EXHIBIT 10.5
NOTE PURCHASE AGREEMENT
Dated as of July 2, 2008
Between
CELLU TISSUE HOLDINGS, INC.
Issuer of the Notes
and
UBS High Yield Relationship Fund, a series of the UBS Relationship Funds
Purchaser
$5,000,000 AGGREGATE PRINCIPAL AMOUNT
OF 9 3/4% SENIOR SECURED NOTES
DUE 2010
NOTE PURCHASE AGREEMENT
This NOTE PURCHASE AGREEMENT is dated as of July 2, 2008, by and between Cellu
Tissue Holdings, Inc. (the "Company") and UBS High Yield Relationship Fund, a
series of the UBS Relationship Funds (the "Purchaser").
RECITALS
WHEREAS, the Company and certain of its Subsidiaries have entered into an
Indenture dated as of March 12, 2004 with The Bank of New York as Trustee (as
supplemented and in effect on the date hereof, the "Indenture"), relating to its
9 3/4% Senior Secured Notes due 2010 (the "Senior Secured Notes") pursuant to
which the Company is authorized to issue additional Senior Secured Notes subject
to the terms and conditions specified in the Indenture.
WHEREAS, the Company desires to issue pursuant to the Indenture and sell to the
Purchaser, and the Purchaser has agreed to purchase, subject to the terms and
conditions herein, $5,000,000 aggregate principal amount of Senior Secured Notes
(the "Notes").
WHEREAS, the Company will use the proceeds of the issuance and sale of the Notes
to provide a portion of the financing for the purchase by the Company of certain
assets (the "Acquisition") pursuant to the Acquisition Agreement.
AGREEMENT
In consideration of the foregoing, and the representations, warranties,
covenants and conditions set forth below, the parties hereto, intending to be
legally bound, hereby agree as follows:
ARTICLE 1
DEFINITIONS
1.1.
CERTAIN DEFINED TERMS.
CAPITALIZED TERMS USED
AND NOT OTHERWISE DEFINED IN THIS AGREEMENT ARE DEFINED IN APPENDIX I.
ARTICLE 2
PURCHASE AND SALE OF THE NOTES
2.1.
PURCHASE AND SALE OF NOTES.
SUBJECT TO THE
TERMS AND CONDITIONS OF THIS AGREEMENT AND ON THE BASIS OF THE REPRESENTATIONS
AND WARRANTIES SET FORTH HEREIN, THE COMPANY HEREBY AGREES TO ISSUE AND TO SELL
TO THE PURCHASER, AND BY ITS ACCEPTANCE HEREOF THE PURCHASER AGREES TO PURCHASE
FROM THE COMPANY AT THE CLOSING, $5,000,000 AGGREGATE PRINCIPAL AMOUNT OF THE
NOTES FOR THE PURCHASE PRICE OF $4,612,500.
2.2.
CLOSING.
THE PURCHASE AND SALE OF THE NOTES
PURSUANT TO SECTION 2.1 SHALL OCCUR AT A CLOSING (THE "CLOSING") TO BE HELD ON
JULY 2, 2008, AT 10:00 A.M. (BOSTON TIME), AT THE OFFICES OF ROPES & GRAY LLP,
ONE INTERNATIONAL PLACE, BOSTON, MA 02110, OR AT SUCH OTHER DATE, TIME AND/OR
LOCATION AS MAY BE AGREED UPON BY THE PARTIES HERETO.
2.3.
DELIVERY OF NOTES.
NOTES WILL BE IN
SUBSTANTIALLY THE FORM OF EXHIBIT A.
THE COMPANY WILL DELIVER THE NOTES TO THE
PURCHASER, AGAINST PAYMENT BY OR ON BEHALF OF THE PURCHASER OF THE PURCHASE
price therefor by wire transfer of Federal (same day) funds to JPMorgan/Chase
Bank, New York, New York, ABA #021000021, Account Name: Cellu Tissue Corp.,
Account #114-733805.
2.4.
USE OF PROCEEDS.
THE PROCEEDS OF THE SALE BY