	 	SEC Reports
	 	 	40	 






 









 






	 	 	 	 	 	 	 
	SECTION 4.03.

	 	Limitation on Indebtedness
	 	 	41	 
	SECTION 4.04.

	 	Limitation on Restricted Payments
	 	 	43	 
	SECTION 4.05.

	 	Restrictions on Distributions from Restricted Subsidiaries
	 	 	47	 
	SECTION 4.06.

	 	Limitation on Sales of Assets and Subsidiary Stock
	 	 	49	 
	SECTION 4.07.

	 	Limitation on Affiliate Transactions
	 	 	53	 
	SECTION 4.08.

	 	Change of Control
	 	 	54	 
	SECTION 4.09.

	 	Limitation on Liens
	 	 	56	 
	SECTION 4.10.

	 	Limitation on Sale/Leaseback Transactions
	 	 	56	 
	SECTION 4.11.

	 	Future Subsidiary Guarantors
	 	 	57	 
	SECTION 4.12.

	 	Compliance Certificate
	 	 	57	 
	SECTION 4.13.

	 	Suspension of Covenants
	 	 	57	 
	SECTION 4.14.

	 	Escrow Account Deposit
	 	 	58	 
	 
	 	 	 	 	 	 
	 

	 	ARTICLE FIVE	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	SUCCESSOR COMPANY	 	 	 	 
	 
	 	 	 	 	 	 
	SECTION 5.01.

	 	When Company May Merge or Transfer Assets 	 	 	59	 






	 	 	 	 	 	 	 
	 

	 	ARTICLE SIX	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	DEFAULTS AND REMEDIES	 	 	 	 
	 
	 	 	 	 	 	 
	SECTION 6.01.

	 	Events of Default
	 	 	61	 
	SECTION 6.02.

	 	Acceleration
	 	 	63	 
	SECTION 6.03.

	 	Other Remedies
	 	 	63	 
	SECTION 6.04.

	 	Waiver of Past Defaults
	 	 	63	 
	SECTION 6.05.

	 	Control by Majority
	 	 	63	 
	SECTION 6.06.

	 	Limitation on Suits
	 	 	64	 
	SECTION 6.07.

	 	Rights of Holders To Receive Payment
	 	 	64	 
	SECTION 6.08.

	 	Collection Suit by Trustee
	 	 	64	 
	SECTION 6.09.

	 	Trustee May File Proofs of Claim
	 	 	65	 
	SECTION 6.10.

	 	Priorities
	 	 	65	 
	SECTION 6.11.

	 	Undertaking for Costs
	 	 	65	 
	SECTION 6.12.

	 	Waiver of Stay or Extension Laws
	 	 	65	 






	 	 	 	 	 	 	 
	 

	 	ARTICLE SEVEN	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	TRUSTEE	 	 	 	 
	 
	 	 	 	 	 	 
	SECTION 7.01.

	 	Duties of Trustee
	 	 	67	 
	SECTION 7.02.

	 	Notice of Defaults
	 	 	68	 
	SECTION 7.03.

	 	Rights of Trustee
	 	 	68	 
	SECTION 7.04.

	 	Individual Rights of Trustee
	 	 	69	 
	SECTION 7.05.

	 	Trustee’s Disclaimer
	 	 	69	 
	SECTION 7.06.

	 	Reports by Trustee to Holders
	 	 	69	 
	SECTION 7.07.

	 	Compensation and Indemnity
	 	 	69	 






ii









 






	 	 	 	 	 	 	 
	SECTION 7.08.

	 	Replacement of Trustee
	 	 	70	 
	SECTION 7.09.

	 	Successor Trustee by Merger
	 	 	71	 
	SECTION 7.10.

	 	Eligibility; Disqualification
	 	 	71	 
	SECTION 7.11.

	 	Preferential Collection of Claims Against Company
	 	 	71	 
	 
	 	 	 	 	 	 
	 

	 	ARTICLE EIGHT	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	DISCHARGE OF INDENTURE; DEFEASANCE	 	 	 	 
	 
	 	 	 	 	 	 
	SECTION 8.01.

	 	Discharge of Liability on Notes; Defeasance
	 	 	72	 
	SECTION 8.02.

	 	Conditions to Defeasance
	 	 	73	 
	SECTION 8.03.

	 	Application of Trust Money
	 	 	74	 
	SECTION 8.04.

	 	Repayment to Company
	 	 	74	 
	SECTION 8.05.

	 	Indemnity for Government Obligations
	 	 	74	 
	SECTION 8.06.

	 	Reinstatement
	 	 	74	 
	 
	 	 	 	 	 	 
	 

	 	ARTICLE NINE	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	AMENDMENTS	 	 	 	 
	 
	 	 	 	 	 	 
	SECTION 9.01.

	 	Without Consent of Holders
	 	 	75	 
	SECTION 9.02.

	 	With Consent of Holders
	 	 	75	 
	SECTION 9.03.

	 	Compliance with Trust Indenture Act
	 	 	76	 
	SECTION 9.04.

	 	Revocation and Effect of Consents and Waivers
	 	 	76	 
	SECTION 9.05.

	 	Notation on or Exchange of Notes
	 	 	77	 
	SECTION 9.06.

	 	Trustee To Sign Amendments
	 	 	77	 
	SECTION 9.07.

	 	Payment for Consent
	 	 	77	 






	 	 	 	 	 	 	 
	 

	 	ARTICLE TEN	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	SUBSIDIARY GUARANTEES	 	 	 	 
	 
	 	 	 	 	 	 
	SECTION 10.01.

	 	Guarantees
	 	 	78	 
	SECTION 10.02.

	 	Limitation on Liability
	 	 	79	 
	SECTION 10.03.

	 	Successors and Assigns
	 	 	80	 
	SECTION 10.04.

	 	No Waiver
	 	 	80	 
	SECTION 10.05.

	 	Modification
	 	 	80	 
	SECTION 10.06.

	 	Release of Subsidiary Guarantor
	 	 	80	 
	SECTION 10.07.

	 	Contribution
	 	 	81	 






	 	 	 	 	 	 	 
	 

	 	ARTICLE ELEVEN	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	MISCELLANEOUS	 	 	 	 
	 
	 	 	 	 	 	 
	SECTION 11.01.

	 	Trust Indenture Act Controls
	 	 	82	 
	SECTION 11.02.

	 	Notices
	 	 	82	 
	SECTION 11.03.

	 	Communication by Holders with Other Holders
	 	 	83	 
	SECTION 11.04.

	 	Certificate and Opinion as to Conditions Precedent
	 	 	83	 






iii









 






	 	 	 	 	 	 	 
	SECTION 11.05.

	 	Statements Required in Certificate or Opinion
	 	 	83	 
	SECTION 11.06.

	 	When Notes Disregarded
	 	 	83	 
	SECTION 11.07.

	 	Rules by Trustee, Paying Agent and Registrar
	 	 	84	 
	SECTION 11.08.

	 	Legal Holidays
	 	 	84	 
	SECTION 11.09.

	 	Governing Law
	 	 	84	 
	SECTION 11.10.

	 	No Recourse Against Others
	 	 	84	 
	SECTION 11.11.

	 	Successors
	 	 	84	 
	SECTION 11.12.

	 	Multiple Originals
	 	 	84	 
	SECTION 11.13.

	 	Table of Contents; Headings
	 	 	84	 






	 	 	 
	Rule 144A/Regulation S Appendix
	 
	 	 
	Exhibit 1 —

	 	Form of Initial Note
	 
	 	 
	Exhibit A —

	 	Form of Exchange Note or Private Exchange Note






iv









 






          INDENTURE dated as of February 5, 2010 (this “Indenture”), among P.H. GLATFELTER COMPANY, a
Pennsylvania corporation (the “Company”) and HSBC BANK USA, NATIONAL ASSOCIATION, as Trustee (the
“Trustee”), and the Subsidiary Guarantors (as defined below).



          Each party agrees as follows for the benefit of the other parties and for the equal and
ratable benefit of the Holders of the Notes.



ARTICLE ONE




          SECTION 1.01. Definitions.



          “Accreted Original Issue Discount” means the amount of accretion per $1,000 principal amount
of Notes, determined based on a rate (the “Additional Yield”) of 1.035%. The accreted amount as of
any date will be determined as if the principal amount of the Notes accrued additional interest at
the Additional Yield calculated on a semi-annual bond equivalent basis, using a 360-day year
comprised of twelve 30-day months.



          “Acquisition” means the acquisition by Glatfelter Canada Inc., a wholly owned Subsidiary of
the Company, from Brookfield Special Situations Management Limited of all the issued and
outstanding equity interests of Concert Industries Corp. pursuant to the Share Purchase Agreement.



          “Additional Assets” means:




     (1) any property, plant or equipment used in a Related Business;




     (2) the Capital Stock of a Person that becomes a Restricted Subsidiary as a result of
the acquisition of such Capital Stock by the Company or another Restricted Subsidiary; or




     (3) Capital Stock constituting a minority interest in any Person that at such time is
a Restricted Subsidiary;



provided, however, that any such Restricted Subsidiary described in clause (2) or
(3) above is primarily engaged in a Related Business.




          “Adjusted Treasury Rate” means, with respect to any redemption date, (1) the yield, under the
heading which represents the average for the immediately preceding week, appearing in the most
recently published statistical release designated “H.15(519)” or any successor publication which is
published weekly by the Board of Governors of the Federal Reserve System and which establishes
yields on actively traded United States Treasury securities adjusted to constant maturity under the
caption “Treasury Constant Maturities,” for the maturity corresponding to the Comparable Treasury
Issue (if no maturity is within three months before or after May 1, 2011, yields for the two
published maturities most closely corresponding to the Comparable Treasury Issue shall be
determined and the Adjusted Treasury Rate shall be interpolated or



 









 





extrapolated from such yields on
a straight line basis, rounding to the nearest month) or (2) if such release (or any successor
release) is not published during the week preceding the calculation date or does not contain such
yields, the rate per year equal to the semi-annual equivalent yield to maturity of the Comparable
Treasury Issue (expressed as a percentage of its principal amount) equal to the Comparable Treasury
Price for such redemption date, in each case calculated on the third Business Day immediately
preceding the redemption date, plus 0.50%.




          “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 the purposes of this definition, “control” when used with respect to any Person means the power
to direct the management and policies of such Person, directly or indirectly, whether through the
ownership of voting
securities, by contract or otherwise; and the terms “controlling” and “controlled” have
meanings correlative to the foregoing.



          “Applicable Premium” means with respect to a Note at any redemption date, the greater of (1)
1.00% of the principal amount of such Note and (2) the excess of (A) the present value at such
redemption date of (i) the redemption price of such Note on May 1, 2011 (such redemption price
being described in the second paragraph of Section 5 of the Notes exclusive of any accrued
interest) plus (ii) all required remaining scheduled interest payments due on such Note through May
1, 2011 (but excluding accrued and unpaid interest to the redemption date), computed using a
discount rate equal to the Adjusted Treasury Rate, over (B) the principal amount of such Note on
such redemption date.



          “Asset Disposition” means any sale, lease, transfer or other disposition (or series of related
sales, leases, transfers or dispositions) by the Company or any Restricted Subsidiary, including
any disposition by means of a merger, consolidation or similar transaction (each referred to for
the purposes of this definition as a “disposition”), of:




     (1) any shares of Capital Stock of a Restricted Subsidiary (other than directors’
qualifying shares or shares required by applicable law to be held by a Person other than
the Company or a Restricted Subsidiary),




     (2) all or substantially all the assets of any division or line of business of the
Company or any Restricted Subsidiary, or




     (3) any other assets of the Company or any Restricted Subsidiary outside of the
ordinary course of business of the Company or such Restricted Subsidiary;



provided, however, that the following shall not constitute an Asset Disposition:





     (A) a disposition by a Restricted Subsidiary to the Company or by the Company
or a Restricted Subsidiary to a Restricted Subsidiary;




     (B) for purposes of Section 4.06 only, (i) a disposition that constitutes a
Restricted Payment (or would constitute a Restricted



2









 






Payment but for the exclusions
from the definition thereof) and that is not prohibited by Section 4.04 and (ii) a
disposition of all or substantially all the assets of the Company in accordance
with Section 5.01;




     (C) a disposition of assets with a fair market value of less than $2.5
million;




     (D) a disposition of cash or Temporary Cash Investments;




     (E) dispositions (including without limitation surrenders and waivers) of
accounts receivable or other contract rights in connection with the compromise,
settlement or collection thereof;




     (F) any sale or disposition of any property or equipment that has become
damaged, worn out or obsolete or pursuant to a program for the maintenance or
upgrading of such property or equipment;




     (G) the creation of a Lien (but not the sale or other disposition of the
property subject to such Lien); and




     (H) any disposition of assets that constitutes a Change of Control to the
extent the Company has complied with Section 4.08.



          “Attributable Debt” in respect of a Sale/Leaseback Transaction means, as at the time of
determination, the present value (discounted at the interest rate borne by the Notes, compounded
annually) of the total obligations of the lessee for rental payments during the remaining term of
the lease included in such Sale/Leaseback Transaction (including any period for which such lease
has been extended); provided, however, that if such Sale/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.”



          “Average Life” means, as of the date of determination, with respect to any Indebtedness, the
quotient obtained by dividing:




     (1) the sum of the products of the numbers of years from the date of determination to
the dates of each successive scheduled principal payment of or redemption or similar
payment with respect to such Indebtedness multiplied by the amount of such payment by




     (2) the sum of all such payments.



          “Board of Directors” means the Board of Directors of the Company or any committee thereof duly
authorized to act on behalf of such Board.



          “Business Day” means each day which is not a Legal Holiday.



3









 





          “Capital Lease Obligation” means an obligation that is required to be classified and accounted
for as a capital lease for financial reporting purposes in accordance with GAAP, and the amount of
Indebtedness represented by such obligation shall be the capitalized amount of such obligation
determined 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 terminated by the lessee without payment of a penalty. For purposes of Section 4.09,
a Capital Lease Obligation will be deemed to be secured by a Lien on the property being leased.



          “Capital Stock” of any Person means any and all shares, interests (including partnership
interests), rights to purchase, warrants, options, participations or other equivalents of or
interests in (however designated) equity of such Person, including any Preferred Stock, but
excluding any debt securities convertible into such equity.



          “Code” means the Internal Revenue Code of 1986, as amended.



          “Commodity Agreement” means any commodity forward contract, commodities futures contract,
commodity swaps, commodity option or other similar agreement or arrangement.



          “Company” means the party named as such in this Indenture until a successor replaces it and,
thereafter, means the successor and, for purposes of any provision contained herein and required by
the TIA, each other obligor on the indenture securities.



          “Comparable Treasury Issue” means the United States Treasury security selected by the
Quotation Agent as having a maturity comparable to the remaining term of the Notes from the
redemption date to May 1, 2011, that would be utilized, at the time of selection and in accordance
with customary financial practice, in pricing new issues of corporate debt securities of a maturity
most nearly equal to May 1, 2011.



          “Comparable Treasury Price” means, with respect to any redemption date, if clause (2) of the
Adjusted Treasury Rate is applicable, the average of three, or such lesser number as is obtained by
the Trustee, Reference Treasury Dealer Quotations for such redemption date.



          “Consolidated Coverage Ratio” as of any date of determination means the ratio of (a) the
aggregate amount of EBITDA for the period of the most recent four consecutive fiscal quarters
ending at least 45 days prior to the date of such determination to (b) Consolidated Interest
Expense for such four fiscal quarters; provided, however, that:




     (1) if the Company or any Restricted Subsidiary has Incurred any Indebtedness since
the beginning of such period that remains outstanding or if the transaction giving rise to
the need to calculate the Consolidated Coverage Ratio is an Incurrence of Indebtedness, or
both, EBITDA and Consolidated Interest Expense for such period shall be calculated after
giving effect on a pro forma



4









 






basis to such Indebtedness as if such Indebtedness had been
Incurred on the first day of such period;




     (2) if the Company or any Restricted Subsidiary has repaid, repurchased, defeased or
otherwise discharged any Indebtedness since the beginning of such period or if any
Indebtedness is to be repaid, repurchased, defeased or otherwise discharged (in each case
other than Indebtedness Incurred under any revolving credit facility unless such
Indebtedness has been permanently repaid and has not been replaced) on the date of the
transaction giving rise to the need to calculate the Consolidated Coverage Ratio, EBITDA
and Consolidated Interest Expense for such period shall be calculated on a pro forma basis
as if such discharge had occurred on the first day of such period and as if the Company or
such Restricted Subsidiary had not earned the interest income actually earned during such
period in respect of cash or Temporary Cash Investments used to repay, repurchase, defease
or otherwise discharge such Indebtedness;




     (3) if since the beginning of such period the Company or any Restricted Subsidiary
shall have made any Asset Disposition, EBITDA for such period shall be reduced by an amount
equal to EBITDA (if positive) directly attributable to the assets which are the subject of
such Asset Disposition for such period, or increased by an amount equal to EBITDA (if
negative), directly attributable thereto for such period and Consolidated Interest Expense
for such period shall be reduced by an amount equal to the Consolidated Interest Expense
directly attributable to any Indebtedness of the Company or any Restricted Subsidiary
repaid, repurchased, defeased or otherwise discharged with respect to the Company and its
continuing Restricted Subsidiaries in connection with such Asset Disposition for such
period (or, if the Capital Stock of any Restricted Subsidiary is sold, the Consolidated
Interest Expense for such period directly attributable to the Indebtedness of such
Restricted Subsidiary to the extent the Company and its continuing Restricted Subsidiaries
are no longer liable for such Indebtedness after such sale);




     (4) if since the beginning of such period the Company or any Restricted Subsidiary (by
merger or otherwise) shall have made an Investment in any Restricted Subsidiary (or any
Person which becomes a Restricted Subsidiary) or an acquisition of assets, including any
acquisition of assets occurring in connection with a transaction requiring a calculation to
be made hereunder, which constitutes all or substantially all of an operating unit of a
business, EBITDA and Consolidated Interest Expense for such period shall be calculated
after giving pro forma effect thereto (including the Incurrence of any Indebtedness) as if
such Investment or acquisition had occurred on the first day of such period; and




     (5) if since the beginning of such period any Person (that subsequently became a
Restricted Subsidiary or was merged with or into the Company or any Restricted Subsidiary
since the beginning of such period) shall have made any Asset Disposition, any Investment
or acquisition of assets that would have required an adjustment pursuant to clause (3) or
(4) above if made by the



5









 






Company or a Restricted Subsidiary during such period, EBITDA and
Consolidated Interest Expense for such period shall be calculated after giving pro forma
effect thereto as if such Asset Disposition, Investment or acquisition had occurred on the
first day of such period.



For purposes of this definition, whenever pro forma effect is to be given to an acquisition of
assets, the amount of income or earnings relating thereto and the amount of Consolidated Interest
Expense associated with any Indebtedness Incurred in connection therewith, the pro forma
calculations shall be determined in
good faith by a responsible financial or accounting Officer of the Company. If any Indebtedness
bears a floating rate of interest and is being given pro forma effect, the interest on such
Indebtedness shall be calculated as if the rate in effect on the date of determination had been the
applicable rate for the entire period (taking into account any Interest Rate Agreement applicable
to such Indebtedness if such Interest Rate Agreement has a remaining term in excess of 12 months).




          If any Indebtedness is Incurred under a revolving credit facility and is being given pro forma
effect, the interest on such Indebtedness shall be calculated based on the average daily balance of
such Indebtedness for the four fiscal quarters subject to the pro forma calculation to the extent
that such Indebtedness was incurred solely for working capital purposes.



          “Consolidated Current Liabilities” as of the date of determination means the aggregate amount
of liabilities of the Company and its consolidated Restricted Subsidiaries which may properly be
classified as current liabilities (including taxes accrued as estimated), on a consolidated basis,
after eliminating:




     (1) all intercompany items between the Company and any Restricted Subsidiary; and




     (2) all current maturities of long-term Indebtedness, all as determined in accordance
with GAAP consistently applied.



          “Consolidated Interest Expense” means, for any period, the total interest expense of the
Company and its consolidated Restricted Subsidiaries, plus, to the extent not included in such
total interest expense, and to the extent incurred by the Company or its Restricted Subsidiaries,
without duplication:




     (1) interest expense attributable to Capital Lease Obligations;




     (2) amortization of debt discount and debt issuance cost;




     (3) capitalized interest;




     (4) non-cash interest expense;




     (5) commissions, discounts and other fees and charges owed with respect to letters of
credit and bankers’ acceptance financing;



6









 






     (6) net payments pursuant to Hedging Obligations;




     (7) dividends accrued in respect of all Disqualified Stock of the Company and all
Preferred Stock of any Restricted Subsidiary, in each case held by Persons other than the
Company or a Wholly Owned Subsidiary (other than dividends payable solely in Capital Stock
(other than Disqualified Stock) of the Company); provided, however, that
such dividends will be multiplied by a fraction the numerator of which is one and the
denominator of which is one minus the effective combined tax rate of the issuer of such
Preferred Stock (expressed as a decimal) for such period (as estimated by the chief
financial officer of the Company in good faith);




     (8) interest incurred in connection with Investments in discontinued operations;




     (9) interest accruing on any Indebtedness of any other Person to the extent such
Indebtedness is Guaranteed by (or secured by the assets of) the Company or any Restricted
Subsidiary; and




     (10) the cash contributions to any employee stock ownership plan or similar trust to
the extent such contributions are used by such plan or trust to pay interest or fees to any
Person (other than the Company) in connection with Indebtedness Incurred by such plan or
trust.



          “Consolidated Net Income” means, for any period, the net income of the Company and its
consolidated Subsidiaries; provided, however, that there shall not be included in
such Consolidated Net Income:




     (1) any net income of any Person (other than the Company) if such Person is not a
Restricted Subsidiary, except that:




     (A) subject to the exclusion contained in clause (4) below, the Company’s
equity in the net income of any such Person for such period shall be included in
such Consolidated Net Income up to the aggregate amount of cash actually
distributed by such Person during such period to the Company or a Restricted
Subsidiary as a dividend or other distribution (subject, in the case of a dividend
or other distribution paid to a Restricted Subsidiary, to the limitations contained
in clause (3) below); and




     (B) the Company’s equity in a net loss of any such Person for such period
shall be included in determining such Consolidated Net Income;




     (2) any net income (or loss) of any Person acquired by the Company or a Subsidiary in
a pooling of interests transaction (or any transaction accounted for in a manner similar to
a pooling of interests) for any period prior to the date of such acquisition;



7









 






     (3) any net income of any Restricted Subsidiary if such Restricted Subsidiary is
subject to restrictions, directly or indirectly, on the payment of dividends or the making
of distributions by such Restricted Subsidiary, directly or indirectly, to the Company,
except that:




     (A) subject to the exclusion contained in clause (4) below, the Company’s
equity in the net income of any such Restricted Subsidiary for such period shall be
included in such Consolidated Net Income up to the aggregate amount of cash
actually distributed by such Restricted Subsidiary during such period to the
Company or another Restricted Subsidiary as a dividend or other distribution
(subject, in the case of a dividend or other distribution paid to another
Restricted Subsidiary, to the limitation contained in this clause); and




     (B) the Company’s equity in a net loss of any such Restricted Subsidiary for
such period shall be included in determining such Consolidated Net Income;




     (4) any gain (or loss) realized upon the sale or other disposition of any assets of
the Company, its consolidated Subsidiaries or any other Person (including pursuant to any
sale-and-leaseback arrangement) which is not sold or otherwise disposed of in the ordinary
course of business and any gain (or loss) realized upon the sale or other disposition of
any Capital Stock of any Person;




     (5) extraordinary gains or losses; and




     (6) the cumulative effect of a change in accounting principles,



in each case, for such period. Notwithstanding the foregoing, for the purposes of Section 4.04
only, there shall be excluded from Consolidated Net Income any repurchases, repayments or
redemptions of Investments, proceeds realized on the sale of Investments or return of capital to
the Company or a Restricted Subsidiary to the extent such repurchases, repayments, redemptions,
proceeds or returns increase the amount of Restricted Payments permitted under Section 4.04
pursuant to clause (a)(3)(D) thereof.




          “Consolidated Net Tangible Assets” as of any date of determination, means the total amount of
assets (less accumulated depreciation and amortization, allowances for doubtful receivables, other
applicable reserves and other properly deductible items) which would appear on a consolidated
balance sheet of the Company and its consolidated Restricted Subsidiaries, determined on a
consolidated basis in accordance with GAAP, and after giving effect to purchase accounting and
after deducting therefrom Consolidated Current Liabilities and, to the extent otherwise included,
the amounts of:




     (1) minority interests in consolidated Subsidiaries held by Persons other than the
Company or a Restricted Subsidiary;



8









 






     (2) excess of cost over fair value of assets of businesses acquired, as determined in
good faith by the Board of Directors;




     (3) any revaluation or other write-up in book value of assets subsequent to the Issue
Date as a result of a change in the method of valuation in accordance with GAAP
consistently applied;




     (4) unamortized debt discount and expenses and other unamortized deferred charges,
goodwill, patents, trademarks, service marks, trade names, copyrights, licenses,
organization or developmental expenses and other intangible items;




     (5) treasury stock;




     (6) cash set apart and held in a sinking or other analogous fund established for the
purpose of redemption or other retirement of Capital Stock to the extent such obligation is
not reflected in Consolidated Current Liabilities; and




     (7) Investments in and assets of Unrestricted Subsidiaries.



          “Credit Agreement” means the Credit Agreement dated as of April 3, 2006, as amended, entered
into by and among, the Company, certain of its Subsidiaries, the lenders from time to time a party
thereto, PNC Bank, National Association, as Agent, and Credit Suisse Securities (USA) LLC, as
Syndication Agent, together with the related documents thereto (including the term loans and
revolving loans thereunder, any guarantees and security documents), as amended, extended, renewed,
restated, supplemented, refunded, replaced, refinanced or otherwise modified (in whole or in part,
and without limitation as to amount, terms, conditions, covenants and other provisions) from time
to time by one or more credit facilities, and any agreement (and related document) entered into in
substitution for any credit agreement, in which case, the credit agreement or similar agreement
together with all other documents and instruments related thereto shall constitute the “Credit
Agreement,” whether with the same or any other agent, lender or group of lenders.



          “Credit Facilities” means one or more debt facilities (including the Credit Agreement (and any
hedging arrangements with the lenders thereunder or Affiliates of such lenders, secured by the
collateral securing the Company’s Obligations under the Credit Agreement, if any), commercial paper
facilities, fiscal agency agreements or indentures, in each case with banks or other institutional
lenders or a trustee, 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), letters of credit or issuance of notes, bonds,
debentures or other evidences of Indebtedness, in each case as amended, extended, renewed,
restated, supplemented, refunded, replaced, refinanced or otherwise modified (in whole or in part,
and without limitation as to amount, terms, conditions, covenants and other provisions) from time
to time by one or more of such facilities or forms of Indebtedness.



9









 





          “Currency Agreement” means any foreign exchange contract, currency swap agreement or other
similar agreement with respect to currency values.



          “Default” means any event which is, or after notice or passage of time or both would be, an
Event of Default.



          “Disqualified Stock” means, with respect to any Person, any Capital Stock which by its terms
(or by the terms of any security into which it is convertible or for which it is exchangeable at
the option of the Holder) or upon the happening of any event:




     (1) matures or is mandatorily redeemable (other than redeemable only for Capital Stock
of such Person which is not itself Disqualified Stock) pursuant to a sinking fund
obligation or otherwise;




     (2) is convertible or exchangeable at the option of the holder for Indebtedness or
Disqualified Stock; or




     (3) is mandatorily redeemable or must be purchased upon the occurrence of certain
events or otherwise, in whole or in part;



in each case on or prior to the first anniversary of the Stated Maturity of the Notes;
provided, however, that any Capital Stock that would not constitute Disqualified
Stock but for provisions thereof giving holders thereof the right to require such Person to
purchase or redeem such Capital Stock upon the occurrence of an “asset sale” or “change of control”
occurring prior to the first anniversary of the Stated Maturity of the Notes shall not constitute
Disqualified Stock if:





     (i) the “asset sale” or “change of control” provisions applicable to such Capital
Stock are not more favorable to the holders of such Capital Stock than the terms applicable
to the Notes and described under Sections 4.06 and 4.08; and




     (ii) any such requirement only becomes operative after compliance with such terms
applicable to the Notes, including the purchase of any Notes tendered pursuant thereto.



The amount of any Disqualified Stock that does not have a fixed redemption, repayment or repurchase
price will be calculated in accordance with the terms of such Disqualified Stock as if such
Disqualified Stock were redeemed, repaid or repurchased on any date on which the amount of such
Disqualified Stock is to be determined pursuant to this Indenture; provided,
however, that if such Disqualified Stock could not be required to be redeemed, repaid or
repurchased at the time of such determination, the redemption, repayment or repurchase price will
be the book value of such Disqualified Stock as reflected in the most recent financial statements
of such Person.




          “Domestic Restricted Subsidiary” means any Restricted Subsidiary that is not a Foreign
Subsidiary.



10









 





          “EBITDA” for any period means the sum of Consolidated Net Income, plus the following to the
extent deducted in calculating such Consolidated Net Income:




     (1) all income tax expense of the Company and its consolidated Restricted
Subsidiaries;




     (2) Consolidated Interest Expense;




     (3) depreciation and amortization expense of the Company and its consolidated
Restricted Subsidiaries (excluding amortization expense attributable to a prepaid item that
was paid in cash in a prior period); and




     (4) all other non-cash charges of the Company and its consolidated Restricted
Subsidiaries (excluding any such non-cash charge to the extent that it represents an
accrual of or reserve for cash expenditures in any future period) less all non-cash items
of income of the Company and its consolidated Restricted Subsidiaries (other than accruals
of revenue by the Company and its consolidated Restricted Subsidiaries in the ordinary
course of business);



in each case for such period. Notwithstanding the foregoing, the provision for taxes based on the
income or profits of, and the depreciation and amortization and non-cash charges of, a Restricted
Subsidiary shall be added to Consolidated Net Income to compute EBITDA only to the extent (and in
the same proportion, including by reason of minority interests) that the net income or loss of such
Restricted Subsidiary was included in calculating Consolidated Net Income and only if a
corresponding amount would be permitted at the date of determination to be dividended to the
Company by such Restricted Subsidiary without prior approval (that has not been obtained), pursuant
to the terms of its charter and all agreements, instruments, judgments, decrees, orders, statutes,
rules and governmental regulations applicable to such Restricted Subsidiary or its stockholders.




          “Equity Offering” means any public or private sale after the Issue Date of common stock of the
Company, other than public offerings with respect to the Company’s common stock registered on Form
S-8.



          “Escrow Account” means the P.H. Glatfelter Company 2010 Notes Escrow Account, maintained by
the Escrow Agent in trust for the benefit of the Holders.



          “Escrow Agent” means HSBC Bank USA, National Association, in its capacity as Escrow Agent
pursuant to the Escrow Agreement.



          “Escrow Agreement” means the Escrow Agreement dated as of February 5, 2010, among HSBC Bank
USA, National Association (acting in its capacities as the Escrow Agent thereunder and as Trustee)
and the Company, relating to the Escrow Account.



11









 





          “Escrow Funds” means the aggregate funds deposited into the Escrow Account together with all
interest thereon received by the Escrow Agent for the benefit of the Holders.



          “Exchange Act” means the U.S. Securities Exchange Act of 1934, as amended.



          “Exchange Notes” means the debt securities of the Company issued pursuant to this Indenture in
exchange for, and in an aggregate principal amount equal to, the Notes, in compliance with the
terms of the Registration Rights Agreement.



          “Existing
Notes” means the outstanding
71/8% Senior Notes due 2016 of the Company
issued under an Indenture dated April 28, 2006, as supplemented, among the Company, SunTrust Bank,
as trustee, and the Subsidiary Guarantors (as defined therein).



          “Existing Notes Issue Date” means April 28, 2006.



          “Foreign Subsidiary” means any Restricted Subsidiary of the Company that is not organized
under the laws of the United States of America or any State thereof or the District of Columbia.



          “GAAP” means generally accepted accounting principles in the United States of America as in
effect from time to time, including those set forth in:




     (1) the opinions and pronouncements of the Accounting Principles Board of the American
Institute of Certified Public Accountants;




     (2) statements and pronouncements of the Financial Accounting Standards Board;




     (3) such other statements by such other entity as approved by a significant segment of
the accounting profession; and




     (4) the rules and regulations of the SEC governing the inclusion of financial
statements (including pro forma financial statements) in periodic reports required to be
filed pursuant to
Section 13 of the Exchange Act, including opinions and pronouncements in staff
accounting bulletins and similar written statements from the accounting staff of the SEC.



          “Guarantee” means any obligation, contingent or otherwise, of any Person directly or
indirectly guaranteeing any Indebtedness of any Person and any obligation, direct or indirect,
contingent or otherwise, of such Person:




     (1) to purchase or pay (or advance or supply funds for the purchase or payment of)
such Indebtedness of such Person (whether arising by virtue of partnership arrangements, or
by agreements to keep-well, to purchase assets,



12









 






goods, securities or services, to
take-or-pay or to maintain financial statement conditions or otherwise); or




     (2) entered into for the purpose of assuring in any other manner the obligee of such
Indebtedness of the payment thereof or to protect such obligee against loss in respect
thereof (in whole or in part);



provided, however, that the term “Guarantee” shall not include endorsements for
collection or deposit in the ordinary course of business. The term “Guarantee” used as a verb has a
corresponding meaning.




          “Guarantee Agreement” means a supplemental indenture, in a form reasonably satisfactory to the
Trustee, pursuant to which a Subsidiary Guarantor guarantees the Company’s obligations with respect
to the Notes on the terms provided for in this Indenture.



          “Hedging Obligations” of any Person means the obligations of such Person pursuant to any
Interest Rate Agreement, Currency Agreement or Commodity Agreement.



          “Holder” or “Noteholder” means the Person in whose name a Note is registered on the
Registrar’s books.



          “Incur” means issue, assume, Guarantee, incur or otherwise become liable for;
provided, however, that any Indebtedness of a Person existing at the time such
Person becomes a Restricted Subsidiary (whether by merger, consolidation, acquisition or otherwise)
shall be deemed to be Incurred by such Person at the time it becomes a Restricted Subsidiary. The
term “Incurrence” when used as a noun shall have a correlative meaning. Solely for purposes of
determining compliance with Section 4.03:




     (1) amortization of debt discount or the accretion of principal with respect to a
non-interest bearing or other discount security;




     (2) the payment of regularly scheduled interest in the form of additional Indebtedness
of the same instrument or the payment of regularly scheduled dividends on Capital Stock in
the form of additional Capital Stock of the same class and with the same terms; and




     (3) the obligation to pay a premium in respect of Indebtedness arising in connection
with the issuance of a notice of redemption or making of a mandatory offer to purchase such
Indebtedness



will not be deemed to be the Incurrence of Indebtedness.





13












 





          “Indebtedness” means, with respect to any Person on any date of determination (without
duplication):





     (1) the principal in respect of (A) indebtedness of such Person for money borrowed and
(B) indebtedness evidenced by notes, debentures, bonds or other similar instruments for the
payment of which such Person is responsible or liable, including, in each case, any premium
on such indebtedness to the extent such premium has become due and payable;




     (2) all Capital Lease Obligations of such Person and all Attributable Debt in respect
of Sale/Leaseback Transactions entered into by such Person;




     (3) all obligations of such Person issued or assumed as the deferred purchase price of
property, all conditional sale obligations of such Person and all obligations of such
Person under any title retention agreement (but excluding any accounts payable or other
liability to trade creditors arising in the ordinary course of business);




     (4) all obligations of such Person for the reimbursement of any obligor on any letter
of credit, bankers’ acceptance or similar credit transaction (other than obligations with
respect to letters of credit securing obligations (other than obligations described in
clauses (1) through (3) above) entered into in the ordinary course of business of such
Person to the extent such letters of credit are not drawn upon or, if and to the extent
drawn upon, such drawing is reimbursed no later than the tenth Business Day following
payment on the letter of credit);




     (5) the amount of all obligations of such Person with respect to the redemption,
repayment or other repurchase of any Disqualified Stock of such Person or, with respect to
any Preferred Stock of any Subsidiary of such Person, the principal amount of such
Preferred Stock to be determined in accordance with this Indenture (but excluding, in each
case, any accrued dividends);




     (6) all obligations of the type referred to in clauses (1) through (5) of other
Persons and all dividends of other Persons for the payment of which, in either case, such
Person is responsible or liable, directly or indirectly, as obligor, guarantor or
otherwise, including by means of any Guarantee;




     (7) all obligations of the type referred to in clauses (1) through (6) of other
Persons secured by any Lien on any property or asset of such Person (whether or not such
obligation is assumed by such Person), the amount of such obligation being deemed to be the
lesser of the fair market value of such property or assets and the amount of the obligation
so secured; and




     (8) to the extent not otherwise included in this definition, Hedging Obligations of
such Person.


Notwithstanding the foregoing, in connection with the purchase by the Company or any Restricted
Subsidiary of any business, the term “Indebtedness” will exclude post-closing





14









 







payment adjustments to which the seller may become entitled to the extent such payment is determined by a final closing
balance sheet or such payment depends on the performance of such business after the closing;
provided, however, that, at the time of closing, the amount of any such payment is
not determinable and, to the extent such payment thereafter becomes fixed and determined, the
amount is paid within 30 days thereafter.




          The amount of Indebtedness of any Person at any date shall be the outstanding balance at such
date of all obligations as described above; provided, however, that in the case of
Indebtedness sold at a discount, the amount of such Indebtedness at any time will be the accreted
value thereof at such time.




          “Indenture” means this Indenture as amended or supplemented from time to time.




          “Independent Qualified Party” means an investment banking firm, accounting firm or appraisal
firm of national standing; provided, however, that such firm is not an Affiliate of
the Company.




          “Initial Purchaser” means Credit Suisse Securities (USA) LLC.




          “Interest Rate Agreement” means any interest rate swap agreement, interest rate cap agreement
or other financial agreement or arrangement with respect to exposure to interest rates.




          “Investment” in any Person means any direct or indirect advance, loan (other than advances to
customers in the ordinary course of business that are recorded as accounts receivable on the
balance sheet of the lender) or other extensions of credit (including by way of Guarantee or
similar arrangement) or capital contribution to (by means of any transfer of cash or other property
to others or any payment for property or services for the account or use of others), or any
purchase or acquisition of Capital Stock, Indebtedness or other similar instruments issued by such
Person. If the Company or any Restricted Subsidiary issues, sells or otherwise disposes of any
Capital Stock of a Person that is a Restricted Subsidiary such that, after giving effect thereto,
such Person is no longer a Restricted Subsidiary, any Investment by the Company or any Restricted
Subsidiary in such Person remaining after giving effect thereto will be deemed to be a new
Investment at such time. The acquisition by the Company or any Restricted Subsidiary of a Person
that holds an Investment in a third Person will be deemed to be an Investment by the Company or
such Restricted Subsidiary in such third Person at such time. Except as otherwise provided for
herein, the amount of an Investment shall be its fair market value at the time the Investment is
made and without giving effect to subsequent changes in value.




          For purposes of the definition of “Unrestricted Subsidiary,” the definition of “Restricted
Payment” and Section 4.04:





     (1) “Investment” shall include the portion (proportionate to the Company’s equity
interest in such Subsidiary) of the fair market value of the net



15









 






assets of any Subsidiary of the Company at the time that such Subsidiary is designated an Unrestricted Subsidiary;
provided, however, that upon a redesignation of such Subsidiary as a
Restricted Subsidiary, the Company shall be deemed to continue to have a permanent
“Investment” in an Unrestricted Subsidiary equal to an amount (if positive) equal to (A)
the Company’s “Investment” in such Subsidiary at the time of such redesignation less (B)
the portion (proportionate to the Company’s equity interest in such Subsidiary) of the fair
market value of the net assets of such Subsidiary at the time of such redesignation; and




     (2) any property transferred to or from an Unrestricted Subsidiary shall be valued at
its fair market value at the time of such transfer, in each case as determined in good
faith by the Board of Directors.



          “Investment Grade Rating” means a rating equal to or higher than Baa3 (or equivalent) by
Moody’s and BBB- (or the equivalent) by Standard and Poor’s, or an equivalent rating by any other
Rating Agency.




          “Issue Date” means February 5, 2010.




          “Legal Holiday” means a Saturday, a Sunday or a day on which banking institutions are not
required to be open in the State of New York.




          “Lien” means any mortgage, pledge, security interest, encumbrance, lien or charge of any kind
(including any conditional sale or other title retention agreement or lease in the nature thereof).




          “Moody’s” means Moody’s Investors Service, Inc. and any successor to its rating agency
business.




          “Net Available Cash” from an Asset Disposition means cash payments received therefrom
(including any cash payments received by way of deferred payment of principal pursuant to a note or
installment receivable or otherwise and proceeds from the sale or other disposition of any
securities received as consideration, but only as and when received, but excluding any other
consideration received in the form of assumption by the acquiring Person of Indebtedness or other
obligations relating to such properties or assets or received in any other non-cash form), in each
case net of:





     (1) all legal, title and recording tax expenses, commissions and other fees and
expenses incurred, and all Federal, state, provincial, foreign and local taxes required to
be accrued as a liability under GAAP, as a consequence of such Asset Disposition;




     (2) all payments made on any Indebtedness which is secured by any assets subject to
such Asset Disposition, in accordance with the terms of any Lien upon or other security
agreement of any kind with respect to such assets, or which must by its terms, or in order
to obtain a necessary consent to such Asset Disposition, or by applicable law, be repaid
out of the proceeds from such Asset Disposition;



16









 






     (3) all distributions and other payments required to be made to minority interest
Holders in Restricted Subsidiaries as a result of such Asset Disposition;




     (4) the deduction of appropriate amounts provided by the seller as a reserve, in
accordance with GAAP, against any liabilities associated with the property or other assets
disposed in such Asset Disposition and retained by the Company or any Restricted Subsidiary
after such Asset Disposition; and




     (5) any portion of the purchase price from an Asset Disposition placed in escrow,
whether as a reserve for adjustment of the purchase price, for satisfaction of indemnities
in respect of such Asset Disposition or otherwise in connection with that Asset
Disposition; provided, however, that upon the termination of that escrow,
Net Available Cash will be increased by any portion of funds in the escrow that are
released to the Company or any Restricted Subsidiary.



          “Net Cash Proceeds,” with respect to any issuance or sale of Capital Stock or Indebtedness,
means the cash proceeds of such issuance or sale net of attorneys’ fees, accountants’ fees,
underwriters’ or placement agents’ fees, discounts or commissions and brokerage, consultant and
other fees actually incurred in connection with such issuance or sale and net of taxes paid or
payable as a result thereof.




          “Notes”
means the
71/8% Senior Notes due 2016 issued pursuant to this Indenture.




          “Obligations” means, with respect to any Indebtedness, all obligations for principal, premium,
interest, penalties, fees, indemnifications, reimbursements, and other amounts payable pursuant to
the documentation governing such Indebtedness.




          “Officer” means the Chairman of the Board, the President, any Vice President, the Treasurer or
the Secretary of the Company.




          “Officers’ Certificate” means a certificate signed by two Officers.




          “Opinion of Counsel” means a written opinion from legal counsel who is acceptable to the
Trustee. The counsel may be an employee of or counsel to the Company or the Trustee.




          “Permitted Investment” means an Investment by the Company or any Restricted Subsidiary in:





     (1) the Company, a Restricted Subsidiary or a Person that will, upon the making of
such Investment, become a Restricted Subsidiary; provided, however, that
the primary business of such Restricted Subsidiary is a Related Business;




     (2) another Person if, as a result of such Investment, such other Person is merged or
consolidated with or into, or transfers or conveys all or substantially all its assets to,
the Company or a Restricted Subsidiary; provided, however, that such
Person’s primary business is a Related Business;



17









 






     (3) cash and Temporary Cash Investments;




     (4) receivables owing to the Company or any Restricted Subsidiary if created or
acquired in the ordinary course of business and payable or dischargeable in accordance with
customary trade terms; provided, however, that such trade terms may include
such concessionary trade terms as the Company or any such Restricted Subsidiary deems
reasonable under the circumstances;




     (5) payroll, travel and similar advances to cover matters that are expected at the
time of such advances ultimately to be treated as expenses for accounting purposes and that
are made in the ordinary course of business;




     (6) loans or advances to employees made in the ordinary course of business consistent
with past practices of the Company or such Restricted Subsidiary;




     (7) stock, obligations or securities received in settlement of debts created in the
ordinary course of business and owing to the Company or any Restricted Subsidiary or in
satisfaction of judgments;




     (8) any Person to the extent such Investment represents the non-cash portion of the
consideration received for (A) an Asset Disposition as permitted pursuant to Section 4.06
or (B) a disposition of assets not constituting an Asset Disposition;




     (9) any Person where such Investment was acquired by the Company or any of its
Restricted Subsidiaries (A) in exchange for any other Investment or accounts receivable
held by the Company or any such Restricted Subsidiary in connection with or as a result of
a bankruptcy, workout, reorganization or recapitalization of the issuer of such other
Investment or accounts receivable or (B) as a result of a foreclosure by the Company or any
of its Restricted Subsidiaries with respect to any secured Investment or other transfer of
title with respect to any secured Investment in default;




     (10) any Person to the extent such Investments consist of prepaid expenses, negotiable
instruments held for collection and lease, utility and workers’ compensation, performance
and other similar deposits made in the ordinary course of business by the Company or any
Restricted Subsidiary;




     (11) any Person to the extent such Investments consist of Hedging Obligations
otherwise permitted under Section 4.03;




     (12) any Person to the extent such Investment existed on the Existing Notes Issue
Date, and any extension, modification or renewal of any such Investments existing on the
Existing Notes Issue Date, but only to the extent not involving additional advances,
contributions or other Investments of cash or other assets or other increases thereof
(other than as a result of the accrual or accretion of interest or original issue discount
or the issuance of pay-in-kind securities, in



18









 






each case, pursuant to the terms of such
Investment as in effect on the Existing Notes Issue Date;




     (13) Investments in Permitted Joint Ventures, when taken together with all other
Investments made pursuant to this clause (13), do not exceed $35.0 million;




     (14) obligations of one or more officers, directors or employees of the Company or any
of its Restricted Subsidiaries in connection with such individual’s acquisition of shares
of Capital Stock of the Company (and refinancings of the principal thereof and accrued
interest thereon) so long as no net cash or other assets of the Company and its Restricted
Subsidiaries are paid by the Company or any of its Restricted Subsidiaries to such
individuals in connection with the acquisition of any such obligations;




     (15) Investments in prepaid expenses, negotiable instruments held for collection or
deposit and lease, utility and workers compensation, performance and similar deposits
entered into as a result of the operations of the business in the ordinary course of
business; and




     (16) Persons to the extent such Investments, when taken together with all other
Investments made pursuant to this clause (16) and outstanding on the date such Investment
is made, do not exceed the greater of (i) $35 million and (ii) 3.0% of Consolidated Net
Tangible Assets.



          “Permitted Joint Venture” means any joint venture in which the Company or any Subsidiary
thereof holds an equity interest and that is engaged in a Related Business.




          “Permitted Liens” means, with respect to any Person:





     (1) pledges or deposits by such Person under worker’s compensation laws, unemployment
insurance laws or similar legislation, or good faith deposits in connection with bids,
tenders, contracts (other than for the payment of Indebtedness) or leases to which such
Person is a party, or deposits to secure public or statutory obligations of such Person or
deposits of cash or United States government bonds to secure surety or appeal bonds to
which such Person is a party, or deposits as security for contested taxes or import duties
or for the payment of rent, in each case Incurred in the ordinary course of business;




     (2) Liens imposed by law, such as carriers’, warehousemen’s and mechanics’ Liens, in
each case for sums not yet due or being contested in good faith by appropriate proceedings
or other Liens arising out of judgments or awards against such Person with respect to which
such Person shall then be proceeding with an appeal or other proceedings for review and
Liens arising solely by virtue of any statutory or common law provision relating to
banker’s Liens, rights of set-off or similar rights and remedies as to deposit accounts or
other funds maintained with a creditor depository institution; provided,
however, that (A) such deposit account is not a dedicated cash collateral account
and is not subject to restrictions



19









 






against access by the Company in excess of those set
forth by regulations promulgated by the Federal Reserve Board and (B) such deposit account
is not intended by the Company or any Restricted Subsidiary to provide collateral to the
depository institution;




     (3) Liens for taxes, assessments or governmental charges not yet subject to penalties
for non-payment or which are being contested in good faith by appropriate proceedings;




     (4) Liens in favor of issuers of surety bonds or letters of credit issued pursuant to
the request of and for the account of such Person in the ordinary course of its business;
provided, however, that such letters of credit do not constitute
Indebtedness;




     (5) minor survey exceptions, minor encumbrances, 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 or Liens incidental to the conduct of the business of such Person or to
the ownership of its properties which were not Incurred in connection with Indebtedness and
which 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;




     (6) Liens securing Indebtedness Incurred to finance the construction, purchase or
lease of, or repairs, improvements or additions to, property, plant or equipment of such
Person; provided, however, that the Lien may not extend to any other
property owned by such Person or any of its Restricted Subsidiaries at the time the Lien is
Incurred (other than assets and property affixed or appurtenant thereto), and the
Indebtedness (other than any interest thereon) secured by the Lien may not be Incurred more
than 180 days after the later of the acquisition, completion of construction, repair,
improvement, addition or commencement of full operation of the property subject to the
Lien;




     (7) Liens to secure Indebtedness permitted under the provisions described in clause
(b)(1) under Section 4.03 (including, during any Suspension Period, Indebtedness of the
type and in the amounts specified under such clause);




     (8) Liens existing on the Existing Notes Issue Date;




     (9) Liens on property or shares of Capital Stock of another Person at the time such
other Person becomes a Subsidiary of such Person; provided, however, that
the Liens may not extend to any other property owned by such Person or any of its
Restricted Subsidiaries (other than assets and property affixed or appurtenant thereto);




     (10) Liens on property at the time such Person or any of its Subsidiaries acquires the
property, including any acquisition by means of a merger or consolidation with or into such
Person or a Subsidiary of such Person; provided,



20









 






however, that the Liens may not extend to any other property owned by such Person or any of its Restricted
Subsidiaries (other than assets and property affixed or appurtenant thereto);




     (11) Liens securing Indebtedness or other obligations of a Subsidiary of such Person
owing to such Person or a Restricted Subsidiary of such Person;




     (12) Liens securing Hedging Obligations so long as such Hedging Obligations are
permitted to be Incurred under this Indenture;




     (13) Liens to secure Indebtedness permitted under the provisions described in clause
(b)(11) under Section 4.03 (including, during any Suspension Period, Indebtedness of the
type and in the amounts specified under such clause); provided, however,
such Liens are limited to the assets that are the subject of such Indebtedness and the
proceeds thereof;




     (14) Liens in favor of the Company or any Subsidiary Guarantor; and




     (15) Liens to secure any Refinancing (or successive Refinancings) as a whole, or in
part, of any Indebtedness secured by any Lien referred to in the foregoing clause (6), (8),
(9), (10) or (13); provided, however, that:




     (A) such 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); and




     (B) the Indebtedness secured by such Lien at such time is not increased to any
amount greater than the sum of (i) the outstanding principal amount or, if greater,
committed amount of the Indebtedness described under clause (6), (8), (9), (10) or
(13) at the time the original Lien became a Permitted Lien and (ii) an amount
necessary to pay any fees and expenses, including premiums, related to such
refinancing, refunding, extension, renewal or replacement.


Notwithstanding the foregoing, “Permitted Liens” will not include any Lien described in clause (6),
(9) or (10) above to the extent such Lien applies to any Additional Assets acquired directly or
indirectly from Net Available Cash pursuant to Section 4.06. For
purposes of this definition, the term “Indebtedness” shall be deemed to include interest on such
Indebtedness.




          “Person” means any individual, corporation, partnership, limited liability company, joint
venture, association, joint-stock company, trust, unincorporated organization, government or any
agency or political subdivision thereof or any other entity.





21









 








          “Pre-Approved Timberland Sale Initiative” means any initiative approved by the Board of
Directors pursuant to which the Company has identified timberland to be sold, transferred or
otherwise disposed and pursuant to which the Board of Directors has authorized management of the
Company to effect the sale, transfer or disposal of such timberland.




          “Preferred Stock,” as applied to the Capital Stock of any Person, means Capital Stock of any
class or classes (however designated) which is preferred as to the payment of dividends or
distributions, or as to the distribution of assets upon any voluntary or involuntary liquidation or
dissolution of such Person, over shares of Capital Stock of any other class of such Person.




          “principal” of a Note means the principal of the Note plus the premium, if any, payable on the
Note which is due or overdue or is to become due at the relevant time.




          “Quotation Agent” means the Reference Treasury Dealer selected by the Trustee after
consultation with the Company.




          “Rating Agencies” means Moody’s and Standard & Poor’s or, if Moody’s or Standard & Poor’s or
both shall not make a rating on the Notes publicly available, a nationally recognized statistical
rating agency or agencies, as the case may be, selected by the Board of Directors, which shall be
substituted for Moody’s or Standard & Poor’s or both, as the case may be.




          “Reference Treasury Dealer” means Credit Suisse Securities (USA) LLC and its successors and
assigns and two other nationally recognized investment banking firms selected by the Company that
are primary U.S. Government securities dealers.




          “Reference Treasury Dealer Quotations” means with respect to each Reference Treasury Dealer
and any redemption date, the average, as determined by the Trustee, of the bid and asked prices for
the Comparable Treasury Issue, expressed in each case as a percentage of its principal amount,
quoted in writing to the Trustee by such Reference Treasury Dealer at 5:00 p.m., New York City
time, on the third Business Day immediately preceding such redemption date.




          “Refinance” means, in respect of any Indebtedness, to refinance, extend, renew, refund, repay,
prepay, purchase, redeem, defease or retire, or to issue other Indebtedness in exchange or
replacement for, such Indebtedness. “Refinanced” and “Refinancing” shall have correlative meanings.




          “Refinancing Indebtedness” means Indebtedness that Refinances any Indebtedness of the Company
or any Restricted Subsidiary existing on the Issue Date or Incurred in compliance with this
Indenture, including Indebtedness that Refinances Refinancing Indebtedness; provided,
however, that:





     (1) such Refinancing Indebtedness has a Stated Maturity no earlier than the Stated
Maturity of the Indebtedness being Refinanced;



22









 






     (2) such Refinancing Indebtedness has an Average Life at the time such Refinancing
Indebtedness is Incurred that is equal to or greater than the Average Life of the
Indebtedness being Refinanced;




     (3) such Refinancing Indebtedness has an aggregate principal amount (or if Incurred
with original issue discount, an aggregate issue price) that is equal to or less than the
aggregate principal amount (or if Incurred with original issue discount, the aggregate
accreted value) then outstanding (plus fees and expenses, including any premium and
defeasance costs) under the Indebtedness being Refinanced; and




     (4) if the Indebtedness being Refinanced is subordinated in right of payment to the
Notes, such Refinancing Indebtedness is subordinated in right of payment to the Notes at
least to the same extent as the Indebtedness being Refinanced;


provided further, however, that Refinancing Indebtedness shall not include (A)
Indebtedness of a Subsidiary that Refinances Indebtedness of the Company or (B) Indebtedness of the
Company or a Restricted Subsidiary that Refinances Indebtedness of an Unrestricted Subsidiary.




          “Registration Rights Agreement” means the Registration Rights Agreement dated February 5,
2010, among the Company, the Subsidiary Guarantors and the Initial Purchaser.




          “Related Business” means any business in which the Company or any of the Restricted
Subsidiaries was engaged on the Issue Date and any business related, ancillary or complementary to
such business.




          “Restricted Payment” with respect to any Person means:





     (1) the declaration or payment of any dividends or any other distributions of any sort
in respect of its Capital Stock (including any payment in connection with any merger or
consolidation involving such Person) or similar payment to the direct or indirect holders
of its Capital Stock (other than (A) dividends or distributions payable solely in its
Capital Stock (other than Disqualified Stock), (B) dividends or distributions payable
solely to the Company or a Restricted Subsidiary and (C) pro rata dividends or other
distributions made by a Subsidiary that is not a Wholly Owned Subsidiary to minority
stockholders (or owners of an equivalent interest in the case of a Subsidiary that is an entity other than a
corporation));




     (2) the purchase, repurchase, redemption, defeasance or other acquisition or
retirement for value of any Capital Stock of the Company held by any Person (other than by
a Restricted Subsidiary) or of any Capital Stock of a Restricted Subsidiary held by any
Affiliate of the Company (other than by a Restricted Subsidiary), including in connection
with any merger or consolidation and



23









 






including the exercise of any option to exchange any Capital Stock (other than into Capital Stock of the Company that is not Disqualified
Stock);




     (3) the purchase, repurchase, redemption, defeasance or other acquisition or
retirement for value, prior to scheduled maturity, scheduled repayment or scheduled sinking
fund payment of any Subordinated Obligations of the Company or any Subsidiary Guarantor
(other than (A) from the Company or a Restricted Subsidiary or (B) the purchase,
repurchase, redemption, defeasance or other acquisition or retirement of Subordinated
Obligations purchased in anticipation of satisfying a sinking fund obligation, principal
installment or final maturity, in each case due within one year of the date of such
purchase, repurchase, redemption, defeasance or other acquisition or retirement); or




     (4) the making of any Investment (other than a Permitted Investment) in any Person.



          “Restricted Subsidiary” means any Subsidiary of the Company that is not an Unrestricted
Subsidiary.




          “Sale/Leaseback Transaction” means an arrangement relating to property owned by the Company or
a Restricted Subsidiary on the Issue Date or thereafter acquired by the Company or a Restricted
Subsidiary whereby the Company or a Restricted Subsidiary transfers such property to a Person and
the Company or a Restricted Subsidiary leases it from such Person.




          “SEC” means the U.S. Securities and Exchange Commission.




          “Securities Act” means the U.S. Securities Act of 1933, as amended.




          “Senior Indebtedness” means with respect to any Person:





     (1) Indebtedness of such Person, whether outstanding on the Issue Date or thereafter
Incurred; and




     (2) all other Obligations of such Person (including interest accruing on or after the
filing of any petition in bankruptcy or for reorganization relating to such Person whether
or not post-filing interest is allowed in such proceeding) in respect of Indebtedness
described in clause (1) above


unless, in the case of clauses (1) and (2), in the instrument creating or evidencing the same or
pursuant to which the same is outstanding, it is provided that such Indebtedness or other
Obligations are subordinate in right of payment to the Notes or the Subsidiary Guarantee of such
Person, as the case may be; provided, however, that Senior Indebtedness shall not
include:





     (i) any obligation of such Person to the Company or any Subsidiary of the Company;



24









 






     (ii) any liability for Federal, state, local or other taxes owed or owing by such
Person;




     (iii) any accounts payable or other liability to trade creditors arising in the
ordinary course of business;




     (iv) any Indebtedness or other Obligation of such Person which is subordinate or
junior in any respect to any other Indebtedness or other Obligation of such Person; or




     (v) that portion of any Indebtedness which at the time of Incurrence is Incurred in
violation of this Indenture.



          “Share Purchase Agreement” means the Share Purchase Agreement dated January 4, 2010, among
Brookfield Special Situations Management Limited, P.H. Glatfelter Company and Glatfelter Canada
Inc.




          “Significant Subsidiary” means any Restricted Subsidiary that would be a “Significant
Subsidiary” of the Company within the meaning of Rule 1-02 under Regulation S-X promulgated by the
SEC.




          “Special Mandatory Redemption Date” means the earlier to occur of (1) March 31, 2010 if the
Acquisition has not been completed on or prior to March 29, 2010 or (2) the Business Day following
the receipt of the Redemption Release Certificate by the Escrow Agent pursuant to Section 5(b)(i)
of the Escrow Agreement (or if such Redemption Release Certificate is not received prior to 2:00
p.m. New York time, the next following Business Day) following the termination of the Share
Purchase Agreement.




          “Special Mandatory Redemption Price” means a redemption price equal to 95.000% of the
principal amount of the Notes, plus accrued and unpaid interest from November 1, 2009 to the Issue
Date, plus accrued and unpaid interest and Accreted Original Issue Discount from the Issue Date to,
but not including, the Special Mandatory Redemption Date.




          “Standard & Poor’s” means Standard & Poor’s, a division of The McGraw-Hill Companies, Inc.,
and any successor to its rating agency business.




          “Stated Maturity” means, with respect to any security, the date specified in such security as
the fixed date on which the final payment of principal of such security is due and payable,
including pursuant to any mandatory redemption provision (but excluding any provision providing for
the repurchase of such security at the option of the holder thereof upon the happening of any
contingency unless such contingency has occurred).




          “Subordinated Obligation” means, with respect to a Person, any Indebtedness of such Person
(whether outstanding on the Issue Date or thereafter Incurred) which is subordinate or junior in
right of payment to the Notes or a Subsidiary





25









 







Guarantee of such Person, as the case may be,
pursuant to a written agreement to that effect.




          “Subsidiary” means, with respect to any Person, any corporation, association, partnership or
other business entity of which more than 50% of the total voting power of shares of Voting Stock is
at the time owned or controlled, directly or indirectly, by:





     (1) such Person;




     (2) such Person and one or more Subsidiaries of such Person; or




     (3) one or more Subsidiaries of such Person.



          “Subsidiary Guarantor” means each Subsidiary of the Company that executes this Indenture as a
guarantor on the Issue Date and each other Subsidiary of the Company that thereafter guarantees the
Notes pursuant to the terms of this Indenture.




          “Subsidiary Guarantee” means a Guarantee by a Subsidiary Guarantor of the Company’s
obligations with respect to the Notes.




          “Temporary Cash Investments” means any of the following:





     (1) any investment in direct obligations of the United States of America or any agency
thereof or obligations guaranteed by the United States of America or any agency thereof;




     (2) investments in demand and time deposit accounts, certificates of deposit and money
market deposits maturing within 180 days of the date of acquisition thereof issued by a
bank or trust company which is organized under the laws of the United States of America,
any State thereof or any foreign country recognized by the United States of America, and
which bank or trust company has capital, surplus and undivided profits aggregating in
excess of $50.0 million (or the foreign currency equivalent thereof) and has outstanding
debt which is rated “A” (or such similar equivalent rating) or higher by at least one
nationally recognized statistical rating organization (as defined in Rule 436 under the
Securities Act) or any money-market fund sponsored by a registered broker dealer or mutual
fund distributor;




     (3) repurchase obligations with a term of not more than 30 days for underlying
securities of the types described in clause (1) above entered into with a bank meeting the
qualifications described in clause (2) above;




     (4) investments in commercial paper, maturing not more than 90 days after the date of
acquisition, issued by a corporation (other than an Affiliate of the Company) organized and
in existence under the laws of the United States of America or any foreign country
recognized by the United States of America with a rating at the time as of which any
investment therein is made of “P-1” (or



26









 






higher) according to Moody’s or “A-1” (or higher)
according to Standard and Poor’s;




     (5) investments in securities with maturities of six months or less from the date of
acquisition issued or fully guaranteed by any state, commonwealth or territory of the
United States of America, or by any political subdivision or taxing authority thereof, and
rated at least “A” by Standard & Poor’s or “A” by Moody’s; and




     (6) investments in money market funds that invest substantially all their assets in
securities of the types described in clauses (1) through (5) above.



          “Trustee” means HSBC Bank USA, National Association until a successor replaces it and,
thereafter, means the successor.




          “Trust Indenture Act” or “TIA” means the Trust Indenture Act of 1939 (15 U.S.C. §§
77aaa-77bbbb) as in effect on the Issue Date.




          “Trust Officer” means, when used with respect to the Trustee, any officer within the corporate
trust department of the Trustee, including any vice president, assistant vice president, assistant
treasurer, trust officer or any other officer of the Trustee who customarily performs functions
similar to those performed by the Persons who at the time shall be such officers, respectively, or
to whom any corporate trust matter is referred because of such person’s knowledge of and
familiarity with the particular subject, and who shall have direct responsibility for the
administration of this Indenture.




          “Uniform Commercial Code” means the New York Uniform Commercial Code as in effect from time to
time.




          “Unrestricted Subsidiary” means:





     (1) GPW Virginia Timberlands LLC;




     (2) any Subsidiary of the Company that at the time of determination shall be
designated an Unrestricted Subsidiary by the Board of Directors in the manner provided
below; and




     (3) any Subsidiary of an Unrestricted Subsidiary.


The Board of Directors may designate any Subsidiary of the Company (including any newly acquired or
newly formed Subsidiary) to be an Unrestricted Subsidiary unless such Subsidiary or any of its
Subsidiaries owns any Capital Stock or Indebtedness of, or holds any Lien on any property of, the
Company or any other Subsidiary of the Company that is not a Subsidiary of the Subsidiary to be so
designated; provided, however, that either (A) the Subsidiary to be so designated
has total assets of $1,000 or less or (B) if such Subsidiary has assets greater than $1,000, such
designation would be permitted under Section 4.04.





27









 








          The Board of Directors may designate any Unrestricted Subsidiary to be a Restricted
Subsidiary; provided, however, that immediately after giving effect to such
designation (A) the Company could Incur $1.00 of additional Indebtedness under paragraph (a) of
Section 4.03 and (B) no Default shall have occurred and be continuing. Any such designation by the
Board of Directors shall be evidenced to the Trustee by promptly filing with the Trustee a copy of
the resolution of the Board of Directors giving effect to such designation and an Officers’
Certificate certifying that such designation complied with the foregoing provisions.




          “U.S. Government Obligations” means direct obligations (or certificates representing an
ownership interest in such obligations) of the United States of America (including any agency or
instrumentality thereof) for the payment of which the full faith and credit of the United States of
America is pledged and which are not callable at the issuer’s option.




          “Voting Stock” of a Person means all classes of Capital Stock of such Person then outstanding
and normally entitled (without regard to the occurrence of any contingency) to vote in the election
of directors, managers or trustees thereof.




          “Wholly Owned Subsidiary” means a Restricted Subsidiary all the Capital Stock of which (other
than directors’ qualifying shares) is owned by the Company or one or more other Wholly Owned
Subsidiaries.




          SECTION 1.02. Other Definitions.







28









 








	 	 	 	 	 
	 	 	Defined in
	Term 	 	Section
	“Affiliate Transaction”

	 	 	4.07	(a)
	“Appendix”

	 	 	2.01	 
	“Asset Sale Offer”

	 	 	4.06	(b)
	“Bankruptcy Law”

	 	 	6.01	 
	“Change of Control”

	 	 	4.08	(a)
	“Change of Control Offer”

	 	 	4.08	(b)
	“Company Release Certificate”

	 	 	3.07	 
	“covenant defeasance option”

	 	 	8.01	(b)
	“Custodian”

	 	 	6.01	 
	“Escrow Amount”

	 	 	4.14	 
	“Event of Default”

	 	 	6.01	 
	“Guaranteed Obligations”

	 	 	10.01	 
	“Initial Lien”

	 	 	4.09	 
	“legal defeasance option”

	 	 	8.01	(b)
	“Notice of Default”

	 	 	6.01	 
	“Offer Amount”

	 	 	4.06(c)	(2)
	“Offer Period”

	 	 	4.06(c)	(2)
	“Paying Agent”

	 	 	2.03	 
	“Purchase Date”

	 	 	4.06(c	)(1)
	“Redemption Release Certificate”

	 	 	3.07	 
	“Registrar”

	 	 	2.03	 
	“Reversion Date”

	 	 	4.13	 
	“Special Mandatory Redemption”

	 	 	3.07	 
	“Successor Company”

	 	 	5.01(a	)(1)
	“Suspended Covenants”

	 	 	4.13	 
	“Suspension Date”

	 	 	4.13	 
	“Suspension Period”

	 	 	4.13	 






          SECTION 1.03. Incorporation by Reference of Trust Indenture Act. This Indenture is
subject to the mandatory provisions of the TIA which are incorporated by reference in and made a
part of this Indenture. The following TIA terms have the following meanings:




          “indenture securities” means the Notes and the Subsidiary Guarantees;




          “indenture security holder” means a Noteholder;




          “indenture to be qualified” means this Indenture;




          “indenture trustee” or “institutional trustee” means the Trustee; and




          “obligor” on the indenture securities means the Company, each Subsidiary Guarantor and any
successor obligor on the indenture securities.







29









 








          All other TIA terms used in this Indenture that are defined by the TIA, defined by TIA
reference to another statute or defined by SEC rule have the meanings assigned to them by such
definitions.




          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) “including” means including without limitation;




     (5) words in the singular include the plural and words in the plural include the
singular;




     (6) unsecured Indebtedness shall not be deemed to be subordinate or junior to secured
Indebtedness merely by virtue of its nature as unsecured Indebtedness;




     (7) secured Indebtedness shall not be deemed to be subordinate or junior to any other
secured Indebtedness merely because it has a junior priority with respect to the same
collateral;




     (8) the principal amount of any noninterest bearing or other discount security at any
date shall be the principal amount thereof that would be shown on a balance sheet of the
issuer dated such date prepared in accordance with GAAP; and




     (9) all references to the date the Notes were originally issued shall refer to the
date the Initial Notes were originally issued on the Issue Date.




30











 





ARTICLE TWO




The Notes



          SECTION 2.01. Form and Dating. Provisions relating to the Notes are set forth in the
Rule 144A/Regulation S Appendix attached hereto (the “Appendix”) which is hereby incorporated in,
and expressly made part of, this Indenture. The Initial Notes and the Trustee’s certificate of
authentication shall be substantially in the form of Exhibit 1 to the Appendix which is hereby
incorporated in, and expressly made a part of, this Indenture. The Exchange Notes, the Private
Exchange Notes and the Trustee’s certificate of authentication shall be substantially in the form
of Exhibit A, which is hereby incorporated in, and expressly made a part of, this Indenture. The
Notes may have notations, legends or endorsements required by law, stock exchange rule, agreements
to which the Company is subject, if any, or usage (provided that any such notation, legend
or endorsement is in a form acceptable to the Company). Each Note shall be dated the date of its
authentication. The terms of the Notes set forth in the Appendix and Exhibit A are part of the
terms of this Indenture. To the extent any provision of the Appendix, Exhibit A or any Note
conflicts with Articles One through Eleven hereof, the provisions of Articles One through Eleven
shall control.




          SECTION 2.02. Execution and Authentication. At least one Officer shall sign the Notes
for the Company by manual or facsimile signature.




          If an Officer whose signature is on a Note no longer holds that office at the time the Trustee
authenticates the Note, the Note shall be valid nevertheless.




          A Note shall not be valid until an authorized signatory of the Trustee manually signs the
certificate of authentication on the Note. The signature of the Trustee shall be conclusive
evidence that the Note has been authenticated under this Indenture.




          On the Issue Date, the Trustee shall authenticate and deliver $100 million of the Notes and,
at any time and from time to time thereafter, the Trustee shall authenticate and deliver Notes for
original issue in an aggregate principal amount specified in such order, in each case upon a
written order of the Company signed by at least one Officer of the Company. Such order shall
specify the amount of the Notes to be authenticated and the date on which the original issue of
Notes is to be authenticated and, in the case of an issuance of Additional Notes pursuant to
Section 2.14 after the Issue Date, shall certify that such issuance is in compliance with Section
4.03.




          The Trustee may appoint an authenticating agent reasonably acceptable to the Company to
authenticate the Notes. Unless limited by the terms of such appointment, 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 any Registrar, Paying Agent or agent for service of notices and demands.







31









 








          SECTION 2.03. Registrar and Paying Agent. The Company shall maintain an office or
agency where Notes may be presented for registration of transfer or for exchange (including any
co-registrar, the “Registrar”) and an office or agency where Notes may be presented for payment
(the “Paying Agent”). The Registrar shall keep a register of the Holders of the Notes and of the
transfer and exchange of the Notes. The Company may have one or more co-registrars and one or more
additional paying agents. The term “Paying Agent” includes any additional paying agent.




          The Company shall enter into an appropriate agency agreement with any Registrar or Paying
Agent not a party to this Indenture, which shall incorporate the terms of the TIA. The agreement
shall implement the provisions of this Indenture that relate to such agent. The Company shall
notify the Trustee of the name and address of any such agent. If the Company fails to maintain a
Registrar or Paying Agent, the Trustee shall act as such and shall be entitled to appropriate
compensation therefor pursuant to Section 7.07. The Company or any Wholly Owned Subsidiary
incorporated or organized within The United States of America may act as Paying Agent, Registrar,
co-registrar or transfer agent.




          The Company initially appoints the Trustee as Registrar and Paying Agent in connection with
the Notes.




          SECTION 2.04. Paying Agent To Hold Money in Trust. Prior to each due date of the
principal and interest on any Note, the Company shall deposit with the Paying Agent a sum
sufficient to pay such principal and interest when so becoming due. The Company shall require each
Paying Agent (other than the Trustee) to agree in writing that the Paying Agent shall hold in trust
for the benefit of Noteholders or the Trustee all money held by the Paying Agent for the payment of
principal of or interest on the Notes and shall notify the Trustee of any default by the Company in
making any such payment. If the Company or a Subsidiary acts as Paying Agent, it shall segregate
the money held by it as Paying Agent and hold it as a separate trust fund. The Company at any time
may require a Paying Agent to pay all money held by it to the Trustee and to account for any funds
disbursed by the Paying Agent. Upon complying with this Section, the Paying Agent shall have no
further liability for the money delivered to the Trustee.




          SECTION 2.05. Noteholder Lists. The Trustee shall preserve in as current a form as is
reasonably practicable the most recent list available to it of the names and addresses of
Noteholders. If the Trustee is not the Registrar, the Company shall furnish to the Trustee, in
writing at least five 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 Noteholders and the aggregate principal amount of
Notes held by each such Noteholder.




          SECTION 2.06. Transfer and Exchange. The Notes shall be issued in registered form and
shall be transferable only upon the surrender of a Note for registration of transfer. When a Note
is presented to the Registrar with a request to register a transfer, the Registrar shall register
the transfer as requested if the requirements of this Indenture and Section 8-401(1) of the Uniform
Commercial Code are met. When






32









 







Notes are presented to the Registrar with a request to exchange them for an equal principal
amount of Notes of other denominations, the Registrar shall make the exchange as requested if the
same requirements are met.




          SECTION 2.07. Replacement Notes. If a mutilated Note is surrendered to the Registrar
or if the Holder of a Note claims that the Note has been lost, destroyed or wrongfully taken, the
Company shall issue and the Trustee shall authenticate a replacement Note if the Trustee’s
requirements are met and the Holder satisfies any other reasonable requirements of the Trustee. If
required by the Trustee or the Company, such Holder shall furnish an indemnity bond sufficient in
the judgment of the Company and the Trustee to protect the Company, the Trustee, the Paying Agent
and the Registrar from any loss which any of them may suffer if a Note is replaced. The Company
and the Trustee may charge the Holder for their expenses in replacing a Note.




          Every replacement Note is an additional Obligation of the Company.




          SECTION 2.08. Outstanding Notes. Notes outstanding at any time are all Notes
authenticated by the Trustee except for those canceled by it, those delivered to it for
cancellation and those described in this Section as not outstanding. Except as set forth in
Section 2.09, a Note does not cease to be outstanding because the Company or an Affiliate of the
Company holds the Note.




          If a Note is replaced pursuant to Section 2.07, it ceases to be outstanding unless the Trustee
and the Company receive proof satisfactory to them that the replaced Note is held by a protected
purchaser (as defined in Section 8-303 of the Uniform Commercial Code).




          If the Paying Agent segregates and holds in trust, in accordance with this Indenture, on a
redemption date or maturity date money sufficient to pay all principal and interest payable on that
date with respect to the Notes (or portions thereof) to be redeemed or maturing, as the case may
be, then on and after that date such Notes (or portions thereof) cease to be outstanding and
interest on them ceases to accrue.




          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 Subsidiary Guarantor, or by any Person directly or indirectly controlling or
controlled by or under direct or indirect common control with the Company or any Subsidiary
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 the Trustee knows are so owned will be so disregarded.




          SECTION 2.10. Temporary Notes. Until definitive Notes are ready for delivery, the
Company may prepare and the Trustee shall authenticate temporary Notes. Temporary Notes shall be
substantially in the form of definitive Notes but may have variations that the Company considers
appropriate for temporary Notes. Without






33









 







unreasonable delay, the Company shall prepare and the Trustee shall authenticate definitive
Notes and deliver them in exchange for temporary Notes.




          SECTION 2.11. Cancellation. The Company at any time may deliver Notes to the Trustee
for cancellation. The Registrar and the Paying Agent shall forward to the Trustee any Notes (i)
surrendered to them for registration of transfer, exchange or payment or (ii) as required on the
Special Mandatory Redemption Date in accordance with the terms and conditions of the Escrow
Agreement. The Trustee and no one else shall cancel and destroy (subject to the record retention
requirements of the Exchange Act) all Notes surrendered for registration of transfer, exchange,
payment, replacement or cancellation and deliver a certificate of such destruction to the Company
unless the Company directs the Trustee to deliver cancelled Notes to the Company. The Company may
not issue new Notes to replace Notes it has redeemed, paid or delivered to the Trustee for
cancellation.




          SECTION 2.12. Defaulted Interest. If the Company defaults in a payment of interest on
the Notes, the Company shall pay defaulted interest (plus interest on such defaulted interest to
the extent lawful) in any lawful manner if, after notice given by the Company to the Trustee of the
proposed payment pursuant to this clause, such manner of payment shall be deemed practicable in
writing by the Trustee. The Company may pay the defaulted interest to the persons who are
Noteholders on a subsequent special record date. The Company shall fix or cause to be fixed any
such special record date and payment date to the reasonable satisfaction of the Trustee and shall
promptly mail to each Noteholder a notice that states the special record date, the payment date and
the amount of defaulted interest to be paid.




          SECTION 2.13. CUSIP Numbers, ISINs, etc. The Company in issuing the Notes may use
“CUSIP” numbers, ISINs and “Common Code” numbers (in each case if then generally in use) and, if
so, the Trustee shall use “CUSIP” numbers, ISINs and “Common Code” numbers in notices of redemption
or exchange as a convenience to Holders; provided, however, that any such notice
may state that no representation is made as to the correctness of such numbers either as printed on
the Notes or as contained in any notice of a redemption or exchange and that reliance may be placed
only on the other identification numbers printed on the Notes, and any such redemption or exchange
shall not be affected by any defect in or omission of such numbers. The Company shall advise the
Trustee in writing of any change in any “CUSIP” numbers, ISINs or “Common Code” numbers applicable
to the Notes.




          The Company, any Subsidiary Guarantor, the Trustee, any Paying Agent and any authenticating
agent may treat the Person in whose name any Note is registered as the owner of such Note for the
purpose of receiving payments of principal of or interest on such Note and for all other purposes.
None of the Company, any Subsidiary Guarantor, the Trustee, any Paying Agent or any authenticating
agent shall be affected by any notice to the contrary.




          SECTION 2.14. Issuance of Additional Notes. After the Issue Date, the Company shall
be entitled, subject to its compliance with Section 4.03, to issue






34









 







Additional Notes under this Indenture, which Additional Notes shall have identical terms as
the Initial Notes issued on the Issue Date, other than with respect to the date of issuance, issue
price, the date of first payment of interest and paragraph 7 of the form of Notes;
provided, however, that Additional Notes which are not fungible for U.S. federal
income tax purposes with all other Notes issued under this Indenture shall be issued under separate
CUSIP numbers. All the Notes issued under this Indenture shall be treated as a single class for all
purposes of this Indenture including waivers, amendments, redemptions and offers to purchase.




          With respect to any Additional Notes, the Company shall set forth in a resolution of the Board
of Directors and an Officers’ Certificate, a copy of each 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 the provision of Section 4.03 that the Company is
relying on to issue such Additional Notes;




     (2) the issue price, the issue date and the “CUSIP” numbers, ISINs or “Common Code”
numbers, if any, of such Additional Notes; and




     (3) whether such Additional Notes shall be Initial Notes or shall be issued in the
form of Exchange Notes or Private Exchange Notes as set forth in Exhibit A.



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ARTICLE THREE




Redemption



          SECTION 3.01. Notices to Trustee. If the Company elects to redeem Notes pursuant to
paragraph 5 of the Notes, it shall notify the Trustee in writing of the redemption date, the
principal amount of Notes to be redeemed and the redemption price.




          The Company shall give each notice to the Trustee provided for in this Section at least 60
days before the redemption date unless the Trustee consents to a shorter period. Such notice shall
be accompanied by an Officers’ Certificate from the Company to the effect that such redemption will
comply with the conditions herein.




          SECTION 3.02. Selection of Notes To Be Redeemed. If fewer than all the Notes are to
be redeemed, the Trustee shall select the Notes to be redeemed from outstanding Notes not
previously called for redemption, in compliance with the requirements of the principal national
securities exchange, if any, on which such Notes are listed, or, if such Notes are not so listed,
pro rata or, if not practicable, by lot or by such other method as the Trustee in its sole
discretion shall deem fair and appropriate (and in such manner as complies with applicable legal
requirements). The Trustee may select for redemption portions of the principal of Notes that have
denominations larger than $2,000. Notes and portions of them the Trustee selects shall be in
principal amounts of $2,000 or a whole multiple of $1,000 in excess of $2,000. Provisions of this
Indenture that apply to Notes called for redemption also apply to portions of Notes called for
redemption. The Trustee shall notify the Company promptly of the Notes or portions of Notes to be
redeemed.




          The selection by the Trustee of the Notes to be redeemed shall be conclusive and binding and
the Trustee shall incur no liability in connection with such selection.




          Notwithstanding anything else contained in this Section 3.02, the selection of Notes, or
portions thereof, that are represented by a Global Security or that are held by or on behalf of the
Depository, in the case of any partial redemption, shall also be made in accordance with the
applicable rules and procedures of the Depository and neither the Trustee nor the Company shall
have any liability or responsibility with respect thereto.




          SECTION 3.03. Notice of Redemption. At least 30 days but not more than 60 days before
a date for redemption of Notes, the Company shall mail a notice of redemption by first-class mail
to each Holder of Notes to be redeemed at such Holder’s registered address.




          The notice shall identify the Notes to be redeemed and shall state:





     (1) the redemption date;




     (2) the redemption price;



36









 






     (3) the name and address of the Paying Agent;




     (4) that Notes called for redemption must be surrendered to the Paying Agent to
collect the redemption price;




     (5) if fewer than all the outstanding Notes are to be redeemed, the identification and
principal amounts of the particular Notes to be redeemed;




     (6) that, unless the Company defaults in making such redemption payment, interest on
Notes (or the portion thereof) called for redemption ceases to accrue on and after the
redemption date;




     (7) the “CUSIP” number, ISIN or “Common Code” numbers, if any, printed on the Notes
being redeemed; and




     (8) that no representation is made as to the correctness or accuracy of the “CUSIP”
number, ISIN, or “Common Code” numbers, if any, listed in such notice or printed on the
Notes.



          At the Company’s request, the Trustee shall give the notice of redemption in the Company’s
name and at the Company’s expense. In such event, the Company shall notify the Trustee and provide
the information required by this Section.




          SECTION 3.04. Effect of Notice of Redemption. Once notice of redemption is mailed,
Notes called for redemption become irrevocably due and payable on the redemption date and at the
redemption price stated in the notice. Upon surrender to the Paying Agent to be forwarded to the
Trustee, such Notes shall be paid at the redemption price stated in the notice, plus accrued
interest to the redemption date (subject to the right of Holders of record on the relevant record
date to receive interest due on the related interest payment date), and such Notes shall be
canceled by the Trustee. Failure to give notice or any defect in the notice to any Holder shall
not affect the validity of the notice to any other Holder.




          SECTION 3.05. Deposit of Redemption Price. Prior to the redemption date, the Company
shall deposit with the Paying Agent (or, if the Company or a Subsidiary is the Paying Agent, shall
segregate and hold in trust) money in available funds sufficient to pay the redemption price of and
accrued interest on all Notes to be redeemed on that date other than Notes or portions of Notes
called for redemption which have been delivered by the Company to the Trustee for cancellation.
The Paying Agent shall promptly return to the Company any money so deposited which is not required
for that purpose upon the written request of the Company, except with respect to monies owed as
obligations to the Trustee pursuant to Article Seven.




          SECTION 3.06. Notes Redeemed in Part. Upon surrender of a Note that is redeemed in
part, the Company shall execute and the Trustee shall authenticate for the Holder (at the Company’s
expense) a new Note equal in principal amount to the unredeemed portion of the Note surrendered.







37









 








          SECTION 3.07. Special Mandatory Redemption. (a) Notwithstanding the foregoing
provisions of this Article Three, but in accordance with the terms and conditions of the Escrow
Agreement if (i) the Escrow Agent receives, at any one time on or prior to 2:00 p.m. (New York City
time) March 29, 2010, a Redemption Release Certificate executed by any two of the Chairman of the
Board of Directors, the President, any Vice President, the Treasurer or the Secretary of the
Company certifying that the Share Purchase Agreement has been terminated on or prior to March 29,
2010 (the Redemption Release Certificate) or (ii) the Escrow Agent has not received, on or prior to
2:00 p.m. (New York City time) March 29, 2010, the Company Release Certificate certifying that the
Acquisition has occurred or will occur concurrently with the release of the Escrow Funds in
accordance with the Share Purchase Agreement (the Company Release Certificate), the Company shall
redeem all of the Notes at the Special Mandatory Redemption Price on the Special Mandatory
Redemption Date, with notice of such redemption to be provided in accordance with Section 3.07(b);
provided, however, that for purposes of this Section 3.07, the Company shall not be
subject to the provisions of Sections 3.01, 3.03 and 3.05 hereof.




          (b) If the Company is required to redeem the Notes pursuant to Section 3.07(a), on the date
such requirement arises, the Trustee, on behalf of the Company and the Subsidiary Guarantors shall
deliver by first class mail a notice of the Special Mandatory Redemption to each Holder. For
Global Securities which are held on behalf of DTC, Euroclear or Clearstream, notice of the Special
Mandatory Redemption may be given to DTC, Euroclear or Clearstream, as applicable, for
communication to entitled accountholders in substitution for the aforesaid mailing.




          (c) The notice of the Special Mandatory Redemption shall identify the Notes to be redeemed
and corresponding CUSIP, ISIN or Common Code numbers, as applicable and shall state:





     (1) the applicable clause in the Escrow Agreement pursuant to which the Company is
permitted or required to release the Escrow Funds to the Paying Agent;




     (2) the Special Mandatory Redemption Date and the Special Mandatory Redemption Price;
and




     (3) that no representation is made as to the correctness or accuracy of the CUSIP,
ISIN or Common Code number, if any, listed in such notice or printed on the Notes.



          (d) The Company shall fund the amount by which the Special Mandatory Redemption Price plus
any fees owed to the Escrow Agent exceeds the amount in the Escrow Account on the Special Mandatory
Redemption Date, by paying or depositing with, on or prior to the Special Mandatory Redemption
Date, the Paying Agent, cash equal to the shortfall amount.







38









 








          (e) If any funds remain in the Escrow Account after funds sufficient to pay for the
redemption of the Notes on the Special Mandatory Redemption Date have been released from the Escrow
Account to the Paying Agent and after all fees owed to the Escrow Agent have been released to the
Escrow Agent by the Paying Agent in accordance with the terms of this Indenture, then such
remaining funds shall, on or prior to the close of business on the Special Mandatory Redemption
Date, be immediately released and delivered to the Company.





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ARTICLE FOUR




Covenants



          SECTION 4.01. Payment of Notes. The Company shall promptly pay the principal of and
interest on the Notes on the dates and in the manner provided in the Notes and in this Indenture.
Principal and interest shall be considered paid on the date due if on such date the Trustee or the
Paying Agent holds in accordance with this Indenture money sufficient to pay all principal and
interest then due.




          The Company shall pay interest on overdue principal at the rate specified therefor in the
Notes, and it shall pay interest on overdue installments of interest at the same rate to the extent
lawful.




          SECTION 4.02. SEC Reports. Whether or not the Company is subject to the reporting
requirements of Section 13 or 15(d) of the Exchange Act, the Company will file with the SEC
(subject to the next sentence) and provide the Trustee and Noteholders with such annual and other
reports as are specified in Sections 13 and 15(d) of the Exchange Act and applicable to a U.S.
corporation subject to such Sections, such reports to be so filed and provided at the times
specified for the filings of such reports under such Sections and containing all the information,
audit reports and exhibits required for such reports. If at any time, the Company is not subject to
the periodic reporting requirements of the Exchange Act for any reason, the Company will
nevertheless continue filing the reports specified in the preceding sentence with the SEC within
the time periods required 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 such filings for any reason, the Company
will post the reports specified in the preceding sentence on its website within the time periods
that would apply if the Company were required to file those reports with the SEC.




          At any time that any of the Company’s Subsidiaries are Unrestricted Subsidiaries, then the
quarterly and annual financial information required by the preceding paragraph 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.




          In addition, the Company will furnish to the Holders of the Notes and to prospective
investors, upon the requests of such Holders, any information required to be delivered pursuant to
Rule 144A(d)(4) under the Securities Act so long as the Notes are not freely transferable under the
Securities Act.




          Delivery of such reports, information, and documents to the Trustee pursuant to the provisions
of this Section 4.02 is for informational purposes only and the






40









 







Trustee’s receipt of such shall not constitute constructive notice of any information
contained therein or determinable from information contained therein, including the Company’s
compliance with any of its covenants hereunder (as to which the Trustee is entitled to rely
exclusively on Officers’ Certificates).




          SECTION 4.03. Limitation on Indebtedness. (a) The Company will not, and will not
permit any Restricted Subsidiary to, Incur, directly or indirectly, any Indebtedness;
provided, however, that the Company and the Subsidiary Guarantors will be entitled
to Incur Indebtedness if, on the date of such Incurrence and after giving effect thereto on a pro
forma basis, the Consolidated Coverage Ratio exceeds 2.00 to 1.




          (b) Notwithstanding the foregoing paragraph (a), the Company and the Restricted Subsidiaries
will be entitled to Incur any or all of the following Indebtedness:





     (1) Indebtedness Incurred by the Company or any Restricted Subsidiary pursuant to any
Credit Facilities; provided, however, that, immediately after giving effect
to any such Incurrence, the aggregate principal amount of all Indebtedness Incurred under
this clause (1) and then outstanding does not exceed the greater of (i) $300 million and
(ii) the sum of (x) 60% of the inventory of the Company and its Restricted Subsidiaries and
(y) 85% of the book value of the accounts receivables of the Company and its Restricted
Subsidiaries;




     (2) Indebtedness owed to and held by the Company or a Restricted Subsidiary;
provided, however, that (A) any subsequent issuance or transfer of any
Capital Stock which results in any such Restricted Subsidiary ceasing to be a Restricted
Subsidiary or any subsequent transfer of such Indebtedness (other than to the Company or a
Restricted Subsidiary) shall be deemed, in each case, to constitute the Incurrence of such
Indebtedness by the obligor thereon, (B) if the Company is the obligor on such
Indebtedness, such Indebtedness is expressly subordinated to the prior payment in full in
cash of all obligations with respect to the Notes and (C) if a Subsidiary Guarantor is the
obligor on such Indebtedness, such Indebtedness is expressly subordinated to the prior
payment in full in cash of all obligations of such Subsidiary Guarantor with respect to its
Subsidiary Guarantee;




     (3) the Notes (other than any Additional Notes) and the Exchange Notes with respect to
such Notes;




     (4) Indebtedness outstanding on the Issue Date (other than Indebtedness described in
clause (1), (2) or (3) of this Section 4.03(b)), including the Existing Notes;




     (5) Indebtedness of a Restricted Subsidiary Incurred and outstanding on or prior to
the date on which such Subsidiary became a Restricted Subsidiary or was acquired by the
Company (other than Indebtedness Incurred in connection with, or to provide all or any
portion of the funds or credit support utilized to consummate, the transaction or series of
related transactions pursuant to which



41









 






such Subsidiary became a Restricted Subsidiary or was acquired by the Company);
provided, however, that on the date such Subsidiary became a Restricted
Subsidiary or was acquired by the Company and after giving pro forma effect thereto, the
Company would have been entitled to Incur at least $1.00 of additional Indebtedness
pursuant to paragraph (a) of this Section 4.03(b);




     (6) Refinancing Indebtedness in respect of Indebtedness Incurred pursuant to paragraph
(a) or pursuant to clause (3), (4) or (5) or this clause (6); provided,
however, that to the extent such Refinancing Indebtedness directly or indirectly
Refinances Indebtedness of a Restricted Subsidiary Incurred pursuant to clause (5), such
Refinancing Indebtedness shall be Incurred only by such Restricted Subsidiary;




     (7) Hedging Obligations incurred in the ordinary course of business with a bona fide
intention to limit interest rate risk, exchange rate risk or commodity price risk;




     (8) Indebtedness in respect of workers’ compensation claims, self-insurance
obligations, bankers’ acceptances, performance bonds, bid bonds, appeal bonds and surety
bonds or other similar bonds or obligations, and any Guarantees or letters of credit
functioning as or supporting any of the foregoing;




     (9) Indebtedness arising from any agreement providing for indemnities, Guarantees,
purchase price adjustments, holdbacks, contingency payment obligations based on the
performance of the acquired or disposed assets or similar obligations (other than
Guarantees of Indebtedness) Incurred by any Person in connection with the acquisition or
disposition of assets;




     (10) Indebtedness of Foreign Subsidiaries for purposes of financing working capital in
an aggregate principal amount at any one time outstanding not to exceed $30.0 million;




     (11) 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, cost of construction or improvement or carrying cost of assets
used in the business of the Company and its Restricted Subsidiaries and related financing
costs, and Refinancing Indebtedness Incurred to Refinance any Indebtedness Incurred
pursuant to this clause, in an aggregate principal amount at any one time outstanding not
to exceed $30.0 million;




     (12) Indebtedness arising from the honoring by a bank or other financial institution
of a check, draft or similar instrument drawn against insufficient funds in the ordinary
course of business; provided, however, that such Indebtedness is
extinguished within five Business Days of its Incurrence;




     (13) Indebtedness consisting of the Subsidiary Guarantee of a Subsidiary Guarantor and
any Guarantee by a Subsidiary Guarantor of Indebtedness Incurred



42









 






pursuant to paragraph (a) or pursuant to clause (1), (2), (3) or (4) or pursuant to
clause (6) to the extent the Refinancing Indebtedness Incurred thereunder directly or
indirectly Refinances Indebtedness Incurred pursuant to paragraph (a) or pursuant to clause
(3) or (4); and




     (14) Indebtedness of the Company or of any Subsidiary Guarantor in an aggregate
principal amount which, when taken together with all other Indebtedness of the Company and
its Restricted Subsidiaries outstanding on the date of such Incurrence (other than
Indebtedness permitted by clauses (1) through (13) above or paragraph (a)), does not exceed
the greater of (i) $50 million and (ii) 5% of Consolidated Net Tangible Assets, as
determined as of the most recent practical date (as adjusted for any significant
dispositions of assets since such date).



          (c) Notwithstanding the foregoing, neither the Company nor any Subsidiary Guarantor will
incur any Indebtedness pursuant to the foregoing paragraph (b) if the proceeds thereof are used,
directly or indirectly, to Refinance any Subordinated Obligations of the Company or any Subsidiary
Guarantor unless such Indebtedness shall be subordinated to the Notes or the applicable Subsidiary
Guarantee to at least the same extent as such Subordinated Obligations.




          (d) For purposes of determining compliance with this Section 4.03:





     (1) any Indebtedness outstanding under the Credit Agreement on the Issue Date will be
treated as Incurred on the Issue Date under clause (1) of paragraph (b) above;




     (2) in the event that an item of Indebtedness (or any portion thereof) meets the
criteria of more than one of the types of Indebtedness described above, the Company, in its
sole discretion, will classify such item of Indebtedness (or any portion thereof) at the
time of Incurrence and will only be required to include the amount and type of such
Indebtedness in one of the above clauses;




     (3) the Company will be entitled to divide and classify an item of Indebtedness in
more than one of the types of Indebtedness described above; and




     (4) the Company may, at any time, change the classification of an item of Indebtedness
or any portion thereof (except for Indebtedness Incurred under clause (1) of paragraph (b)
above) to any other clause of paragraph (b) above or to paragraph (a) above;
provided, however, that the Company or the applicable Restricted
Subsidiary, as the case may be, would be permitted to Incur such item of Indebtedness or
portion thereof pursuant to such other clause or paragraph (a), as the case may be, at time
of such reclassification.



          SECTION 4.04. Limitation on Restricted Payments. (a) The Company will not, and will
not permit any Restricted Subsidiary, directly or indirectly, to make a Restricted Payment if at
the time the Company or such Restricted Subsidiary makes such Restricted Payment:







43









 









     (1) a Default shall have occurred and be continuing (or would result therefrom);




     (2) the Company is not entitled to Incur an additional $1.00 of Indebtedness pursuant
to paragraph (a) of Section 4.03; or




     (3) the aggregate amount of such Restricted Payment and all other Restricted Payments
since the Existing Notes Issue Date would exceed the sum of (without duplication):




     (A) 50% of the Consolidated Net Income accrued during the period (treated as
one accounting period) from the beginning of the fiscal quarter immediately
following the fiscal quarter during which the Existing Notes Issue Date occurred to
the end of the most recent fiscal quarter ending at least 45 days prior to the date
of such Restricted Payment (or, in case such Consolidated Net Income shall be a
deficit, minus 100% of such deficit); plus




     (B) 100% of the aggregate Net Cash Proceeds, or the fair market value of
property other than cash, received by the Company from the issuance or sale of its
Capital Stock (other than Disqualified Stock) subsequent to the Existing Notes
Issue Date (other than an issuance or sale to a Subsidiary of the Company and other
than an issuance or sale to an employee stock ownership plan or to a trust
established by the Company or any of its Subsidiaries for the benefit of their
employees) and 100% of any cash, or the fair market value of property other than
cash, received as a capital contribution by the Company from its shareholders
subsequent to the Existing Notes Issue Date; plus




     (C) the amount by which Indebtedness of the Company is reduced on the
Company’s balance sheet upon the conversion or exchange subsequent to the Existing
Notes Issue Date of any Indebtedness of the Company convertible or exchangeable for
Capital Stock (other than Disqualified Stock) of the Company (less the amount of
any cash, or the fair value of any other property, distributed by the Company upon
such conversion or exchange); provided, however, that the foregoing
amount shall not exceed the Net Cash Proceeds received by the Company or any
Restricted Subsidiary from the sale of such Indebtedness (excluding Net Cash
Proceeds from sales to a Subsidiary of the Company or to an employee stock
ownership plan or to a trust established by the Company or any of its Subsidiaries
for the benefit of their employees); plus




     (D) an amount equal to the sum of (i) the net reduction in the Investments
(other than Permitted Investments) made by the Company or any Restricted Subsidiary
in any Person resulting from repurchases, repayments or redemptions of such
Investments by such Person, proceeds realized on the sale of such Investment and
proceeds representing the



44









 






return of capital (excluding dividends and distributions), in each case
received by the Company or any Restricted Subsidiary subsequent to the Existing
Notes Issue Date, and (ii) to the extent such Person is an Unrestricted Subsidiary,
the portion (proportionate to the Company’s equity interest in such Subsidiary) of
the fair market value of the net assets of such Unrestricted Subsidiary at the time
such Unrestricted Subsidiary is designated a Restricted Subsidiary;
provided, however, that the foregoing sum shall not exceed, in the
case of any such Person or Unrestricted Subsidiary, the amount of Investments
(excluding Permitted Investments) made subsequent to the Existing Notes Issue Date
(and treated as a Restricted Payment) by the Company or any Restricted Subsidiary
in such Person or Unrestricted Subsidiary.



          (b) The preceding provisions will not prohibit:





     (1) any Restricted Payment made out of the Net Cash Proceeds of the substantially
concurrent sale of, or made by exchange for, Capital Stock of the Company (other than
Disqualified Stock and other than Capital Stock issued or sold to a Subsidiary of the
Company or an employee stock ownership plan or to a trust established by the Company or any
of its Subsidiaries for the benefit of their employees) or a substantially concurrent cash
capital contribution received by the Company from its shareholders; provided,
however, that (A) such Restricted Payment shall be excluded in the calculation of
the amount of Restricted Payments and (B) the Net Cash Proceeds from such sale or such cash
capital contribution (to the extent so used for such Restricted Payment) shall be excluded
from the calculation of amounts under clause (3)(B) of paragraph (a) above;




     (2) any purchase, repurchase, redemption, defeasance or other acquisition or
retirement for value of Subordinated Obligations of the Company or a Subsidiary Guarantor
made by exchange for, or out of the proceeds of the substantially concurrent Incurrence of,
Indebtedness of such Person which is permitted to be Incurred pursuant to Section 4.03;
provided, however, that such purchase, repurchase, redemption, defeasance
or other acquisition or retirement for value shall be excluded in the calculation of the
amount of Restricted Payments;




     (3) dividends paid within 60 days after the date of declaration thereof if at such
date of declaration such dividend would have complied with this Section 4.04;
provided, however, that at the time of payment of such dividend, no other
Default shall have occurred and be continuing (or result therefrom); provided
further, however, that such dividend shall be included in the calculation
of the amount of Restricted Payments;




     (4) so long as no Default has occurred and is continuing, the purchase, redemption or
other acquisition of shares of Capital Stock of the Company or any of its Subsidiaries from
employees, former employees, directors or former directors of the Company or any of its
Subsidiaries (or permitted transferees of



45









 






such employees, former employees, directors or former directors), pursuant to the
terms of the agreements (including employment agreements) or plans (or amendments thereto)
approved by the Board of Directors under which such individuals purchase or sell or are
granted the option to purchase or sell, shares of such Capital Stock; provided,
however, that the aggregate amount of such Restricted Payments (excluding amounts
representing cancellation of Indebtedness) shall not exceed $1.0 million in any calendar
year; provided further, however, that such repurchases and other
acquisitions shall be excluded in the calculation of the amount of Restricted Payments;




     (5) the declaration and payments of dividends on Disqualified Stock issued pursuant to
Section 4.03; provided, however, that at the time of payment of such
dividend, no Default shall have occurred and be continuing (or result therefrom);
provided further, however, that such dividends shall be excluded in
the calculation of the amount of Restricted Payments;




     (6) repurchases of Capital Stock deemed to occur upon exercise of stock options if
such Capital Stock represents a portion of the exercise price of such options;
provided, however, that such Restricted Payments shall be excluded in the
calculation of the amount of Restricted Payments;




     (7) cash payments in lieu of the issuance of fractional shares in connection with the
exercise of warrants, options or other securities convertible into or exchangeable for
Capital Stock of the Company; provided, however, that any such cash payment
shall not be for the purpose of evading the limitation of this Section 4.04; provided
further, however, that such payments shall be excluded in the calculation of
the amount of Restricted Payments;




     (8) in the event of a Change of Control, and if no Default shall have occurred and be
continuing, the payment, purchase, redemption, defeasance or other acquisition or
retirement of Subordinated Obligations of the Company or any Subsidiary Guarantor, in each
case, at a purchase price not greater than 101% of the principal amount of such
Subordinated Obligations, plus any accrued and unpaid interest thereon; provided,
however, that prior to such payment, purchase, redemption, defeasance or other
acquisition or retirement, the Company (or a third party to the extent permitted by this
Indenture) has made a Change of Control Offer with respect to the Notes as a result of such
Change of Control and has repurchased all Notes validly tendered and not withdrawn in
connection with such Change of Control Offer; provided further, however,
that such payments, purchases, redemptions, defeasances or other acquisitions or
retirements shall be included in the calculation of the amount of Restricted Payments;




     (9) payments of intercompany subordinated Indebtedness, the Incurrence of which was
permitted under clause (2) of paragraph (b) of Section 4.03; provided,
however, that no Default has occurred and is continuing or would otherwise result
therefrom; provided further, however, that such payments shall be excluded
in the calculation of the amount of Restricted Payments;



46









 






     (10) the payment of ordinary quarterly dividends on the common stock of the Company at
a rate no greater than $0.09 per share (as adjusted for stock splits and other similar
changes to such common stock); provided, however, the aggregate amount of
such dividends in any year shall not exceed $17.5 million; provided further,
however, that such payments shall be included in the calculation of the amount of
Restricted Payments; and




     (11) Restricted Payments in an amount which, when taken together with all Restricted
Payments made pursuant to this clause (11), does not exceed $35.0 million;
provided, however, that (A) at the time of each such Restricted Payment, no
Default shall have occurred and be continuing (or result therefrom) and (B) such Restricted
Payments shall be excluded in the calculation of the amount of Restricted Payments.



          SECTION 4.05. Restrictions on Distributions from Restricted Subsidiaries. The Company
will not, and will not permit any Restricted Subsidiary to, create or otherwise cause or permit to
exist or become effective any consensual encumbrance or restriction on the ability of any
Restricted Subsidiary to (a) pay dividends or make any other distributions on its Capital Stock to
the Company or a Restricted Subsidiary or pay any Indebtedness owed to the Company, (b) make any
loans or advances to the Company or (c) transfer any of its property or assets to the Company,
except:





     (1) with respect to clauses (a), (b) and (c),




     (A) any encumbrance or restriction pursuant to an agreement in effect at or
entered into on the Issue Date;




     (B) any encumbrance or restriction contained in the terms of any Indebtedness
Incurred pursuant to clause (b)(1) of Section 4.03 or any agreement pursuant to
which such Indebtedness was issued if (i) either (x) the encumbrance or restriction
applies only in the event of and during the continuance of a payment default or a
default with respect to a financial covenant contained in such Indebtedness or
agreement or (y) the Company determines at the time any such Indebtedness is
Incurred (and at the time of any modification of the terms of any such encumbrance
or restriction) that any such encumbrance or restriction will not materially affect
the Company’s ability to make principal or interest payments on the Notes and any
other Indebtedness that is an obligation of the Company and (ii) the encumbrance or
restriction is not materially more disadvantageous to the Holders of the Notes than
is customary in comparable financings or agreements (as determined by the Company
in good faith);




     (C) any encumbrance or restriction with respect to a Restricted Subsidiary
pursuant to an agreement relating to any Indebtedness Incurred by such Restricted
Subsidiary on or prior to the date on which such



47









 






Restricted Subsidiary was acquired
by the Company (other than
Indebtedness Incurred as consideration in, or to provide all or any portion of
the funds or credit support utilized to consummate, the transaction or series of
related transactions pursuant to which such Restricted Subsidiary became a
Restricted Subsidiary or was acquired by the Company) and outstanding on such date;




     (D) any encumbrance or restriction pursuant to an agreement effecting a
Refinancing of Indebtedness Incurred pursuant to an agreement referred to in clause
(A) or (B) of clause (1) of this Section 4.05 or this clause (D) or contained in
any amendment to an agreement referred to in clause (A) or (B) of clause (1) of
this Section 4.05 or this clause (D); provided, however, that the
encumbrances and restrictions with respect to such Restricted Subsidiary contained
in any such refinancing agreement or amendment are no less favorable to the Holders
than encumbrances and restrictions with respect to such Restricted Subsidiary
contained in such predecessor agreements;




     (E) with respect to any Foreign Subsidiary, any encumbrance or restriction
contained in the terms of any Indebtedness, or any agreement pursuant to which such
Indebtedness was Incurred;




     (F) Liens permitted to be incurred under the provisions of Section 4.09 that
limit the right of the debtor to dispose of the assets subject to such Liens;




     (G) encumbrances or restrictions contained in agreements entered into in
connection with Hedging Obligations permitted from time to time under this
Indenture;




     (H) restrictions on cash or other deposits or net worth requirements imposed
by customers or required by insurance, surety or bonding companies, in each case,
under contracts entered into in the ordinary course of business;




     (I) existing under, by reason of or with respect to applicable law, rule,
regulation or order;




     (J) with respect to any Person or the property or assets of a Person acquired
by the Company or any of its Restricted Subsidiaries existing at the time 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 and any amendments, modifications, restatements,
renewals, increases, extensions, supplements, refundings, replacements or
refinancings thereof, provided that the encumbrances and restrictions in
any such amendments, modifications, restatements, renewals, increases, extensions,
supplements,



48









 






refundings, replacements or refinancings are, in the reasonable good
faith
judgment of the Chief Executive Officer and the Chief Financial Officer of the
Company, no more restrictive, taken as a whole, than those in effect on the date of
the acquisition; and




     (K) any encumbrance or restriction with respect to a Restricted Subsidiary
imposed pursuant to an agreement entered into for the sale or disposition of all or
substantially all the Capital Stock or assets of such Restricted Subsidiary pending
the closing of such sale or disposition; and



          (2) with respect to clause (c) only,





     (A) any encumbrance or restriction consisting of customary nonassignment
provisions in leases governing leasehold interests to the extent such provisions
restrict the transfer of the lease or the property leased thereunder;




     (B) any encumbrance or restriction contained in credit agreements, security
agreements or mortgages securing Indebtedness of a Restricted Subsidiary to the
extent such encumbrance or restriction restricts the transfer of the property
subject to such credit agreements, security agreements or mortgages; and




     (C) customary restrictions contained in asset sale agreements limiting the
transfer of such assets pending the closing of such sale.



          SECTION 4.06. Limitation on Sales of Assets and Subsidiary Stock.
 (a) The Company will not, and will not permit any Restricted Subsidiary to, directly or
indirectly, consummate any Asset Disposition unless:





     (1) the Company or such Restricted Subsidiary receives consideration at the time of
such Asset Disposition at least equal to the fair market value (including as to the value
of all non-cash consideration), as determined in good faith by the Board of Directors (or,
in the case of any sale of timberland pursuant to a Pre-Approved Timberland Sale
Initiative, as determined in good faith by an executive officer of the Company), of the
 shares and assets subject to such Asset Disposition;




     (2) at least 75% of the consideration thereof received by the Company or such
Restricted Subsidiary is in the form of (A) cash or cash equivalents or (B) Additional
Assets; and




     (3) an amount equal to 100% of the Net Available Cash from such Asset Disposition is
applied by the Company (or such Restricted Subsidiary, as the case may be)



49









 






     (A) first, to the extent the Company elects, to acquire Additional Assets
within one year from the later of the date of such Asset Disposition or the receipt
of such Net Available Cash;




     (B) second, to the extent of the balance of such Net Available Cash after
application in accordance with clause (A), to the extent the Company elects (or is
required by the terms of any Indebtedness), to prepay, repay, redeem or purchase
Senior Indebtedness of the Company or Indebtedness (other than any Disqualified
Stock) of a Restricted Subsidiary (in each case other than Indebtedness owed to the
Company or an Affiliate of the Company) within one year from the later of the date
of such Asset Disposition or the receipt of such Net Available Cash; and




     (C) third, to the extent of the balance of such Net Available Cash after
application in accordance with clauses (A) and (B), to make an offer to the Holders
of the Notes (and to Holders of other Senior Indebtedness of the Company designated
by the Company) to purchase Notes (and such other Senior Indebtedness of the
Company) pursuant to and subject to the conditions contained in this Indenture;


provided, however, that in connection with any prepayment, repayment or purchase of
Indebtedness pursuant to clause (B) or (C) above (other than with the Net Available Cash from any
Asset Disposition of timberland pursuant to a Pre-Approved Timberland Sale Initiative), the Company
or such Restricted Subsidiary shall permanently retire such Indebtedness and shall cause the
related loan commitment (if any) to be permanently reduced in an amount equal to the principal
amount so prepaid, repaid or purchased.




          Notwithstanding the foregoing provisions of this Section 4.06, the Company and the Restricted
Subsidiaries will not be required to apply any Net Available Cash in accordance with this Section
4.06 except to the extent that the aggregate Net Available Cash from all Asset Dispositions which
is not applied in accordance with this Section 4.06 exceeds $25.0 million.




          For the purposes of this Section 4.06, the following are deemed to be cash or cash
equivalents:





     (1) the assumption or discharge of Indebtedness of the Company (other than obligations
in respect of Disqualified Stock of the Company) or any Restricted Subsidiary (other than
obligations in respect of Disqualified Stock or Preferred Stock of a Subsidiary Guarantor)
and the release of the Company or such Restricted Subsidiary from all liability on such
Indebtedness in connection with such Asset Disposition; and




     (2) securities received by the Company or any Restricted Subsidiary from the
transferee that are promptly converted by the Company or such Restricted Subsidiary into
cash (including, in the case of any installment note received by the Company or any
Restricted Subsidiary in respect of any Asset Disposition of




50












 






timberland pursuant to a
Pre-Approved Timberland Sale Initiative, the receipt of cash in respect of any loan secured
solely by a pledge of such installment note and, if applicable, the pledge or assignment of
a letter of credit or similar instrument provided by such transferee), to the extent of
cash received in that conversion.


          (b) In the event of an Asset Disposition that requires the purchase of Notes (and
other Senior Indebtedness of the Company) pursuant to clause (a)(3)(C) above, the Company will
purchase Notes tendered pursuant to an offer by the Company for the Notes (and such other Senior
Indebtedness) at a purchase price of 100% of their principal amount (or, in the event such other
Senior Indebtedness of the Company was issued with significant original issue discount, 100% of the
accreted value thereof) without premium, plus accrued but unpaid interest (or, in respect of such
other Senior Indebtedness of the Company, such lesser price, if any, as may be provided for by the
terms of such Senior Indebtedness) in accordance with the procedures (including prorating in the
event of oversubscription) set forth in this Indenture (an “Asset Sale Offer”). If the aggregate
purchase price of the securities tendered exceeds the Net Available Cash allotted to their
purchase, the Company will select the securities to be purchased on a pro rata basis but in round
denominations, which in the case of the Notes will be denominations of $1,000 principal amount or
multiples thereof and allocated such that after such purchase, no Note purchased in part would have
a principal amount of less than $2,000. The Company shall not be required to make such an offer to
purchase Notes (and other Senior Indebtedness of the Company) pursuant to this Section 4.06 if the
Net Available Cash available therefor is less than $10.0 million (which lesser amount shall be
carried forward for purposes of determining whether such an offer is required with respect to the
Net Available Cash from any subsequent Asset Disposition). Upon completion of such an offer to
purchase, Net Available Cash will be deemed to be reduced by the aggregate amount of such offer.


          (c) (1) Promptly, and in any event within 10 days after the Company becomes
obligated to make an Asset Sale Offer, the Company shall deliver to the Trustee and send, by
first-class mail to each Holder, a written notice stating that the Holder may elect to have his
Notes purchased by the Company either in whole or in part (subject to prorating as described in
paragraph (b) of this Section 4.06 in the event the Asset Sale Offer is oversubscribed) in integral
multiples of $1,000 of principal amount such that no Note purchased in part would have a principal
amount of less than $2,000, at the applicable purchase price. The notice shall specify a purchase
date not less than 30 days nor more than 60 days after the date of such notice (the “Purchase
Date”) and shall contain such information concerning the business of the Company which the Company
in good faith believes will enable such Holders to make an informed decision (which at a minimum
will include (A) the most recently filed Annual Report on Form 10-K (including audited consolidated
financial statements) of the Company, the most recent subsequently filed Quarterly Report on Form
10-Q and any Current Report on Form 8-K of the Company filed subsequent to such Quarterly Report,
other than Current Reports describing Asset Sales otherwise described in the offering materials (or
corresponding successor reports), (B) a description of material developments in the Company’s
business subsequent to the date of the latest of such Reports, and (C) if material, appropriate
pro



51









 








forma financial information) and all instructions and materials necessary to
tender Notes pursuant to the Asset Sale Offer, together with the information contained in clause
(3).





     (2) Not later than the date upon which written notice of an Asset Sale Offer is
delivered to the Trustee as provided above, the Company shall deliver to the Trustee an
Officers’ Certificate as to (A) the amount of the Asset Sale Offer (the “Offer Amount”),
including information as to any other Senior Indebtedness included in the Asset Sale Offer,
(B) the allocation of the Net Available Cash from the Asset Sale pursuant to which such
Asset Sale Offer is being made and (C) the compliance of such allocation with the
provisions of this Section 4.06. On such date, the Company shall also irrevocably deposit
with the Trustee or with a Paying Agent (or, if the Company is acting as its own Paying
Agent, segregate and hold in trust) in Temporary Cash Investments maturing on the last day
prior to the Purchase Date or on the Purchase Date if funds are immediately available by
open of business, an amount equal to the Offer Amount to be held for payment in accordance
with the provisions of this Section. If the Asset Sale Offer includes other Senior
Indebtedness, the deposit described in the preceding sentence shall be made with any paying
agent other than the Trustee pursuant to arrangements satisfactory to the Trustee and
described in an Officers’ Certificate delivered to the Trustee. Upon the expiration of the
period for which the Asset Sale Offer remains open (the “Offer Period”), the Company shall
deliver to the Trustee for cancellation the Notes or portions thereof which have been
properly tendered to and are to be accepted by the Company. The Trustee shall, on the
Purchase Date, mail or deliver payment (or cause the delivery of payment) to each tendering
Holder in the amount of the purchase price. In the event that the aggregate purchase price
of the Notes delivered by the Company to the Trustee is less than the Offer Amount
applicable to the Notes, the Trustee shall deliver the excess to the Company immediately
after the expiration of the Offer Period for application in accordance with this Section
4.06.




     (3) Holders electing to have a Note purchased shall be required to surrender the
Note, with an appropriate form duly completed, to the Company at the address specified in
the notice at least three Business Days prior to the Purchase Date. Holders shall be
entitled to withdraw their election if the Trustee or the Company receives not later than
one Business Day prior to the Purchase Date, a telex, facsimile transmission or letter
setting forth the name of the Holder, the principal amount of the Note which was delivered
for purchase by the Holder and a statement that such Holder is withdrawing his election to
have such Note purchased. Holders whose Notes are purchased only in part shall be issued
new Notes equal in principal amount to the unpurchased portion of the Notes surrendered.




     (4) At the time the Company delivers Notes to the Trustee which are to be accepted
for purchase, the Company shall also deliver an Officers’ Certificate stating that such
Notes are to be accepted by the Company pursuant to and in accordance with the terms of
this Section 4.06. A Note shall be deemed to have



52









 






been accepted for purchase at the time
the Trustee, directly or through an agent, mails or delivers payment therefor to the
surrendering Holder.


          (d) The Company will comply, to the extent applicable, with the requirements of
Section 14(e) of the Exchange Act and any other securities laws or regulations in connection with
the repurchase of Notes pursuant to this Section 4.06. To the extent that the provisions of any
securities laws or regulations conflict with provisions of this Section 4.06, the Company will
comply with the applicable securities laws and regulations and will not be deemed to have breached
its obligations under this Section 4.06 by virtue of its compliance with such securities laws or
regulations.


          SECTION 4.07. Limitation on Affiliate Transactions. (a) The Company will
not, and will not permit any Restricted Subsidiary to, enter into or permit to exist any
transaction (including the purchase, sale, lease or exchange of any property, employee compensation
arrangements or the rendering of any service) with, or for the benefit of, any Affiliate of the
Company (an “Affiliate Transaction”) unless:




     (1) the terms of the Affiliate Transaction are no less favorable to the
Company or such Restricted Subsidiary than those that could be obtained at the time of the
Affiliate Transaction in arm’s-length dealings with a Person who is not an Affiliate;




     (2) if such Affiliate Transaction involves an amount in excess of $15.0
million, the terms of the Affiliate Transaction are set forth in writing and a majority of
the non-employee directors of the Company disinterested with respect to such Affiliate
Transaction have determined in good faith that the criteria set forth in clause (1) are
satisfied and have approved the relevant Affiliate Transaction as evidenced by a resolution
of the Board of Directors; and




     (3) if such Affiliate Transaction involves an amount in excess of $30.0
million, the Board of Directors shall also have received a written opinion from an
Independent Qualified Party to the effect that such Affiliate Transaction is fair, from a
financial standpoint, to the Company and its Restricted Subsidiaries or is not less
favorable to the Company and its Restricted Subsidiaries than could reasonably be expected
to be obtained at the time in an arm’s-length transaction with a Person who was not an
Affiliate.




     (b) The provisions of the preceding paragraph (a) will not prohibit:




     (1) any Investment (other than a Permitted Investment) or other Restricted
Payment, in each case permitted to be made pursuant to (but only to the extent included in
the calculation of the amount of Restricted Payments made pursuant to paragraph (a)(3) of)
Section 4.04;




     (2) any issuance of securities, or other payments, awards or grants in cash,
securities or otherwise pursuant to, or the funding of, employment arrangements, stock
options and stock ownership plans approved by the Board of Directors;



53









 






     (3) loans or advances to employees in the ordinary course of business in
accordance with the past practices of the Company or its Restricted Subsidiaries, but in
any event not to exceed $5.0 million in the aggregate outstanding at any one time;




     (4) the payment of fees to directors of the Company and its Restricted
Subsidiaries who are not employees of the Company or its Restricted Subsidiaries;




     (5) any transaction with the Company, a Restricted Subsidiary or joint
venture or similar entity which would constitute an Affiliate Transaction solely because
the Company or a Restricted Subsidiary owns an equity interest in or otherwise controls
such Restricted Subsidiary, joint venture or similar entity;




     (6) the issuance or sale of any Capital Stock (other than Disqualified
Stock) of the Company;




     (7) pledges of Capital Stock of Unrestricted Subsidiaries for the benefit of
lenders of Unrestricted Subsidiaries; and




     (8) any agreement as in effect on the Issue Date and described in the
Offering Circular or any renewals or extensions of any such agreement (so long as such
renewals or extensions are not
less favorable to the Company or the Restricted Subsidiaries) and the transactions
evidenced thereby.


          SECTION 4.08. Change of Control. (a) Upon the occurrence of any of the
following events (each a “Change of Control”), unless the Company has exercised its right to redeem
all of the outstanding Notes pursuant to paragraph 5 of the Notes, each Holder shall have the right
to require that the Company repurchase such Holder’s Notes at a purchase price in cash equal to
101% of the principal amount thereof on the date of purchase plus accrued and unpaid interest, if
any, to the date of purchase (subject to the right of holders of record on the relevant record date
to receive interest due on the relevant interest payment date):




     (1) any “person” (as such term is used in Sections 13(d) and 14(d) of the
Exchange Act) is or becomes the “beneficial owner” (as defined in Rules 13d-3 and 13d-5
under the Exchange Act, except that for purposes of this clause (1) such person shall be
deemed to have “beneficial ownership” of all shares that any such person has the right to
acquire, whether such right is exercisable immediately or only after the passage of time),
directly or indirectly, of more than 35% of the total voting power of the Voting Stock of
the Company;




     (2) individuals who on the Issue Date constituted the Board of Directors
(together with any new directors whose election by such Board of Directors or whose
nomination for election by the shareholders of the Company was approved by a vote of a
majority of the directors of the Company then still in office who were either directors on
the Issue Date or whose election or nomination for



54









 






election was previously so approved)
cease for any reason to constitute a majority of the Board of Directors then in office;




     (3) the adoption of a plan relating to the liquidation or dissolution of the
Company; or




     (4) the merger or consolidation of the Company with or into another Person
or the merger of another Person with or into the Company, or the sale of all or
substantially all the assets of the Company (determined on a consolidated basis) to another
Person other than a transaction, following which (A) in the case of a merger or
consolidation transaction, holders of securities that represented 100% of the Voting Stock
of the Company immediately prior to such transaction (or other securities into which such
securities are converted as part of such merger or consolidation transaction) own directly
or indirectly at least a majority of the voting power of the Voting Stock of the surviving
Person in such merger or consolidation transaction immediately after such transaction and
in substantially the same proportion as before the transaction, and (B) in the case of a
sale of assets transaction, each transferee becomes an obligor in respect of the Notes and
a Subsidiary of the transferor of such assets.


          (b) Within 30 days following any Change of Control, the Company will mail a notice
to each Holder with a copy to the Trustee (the “Change of Control Offer”) stating:




     (1) that a Change of Control has occurred and that such Holder has the right
to require the Company to purchase such Holder’s Notes at a purchase price in cash equal to
101% of the principal amount thereof on the date of purchase, plus accrued and unpaid
interest, if any, to the date of purchase (subject to the right of Holders of record on the
relevant record date to receive interest on the relevant interest payment date);




     (2) the circumstances and relevant facts regarding such Change of Control
(including information with respect to pro forma historical income, cash flow and
capitalization, in each case after giving effect to such Change of Control);




     (3) the purchase date (which shall be no earlier than 30 days nor later than
60 days from the date such notice is mailed); and




     (4) the instructions, as determined by the Company, consistent with this
Section 4.08, that a Holder must follow in order to have its Notes purchased.


          (c) The Company will not be required to make a Change of Control Offer following a
Change of Control if a third party makes the Change of Control Offer in the manner, at the times
and otherwise in compliance with the requirements set forth in this Indenture applicable to a
Change of Control Offer made by the Company and purchases all Notes validly tendered and not
withdrawn under such Change of Control Offer.




55









 







          (d) The Company will comply, to the extent applicable, with the requirements of
Section 14(e) of the Exchange Act and any other securities laws or regulations in connection with
the repurchase of 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 4.08, the Company
will comply with the applicable securities laws and regulations and shall not be deemed to have
breached its obligations under this Section 4.08 by virtue of its compliance with such securities
laws or regulations.


          SECTION 4.09. Limitation on Liens. The Company will not, and will not
permit any Restricted Subsidiary to, directly or indirectly, Incur or permit to exist any Lien (the
“Initial Lien”) of any nature whatsoever on any of its properties (including Capital Stock of a
Restricted Subsidiary), whether owned at the Issue Date or thereafter acquired, securing any
Indebtedness, other than Permitted Liens, without effectively providing that the Notes shall be
secured equally and ratably with (or prior to) the obligations so secured for so long as such
obligations are so secured; provided, however, that the Company and the Restricted
Subsidiaries will be entitled to Incur other Liens to secure Indebtedness as long as the amount of
outstanding Indebtedness secured by Liens pursuant to this proviso (including any Attributable
Debt) does not exceed at the time of such incurrence 5% of Consolidated Net Tangible Assets, as
determined as of the most recent practical date (adjusted for any significant dispositions of
assets since such date) (and any such Liens Incurred pursuant to this proviso may be permitted to
exist).


          Any Lien created for the benefit of the Holders of the Notes pursuant to the preceding
sentence shall provide by its terms that such Lien shall be automatically and unconditionally
released and discharged upon the release and discharge of the Initial Lien.


          SECTION 4.10. Limitation on Sale/Leaseback Transactions. The Company will
not, and will not permit any Restricted Subsidiary to, enter into any Sale/Leaseback Transaction
with respect to any property unless:




     (1) the Company or such Restricted Subsidiary would be entitled to (A) Incur
Indebtedness in an amount equal to the Attributable Debt with respect to such
Sale/Leaseback Transaction pursuant to Section 4.03 and (B) create a Lien on such property
securing such Attributable Debt without equally and ratably securing the Notes pursuant to
Section 4.09;




     (2) the net proceeds received by the Company or any Restricted Subsidiary in
connection with such Sale/Leaseback Transaction are at least equal to the fair market value
(as determined by the Board of Directors) of such property; and




     (3) the Company applies the proceeds of such transaction in compliance with
Section 4.06.



56









 




          SECTION 4.11. Future Subsidiary Guarantors. The Company will not permit any
Domestic Restricted Subsidiary, directly or indirectly, to Incur any Indebtedness unless:




     (1) such Indebtedness is Incurred by such Restricted Subsidiary pursuant to
clause (2), (4), (5), (6) (with respect to Refinancing Indebtedness of Indebtedness
initially Incurred under clause (4) or (5) only), (7), (8), (9), (11) or (12) of paragraph
(b) of Section 4.03;




     (2) such Restricted Subsidiary is a Subsidiary Guarantor; or




     (3) such Restricted Subsidiary simultaneously executes and delivers a
Subsidiary Guarantee and becomes a Subsidiary Guarantor.


          SECTION 4.12. Compliance Certificate. The Company shall deliver to the
Trustee within 120 days after the end of each fiscal year of the Company 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 and each Subsidiary Guarantor has kept, observed, performed and fulfilled its
obligations under this Indenture, and further stating, that in the course of the performance by the
signers of their duties as Officers of the Company they would normally have knowledge of any
Default and whether or not the signers know of any Default that occurred during such period. If
they do, the certificate shall describe the Default, its status and what action the Company is
taking or proposes to take with respect thereto.


          SECTION 4.13. Suspension of Covenants. Following the first day (the
“Suspension Date”) that:




     (1) the Notes have an Investment Grade Rating from both of the Rating
Agencies, and




     (2) no Default has occurred and is continuing under this Indenture,



the Company and its Restricted Subsidiaries will not be subject to the following provisions of this
Indenture:




               (A) Section 4.03,



               (B) Section 4.04,



               (C) Section 4.05,



               (D) Section 4.06,



               (E) clause (3) under Section 4.10,



               (F) clauses (2) and (3) of Section 5.01(a),



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               (G) Section 4.07 and



               (H) Section 4.11



(collectively, the “Suspended Covenants”). In addition, the Subsidiary Guarantees of the Subsidiary
Guarantors will also be suspended as of the Suspension Date. In the event that the Company and its
Restricted Subsidiaries are not subject to the Suspended Covenants for any period of time as a
result of the foregoing, and on any subsequent date (the “Reversion Date”) one or both of the
Rating Agencies withdraws its Investment Grade Rating or downgrades the rating assigned to the
Notes below an Investment Grade Rating, then the Company and the Restricted Subsidiaries will
thereafter again be subject to the Suspended Covenants with respect to future events and the
Subsidiary Guarantees will be reinstated. The period of time between the Suspension Date and the
Reversion Date is referred to in this Indenture as the “Suspension Period.” Notwithstanding that
the Suspended Covenants may be reinstated, no default will be deemed to have occurred as a result
of a failure to comply with the Suspended Covenants during the Suspension Period.



          On the Reversion Date, all Indebtedness Incurred during the Suspension Period will be
classified to have been Incurred pursuant to paragraph (a) of Section 4.03 or one of the clauses
set forth in paragraph (b) of Section 4.03 (to the extent such Indebtedness would be permitted to
be Incurred thereunder as of the Reversion Date and after giving effect to Indebtedness Incurred
prior to the Suspension Period and outstanding on the Reversion Date). To the extent such
Indebtedness would not be so permitted to be Incurred pursuant to paragraph (a) or (b) of Section
4.03 such Indebtedness will be deemed to have been outstanding on the Issue Date, so that it is
classified as permitted under clause (4) of Section 4.03(b). Calculations made after the Reversion
Date of the amount available to be made as Restricted Payments under Section 4.04 will be made as
though Section 4.04 had been in effect since the Issue Date and throughout the Suspension Period.
Accordingly, Restricted Payments made during the Suspension Period will reduce the amount available
to be made as Restricted Payments under paragraph (a) of Section 4.04 and the items specified in
subclauses (3)(A) through (3)(D) of paragraph (a) of Section 4.04 will increase the amount
available to be made under paragraph (a) thereof.


          SECTION 4.14. Escrow Account Deposit. In accordance with the terms of the
Escrow Agreement, upon the consummation of the sale of the Notes, the Issuer shall cause the
Initial Purchaser to deposit $94,860,416.70 (the Escrow Amount), representing the proceeds of
payment by the Initial Purchaser for the sale of the Notes pursuant to the Purchase Agreement, into
the Escrow Account with the Escrow Agent.



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ARTICLE FIVE




Successor Company



          SECTION 5.01. When Company May Merge or Transfer Assets. (a) The Company
will not consolidate with or merge with or into, or convey, transfer or lease, in one transaction
or a series of transactions, directly or indirectly, all or substantially all its assets to, any
Person, unless:




     (1) the resulting, surviving or transferee Person (the “Successor Company”)
shall be a Person organized and existing under the laws of the United States of America,
any State thereof or the District of Columbia and the Successor Company (if not the
Company) shall expressly assume, by an indenture supplemental hereto, executed and
delivered to the Trustee, in form satisfactory to the Trustee, all the obligations of the
Company under the Notes and this Indenture;




     (2) immediately after giving pro forma effect to such transaction (and
treating any Indebtedness which becomes an obligation of the Successor Company or any
Subsidiary as a result of such transaction as having been Incurred by such Successor
Company or such Subsidiary at the time of such transaction), no Default shall have occurred
and be continuing;




     (3) immediately after giving pro forma effect to such transaction, the
Successor Company would be able to Incur an additional $1.00 of Indebtedness pursuant to
paragraph (a) of Section 4.03; and




     (4) the Company shall have delivered to the Trustee an Officers’ Certificate
and an Opinion of Counsel, each stating that such consolidation, merger or transfer and
such supplemental indenture (if any) complies with this Indenture.



provided, however, that clause (3) will not be applicable to (A) a Restricted
Subsidiary consolidating with, merging into or transferring all or part of its properties and
assets to the Company (so long as no Capital Stock of the Company is distributed to any Person) or
(B) the Company merging with an Affiliate of the Company solely for the purpose and with the sole
effect of reincorporating the Company in another jurisdiction.



          For purposes of this Section 5.01, the sale, lease, conveyance, assignment, transfer or other
disposition of all or substantially all of the properties and assets of one or more Subsidiaries of
the Company, which properties and assets, if held by the Company instead of such Subsidiaries,
would constitute all or substantially all of the properties and assets of the Company on a
consolidated basis, shall be deemed to be the transfer of all or substantially all of the
properties and assets of the Company.


          The Successor Company will be the successor to the Company and shall succeed to, and be
substituted for, and may exercise every right and power of, the Company under this Indenture, and
the predecessor Company, except in the case of a



59









 








lease, shall be released from the obligation to pay the principal of and interest on the Notes.



          (b) The Company will not permit any Subsidiary Guarantor to consolidate with or
merge with or into, or convey, transfer or lease, in one transaction or a series of transactions,
all or substantially all of its assets to any Person unless:




     (1) except in the case of a Subsidiary Guarantor (x) that has been disposed
of in its entirety to another Person (other than to the Company or an Affiliate of the
Company), whether through a merger, consolidation or sale of Capital Stock or assets or (y)
that, as a result of the disposition of all or a portion of its Capital Stock, ceases to be
a Subsidiary, in both cases, if in connection therewith the Company (A) complies with its
obligations under Section 4.06 in respect of such disposition, (B) the resulting, surviving
or transferee Person (if not such Subsidiary) shall be a Person organized and existing under the laws of the jurisdiction under which such
Subsidiary was organized or under the laws of the United States of America, or any State
thereof or the District of Columbia, and (C) such Person shall expressly assume, by a
Guarantee Agreement, in a form satisfactory to the Trustee, all the obligations of such
Subsidiary, if any, under its Subsidiary Guarantee;




     (2) immediately after giving effect to such transaction or transactions on a
pro forma basis (and treating any Indebtedness which becomes an obligation of the
resulting, surviving or transferee Person as a result of such transaction as having been
issued by such Person at the time of such transaction), no Default shall have occurred and
be continuing; and




     (3) the Company delivers to the Trustee an Officers’ Certificate and an
Opinion of Counsel, each stating that such consolidation, merger or transfer and such
Guarantee Agreement, if any, complies with this Indenture.



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ARTICLE SIX




Defaults and Remedies



          SECTION 6.01. Events of Default. An “Event of Default” occurs if:




     (1) the Company defaults in any payment of interest on any Note when the
same becomes due and payable and such default continues for a period of 30 days;




     (2) the Company (A) defaults in the payment of the principal of any Note
when the same becomes due and payable at its Stated Maturity, upon optional redemption,
upon declaration of acceleration or otherwise; (B) fails to redeem or purchase Notes when
required pursuant to this Indenture or the Notes, including under Section 3.07; or (C)
fails to comply with any obligation in the Escrow Agreement;




     (3) the Company fails to comply with Section 5.01(a);




     (4) the Company fails to comply with Section 4.02, 4.03, 4.04, 4.05, 4.06
(other than a failure to purchase Notes), 4.07, 4.08 (other than a failure to purchase
Notes), 4.09, 4.10, 4.11 or 5.01 (other than a failure to comply with paragraph (a)
thereof) and such failure continues for 30 days after the notice specified below;




     (5) the Company or any Subsidiary Guarantor fails to comply with any of its
agreements contained in the Notes or this Indenture (other than those referred to in clause
(1), (2), (3) or (4) above) and such failure continues for 60 days after the notice
specified below;




     (6) Indebtedness of the Company, any Subsidiary Guarantor or any Significant
Subsidiary is not paid within any applicable grace period after final maturity or is
accelerated by the holders thereof because of a default and the total amount of such
Indebtedness unpaid or accelerated exceeds $15.0 million, or its foreign currency
equivalent at the time;




     (7) the Company, any Subsidiary Guarantor or any Significant Subsidiary
pursuant to or within the meaning of any 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 any
substantial part of its property; or



               (D) makes a general assignment for the benefit of its creditors;



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     or takes any comparable action under any foreign laws relating to insolvency;




     (8) a court of competent jurisdiction enters an order or decree under any
Bankruptcy Law that:




     (A) is for relief against the Company, any Subsidiary Guarantor or
any Significant Subsidiary in an involuntary case;




     (B) appoints a Custodian of the Company, any Subsidiary Guarantor or
any Significant Subsidiary or for any substantial part of its property; or




     (C) orders the winding up or liquidation of the Company, any
Subsidiary Guarantor or any Significant Subsidiary;



or any similar relief is granted under any foreign laws and the order or decree,
as described under this Section (8), remains unstayed and in effect for 60
consecutive days;




     (9) any judgment or decree is rendered for the payment of money in an amount
in excess of $15.0 million against the Company, any Subsidiary Guarantor or any Significant
Subsidiary and such judgment or decree remains outstanding for a period of 60 days and is
not discharged, waived or stayed; or




     (10) any Subsidiary Guarantee ceases to be in full force and effect (other
than in accordance with the terms of the Indenture or such Subsidiary Guarantee) or any
Subsidiary Guarantor denies or disaffirms its obligations under its Subsidiary Guarantee.


          The foregoing will constitute Events of Default whatever the reason for any such Event of
Default and whether it is voluntary or involuntary or is effected by operation of law or pursuant
to any judgment, decree or order of any court or any order, rule or regulation of any
administrative or governmental body.


          The term “Bankruptcy Law” means title 11, United States Code, or any similar Federal or state
law for the relief of debtors. The term “Custodian” means any receiver, trustee, assignee,
liquidator, sequestrator or similar official under any Bankruptcy Law.


          A Default under clauses (4) or (5) is not an Event of Default until the Trustee or the Holders
of at least 25% in principal amount of the outstanding Notes notify the Company of the Default and
the Company does not cure such Default within the time specified after receipt of such notice.
Such notice must specify the Default, demand that it be remedied and state that such notice is a
“Notice of Default”.


          The Company shall deliver to the Trustee, within 30 days after the occurrence thereof, written
notice in the form of an Officers’ Certificate of any Event of



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Default under clause (6) or (10) and
any event which with the giving of notice or the lapse of time would become an Event of Default
under clause (4), (5) or (9), its status and what action the Company is taking or proposes to take
with respect thereto.



          SECTION 6.02. Acceleration. If an Event of Default occurs and is
continuing, the Trustee or the Holders of at least 25% in principal amount of the outstanding Notes
may declare the principal of and accrued but unpaid interest on all the Notes to be due and payable
by a notice in writing to the Company (and to the Trustee, if given by Holders) specifying the
respective Event of Default. Upon such a declaration, such principal and interest shall be due and
payable immediately. If an Event of Default specified in Section 6.01(7) or (8) with respect to
the Company occurs and is continuing, the principal of and interest on all of the outstanding Notes
will ipso facto become and be immediately due and payable without any declaration or other act on
the part of the Trustee or any Holders. The Holders of a majority in principal amount of the Notes
by notice to the Trustee may rescind an acceleration and its consequences if the rescission would
not conflict with any judgment or decree and if all existing Events of Default have been cured or
waived except nonpayment of principal or interest that has become due solely because of
acceleration. No such rescission shall affect any subsequent Default or impair any right
consequent thereto.


          SECTION 6.03. Other Remedies. If an Event of Default occurs and is
continuing, the Trustee may pursue any available remedy to collect the payment of principal of or
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 Noteholder 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. No remedy is exclusive
of any other remedy. All available remedies are cumulative.


          SECTION 6.04. Waiver of Past Defaults. The Holders of 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 such Notes, waive any existing Default and its consequences under this
Indenture, except (a) a continuing Default in the payment of principal of or interest on any such
Notes held by a non-consenting Holder, (b) a Default arising from the failure to redeem or purchase
any Note when required pursuant to this Indenture or (c) a Default in respect of a provision that
under Section 9.02 cannot be amended without the consent of each Holder affected. When a Default
is waived, it is deemed cured, but no such waiver shall extend to any subsequent or other Default
or impair any consequent right.


          SECTION 6.05. Control by Majority. The Holders of a majority in principal
amount of the Notes may, by an instrument or concurrent instruments in writing executed and
delivered to the Trustee, direct the time, method and place of conducting any proceeding for any
remedy available to the Trustee or of exercising any trust or




63












 




power conferred on the Trustee. However, the Trustee may refuse to follow any direction that
conflicts with law or this Indenture or, subject to Section 7.01, that the Trustee determines is
unduly prejudicial to the rights of other Holders or would involve the Trustee in personal
liability; provided, however, that the Trustee may take any other action deemed
proper by the Trustee that is not inconsistent with such direction. Prior to taking any action
hereunder, the Trustee shall be entitled to indemnification satisfactory to it in its sole
discretion against all losses, liabilities and expenses caused by taking or not taking such action.




          SECTION 6.06. Limitation on Suits. Except to enforce the right to receive payment of
principal or interest when due, no Noteholder may pursue any remedy with respect to this Indenture
or the Notes unless:





     (1) the Holder gives to the Trustee written notice stating that an Event of Default is
continuing;




     (2) the Holders of at least 25% in principal amount of the Notes make a written
request to the Trustee to pursue the remedy;




     (3) such Holder or Holders offer to the Trustee reasonable security or indemnity
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) the Holders of a majority in principal amount of the Notes do not give the Trustee
a direction inconsistent with the request during such 60-day period.



          A Noteholder may not use this Indenture to prejudice the rights of another Noteholder or to
obtain a preference or priority over another Noteholder. In the event that the Definitive Notes
are not issued to any beneficial owner promptly after the Registrar has received a request from the
Holder of a Global Note to issue such Definitive Notes to such beneficial owner or its nominee, the
Company expressly agrees and acknowledges, with respect to the right of any Holder to pursue a
remedy pursuant to this Indenture, the right of such beneficial owner of Notes to pursue such
remedy with respect to the portion of the Global Note that represents such beneficial owner’s Notes
as if such Definitive Notes had been issued.




          SECTION 6.07. Rights of Holders To Receive Payment. Notwithstanding any other
provision of this Indenture, the right of any Holder to receive payment of principal of and
interest on the Notes held by such Holder, on or after the respective due dates expressed in the
Notes, or to bring suit for the enforcement of any such payment on or after such respective dates,
shall not be impaired or affected without the consent of such Holder.




          SECTION 6.08. Collection Suit by Trustee. If an Event of Default specified in Section
6.01(1) or (2) occurs and is continuing, the Trustee may recover judgment in its own name and as
trustee of an express trust against the Company or any






64









 







Subsidiary Guarantor for the whole amount then due and owing (together with interest on any
unpaid interest to the extent lawful) and the amounts provided for in Section 7.07.




          SECTION 6.09. Trustee May File Proofs of Claim. The Trustee may 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 and the Noteholders allowed in any judicial proceedings relative to the Company and
Subsidiary Guarantors, their creditors or their property and, unless prohibited by law or
applicable regulations, may vote on behalf of the Holders in any election of a trustee in
bankruptcy or other Person performing similar functions, and any Custodian in any such judicial
proceeding is hereby authorized by each Holder to make 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 it for the reasonable compensation, expenses, disbursements and advances
of the Trustee, its agents and its counsel, and any other amounts due the Trustee under Section
7.07.




          SECTION 6.10. Priorities. If the Trustee collects any money or property pursuant to
this Article Six, it shall pay out the money or property in the following order:





     FIRST: to the Trustee for amounts due under Section 7.07;




     SECOND: to Noteholders for amounts due and unpaid on the Notes for principal and
interest, ratably, without preference or priority of any kind, according to the amounts due
and payable on the Notes for principal and interest, respectively; and




     THIRD: to the Company.



          The Trustee may fix a record date and payment date for any payment to Noteholders pursuant to
this Section 6.10. At least 15 days before such record date, the Company shall mail to each
Noteholder and the Trustee a notice that states the record date, the payment date and amount to be
paid.




          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 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 does not apply to a suit by the Trustee, a suit by a Holder pursuant to
Section 6.07 or a suit by Holders of more than 10% in aggregate principal amount of the Notes.




          SECTION 6.12. Waiver of Stay or Extension Laws. The Company and the Subsidiary
Guarantors covenant (to the extent they may lawfully do so) that they shall not at any time insist
upon, or plead, or in any manner whatsoever claim or take the benefit or advantage of, any stay or
extension law wherever enacted, now or at any time hereafter in force, which may affect the
covenants or the performance of this Indenture;






65









 







and each of the Company and each Subsidiary Guarantor (to the extent that it may lawfully do
so) hereby expressly waives all benefit or advantage of any such law, and shall not hinder, delay
or impede the execution of any power herein granted to the Trustee, but shall suffer and permit the
execution of every such power as though no such law had been enacted.





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ARTICLE SEVEN




Trustee



          SECTION 7.01. Duties of Trustee. (a) If an Event of Default has occurred and is
continuing, the Trustee shall exercise the rights and powers vested in it by this Indenture and use
the same degree of care and skill in their 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 Trustee undertakes to perform such duties and only such duties as are
specifically set forth in this Indenture 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, in the case of any such certificates or opinions which by any
provision hereof are specifically required to be furnished to the Trustee, the Trustee
shall examine the certificates and opinions to determine whether or not they conform to the
requirements of this Indenture, but has no duty to verify the contents thereof.



          (c) The Trustee may not be relieved from liability for its own negligent action, its own
negligent failure to act or its own wilful misconduct, except that:





     (1) this paragraph does not limit the effect of paragraph (b) of this Section 7.01;




     (2) the Trustee shall not be liable for any error of judgment made in good faith by a
Trust Officer unless it is proved that the Trustee was negligent in ascertaining the
pertinent facts; and




     (3) the Trustee shall not be liable with respect to any action it takes or omits to
take in good faith in accordance with a direction received by it pursuant to Section 6.04
or 6.05 or exercising any trust or power conferred upon the Trustee under this Indenture
with respect to the Notes.



          (d) Every provision of this Indenture that in any way relates to the Trustee is subject to
paragraphs (a), (b), (c) and (g) of this Section 7.01.




          (e) The Trustee shall not be liable for interest on any money received by it except as the
Trustee may agree in writing with the Company.




          (f) Money held in trust by the Trustee need not be segregated from other funds except to the
extent required by law.





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          (g) No provision of this Indenture shall require the Trustee to expend or risk its own funds
or otherwise incur financial liability in the performance of any of its duties hereunder or in the
exercise of any of its rights or powers, if it shall have reasonable grounds to believe that
repayment of such funds or adequate indemnity against such risk or liability is not reasonably
assured to it.




          (h) Every provision of this Indenture relating to the conduct or affecting the liability of
or affording protection to the Trustee shall be subject to the provisions of this Section and to
the provisions of the TIA.




          SECTION 7.02. Notice of Defaults. If a Default occurs, is continuing and is known to
the Trustee, the Trustee shall mail to each Noteholder notice of such Default within 90 days after
it occurs. Except in the case of a Default in the payment of the principal of or interest on any
Note, the Trustee may withhold such notice if and so long as a committee of its Trust Officers in
good faith determines that the withholding of the notice is not opposed to the interests of the
Holders. For purposes of this Section 7.02, the Trustee shall not be deemed to have knowledge of a
Default or an Event of Default hereunder unless an officer of the Trustee with direct
responsibility for the administration of this Indenture has actual knowledge thereof, or unless
written notice of any event which is a Default or an Event of Default is received by the Trustee
and such notice references the Notes or this Indenture.




          SECTION 7.03. Rights of Trustee. (a) The Trustee may rely on 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. The Trustee shall not be liable for any action it takes or omits to take
in good faith in reliance on the Officers’ Certificate or Opinion of Counsel.




          (c) The Trustee may act through agents and shall not be responsible for the misconduct or
negligence of any agent appointed with due care.




          (d) The Trustee shall not be liable for any action it takes or omits to take in good faith
which it believes to be authorized or within its rights or powers;provided,
however, that the Trustee’s conduct does not constitute wilful misconduct or negligence.
The Trustee shall not be bound to make any investigation into the facts or matters stated in any
resolution, certificate, statement, instrument, opinion, report, notice, request, consent, order,
approval, bond, debenture, note or other paper or document unless requested in writing to do so by
the Holders of not less than a majority in principal amount outstanding of the Notes, but the
Trustee, in its discretion, may make such further inquiry or investigation into such facts or
matters as it may see fit, and, if the Trustee shall determine to make such further inquiry or
investigation, it shall be entitled to examine the books, records and premises of the Company,
personally or by agent or attorney, at the expense of the Company and shall incur no liability of
any kind by reason of such inquiry or investigation.







68









 








          (e) The Trustee may consult with counsel (at the expense of the Company), and the advice or
Opinion of Counsel with respect to legal matters relating to this Indenture and the Notes shall 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 such advice or Opinion of
Counsel.




          (f) 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 (when serving in such capacity or in the capacity of Paying Agent,
Registrar, Note Custodian or any other capacity under this Indenture), and each officer, director
and employee of the Trustee and any agent, custodian and other Person employed by the Trustee to
act hereunder.




          SECTION 7.04. 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
its Affiliates with the same rights it would have if it were not Trustee. Any Paying Agent or
Registrar may do the same with like rights. However, the Trustee must comply with Sections 7.10
and 7.11.




          SECTION 7.05. Trustee’s Disclaimer. The Trustee shall not be responsible for and
makes no representation as to the validity or adequacy of this Indenture or the Notes, it shall not
be accountable for the Company’s use of the proceeds from the Notes, and it shall not be
responsible for any statement of the Company in this Indenture or in any document issued in
connection with the sale of the Notes or in the Notes other than the Trustee’s certificate of
authentication.




          SECTION 7.06. Reports by Trustee to Holders. As promptly as practicable after each
April 15, beginning with the April 15 following the date of this Indenture, and in any event prior
to June 15 of each year, the Trustee shall mail to each Noteholder a brief report dated as of such
April 15 that complies with TIA § 313(a). The Trustee also shall comply with TIA § 313(b).




          A copy of each report at the time of its mailing to Noteholders shall be filed with the SEC
and each stock exchange (if any) on which the Notes are listed. The Company agrees to notify
promptly the Trustee whenever the Notes become listed on any stock exchange and of any delisting
thereof.




          SECTION 7.07. Compensation and Indemnity. The Company shall pay to the Trustee from
time to time reasonable compensation for its services. The Trustee’s compensation shall not be
limited by any law on compensation of a trustee of an express trust. The Company shall reimburse
the Trustee upon request for all reasonable out-of-pocket expenses incurred or made by it,
including costs of collection, in addition to the compensation for its services. Such expenses
shall include the reasonable compensation and expenses, disbursements and advances of the Trustee’s
agents, counsel, accountants and experts. The Company shall indemnify the Trustee (and its
officers, directors, employees, agents and attorneys-in-fact) against any and all loss, liability
or expense (including attorneys’ fees) incurred by it in connection with the administration of this






69









 







trust and the performance of its duties hereunder. The Trustee shall notify the Company
promptly of any claim for which it may seek indemnity. Failure by the Trustee to so notify the
Company shall not relieve the Company of its obligations hereunder. The Company shall defend the
claim and the Trustee may have separate counsel and the Company shall pay the fees and expenses of
such counsel. The Company need not reimburse any expense or indemnify against any loss, liability
or expense incurred by the Trustee through the Trustee’s own wilful misconduct, negligence or bad
faith.




          To secure the Company’s payment obligations in this Section, the Trustee shall have a lien
prior to the Notes on all money or property held or collected by the Trustee other than money or
property held in trust to pay principal of and interest on particular Notes.




          The Company’s payment obligations pursuant to this Section shall survive the discharge of this
Indenture, any rejection or termination of this Indenture under any Bankruptcy Law, the resignation
or removal of the Trustee and payment in full of the Notes. When the Trustee incurs expenses after
the occurrence of a Default specified in clause (7) or (8) of Section 6.01(a) with respect to the
Company, the expenses are intended to constitute expenses of administration under the Bankruptcy
Law.




          The provisions of this Section 7.07 shall be applicable to the Trustee when serving in its
capacity as Trustee and when serving as Paying Agent, Registrar, Note Custodian or in any other
capacity under this Indenture.




          SECTION 7.08. Replacement of Trustee. The Trustee may resign at any time by so
notifying the Company. The Holders of a majority in outstanding principal amount of the Notes may
remove the Trustee by so notifying the Trustee and may appoint a successor Trustee. The Company
shall remove the Trustee if:





     (1) the Trustee fails to comply with Section 7.10;




     (2) the Trustee is adjudged bankrupt or insolvent;




     (3) a receiver or other public officer takes charge of the Trustee or its property; or




     (4) the Trustee otherwise becomes incapable of acting.



          If the Trustee resigns, is removed by the Company or by the Holders of a majority in
outstanding principal amount of the Notes and such Holders do not reasonably promptly appoint a
successor Trustee, or if a vacancy exists in the office of Trustee for any reason (the Trustee in
such event being referred to herein as the retiring Trustee), the Company shall promptly appoint a
successor Trustee.




          A successor Trustee shall deliver a written acceptance of its appointment to the retiring
Trustee and to the Company. Thereupon the resignation or removal of the retiring Trustee shall
become effective, and the successor Trustee shall have all the rights, powers and duties of the
Trustee under this Indenture. The successor Trustee shall mail a






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notice of its succession to Noteholders. The retiring Trustee shall promptly transfer all
property held by it as Trustee to the successor Trustee, subject to the lien provided for in
Section 7.07.




          If a successor Trustee does not take office within 60 days after the retiring Trustee resigns
or is removed, the retiring Trustee or the Holders of 10% in outstanding principal amount of the
Notes may petition any court of competent jurisdiction for the appointment of a successor Trustee.




          If the Trustee fails to comply with Section 7.10, any Noteholder may petition any court of
competent jurisdiction for the removal of the Trustee and the appointment of a successor Trustee.




          Notwithstanding the replacement of the Trustee pursuant to this Section, the Company’s
obligations under Section 7.07 shall continue for the benefit of the retiring Trustee.




          SECTION 7.09. Successor Trustee by Merger. If the Trustee consolidates with, merges
or converts into, or transfers all or substantially all its corporate trust business or assets to,
another corporation or banking association, the resulting, surviving or transferee corporation
without any further act shall be the successor Trustee.




          In case at the time such successor or successors by merger, conversion or consolidation to the
Trustee shall succeed to the trusts created by this Indenture any of the Notes shall have been
authenticated but not delivered, any such successor to the Trustee may adopt the certificate of
authentication of any predecessor trustee, and deliver such Notes so authenticated; and in case at
that time any of the Notes shall not have been authenticated, any successor to the Trustee may
authenticate such Notes either in the name of any predecessor hereunder or in the name of the
successor to the Trustee; and in all such cases such certificates shall have the full force which
it is anywhere in the Notes or in this Indenture provided that the certificate of the Trustee shall
have.




          SECTION 7.10. Eligibility; Disqualification. The Trustee shall at all times satisfy
the requirements of TIA § 310(a). The Trustee shall have a combined capital and surplus of at
least $50,000,000 as set forth in its most recent published annual report of condition. The
Trustee shall comply with TIA § 310(b); provided, however, that there shall be
excluded from the operation of TIA § 310(b)(1) any indenture or indentures under which other
securities or certificates of interest or participation in other securities of the Company are
outstanding if the requirements for such exclusion set forth in TIA § 310(b)(1) are met.




          SECTION 7.11. Preferential Collection of Claims Against Company. The Trustee shall
comply with TIA § 311(a), excluding any creditor relationship listed in TIA § 311(b). A Trustee
who has resigned or been removed shall be subject to TIA § 311(a) to the extent indicated.





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ARTICLE EIGHT




Discharge of Indenture; Defeasance




          SECTION 8.01. Discharge of Liability on Notes; Defeasance. (a) When (1) the Company
delivers to the Trustee all outstanding Notes (other than Notes replaced pursuant to Section 2.07)
for cancellation or (2) all outstanding Notes have become due and payable, whether at maturity or
on a redemption date as a result of the mailing of a notice of redemption pursuant to Article
Three, and the Company irrevocably deposits with the Trustee funds sufficient to pay at maturity or
upon redemption all outstanding Notes, including interest thereon to maturity or such redemption
date (other than Notes replaced pursuant to Section 2.07), and if in either case the Company pays
all other sums payable hereunder by the Company, then this Indenture shall, subject to paragraph
(c) of this Section 8.01, cease to be of further effect. The Trustee shall acknowledge
satisfaction and discharge of this Indenture on demand of the Company accompanied by an Officers’
Certificate and an Opinion of Counsel and at the cost and expense of the Company.



          (b) Subject to paragraph (c) of this Section 8.01 and Section 8.02, the Company at any time
may terminate (1) all its obligations under the Notes and this Indenture (“legal defeasance
option”) or (2) its obligations under Sections 4.02, 4.03, 4.04, 4.05, 4.06, 4.07, 4.08, 4.09, 4.10
and 4.11 and the operation of clauses (4), (5), (6), (7), and (8) of Section 6.01(a) (but, in the
case of clauses (7) and (8), with respect only to Significant Subsidiaries and Subsidiary
Guarantors) and the limitations contained in Section 5.01(a)(3) (“covenant defeasance option”).
The Company may exercise its legal defeasance option notwithstanding its prior exercise of its
covenant defeasance option.



          If the Company exercises its legal defeasance option, payment of the Notes may not be
accelerated because of an Event of Default with respect thereto. If the Company exercises its
covenant defeasance option, payment of the Notes may not be accelerated because of an Event of
Default specified in clauses (4), (5), (6), (7) and (8) of Section 6.01(a) (but, in the case of
clauses (7) and (8) with respect only to Significant Subsidiaries and Subsidiary Guarantors) or
because of the failure of the Company to comply with Section 5.01(a)(3). If the Company exercises
its legal defeasance option or its covenant defeasance option, each Subsidiary Guarantor, if any,
shall be released from all its obligations with respect to its Subsidiary Guarantee.



          Upon satisfaction of the conditions set forth herein and upon request of the Company, the
Trustee shall acknowledge in writing the discharge of those obligations that the Company
terminates.



          (c) Notwithstanding clauses (a) and (b) above, the Company’s obligations in Sections 2.03,
2.04, 2.05, 2.06, 2.07, 2.08, 7.07 and 7.08 and in this Article Eight shall survive until the Notes
have been paid in full. Thereafter, the Company’s obligations in Sections 7.07, 8.04 and 8.05
shall survive.



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          SECTION 8.02. Conditions to Defeasance. The Company may exercise its legal defeasance
option or its covenant defeasance option only if:




     (1) the Company irrevocably deposits in trust with the Trustee money or U.S.
Government Obligations for the payment of principal of and interest on the Notes to
maturity or redemption, as the case may be;




     (2) the Company delivers to the Trustee a certificate from a nationally recognized
firm of independent accountants expressing their opinion that the payments of principal and
interest when due and without reinvestment on the deposited U.S. Government Obligations
plus any deposited money without investment will provide cash at such times and in such
amounts as will be sufficient to pay principal and interest when due on all the Notes to
maturity or redemption, as the case may be;




     (3) 123 days pass after the deposit is made and during the 123-day period no Default
specified in Sections 6.01(7) or (8) with respect to the Company occurs which is continuing
at the end of the period;




     (4) the deposit does not constitute a default under any other agreement binding on the
Company;




     (5) the Company delivers to the Trustee an Opinion of Counsel to the effect that the
trust resulting from the deposit does not constitute, or is qualified as, a regulated
investment company under the Investment Company Act of 1940;




     (6) in the case of the legal defeasance option, the Company shall have delivered to
the Trustee an Opinion of Counsel stating that (A) the Company has received from, or there
has been published by, the Internal Revenue Service a ruling, or (B) since the date of this
Indenture there has been a change in the applicable Federal income tax law, in either case
to the effect that, and based thereon such Opinion of Counsel shall confirm that, the
Noteholders will not recognize income, gain or loss for Federal income tax purposes as a
result of such 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 defeasance had
not occurred;




     (7) in the case of the covenant defeasance option, the Company shall have delivered to
the Trustee an Opinion of Counsel to the effect that the Noteholders 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; and




     (8) the Company delivers to the Trustee an Officers’ Certificate and an Opinion of
Counsel, each stating that all conditions precedent to the defeasance and discharge of the
Notes as contemplated by this Article Eight have been complied with.



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          Before or after a deposit, the Company may make arrangements satisfactory to the Trustee for
the redemption of Notes at a future date in accordance with Article Three.



          SECTION 8.03. Application of Trust Money. The Trustee shall hold in trust money or
U.S. Government Obligations deposited with it pursuant to this Article Eight. It shall apply the
deposited money and the money from U.S. Government Obligations through the Paying Agent and in
accordance with this Indenture to the payment of principal of and interest on the Notes.



          SECTION 8.04. Repayment to Company. The Trustee and the Paying Agent shall promptly
turn over to the Company upon request any excess money or securities held by them at any time.



          Subject to any applicable abandoned property law, the Trustee and the Paying Agent shall pay
to the Company upon request any money held by them for the payment of principal or interest that
remains unclaimed for two years, and, thereafter, Noteholders entitled to the money must look to
the Company for payment as general creditors.



          SECTION 8.05. Indemnity for Government Obligations. The Company shall pay and shall
indemnify the Trustee against any tax, fee or other charge imposed on or assessed against deposited
U.S. Government Obligations or the principal and interest received on such U.S. Government
Obligations.



          SECTION 8.06. Reinstatement. If the Trustee or Paying Agent is unable to apply any
money or U.S. Government Obligations in accordance with this Article Eight 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 each Subsidiary
Guarantor’s obligations under this Indenture, each Subsidiary Guarantee and the Notes shall be
revived and reinstated as though no deposit had occurred pursuant to this Article Eight until such
time as the Trustee or Paying Agent is permitted to apply all such money or U.S. Government
Obligations in accordance with this Article Eight; provided, however, that, if the
Company has made any payment of interest on or principal of any Notes because of the reinstatement
of its obligations, the Company shall be subrogated to the rights of the Holders of such Notes to
receive such payment from the money or U.S. Government Obligations held by the Trustee or Paying
Agent.



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ARTICLE NINE




Amendments




          SECTION 9.01. Without Consent of Holders. The Company, the Subsidiary Guarantors and
the Trustee may amend this Indenture or the Notes without notice to or consent of any Noteholder:




     (1) to cure any ambiguity, omission, defect or inconsistency;




     (2) to comply with Article Five;




     (3) to provide for uncertificated Notes in addition to or in place of certificated
Notes; provided, however, that the uncertificated Notes are issued in
registered form for purposes of Section 163(f) of the Code or in a manner such that the
uncertificated Notes are described in Section 163(f)(2)(B) of the Code;




     (4) to add guarantees with respect to the Notes, including any Subsidiary Guarantees,
or to secure the Notes;




     (5) to add to the covenants of the Company or any Subsidiary Guarantor for the benefit
of the Holders or to surrender any right or power herein conferred upon the Company or any
Subsidiary Guarantor;




     (6) to make any change that does not adversely affect the rights of any Noteholder;




     (7) to comply with any requirements of the SEC in connection with qualifying, or
maintaining the qualification of, this Indenture under the TIA; or




     (8) to make any amendment to the provisions of this Indenture relating to the transfer
and legending of Notes; provided, however, that (a) compliance with this
Indenture as so amended would not result in Notes being transferred in violation of the
Securities Act or any other applicable securities law and (b) such amendment does not
materially and adversely affect the rights of Holders to transfer Notes.



          After an amendment under this Section becomes effective, the Company shall mail to Noteholders
a notice briefly describing such amendment. The failure to give such notice to all Noteholders, or
any defect therein, shall not impair or affect the validity of an amendment under this Section.



          SECTION 9.02. With Consent of Holders. (a) The Company, the Subsidiary Guarantors
and the Trustee may amend this Indenture, or the Notes with the written consent of the Holders of
at least a majority in principal amount of the Notes then outstanding (including consents obtained
in connection with a tender offer or exchange for the Notes) and any past Default or compliance
with any provisions may also be waived with the consent of the Holders of at least a majority in
principal amount of the



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Notes then outstanding. However, without the consent of each Holder affected thereby, an
amendment or waiver may not:





     (1) reduce the amount of Notes whose Holders must consent to an amendment;




     (2) reduce the rate of or extend the time for payment of interest on any Note;




     (3) reduce the principal of or change the Stated Maturity of any Note;




     (4) reduce the amount payable upon the redemption of any Note or change the time at
which any Note may be redeemed, in each case as contained in Article Three or paragraph 5
or 7 of the Notes;




     (5) make any Note payable in money other than that stated in the Note;




     (6) make any change in Section 6.04 or 6.07 or the second sentence of this Section;




     (7) make any changes in the ranking or priority of any Note that would adversely
affect the Holders;




     (8) other than in accordance with this Indenture, make any change in or release any
Subsidiary Guarantee that would adversely affect the Holders; or




     (9) make any change in the Escrow Agreement that would adversely affect the Holders.



          It shall not be necessary for the consent of the Holders under this Section to approve the
particular form of any proposed amendment, but it shall be sufficient if such consent approves the
substance thereof.



          After an amendment under this Section becomes effective, the Company shall mail to Noteholders
a notice briefly describing such amendment. The failure to give such notice to all Noteholders, or
any defect therein, shall not impair or affect the validity of an amendment under this Section.



          SECTION 9.03. Compliance with Trust Indenture Act. Every amendment to this Indenture
or the Notes shall comply with the TIA as then in effect.



          SECTION 9.04. Revocation and Effect of Consents and Waivers. A consent to an
amendment or a waiver by a Holder of a Note shall bind the Holder and every subsequent Holder of
that Note or portion of the Note that evidences the same debt as the consenting Holder’s Note, even
if notation of the consent or waiver is not made on the Note. However, any such Holder or
subsequent Holder may revoke the consent or waiver as to such Holder’s Note or portion of the Note
if the Trustee receives the notice of revocation before the date the amendment or waiver becomes
effective. After an



76









 




amendment or waiver becomes effective, it shall bind every Noteholder. An amendment or waiver
becomes effective upon the execution of such amendment or waiver by the Trustee.




          The Company may, but shall not be obligated to, fix a record date for the purpose of
determining the Noteholders entitled to give their consent or take any other action described above
or required or permitted to be taken pursuant to this Indenture. If a record date is fixed, then
notwithstanding the immediately preceding paragraph, those Persons who were Noteholders at such
record date (or their duly designated proxies), and only those Persons, shall be entitled to give
such consent or to revoke any consent previously given or to take any such action, whether or not
such Persons continue to be Holders after such record date. No such consent shall be valid or
effective for more than 120 days after such record date.



          SECTION 9.05. Notation on or Exchange of Notes. If an amendment changes the terms of
a Note, the Trustee may require the Holder of the Note to deliver it to the Trustee. The Trustee
may place an appropriate notation on the Note regarding the changed terms and return it to the
Holder. Alternatively, if the Company or the Trustee so determines, the Company in exchange for
the Note shall issue and the Trustee shall authenticate a new Note that reflects the changed terms.
Failure to make the appropriate notation or to issue a new Note shall not affect the validity of
such amendment.



          SECTION 9.06. Trustee To Sign Amendments. The Trustee shall sign any amendment
authorized pursuant to this Article Nine if the amendment does not adversely affect the rights,
duties, liabilities or immunities of the Trustee. If it does, the Trustee may but need not sign
it. In signing such amendment the Trustee shall be entitled to receive indemnity reasonably
satisfactory to it and to receive, and (subject to Section 7.01) shall be fully protected in
relying upon, an Officers’ Certificate and an Opinion of Counsel stating that such amendment is
authorized or permitted by this Indenture.



          SECTION 9.07. Payment for Consent. Neither the Company nor any Affiliate of the
Company shall, directly or indirectly, pay or cause to be paid any consideration, whether by way of
interest, fee or otherwise, to any Holder 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 all Holders and is paid to all Holders that so consent, waive or agree
to amend in the time frame set forth in solicitation documents relating to such consent, waiver or
agreement.



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ARTICLE TEN




Subsidiary Guarantees




          SECTION 10.01. Guarantees. Subject to this Article Ten, each Subsidiary Guarantor
hereby unconditionally and irrevocably guarantees, jointly and severally, to each Holder and to the
Trustee and its successors and assigns (a) the full and punctual payment of principal of and
interest on the Notes when due, whether at maturity, by acceleration, by redemption or otherwise,
and all other monetary obligations of the Company under this Indenture and the Notes and (b) the
full and punctual performance within applicable grace periods of all other obligations of the
Company under this Indenture and the Notes (all the foregoing being hereinafter collectively called
the “Guaranteed Obligations”). Each Subsidiary Guarantor further agrees that the Guaranteed
Obligations may be extended or renewed, in whole or in part, without notice or further assent from
such Subsidiary Guarantor and that such Subsidiary Guarantor will remain bound under this Article
Ten notwithstanding any extension or renewal of any Guaranteed Obligation.



          Each Subsidiary Guarantor waives presentation to, demand of, payment from and protest to the
Company of any of the Guaranteed Obligations and also waives notice of protest for nonpayment.
Each Subsidiary Guarantor waives notice of any default under the Notes or the Guaranteed
Obligations. The obligations of each Subsidiary Guarantor hereunder shall not be affected by (1)
the failure of any Holder or the Trustee to assert any claim or demand or to enforce any right or
remedy against the Company or any other Person (including any Subsidiary Guarantor) under this
Indenture, the Notes or any other agreement or otherwise; (2) any extension or renewal of any
thereof; (3) any rescission, waiver, amendment or modification of any of the terms or provisions of
this Indenture, the Notes or any other agreement; (4) the release of any security held by any
Holder or the Trustee for the Guaranteed Obligations or any of them; (5) the failure of any Holder
or the Trustee to exercise any right or remedy against any other guarantor of the Guaranteed
Obligations; or (6) except as set forth in Section 10.06, any change in the ownership of such
Subsidiary Guarantor.



          Each Subsidiary Guarantor further agrees that its Subsidiary Guarantee herein constitutes a
guarantee of payment, performance and compliance when due (and not a guarantee of collection) and
waives any right to require that any resort be had by any Holder or the Trustee to any security
held for payment of the Guaranteed Obligations.



          Except as expressly set forth in Sections 8.01(b), 10.02 and 10.06, the obligations of each
Subsidiary Guarantor hereunder shall not be subject to any reduction, limitation, impairment or
termination for any reason, including any claim of waiver, release, surrender, alteration or
compromise, and shall not be subject to any defense of setoff, counterclaim, recoupment or
termination whatsoever or by reason of the invalidity, illegality or unenforceability of the
Guaranteed Obligations or otherwise. Without limiting the generality of the foregoing, the
obligations of each Subsidiary Guarantor herein shall not be discharged or impaired or otherwise
affected by the failure



78









 




of any Holder or the Trustee to assert any claim or demand or to enforce any remedy under this
Indenture, the Notes or any other agreement, by any waiver or modification of any thereof, by any
default, failure or delay, willful or otherwise, in the performance of the obligations, or by any
other act or thing or omission or delay to do any other act or thing which may or might in any
manner or to any extent vary the risk of such Subsidiary Guarantor or would otherwise operate as a
discharge of such Subsidiary Guarantor as a matter of law or equity.




          Each Subsidiary Guarantor further agrees that its Guarantee herein shall continue to be
effective or be reinstated, as the case may be, if at any time payment, or any part thereof, of
principal of or interest on any Obligation is rescinded or must otherwise be restored by any Holder
or the Trustee upon the bankruptcy or reorganization of the Company or otherwise.



          In furtherance of the foregoing and not in limitation of any other right which any Holder or
the Trustee has at law or in equity against any Subsidiary Guarantor by virtue hereof, upon the
failure of the Company to pay the principal of or interest on any Guaranteed Obligation when and as
the same shall become due, whether at maturity, by acceleration, by redemption or otherwise, or to
perform or comply with any other Guaranteed Obligation, each Subsidiary Guarantor hereby promises
to and shall, upon receipt of written demand by the Trustee, forthwith pay, or cause to be paid, in
cash, to the Holders or the Trustee an amount equal to the sum of (A) the unpaid amount of such
Guaranteed Obligations, (B) accrued and unpaid interest on such Guaranteed Obligations (but only to
the extent not prohibited by law) and (C) all other monetary obligations of the Company to the
Holders and the Trustee pursuant to the Indenture.



          Each Subsidiary Guarantor agrees that it shall not be entitled to any right of subrogation in
respect of any Guaranteed Obligations guaranteed hereby until payment in full in cash of all
Guaranteed Obligations. Each Subsidiary Guarantor further agrees that, as between it, on the one
hand, and the Holders and the Trustee, on the other hand, (i) the maturity of the Guaranteed
Obligations hereby may be accelerated as provided in Article Six for the purposes of such
Subsidiary Guarantor’s Subsidiary Guarantee herein, notwithstanding any stay, injunction or other
prohibition preventing such acceleration in respect of the Guaranteed Obligations guaranteed
hereby, and (ii) in the event of any declaration of acceleration of such Guaranteed Obligations as
provided in Article Six, such Guaranteed Obligations (whether or not due and payable) shall
forthwith become due and payable by such Subsidiary Guarantor for the purposes of this Section.



          Each Subsidiary Guarantor also agrees to pay any and all costs and expenses (including
reasonable attorneys’ fees) incurred by the Trustee or any Holder in enforcing any rights under
this Section.



          SECTION 10.02. Limitation on Liability. Any term or provision of this Indenture to
the contrary notwithstanding, the maximum aggregate amount of the Guaranteed Obligations guaranteed
hereunder by any Subsidiary Guarantor shall not exceed the maximum amount that can be hereby
guaranteed without rendering this Indenture, as it relates to such Subsidiary Guarantor, voidable
under applicable law



79









 




relating to fraudulent conveyance or fraudulent transfer or similar laws affecting the rights
of creditors generally.




          SECTION 10.03. Successors and Assigns. This Article Ten shall be binding upon each
Subsidiary Guarantor and its successors and assigns and shall enure to the benefit of the
successors and assigns of the Trustee and the Holders and, in the event of any transfer or
assignment of rights by any Holder or the Trustee, the rights and privileges conferred upon that
party in this Indenture and in the Notes shall automatically extend to and be vested in such
transferee or assignee, all subject to the terms and conditions of this Indenture.



          SECTION 10.04. No Waiver. Neither a failure nor a delay on the part of either the
Trustee or the Holders in exercising any right, power or privilege under this Article Ten shall
operate as a waiver thereof, nor shall a single or partial exercise thereof preclude any other or
further exercise of any right, power or privilege. The rights, remedies and benefits of the
Trustee and the Holders herein expressly specified are cumulative and not exclusive of any other
rights, remedies or benefits which either may have under this Article Ten at law, in equity, by
statute or otherwise.



          SECTION 10.05. Modification. No modification, amendment or waiver of any provision of
this Article Ten, nor the consent to any departure by any Subsidiary Guarantor therefrom, shall in
any event be effective unless the same shall be in writing and signed by the Trustee, and then such
waiver or consent shall be effective only in the specific instance and for the purpose for which
given. No notice to or demand on any Subsidiary Guarantor in any case shall entitle such
Subsidiary Guarantor to any other or further notice or demand in the same, similar or other
circumstances.



          SECTION 10.06. Release of Subsidiary Guarantor. A Subsidiary Guarantor will be
released from its obligations under this Article Ten (other than any obligation that may have
arisen under Section 10.07)




     (1) upon the sale or other disposition (including by way of consolidation or merger)
of a Subsidiary Guarantor, including the sale or disposition of the Capital Stock of a
Subsidiary Guarantor following which such Subsidiary Guarantor is no longer a Subsidiary of
the Company,




     (2) upon the sale or disposition of all or substantially all the assets of such
Subsidiary Guarantor,




     (3) upon the designation of such Subsidiary Guarantor as an Unrestricted Subsidiary in
accordance with the terms of this Indenture,




     (4) at such time as such Subsidiary Guarantor does not have any Indebtedness
outstanding that would have required such Subsidiary Guarantor to enter into a Guarantee
Agreement pursuant to Section 4.11 and the Company provides an Officers’ Certificate to the
Trustee certifying that no such Indebtedness is outstanding and that the Company elects to
have such Subsidiary Guarantor released from this Article Ten,



80









 






     (5) upon defeasance of the Notes pursuant to Article Eight, or




     (6) upon the full satisfaction of the Company’s obligations under this Indenture
pursuant to Section 8.01(a) or otherwise in accordance with the terms of the Indenture;


provided, however, that in the case of clauses (1) and (2) above, (i) such sale or
other disposition is made to a Person other than the Company or an Affiliate of the Company and
(ii) such sale or disposition is otherwise permitted by this Indenture. At the request of the
Company, the Trustee shall execute and deliver an appropriate instrument evidencing such release.




          SECTION 10.07. Contribution. Each Subsidiary Guarantor that makes a payment under its
Subsidiary Guarantee shall be entitled upon payment in full of all Guaranteed Obligations under
this Indenture to a contribution from each other Subsidiary Guarantor in an amount equal to such
other Subsidiary Guarantor’s pro rata portion of such payment based on the
respective net assets of all the Subsidiary Guarantors at the time of such payment determined in
accordance with GAAP.



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ARTICLE ELEVEN




Miscellaneous




          SECTION 11.01. Trust Indenture Act Controls. If any provision of this Indenture
limits, qualifies or conflicts with another provision which is required to be included in this
Indenture by the TIA, the required provision shall control.



          SECTION 11.02. Notices. Any notice or communication shall be in writing and delivered
in person or mailed by first-class mail addressed as follows:



          if to the Company or any Subsidiary Guarantor:


P. H. Glatfelter Company

96 South George Street

Suite 500

York, Pennsylvania 17401

Attention of:

General Counsel



if to the Trustee:



HSBC Bank USA, National Association

452 Fifth Avenue

New York, NY 10018

Fax: 212 525-1300

Attention of: Corporate Trust & Loan Agency




          The Company, any Subsidiary Guarantor or the Trustee by notice to the other may designate
additional or different addresses for subsequent notices or communications.



          Any notice or communication mailed to a Noteholder shall be mailed to the Noteholder at the
Noteholder’s address as it appears on the registration books of the Registrar and shall be
sufficiently given if so mailed within the time prescribed.



          Failure to mail a notice or communication to a Noteholder or any defect in it shall not affect
its sufficiency with respect to other Noteholders. If a notice or communication is mailed in the
manner provided above, it is duly given, whether or not the addressee receives it.



          Where this Indenture provides for notice in any manner, such notice may be waived in writing
by the Person entitled to receive such notice, either before or after the event, and such waiver
shall be the equivalent of such notice. Waivers of notice by Holders shall be filed with the
Trustee, but such filing shall not be a condition precedent to the validity of any action taken in
reliance upon such waiver.



82









 





          If the Company mails a notice or communication to the Holders of Securities, it shall mail a
copy to the Trustee and each Registrar or Paying Agent, as the case may be, with respect to the
Securities.



          SECTION 11.03. Communication by Holders with Other Holders. Noteholders may
communicate pursuant to TIA § 312(b) with other Noteholders with respect to their rights under this
Indenture or the Notes. The Company, any Subsidiary Guarantor, the Trustee, the Registrar and
anyone else shall have the protection of TIA § 312(c).



          SECTION 11.04. Certificate and Opinion as to Conditions Precedent. Upon any request
or application by the Company to the Trustee to take or refrain from taking 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 stating that, in the opinion of the signers, all conditions precedent, if any,
provided for in this Indenture relating to the proposed action have been complied with; and




     (2) an Opinion of Counsel in form and substance reasonably satisfactory to the Trustee
stating that, in the opinion of such counsel, all such conditions precedent have been
complied with.



          SECTION 11.05. Statements Required in Certificate or Opinion. Each Officers’
Certificate or Opinion of Counsel with respect to compliance with a covenant or condition provided
for in this Indenture shall include:




     (1) a statement that the individual making such Officers’ Certificate or Opinion of
Counsel has read such covenant or condition and the definitions herein relating thereto;




     (2) a brief statement as to the nature and scope of the examination or investigation
upon which the statements or opinions contained in such Officers’ Certificate or Opinion of
Counsel are based;




     (3) a statement that, in the opinion of such individual, he has made such examination
or investigation as is necessary to enable him to express an informed opinion as to whether
or not such covenant or condition has been complied with; and




     (4) a statement as to whether or not, in the opinion of such individual, such covenant
or condition has been complied with.



          SECTION 11.06. When Notes Disregarded. In determining whether the Holders of the
required principal amount of Notes have concurred in any direction, waiver or consent, Notes owned
by the Company or by any Person directly or indirectly controlling or controlled by or under direct
or indirect common control with the Company shall be disregarded and deemed not to be outstanding,
except that, for the



83









 




purpose of determining whether the Trustee shall be protected in relying on any such
direction, waiver or consent, only Notes which the Trustee knows are so owned shall be so
disregarded. Also, subject to the foregoing, only Notes outstanding at the time shall be
considered in any such determination.




          SECTION 11.07. Rules by Trustee, Paying Agent and Registrar. The Trustee may make
reasonable rules for action by or a meeting of Noteholders. The Registrar and the Paying Agent may
make reasonable rules for their functions.



          SECTION 11.08. Legal Holidays. If a payment date is a Legal Holiday, payment shall be
made on the next succeeding day that is not a Legal Holiday, and no interest shall accrue for the
intervening period. If a regular record date is a Legal Holiday, the record date shall not be
affected.



          SECTION 11.09. Governing Law. This Indenture and the Notes shall be governed by, and
construed in accordance with, the laws of the State of New York.



          SECTION 11.10. No Recourse Against Others. A director, officer, employee,
incorporator or stockholder, as such, of the Company or any Subsidiary Guarantor shall not have any
liability for any obligations of the Company under the Notes or this Indenture or of such
Subsidiary Guarantor under its Subsidiary Guarantee, or this Indenture or for any claim based on,
in respect of or by reason of such obligations or their creation. By accepting a Note, each
Noteholder shall waive and release all such liability. The waiver and release shall be part of the
consideration for the issue of the Notes.



          SECTION 11.11. Successors. All agreements of the Company in this Indenture and the
Notes shall bind its successors. All agreements of the Trustee in this Indenture shall bind its
successors.



          SECTION 11.12. Multiple Originals. The parties may sign any number of copies of this
Indenture. Each signed copy shall be an original, but all of them together represent the same
agreement. One signed copy is enough to prove this Indenture.



          SECTION 11.13. Table of Contents; Headings. The table of contents, cross-reference
sheet and headings of the Articles and Sections of this Indenture have been inserted for
convenience of reference only, are not intended to be considered a part hereof and shall not modify
or restrict any of the terms or provisions hereof.



84









 




IN WITNESS WHEREOF, the parties have caused this Indenture to be duly executed as of the date first
written above written.




	 	 	 	 	 
	 	P. H. GLATFELTER COMPANY,



 	 
	 	By:  	/s/ John P. Jacunski 	 
	 	 	Name:  	John P. Jacunski 	 
	 	 	Title:  	Senior Vice President and 
Chief Financial Officer 	 
	 



Signature page to the Indenture







85









 








	 	 	 	 	 
	 	PHG TEA LEAVES, INC.

 	 
	 	By:  	/s/ Thomas G. Jackson
 	 
	 	 	Name:  	Thomas G. Jackson 	 
	 	 	Title:  	President & Secretary 	 
	 
	 	MOLLANVICK, INC.

 	 
	 	By:  	/s/ George B. Amoss
 	 
	 	 	Name:  	George B. Amoss, Jr. 	 
	 	 	Title:  	President 	 
	 



	 	 	 	 	 
	 	THE GLATFELTER PULP WOOD COMPANY

 	 
	 	By:  	/s/ Thomas G. Jackson
 	 
	 	 	Name:  	Thomas G. Jackson 	 
	 	 	Title:  	Secretary 	 
	 
	 	GLATFELTER HOLDINGS LLC

 	 
	 	By:  	/s/ Thomas G. Jackson
 	 
	 	 	Name:  	Thomas G. Jackson 	 
	 	 	Title:  	Secretary 	 
	 



	 	 	 	 	 
	 	HSBC BANK USA, NATIONAL

ASSOCIATION,

as Trustee

 	 
	 	By:  	/s/ Joseph A. Lloret
 	 
	 	 	Name:  	Joseph A. Lloret 	 
	 	 	Title:  	Assistant Vice President 	 
	 



Signature page to the Indenture





 












 








SCHEDULE I




SCHEDULE I




LIST OF SUBSIDIARY GUARANTORS



PHG Tea Leaves, Inc.



Mollanvick, Inc.



The Glatfelter Pulp Wood Company



Glatfelter Holdings LLC







 









 








RULE 144A/REGULATION S APPENDIX




PROVISIONS RELATING TO INITIAL NOTES,

PRIVATE EXCHANGE NOTES

AND EXCHANGE NOTES



1. Definitions



1.1 Definitions



For the purposes of this Appendix the following terms shall have the meanings indicated below:





          “Additional Notes” means Notes (other than the Initial Notes issued on the Issue Date) issued
under this Indenture, as part of the same series as the Initial Notes issued on the Issue Date.



          “Applicable Procedures” means, with respect to any transfer or transaction involving a
Temporary Regulation S Global Note or beneficial interest therein, the rules and procedures of the
Depository for such a Temporary Regulation S Global Note, to the extent applicable to such
transaction and as in effect from time to time.



          “Definitive Note” means a certificated Initial Note or Exchange Note or Private Exchange Note
bearing, if required, the appropriate restricted securities legend set forth in Section 2.3(e).



          “Depository” means The Depository Trust Company, its nominees and their respective successors.



          “Distribution Compliance Period”, with respect to any Notes, means the period of 40
consecutive days beginning on and including the later of (i) the day on which such Notes are first
offered to Persons other than distributors (as defined in Regulation S under the Securities Act) in
reliance on Regulation S and (ii) the issue date with respect to such Notes.



          “Exchange Notes” means (1) the 71/8% Senior Notes due 2016 issued pursuant to the Indenture in
connection with a Registered Exchange Offer and (2) Additional Notes, if any, issued pursuant to a
registration statement filed with the SEC under the Securities Act.



          “Initial Notes” means (1) $100,000,000 aggregate principal amount of 71/8% Senior Notes due 2016
issued on the Issue Date and (2) Additional Notes, if any, issued in a transaction exempt from the
registration requirements of the Securities Act.



          “Initial Purchaser” means (1) with respect to the Initial Notes issued on the Issue Date,
Credit Suisse Securities (USA) LLC, and (2) with respect to each issuance of



2









 




Additional Notes, the Persons purchasing such Additional Notes under the related Purchase
Agreement.




          “Notes Custodian” means the custodian with respect to a Global Note (as appointed by the
Depository), or any successor Person thereto and shall initially be the Trustee.



          “Private Exchange” means the offer by the Company, pursuant to a Registration Rights
Agreement, to the Initial Purchaser to issue and deliver to each Initial Purchaser, in exchange for
the Initial Notes held by the Initial Purchaser as part of its initial distribution, a like
aggregate principal amount of Private Exchange Notes.



          “Private Exchange Notes” means any 71/8% Senior Notes due 2016 issued in connection with a
Private Exchange.



          “Purchase Agreement” means (1) with respect to the Initial Notes issued on the Issue Date, the
Purchase Agreement dated January 29, 2010, among the Company, the Subsidiary Guarantors and the
Initial Purchaser and (2) with respect to each issuance of Additional Notes, the purchase agreement
or underwriting agreement among the Company, the Subsidiary Guarantors and the Persons purchasing
such Additional Notes.



          “QIB” means a “qualified institutional buyer” as defined in Rule 144A.



          “Registered Exchange Offer” means the offer by the Company, pursuant to a Registration Rights
Agreement, to certain Holders of Initial Notes, to issue and deliver to such Holders, in exchange
for the Initial Notes, a like aggregate principal amount of Exchange Notes registered under the
Securities Act.



          “Registration Rights Agreement” means (1) with respect to the Initial Notes issued on the
Issue Date, the Registration Rights Agreement dated February 5, 2010, among the Company, the
Subsidiary Guarantors and the Initial Purchaser and (2) with respect to each issuance of Additional
Notes issued in a transaction exempt from the registration requirements of the Securities Act, the
registration rights agreement, if any, among the Company, the Subsidiary Guarantors and the Persons
purchasing such Additional Notes under the related Purchase Agreement.



          “Rule 144A Notes” means all Notes offered and sold to QIBs in reliance on Rule 144A.



          “Notes” means the Initial Notes, the Exchange Notes and the Private Exchange Notes, treated as
a single class.



          “Securities Act” means the Securities Act of 1933.



          “Shelf Registration Statement” means the registration statement issued by the Company in
connection with the offer and sale of Initial Notes or Private Exchange Notes pursuant to a
Registration Rights Agreement.



3









 





          “Transfer Restricted Notes” means Notes that bear or are required to bear the legend relating
to restrictions on transfer relating to the Securities Act set forth in Section 2.3(e) hereto.



     1.2 Other Definitions



	 	 	 	 	 
	 	 	Defined in
	                       Term	 	Section:
	“Agent Members”

	 	 	2.1	(b)
	“Global Notes”

	 	 	2.1	(a)
	“Permanent Regulation S Global Note”

	 	 	2.1	(a)
	“Regulation S”

	 	 	2.1	(a)
	“Regulation S Global Note”

	 	 	2.1	(a)
	“Rule 144A”

	 	 	2.1	(a)
	“Rule 144A Global Note”

	 	 	2.1	(a)
	“Temporary Regulation S Global Note”

	 	 	2.1	(a)






     2. The Notes.



     2.1 (a) Form and Dating. The Initial Notes will be offered and sold by the Company
pursuant to a Purchase Agreement. The Initial Notes will be resold initially only to (i) QIBs in
reliance on Rule 144A under the Securities Act (“Rule 144A”) and (ii) Persons other than U.S.
Persons (as defined in Regulation S) in reliance on Regulation S under the Securities Act
(“Regulation S”). Initial Notes may thereafter be transferred to, among others, QIBs, and
purchasers in reliance on Regulation S, subject to the restrictions on transfer set forth herein.
Initial Notes initially resold pursuant to Rule 144A shall be issued initially in the form of one
or more permanent global Notes in definitive, fully registered form (collectively, the “Rule 144A
Global Note”); and Initial Notes initially resold pursuant to Regulation S shall be issued
initially in the form of one or more temporary global securities in fully registered form
(collectively, the “Temporary Regulation S Global Note”), in each case without interest coupons and
with the global securities legend and the applicable restricted securities legend set forth in
Exhibit 1 hereto, which shall be deposited on behalf of the purchasers of the Initial Notes
represented thereby with the Notes Custodian and registered in the name of the Depository or a
nominee of the Depository, duly executed by the Company and authenticated by the Trustee as
provided in this Indenture. Except as set forth in this Section 2.1(a), beneficial ownership
interests in the Temporary Regulation S Global Note will not be exchangeable for interests in the
Rule 144A Global Note, a permanent global security (the “Permanent Regulation S Global Note”, and
together with the Temporary Regulation S Global Note, the “Regulation S Global Note”) or any other
Note prior to the expiration of the Distribution Compliance Period and then, after the expiration
of the Distribution Compliance Period, may be exchanged for interests in a Rule 144A Global Note or
the Permanent Regulation S Global Note only upon certification in form reasonably satisfactory to
the Trustee that beneficial ownership interests in such Temporary Regulation S Global Note are
owned either by non-U.S. persons or U.S. persons who purchased such interests in a transaction that
did not require registration under the Securities Act.



4









 





          Beneficial interests in Temporary Regulation S Global Notes may be exchanged for interests in
Rule 144A Global Notes if (1) such exchange occurs in connection with a transfer of Notes in
compliance with Rule 144A and (2) the transferor of the beneficial interest in the Temporary
Regulation S Global Note first delivers to the Trustee a written certificate (in a form
satisfactory to the Trustee) to the effect that the beneficial interest in the Temporary Regulation
S Global Note is being transferred to a Person (a) who the transferor reasonably believes to be a
QIB, (b) purchasing for its own account or the account of a QIB in a transaction meeting the
requirements of Rule 144A, and (c) in accordance with all applicable securities laws of the States
of the United States and other jurisdictions.



          Beneficial interests in a Rule 144A Global Note may be transferred to a Person who takes
delivery in the form of an interest in a Regulation S Global Note, whether before or after the
expiration of the Distribution Compliance Period, only if the transferor first delivers to the
Trustee a written certificate (in the form provided in the Indenture) to the effect that such
transfer is being made in accordance with Rule 903 or 904 of Regulation S or Rule 144 (if
applicable).



          The Rule 144A Global Note, the Temporary Regulation S Global Note and the Permanent Regulation
S Global Note are collectively referred to herein as “Global Notes”. The aggregate principal
amount of the Global Notes may from time to time be increased or decreased by adjustments made on
the records of the Trustee and the Depository or its nominee as hereinafter provided.



          (b) Book-Entry Provisions. This Section 2.1(b) shall apply only to a Global Note
deposited with or on behalf of the Depository.



          The Company shall execute and the Trustee shall, in accordance with this Section 2.1(b),
authenticate and deliver initially one or more Global Notes that (a) shall be registered in the
name of the Depository for such Global Note or Global Notes or the nominee of such Depository and
(b) shall be delivered by the Trustee to such Depository or pursuant to such Depository’s
instructions or held by the Trustee as custodian for the Depository.



          Members of, or participants in, the Depository (“Agent Members”) shall have no rights under
this Indenture with respect to any Global Note held on their behalf by the Depository or by the
Trustee as the custodian of the Depository or under such Global Note, and the Company, the Trustee
and any agent of the Company or the Trustee shall be entitled to treat the Depository as the
absolute owner of such Global Note for all purposes whatsoever. Notwithstanding the foregoing,
nothing herein shall prevent the Company, the Trustee or any agent of the Company or the Trustee
from giving effect to any written certification, proxy or other authorization furnished by the
Depository or impair, as between the Depository and its Agent Members, the operation of customary
practices of such Depository governing the exercise of the rights of a holder of a beneficial
interest in any Global Note.




5












 





          (c) Definitive Notes. Except as provided in this Section 2.1 or Section 2.3 or 2.4,
owners of beneficial interests in Global Notes shall not be entitled to receive physical delivery
of Definitive Notes.




     2.2 Authentication. The Trustee shall authenticate and deliver: (1) on the Issue
Date, an aggregate principal amount of $100 million 71/8% Senior Notes due 2016, (2) any Additional
Notes for an original issue in an aggregate principal amount specified in the written order of the
Company pursuant to Section 2.02 of the Indenture and (3) Exchange Notes or Private Exchange Notes
for issue only in a Registered Exchange Offer or a Private Exchange, respectively, pursuant to a
Registration Rights Agreement, for a like principal amount of Initial Notes in each case upon a
written order of the Company signed by at least one Officer of the Company. Such order shall
specify the amount of the Notes to be authenticated and the date on which the original issue of
Notes is to be authenticated and, in the case of any issuance of Additional Notes pursuant to
Section 2.14 of the Indenture, shall certify that such issuance is in compliance with Section 4.03
of the Indenture.



     2.3 Transfer and Exchange.



          (a) Transfer and Exchange of Definitive Notes. When Definitive Notes are presented
to the Registrar with a request:





	 	(x)	 	to register the transfer of such Definitive Notes; or
	 
	 	(y)	 	to exchange such Definitive Notes for an equal principal
amount of Definitive Notes of other authorized denominations,




the Registrar shall register the transfer or make the exchange as requested if its reasonable
requirements for such transaction are met; provided, however, that the Definitive
Notes surrendered for transfer or exchange:





     (i) shall be duly endorsed or accompanied by a written instrument of transfer in form
reasonably satisfactory to the Company and the Registrar, duly executed by the Holder
thereof or its attorney duly authorized in writing; and




     (ii) if such Definitive Notes are not required to bear a restricted securities legend,
they are being transferred or exchanged pursuant to an effective registration statement
under the Securities Act, pursuant to Section 2.3(b) or pursuant to clause (A), (B) or (C)
below, and are accompanied by the following additional information and documents, as
applicable:




     (a) if such Definitive Notes are being delivered to the Registrar by a Holder
for registration in the name of such Holder, without transfer, a certification from
such Holder to that effect; or




     (b) if such Definitive Notes are being transferred to the Company, a
certification to that effect; or



6









 






     (c) if such Definitive Notes are being transferred (x) pursuant to an
exemption from registration in accordance with Rule 144A, Regulation S or Rule 144
under the Securities Act; or (y) in reliance upon another exemption from the
requirements of the Securities Act: (i) a certification to that effect (in the form
set forth on the reverse of the Note) and (ii) if the Company so requests, an
opinion of counsel or other evidence reasonably satisfactory to it as to the
compliance with the restrictions set forth in the legend set forth in Section
2.3(e)(i).



          (b) Restrictions on Transfer of a Definitive Note for a Beneficial Interest in a Global
Note. A Definitive Note may not be exchanged for a beneficial interest in a Rule 144A Global
Note or a Permanent Regulation S Global Note except upon satisfaction of the requirements set forth
below. Upon receipt by the Trustee of a Definitive Note, duly endorsed or accompanied by
appropriate instruments of transfer, in form satisfactory to the Trustee, together with:





     (i) certification, in the form set forth on the reverse of the Note, that such
Definitive Note is either (A) being transferred to a QIB in accordance with Rule
144A or (B) being transferred after expiration of the Distribution Compliance
Period by a Person who initially purchased such Note in reliance on Regulation S to
a buyer who elects to hold its interest in such Note in the form of a beneficial
interest in the Permanent Regulation S Global Note; and




     (ii) written instructions directing the Trustee to make, or to direct the
Notes Custodian to make, an adjustment on its books and records with respect to
such Rule 144A Global Note (in the case of a transfer pursuant to clause (b)(i)(A))
or Permanent Regulation S Global Note (in the case of a transfer pursuant to clause
(b)(i)(B)) to reflect an increase in the aggregate principal amount of the Notes
represented by the Rule 144A Global Note or Permanent Regulation S Global Note, as
applicable, such instructions to contain information regarding the Depository
account to be credited with such increase,


then the Trustee shall cancel such Definitive Note and cause, or direct the Notes Custodian to
cause, in accordance with the standing instructions and procedures existing between the Depository
and the Notes Custodian, the aggregate principal amount of Notes represented by the Rule 144A
Global Note or Permanent Regulation S Global Note, as applicable, to be increased by the aggregate
principal amount of the Definitive Note to be exchanged and shall credit or cause to be credited to
the account of the Person specified in such instructions a beneficial interest in the Rule 144A
Global Note or Permanent Regulation S Global Note, as applicable, equal to the principal amount of
the Definitive Note so canceled. If no Rule 144A Global Notes or Permanent Regulation S Global
Notes, as applicable, are then outstanding, the Company shall issue and the Trustee shall
authenticate, upon written order of the Company in the form of an Officers’ Certificate of the
Company, a new Rule 144A Global Note or Permanent Regulation S Global Note, as applicable, in the
appropriate principal amount.







7









 








          (c) Transfer and Exchange of Global Notes.





     (i) The transfer and exchange of Global Notes or beneficial interests therein
shall be effected through the Depository, in accordance with this Indenture
(including applicable restrictions on transfer set forth herein, if any) and the
procedures of the Depository therefor. A transferor of a beneficial interest in a
Global Note shall deliver to the Registrar a written order given in accordance with
the Depository’s procedures containing information regarding the participant
account of the Depository to be credited with a beneficial interest in the Global
Note. The Registrar shall, in accordance with such instructions instruct the
Depository to credit to the account of the Person specified in such instructions a
beneficial interest in the Global Note and to debit the account of the Person
making the transfer the beneficial interest in the Global Note being transferred.




     (ii) If the proposed transfer is a transfer of a beneficial interest in one
Global Note to a beneficial interest in another Global Note, the Registrar shall
reflect on its books and records the date and an increase in the principal amount
of the Global Note to which such interest is being transferred in an amount equal
to the principal amount of the interest to be so transferred, and the Registrar
shall reflect on its books and records the date and a corresponding decrease in the
principal amount of the Global Note from which such interest is being transferred.




     (iii) Notwithstanding any other provisions of this Appendix (other than the
provisions set forth in Section 2.4), a Global Note may not be transferred as a
whole except by the Depository to a nominee of the Depository or by a nominee of
the Depository to the Depository or another nominee of the Depository or by the
Depository or any such nominee to a successor Depository or a nominee of such
successor Depository.




     (iv) In the event that (a) Global Note is exchanged for Definitive Notes
pursuant to Section 2.4 of this Appendix, prior to the consummation of a Registered
Exchange Offer or the effectiveness of a Shelf Registration Statement with respect
to such Notes, such Notes may be exchanged only in accordance with such procedures
as are substantially consistent with the provisions of this Section 2.3 (including
the certification requirements set forth on the reverse of the Initial Notes
intended to ensure that such transfers comply with Rule 144A, Regulation S or
another applicable exemption under the Securities Act, as the case may be) and such
other procedures as may from time to time be adopted by the Company.



          (d) Restrictions on Transfer of Temporary Regulation S Global Notes. During the
Distribution Compliance Period, beneficial ownership interests in Temporary Regulation S Global
Notes may only be sold, pledged or transferred in accordance with the Applicable Procedures and
only (i) to the Company, (ii) in an offshore transaction in accordance with Regulation S (other
than a transaction resulting in an exchange for an






8









 







interest in a Permanent Regulation S Global Note), (iii) pursuant to Section 2.1 or (iv)
pursuant to an effective registration statement under the Securities Act, in each case in
accordance with any applicable securities laws of any State of the United States.




          (e) Legends.





     (i) Except as permitted by the following paragraphs (ii), (iii) and (iv),
each Note certificate evidencing the Global Notes (and all Notes issued in exchange
therefor or in substitution thereof), in the case of Notes offered otherwise than
in reliance on Regulation S shall bear a legend in substantially the following
form:




THIS NOTE (OR ITS PREDECESSOR) WAS ORIGINALLY ISSUED IN A TRANSACTION EXEMPT FROM
REGISTRATION UNDER THE UNITED STATES SECURITIES ACT OF 1933 (THE “SECURITIES ACT”),
AND THIS NOTE MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED IN THE ABSENCE OF
SUCH REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM. EACH PURCHASER OF THIS
NOTE IS HEREBY NOTIFIED THAT THE SELLER OF THIS NOTE MAY BE RELYING ON THE
EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE SECURITIES ACT PROVIDED BY RULE
144A THEREUNDER.




THE HOLDER OF THIS NOTE AGREES FOR THE BENEFIT OF THE COMPANY THAT (A) THIS NOTE
MAY BE OFFERED, RESOLD, PLEDGED OR OTHERWISE TRANSFERRED, ONLY (I) TO P.H
GLATFELTER COMPANY OR ANY WHOLLY OWNED SUBSIDIARY THEREOF, (II) IN THE UNITED
STATES TO A PERSON WHOM THE SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL
BUYER (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) IN A TRANSACTION MEETING
THE REQUIREMENTS OF RULE 144A, (III) OUTSIDE THE UNITED STATES IN AN OFFSHORE
TRANSACTION IN ACCORDANCE WITH RULE 904 UNDER THE SECURITIES ACT, (IV) PURSUANT TO
EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY RULE 144
THEREUNDER (IF AVAILABLE) OR (V) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT
UNDER THE SECURITIES ACT, IN EACH OF CASES (I) THROUGH (V) IN ACCORDANCE WITH ANY
APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES, AND (B) THE HOLDER
WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER OF THIS NOTE
FROM IT OF THE RESALE RESTRICTIONS REFERRED TO IN (A) ABOVE.




     Each certificate evidencing a Note offered in reliance on Regulation S shall, in
addition to the foregoing, bear a legend in substantially the following form:



9









 






THIS NOTE (OR ITS PREDECESSOR) WAS ORIGINALLY ISSUED IN A TRANSACTION ORIGINALLY
EXEMPT FROM REGISTRATION UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE
“SECURITIES ACT”), AND MAY NOT BE TRANSFERRED IN THE UNITED STATES OR TO, OR FOR
THE ACCOUNT OR BENEFIT OF, ANY U.S. PERSON EXCEPT PURSUANT TO AN AVAILABLE
EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND ALL
APPLICABLE STATE SECURITIES LAWS. TERMS USED ABOVE HAVE THE MEANINGS GIVEN TO THEM
IN REGULATION S UNDER THE SECURITIES ACT.




Each Definitive Note shall also bear the following additional legend:




IN CONNECTION WITH ANY TRANSFER, THE HOLDER WILL DELIVER TO THE REGISTRAR AND
TRANSFER AGENT SUCH CERTIFICATES AND OTHER INFORMATION AS SUCH TRANSFER AGENT MAY
REASONABLY REQUIRE TO CONFIRM THAT THE TRANSFER COMPLIES WITH THE FOREGOING
RESTRICTIONS.




     (ii) Upon any sale or transfer of a Transfer Restricted Note (including any
Transfer Restricted Note represented by a Global Note) pursuant to Rule 144 under
the Securities Act, the Registrar shall permit the transferee thereof to exchange
such Transfer Restricted Note for a certificated Note that does not bear the legend
set forth above and rescind any restriction on the transfer of such Transfer
Restricted Note, if the transferor thereof certifies in writing to the Registrar
that such sale or transfer was made in reliance on Rule 144 (such certification to
be in the form set forth on the reverse of the Note).




     (iii) After a transfer of any Initial Notes or Private Exchange Notes
pursuant to and during the period of the effectiveness of a Shelf Registration
Statement with respect to such Initial Notes or Private Exchange Notes, as the case
may be, all requirements pertaining to legends on such Initial Note or such Private
Exchange Note will cease to apply, the requirements requiring any such Initial Note
or such Private Exchange Note issued to certain Holders be issued in global form
will cease to apply, and a certificated Initial Note or Private Exchange Note or an
Initial Note or Private Exchange Note in global form, in each case without
restrictive transfer legends, will be available to the transferee of the Holder of
such Initial Notes or Private Exchange Notes upon exchange of such transferring
Holder’s certificated Initial Note or Private Exchange Note or directions to
transfer such Holder’s interest in the Global Note, as applicable.



10









 






     (iv) Upon the consummation of a Registered Exchange Offer with respect to the
Initial Notes, all requirements pertaining to such Initial Notes that Initial Notes
issued to certain Holders be issued in global form will still apply with respect to
Holders of such Initial Notes that do not exchange their Initial Notes, and
Exchange Notes in certificated or global form, in each case without the restricted
securities legend set forth in Exhibit 1 hereto will be available to Holders that
exchange such Initial Notes in such Registered Exchange Offer.




     (v) Upon the consummation of a Private Exchange with respect to the Initial
Notes, all requirements pertaining to such Initial Notes that Initial Notes issued
to certain Holders be issued in global form will still apply with respect to
Holders of such Initial Notes that do not exchange their Initial Notes, and Private
Exchange Notes in global form with the global securities legend and the applicable
restricted securities legend set forth in Exhibit 1 hereto will be available to
Holders that exchange such Initial Notes in such Private Exchange.




     (vi) OID Legend. Each Note certificate evidencing the Global Notes (and all
Notes issued in exchange therefor or in substitution thereof) that has more than a
de minimis about of original issue discount for U.S. Federal income tax purposes
shall bear a legend in substantially the following form:




THIS NOTE IS ISSUED WITH ORIGINAL ISSUE DISCOUNT FOR PURPOSES OF SECTION 1271 ET
SEQ. OF THE INTERNAL REVENUE CODE. A HOLDER MAY OBTAIN THE ISSUE PRICE, AMOUNT OF
ORIGINAL ISSUE DISCOUNT, ISSUE DATE AND YIELD TO MATURITY FOR SUCH NOTES BY
SUBMITTING A WRITTEN REQUEST FOR SUCH INFORMATION TO THE ISSUER AT THE FOLLOWING
ADDRESS: P. H. GLATFELTER COMPANY, SUITE 500, 96 SOUTH GEORGE STREET, YORK, PA
17401 ATTENTION: INVESTOR RELATIONS.



          (f) Cancellation or Adjustment of Global Note. At such time as all beneficial
interests in a Global Note have either been exchanged for Definitive Notes, redeemed, purchased or
canceled, such Global Note shall be returned to the Depository for cancellation or retained and
canceled by the Trustee. At any time prior to such cancellation, if any beneficial interest in a
Global Note is exchanged for certificated Notes, redeemed, purchased or canceled, the principal
amount of Notes represented by such Global Note shall be reduced and an adjustment shall be made on
the books and records of the Trustee (if it is then the Notes Custodian for such Global Note) with
respect to such Global Note, by the Trustee or the Notes Custodian, to reflect such reduction.







11









 








          (g) No Obligation of the Trustee.





     (i) The Trustee shall have no responsibility or obligation to any beneficial
owner of a Global Note, a member of, or a participant in the Depository or other
Person with respect to the accuracy of the records of the Depository or its nominee
or of any participant or member thereof, with respect to any ownership interest in
the Notes or with respect to the delivery to any participant, member, beneficial
owner or other Person (other than the Depository) of any notice (including any
notice of redemption) or the payment of any amount, under or with respect to such
Notes. All notices and communications to be given to the Holders and all payments
to be made to Holders under the Notes shall be given or made only to or upon the
order of the registered Holders (which shall be the Depository or its nominee in
the case of a Global Note). The rights of beneficial owners in any Global Note
shall be exercised only through the Depository subject to the applicable rules and
procedures of the Depository. The Trustee may rely and shall be fully protected in
relying upon information furnished by the Depository with respect to its members,
participants and any beneficial owners.




     (ii) The Trustee shall have no obligation or duty to monitor, determine or
inquire as to compliance with any restrictions on transfer imposed under this
Indenture or under applicable law with respect to any transfer of any interest in
any Note (including any transfers between or among Depository participants, members
or beneficial owners in any Global Note) other than to require delivery of such
certificates and other documentation or evidence as are expressly required by, and
to do so if and when expressly required by, the terms of this Indenture, and to
examine the same to determine substantial compliance as to form with the express
requirements hereof.



     2.4 Definitive Notes.



          (a) A Global Note deposited with the Depository or with the Trustee as Notes Custodian for
the Depository pursuant to Section 2.1 shall be transferred to the beneficial owners thereof in the
form of Definitive Notes in an aggregate principal amount equal to the principal amount of such
Global Note, in exchange for such Global Note, only if such transfer complies with Section 2.3
hereof and (i) the Depository notifies the Company that it is unwilling or unable to continue as
Depository for such Global Note and the Depository fails to appoint a successor depository or if at
any time such Depository ceases to be a “clearing agency” registered under the Exchange Act, in
either case, and a successor depository is not appointed by the Company within 90 days of such
notice, or (ii) an Event of Default has occurred and is continuing or (iii) the Company, in its
sole discretion, notifies the Trustee in writing that it elects to cause the issuance of Definitive
Notes under this Indenture.







12









 








          (b) Any Global Note that is transferable to the beneficial owners thereof pursuant to this
Section 2.4 shall be surrendered by the Depository to the Trustee at its office or agency in the
Borough of Manhattan, The City of New York, to be so transferred, in whole or from time to time in
part, without charge, and the Trustee shall authenticate and deliver, upon such transfer of each
portion of such Global Note, an equal aggregate principal amount of Definitive Notes of authorized
denominations. Any portion of a Global Note transferred pursuant to this Section 2.4 shall be
executed, authenticated and delivered only in denominations of $2,000 principal amount and any
integral multiples of $1,000 in excess of $2,000 and registered in such names as the Depository
shall direct. Any Definitive Note delivered in exchange for an interest in the Transfer Restricted
Note shall, except as otherwise provided by Section 2.3(e) hereof, bear the applicable restricted
securities legend and definitive securities legend set forth in Exhibit 1 hereto.




          (c) Subject to the provisions of Section 2.4(b) hereof, the registered Holder of a Global
Note shall be entitled to grant proxies and otherwise authorize any Person, including Agent Members
and Persons that may hold interests through Agent Members, to take any action which a Holder is
entitled to take under this Indenture or the Notes.




          (d) In the event of the occurrence of one of the events specified in Section 2.4(a) hereof,
the Company shall promptly make available to the Trustee a reasonable supply of Definitive Notes in
definitive, fully registered form without interest coupons. In the event that such Definitive
Notes are not issued, the Company expressly acknowledges, with respect to the right of any Holder
to pursue a remedy pursuant to Section 6.06, the right of any beneficial owner of Notes to pursue
such remedy with respect to the portion of the Global Note that represents such beneficial owner’s
Notes as if such Definitive Notes had been issued.









13









 








EXHIBIT 1

to

RULE 144A/REGULATION S APPENDIX




[FORM OF FACE OF INITIAL NOTE]




[Global Notes Legend]



          UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST
COMPANY, A NEW YORK CORPORATION (“DTC”), NEW YORK, NEW YORK, 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 IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY
PAYMENT IS MADE TO CEDE & CO., OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC) ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY
PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.




          TRANSFERS OF THIS GLOBAL NOTE SHALL BE LIMITED TO TRANSFERS IN WHOLE, BUT NOT IN PART, TO
NOMINEES OF DTC OR TO A SUCCESSOR THEREOF OR SUCH SUCCESSOR’S NOMINEE AND TRANSFERS OF PORTIONS OF
THIS GLOBAL NOTE SHALL BE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH
IN THE INDENTURE REFERRED TO ON THE REVERSE HEREOF.




          [[FOR REGULATION S GLOBAL NOTE ONLY] UNTIL 40 DAYS AFTER THE LATER OF COMMENCEMENT OR
COMPLETION OF THE OFFERING, AN OFFER OR SALE OF NOTES WITHIN THE UNITED STATES BY A DEALER (AS
DEFINED IN THE SECURITIES ACT) MAY VIOLATE THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT IF
SUCH OFFER OR SALE IS MADE OTHERWISE THAN IN ACCORDANCE WITH RULE 144A THEREUNDER.]




[Restricted Notes Legend for Notes offered otherwise than in Reliance on Regulation S]




          THIS NOTE (OR ITS PREDECESSOR) WAS ORIGINALLY ISSUED IN A TRANSACTION EXEMPT FROM REGISTRATION
UNDER THE UNITED STATES SECURITIES ACT OF 1933 (THE “SECURITIES ACT”), AND THIS NOTE MAY NOT BE
OFFERED, SOLD OR OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE
EXEMPTION THEREFROM. EACH PURCHASER OF THIS NOTE IS HEREBY NOTIFIED THAT THE SELLER OF THIS NOTE
MAY BE RELYING ON THE EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE SECURITIES ACT PROVIDED BY
RULE 144A THEREUNDER.







 









 







THE HOLDER OF THIS NOTE AGREES FOR THE BENEFIT OF THE COMPANY THAT (A) THIS NOTE MAY BE OFFERED,
RESOLD, PLEDGED OR OTHERWISE TRANSFERRED, ONLY (I) TO P. H. GLATFELTER COMPANY OR ANY WHOLLY-OWNED
SUBSIDIARY THEREOF, (II) IN THE UNITED STATES TO A PERSON WHOM THE SELLER REASONABLY BELIEVES IS A
QUALIFIED INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) IN A TRANSACTION
MEETING THE REQUIREMENTS OF RULE 144A, (III) OUTSIDE THE UNITED STATES IN AN OFFSHORE TRANSACTION
IN ACCORDANCE WITH RULE 904 UNDER THE SECURITIES ACT, (IV) PURSUANT TO AN EXEMPTION FROM
REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY RULE 144 THEREUNDER (IF AVAILABLE) OR (V)
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT, IN EACH OF CASES (I)
THROUGH (V) IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES,
AND (B) THE HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER OF THIS
NOTE FROM IT OF THE RESALE RESTRICTIONS REFERRED TO IN (A) ABOVE.




[Restricted Notes Legend for Notes Offered in Reliance on Regulation S]




          THIS NOTE (OR ITS PREDECESSOR) WAS ORIGINALLY ISSUED IN A TRANSACTION ORIGINALLY EXEMPT FROM
REGISTRATION UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND
MAY NOT BE TRANSFERRED IN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, ANY U.S.
PERSON EXCEPT PURSUANT TO AN AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT AND ALL APPLICABLE STATE SECURITIES LAWS. TERMS USED ABOVE HAVE THE MEANINGS GIVEN
TO THEM IN REGULATION S UNDER THE SECURITIES ACT.




[Temporary Regulation S Global Note Legend]




          EXCEPT AS SET FORTH BELOW, BENEFICIAL OWNERSHIP INTERESTS IN THIS TEMPORARY REGULATION S
GLOBAL NOTE WILL NOT BE EXCHANGEABLE FOR INTERESTS IN THE PERMANENT REGULATION S GLOBAL NOTE OR ANY
OTHER NOTE REPRESENTING AN INTEREST IN THE NOTES REPRESENTED HEREBY WHICH DO NOT CONTAIN A LEGEND
CONTAINING RESTRICTIONS ON TRANSFER, UNTIL THE EXPIRATION OF THE “40-DAY DISTRIBUTION COMPLIANCE
PERIOD” (WITHIN THE MEANING OF RULE 903(b)(2) OF REGULATION S UNDER THE SECURITIES ACT) AND THEN
ONLY UPON CERTIFICATION IN FORM REASONABLY SATISFACTORY TO THE TRUSTEE THAT SUCH BENEFICIAL
INTERESTS ARE OWNED EITHER BY NON-U.S. PERSONS OR U.S. PERSONS WHO PURCHASED SUCH INTERESTS IN A
TRANSACTION THAT DID NOT REQUIRE REGISTRATION UNDER THE SECURITIES ACT. DURING SUCH 40-DAY
DISTRIBUTION COMPLIANCE PERIOD, BENEFICIAL OWNERSHIP INTERESTS IN THIS






2









 







TEMPORARY REGULATION S GLOBAL NOTE MAY ONLY BE SOLD, PLEDGED OR TRANSFERRED (I) TO THE
COMPANY, (II) OUTSIDE THE UNITED STATES IN A TRANSACTION IN ACCORDANCE WITH RULE 904 OF REGULATION
S UNDER THE SECURITIES ACT, (III) IN ACCORDANCE WITH RULE 144A UNDER THE SECURITIES ACT, OR (IV)
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT, IN EACH OF CASES (I)
THROUGH (IV) IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES.
HOLDERS OF INTERESTS IN THIS TEMPORARY REGULATION S GLOBAL NOTE WILL NOTIFY ANY PURCHASER OF THIS
NOTE OF THE RESALE RESTRICTIONS REFERRED TO ABOVE, IF THEN APPLICABLE.




          AFTER THE EXPIRATION OF THE DISTRIBUTION COMPLIANCE PERIOD BENEFICIAL INTERESTS IN THIS
TEMPORARY REGULATION S GLOBAL NOTE MAY BE EXCHANGED FOR INTERESTS IN A RULE 144A GLOBAL NOTE ONLY
IF (1) SUCH EXCHANGE OCCURS IN CONNECTION WITH A TRANSFER OF THE SECURITIES IN COMPLIANCE WITH RULE
144A AND (2) THE TRANSFEROR OF THE REGULATION S GLOBAL NOTE FIRST DELIVERS TO THE TRUSTEE A WRITTEN
CERTIFICATE (IN THE FORM ATTACHED TO THIS CERTIFICATE) TO THE EFFECT THAT THE REGULATION S GLOBAL
NOTE IS BEING TRANSFERRED (A) TO A PERSON WHO THE TRANSFEROR REASONABLY BELIEVES TO BE A QUALIFIED
INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE 144A, (B) TO A PERSON WHO IS PURCHASING FOR ITS OWN
ACCOUNT OR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER IN A TRANSACTION MEETING THE REQUIREMENTS
OF RULE 144A, AND (C) IN ACCORDANCE WITH ALL APPLICABLE SECURITIES LAWS OF THE STATES OF THE UNITED
STATES AND OTHER JURISDICTIONS.




          BENEFICIAL INTERESTS IN A RULE 144A GLOBAL NOTE MAY BE TRANSFERRED TO A PERSON WHO TAKES
DELIVERY IN THE FORM OF AN INTEREST IN THE REGULATION S GLOBAL NOTE, WHETHER BEFORE OR AFTER THE
EXPIRATION OF THE 40-DAY DISTRIBUTION COMPLIANCE PERIOD, ONLY IF THE TRANSFEROR FIRST DELIVERS TO
THE TRUSTEE A WRITTEN CERTIFICATE (IN THE FORM ATTACHED TO THIS CERTIFICATE) TO THE EFFECT THAT
SUCH TRANSFER IS BEING MADE IN ACCORDANCE WITH RULE 904 OF REGULATION S OR RULE 144 (IF AVAILABLE).




[Definitive Notes Legend]




          IN CONNECTION WITH ANY TRANSFER, THE HOLDER WILL DELIVER TO THE REGISTRAR AND TRANSFER AGENT
SUCH CERTIFICATES AND OTHER INFORMATION AS SUCH TRANSFER AGENT MAY REASONABLY REQUIRE TO CONFIRM
THAT THE TRANSFER COMPLIES WITH THE FOREGOING RESTRICTIONS.







3









 









THIS NOTE IS ISSUED WITH ORIGINAL ISSUE DISCOUNT FOR PURPOSES OF SECTION 1271 ET
SEQ. OF THE INTERNAL REVENUE CODE. A HOLDER MAY OBTAIN THE ISSUE PRICE, AMOUNT OF
ORIGINAL ISSUE DISCOUNT, ISSUE DATE AND YIELD TO MATURITY FOR SUCH NOTES BY
SUBMITTING A WRITTEN REQUEST FOR SUCH INFORMATION TO THE ISSUER AT THE FOLLOWING
ADDRESS: P. H. GLATFELTER COMPANY, SUITE 500, 96 SOUTH GEORGE STREET, YORK, PA
17401 ATTENTION: INVESTOR RELATIONS.



			
	No.     
        
       
	 	$ ___






[as revised by the “Schedule of Increases or

Decreases in Global Note”, attached hereto]1




71/8% Senior Notes due 2016




          P. H. Glatfelter Company (the “Issuer” or the “Company”), a Pennsylvania corporation, promises
to pay to [         
      
        
               
      
          
           
     ], or registered assigns, the principal sum of [     
        
            
        
           
 ] Dollars on May 1, 2016.




          Interest Payment Dates: May 1 and November 1.




          Record Dates: April 15 and October 15.




          Additional provisions of this Note are set forth on the other side of this Note.



Dated:






 




			
	1	 	If this Note is a Global Note, insert this
provision.




4









 









IN WITNESS WHEREOF, the Issuer has caused this Note to be signed manually or by facsimile by its
duly authorized officers.




	 	 	 	 	 
	 	P. H. GLATFELTER COMPANY



 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 



	 	 	 	 	 
	TRUSTEE’S CERTIFICATE OF AUTHENTICATION
	 
	 	 	 	 
	HSBC BANK USA, NATIONAL ASSOCIATION,
	          as Trustee, certifies that this is one of


          the Notes referred to in the Indenture.
	 
	 	 	 	 
	By:
	 	 	 	 
	 

	 	 	 	 
	 

	 	Authorized Signatory	 	 







5











 





[FORM OF REVERSE SIDE OF INITIAL NOTE]




71/8% Senior Note due 2016



1. Interest




     P. H. Glatfelter Company, a Pennsylvania corporation (such corporation, and its successors and
assigns under the Indenture hereinafter referred to, being herein called the “Issuer” or the
“Company”), promises to pay interest on the principal amount of this Note at the rate per annum
shown above; provided, however, that if a Registration Default (as defined in the Registration
Rights Agreement) occurs, additional interest will accrue on this Note at a rate of 0.50% per annum
(increasing by an additional 0.50% per annum after each consecutive 90-day period that occurs after
the date on which such Registration default occurs up to a maximum additional interest rate of
1.00%) from and including the date on which any such Registration Default shall occur to but
excluding the date on which all Registration Defaults have been cured. The Company will pay
interest semiannually on May 1 and November 1 of each year, commencing May 1, 2010. 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 November 1, 2009. The Notes are also subject to special mandatory redemption
at a redemption price equal to the initial aggregate offering price of the notes, plus accrued and
unpaid interest and accreted original issue discount to, but not including, the special mandatory
redemption date. Interest will be computed on the basis of a 360-day year of twelve 30-day months.


2. Method of Payment




     The Company will pay interest on the Notes (except defaulted interest) to the Persons who are
registered Holders of Notes (i) at the close of business on the April 15 or October 15 next
preceding the interest payment date even if Notes are canceled after the record date and on or
before the interest payment date or (ii) as required on the Special Mandatory Redemption Date.
Holders must surrender Notes to a Paying Agent to collect principal payments. The Company will pay
principal and interest in money of the United States that at the time of payment is legal tender
for payment of public and private debts. Payments in respect of the Notes represented by a Global
Note (including principal, premium and interest) will be made by wire transfer of immediately
available funds to the accounts specified by The Depository Trust Company. The Company will make
all payments in respect of a certificated Note (including principal, premium and interest) by
mailing a check to the registered address of each Holder thereof; provided, however, that payments
on a certificated Note will be made by wire transfer to a U.S. dollar account maintained by the
payee with a bank in the United States if such Holder elects payment by wire transfer by giving
written notice to the Trustee or the Paying Agent to such effect designating such account no later
than 30 days immediately preceding the relevant due date for payment (or such other date as the
Trustee may accept in its discretion).



6









 




3. Paying Agent and Registrar




     Initially, HSBC Bank USA, National Association (the “Trustee”), will act as Paying Agent and
Registrar. The Company may appoint and change any Paying Agent, Registrar or co-registrar without
notice. The Company or any of its domestically incorporated Wholly Owned Subsidiaries may act as
Paying Agent, Registrar or co-registrar.


4. Indenture




     The Company issued the Notes under an Indenture dated as of February 5, 2010 (the
“Indenture”), among the Company, the Trustee and the Subsidiary Guarantors. 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 (15 U.S.C. §§ 77aaa-77bbbb) (the “Act”). Terms defined in the
Indenture and not defined herein have the meanings ascribed thereto in the Indenture. The Notes
are subject to all such terms, and Noteholders are referred to the Indenture and the Act for a
statement of those terms.



     The Notes are general unsecured obligations of the Company. The Company shall be entitled,
subject to its compliance with Section 4.03 of the Indenture, to issue Additional Notes pursuant to
Section 2.14 of the Indenture. The Initial Notes issued on the Issue Date, any Additional Notes
and all Exchange Notes or Private Exchange Notes issued in exchange therefor will be treated as a
single class for all purposes under the Indenture. The Indenture contains covenants that limit the
ability of the Company and its subsidiaries to incur additional indebtedness; pay dividends or
distributions on, or redeem or repurchase, capital stock; make investments; issue or sell capital
stock of subsidiaries; engage in transactions with affiliates; create liens on assets; enter into
sale/leaseback transactions; transfer or sell assets; guarantee indebtedness; restrict dividends or
other payments from subsidiaries; and consolidate, merge or transfer all or substantially all of
its assets and the assets of its subsidiaries. These covenants are subject to important exceptions
and qualifications.


5. Optional Redemption




     Except as set forth below, the Company shall not be entitled to redeem the Notes at its
option.



     On and after May 1, 2011, the Company shall be entitled at its option to redeem all or a
portion of the Notes upon not less than 30 nor more than 60 days’ notice, at the redemption prices
(expressed in percentages of principal amount on the redemption date), plus accrued interest to the
redemption date (subject to the right of Holders of record on the relevant record date to receive
interest due on the relevant interest payment date), if redeemed during the 12-month period
commencing on May 1 of the years set forth below:



7









 





	 	 	 	 	 
	 	 	Redemption	 
	Period	 	Price	 
	2011
	 	 	103.563	%
	2012
	 	 	102.375	%
	2013
	 	 	101.188	%
	2014 and thereafter
	 	 	100.000	%






     Prior to May 1, 2011, the Company shall be entitled at its option to redeem all, but not less
than all, of the Notes at a redemption price equal to 100.000% of the principal amount of the Notes
plus the Applicable Premium as of, and accrued and unpaid interest to, the redemption date (subject
to the right of Holders on the relevant record date to receive interest due on the relevant
interest payment date). The Company shall cause notice of such redemption to be mailed by
first-class mail to each Holder’s registered address, not less than 30 nor more than 60 days prior
to the redemption date.


6. Notice of Redemption




     Notice of optional redemption will be mailed at least 30 days but not more than 60 days before
the redemption date to each Holder of Notes to be redeemed at his registered address. Notes in
denominations larger than $2,000 principal amount may be redeemed in part but only in whole
multiples of $1,000. If money sufficient to pay the redemption price of and accrued interest on
all Notes (or portions thereof) to be redeemed on the redemption date is deposited with the Paying
Agent on or before the redemption date and certain other conditions are satisfied, on and after
such date interest ceases to accrue on such Notes (or such portions thereof) called for redemption.


7. Special Mandatory Redemption




     If the Acquisition is not completed on or prior to March 29, 2010 or the Share Purchase
Agreement is terminated on or prior to March 29, 2010, the Company shall redeem all of the Notes on
the Special Mandatory Redemption Date at the Special Mandatory Redemption Price. Notice of such
redemption will be provided to the Escrow Agent in the form of the Redemption Release Certificate
certifying that the Company is required to redeem the Notes. Notice of such redemption will be
provided to the Holders on the Business Day on which Company shall become obligated
to conduct such Special Mandatory Redemption.


8. Put Provisions




     Upon a Change of Control, any Holder of Notes will have the right to cause the Company to
repurchase all or any part of the Notes of such Holder at a repurchase price equal to 101% of the
principal amount of the Notes to be repurchased plus accrued interest to the date of repurchase
(subject to the right of holders of record on the relevant record date to receive interest due on
the related interest payment date) as provided in, and subject to the terms of, the Indenture.



8









 




9. Guarantee




     The payment by the Company of the principal of, and premium and interest on, the Notes is
guaranteed on a joint and several senior unsecured basis by each of the Subsidiary Guarantors to
the extent set forth in the Indenture.


10. Denominations; Transfer; Exchange




     The Notes are in registered form without coupons in denominations of $2,000 principal amount
and whole multiples of $1,000. A Holder may transfer or exchange Notes in accordance with the
Indenture. The Registrar may require a Holder, among other things, to furnish appropriate
endorsements or transfer documents and to pay any taxes and fees required by law or permitted by
the Indenture. The Registrar need not register the transfer of or exchange any Notes selected for
redemption (except, in the case of a Note to be redeemed in part, the portion of the Note not to be
redeemed) or any Notes for a period of 15 days before a selection of Notes to be redeemed or
15 days before an interest payment date.


11. Persons Deemed Owners




     The registered Holder of this Note may be treated as the owner of it for all purposes.


12. Unclaimed Money




     If money for the payment of principal or interest remains unclaimed for two years, the Trustee
or Paying Agent shall pay the money back to the Company at its request unless an abandoned property
law designates another Person. After any such payment, Holders entitled to the money must look
only to the Company and not to the Trustee for payment.


13. Discharge and Defeasance




     Subject to certain conditions, the Company at any time shall be entitled to terminate some or
all of its obligations under the Notes and the Indenture if the Company deposits with the Trustee
money or U.S. Government Obligations for the payment of principal and interest on the Notes to
redemption or maturity, as the case may be.


14. Amendment, Waiver




     Subject to certain exceptions set forth in the Indenture, (a) the Indenture and the Notes may
be amended with the written consent of the Holders of at least a majority in principal amount
outstanding of the Notes and (b) any default or noncompliance with any provision may be waived with
the written consent of the Holders of a majority in principal amount outstanding of the Notes.
Subject to certain exceptions set forth in the Indenture, without the consent of any Noteholder,
the Company, the Subsidiary Guarantors and the Trustee shall be entitled to amend the Indenture or
the Notes to cure any ambiguity, omission, defect or inconsistency, or to comply with Article Five
of the



9









 




Indenture, or to provide for uncertificated Notes in addition to or in place of certificated
Notes, or to add guarantees with respect to the Notes, including Subsidiary Guarantees, or to
secure the Notes, or to add additional covenants or surrender rights and powers conferred on the
Company or the Subsidiary Guarantors, or to comply with any requirement of the SEC in connection
with qualifying the Indenture under the Act, or to make any change that does not adversely affect
the rights of any Noteholder, or to make amendments to provisions of the Indenture relating to the
form, authentication, transfer and legending of the Notes, or to provide for the issuance of
Additional Notes in accordance with the limitations set forth in the Indenture as of the date of
the Indenture.



15. Defaults and Remedies




     Under the Indenture, Events of Default include: default for 30 days in payment of interest on
the Notes; default in payment of principal on the Notes at maturity, upon redemption pursuant to
paragraph 5 of the Notes, upon acceleration or otherwise, or failure by the Company to redeem or
purchase Notes when required; failure by the Company or any Subsidiary Guarantor to comply with
other agreements in the Indenture or the Notes, in certain cases subject to notice and lapse of
time; certain accelerations (including failure to pay within any grace period after final maturity)
of other Indebtedness of the Company, any Subsidiary Guarantor or any Significant Subsidiary if the
amount accelerated (or so unpaid) exceeds $15.0 million; certain events of bankruptcy or insolvency
with respect to the Company and the Significant Subsidiaries; certain judgments or decrees for the
payment of money in excess of $15.0 million; and certain defaults with respect to Subsidiary
Guarantees. If an Event of Default occurs and is continuing, the Trustee or the Holders of at
least 25% in outstanding principal amount of the Notes may declare all the Notes to be due and
payable immediately. Certain events of bankruptcy or insolvency are Events of Default which will
result in the Notes being due and payable immediately upon the occurrence of such Events of
Default.



     Noteholders may not enforce the Indenture or the Notes except as provided in the Indenture.
The Trustee may refuse to enforce the Indenture or the Notes unless it receives indemnity or
security satisfactory to it. Subject to certain limitations, Holders of a majority in outstanding
principal amount of the Notes may direct the Trustee in its exercise of any trust or power. The
Trustee may withhold from Noteholders notice of any continuing Default (except a Default in payment
of principal or interest) if it determines that withholding notice is in the interest of the
Holders.


16. Trustee Dealings with the Company




     Subject to certain limitations imposed by the Act, the Trustee under the Indenture, in its
individual or any other capacity, may become the owner or pledgee of Notes and may otherwise deal
with and collect obligations owed to it by the Company or its Affiliates and may otherwise deal
with the Company or its Affiliates with the same rights it would have if it were not Trustee.




10












 





17. No Recourse Against Others




     A director, officer, employee or stockholder, as such, of the Company or any Subsidiary
Guarantor shall not have any liability for any obligations of the Company under the Notes or the
Indenture or of such Subsidiary Guarantor under its Subsidiary Guarantee or the Indenture or for
any claim based on, in respect of or by reason of such obligations or their creation. By accepting
a Note, each Noteholder waives and releases all such liability. The waiver and release are part of
the consideration for the issue of the Notes.



18. Authentication




     This Note shall not be valid until an authorized signatory of the Trustee (or an
authenticating agent) manually signs the certificate of authentication on the other side of this
Note.



19. Abbreviations




     Customary abbreviations may be used in the name of a Noteholder or an assignee, such as TEN
COM (=tenants in common), TEN ENT (=tenants by the entireties), JT TEN (=joint tenants with rights
of survivorship and not as tenants in common), CUST (=custodian), and U/G/M/A (=Uniform Gift to
Minors Act).



20. CUSIP Numbers




     Pursuant to a recommendation promulgated by the Committee on Uniform Note Identification
Procedures the Company has caused CUSIP numbers to be printed on the Notes and has directed the
Trustee to use CUSIP numbers in notices of redemption as a convenience to Noteholders. No
representation is made as to the accuracy of such numbers either as printed on the Notes or as
contained in any notice of redemption and reliance may be placed only on the other identification
numbers placed thereon.



21. Holders’ Compliance with Registration Rights Agreement




     Each Holder of a Note, by acceptance hereof, acknowledges and agrees to the provisions of the
Registration Rights Agreement, including the obligations of the Holders with respect to a
registration and the indemnification of the Company to the extent provided therein.



22. Governing Law




     THIS SECURITY SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF
NEW YORK.



     The Company will furnish to any Noteholder upon written request and without charge to the
Noteholder a copy of the Indenture which has in it the text of this Note in larger type. Requests
may be made to:



11









 




P. H. Glatfelter Company

96 South George Street, Suite 500

York, Pennsylvania 17401



Attention: General Counsel







12









 








      




ASSIGNMENT FORM



To assign this Note, fill in the form below:



I or we assign and transfer this Note to



(Print or type assignee’s name, address and zip code)



(Insert assignee’s soc. sec. or tax I.D. No.)



and irrevocably appoint  
          agent to transfer this Note on the books of the
Company. The agent may substitute another to act for him.




      




Date:     
       
               
              Your Signature:
                
       
               
             
               
                
               
           
      




      



Sign exactly as your name appears on the other side of this Note.



In connection with any transfer of any of the Notes evidenced by this certificate occurring prior
to the expiration of the period referred to in Rule 144 under the Securities Act after the later
of the date of original issuance of such Notes and the last date, if any, on which such Notes were
owned by the Company or any Affiliate of the Company, the undersigned confirms that such Notes are
being transferred in accordance with its terms:




CHECK ONE BOX BELOW




	 	 	 	 	 
	(1)

	 	o
	 	to the Company; or
	 
	 	 	 	 
	(2)

	 	o
	 	pursuant to an effective registration statement under
the Securities Act of 1933; or
	 
	 	 	 	 
	(3)

	 	o
	 	inside the United States to a “qualified
institutional buyer” (as defined in Rule 144A under
the Securities Act of 1933) that purchases for its
own account or for the account of a qualified
institutional buyer to whom notice is given that such
transfer is being made in reliance on Rule 144A, in
each case pursuant to and in compliance with Rule
144A under the Securities Act of 1933; or
	 
	 	 	 	 
	(4)

	 	o
	 	outside the United States in an offshore transaction
within the meaning of Regulation S under the
Securities Act in compliance with Rule 904 under the
Securities Act of 1933; or






13









 






	 	 	 	 	 
	(5)

	 	o
	 	pursuant to the exemption from registration provided
by Rule 144 under the Securities Act of 1933; or
	 
	 	 	 	 
	 

	 	 	 	Unless one of the boxes is checked, the Trustee will refuse to register any of the
Notes evidenced by this certificate in the name of any person other than the
registered holder thereof; provided, however, that if box (4) is checked, the
Trustee shall be entitled to require, prior to registering any such transfer of the
Notes, such legal opinions, certifications and other information as the Company has
reasonably requested to confirm that such transfer is being made pursuant to an
exemption from, or in a transaction not subject to, the registration requirements
of the Securities Act of 1933, such as the exemption provided by Rule 144 under
such Act.






	 	 	 	 	 	 	 
	 

	 	 	 	 

Signature
	 	 





Signature Guarantee:




	 	 	 	 	 	 	 	 	 
	 

	 	 

Signature must be guaranteed
	 	 	 	 

Signature
	 	 






14









 





Signatures must be guaranteed by an “eligible guarantor institution” meeting the requirements of
the Registrar, which requirements include membership or participation in the Note Transfer Agent
Medallion Program (“STAMP”) or such other “signature guarantee program” as may be determined by the
Registrar in addition to, or in substitution for, STAMP, all in accordance with the Securities
Exchange Act of 1934, as amended.



 






15









 







TO BE COMPLETED BY PURCHASER IF (2) ABOVE IS CHECKED.




     The undersigned represents and warrants that it is purchasing this Note for its own account or
an account with respect to which it exercises sole investment discretion and that it and any such
account is a “qualified institutional buyer” within the meaning of Rule 144A under the Securities
Act of 1933, and is aware that the sale to it is being made in reliance on Rule 144A and
acknowledges that it has received such information regarding the Company as the undersigned has
requested pursuant to Rule 144A or has determined not to request such information and that it is
aware that the transferor is relying upon the undersigned’s foregoing representations in order to
claim the exemption from registration provided by Rule 144A.



	 	 	 	 	 
	Dated:
	 	 	 	 
	 

	 	 
	 	 
	 

	 	 	 	Notice:       To be executed by
	 

	 	 	 	                   an executive officer






16









 






[TO BE ATTACHED TO GLOBAL NOTES]




SCHEDULE OF INCREASES OR DECREASES IN GLOBAL NOTE



The following increases or decreases in this Global Note have been made:



	 	 	 	 	 
	Date of	 	Amount of	 	Amount of	 	 	Principal	 	 	Signature of
	Exchange	 	decrease in	 	increase in	 	 	amount of this	 	 	authorized
	 	 	 	 	Principal	 	Principal	 	 	Global Note	 	 	officer of
	 	 	 	 	amount of this	 	amount of this	 	 	following such	 	 	Trustee or Notes
	 	 	 	 	Global Note	 	Global Note	 	 	decrease or	 	 	Custodian
	 	 	 	 	 	 	 	 	 	 	 	increase)





17









 






OPTION OF HOLDER TO ELECT PURCHASE



If you want to elect to have this Note purchased by the Company pursuant to Section 4.06 or 4.08 of
the Indenture, check the box:



If you want to elect to have only part of this Note purchased by the Company pursuant to Section
4.06 or 4.08 of the Indenture, state the amount in principal amount:



$                    




	 	 	 	 	 	 	 
	Dated:

	 	 	 	Your Signature:	 	 
	 

	 	 
	 	 	 	 
	 

	 	 	 	 	 	(Sign exactly as your name
appears on the other side of
this Note.)






	 	 	 
	Signature Guarantee:
	 	 
	 

	 	 
	 

	 	(Signature must be guaranteed)





Signatures must be guaranteed by an “eligible guarantor institution” meeting the requirements of
the Registrar, which requirements include membership or participation in the Note Transfer Agent
Medallion Program (“STAMP”) or such other “signature guarantee program” as may be determined by the
Registrar in addition to, or in substitution for, STAMP, all in accordance with the Securities
Exchange Act of 1934, as amended.





18











 





EXHIBIT A




[FORM OF FACE OF EXCHANGE NOTE

OR PRIVATE EXCHANGE NOTE]*/**/






 




			
	*	 	/ If the Note is to be issued in global form add the Global Notes Legend from Exhibit 1
to the Appendix and the attachment from such Exhibit 1 captioned “[TO BE ATTACHED TO GLOBAL NOTES]
- SCHEDULE OF INCREASES OR DECREASES IN GLOBAL NOTE”.
	 
	**	 	/ If the Note is a Private Exchange Note issued in a Private Exchange to the Initial
Purchaser holding an unsold portion of its initial allotment, add the Restricted Notes Legend from
Exhibit 1 to the Appendix and replace the Assignment Form included in this Exhibit A with the
Assignment Form included in such Exhibit 1.




 









 











THIS NOTE IS ISSUED WITH ORIGINAL ISSUE DISCOUNT FOR PURPOSES OF SECTION 1271 ET
SEQ. OF THE INTERNAL REVENUE CODE. A HOLDER MAY OBTAIN THE ISSUE PRICE, AMOUNT OF
ORIGINAL ISSUE DISCOUNT, ISSUE DATE AND YIELD TO MATURITY FOR SUCH NOTES BY
SUBMITTING A WRITTEN REQUEST FOR SUCH INFORMATION TO THE ISSUER AT THE FOLLOWING
ADDRESS: P. H. GLATFELTER COMPANY, SUITE 500, 96 SOUTH GEORGE STREET, YORK, PA
17401 ATTENTION: INVESTOR RELATIONS.



 


			
	No.
	 	$                 






[as revised by the “Schedule of Increases or

Decreases in Global Note”, attached hereto]2




71/8% Senior Notes due 2016



          P. H. Glatfelter Company (the “Issuer” or the “Company”), a Pennsylvania corporation, promises
to pay to
[                                                                            
    ],
or registered assigns, the principal sum of
[                                        ] Dollars on May 1, 2016.



          Interest
Payment Dates: May 1 and November 1.



          Record Dates: April 15 and October 15.



          Additional provisions of this Note are set forth on the other side of this Note.


Dated:




	 	 	 	 	 
	 	P. H. GLATFELTER COMPANY

 	 
	 	By  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 



TRUSTEE’S CERTIFICATE OF

           AUTHENTICATION




HSBC BANK USA, NATIONAL

           ASSOCIATION,

      as Trustee, certifies that this is one of

          the Notes referred to in the Indenture.






 




			
	2	 	If this Note is a Global Note, insert this
provision.




2









 










	 	 	 	 	 
	 	 	 
	By  	
 	 
	 	Authorized Signatory 	 
	 	 	 	 
	 




3









 





[FORM OF REVERSE SIDE OF EXCHANGE NOTE

OR PRIVATE EXCHANGE NOTE]




71/8% Senior Note due 2016



1. Interest




     P.H. Glatfelter Company, a Pennsylvania corporation, (such corporation, and its successors and
assigns under the Indenture hereinafter referred to, being herein called the “Company”), promises
to pay interest on the principal amount of this Note at the rate per annum shown above[; provided,
however, that if a Registration Default (as defined in the Registration Rights Agreement) occurs,
additional interest will accrue on this Note at a rate of 0.50% per annum (increasing by an
additional 0.50% per annum after each consecutive 90-day period that occurs after the date on which
such Registration default occurs up to a maximum additional interest rate of 1.00%) from and
including the date on which any such Registration Default shall occur to but excluding the date on
which all Registration Defaults have been cured.]3 The Company will pay interest
semiannually on May 1 and November 1 of each year, commencing May 1, 2010. The Notes are also
subject to special mandatory redemption at a redemption price equal to the initial aggregate
offering price of the notes, plus accrued and unpaid interest and accreted original issue discount
to, but not including, the special mandatory redemption 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
November 1, 2009. Interest will be computed on the basis of a 360-day year of twelve 30-day
months.



2. Method of Payment




     The Company will pay interest on the Notes (except defaulted interest) to the Persons who are
registered Holders of the Notes (i) at the close of business on the April 15 or October 15 next
preceding the interest payment date even if Notes are canceled after the record date and on or
before the interest payment date or (ii) as required on the Special Mandatory Redemption Date.
Holders must surrender Notes to a Paying Agent to collect principal payments. The Company will pay
principal and interest in money of the United States that at the time of payment is legal tender
for payment of public and private debts. Payments in respect of the Notes represented by a Global
Note (including principal, premium and interest) will be made by wire transfer of immediately
available funds to the accounts specified by The Depository Trust Company. The Company will make
all payments in respect of a certificated Note (including principal, premium and interest) by
mailing a check to the registered address of each Holder thereof; provided, however, that payments
on a certificated Note will be made by wire transfer to a U.S. dollar account maintained by the
payee with a bank in the United States





 




			
	3	 	Insert if at the date of issuance of the Exchange
Note or Private Exchange Note (as the case may be), any Registration Default
has occurred with respect to the related Initial Notes during the interest
period in which such date of issuance occurs.




4









 









if such Holder elects payment by wire transfer by giving written notice to the Trustee or the
Paying Agent to such effect designating such account no later than 30 days immediately preceding
the relevant due date for payment (or such other date as the Trustee may accept in its discretion).




3. Paying Agent and Registrar




     Initially, HSBC Bank USA, National Association (the “Trustee”), will act as Paying Agent and
Registrar. The Company may appoint and change any Paying Agent, Registrar or co-registrar without
notice. The Company or any of its domestically incorporated Wholly Owned Subsidiaries may act as
Paying Agent, Registrar or co-registrar.



4. Indenture




     The Company issued the Notes under an Indenture dated as of February 5, 2010 (the
“Indenture”), among the Company, the Trustee and the Subsidiary Guarantors. 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 (15 U.S.C. §§ 77aaa-77bbbb) (the “Act”). Terms defined in the
Indenture and not defined herein have the meanings ascribed thereto in the Indenture. The Notes
are subject to all such terms, and Noteholders are referred to the Indenture and the Act for a
statement of those terms.



     The Notes are general unsecured obligations of the Company. The Company shall be entitled,
subject to its compliance with Section 4.03 of the Indenture, to issue Additional Notes pursuant to
Section 2.14 of the Indenture. The Initial Notes issued on the Issue Date, any Additional Notes
and all Exchange Notes or Private Exchange Notes issued in exchange therefor will be treated as a
single class for all purposes under the Indenture. The Indenture contains covenants that limit the
ability of the Company and its subsidiaries to incur additional indebtedness; pay dividends or
distributions on, or redeem or repurchase, capital stock; make investments; issue or sell capital
stock of subsidiaries; engage in transactions with affiliates; create liens on assets; enter into
sale/leaseback transactions; transfer or sell assets; guarantee indebtedness; restrict dividends or
other payments from subsidiaries; and consolidate, merge or transfer all or substantially all of
its assets and the assets of its subsidiaries. These covenants are subject to important exceptions
and qualifications.



5. Optional Redemption




     Except as set forth below, the Company shall not be entitled to redeem the Notes at its
option.



     On and after May 1, 2011, the Company shall be entitled at its option to redeem all or a
portion of the Notes upon not less than 30 nor more than 60 days’ notice, at the redemption prices
(expressed in percentages of principal amount on the redemption date), plus accrued interest to the
redemption date (subject to the right of Holders of record on the relevant record date to receive
interest due on the relevant interest payment date), if



5









 





redeemed during the 12-month period commencing on May 1 of the years set forth below:




	 	 	 	 	 
	 	 	Redemption
	Period	 	Price
	2011
	 	 	103.563	%
	2012
	 	 	102.375	%
	2013
	 	 	101.188	%
	2014 and thereafter
	 	 	100.000	%






     Prior to May 1, 2011, the Company shall be entitled at its option to redeem all, but not less
than all, of the Notes at a redemption price equal to 100.000% of the principal amount of the Notes
plus the Applicable Premium as of, and accrued and unpaid interest to, the redemption date (subject
to the right of Holders on the relevant record date to receive interest due on the relevant
interest payment date). The Company shall cause notice of such redemption to be mailed by
first-class mail to each Holder’s registered address, not less than 30 nor more than 60 days prior
to the redemption date.



6. Notice of Redemption




     Notice of optional redemption will be mailed at least 30 days but not more than 60 days before
the redemption date to each Holder of Notes to be redeemed at his registered address. Notes in
denominations larger than $2,000 principal amount may be redeemed in part but only in whole
multiples of $1,000. If money sufficient to pay the redemption price of and accrued interest on
all Notes (or portions thereof) to be redeemed on the redemption date is deposited with the Paying
Agent on or before the redemption date and certain other conditions are satisfied, on and after
such date interest ceases to accrue on such Notes (or such portions thereof) called for redemption.



7. Special Mandatory Redemption




     If the Acquisition is not completed on or prior to March 29, 2010 or the Share Purchase
Agreement is terminated on or prior to March 29, 2010, the Company shall redeem all of the Notes on
the Special Mandatory Redemption Date at the Special Mandatory Redemption Price. Notice of such
redemption will be provided to the Escrow Agent in the form of the Redemption Release Certificate
certifying that the Company is required to redeem the Notes. Notice of such redemption will be
provided to the Holders on the Business Day on which Company shall become obligated
to conduct such Special Mandatory Redemption.



8. Put Provisions




     Upon a Change of Control, any Holder of Notes will have the right to cause the Company to
repurchase all or any part of the Notes of such Holder at a repurchase price equal to 101% of the
principal amount of the Notes to be repurchased plus accrued interest to the date of repurchase
(subject to the right of holders of record on the relevant



6









 




record date to receive interest due on the related interest payment date) as provided in, and
subject to the terms of, the Indenture.




9. Guarantee




     The payment by the Company of the principal of, and premium and interest on, the Notes is
guaranteed on a joint and several senior unsecured basis by each of the Subsidiary Guarantors to
the extent set forth in the Indenture.



10. Denominations; Transfer; Exchange




     The Notes are in registered form without coupons in denominations of $2,000 principal amount
and whole multiples of $1,000. A Holder may transfer or exchange Notes in accordance with the
Indenture. The Registrar may require a Holder, among other things, to furnish appropriate
endorsements or transfer documents and to pay any taxes and fees required by law or permitted by
the Indenture. The Registrar need not register the transfer of or exchange any Notes selected for
redemption (except, in the case of a Note to be redeemed in part, the portion of the Note not to be
redeemed) or any Notes for a period of 15 days before a selection of Notes to be redeemed or
15 days before an interest payment date.



11. Persons Deemed Owners




     The registered Holder of this Note may be treated as the owner of it for all purposes.



12. Unclaimed Money




     If money for the payment of principal or interest remains unclaimed for two years, the Trustee
or Paying Agent shall pay the money back to the Company at its request unless an abandoned property
law designates another Person. After any such payment, Holders entitled to the money must look
only to the Company and not to the Trustee for payment.



13. Discharge and Defeasance




     Subject to certain conditions, the Company at any time shall be entitled to terminate some or
all of its obligations under the Notes and the Indenture if the Company deposits with the Trustee
money or U.S. Government Obligations for the payment of principal and interest on the Notes to
redemption or maturity, as the case may be.



14. Amendment, Waiver




     Subject to certain exceptions set forth in the Indenture, (a) the Indenture and the Notes may
be amended with the written consent of the Holders of at least a majority in principal amount
outstanding of the Notes and (b) any default or noncompliance with any provision may be waived with
the written consent of the Holders of a majority in principal amount outstanding of the Notes.
Subject to certain exceptions set forth in the



7









 




Indenture, without the consent of any Noteholder, the Company, the Subsidiary Guarantors and
the Trustee shall be entitled to amend the Indenture or the Notes to cure any ambiguity, omission,
defect or inconsistency, or to comply with Article Five of the Indenture, or to provide for
uncertificated Notes in addition to or in place of certificated Notes, or to add guarantees with
respect to the Notes, including Subsidiary Guarantees, or to secure the Notes, or to add additional
covenants or surrender rights and powers conferred on the Company or the Subsidiary Guarantors, or
to comply with any requirement of the SEC in connection with qualifying the Indenture under the
Act, or to make any change that does not adversely affect the rights of any Noteholder, or to make
amendments to provisions of the Indenture relating to the form, authentication, transfer and
legending of the Notes, or to provide for the issuance of Additional Notes in accordance with the
limitations set forth in the Indenture as of the date of the Indenture.




15. Defaults and Remedies




     Under the Indenture, Events of Default include: default for 30 days in payment of interest on
the Notes; default in payment of principal on the Notes at maturity, upon redemption pursuant to
paragraph 5 of the Notes, upon acceleration or otherwise, or failure by the Company to redeem or
purchase Notes when required; failure by the Company or any Subsidiary Guarantor to comply with
other agreements in the Indenture or the Notes, in certain cases subject to notice and lapse of
time; certain accelerations (including failure to pay within any grace period after final maturity)
of other Indebtedness of the Company, any Subsidiary Guarantor or any Significant Subsidiary if the
amount accelerated (or so unpaid) exceeds $15.0 million; certain events of bankruptcy or insolvency
with respect to the Company and the Significant Subsidiaries; certain judgments or decrees for the
payment of money in excess of $15.0 million; and certain defaults with respect to Subsidiary
Guarantees. If an Event of Default occurs and is continuing, the Trustee or the Holders of at
least 25% in outstanding principal amount of the Notes may declare all the Notes to be due and
payable immediately. Certain events of bankruptcy or insolvency are Events of Default which will
result in the Notes being due and payable immediately upon the occurrence of such Events of
Default.



     Noteholders may not enforce the Indenture or the Notes except as provided in the Indenture.
The Trustee may refuse to enforce the Indenture or the Notes unless it receives indemnity or
security satisfactory to it. Subject to certain limitations, Holders of a majority in outstanding
principal amount of the Notes may direct the Trustee in its exercise of any trust or power. The
Trustee may withhold from Noteholders notice of any continuing Default (except a Default in payment
of principal or interest) if it determines that withholding notice is in the interest of the
Holders.




	16. Trustee Dealings with the Company	 	




Subject to certain limitations imposed by the Act, the Trustee under the Indenture, in its
individual or any other capacity, may become the owner or pledgee of Notes and may otherwise deal
with and collect obligations owed to it by the Company or its Affiliates and may otherwise deal
with the Company or its Affiliates with the same rights it would have if it were not
Trustee.






8











 





17. No Recourse Against Others




     A director, officer, employee or stockholder, as such, of the Company or any Subsidiary
Guarantor shall not have any liability for any obligations of the Company under the Notes or the
Indenture or of such Subsidiary Guarantor under its Subsidiary Guarantee or the Indenture or for
any claim based on, in respect of or by reason of such obligations or their creation. By accepting
a Note, each Noteholder waives and releases all such liability. The waiver and release are part of
the consideration for the issue of the Notes.



18. Authentication




     This Note shall not be valid until an authorized signatory of the Trustee (or an
authenticating agent) manually signs the certificate of authentication on the other side of this
Note.



19. Abbreviations




     Customary abbreviations may be used in the name of a Noteholder or an assignee, such as TEN
COM (=tenants in common), TEN ENT (=tenants by the entireties), JT TEN (=joint tenants with rights
of survivorship and not as tenants in common), CUST (=custodian), and U/G/M/A (=Uniform Gift to
Minors Act).



20. CUSIP Numbers




     Pursuant to a recommendation promulgated by the Committee on Uniform Note Identification
Procedures the Company has caused CUSIP numbers to be printed on the Notes and has directed the
Trustee to use CUSIP numbers in notices of redemption as a convenience to Noteholders. No
representation is made as to the accuracy of such numbers either as printed on the Notes or as
contained in any notice of redemption and reliance may be placed only on the other identification
numbers placed thereon.



21. Holders’ Compliance with Registration Rights Agreement




     Each Holder of a Note, by acceptance hereof, acknowledges and agrees to the provisions of the
Registration Rights Agreement, including the obligations of the Holders with respect to a
registration and the indemnification of the Company to the extent provided therein.



22. Governing Law




     THIS SECURITY SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF
NEW YORK.



9









 





     The Company will furnish to any Noteholder upon written request and without charge to the
Noteholder a copy of the Indenture which has in it the text of this Note in larger type. Requests
may be made to:


P. H. Glatfelter Company

96 South George Street, Suite 500

York, Pennsylvania 17401

Attention: General Counsel







10









 








 





ASSIGNMENT FORM


To assign this Note, fill in the form below:



I or we assign and transfer this Note to



(Print or type assignee’s name, address and zip code)



(Insert assignee’s soc. sec. or tax I.D. No.)



and irrevocably appoint            agent to transfer this Note on the books of the
Company. The agent may substitute another to act for him.



 





	 	 	 	 	 	 	 
	Date:

	 	 	 	Your Signature:
	 	 
	 

	 	 
	 	 	 	 





      



Sign exactly as your name appears on the other side of this Note.





11











 





OPTION OF HOLDER TO ELECT PURCHASE



If you want to elect to have this Note purchased by the Company pursuant to Section 4.06 or 4.08 of
the Indenture, check the box:o



If you want to elect to have only part of this Note purchased by the Company pursuant to
Section 4.06 or 4.08 of the Indenture, state the amount in principal amount: $o




	 	 	 	 	 	 	 	 	 
	Dated:

	 	 	 	Your Signature:	 	 	 	 
	 

	 	 

	 	 
	 	 

     (Sign exactly as your name
	 	 
	 

	 	 	 	 	 	      appears on the other side of	 	 
	 

	 	 	 	 	 	     this Note.)	 	 






	 	 	 	 	 
	Signature Guarantee:
	 	 	 	 
	 

	 	 

(Signature must be guaranteed)
	 	 





Signatures must be guaranteed by an “eligible guarantor institution” meeting the requirements of
the Registrar, which requirements include membership or participation in the Note Transfer Agent
Medallion Program (“STAMP”) or such other “signature guarantee program” as may be determined by the
Registrar in addition to, or in substitution for, STAMP, all in accordance with the Securities
Exchange Act of 1934, as amended.