therefrom), as if the additional Indebtedness had been incurred or Disqualified Stock or the preferred stock had been issued, as the case may be, at the beginning of such four-quarter period.
The first paragraph of this covenant will not prohibit the incurrence of any of the following items of Indebtedness (collectively,“Permitted Debt”):
(1) the incurrence by TPI and any Guarantor of additional Indebtedness under Credit Facilities in an aggregate principal amount at any one time outstanding under this clause (1)(with letters of credit being deemed to have a principal amount equal to the maximum potential liability of TPI and its Restricted Subsidiaries thereunder) not to exceed $275.0 millionlessthe aggregate amount of all Net Proceeds of Asset Sales applied by TPI or any of its Restricted Subsidiaries since the date of the indenture to permanently repay any term Indebtedness under a Credit Facility or to repay any revolving credit Indebtedness under a Credit Facility and effect a corresponding commitment reduction thereunder pursuant to the covenant described above under the caption “— Repurchase at the Option of Holders — Asset Sales;”
(2) Existing Indebtedness;
(3) Indebtedness represented by the notes and the related Subsidiary Guarantees to be issued on the date of the indenture;
(4) the incurrence by TPI or any of its Restricted Subsidiaries of Indebtedness represented by Capital Lease Obligations, mortgage financings or purchase money obligations, in each case, incurred for the purpose of financing all or any part of the purchase price or cost of construction or improvement of property, plant or equipment used in the business of TPI or such Restricted Subsidiary, in an aggregate principal amount, including all Permitted Refinancing Indebtedness incurred to refund, refinance or replace any Indebtedness incurred pursuant to this clause (4), not to exceed $5.0 million at any time outstanding;
(5) the incurrence by TPI or any of its Restricted Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or the net proceeds of which are used to refund, refinance, replace, defease or discharge Indebtedness (other than intercompany Indebtedness) that was permitted by the indenture to be incurred under the first paragraph of this covenant or clauses (2), (3), (4), (5) or (13) of this paragraph;
(6) the incurrence by TPI or any of its Restricted Subsidiaries of intercompany Indebtedness between or among TPI and any of its Restricted Subsidiaries;provided, however, that:
(a) if TPI or any Guarantor is the obligor on such Indebtedness and the payee is not TPI or a Guarantor, such Indebtedness must be expressly subordinated to the prior payment in full in cash of all Obligations then due with respect to the notes, in the case of TPI, or the Subsidiary Guarantee, in the case of a Guarantor; and
(b) (i) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than TPI or a Restricted Subsidiary of TPI and (ii) any sale or other transfer of any such Indebtedness to a Person that is not either TPI or a Restricted Subsidiary of TPI;
will be deemed, in each case, to constitute an incurrence of such Indebtedness by TPI or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (6);
(7) the issuance by any of TPI’s Restricted Subsidiaries to TPI or to any of its Restricted Subsidiaries of shares of preferred stock;provided, however,that:
(a) any subsequent issuance or transfer of Equity Interests that results in any such preferred stock being held by a Person other than TPI or a Restricted Subsidiary of TPI; and
(b) any sale or other transfer of any such preferred stock to a Person that is not either TPI or a Restricted Subsidiary of TPI;
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will be deemed, in each case, to constitute an issuance of such preferred stock by such Restricted Subsidiary that was not permitted by this clause (7);
(8) the incurrence by TPI or any of its Restricted Subsidiaries of Hedging Obligations in the ordinary course of business;
(9) the guarantee by TPI or any of the Guarantors of Indebtedness of TPI or a Restricted Subsidiary of TPI that was permitted to be incurred by another provision of this covenant;providedthat if the Indebtedness being guaranteed is subordinated in right of payment to the notes, then the guarantee shall be subordinated in right of payment to the same extent as the Indebtedness guaranteed;
(10) the guarantee by any Foreign Subsidiary of Indebtedness of another Foreign Subsidiary that was permitted to be incurred by another provision of this covenant;
(11) the incurrence by TPI or any of the Restricted Subsidiaries of Indebtedness in respect of letters of credit and bankers acceptances issued in the ordinary course and not supporting indebtedness, including in respect of workers’ compensation claims, self-insurance obligations, performance and surety, appeal and similar bonds or indemnification, adjustment of purchase price or similar obligations incurred in connection with the disposition of any business or assets;
(12) the incurrence by TPI or any of the Restricted Subsidiaries of Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument inadvertently drawn against insufficient funds, so long as such Indebtedness is covered within five business days;
(13) Indebtedness of TPI or any of its Restricted Subsidiaries, to the extent the net proceeds thereof are promptly deposited to defease the notes in accordance with the applicable defeasance provisions in the indenture;
(14) the incurrence by TPI or any of the Restricted Subsidiaries of additional Indebtedness in an aggregate principal amount (or accreted value, as applicable) at any time outstanding not to exceed $40.0 million.
TPI will not incur, and will not permit any Guarantor to incur, any Indebtedness (including Permitted Debt) that is contractually subordinated in right of payment to any other Indebtedness of TPI or such Guarantor unless such Indebtedness is also contractually subordinated in right of payment to the notes and the applicable Subsidiary Guarantee on substantially identical terms;provided, however, that no Indebtedness will be deemed to be contractually subordinated in right of payment to any other Indebtedness of TPI solely by virtue of being unsecured or by virtue of being secured on a first or junior Lien basis.
For purposes of determining compliance with this “Incurrence of Indebtedness and Issuance of Preferred Stock” covenant, in the event that an item of proposed Indebtedness meets the criteria of more than one of the categories of Permitted Debt described in clauses (1) through (14) above, or is entitled to be incurred pursuant to the first paragraph of this covenant, TPI will be permitted to classify such item of Indebtedness or any portion thereof on the date of its incurrence, or later reclassify all or a portion of such item of Indebtedness, in any manner that complies with this covenant. Indebtedness under Credit Facilities outstanding on the date on which notes are first issued and authenticated under the indenture will initially be deemed to have been incurred on such date in reliance on the exception provided by clause (1) of the definition of Permitted Debt. The accrual of interest, the accretion or amortization of original issue discount, the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms, and the payment of dividends on Disqualified Stock in the form of additional shares of the same class of Disqualified Stock will not be deemed to be an incurrence of Indebtedness or an issuance of Disqualified Stock for purposes of this covenant;provided, in each such case, that the amount thereof is included in Fixed Charges of TPI as accrued. Notwithstanding any other provision of this covenant, the maximum amount of Indebtedness that TPI or any Restricted Subsidiary may incur pursuant to this covenant shall not be deemed to be exceeded solely as a result of fluctuations in exchange rates or currency values.
The amount of any Indebtedness outstanding as of any date will be:
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(1) the accreted value of the Indebtedness, in the case of any Indebtedness issued with original issue discount;
(2) the principal amount of the Indebtedness, in the case of any other Indebtedness; and
(3) in respect of Indebtedness of another Person secured by a Lien on the assets of the specified Person, the lesser of:
(A) the Fair Market Value of such asset at the date of determination, and
(B) the amount of the Indebtedness of the other Person.
Liens
TPI will not, and will not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, assume or suffer to exist any Lien of any kind on any asset now owned or hereafter acquired, except Permitted Liens.
Dividend and Other Payment Restrictions Affecting Subsidiaries
TPI will not, and will not permit any of its Restricted Subsidiaries to, directly or indirectly, create or permit to exist or become effective any consensual encumbrance or restriction on the ability of any Restricted Subsidiary to:
(1) pay dividends or make any other distributions on its Capital Stock to TPI or any of its Restricted Subsidiaries, or with respect to any other interest or participation in, or measured by, its profits, or pay any Indebtedness owed to TPI or any of its Restricted Subsidiaries;
(2) make loans or advances to TPI or any of its Restricted Subsidiaries; or
(3) transfer any of its properties or assets to TPI or any of its Restricted Subsidiaries.
However, the preceding restrictions will not apply to encumbrances or restrictions existing under or by reason of:
(1) the Senior Subordinated Indenture and other agreements governing Existing Indebtedness as in effect on the date of the indenture and any amendments, modifications, restatements, renewals, increases, supplements, refundings, replacements or refinancings of those agreements;providedthat the amendments, modifications, restatements, renewals, increases, supplements, refundings, replacement or refinancings are not in the good faith judgment of the Board of Directors of TPI, less favorable, taken as a whole, to the holders of the notes than those contained in those agreements on the date of the indenture;
(2) the indenture, the notes, the exchange notes, the Subsidiary Guarantees and the security documents;
(3) applicable law, rule, regulation or order;
(4) (a) any instrument governing Indebtedness or Capital Stock of a Person acquired by TPI or any of its Restricted Subsidiaries as in effect at the time of such acquisition (except to the extent such Indebtedness or Capital Stock was incurred in connection with or in contemplation of such acquisition), which encumbrance or restriction is not applicable to any Person, or the properties or assets of any Person, other than the Person, or the property or assets of the Person, so acquired;provided that, in the case of Indebtedness, such Indebtedness was permitted by the terms of the indenture to be incurred; and (b) any amendment, modification, replacement or refinancing thereof;provided, however, that such encumbrances or restrictions are not, in the good faith judgment of the Board of Directors, less favorable, taken as a whole, to the holders of the notes than the encumbrances and restrictions contained in the agreements governing the Indebtedness referred to in clause (a);
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(5) customary non-assignment provisions in contracts and licenses entered into in the ordinary course of business;
(6) purchase money obligations for property acquired in the ordinary course of business and Capital Lease Obligations that impose restrictions on the property purchased or leased of the nature described in clause (3) of the preceding paragraph;
(7) any agreement for the sale or other disposition of all or substantially all of the Capital Stock or assets of a Restricted Subsidiary that restricts distributions by that Restricted Subsidiary pending the sale or other disposition;
(8) Permitted Refinancing Indebtedness;providedthat the restrictions contained in the agreements governing such Permitted Refinancing Indebtedness are in the good faith judgment of TPI’s Board of Directors, not materially less favorable, taken as a whole, to the holders of the notes, than those contained in the agreements governing the Indebtedness being refinanced;
(9) Liens permitted to be incurred under the provisions of the covenant described above under the caption “— Liens” that limit the right of the debtor to dispose of the assets subject to such Liens;
(10) provisions limiting the disposition or distribution of assets or property in joint venture agreements, asset sale agreements, sale-leaseback agreements, stock sale agreements and other similar agreements entered into with the approval of TPI’s Board of Directors, which limitation is applicable only to the assets that are the subject of such agreements;
(11) restrictions on cash or other deposits or net worth imposed by customers under contracts entered into in the ordinary course of business; and
(12) other Indebtedness or Disqualified Stock of Restricted Subsidiaries permitted to be incurred subsequent to the date of the indenture pursuant to the provisions of the covenant described under “— Incurrence of Indebtedness and Issuance of Preferred Stock”; provided that the encumbrances or restrictions imposed thereby are ordinary and customary with respect to the type of Indebtedness incurred.
Merger, Consolidation or Sale of Assets
TPI may not, directly or indirectly: (1) consolidate or merge with or into another Person (whether or not TPI is the surviving corporation); or (2) sell, assign, transfer, convey or otherwise dispose of all or substantially all of the properties or assets of TPI and its Restricted Subsidiaries taken as a whole, in one or more related transactions, to another Person; unless:
(1) either: (a) TPI is the surviving corporation; or (b) the Person formed by or surviving any such consolidation or merger (if other than TPI) or to which such sale, assignment, transfer, conveyance or other disposition has been made is a corporation organized or existing under the laws of the United States, any state of the United States or the District of Columbia;
(2) the Person formed by or surviving any such consolidation or merger (if other than TPI) or the Person to which such sale, assignment, transfer, conveyance or other disposition has been made assumes all the obligations of TPI under the notes, the indenture and the security documents pursuant to agreements reasonably satisfactory to the trustee;
(3) immediately before and after giving effect to such transaction, no Default or Event of Default shall have occurred and is continuing; and
(4) TPI or the Person formed by or surviving any such consolidation or merger (if other than TPI), or to which such sale, assignment, transfer, conveyance or other disposition has been made:
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(a) will have Consolidated Net Worth immediately after the transaction equal to or greater than the Consolidated Net Worth of TPI immediately preceding the transaction; and
(b) will, on the date of such transaction after giving pro forma effect thereto and any related financing transactions as if the same had occurred at the beginning of the applicable four-quarter period, be permitted to incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test set forth in the first paragraph of the covenant described above under the caption “— Incurrence of Indebtedness and Issuance of Preferred Stock.”
In addition, TPI may not, directly or indirectly, lease all or substantially all of its properties or assets, in one or more related transactions, to any other Person.
This “Merger, Consolidation or Sale of Assets” covenant will not apply to:
(A) a consolidation or merger of TPI with an Affiliate solely for the purpose of reincorporating TPI in another jurisdiction; and
(B) any sale, transfer, assignment, conveyance, lease or other disposition of assets between or among TPI and its Restricted Subsidiaries.
Transactions with Affiliates
TPI will not, and will not permit any of its Restricted Subsidiaries to, make any payment to, or sell, lease, transfer or otherwise dispose of any of its properties or assets to, or purchase any property or assets from, or enter into or make or amend any transaction, contract, agreement, understanding, loan, advance or guarantee with, or for the benefit of, any Affiliate of TPI (each, an“Affiliate Transaction”), unless:
(1) the Affiliate Transaction is on terms that are no less favorable to TPI or the relevant Restricted Subsidiary than those that would have been obtained in a comparable transaction by TPI or such Restricted Subsidiary with an unrelated Person; and
(2) TPI delivers to the trustee:
(a) with respect to any Affiliate Transaction or series of related Affiliate Transactions involving aggregate consideration in excess of $2.0 million, a resolution of the Board of Directors set forth in an officers’ certificate certifying that such Affiliate Transaction complies with this covenant and that such Affiliate Transaction has been approved by a majority of the disinterested members of the Board of Directors; and
(b) with respect to any Affiliate Transaction or series of related Affiliate Transactions involving aggregate consideration in excess of $20.0 million, an opinion as to the fairness to TPI or such Subsidiary of such Affiliate Transaction from a financial point of view issued by an accounting, appraisal or investment banking firm of national standing.
The following items will not be deemed to be Affiliate Transactions and, therefore, will not be subject to the provisions of the prior paragraph:
(1) any employment agreement, employee benefit plan, officer and director indemnification agreement or any similar arrangement entered into by TPI or any of its Restricted Subsidiaries (including the payment of, or an agreement providing for the payment of, reasonable directors’ fees) in the ordinary course of business;
(2) transactions between or among TPI and/or its Restricted Subsidiaries;
(3) transactions with a Person (other than an Unrestricted Subsidiary of TPI) that is an Affiliate of TPI solely because TPI owns, directly or through a Restricted Subsidiary, an Equity Interest in, or controls, such Person;
(4) any issuance of Equity Interests (other than Disqualified Stock) of TPI to Affiliates of TPI;
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(5) Restricted Payments that do not violate the provisions of the indenture described above under the caption “—Restricted Payments;” and
(6) loans or advances to employees in the ordinary course of business permitted by applicable law not to exceed $1.0 million in the aggregate at any one time outstanding.
Business Activities
TPI will not, and will not permit any of its Restricted Subsidiaries to, engage in any business other than Permitted Businesses, except to such extent as would not be material to TPI and its Restricted Subsidiaries taken as a whole.
Additional Subsidiary Guarantees
If TPI or any of its Restricted Subsidiaries acquires or creates another Domestic Subsidiary after the date of the indenture, then that newly acquired or created Domestic Subsidiary will become a Guarantor and execute a supplemental indenture and deliver an opinion of counsel satisfactory to the trustee within 20 business days of the date on which it was acquired or created.
Designation of Restricted and Unrestricted Subsidiaries
The Board of Directors may designate any Restricted Subsidiary to be an Unrestricted Subsidiary if that designation would not cause a Default. If a Restricted Subsidiary is designated as an Unrestricted Subsidiary, the aggregate Fair Market Value of all outstanding Investments owned by TPI and its Restricted Subsidiaries in the Subsidiary designated as Unrestricted will be deemed to be an Investment made as of the time of the designation and will reduce the amount available for Restricted Payments under the covenant described above under the caption “—Restricted Payments” or under one or more clauses of the definition of Permitted Investments, as determined by TPI. That designation will only be permitted if the Investment would be permitted at that time and if the Restricted Subsidiary otherwise meets the definition of an Unrestricted Subsidiary. The Board of Directors may redesignate any Unrestricted Subsidiary to be a Restricted Subsidiary if that redesignation would not cause a Default.
Limitation on Issuances and Sales of Equity Interests in Restricted Subsidiaries
TPI will not, and will not permit any of its Restricted Subsidiaries to, transfer, convey, sell or otherwise dispose of any Capital Stock in any Restricted Subsidiary of TPI to any Person (other than TPI or a Wholly-Owned Restricted Subsidiary of TPI), unless:
(1) such transfer, conveyance, sale or other disposition is of all the Equity Interests in such Restricted Subsidiary;
(2) the Net Proceeds from such transfer, conveyance, sale or other disposition are applied in accordance with the covenant described above under the caption “— Repurchase at the Option of Holders — Asset Sales”;
(3) such issuances of shares of Capital Stock constituting directors’ qualifying shares or issuances to foreign nationals of shares of Capital Stock of a Foreign Subsidiary, in each case to the extent required by applicable law; and
(4) if, immediately after giving effect to such issuance or sale, such Restricted Subsidiary would no longer constitute a Restricted Subsidiary and any investment in such Person remaining after giving effect to such issuance or sale would have been permitted to be made pursuant to the covenant described above under the caption “—Our Covenants — Restricted Payments” if made on the date of such issuance or sale.
No Amendment to Subordination Provisions
Without the consent of the holders of at least a majority in aggregate principal amount of the notes then outstanding, TPI will not amend, modify or alter the Subordinated Note Indenture in any way to:
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(1) increase the rate of or change the time for payment of interest on any Subordinated Notes;
(2) increase the principal of, advance the final maturity date of or shorten the Weighted Average Life to Maturity of any Subordinated Notes;
(3) alter the redemption provisions or increase the price or terms at which TPI is required to offer to purchase any Subordinated Notes; or
(4) amend the provisions of Article 8 of the Subordinated Note Indenture (which relate to subordination).
Payments for Consent
TPI will not, and will not permit any of its Restricted Subsidiaries to, directly or indirectly, pay or cause to be paid any consideration to or for the benefit of any holder of notes for or as an inducement to any consent, waiver or amendment of any of the terms or provisions of the indenture or the notes unless such consideration is offered to be paid and is paid to all holders of the notes that consent, waive or agree to amend in the time frame set forth in the solicitation documents relating to such consent, waiver or agreement.
Reports
Whether or not required by the Commission’s rules and regulations, so long as any notes are outstanding, TPI will furnish to the holders of notes or cause the trustee to furnish to the holders of notes, within the time periods specified in the Commission’s rules and regulations:
(1) all quarterly and annual reports that would be required to be filed with the Commission on Forms 10-Q and 10-K if TPI were required to file such reports; and
(2) all current reports that would be required to be filed with the Commission on Form 8-K if TPI were required to file such reports.
All such reports will be prepared in all material respects in accordance with all of the rules and regulations applicable to such reports. Each annual report on Form 10-K will include a report on TPI’s consolidated financial statements by TPI’s certified independent accountants. In addition, following the consummation of the exchange offer contemplated by the registration rights agreement, TPI will file a copy of each of the reports referred to in clauses (1) and (2) above with the Commission for public availability within the time periods specified in the rules and regulations applicable to such reports (unless the Commission will not accept such a filing).
In addition, TPI and the Guarantors agree that, for so long as any notes remain outstanding, at any time they are not required to file the reports required by the preceding paragraphs with the Commission, they will furnish to the holders and to securities analysts and prospective investors, upon their request, the information required to be delivered pursuant to Rule 144A(d)(4) under the Securities Act.
Events of Default and Remedies
Each of the following is an Event of Default:
(1) default for 30 consecutive days in the payment when due of interest on with respect to the notes;
(2) default in payment when due of the principal of, or premium, if any, on the notes;
(3) default in the payment of principal of and interest on notes required to be purchased pursuant to an offer to purchase as described under “Repurchase at the Option of Holders — Change of Control” and “Repurchase at the Option of Holders — Asset Sales” above when due and payable;
(4) failure to perform or comply with any of the provisions described under “— Covenants — Mergers, Consolidations and Certain Sales of Assets” above;
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(5) failure by TPI or any of its Restricted Subsidiaries to perform any other covenant or agreement in the indenture, the notes or the security documents, and the default continues for 60 days after written notice to TPI by the trustee or holders of at least 25% in aggregate principal amount of outstanding notes;
(6) default under the terms of one or more instruments evidencing or securing Indebtedness of TPI or any of its Restricted Subsidiaries having an outstanding principal amount of $20.0 million or more individually or in the aggregate that has resulted in the acceleration of the payment of such Indebtedness or failure to pay principal when due at the Stated Maturity of any such Indebtedness;
(7) the rendering of a final judgment or judgments (not subject to appeal) against TPI or any of its Restricted Subsidiaries in an amount of $10.0 million or more which remains undischarged or unstayed for a period of 60 days after the date on which the right to appeal has expired;
(8) the denial or disaffirmation by TPI or any of its Restricted Subsidiaries, or any Person acting on behalf of any of them, in writing, of any material obligation of TPI or any of its Restricted Subsidiaries set forth in or arising under any security documents;
(9) certain events of bankruptcy, insolvency or reorganization described in the indenture with respect to TPI or any of its Restricted Subsidiaries that is a Significant Subsidiary or any group of Restricted Subsidiaries that, taken together, would constitute a Significant Subsidiary;
(10) any Subsidiary Guarantee from a Significant Subsidiary, or any group of Restricted Subsidiaries that, taken together, would constitute a Significant Subsidiary, ceases to be in full force and effect or is declared null and void and unenforceable or is found to be invalid or a Guarantor denies in writing its liability under the Subsidiary Guarantee (other than by reason of a release of such Guarantor from the Subsidiary Guarantee in accordance with the terms of the indenture, the security documents and the Subsidiary Guarantee); and
(11) except as permitted by the indenture, any security document or any Note Lien purported to be granted thereby on an asset or assets fails to constitute a valid and (to the extent required by the security documents) perfected Lien on any material part of the Collateral purported to be subject thereto.
In the case of an Event of Default arising from certain events of bankruptcy or insolvency, with respect to TPI, any Restricted Subsidiary that is a Significant Subsidiary or any group of Restricted Subsidiaries that, taken together, would constitute a Significant Subsidiary, all outstanding notes will become due and payable immediately without further action or notice. If any other Event of Default occurs and is continuing, the trustee or the holders of at least 25% in principal amount of the then outstanding notes may declare all the notes to be due and payable immediately provided, that so long as the Credit Agreement shall be in full force and effect, if an event of default shall have occurred and be continuing (other than as specified under clause (9) above), the notes shall not become due and payable until the earlier to occur of (1) five business days following delivery of a written notice of such acceleration of the notes to the agent under the Credit Agreement, if such event of default has not been cured prior to such fifth business day, and (2) the acceleration of any indebtedness under the Credit Agreement.
Subject to certain limitations, holders of a majority in principal amount of the then outstanding notes may direct the trustee in its exercise of any trust or power. The trustee may withhold from holders of the notes notice of any continuing Default or Event of Default if it determines that withholding notice is in their interest, except a Default or Event of Default relating to the payment of principal or interest.
Subject to the provisions of the indenture relating to the duties of the trustee, in case an Event of Default occurs and is continuing, the trustee will be under no obligation to exercise any of the rights or powers under the indenture at the request or direction of any holders of notes unless such holders have offered to the trustee reasonable indemnity or security against any loss, liability or expense. Except to enforce the right to receive payment of principal, premium (if any) or interest when due, no holder of a note may pursue any remedy with respect to the indenture or the notes unless:
(1) such holder has previously given the trustee notice that an Event of Default is continuing;
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(2) holders of at least 25% in aggregate principal amount of the outstanding notes have requested the trustee to pursue the remedy;
(3) such holders have offered the trustee reasonable security or indemnity against any loss, liability or expense;
(4) the trustee has not complied with such request within 60 days after the receipt thereof and the offer of security or indemnity; and
(5) holders of a majority in aggregate principal amount of the outstanding notes have not given the trustee a direction inconsistent with such request within such 60-day period.
The holders of a majority in aggregate principal amount of the notes then outstanding by notice to the trustee may, on behalf of the holders of all of the notes, rescind an acceleration or waive any existing Default or Event of Default and its consequences under the indenture except a continuing Default or Event of Default in the payment of interest on or the principal of the notes.
In the case of any Event of Default occurring by reason of any willful action or inaction taken or not taken by or on behalf of TPI with the intention of avoiding payment of the premium that TPI would have had to pay if TPI then had elected to redeem the notes pursuant to the optional redemption provisions of the indenture, an equivalent premium will also become and be immediately due and payable to the extent permitted by law upon the acceleration of the notes. If an Event of Default occurs prior to November 15, 2008, by reason of any willful action (or inaction) taken (or not taken) by or on behalf of TPI with the intention of avoiding the prohibition on redemption of the notes prior to November 15, 2008, then the premium specified in the indenture will also become immediately due and payable to the extent permitted by law upon the acceleration of the notes.
TPI is required to deliver to the trustee annually a statement regarding compliance with the indenture. Upon becoming aware of any Default or Event of Default, TPI is required to deliver to the trustee a statement specifying such Default or Event of Default.
No Personal Liability of Directors, Officers, Employees and Stockholders
No director, officer, employee, incorporator or stockholder of TPI or any Guarantor, as such, will have any liability for any obligations of TPI or the Guarantors under the notes, the indenture, the Subsidiary Guarantees, security documents or for any claim based on, in respect of, or by reason of, such obligations or their creation. Each holder of notes by accepting a note waives and releases all such liability. The waiver and release are part of the consideration for issuance of the notes. The waiver may not be effective to waive liabilities under the federal securities laws.
Legal Defeasance and Covenant Defeasance
TPI may, at its option and at any time, elect to have all of its obligations discharged with respect to the outstanding notes and all obligations of the Guarantors discharged with respect to their Subsidiary Guarantees(“Legal Defeasance”) except for:
(1) the rights of holders of outstanding notes to receive payments in respect of the principal of, or interest or premium on such notes when such payments are due from the trust referred to below;
(2) TPI’s obligations with respect to the notes concerning issuing temporary notes, registration of notes, mutilated, destroyed, lost or stolen notes and the maintenance of an office or agency for payment and money for security payments held in trust;
(3) the rights, powers, trusts, duties and immunities of the trustee, and TPI’s and the Guarantor’s obligations in connection therewith; and
(4) the Legal Defeasance provisions of the indenture.
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In addition, TPI may, at its option and at any time, elect to have the obligations of TPI and the Guarantors released with respect to certain covenants (including its obligation to make Change of Control Offers and Asset Sale Offers) that are described in the indenture (“Covenant Defeasance”) and thereafter any omission to comply with those covenants will not constitute a Default or Event of Default with respect to the notes. In the event Covenant Defeasance occurs, certain events (not including non-payment, bankruptcy, receivership, rehabilitation and insolvency events) described under “— Events of Default and Remedies” will no longer constitute an Event of Default with respect to the notes.
In order to exercise either Legal Defeasance or Covenant Defeasance:
(1) TPI must irrevocably deposit with the trustee, in trust, for the benefit of the holders of the notes, cash in U.S. dollars, non-callable Government Securities, or a combination of cash in U.S. dollars and non-callable Government Securities, in amounts as will be sufficient, in the opinion of a nationally recognized investment bank, appraisal firm or firm of independent public accountants to pay the principal of, or interest and premium on, the outstanding notes on the Stated Maturity or on the applicable redemption date, as the case may be, and TPI must specify whether the notes are being defeased to maturity or to a particular redemption date;
(2) in the case of Legal Defeasance, TPI has delivered to the trustee an opinion of counsel reasonably acceptable to the trustee confirming that (a) TPI has received from, or there has been published by, the Internal Revenue Service a ruling or (b) since the date of the 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 will confirm that, the holders of the outstanding notes will not recognize income, gain or loss for federal income tax purposes as a result of such Legal Defeasance and will be subject to federal income tax on the same amounts, in the same manner and at the same times as would have been the case if such Legal Defeasance had not occurred;
(3) in the case of Covenant Defeasance, TPI has delivered to the trustee an opinion of counsel reasonably acceptable to the trustee confirming that the holders of the outstanding notes will not recognize income, gain or loss for federal income tax purposes as a result of such Covenant Defeasance and will be subject to federal income tax on the same amounts, in the same manner and at the same times as would have been the case if such Covenant Defeasance had not occurred;
(4) no Default or Event of Default has occurred and is continuing on the date of such deposit (other than a Default or Event of Default resulting from the borrowing of funds to be applied to such deposit) and the deposit will not result in a breach or violation of, or constitute a default under, any other instrument to which TPI or any Guarantor is a party or by which TPI or any Guarantor is bound;
(5) such Legal Defeasance or Covenant Defeasance will not result in a breach or violation of, or constitute a default under any material agreement or instrument (other than the indenture) to which TPI or any of its Subsidiaries is a party or by which TPI or any of its Subsidiaries is bound;
(6) TPI must deliver to the trustee an officers’ certificate stating that the deposit was not made by TPI with the intent of preferring the holders of notes over the other creditors of TPI with the intent of defeating, hindering, delaying or defrauding creditors of TPI or others; and
(7) TPI must deliver to the trustee an officers’ certificate and an opinion of counsel, each stating that all conditions precedent relating to the Legal Defeasance or the Covenant Defeasance have been complied with.
Amendment, Supplement and Waiver
Except as provided in the next two succeeding paragraphs, the indenture, the notes, the Subsidiary Guarantees or the security documents may be amended or supplemented with the consent of the holders of at least a majority in principal amount of the notes then outstanding (including, without limitation, consents obtained in connection with a purchase of, or tender offer or exchange offer for, notes), and any existing default or compliance with any provision of the indenture or the notes may be waived with the consent of the holders of a majority in principal amount of the
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then outstanding notes (including, without limitation, consents obtained in connection with a purchase of, or tender offer or exchange offer for, notes).
Without the consent of each noteholder affected, an amendment or waiver may not (with respect to any notes held by a non-consenting holder):
(1) reduce the principal amount of notes whose holders must consent to an amendment, supplement or waiver;
(2) reduce the principal of or change the fixed maturity of any note or alter the provisions with respect to the redemption of the notes (other than provisions relating to the covenants described above under the caption “— Repurchase at the Option of Holders”);
(3) reduce the rate of or change the time for payment of interest on any note;
(4) waive a Default or Event of Default in the payment of principal of, or interest or premium, on the notes (except a rescission of acceleration of the notes by the holders of at least a majority in aggregate principal amount of the notes and a waiver of the payment default that resulted from such acceleration);
(5) make any note payable in currency other than that stated in the notes;
(6) make any change in the provisions of the indenture relating to waivers of past Defaults (other than to add sections of the indenture subject thereto) or the rights of holders of notes to receive payments of principal of, or interest or premium, on the notes;
(7) waive a redemption payment with respect to any note (other than a payment required by one of the covenants described above under the caption “— Repurchase at the Option of Holders”);
(8) release any Guarantor from any of its obligations under its Subsidiary Guarantee or the indenture, except in accordance with the terms of the indenture;
(9) make any change in the preceding amendment and waiver provisions; or
(10) release all or substantially all of the Collateral from the Liens created by the security documents except as specifically provided for in the indenture and the security documents.
Notwithstanding the preceding, without the consent of any holder of notes, TPI, the Guarantors and the trustee may amend or supplement the indenture, the security documents or the notes:
(1) to cure any ambiguity, defect or inconsistency;
(2) to provide for uncertificated notes in addition to or in place of certificated notes;
(3) to provide for the assumption of TPI’s obligations to holders of notes in the case of a merger or consolidation or sale of all or substantially all of TPI’s assets;
(4) to make any change that would provide any additional rights or benefits to the holders of notes or that does not adversely affect the legal rights under the indenture of any such holder;
(5) to comply with requirements of the Commission in order to effect or maintain the qualification of the indenture under the Trust Indenture Act;
(6) to conform the text of the indenture, the security documents or the notes to any provision of this Description of Notes to the extent that such provision in this Description of Notes was intended to be a verbatim recitation of a provision of the indenture, the Subsidiary Guarantees, the security documents or the notes;
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(7) to add any additional assets to the Collateral;
(8) to reflect the grant of Liens on the Collateral for the benefit of an additional secured party, to the extent that such Indebtedness and the Lien securing such Indebtedness is permitted by the terms of the indenture; or
(9) to release Collateral from the Lien of the indenture and the security documents when permitted or required by the indenture or the security documents.
Satisfaction and Discharge
The indenture will be discharged and will cease to be of further effect as to all notes issued thereunder, and all security interests in the Collateral created by the security documents in favor of the holders of the notes will be released when:
(1) either:
(a) all notes that have been authenticated, except lost, stolen or destroyed notes that have been replaced or paid and notes for whose payment money has been deposited in trust and thereafter repaid to TPI, have been delivered to the trustee for cancellation; or
(b) all notes that have not been delivered to the trustee for cancellation have become due and payable by reason of the mailing of a notice of redemption or otherwise or will become due and payable within one year and TPI or any Guarantor has irrevocably deposited or caused to be deposited with the trustee as trust funds in trust solely for the benefit of the holders, cash in U.S. dollars, non-callable Government Securities, or a combination of cash in U.S. dollars and non-callable Government Securities, in amounts as will be sufficient, without consideration of any reinvestment of interest, to pay and discharge the entire Indebtedness on the notes not delivered to the trustee for cancellation for principal, premium and accrued interest to the date of maturity or redemption;
(2) no Default or Event of Default has occurred and is continuing on the date of the deposit (other than a Default or Event of Default resulting from the borrowing of funds to be applied to such deposit) and the deposit will not result in a breach or violation of, or constitute a default under, any other instrument to which TPI or any Guarantor is a party or by which TPI or any Guarantor is bound;
(3) TPI or any Guarantor has paid or caused to be paid all sums payable by it under the indenture; and
(4) TPI has delivered irrevocable instructions to the trustee under the indenture to apply the deposited money toward the payment of the notes at maturity or the redemption date, as the case may be.
In addition, TPI must deliver an officers’ certificate and an opinion of counsel to the trustee stating that all conditions precedent to satisfaction and discharge have been satisfied.
Concerning the Trustee
If the trustee becomes a creditor of TPI or any Guarantor, the indenture limits its right to obtain payment of claims in certain cases, or to realize on certain property received in respect of any such claim as security or otherwise. The trustee will be permitted to engage in other transactions; however, if it acquires any conflicting interest it must eliminate such conflict within 90 days, apply to the Commission for permission to continue (if the indenture has been qualified under the Trust Indenture Act) or resign.
The holders of a majority in principal amount of the then outstanding notes will have the right to direct the time, method and place of conducting any proceeding for exercising any remedy available to the trustee, subject to certain exceptions. The indenture provides that in case an Event of Default occurs and is continuing, the trustee will be required, in the exercise of its power, to use the degree of care of a prudent man in the conduct of his own affairs. Subject to such provisions, the trustee will be under no obligation to exercise any of its rights or powers under the
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indenture at the request of any holder of notes, unless such holder has offered to the trustee security and indemnity satisfactory to it against any loss, liability or expense.
Additional Information
Anyone who receives this prospectus may obtain a copy of the indenture and the security documents without charge by writing to Tekni-Plex, Inc. 260 North Denton Tap Road, Suite 150, Coppell, Texas 75019, Attention: James E. Condon, Vice President and Chief Financial Officer.
Book-Entry, Delivery and Form
The notes will be issued in registered, global form in minimum denominations of $1,000 and integral multiples of $1,000 in excess of $1,000. The notes will be deposited with, or on behalf of, the Depository Trust Company and registered in the name of a nominee of DTC.
Except as set forth below, the Global Notes may be transferred, in whole and not in part, only to another nominee of DTC or to a successor of DTC or its nominee. Beneficial interests in the Global Notes may not be exchanged for notes in certificated form except in the limited circumstances described below. See “— Exchange of Global Notes for Certificated Notes.” Except in the limited circumstances described below, owners of beneficial interests in the Global Notes will not be entitled to receive physical delivery of notes in certificated form.
Depository Procedures
The following description of the operations and procedures of DTC, Euroclear and Clearstream are provided solely as a matter of convenience. These operations and procedures are solely within the control of the respective settlement systems and are subject to changes by them. TPI takes no responsibility for these operations and procedures and urges investors to contact the system or their participants directly to discuss these matters.
DTC has advised TPI that DTC is a limited-purpose trust company created to hold securities for its participating organizations (collectively, the“Participants”) and to facilitate the clearance and settlement of transactions in those securities between the Participants through electronic book-entry changes in accounts of its Participants. The Participants include securities brokers and dealers (including the Initial Purchasers), banks, trust companies, clearing corporations and certain other organizations. Access to DTC’s system is also available to other entities such as banks, brokers, dealers and trust companies that clear through or maintain a custodial relationship with a Participant, either directly or indirectly (collectively, the“Indirect Participants”). Persons who are not Participants may beneficially own securities held by or on behalf of DTC only through the Participants or the Indirect Participants. The ownership interests in, and transfers of ownership interests in, each security held by or on behalf of DTC are recorded on the records of the Participants and Indirect Participants.
DTC has also advised TPI that, pursuant to procedures established by it:
(1) upon deposit of the Global Notes, DTC will credit the accounts of the Participants designated by the Initial Purchasers with portions of the principal amount of the Global Notes; and
(2) ownership of these interests in the Global Notes will be shown on, and the transfer of ownership of these interests will be effected only through, records maintained by DTC (with respect to the Participants) or by the Participants and the Indirect Participants (with respect to other owners of beneficial interest in the Global Notes).
The laws of some states require that certain Persons take physical delivery in definitive form of securities that they own. Consequently, the ability to transfer beneficial interests in a Global Note to such Persons will be limited to that extent. Because DTC can act only on behalf of the Participants, which in turn act on behalf of the Indirect Participants, the ability of a Person having beneficial interests in a Global Note to pledge such interests to Persons that do not participate in the DTC system, or otherwise take actions in respect of such interests, may be affected by the lack of a physical certificate evidencing such interests.
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Except as described below, owners of interest in the Global Notes will not have notes registered in their names, will not receive physical delivery of notes in certificated form and will not be considered the registered owners or “Holders” thereof under the indenture for any purpose.
Payments in respect of the principal of, and interest and premium, if any, on a Global Note registered in the name of DTC or its nominee will be payable to DTC in its capacity as the registered holder under the indenture. Under the terms of the indenture, TPI and the trustee will treat the Persons in whose names the notes, including the Global Notes, are registered as the owners of the notes for the purpose of receiving payments and for all other purposes. Consequently, neither TPI, the trustee nor any agent of TPI or the trustee has or will have any responsibility or liability for:
(1) any aspect of DTC’s records or any Participant’s or Indirect Participant’s records relating to or payments made on account of beneficial ownership interest in the Global Notes or for maintaining, supervising or reviewing any of DTC’s records or any Participant’s or Indirect Participant’s records relating to the beneficial ownership interests in the Global Notes; or
(2) any other matter relating to the actions and practices of DTC or any of its Participants or Indirect Participants.
DTC has advised TPI that its current practice, upon receipt of any payment in respect of securities such as the notes (including principal and interest), is to credit the accounts of the relevant Participants with the payment on the payment date unless DTC has reason to believe it will not receive payment on such payment date. Each relevant Participant is credited with an amount proportionate to its beneficial ownership of an interest in the principal amount of the relevant security as shown on the records of DTC. Payments by the Participants and the Indirect Participants to the beneficial owners of notes will be governed by standing instructions and customary practices and will be the responsibility of the Participants or the Indirect Participants and will not be the responsibility of DTC, the trustee or TPI. Neither TPI nor the trustee will be liable for any delay by DTC or any of the Participants or the Indirect Participants in identifying the beneficial owners of the notes, and TPI and the trustee may conclusively rely on and will be protected in relying on instructions from DTC or its nominee for all purposes.
Transfers between the Participants will be effected in accordance with DTC’s procedures, and will be settled in same-day funds, and transfers between participants in Euroclear and Clearstream will be effected in accordance with their respective rules and operating procedures.
DTC has advised TPI that it will take any action permitted to be taken by a holder of notes only at the direction of one or more Participants to whose account DTC has credited the interests in the Global Notes and only in respect of such portion of the aggregate principal amount of the notes as to which such Participant or Participants has or have given such direction. However, if there is an Event of Default under the notes, DTC reserves the right to exchange the Global Notes for legended notes in certificated form, and to distribute such notes to its Participants.
Neither TPI nor the trustee nor any of their respective agents will have any responsibility for the performance by DTC or its participants or indirect participants of their respective obligations under the rules and procedures governing their operations.
Exchange of Global Notes for Certificated Notes
A Global Note is exchangeable for definitive notes in registered certificated form(“Certificated Notes”) if:
(1) DTC (a) notifies TPI that it is unwilling or unable to continue as depositary for the Global Notes or (b) has ceased to be a clearing agency registered under the Exchange Act and, in either case, TPI fails to appoint a successor depositary;
(2) TPI, at its option, notifies the trustee in writing that it elects to cause the issuance of the Certificated Notes; or
(3) there has occurred and is continuing an Event of Default with respect to the notes.
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In addition, beneficial interests in a Global Note may be exchanged for Certificated Notes upon prior written notice given to the trustee by or on behalf of DTC in accordance with the indenture. In all cases, Certificated Notes delivered in exchange for any Global Note or beneficial interests in Global Notes will be registered in the names, and issued in any approved denominations, requested by or on behalf of the depositary (in accordance with its customary procedures).
Same Day Settlement and Payment
TPI will make payments in respect of the notes represented by the Global Notes (including principal, premium, if any, and interest) by wire transfer of immediately available funds to the accounts specified by the Global Note Holder. TPI will make all payments of principal, interest and premium, if any, with respect to Certificated Notes by wire transfer of immediately available funds to the accounts specified by the holders of the Certificated Notes or, if no such account is specified, by mailing a check to each such holder’s registered address. TPI expects that secondary trading in any Certificated Notes will also be settled in immediately available funds.
Certain Definitions
Set forth below are certain defined terms used in the indenture. Reference is made to the indenture for a full disclosure of all such terms, as well as any other capitalized terms used herein for which no definition is provided.
“Acquired Debt” means, with respect to any specified Person:
(1) Indebtedness of any other Person existing at the time such other Person is merged with or into or became a Restricted Subsidiary of such specified Person, whether or not such Indebtedness is incurred in connection with, or in contemplation of, such other Person merging with or into, or becoming a Restricted Subsidiary of, such specified Person; and
(2) Indebtedness secured by a Lien encumbering any asset acquired by such specified Person.
“Affiliate” of any specified Person means any other Person directly or indirectly controlling or controlled by or under direct or indirect common control with such specified Person. For purposes of this definition, “control,” as used with respect to any Person, means the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of such Person, whether through the ownership of voting securities, by agreement or otherwise. For purposes of this definition, the terms “controlling,” “controlled by” and “under common control with” have correlative meanings.
“Asset Sale” means:
(1) the sale, lease, conveyance or other disposition of any assets or rights of TPI or any Restricted Subsidiary;providedthat the sale, conveyance or other disposition of all or substantially all of the assets of TPI and its Restricted Subsidiaries taken as a whole will be governed by the provisions of the indenture described above under the caption “— Repurchase at the Option of Holders — Change of Control” and/or the provisions described above under the caption “—Our Covenants — Merger, Consolidation or Sale of Assets” and not by the provisions of the Asset Sale covenant; and
(2) the issuance of Equity Interests in any of TPI’s Restricted Subsidiaries other than directors’ qualifying shares or the sale of Equity Interests in any of its Subsidiaries.
Notwithstanding the preceding, none of the following items will be deemed to be an Asset Sale:
(1) any single transaction or series of related transactions that involves assets having a Fair Market Value of less than $5.0 million;
(2) a transfer of assets between or among TPI and its Restricted Subsidiaries,
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(3) an issuance of Equity Interests by a Restricted Subsidiary of TPI to TPI or to a Restricted Subsidiary of TPI;
(4) the sale or lease of products, services or accounts receivable in the ordinary course of business and any sale or other disposition of damaged, worn-out or obsolete assets in the ordinary course of business;
(5) the sale or other disposition of cash or Cash Equivalents;
(6) a Restricted Payment that does not violate the covenant described above under the caption “— Our Covenants — Restricted Payments” or a Permitted Investment;
(7) the grant in the ordinary course of business of any non-exclusive license of patents, trademarks, registrations therefor and other similar intellectual property; and
(8) any Lien (or foreclosure thereon) securing Indebtedness to the extent such Lien was granted in compliance with the covenant described above under the caption “—Our Covenants—Liens.”
“Asset Sale Offer”has the meaning assigned to that term in the indenture governing the notes.
“Beneficial Owner” has the meaning assigned to such term in Rule 13d-3 and Rule 13d-5 under the Exchange Act. The terms “Beneficially Owns” and “Beneficially Owned” have a corresponding meaning.
“Board of Directors” means:
(1) with respect to a corporation, the board of directors of the corporation or any committee thereof duly authorized to act on behalf of such board;
(2) with respect to a partnership, the Board of Directors of the general partner of the partnership;
(3) with respect to a limited liability company, the managing member or members or any controlling committee of managing members thereof; and
(4) with respect to any other Person, the board or committee of such Person or other individual or entity serving a similar function.
“Capital Lease Obligation” means, at the time any determination is to be made, the amount of the liability in respect of a capital lease that would at that time be required to be capitalized on a balance sheet in accordance with GAAP, and the Stated Maturity thereof shall be the date of the last payment of rent or any other amount due under such lease prior to the first date upon which such lease may be prepaid by the lessee without payment of a penalty.
“Capital Stock” means:
(1) in the case of a corporation, corporate stock;
(2) in the case of an association or business entity, any and all shares, interests, participations, rights or other equivalents (however designated) similar to corporate stock;
(3) in the case of a partnership or limited liability company, partnership interests (whether general or limited) or membership interests; and
(4) any other interest or participation that confers on a Person the right to receive a share of the profits and losses of, or distributions of assets of, the issuing Person.
“Cash Equivalents” means:
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(1) securities issued or directly and fully guaranteed or insured by the United States or any agency or instrumentality thereof (provided that the full faith and credit of the United States is pledged in support thereof) having maturities of not more than one year from the date of acquisition;
(2) dollar denominated time deposits and certificates of deposit of any commercial bank having, or which is the principal banking subsidiary of a bank holding company having, a long-term unsecured debt rating of at least “A” or the equivalent thereof from S&P or “A2” or the equivalent thereof from Moody’s with maturities of not more than one year from the date of acquisition;
(3) repurchase obligations for underlying securities of the types described in clause (1) above entered into with any bank meeting the qualifications specified in clause (2) above;
(4) commercial paper issued by any Person incorporated in the United States rated at least A-1 or the equivalent thereof by S&P or at least P-1 or the equivalent thereof by Moody’s and in each case maturing not more than one year after the date of acquisition;
(5) marketable direct obligations issued by the District of Columbia or any State of the United States or any political subdivision of any such State or any public instrumentality thereof maturing within one year from the date of acquisition and, at the time of acquisition, having one of the two highest ratings obtainable from either S&P or Moody’s;
(6) investments in money market funds substantially all of whose assets are comprised of Cash Equivalents of the types described in clauses (1) through (5) above; and
(7) in the case of Investments by foreign Subsidiaries, other short-term investments in accordance with normal investment practices for cash management of a type analogous to the foregoing.
“Change of Control” means the occurrence of any of the following:
(1) any person or persons acting together that would constitute a group (for purposes of Section 13(d) of the Exchange Act, or any successor provision thereto) (a “group”), together with any Affiliates or related Persons thereof, other than any such Person, Persons, Affiliates or related Person who are Permitted Holders, shall Beneficially Own, directly or indirectly, at least (a) 50% of the voting power of TPI’s outstanding voting stock or (b) 40% of the voting power of TPI’s outstanding voting stock and in the case of clause (b) the Permitted Holders own less than such Person or group (in doing the “own less than” comparison in this clause (b), the holdings of the Permitted Holders who are members of the new group shall not be counted in the shares held in the aggregate by Permitted Holders); provided that in no event shall a “governance change,” within the meaning of the amended and restated limited liability company agreement of Tekni-Plex Partners and the limited liability company agreement of MST/TP Partners, in each case as in effect on June 21, 2000, be deemed to be a Change of Control under the indenture;
(2) any sale, lease or other transfer (in one transaction or a series of related transactions) is made by TPI or any Restricted Subsidiaries of all or substantially all of the consolidated assets of TPI and the Restricted Subsidiaries to any Person;
(3) TPI consolidates with or merges with or into another person or any person consolidates with, or merges with or into, TPI, in any such event pursuant to a transaction in which immediately after the consummation thereof persons owning a majority of TPI’s voting stock voting immediately prior to such consummation shall cease to own a majority of TPI’s voting stock, or, if TPI is not the surviving entity, a majority of the voting stock of such surviving entity;
(4) continuing directors cease to constitute at least a majority of the board of directors of TPI; or
(5) TPI’s stockholders approve any plan or proposal for TPI’s liquidation or dissolution.
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In no event would the sale of TPI’s common stock to an underwriter or group of underwriters in privity of contract with TPI (or anybody in privity of contact with such underwriters) be deemed to be a Change of Control or be deemed the acquisition of more than 40% of the voting power of TPI’s outstanding voting stock by a Person or any group unless such common stock is held in an investment account in which case the investment account would be treated without giving effect to the foregoing part of this sentence.
“Change of Control Offer” has the meaning assigned to it in the indenture governing the notes.
“Collateral”includes, but is not limited to, the following property of TPI and the Guarantors (whether now owned or existing or acquired or arising after the date of the indenture):
| | (1) | all of the stock and equity interests of TPI’s Domestic Subsidiaries and 65% of the Capital Stock and equity interests of certain of TPI’s Foreign Subsidiaries; |
| | | |
| | (2) | all accounts, inventory, general intangibles, equipment and insurance policies; |
| | | |
| | (3) | all documents of title covering, evidencing or representing goods; |
| | | |
| | (4) | all instruments and chattel paper; |
| | | |
| | (5) | commercial tort claims; |
| | | |
| | (6) | certain real property; |
| | | |
| | (7) | rights under certain railcar leases; |
| | | |
| | (8) | patents, trademarks, copyrights and other intellectual property; |
| | | |
| | (9) | all letter of credit right; |
| | | |
| | (10) | all supporting obligations; |
| | | |
| | (11) | certain deposit accounts; and |
| | | |
| | (12) | all proceeds of, and all other profits, products, rents or receipts, arising from the collection, sale, lease, exchange, assignment, licensing or other disposition or realization upon the Collateral described in (1) through (11) above. |
“Consolidated Cash Flow” means, with respect to any specified Person for any period, the Consolidated Net Income of such Person for such period plus, without duplication:
(1) an amount equal to any extraordinary loss plus any net loss realized by such Person or any of its Restricted Subsidiaries in connection with an Asset Sale, to the extent such losses were deducted in computing such Consolidated Net Income;plus
(2) provision for taxes based on income or profits of such Person and its Restricted Subsidiaries for such period, to the extent that such provision for taxes was deducted in computing such Consolidated Net Income;plus
(3) the Fixed Charges of such Person and its Restricted Subsidiaries for such period, to the extent that such Fixed Charges were deducted in computing such Consolidated Net Income;plus
(4) depreciation and amortization (including amortization of intangibles but excluding amortization of prepaid cash expenses that were paid in a prior period) of such Person and its Restricted Subsidiaries for such
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period to the extent that such depreciation and amortization expenses were deducted in computing such Consolidated Net Income;plus
(5) non-cash items to the extent deducted from Consolidated Net Income for such period, other than any non-cash charges that represent accruals of, or reserves for, cash disbursements to be made in any future accounting period;
in each case, on a consolidated basis and determined in accordance with GAAP.
“Consolidated Net Income” means, with respect to any specified Person for any period, the aggregate of the Net Income of such Person and its Restricted Subsidiaries for such period, on a consolidated basis, determined in accordance with GAAP;providedthat:
(1) the Net Income (but not loss) of any Person that is not a Restricted Subsidiary or that is accounted for by the equity method of accounting will be included only to the extent of the amount of dividends or similar distributions paid in cash to the specified Person or a Restricted Subsidiary of the Person;
(2) the Net Income of any Restricted Subsidiary will be excluded to the extent that the declaration or payment of dividends or similar distributions by that Restricted Subsidiary of that Net Income is not at the date of determination permitted without any prior governmental approval (that has not been obtained) or, directly or indirectly, by operation of the terms of its charter or any agreement, instrument, judgment, decree, order, statute, rule or governmental regulation applicable to that Restricted Subsidiary or its stockholders;
(3) the cumulative effect of a change in accounting principles will be excluded; and
(4) non cash gains and losses due solely to fluctuations in currency values will be excluded.
“Consolidated Net Worth” means, with respect to any specified Person as of any date, the sum of:
(1) the consolidated equity of the common stockholders of such Person and its consolidated Subsidiaries as of such date;plus
(2) the respective amounts reported on such Person’s balance sheet as of such date with respect to any series of preferred stock (other than Disqualified Stock) that by its terms is not entitled to the payment of dividends unless such dividends may be declared and paid only out of net earnings in respect of the year of such declaration and payment, but only to the extent of any cash received by such Person upon issuance of such preferred stock.
“Continuing Directors” means, as of any date of determination, any member of the Board of Directors of TPI who:
(1) was a member of such Board of Directors on the date of the indenture; or
(2) was nominated for election or elected to such Board of Directors with the approval of a majority of the Continuing Directors who were members of such Board at the time of such nomination or election.
“Credit Agreement” means that certain Credit Agreement, dated as of June 21, 2000, by and among TPI, the Guarantor parties thereto, the Lender parties thereto, the LC Issuing Banks referred to therein (each as therein defined), and JP Morgan Chase Bank, as agent, including any related notes, guarantees, collateral documents, instruments and agreements executed in connection therewith, and in each case as amended, restated, modified, increased, renewed, refunded, replaced (whether upon or after termination or otherwise) or refinanced (including by means of sales of debt securities to institutional investors) in whole or in part from time to time, including any agreement increasing the amount of indebtedness incurred thereunder or available to be borrowed thereunder, provided that on the date of that Indebtedness is incurred it would not be prohibited by clause (1) of the second
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paragraph of the covenant described under the caption “— Incurrence of Additional Indebtedness and Issuance of Preferred Stock.”
“Credit Agreement Agent” means, at any time, the Person serving at such time as the “Agent” or“Administrative Agent” under the Credit Agreement or any other representative of the Lenders then most recently designated by the Majority Lenders, in a written notice delivered to the trustee, as the Credit Agreement Agent for the purposes of the indenture.
“Credit Bid Rights” means, in respect of any order relating to a sale of assets in any insolvency or liquidation proceeding, that:
(1) such order grants the holders of notes (individually and in any combination) the right to bid at the sale of such assets and the right to offset such holders’ claims secured by Note Liens upon such assets against the purchase price of such assets if:
(a) the bid of such holders is the highest bid or otherwise determined by a court to be the best offer at a sale; and
(b) the bid of such holders includes a cash purchase price component payable at the closing of the sale in an amount that would be sufficient on the date of the closing of the sale, if such amount were applied to such payment on such date, to pay all unpaid Priority Lien Obligations (except Unasserted Contingent Obligations) and to satisfy all liens entitled to priority over the Priority Liens that attach to the proceeds of the sale, and such order requires such amount to be so applied; and
(2) such order allows the claims of the holders of notes in such insolvency or liquidation proceeding to the extent required for the grant of such rights.
“Credit Facilities” means, one or more debt facilities (including, without limitation, the Credit Agreement) or commercial paper facilities, in each case with banks or other institutional lenders providing for revolving credit loans, term loans, receivables financing (including through the sale of receivables to such lenders or to special purpose entities formed to borrow from such lenders against such receivables) or letters of credit, in each case, as amended, restated, modified, increased, renewed, refunded, replaced (whether upon termination or otherwise) or refinanced (including by means of sales of debt securities to institutional investors) in whole or in part from time to time.
“Default” means any event that is, or with the passage of time or the giving of notice or both would be, an Event of Default.
“Discharge of Priority Lien Obligations” means termination of all commitments to extend credit that would constitute Priority Lien Debt, payment in full in cash of the principal of and interest and premium (if any) on all Priority Lien Debt (except undrawn letters of credit), discharge or cash collateralization (in compliance with the relevant Priority Lien Documents) of all letters of credit outstanding under any Priority Lien Debt or Hedging Obligations constituting Priority Lien Debt, and payment in full in cash of all other Priority Lien Obligations (except Unasserted Contingent Obligations) that are outstanding and unpaid at the time the Priority Lien Debt is paid in full in cash.
“Disqualified Stock” means any Capital Stock that, by its terms (or by the terms of any security into which it is convertible, or for which it is exchangeable, in each case at the option of the holder of the Capital Stock), or upon the happening of any event, matures or is mandatorily redeemable, pursuant to a sinking fund obligation or otherwise, or redeemable at the option of the holder of the Capital Stock, in whole or in part, on or prior to the date that is 91 days after the date on which the notes mature. Notwithstanding the preceding sentence, any Capital Stock that would constitute Disqualified Stock solely because the holders of the Capital Stock have the right to require TPI to repurchase such Capital Stock upon the occurrence of a change of control or an asset sale will not constitute Disqualified Stock if the terms of such Capital Stock provide that TPI may not repurchase or redeem any such Capital Stock pursuant to such provisions unless such repurchase or redemption complies with the covenant described above under the caption “—Our Covenants — Restricted Payments.” Provided further, that if the Capital
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Stock is issued to any plan for the benefit of employees of TPI or its subsidiaries or by any such plan to those employees, that Capital Stock shall not constitute Disqualified Stock solely because it may be required to be repurchased by TPI in order to satisfy applicable statutory or regulatory obligations. The amount of Disqualified Stock deemed to be outstanding at any time for purposes of the indenture will be the maximum amount that TPI and its Restricted Subsidiaries may become obligated to pay upon the maturity of, or pursuant to any mandatory redemption provisions of, such Disqualified Stock, exclusive of accrued dividends.
“Domestic Subsidiary” means any Restricted Subsidiary of TPI that was formed under the laws of the United States or any state of the United States or the District of Columbia or that guarantees or otherwise provides direct credit support for any Indebtedness of TPI.
“Equity Interests” means Capital Stock and all warrants, options or other rights to acquire Capital Stock (but excluding any debt security that is convertible into, or exchangeable for, Capital Stock).
“Equity Offerings” means one or more public or private offerings of Equity Interests (other than Disqualified Stock) of TPI or cash capital contributions received by TPI in respect of such Equity Interests (other than Disqualified Stock).
“Existing Indebtedness” means up to $320.8 million in aggregate principal amount of Indebtedness of TPI and its Subsidiaries in existence on the date of the indenture, until such amounts are repaid. The $320.8 million of Existing Indebtedness includes $315.0 million in aggregate principal amount of TPI’s existing 12 3/4% Senior Subordinated Notes due 2010.
“Fair Market Value” means the value that would be paid by a willing buyer to an unaffiliated willing seller, determined in good faith by the Board of Directors of TPI (unless otherwise provided in the indenture).
“Fixed Charge Coverage Ratio” means with respect to any specified Person for any period, the ratio of the Consolidated Cash Flow of such Person for such period to the Fixed Charges of such Person for such period. In the event that the specified Person or any of its Restricted Subsidiaries incurs, assumes, Guarantees, repays, repurchases, redeems, defeases or otherwise discharges any Indebtedness (other than ordinary working capital borrowings) or issues, repurchases or redeems preferred stock subsequent to the commencement of the period for which the Fixed Charge Coverage Ratio is being calculated and on or prior to the date on which the event for which the calculation of the Fixed Charge Coverage Ratio is made (the “Calculation Date”), then the Fixed Charge Coverage Ratio will be calculated giving pro forma effect to such incurrence, assumption, Guarantee, repayment, repurchase, redemption, defeasance or other discharge of Indebtedness, or such issuance, repurchase or redemption of preferred stock, and the use of the proceeds therefrom, as if the same had occurred at the beginning of the applicable four-quarter reference period.
In addition, for purposes of calculating the Fixed Charge Coverage Ratio:
(1) acquisitions that have been made by the specified Person or any of its Restricted Subsidiaries, including through mergers or consolidations, or any Person or any of its Restricted Subsidiaries acquired by the specified Person or any of its Restricted Subsidiaries, and including any related financing transactions and including increases in ownership of Restricted Subsidiaries, during the four-quarter reference period or subsequent to such reference period and on or prior to the Calculation Date will be given pro forma effect (such calculations will be done in accordance with Regulation S-X under the Securities Act or any successor provision and may include reasonable ascertainable cost savings) as if they had occurred on the first day of the four-quarter reference period;
(2) the Consolidated Cash Flow attributable to discontinued operations, as determined in accordance with GAAP, and operations or businesses (and ownership interests therein) disposed of prior to the Calculation Date, will be excluded;
(3) the Fixed Charges attributable to discontinued operations, as determined in accordance with GAAP, and operations or businesses (and ownership interests therein) disposed of prior to the Calculation Date, will be
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excluded, but only to the extent that the obligations giving rise to such Fixed Charges will not be obligations of the specified Person or any of its Restricted Subsidiaries following the Calculation Date;
(4) any Person that is a Restricted Subsidiary on the Calculation Date will be deemed to have been a Restricted Subsidiary at all times during such four-quarter period;
(5) any Person that is not a Restricted Subsidiary on the Calculation Date will be deemed not to have been a Restricted Subsidiary at any time during such four-quarter period; and
(6) if any Indebtedness bears a floating rate of interest, the interest expense on such Indebtedness will be calculated as if the rate in effect on the Calculation Date had been the applicable rate for the entire period (taking into account any Hedging Obligation applicable to such Indebtedness if such Hedging Obligation has a remaining term until the earlier of the maturity of such Indebtedness or as at the Calculation Date in excess of 12 months).
“Fixed Charges” means, with respect to any specified Person for any period, the sum, without duplication, of:
(1) the consolidated interest expense of such Person and its Restricted Subsidiaries for such period, whether paid or accrued, including, without limitation, amortization of debt issuance costs and original issue discount, non-cash interest payments, the interest component of any deferred payment obligations, the interest component of all payments associated with Capital Lease Obligations, imputed interest with respect to Attributable Debt, commissions, discounts and other fees and charges incurred in respect of letter of credit or bankers’ acceptance financings, and net of the effect of all payments made or received pursuant to Hedging Obligations in respect of interest rates;plus
(2) the consolidated interest of such Person and its Restricted Subsidiaries that was capitalized during such period to the extent the net income of such Restricted Subsidiary is included in the calculation of Net Income;plus
(3) any interest accruing on Indebtedness of another Person that is Guaranteed by such Person or one of its Restricted Subsidiaries or secured by a Lien on assets of such Person or one of its Restricted Subsidiaries, whether or not such Guarantee or Lien is called upon;plus
(4) the product of (a) all dividends, whether paid or accrued and whether or not in cash, on any series of preferred stock of such Person or any of its Restricted Subsidiaries, other than dividends on Equity Interests payable solely in Equity Interests of TPI (other than Disqualified Stock) or to TPI or a Restricted Subsidiary of TPI, times (b) a fraction, the numerator of which is one and the denominator of which is one minus the then current combined federal, state and local statutory tax rate of such Person, expressed as a decimal, in each case, on a consolidated basis and in accordance with GAAP.
“Foreign Subsidiary” means any Restricted Subsidiary that is not a Domestic Subsidiary.
“GAAP” means generally accepted accounting principles set forth in the opinions and pronouncements of the Accounting Principles Board of the American Institute of Certified Public Accountants and statements and pronouncements of the Financial Accounting Standards Board or in such other statements by such other entity as have been approved by a significant segment of the accounting profession, which are in effect from time to time.
“Guarantee” means a guarantee other than by endorsement of negotiable instruments for collection in the ordinary course of business, direct or indirect, in any manner including, without limitation, by way of a pledge of assets or through letters of credit or reimbursement agreements in respect thereof, of all or any part of any Indebtedness (whether arising by virtue of partnership arrangements, or by agreements to keep-well, to purchase assets, goods, securities or services, to take or pay or to maintain financial statement conditions or otherwise).
“Guarantors” means:
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(1) all of TPI’s Domestic Subsidiaries with the exception of Coast Recycling North, Inc., Pure Tech Recycling of California, Alumet Smelting Corporation and Pure Tech APR, Inc.; and
(2) any other subsidiary that executes a Subsidiary Guarantee in accordance with the provisions of the indenture;
and their respective successors and assigns.
“Hedging Obligations” means, with respect to any specified Person, the obligations of such Person under:
(1) interest rate swap agreements (whether from fixed to floating or from floating to fixed), interest rate cap agreements and interest rate collar agreements;
(2) other agreements or arrangements designed to manage interest rates or interest rate risk; and
(3) other agreements or arrangements designed to protect such Person against fluctuations in currency exchange rates or commodity prices or the prices of other raw materials used in their business.
“Indebtedness” means, with respect to any specified Person, any indebtedness of such Person (excluding accrued expenses and trade payables), whether or not contingent:
(1) in respect of borrowed money;
(2) evidenced by bonds, notes, debentures or similar instruments or letters of credit (or reimbursement agreements in respect thereof);
(3) in respect of banker’s acceptances;
(4) representing Capital Lease Obligations in respect of sale and leaseback transactions;
(5) representing the balance deferred and unpaid of the purchase price of any property or services due more than six months after such property is acquired or such services are completed; or
(6) representing any Hedging Obligations,
if and to the extent any of the preceding items (other than letters of credit, Attributable Debt and Hedging Obligations) would appear as a liability upon a balance sheet of the specified Person prepared in accordance with GAAP. In addition, the term “Indebtedness” includes all Indebtedness of others secured by a Lien on any asset of the specified Person (whether or not such Indebtedness is assumed by the specified Person) and, to the extent not otherwise included, the Guarantee by the specified Person of any Indebtedness of any other Person.
“Investments” means, with respect to any Person, all direct or indirect investments by such Person in other Persons (including Affiliates) in the forms of loans (including Guarantees or other obligations), advances or capital contributions (excluding commission, travel and similar advances to officers and employees made in the ordinary course of business), purchases or other acquisitions for consideration of Indebtedness, Equity Interests or other securities, together with all items that are or would be classified as investments on a balance sheet prepared in accordance with GAAP. If TPI or any Subsidiary of TPI sells or otherwise disposes of any Equity Interests of any direct or indirect Subsidiary of TPI such that, after giving effect to any such sale or disposition, such Person is no longer a Subsidiary of TPI, TPI will be deemed to have made an Investment on the date of any such sale or disposition equal to the Fair Market Value of TPI’s Investments in such Subsidiary that were not sold or disposed of in an amount determined as provided in the final paragraph of the covenant described above under the caption “— Our Covenants — Restricted Payments.” The acquisition by TPI or any Subsidiary of TPI of a Person that holds an Investment in a third Person will be deemed to be an Investment by TPI or such Subsidiary in such third Person in an amount equal to the Fair Market Value of the Investments held by the acquired Person in such third Person in an amount determined as provided in the final paragraph of the covenant described above under the caption “— Our
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Covenants — Restricted Payments.” Except as otherwise provided in the indenture, the amount of an Investment will be determined at the time the Investment is made and without giving effect to subsequent changes in value.
“Lenders” means, at any time, the parties to the Credit Agreement then holding (or committed to provide) loans, letters of credit or other extensions of credit that constitute (or when provided will constitute) Priority Lien Debt outstanding under the Credit Agreement.
“Lien” means, with respect to any asset, any mortgage, lien, pledge, charge, security interest or encumbrance of any kind in respect of such asset, whether or not filed, recorded or otherwise perfected under applicable law, including any conditional sale or other title retention agreement, any lease in the nature thereof, any option or other agreement to sell give a security interest in and any filing of or agreement to give any financing statement under the Uniform Commercial Code (or equivalent statutes) of any jurisdiction.
“Majority Lenders” means, at any time, Lenders then holding or committed to provide at least a majority in principal amount of the aggregate loans, letters of credit and other extensions of credit outstanding or committed under the Credit Agreement.
“Moody’s” means Moody’s Investors Service, Inc.
“Net Income” means, with respect to any specified Person, the net income (loss) of such Person, determined in accordance with GAAP and before any reduction in respect of preferred stock dividends, excluding, however:
(1) any gain (but not loss), together with any related provision for taxes on such gain (but not loss), realized in connection with: (a) any Asset Sale; or (b) the disposition of any securities by such Person or any of its Restricted Subsidiaries or the extinguishment of any Indebtedness of such Person or any of its Restricted Subsidiaries; and
(2) any extraordinary gain (or loss), together with any related provision for taxes on such extraordinary gain (or loss).
“Net Proceeds” means the aggregate cash proceeds received by TPI or any of its Restricted Subsidiaries in respect of any Asset Sale (including, without limitation, any cash received upon the sale or other disposition of any non-cash consideration received in any Asset Sale), net of the direct costs relating to such Asset Sale, including, without limitation, legal, accounting and investment banking fees, and sales commissions, and any relocation expenses incurred as a result of the Asset Sale, taxes paid or payable as a result of the Asset Sale, in each case, after taking into account any available tax credits or deductions and any tax sharing arrangements, and amounts required to be applied to the repayment of Indebtedness, other than Indebtedness under a Credit Facility, secured by a Lien on the asset or assets that were the subject of such Asset Sale and any reserve for adjustment in respect of the sale price of such asset or assets established in accordance with GAAP.
“Non-Recourse Debt” means Indebtedness:
(1) as to which neither TPI nor any of its Restricted Subsidiaries (a) provides credit support of any kind (including any undertaking, agreement or instrument that would constitute Indebtedness), (b) is directly or indirectly liable as a guarantor or otherwise, or (c) constitutes the lender;
(2) no default with respect to which (including any rights that the holders of the Indebtedness may have to take enforcement action against an Unrestricted Subsidiary) would permit upon notice, lapse of time or both any holder of any other Indebtedness of TPI or any of its Restricted Subsidiaries to declare a default on such other Indebtedness or cause the payment of the Indebtedness to be accelerated or payable prior to its Stated Maturity; and
(3) as to which the lenders have been notified in writing that they will not have any recourse to the stock or assets of TPI or any of its Restricted Subsidiaries.
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“Note Lien” means, to the extent securing Note Obligations, a Lien granted pursuant to a security document as security for Note Obligations.
“Note Obligations” means the notes, the Subsidiary Guarantees and all other Obligations of any Obligor under the indenture, the notes, the Subsidiary Guarantees and the security documents.
“Obligations” means any principal, interest, penalties, fees, indemnifications, reimbursements, damages and other liabilities payable under the documentation governing any Indebtedness.
“Obligor” means a Person obligated as an issuer or guarantor of the notes.
“Permitted Business” means (1) the manufacturing and distributing of packaging products and materials, plastics products and materials, specialty chemicals and other disposable products and tubing products and (2) any business or activity reasonably related or ancillary thereto.
“Permitted Holder”means (i) Dr. F. Patrick Smith, the estate of Kenneth W.R. Baker and (a) entities controlled by such Persons, (b) trusts for the benefit of such individual Persons or the spouses, issue, parents or other relatives of such individual Persons and (c) in the event of the death of any such individual Person, heirs or testamentary legatees of such Person; and (ii) Tekni-Plex Partners LLC and entities controlled by such Person. For purposes of this definition, “control,” as used with respect to any Person, shall mean the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of such Person, whether through the ownership of voting securities or by contract or otherwise.
“Permitted Investments” means:
(1) any Investment in TPI or in a Restricted Subsidiary of TPI;
(2) any Investment in Cash Equivalents;
(3) any Investment by TPI or any Restricted Subsidiary of TPI in a Person, if as a result of such Investment:
(a) such Person becomes a Restricted Subsidiary of TPI; or
(b) such Person is merged, consolidated or amalgamated with or into, or transfers or conveys substantially all of its assets to, or is liquidated into, TPI or a Restricted Subsidiary of TPI;
(4) any Investment made as a result of the receipt of consideration from an Asset Sale that was made pursuant to and in compliance with the covenant described above under the caption “— Repurchase at the Option of Holders — Asset Sales;”
(5) any acquisition of assets or Capital Stock (other than Disqualified Stock) solely in exchange for the issuance of Equity Interests (other than Disqualified Stock) of TPI;
(6) any Investments received in compromise or resolution of (A) obligations of any Person or customer that were incurred in the ordinary course of business of TPI or any of its Restricted Subsidiaries, including pursuant to any plan of reorganization or similar arrangement upon the bankruptcy or insolvency of such Person; or (B) litigation, arbitration or other disputes with Persons who are not Affiliates;
(7) investments represented by Hedging Obligations;
(8) loans or advances to employees made in the ordinary course of business of TPI or the Restricted Subsidiary of TPI;
(9) repurchases of the notes;
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(10) other Investments in any Person other than an Affiliate of TPI having an aggregate Fair Market Value (measured on the date each such Investment was made and without giving effect to subsequent changes in value), when taken together with all other Investments made pursuant to this clause (10) that are at the time outstanding not to exceed $20.0 million;
(11) endorsements for collection or deposit in the ordinary course of business by such Person of bank drafts and similar negotiable instruments of such other Person received as payment for ordinary course of business trade receivable; and
(12) receivables and prepaid expenses, in each case arising in the ordinary course of business; provided, however that such receivables and prepaid expenses would be recorded as assets of such Person in accordance with GAAP.
“Permitted Liens” means:
(1) Note Liens;
(2) Priority Liens;
(3) Liens in favor of TPI or the Guarantors;
(4) Liens on property of a Person existing at the time such Person is merged with or into or consolidated with TPI or any Subsidiary of TPI;provided that such Liens were in existence prior to the contemplation of such merger or consolidation and do not extend to any assets other than those of the Person merged into or consolidated with TPI or the Subsidiary;
(5) Liens on property (including Capital Stock) existing at the time of acquisition of the property, including by way of merger, consolidation or otherwise, by TPI or any Subsidiary of TPI;provided that such Liens were in existence prior to, such acquisition, and not incurred in contemplation of, such acquisition and do not extend to any assets other than those of the Person merged into or consolidated with TPI or the Subsidiary;
(6) Liens to secure the performance of statutory obligations (including obligations under workers compensation, unemployment insurance or similar legislation), surety or appeal bonds, performance bonds or other obligations of a like nature incurred in the ordinary course of business;
(7) Liens existing on the date of the indenture;
(8) Liens for taxes, assessments or governmental charges or claims that are not yet delinquent or that are being contested in good faith by appropriate proceedings promptly instituted and diligently concluded;providedthat any reserve or other appropriate provision as is required in conformity with GAAP has been made therefor;
(9) Liens imposed by law, such as carriers’, warehousemen’s, landlord’s and mechanics’ Liens, in each case, incurred in the ordinary course of business;
(10) survey exceptions, easements or reservations of, or rights of others for, licenses, rights-of-way, sewers, electric lines, telegraph and telephone lines and other similar purposes, or zoning or other restrictions as to the use of real property that were not incurred in connection with Indebtedness and that do not in the aggregate materially adversely affect the value of said properties or materially impair their use in the operation of the business of such Person;
(11) Liens created for the benefit of (or to secure) the notes (or the Subsidiary Guarantees);
(12) Liens to secure any Permitted Refinancing Indebtedness permitted to be incurred under the indenture;provided, however, that:
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(A) the new Lien shall be limited to all or part of the same property and assets that secured or, under the written agreements pursuant to which the original Lien arose, could secure the original Lien (plus improvements and accessions to, such property or proceeds or distributions thereof); and
(B) the Indebtedness secured by the new Lien is not increased to any amount greater than the sum of (1) the outstanding principal amount or, if greater, committed amount, of the Permitted Referencing Indebtedness and (2) an amount necessary to pay any fees and expenses, including premiums, related to such refinancings, refunding, extension, renewal or replacement;
(13) Liens in favor of the trustee as provided for in the indenture on money or property held or collected by the trustee in its capacity as trustee;
(14) Liens arising pursuant to an order of attachment, distraint or similar legal process arising in connection with legal proceedings not giving rise to an Event of Default under the indenture;
(15) Liens incurred in the ordinary course of business of TPI or any Subsidiary of TPI with respect to obligations that do not exceed $5.0 million at any one time outstanding; and
(16) Liens in favor of the trustee as provided for the 12 3/4% Senior Subordinated Notes Indenture, as supplemented, on money or property held or collected by the trustee in its capacity as trustee.
“Permitted Refinancing Indebtedness” means any Indebtedness of TPI or any of its Restricted Subsidiaries issued in exchange for, or the net proceeds of which are used to refund, refinance, replace, defease or discharge other Indebtedness of TPI or any of its Restricted Subsidiaries (other than intercompany Indebtedness);providedthat:
(1) the principal amount (or accreted value, if applicable) of such Permitted Refinancing Indebtedness does not exceed the principal amount (or accreted value, if applicable) of the Indebtedness extended, refinanced, renewed, replaced, defeased or refunded (plus all accrued interest on the Indebtedness and the amount of all expenses and premiums incurred in connection therewith);
(2) such Permitted Refinancing Indebtedness has a final maturity date later than the final maturity date of, and has a Weighted Average Life to Maturity equal to or greater than the Weighted Average Life to Maturity of, the Indebtedness being extended, refinanced, renewed, replaced, defeased or refunded;
(3) if the Indebtedness being extended, refinanced, renewed, replaced, defeased or refunded is subordinated in right of payment to the notes, such Permitted Refinancing Indebtedness has a final maturity date later than the final maturity date of, and is subordinated in right of payment to, the notes on terms at least as favorable to the holders of notes as those contained in the documentation governing the Indebtedness being extended, refinanced, renewed, replaced, defeased or refunded; and
(4) such Indebtedness is incurred either by TPI or by the Restricted Subsidiary who is the obligor on the Indebtedness being extended, refinanced, renewed, replaced, defeased or refunded or any other Restricted Subsidiary.
“Person” means any individual, corporation, partnership, joint venture, association, joint-stock company, trust, unincorporated organization, limited liability company or government or other entity.
“Priority Lien” means, to the extent securing Priority Lien Obligations, a Lien granted to any holder, or representative of holders, of Priority Lien Obligations as security for Priority Lien Obligations.
“Priority Lien Agent” means the Credit Agreement Agent or, after the Credit Agreement and all commitments to extend credit thereunder have been terminated, all letters of credit (if any) issued under the Credit Agreement have been discharged or cash collateralized in accordance with the terms thereof, and all Priority Lien Obligations (except Unasserted Contingent Obligations) outstanding under the Credit Agreement have been paid in full in cash,
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a single representative of all holders of Priority Liens most recently designated by TPI in an Officer’s Certificate delivered to the trustee or the successor of such representative in its capacity as such.
“Priority Lien Debt” means:
(1) the principal of and interest (including interest accruing on or after the filing of any petition in bankruptcy or for reorganization, only to the extent a claim for post-petition interest is allowed in any case under the Bankruptcy Code) on Indebtedness under the Credit Agreement to the extent which, when advanced (or, in the case of any reimbursement obligation for a letter of credit issued under the Credit Agreement, when such letter of credit was issued), either (a) was permitted to be incurred by clause (1) or clause (14) of the definition of “Permitted Debt” or (b) was advanced (or, in the case of any such reimbursement obligation, relates to a letter of credit that was issued) upon delivery to the trustee and the Credit Agreement Agent of an officer’s certificate to the effect that such Indebtedness was permitted to be incurred by clause (1) or clause (14) of the definition of “Permitted Debt”, including without limitation any such Indebtedness incurred in any insolvency or liquidation proceeding to the extent permitted by clause (1) or clause (14) of the definition of “Permitted Debt;”
(2) Hedging Obligations permitted to be incurred by clause (8) of the definition of “Permitted Debt” that are equally and ratably secured by any and all Liens securing Indebtedness outstanding under the Credit Agreement; and
(3) the principal of and interest (including interest accruing on or after the filing of any petition in bankruptcy or for reorganization, only to the extent a claim for post-petition interest is allowed in such any case under the Bankruptcy Code) on Indebtedness under any Credit Facility other than the Credit Agreement to the extent such Indebtedness was permitted to be incurred by clause (1) or clause (14) of the definition of “Permitted Debt” but only if on or before the day on which such Indebtedness was incurred by TPI or any of its Restricted Subsidiaries such Indebtedness is designated by TPI, in an officer’s certificate delivered to the trustee and the Credit Agreement Agent on or before such date, as Priority Lien Debt for the purposes of the indenture.
“Priority Lien Documents” means the documentation relating to any Priority Lien Debt including, without limitation, the Credit Agreement, the Priority Lien Security Documents and all other agreements governing, securing or relating to any Priority Lien Obligations.
“Priority Lien Obligations” means the Priority Lien Debt and all other Obligations of TPI or any Guarantor under the Priority Lien Documents.
“Priority Lien Security Documents” means one or more security agreements, pledge agreements, collateral assignment, mortgages, deed of trust or other grants or transfers for security executed and delivered by TPI or any Guarantor creating a Lien upon property owned or to be acquired by TPI or such Guarantor in favor of any holder or holders of Priority Lien Debt, or any trustee, agent or representative acting for any such holders, as security for any Priority Lien Obligations.
“Restricted Investment” means an Investment other than a Permitted Investment.
“Restricted Subsidiary” of a Person means any Subsidiary of the referent Person that is not an Unrestricted Subsidiary.
“S&P” means Standard & Poor’s Ratings Group.
“Significant Subsidiary” means any Subsidiary that would be a “significant subsidiary” as defined in Article 1, Rule 1-02 of Regulation S-X, promulgated pursuant to the Securities Act, as such Regulation is in effect on the date hereof.
“Stated Maturity” means, with respect to any installment of interest or principal on any series of Indebtedness, the date on which the payment of interest or principal was scheduled to be paid in the documentation governing such Indebtedness as of the date of the indenture, and will not include any contingent obligations to repay, redeem or repurchase any such interest or principal prior to the date originally scheduled for the payment thereof.
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“Subordinated Notes” means TPI’s 12 ¾% Senior Subordinated Notes due 2010 issued pursuant to the Subordinated Note Indenture.
“Subordinated Note Indenture” means the indenture, dated as of June 21, 2000, by and among TPI, the Guarantors and HSBC Bank USA, as trustee, under which TPI’s 12 ¾% Senior Subordinated Notes due 2010 were issued, as supplemented by a First Supplemental Indenture, dated as of May 6, 2002, by and among TPI, TPI Acquisition Subsidiary, Inc. and HSBC Bank USA and by a Second Supplemental Indenture, dated as of August 22, 2002, by and among, TPI, TP-Elm Acquisition Subsidiary, Inc. and HSBC Bank USA and further supplemented by a Third Supplemental Indenture, dated as of April 25, 2005, by and among TPI, the Guarantors and HSBC Bank USA, National Association (successor by merger to HSBC Bank USA).
“Subsidiary” means, with respect to any specified Person:
(1) any corporation, association or other business entity of which more than 50% of the total voting power of shares of Capital Stock entitled (without regard to the occurrence of any contingency and after giving effect to any voting agreement or stockholders’ agreement that effectively transfers voting power) to vote in the election of directors, managers or trustees of the corporation, association or other business entity is at the time owned or controlled, directly or indirectly, by that Person or one or more of the other Subsidiaries of that Person (or a combination thereof); and
(2) any partnership (a) the sole general partner or the managing general partner of which is such Person or a Subsidiary of such Person or (b) the only general partners of which are that Person or one or more Subsidiaries of that Person (or any combination thereof).
“Subsidiary Guarantee”means the Guarantee by each Guarantor of TPI’s obligations under the indenture and on the notes, executed pursuant to the provisions of the indenture.
“Unasserted Contingent Obligations” means, at any time, Obligations for taxes, costs, indemnifications, reimbursements, damages and other liabilities (except (i) the principal of and interest and premium (if any) on, and fees relating to, any Indebtedness and (ii) contingent obligations to reimburse the issuer of an outstanding letter of credit for amounts that may be drawn or paid thereunder) in respect of which no claim or demand for payment has been made at such time.
“Unrestricted Subsidiary” means any Subsidiary of TPI that is designated by the Board of Directors as an Unrestricted Subsidiary pursuant to a Board Resolution, but only to the extent that such Subsidiary:
(1) has no Indebtedness other than Non-Recourse Debt;
(2) except as permitted by the covenant described above under the caption “— Our Covenants — Affiliate Transactions,” is not party to any agreement, contract, arrangement or understanding with TPI or any Restricted Subsidiary of TPI unless the terms of any such agreement, contract, arrangement or understanding are no less favorable to TPI or such Restricted Subsidiary than those that might be obtained at the time from Persons who are not Affiliates of TPI;
(3) is a Person with respect to which neither TPI nor any of its Restricted Subsidiaries has any direct or indirect obligation (a) to subscribe for additional Equity Interests or (b) to maintain or preserve such Person’s financial condition or to cause such Person to achieve any specified levels of operating results; and
(4) has not guaranteed or otherwise directly or indirectly provided credit support for any Indebtedness of TPI or any of its Restricted Subsidiaries.
Any designation of a Subsidiary of TPI as an Unrestricted Subsidiary will be evidenced to the trustee by filing with the trustee a certified copy of the Board Resolution giving effect to such designation and an officers’ certificate certifying that such designation complied with the preceding conditions and was permitted by the covenant described above under the caption “— Our Covenants — Restricted Payments.” If, at any time, any Unrestricted Subsidiary would fail to meet the preceding requirements as an Unrestricted Subsidiary, it will thereafter cease to be
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an Unrestricted Subsidiary for purposes of the indenture and any Indebtedness of such Subsidiary will be deemed to be incurred by a Restricted Subsidiary of TPI as of such date and, if such Indebtedness is not permitted to be incurred as of such date under the covenant described under the caption “— Our Covenants—Incurrence of Indebtedness and Issuance of Preferred Stock,” TPI will be in default of such covenant. The Board of Directors of TPI may at any time designate any Unrestricted Subsidiary to be a Restricted Subsidiary; provided that such designation will be deemed to be an incurrence of Indebtedness by a Restricted Subsidiary of TPI of any outstanding Indebtedness of such Unrestricted Subsidiary and such designation will only be permitted if (1) such Indebtedness is permitted under the covenant described under the caption “— Our Covenants—Incurrence of Indebtedness and Issuance of Preferred Stock,” calculated on a pro forma basis as if such designation had occurred at the beginning of the four-quarter reference period; and (2) no Default or Event of Default would be in existence following such designation.
“Voting Stock” of any Person as of any date means the Capital Stock of such Person that is at the time entitled to vote in the election of the Board of Directors of such Person.
“Weighted Average Life to Maturity” means, when applied to any Indebtedness at any date, the number of years obtained by dividing:
(1) the sum of the products obtained by multiplying (a) the amount of each then remaining installment, sinking fund, serial maturity or other required payments of principal, including payment at final maturity, in respect of the Indebtedness, by (b) the number of years (calculated to the nearest one-twelfth) that will elapse between such date and the making of such payment; by
(2) the then outstanding principal amount of such Indebtedness.
“Wholly-Owned Restricted Subsidiary” of any specified Person means a Restricted Subsidiary of such Person all of the outstanding Capital Stock or other ownership interests of which (other than directors’ qualifying shares) will at the time be owned by such Person or by one or more Wholly-Owned Restricted Subsidiaries of such Person and one or more Wholly-Owned Restricted Subsidiaries of such Person.
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THE EXCHANGE OFFER
Purpose of the Exchange Offer
The old notes were sold by us to the initial purchasers pursuant to a purchase agreement, dated November 12, 2003, between us and the initial purchasers. The initial purchasers subsequently sold the old notes to “qualified institutional buyers,” as defined in Rule 144A under the Securities Act in reliance on Rule 144A and outside the United States in accordance with Regulation S under the Securities Act. As a condition to the initial sale of the old notes, we and the initial purchasers entered into a registration rights agreement. Pursuant to the registration rights agreement, we agreed that we would:
- file with the SEC within 90 days after the closing date, which is the date we delivered the old notes to theinitial purchasers, a registration statement under the Securities Act with respect to the new notes; and
- use all commercially reasonable efforts to cause such registration statement to become effective under theSecurities Act within 180 days after the closing date; and
- use our commercially reasonable efforts to consummate the Exchange Offer within 30 business days afterthe registration statement is declared effective.
We agreed to issue and exchange new notes for all old notes validly tendered and not withdrawn before the expiration of the exchange offer. A copy of the registration rights agreement has been filed as an exhibit to the registration statement of which this prospectus is a part. The registration statement is intended to satisfy certain of our obligations under the registration rights agreement and the purchase agreement. In the event that due to a change in current interpretations by the SEC, we are not permitted to effect such exchange offer, if any holder of the old notes notifies us prior to the 20th day following consummation of the exchange offer that such holder is not eligible to participate in the exchange offer pursuant to the registration rights agreement, or under other specified circumstances, we agreed to file a shelf registration statement covering resales by the holders of the old notes and will use our commercially reasonable efforts to cause such shelf registration statement to become effective and to keep such shelf registration statement effective for a maximum of two years from the closing date.
We were not able to cause this registration statement to be declared effective by the SEC within 180 days after the closing date as specified in the registration rights agreement we entered into with Lehman Brothers Inc. and Citigroup Global Markets Inc. on November 21, 2003. As a result, we paid liquidated damages in an amount equal to 0.25% per annum of the principal amount of the old notes for the first 90-day period immediately following the 180th date after the closing date which liquidated damages increased by an additional 0.25% per annum with respect to each subsequent 90-day period until they equaled 1.00% per annum, which is the maximum amount of liquidated damages that we are required to pay and it is the amount we are currently paying to holders of the old notes.
Terms of the Exchange Offer; Period for Tendering Old Notes
This prospectus and the accompanying letter of transmittal contain the terms and conditions of the exchange offer. Upon the terms and subject to the conditions included in this prospectus and in the accompanying letter of transmittal, which together are the exchange offer, we will accept for exchange old notes which are properly tendered on or prior to the expiration date, unless you have previously withdrawn them.
- When you tender to us old notes as provided below, our acceptance of the old notes will constitute abinding agreement between you and us upon the terms and subject to the conditions in this prospectus andin the accompanying letter of transmittal.
- For each $1,000 principal amount of old notes surrendered to us in the exchange offer, we will give you$1,000 principal amount of new notes.
- We will keep the exchange offer open for not less than 20 business days, or longer if required by applicablelaw, after the date that we first mail notice of the exchange offer to the holders of the old notes. We aresending this prospectus, together with the letter of transmittal, on or about the date of this prospectus to all
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of the registered holders of old notes at their addresses listed in the trustee’s security register with respect to the old notes.
- The exchange offer expires at 5:00 p.m., New York City time, on , 2006;provided, however,thatwe, in our sole discretion, may extend the period of time for which the exchange offer is open. The term“expiration date” means , 2006 or, if extended by us, the latest time and date to which the exchange offer is extended.
- As of the date of this prospectus, $275,000,000 in aggregate principal amount of the old notes wereoutstanding. The exchange offer is not conditioned upon any minimum principal amount of old notes beingtendered.
- Our obligation to accept old notes for exchange in the exchange offer is subject to the conditions that wedescribe in the section called “Conditions to the Exchange Offer” below.
- We expressly reserve the right, at any time, to extend the period of time during which the exchange offer isopen, and thereby delay acceptance of any old notes, by giving oral or written notice of an extension to theexchange agent and notice of that extension to the holders as described below. During any extension, allold notes previously tendered will remain subject to the exchange offer unless withdrawal rights areexercised. Any old notes not accepted for exchange for any reason will be returned without expense to thetendering holder promptly upon the expiration or termination of the exchange offer.
- We expressly reserve the right to amend or terminate the exchange offer, and not to accept for exchangeany old notes that we have not yet accepted for exchange, if any of the conditions of the exchange offerspecified below under “Conditions to the Exchange Offer” are not satisfied. In the event of a materialchange in the exchange offer, including the waiver of a material condition, we will extend the offer period if necessary so that at least five business days remain in the offer following notice of such material change.
- We will give oral or written notice of any extension, amendment, termination or non-acceptance describedabove to holders of the old notes as promptly as practicable. If we extend the expiration date, we will givenotice by means of a press release or other public announcement no later than 9:00 a.m., New York Citytime, on the business day after the previously scheduled expiration date. Without limiting the manner inwhich we may choose to make any public announcement and subject to applicable law, we will have noobligation to publish, advertise or otherwise communicate any public announcement other than by issuing arelease to the Dow Jones News Service.
- Holders of old notes do not have any appraisal or dissenters’ rights in connection with the exchange offer.
- Old notes which are not tendered for exchange or are tendered but not accepted in connection with theexchange offer will remain outstanding and be entitled to the benefits of the indenture, but will not beentitled to any further registration rights under the registration rights agreement.
- We intend to conduct the exchange offer in accordance with the applicable requirements of the ExchangeAct and the rules and regulations of the SEC thereunder.
- By executing, or otherwise becoming bound by, the letter of transmittal, you will be making therepresentations described below to us. See “—Resales of the New Notes.”
Important rules concerning the exchange offer
You should note that:
- All questions as to the validity, form, eligibility, time of receipt and acceptance of old notes tendered forexchange will be determined by TPI in its sole discretion, which determination shall be final and binding.
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- We reserve the absolute right to reject any and all tenders of any particular old notes not properly tenderedor to not accept any particular old notes which acceptance might, in our judgment or the judgment of ourcounsel, be unlawful.
- We also reserve the absolute right to waive any defects or irregularities of the exchange offer as to anyparticular old notes or conditions of the exchange offer either before or after the expiration date, includingthe right to waive the ineligibility of any holder who seeks to tender old notes in the exchange offer.Although we may announce the waiver of a condition after the exchange offer has expired, we will do sobased on circumstances as they exist on the expiration date. If we waive a condition to the offer and arerequired to extend the offer, we will give notice to the holders as described above. Unless we agree towaive any defect or irregularity in connection with the tender of old notes for exchange, you must cure anydefect or irregularity within any reasonable period of time as we shall determine.
- Our reasonable interpretation of the terms and conditions of the exchange offer as to any particular oldnotes either before or after the expiration date shall be final and binding on all parties.
- Neither TPI, the exchange agent nor any other person shall be under any duty to give notification of anydefect or irregularity with respect to any tender of old notes for exchange, nor shall any of them incur anyliability for failure to give any notification.
Procedures for Tendering Old Notes
What to submit and how
If you, as the registered holder of an old security, wish to tender your old notes for exchange in the exchange offer, you must transmit a properly completed and duly executed letter of transmittal to HSBC Bank USA at the address set forth below under “Exchange Agent” on or prior to the expiration date.
In addition,
(1) certificates for old notes must be received by the exchange agent along with the letter of transmittal,or
(2) a timely confirmation of a book-entry transfer of old notes, if such procedure is available, into the exchange agent’s account at DTC using the procedure for book-entry transfer described below, must be received by the exchange agent prior to the expiration date or
(3) you must comply with the guaranteed delivery procedures described below.
The method of delivery of old notes, letters of transmittal and notices of guaranteed delivery is at your election and risk. If delivery is by mail, we recommend that registered mail, properly insured, with return receipt requested, be used. In all cases, sufficient time should be allowed to assure timely delivery. No letters of transmittal or old notes should be sent to TPI.
How to sign your letter of transmittal and other documents
Signatures on a letter of transmittal or a notice of withdrawal, as the case may be, must be guaranteed unless the old notes being surrendered for exchange are tendered
(1) by a registered holder of the old notes who has not completed the box entitled “Special Issuance Instructions” or “Special Delivery Instructions” on the letter of transmittal or
(2) for the account of an eligible institution.
If signatures on a letter of transmittal or a notice of withdrawal, as the case may be, are required to be guaranteed, the guarantees must be by any of the following eligible institutions:
- a firm which is a member of a registered national securities exchange or a member of the NationalAssociation of Securities Dealers, Inc. or
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- a commercial bank or trust company having an office or correspondent in the United States
If the letter of transmittal is signed by a person or persons other than the registered holder or holders of old notes, the old notes must be endorsed or accompanied by appropriate powers of attorney, in either case signed exactly as the name or names of the registered holder or holders that appear on the old notes and with the signature guaranteed.
If the letter of transmittal or any old notes or powers of attorney are signed by trustees, executors, administrators, guardians, attorneys-in-fact, officers or corporations or others acting in a fiduciary or representative capacity, the person should so indicate when signing and, unless waived by TPI, proper evidence satisfactory to TPI of its authority to so act must be submitted.
Acceptance of Old Notes for Exchange; Delivery of New Notes
Once all of the conditions to the exchange offer are satisfied or waived, we will accept, promptly after the expiration date, all old notes properly tendered and will issue the new notes promptly after acceptance of the old notes. See “Conditions to the Exchange Offer” below. For purposes of the exchange offer, our giving of oral or written notice of our acceptance to the exchange agent will be considered our acceptance of the exchange offer.
In all cases, we will issue new notes in exchange for old notes that are accepted for exchange only after timely receipt by the exchange agent of:
- certificates for old notes, and
- a properly completed and duly executed letter of transmittal, or
- a timely book-entry confirmation of transfer of old notes into the exchange agent’s account at DTC usingthe book-entry transfer procedures described below.
If we do not accept any tendered old notes for any reason included in the terms and conditions of the exchange offer or if you submit certificates representing old notes in a greater principal amount than you wish to exchange, we will return any unaccepted or non-exchanged old notes without expense to the tendering holder or, in the case of old notes tendered by book-entry transfer into the exchange agent’s account at DTC using the book-entry transfer procedures described below, non-exchanged old notes will be credited to an account maintained with DTC promptly upon the expiration or termination of the exchange offer.
Book-Entry Transfer
The exchange agent will make a request to establish an account with respect to the old notes at DTC for purposes of the exchange offer promptly after the date of this prospectus. Any financial institution that is a participant in DTC’s systems may make book-entry delivery of old notes by causing DTC to transfer old notes into the exchange agent’s account in accordance with DTC’s Automated Tender Offer Program procedures for transfer. However, the exchange for the old notes so tendered will only be made after timely confirmation of book-entry transfer of old notes into the exchange agent’s account, and timely receipt by the exchange agent of an agent’s message, transmitted by DTC and received by the exchange agent and forming a part of a book-entry confirmation. The agent’s message must state that DTC has received an express acknowledgment from the participant tendering old notes that are the subject of that book-entry confirmation that the participant has received and agrees to be bound by the terms of the letter of transmittal, and that we may enforce the agreement against that participant.
If your old notes are held through DTC, you must complete a form called “instructions to registered holder and/or book-entry participant,” which will instruct the DTC participant through whom you hold your securities of your intention to tender your old notes or not tender your old notes. Please note that delivery of documents to DTC in accordance with its procedures does not constitute delivery to the exchange agent and we will not be able to accept your tender of securities until the exchange agent receives a letter of transmittal and a book-entry confirmation from DTC with respect to your securities. A copy of that form is available from the exchange agent.
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Guaranteed Delivery Procedures
If you are a registered holder of old notes and you want to tender your old notes but your old notes are not immediately available, or time will not permit your old notes to reach the exchange agent before the expiration date, or the procedure for book-entry transfer cannot be completed on a timely basis, a tender may be effected if
(1) the tender is made through an eligible institution,
(2) prior to the expiration date, the exchange agent receives, by facsimile transmission, mail or hand delivery, from that eligible institution a properly completed and duly executed letter of transmittal and notice of guaranteed delivery, substantially in the form provided by us, stating:
- the name and address of the holder of old notes
- the amount of old notes tendered
- the tender is being made by delivering that notice and guaranteeing that within three New York StockExchange trading days after the date of execution of the notice of guaranteed delivery, the certificates of allphysically tendered old notes, in proper form for transfer, or a book-entry confirmation, as the case may be,will be deposited by that eligible institution with the exchange agent, and
(3) the certificates for all physically tendered old notes, in proper form for transfer, or a book-entry confirmation, as the case may be, are received by the exchange agent within three New York Stock Exchange trading days after the date of execution of the notice of guaranteed delivery.
Withdrawal Rights
You can withdraw your tender of old notes at any time on or prior to the expiration date.
For a withdrawal to be effective, a written notice of withdrawal must be received by the exchange agent at one of the addresses listed below under “Exchange Agent.” Any notice of withdrawal must specify:
- the name of the person having tendered the old notes to be withdrawn
- the old notes to be withdrawn
- the principal amount of the old notes to be withdrawn
- if certificates for old notes have been delivered to the exchange agent, the name in which the old notes areregistered, if different from that of the withdrawing holder
- if certificates for old notes have been delivered or otherwise identified to the exchange agent, then, prior tothe release of those certificates, you must also submit the serial numbers of the particular certificates to bewithdrawn and a signed notice of withdrawal with signatures guaranteed by an eligible institution unlessyou are an eligible institution
- if old notes have been tendered using the procedure for book-entry transfer described above, any notice ofwithdrawal must specify the name and number of the account at DTC to be credited with the withdrawn oldnotes and otherwise comply with the procedures of that facility
Please note that all questions as to the validity, form, eligibility and time of receipt of notices of withdrawal will be determined by us, and our determination shall be final and binding on all parties. Any old notes so withdrawn will be considered not to have been validly tendered for exchange for purposes of the exchange offer.
If you have properly withdrawn old notes and wish to re-tender them, you may do so by following one of the procedures described under “Procedures for Tendering Old Notes” above at any time on or prior to the expiration date.
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Conditions to the Exchange Offer
Notwithstanding any other provisions of the exchange offer, we will not be required to accept for exchange, or to issue new notes in exchange for, any old notes and may terminate or amend the exchange offer, if as of the expiration date of the offer, that acceptance or issuance would violate applicable law or any interpretation of the staff of the SEC.
That condition is for our sole benefit and may be asserted by us regardless of the circumstances giving rise to that condition. Our failure at any time to exercise the foregoing rights shall not be considered a waiver by us of that right. Our rights described in the prior paragraph are ongoing rights which we may assert at any time and from time to time and all conditions to the exchange offer, other than those subject to governmental approval, will be satisfied or waived prior to the expiration date of the offer.
In addition, we will not accept for exchange any old notes tendered, and no new notes will be issued in exchange for any old notes, if at that time any stop order shall be threatened or in effect with respect to the exchange offer to which this prospectus relates or the qualification of the indenture under the Trust Indenture Act.
Exchange Agent
HSBC Bank USA has been appointed as the exchange agent for the exchange offer. All executed letters of transmittal should be directed to the exchange agent at one of the addresses set forth below. Questions and requests for assistance, requests for additional copies of this prospectus or of the letter of transmittal and requests for notices of guaranteed delivery should be directed to the exchange agent, addressed as follows:
| By Registered or Certified Mail, | | |
| Overnight Courier or Hand: | | By Facsimile: |
| |
|
| HSBC Bank USA | | HSBC Bank USA |
| One Hanson Place | | Attention: Paulette Shaw |
| Brooklyn, New York 11243 | | (718) 488-4488 |
| Attention: Paulette Shaw | | |
| Tel: (718) 488-4475 | | |
Delivery to an address other than as listed above or transmission of instructions via facsimile other than as listed above does not constitute a valid delivery.
Fees and Expenses
The principal solicitation is being made by mail; however, additional solicitation may be made by telegraph, telephone or in person by our officers, regular employees and affiliates. We will not pay any additional compensation to any of our officers and employees who engage in soliciting tenders. We will not make any payment to brokers, dealers, or others soliciting acceptances of the exchange offer. However, we will pay the exchange agent reasonable and customary fees for its services and will reimburse it for its reasonable out-of-pocket expenses in connection with the exchange offer.
The estimated cash expenses to be incurred in connection with the exchange offer, including legal, accounting, SEC filing, printing and exchange agent expenses, will be paid by us and are estimated in the aggregate to be $250,000.
Transfer Taxes
Holders who tender their old notes for exchange will not be obligated to pay any transfer taxes in connection therewith, except that holders who instruct us to register new notes in the name of, or request that old notes not tendered or not accepted in the exchange offer be returned to, a person other than the registered tendering holder will be responsible for the payment of any applicable transfer tax thereon.
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Resale of the New Notes
Under existing interpretations of the staff of the SEC contained in several no-action letters to third parties, the new notes would in general be freely transferable after the exchange offer without further registration under the Securities Act. The relevant no-action letters include theExxon Capital Holdings Corporation letter, which was made available by the SEC on May 13, 1988, and theMorgan Stanley & Co. Incorporated letter, made available on June 5, 1991.
However, any purchaser of old notes who is an “affiliate” of TPI or who intends to participate in the exchange offer for the purpose of distributing the new notes
(1) will not be able to rely on the interpretation of the staff of the SEC,
(2) will not be able to tender its old notes in the exchange offer and
(3) must comply with the registration and prospectus delivery requirements of the Securities Act in connection with any sale or transfer of the securities unless that sale or transfer is made using an exemption from those requirements.
By executing, or otherwise becoming bound by, the letter of transmittal each holder of the old notes will represent that:
(1) it is not our “affiliate”;
(2) any new notes to be received by it were acquired in the ordinary course of its business; and
(3) it has no arrangement or understanding with any person to participate, and is not engaged in and does not intend to engage, in the “distribution,” within the meaning of the Securities Act, of the new notes.
In addition, in connection with any resales of new notes, any broker-dealer participating in the exchange offer who acquired securities for its own account as a result of market-making or other trading activities must deliver a prospectus meeting the requirements of the Securities Act. The SEC has taken the position in theShearman &Sterling no-action letter, which it made available on July 2, 1993, that participating broker-dealers may fulfill their prospectus delivery requirements with respect to the new notes, other than a resale of an unsold allotment from the original sale of the old notes, with the prospectus contained in the exchange offer registration statement. Under the registration rights agreement, we are required to allow participating broker-dealers and other persons, if any, subject to similar prospectus delivery requirements to use this prospectus as it may be amended or supplemented from time to time, in connection with the resale of new notes.
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UNITED STATES FEDERAL INCOME TAX CONSIDERATIONS
The exchange of old notes for new notes pursuant to the exchange offer will not result in any United States federal income tax consequences to holders. When a holder exchanges an old note for an exchange note pursuant to the exchange offer, the holder will have the same adjusted basis and holding period in the exchange note as in the old note immediately before the exchange.
Noteholders considering this exchange offer are urged to consult their tax advisors with regard to the application of the United States federal income tax laws to their particular situations as well as any tax consequences arising under the laws of any state, local or foreign taxing jurisdiction.
In the opinion of Davis Polk & Wardwell, the following are the material United States federal income tax consequences of ownership and disposition of the notes. This discussion only applies to:
| • | notes purchased by those initial holders who exchange old notes for new notes pursuant to the exchange offer and purchased the old notes at the “issue price”, which was the first price to the public (not including bond houses, brokers or similar persons or organizations acting in the capacity of underwriters, placement agents or wholesalers) at which a substantial amount of the old notes was sold for money; |
| | | |
| • | notes held as capital assets for United States federal income tax purposes; and |
| | | |
| • | notes held by holders that are for United States federal income tax purposes: |
| | | |
| | • | citizens or residents of the United States; |
| | | |
| | • | corporations, or other entities taxable as corporations for United States federal income tax purposes, created or organized in or under the laws of the United States or of any political subdivision thereof; or |
| | | |
| | • | estates or trusts whose income is subject to United States federal income taxation regardless of its source. |
This discussion does not describe all of the tax consequences that may be relevant to a holder’s particular circumstances or to holders subject to special rules, such as:
- certain financial institutions;
- insurance companies;
- tax-exempt organizations;
- dealers in securities or foreign currencies;
- persons holding notes as part of a hedge;
- holders whose functional currency is not the U.S. dollar;
- United States expatriates;
- partnerships or other entities classified as partnerships for U.S. federal income tax purposes; or
- persons subject to the alternative minimum tax.
This discussion is based on the Internal Revenue Code of 1986, as amended to the date hereof (the “Code”), administrative pronouncements, judicial decisions and final, temporary and proposed Treasury regulations, changes to any of which subsequent to the date of this prospectus may affect the tax consequences described herein, possibly on a retroactive basis.
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Holders of notes are urged to consult their tax advisors with regard to the application of the united states federal income tax laws to their particular situations as well as any tax consequences arising under the laws of any state, local or foreign taxing jurisdiction.
EXCHANGE OF NOTES
The exchange of old notes for new notes pursuant to the exchange offer will not result in any United States federal income tax consequences to holders. When a holder exchanges an old note for a new note pursuant to the exchange offer, the holder will have the same adjusted basis and holding period in the new note as in the old note immediately before the exchange.
HOLDERS CONSIDERING THIS EXCHANGE OFFER ARE URGED TO CONSULT THEIR TAX ADVISORS WITH REGARD TO THE APPLICATION OF THE UNITED STATES FEDERAL INCOME TAX LAWS TO THEIR PARTICULAR SITUATIONS AS WELL AS ANY TAX CONSEQUENCES ARISING UNDER THE LAWS OF ANY STATE, LOCAL OR FOREIGN TAXING JURISDICTION.
INTEREST INCOME
The notes were not issued with “original issue discount” within the meaning of Section 1273 of the Code. A holder will recognize interest paid on a note as ordinary income at the time it accrues or is received in accordance with the holder’s method of accounting for United States federal income tax purposes.
DISPOSITION OF NOTES
Upon the sale, exchange (other than the exchange of an old note for a new note) or retirement of a note, a holder will recognize taxable gain or loss equal to the difference between the amount realized on the disposition of the note (excluding any amount attributable to accrued but unpaid interest, which is treated as interest income as described in the previous paragraph) and the holder’s adjusted tax basis in the note. A holder’s adjusted tax basis in a note will generally equal the cost of the note to the holder, reduced by any principal payments received by the holder. Gain or loss realized on the sale, exchange or retirement of a note will be capital gain or loss and will be long-term capital gain or loss if at the time of sale, exchange or retirement the note has been held for more than one year. Holders should consult their tax advisors regarding the treatment of capital gains and losses.
BACKUP WITHHOLDING AND INFORMATION REPORTING
Information returns may be filed with the Internal Revenue Service in connection with payments on the notes and the proceeds from a sale or other disposition of the notes. A holder may be subject to backup withholding on these payments if the holder fails to provide its taxpayer identification number and comply with certain certification procedures, or otherwise fails to establish an exemption from backup withholding. The amount of any backup withholding will be allowed as a credit against the holder’s United Sates federal income tax liability and may entitle the holder to a refund, provided that the required information is furnished to the Internal Revenue Service.
PLAN OF DISTRIBUTION
Each broker-dealer that receives new notes for its own account in the exchange offer must acknowledge that it will deliver a prospectus in connection with any resale of new notes. This prospectus, as it may be amended or supplemented from time to time, may be used by a broker-dealer in connection with resales of new notes received in exchange for old notes where old notes were acquired as a result of market-making activities or other trading activities. We have agreed that, for a period of 180 days after the expiration date, we will make this prospectus, as amended or supplemented, available to any broker-dealer for use in connection with any resale of new notes received by it in exchange for old notes.
We will not receive any proceeds from any sale of new notes by broker-dealers.
New notes received by broker-dealers for their own account in the exchange offer may be sold from time to time in one or more transactions
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- in the over-the-counter market
- in negotiated transactions
- through the writing of options on the new notes or
- a combination of those methods of resale
at market prices prevailing at the time of resale, at prices related to prevailing market prices or negotiated prices.
Any resale may be made
- directly to purchasers or
- to or through brokers or dealers who may receive compensation in the form of commissions or concessionsfrom any broker-dealer or the purchasers of any new notes.
Any broker-dealer that resells new notes that were received by it for its own account in the exchange offer and any broker or dealer that participates in a distribution of those new notes may be considered to be an “underwriter” within the meaning of the Securities Act. Any profit on any resale of those new notes and any commission or concessions received by any of those persons may be considered to be underwriting compensation under the Securities Act. The letter of transmittal states that, by acknowledging that it will deliver and by delivering a prospectus, a broker-dealer will not be considered to admit that it is an “underwriter” within the meaning of the Securities Act.
For a period of 180 days after the expiration date, we will promptly send additional copies of this prospectus and any amendment or supplement to this prospectus to any broker-dealer that requests those documents in the letter of transmittal. We have agreed to pay all expenses incident to the exchange offer, including the expenses of one counsel for the holders of the securities, other than commissions or concessions of any brokers or dealers and will indemnify the holders of the securities, including any broker-dealers, against some liabilities, including liabilities under the Securities Act.
LEGAL MATTERS
The validity of the new notes offered and the guarantees will be passed upon for Tekni-Plex, Inc. by Davis Polk & Wardwell, New York, New York.
EXPERTS
The consolidated financial statements and schedules of Tekni-Plex, Inc. incorporated by reference in this prospectus have been audited by BDO Seidman, LLP, an independent registered public accounting firm, to the extent and for the periods set forth in their reports incorporated herein by reference, and are incorporated herein in reliance upon such reports given upon the authority of said firm as experts in auditing and accounting.
WHERE YOU CAN FIND MORE INFORMATION
We are subject to the informational requirements of the Exchange Act, and we file periodic reports and other information with the SEC. Our obligation to file periodic reports and other information with the SEC will be suspended if our notes are held of record by fewer than 300 holders as of the beginning of any fiscal year of Tekni-Plex. We have also agreed that, whether or not we are required to do so by the rules and regulations of the SEC, for so long as any of the notes remain outstanding, we will furnish to the noteholders and following the consummation of the exchange offer file with the SEC (unless the SEC will not accept such a filing);
- all quarterly and annual financial information that would be required to be contained in a filing with theSEC on Forms 10-Q and 10-K if we were required to file such forms, including a “Management’s
87
Discussion and Analysis of Financial Condition and Results of Operations” and, with respect to the annualinformation only, a report thereon by our certified independent accountants and
- all reports that would be required to be filed with the SEC on Form 8-K if we were required to file suchreports.
In addition, for so long as any of the notes remain outstanding, we will make available to any prospective purchaser of the notes or beneficial owner of the notes in connection with any sale thereof the information required by Rule 144(d)(4) under the Securities Act. Annual reports delivered to the trustee and the noteholders will contain financial information that has been examined and reported upon, with an opinion expressed by an independent public or certified public accountant. We will also furnish such other reports as may be required by law.
WE WILL PROMPTLY PROVIDE WITHOUT CHARGE TO YOU, UPON ORAL OR WRITTEN REQUEST, A COPY OF ANY OR ALL OF THE DOCUMENTS INCORPORATED BY REFERENCE IN THIS PROSPECTUS. TO OBTAIN TIMELY DELIVERY, YOU MUST REQUEST THE INFORMATION NO LATER THAN, _____________ 2006, OR FIVE BUSINESS DAYS BEFORE THE EXPIRATION DATE, IF THE EXCHANGE OFFER IS EXTENDED. REQUESTS SHOULD BE DIRECTED TO:
TEKNI-PLEX, INC.
260 NORTH DENTON TAP ROAD
COPPELL, TEXAS 75019
TELEPHONE: (972) 304-5077
FACSIMILE: (972) 304-6297
Our SEC filings are available over the Internet at the SEC’s web site at http://www.sec.gov. You may also read and copy any document we file with the SEC at its public reference facilities:
Public Reference Room Office
450 Fifth Street, N.W.
Room 1024
Washington, D.C. 20549
You may also obtain copies of the documents at prescribed rates by writing to the Public Reference section of the SEC at 450 Fifth Street, N.W., Room 1024, Washington, D.C. 20549. Please call 1-800-SEC-0330 for further information on the operations of the public reference facilities.
The information incorporated by reference or deemed incorporated by reference is considered to be part of this prospectus. We incorporate by reference the documents listed below:
- Our Annual Report on Form 10-K for the year ended July 1, 2005
- Our Quarterly Report on Form 10-Q for the quarter ended September 30, 2005
- Our Current Reports on Forms 8-K filed on September 21, September 29 and October 14, 2005.
The prospectus is also accompanied by a copy of our Annual Report on Form 10-K for the year ended July 1, 2005 and our Quarterly Report on Form 10-Q for the quarter ended September 30, 2005.
88
PART II
Information Not Required in Prospectus
Item 20. Indemnification of Directors and Officers
Section 145 of the General Corporation Law of the State of Delaware authorizes a court to award or a corporation’s board of directors to grant indemnification to directors and officers in terms that are sufficiently broad to permit indemnification under certain circumstances for liabilities (including reimbursement for expenses incurred) arising under the Securities Act of 1933. Tekni-Plex’s certificate of incorporation contains a provision eliminating the personal liability of its directors to the company or its shareowners for breach of fiduciary duty as a director to the fullest extent permitted by applicable law. Tekni-Plex’s bylaws provide for the mandatory indemnification of our directors and officers to the maximum extent permitted by Delaware law. Tekni-Plex’s bylaws also provide (i) that we may expand the scope of the indemnification by individual contracts with our directors and officers, and (ii) that we shall not be required by law, if the proceeding in which indemnification is sought was brought by a director or officer, it was authorized in advance by our board of directors, the indemnification is provided by us, in our sole discretion pursuant to powers vested in us under the Delaware law, or the indemnification is required by individual contract. In addition, our bylaws give us the power to indemnify our employees and agents to the maximum extent permitted by Delaware law.
Item 21. Exhibits and Financial Statement Schedules
(a) Exhibits
| | 3.1 | Amended and Restated Certificate of Incorporation of Tekni-Plex, Inc.8 |
| |
| | 3.2 | Amended and Restated By-laws of Tekni-Plex, Inc.1 |
| |
| | 3.3 | Certificate of Incorporation of PureTec Corporation.1 |
| |
| | 3.4 | By-laws of PureTec Corporation.1 |
| |
| | 3.5 | Certificate of Incorporation of Tri-Seal Holdings, Inc.1 |
| |
| | 3.6 | By-laws of Tri-Seal Holding, Inc.1 |
| |
| | 3.7 | Certificate of Incorporation of Natvar Holdings, Inc.1 |
| |
| | 3.8 | By-laws of Natvar Holdings.1 |
| |
| | 3.9 | Certificate of Incorporation of Plastic Specialties and Technologies, Inc.1 |
| |
| | 3.10 | By-laws of Plastic Specialties and Technologies, Inc.1 |
| |
| | 3.11 | Certificate of Incorporation of Plastic Specialties and Technologies Investments, Inc.1 |
| |
| | 3.12 | By-laws of Plastic Specialties and Technologies Investments, Inc.1 |
| |
| | 3.13 | Certificate of Incorporation of Burlington Resins, Inc.1 |
| |
| | 3.14 | By-laws of Burlington Resins, Inc.1 |
| |
| | 3.15 | Certificate of Incorporation of TPI Acquisition Subsidiary, Inc.2 |
| |
| | 3.16 | By-laws of TPI Acquisition Subsidiary, Inc.2 |
| |
| | 3.17 | Certificate of Incorporation of Distributors Recycling, Inc.1 |
| |
| | 3.18 | By-laws of Distributors Recycling, Inc.1 |
| |
II-1
| | 3.19 | Certificate of Incorporation of TP-Elm Acquisition Subsidiary, Inc.2 |
| |
| | 3.20 | By-laws of TP-Elm Acquisition Subsidiary, Inc.2 |
| |
| | 4.1 | Indenture, dated as of November 21, 2003 among Tekni-Plex, Inc., the Guarantors listed therein and HSBC Bank USA, as Trustee.3 |
| |
| | 4.2 | Purchase Agreement, dated as of November 12, 2003 among Tekni-Plex, Inc., the Guarantors listed therein, and Lehman Brothers Inc. and Citigroup Global Markets Inc.3 |
| |
| | 4.3 | Registration Right Agreement, dated as of November 21, 2003 among Tekni-Plex, Inc., the Guarantors listed therein, and Lehman Brothers Inc. and Citigroup Global Markets Inc.3 |
| |
| | 4.4 | Indenture, dated as of June 21, 2000 among Tekni-Plex, Inc., the Guarantors listed therein and HSBC Bank USA, as Trustee.1 |
| |
| | 4.5 | First Supplemental Indenture, dated as of May 6, 2002 among Tekni-Plex, Inc., TPI Acquisition Subsidiary, Inc. and HSBC Bank USA, as Trustee2 |
| |
| | 4.6 | Second Supplemental Indenture, dated as of August 22, 2002 among Tekni-Plex, Inc., TP-Elm Acquisition Subsidiary, Inc. and HSBC Bank USA, as Trustee2 |
| |
| | 4.7 | Third Supplemental Indenture, dated as of April 25, 2005 among Tekni-Plex, Inc., the Guarantors listed therein and HSBC Bank USA, National Association, as Trustee7 |
| |
| | 4.8 | Indenture, dated as of June 10, 2005 among Tekni-Plex, Inc., the guarantors party thereto and HSBC Bank USA, National Association, as Trustee.7 |
| |
| | 5.1 | Opinion of Davis Polk & Wardwell.8 |
| |
| | 5.2 | Opinion of Pitney Hardin LLP.8 |
| |
| | 8.1 | Opinion of Davis Polk & Wardwell as to tax matters.3 |
| |
| | 10.1 | Credit Agreement, dated as of June 21, 2000, among Tekni-Plex, Inc., the Guarantors party thereto, the Lenders party thereto, the LC Issuing Banks referred to therein and Morgan Guaranty Trust Company of New York.1 |
| |
| | 10.1.1 | First Amendment to the Credit Agreement dated September 26, 2001.3 |
| |
| | 10.1.2 | Second Amendment to the Credit Agreement dated November 1, 2001.3 |
| |
| | 10.1.3 | Third Amendment to the Credit Agreement dated September 22, 2003.3 |
| |
| | 10.2 | Second Amended and Restated Employment Agreement dated May 13, 2005.6 |
| |
| | 10.3 | Credit Agreement, dated as of June 10, 2005 among the Company, the lenders and issuers party thereto, Citicorp USA, Inc., as Administrative Agent and General Electric Capital Corporation, as Syndication Agent.7 |
| |
| | 12 | Statement regarding Computation of Ratios.9 |
| |
| | 23.1 | Consent of BDO Seidman, LLP.9 |
| |
| | 23.2 | Consent of Davis Polk & Wardwell (included in Exhibits 5.1 and 8.1). |
| |
| | 24.1 | Power of Attorney (included on signature page). |
| |
II-2
| | 25.1 | Statement of Eligibility of Trustee, HSBC Bank USA, on Form T-1.3 |
| |
| | 25.2 | Statement of Eligibility of Trustee, HSBC Bank USA, National Association (successor by merger to HSBC Bank USA), on Form T-1.8 |
| |
| | 99.1.1 | Form of Letter of Transmittal.3 |
| |
| | 99.1.2 | Amended Form of Letter of Transmittal.9 |
| |
| | 99.2 | Form of Notice of Guaranteed Delivery.3 |
| |
| | 99.3 | Form of Tender Instructions.3 |
| |
| | 99.4 | Form of Exchange Agent Agreement.3 |
| |
| | 99.5 | Instruction to Registered Holders and/or Book-Entry Transfer Facility Participants.3 |
| |
| | 99.6 | Broker’s Letter to Clients.3 |
| |
|
| 1 | Filed previously as an Exhibit to our Registration Statement on Form S-4 (File No. 333-43800) filed on August 15, 2000. |
| 2 | Filed previously as an Exhibit to our Registration Statement on Form S-4 (File No. 333-98561) filed on August 22, 2002. |
| 3 | Filed previously as an Exhibit to our Registration Statement on Form S-4 (File No. 333-111778) filed on January 8, 2004. |
| 4 | Filed previously as an Exhibit to our Registration Statement on Form S-4 (File No. 333-111778) filed on March 10, 2004. |
| 5 | Filed previously as an Exhibit to our Registration Statement on Form S-4 (File No. 333-111778) filed on May 14, 2004. |
| 6 | Filed previously as an Exhibit to our Form 8-K filed on May 19, 2005 |
| 7 | Filed previously as an Exhibit to our Form 8-K filed on June 16, 2005. |
| 8 | Filed previously as an Exhibit to our Registration Statement on Form S-4 (File No. 333-111778) filed on July 13, 2005. |
| 9 | Filed herewith. |
Item 22. Undertakings
(a) The undersigned hereby undertakes that, for the purpose of determining any liability under the Securities Act of 1933, each filing of the registrant’s annual report pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934 that is incorporated by reference in the registration statement shall be deemed to be a new registration statement relating to the notes offered therein, and the offering of such notes at that time shall be deemed to be the initial bona fide offering thereof.
(b) Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to our directors, officers and controlling persons pursuant to the foregoing provisions, or otherwise, we have been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by us of expenses incurred or paid by one of our directors, officers or controlling persons in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the notes being registered, we will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such
II-3
indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue.
(c) The undersigned hereby undertakes to respond to requests for information that is incorporated by reference into the prospectus pursuant to Item 4, 10(b), 11 or 13 of this form, within one business day of receipt of such request, and to send the incorporated documents by first class mail or other equally prompt means. This includes information contained in documents filed subsequent to the effective date of the registration statement through the date of responding to the request.
(d) The undersigned hereby undertakes to supply by means of a post-effective amendment all information concerning a transaction that was not the subject of and included in the registration statement when it became effective.
(e) The undersigned registrant hereby undertakes to file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement:
(i) To include any prospectus required by section 10(a)(3) of the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information in the registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than a 20% change in the maximum aggregate offering price set forth in the “Calculation of Registration Fee” table in the effective registration statement; and
(iii) To include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement.
(f) That, for the purpose of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.
(g) To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering.
II-4
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, Tekni-Plex, Inc., a Delaware corporation, has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized in Coppell, Texas on January 27, 2006.
| | TEKNI-PLEX, INC. |
| | | | |
| | By: | /s/ | F. Patrick Smith |
| | |
|
| | | Name: | F. Patrick Smith |
| | | Title: | Chairman of the Board and Chief
Executive Officer |
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints F. Patrick Smith and James E. Condon, and each of them, his or her true and lawful attorneys-in-fact and agents, with full power of substitution and resubstitution, for him or her and in his or her name, place and stead, in any and all capacities, to sign any and all amendments (including post-effective amendments) to this registration statement and any and all additional registration statements pursuant to Rule 462(b) of the Securities Act of 1933, as amended, and to file the same, with all exhibits thereto, and all other documents in connection therewith, with the Securities and Exchange Commission, granting unto each said attorney-in-fact and agents full power and authority to do and perform each and every act in person, hereby ratifying and confirming all that said attorneys-in-fact and agents or either of them or their or his or her substitute or substitutes may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, as amended, this Registration Statement has been signed below by the following persons in the capacities and on the dates indicated.
| Signature | | Title | | Date |
| |
| |
|
| | | | | | |
| /s/ F. Patrick Smith | | Chairman of the Board and Chief Executive Officer | | January 27, 2006 |
| | | | | |
| F. Patrick Smith | | | | | |
| |
| |
| /s/ James E. Condon | | Vice President and Chief Financial Officer and | | January 27, 2006 |
| | Director (principal accounting officer) | | | |
| James E. Condon | | | | | |
| |
| |
| /s/ Edward Goldberg | | Senior Vice President and Director | | January 27, 2006 |
| | | | | |
| Edward Goldberg | | | | | |
| |
| |
| /s/ J. Andrew McWethy | | Director | | January 27, 2006 |
| | | | | |
| J. Andrew McWethy | | | | | |
| |
| |
| /s/ Michael F. Cronin | | Director | | January 27, 2006 |
| | | | | |
| Michael F. Cronin | | | | | |
| |
| |
| /s/ John S. Geer | | Director | | January 27, 2006 |
| | | | | |
| John S. Geer | | | | | |
II-5
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, PureTec Corporation, a Delaware corporation, has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized in Coppell, Texas on January 27, 2006.
| | PURETEC CORPORATION |
| | | | |
| | By: | /s/ | F. Patrick Smith |
| | |
|
| | | Name: | F. Patrick Smith |
| | | Title: | Chairman of the Board and Chief
Executive Officer |
Pursuant to the requirements of the Securities Act of 1933, as amended, this Registration Statement has been signed by the following persons in the capacities and on the dates indicated.
| Signature | | Title | | Date |
| |
| |
|
| | | | | | |
| /s/ F. Patrick Smith | | Chief Executive Officer and Director | | January 27, 2006 |
| | | | | |
| F. Patrick Smith | | | | | |
| |
| |
| /s/ James E. Condon | | Chief Financial Officer and Director | | January 27, 2006 |
| | (principal financial and accounting officer) | | | |
| James E. Condon | | | | | |
II-6
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, Tri-Seal Holdings, Inc., a Delaware corporation, has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized in Coppell, Texas on January 27, 2006.
| | TRI-SEAL HOLDINGS, INC. |
| | | | |
| | By: | /s/ | F. Patrick Smith |
| | |
|
| | | Name: | F. Patrick Smith |
| | | Title: | Chairman of the Board and Chief
Executive Officer |
Pursuant to the requirements of the Securities Act of 1933, as amended, this Registration Statement has been signed by the following persons in the capacities and on the dates indicated.
| Signature | | Title | | Date |
| |
| |
|
| | | | | | |
| /s/ F. Patrick Smith | | Chairman of the Board and Chief | | January 27, 2006 |
| | Executive Officer | | | |
| F. Patrick Smith | | | | | |
| |
| |
| /s/ James E. Condon | | Chief Financial Officer and Director | | January 27, 2006 |
| | (principal financial and accounting officer) | | | |
| James E. Condon | | | | | |
II-7
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, Natvar Holdings, Inc., a Delaware corporation, has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized in Coppell, Texas on January 27, 2006.
| | NATVAR HOLDINGS, INC. |
| | | | |
| | By: | /s/ | F. Patrick Smith |
| | |
|
| | | Name: | F. Patrick Smith |
| | | Title: | Chairman of the Board and Chief
Executive Officer |
Pursuant to the requirements of the Securities Act of 1933, as amended, this Registration Statement has been signed by the following persons in the capacities and on the dates indicated.
| Signature | | Title | | Date |
| |
| |
|
| | | | | | |
| /s/ F. Patrick Smith | | Chairman of the Board and Chief | | January 27, 2006 |
| | Executive Officer | | | |
| F. Patrick Smith | | | | | |
| |
| |
| /s/ James E. Condon | | Chief Financial Officer and Director | | January 27, 2006 |
| | (principal financial and accounting officer) | | | |
| James E. Condon | | | | | |
II-8
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, Plastic Specialties and Technologies, Inc., a Delaware corporation, has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized in Coppell, Texas on January 27, 2006.
| | PLASTIC SPECIALTIES AND TECHNOLOGIES, INC. |
| | | | |
| | By: | /s/ | F. Patrick Smith |
| | |
|
| | | Name: | F. Patrick Smith |
| | | Title: | Chairman of the Board and Chief
Executive Officer |
Pursuant to the requirements of the Securities Act of 1933, as amended, this Registration Statement has been signed by the following persons in the capacities and on the dates indicated.
| Signature | | Title | | Date |
| |
| |
|
| | | | | | |
| /s/ F. Patrick Smith | | Chairman of the Board and Chief | | January 27, 2006 |
| | Executive Officer | | | |
| F. Patrick Smith | | | | | |
| |
| |
| /s/ James E. Condon | | Chief Financial Officer and Director | | January 27, 2006 |
| | (principal financial and accounting officer) | | | |
| James E. Condon | | | | | |
II-9
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, Plastics Specialties and Technologies Investments, Inc., a Delaware corporation, has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized in Coppell, Texas on January 27, 2006.
| | PLASTIC SPECIALTIES AND
TECHNOLOGIES INVESTMENTS, INC. |
| | | | |
| | By: | /s/ | F. Patrick Smith |
| | |
|
| | | Name: | F. Patrick Smith |
| | | Title: | Chairman of the Board and Chief
Executive Officer |
Pursuant to the requirements of the Securities Act of 1933, as amended, this Registration Statement has been signed by the following persons in the capacities and on the dates indicated.
| Signature | | Title | | Date |
| |
| |
|
| | | | | | |
| /s/ F. Patrick Smith | | Chairman of the Board and Chief | | January 27, 2006 |
| | Executive Officer | | | |
| F. Patrick Smith | | | | | |
| |
| |
| /s/ James E. Condon | | Chief Financial Officer and Director | | January 27, 2006 |
| | (principal financial and accounting officer) | | | |
| James E. Condon | | | | | |
II-10
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, Burlington Resins, Inc., a Delaware corporation, has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized in Coppell, Texas on January 27, 2006.
| | BURLINGTON RESINS, INC. |
| | | | |
| | By: | /s/ | F. Patrick Smith |
| | |
|
| | | Name: | F. Patrick Smith |
| | | Title: | Chairman of the Board and Chief
Executive Officer |
Pursuant to the requirements of the Securities Act of 1933, as amended, this Registration Statement has been signed by the following persons in the capacities and on the dates indicated.
| Signature | | Title | | Date |
| |
| |
|
| | | | | | |
| /s/ F. Patrick Smith | | Chairman of the Board and Chief | | January 27, 2006 |
| | Executive Officer | | | |
| F. Patrick Smith | | | | | |
| |
| |
| /s/ James E. Condon | | Chief Financial Officer and Director | | January 27, 2006 |
| | (principal financial and accounting officer) | | | |
| James E. Condon | | | | | |
II-11
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, TPI Acquisition Subsidiary, Inc., a Delaware corporation, has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized in Coppell, Texas on January 27, 2006.
| | TPI ACQUISITION SUBSIDIARY, INC. |
| | | | |
| | By: | /s/ | F. Patrick Smith |
| | |
|
| | | Name: | F. Patrick Smith |
| | | Title: | Chairman of the Board and Chief
Executive Officer |
Pursuant to the requirements of the Securities Act of 1933, as amended, this Registration Statement has been signed by the following persons in the capacities and on the dates indicated.
| Signature | | Title | | Date |
| |
| |
|
| | | | | | |
| /s/ F. Patrick Smith | | Chairman of the Board and Chief | | January 27, 2006 |
| | Executive Officer | | | |
| F. Patrick Smith | | | | | |
| |
| |
| /s/ James E. Condon | | Chief Financial Officer and Director | | January 27, 2006 |
| | (principal financial and accounting officer) | | | |
| James E. Condon | | | | | |
II-12
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, Distributors Recycling, Inc., a New Jersey corporation, has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized in Coppell, Texas on January 27, 2006.
| | DISTRIBUTORS RECYCLING, INC. |
| | | | |
| | By: | /s/ | F. Patrick Smith |
| | |
|
| | | Name: | F. Patrick Smith |
| | | Title: | Chairman of the Board and Chief
Executive Officer |
Pursuant to the requirements of the Securities Act of 1933, as amended, this Registration Statement has been signed by the following persons in the capacities and on the dates indicated.
| Signature | | Title | | Date |
| |
| |
|
| | | | | | |
| /s/ F. Patrick Smith | | Chairman of the Board and Chief | | January 27, 2006 |
| | Executive Officer | | | |
| F. Patrick Smith | | | | | |
| |
| |
| /s/ James E. Condon | | Chief Financial Officer and Director | | January 27, 2006 |
| | (principal financial and accounting officer) | | | |
| James E. Condon | | | | | |
II-13
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, TP-Elm Acquisition Subsidiary, Inc., a Delaware corporation, has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized in Coppell, Texas on January 27, 2006.
| | TP-ELM ACQUISITION SUBSIDIARY, INC. |
| | | | |
| | By: | /s/ | F. Patrick Smith |
| | |
|
| | | Name: | F. Patrick Smith |
| | | Title: | Chairman of the Board and Chief
Executive Officer |
Pursuant to the requirements of the Securities Act of 1933, as amended, this Registration Statement has been signed by the following persons in the capacities and on the dates indicated.
| Signature | | Title | | Date |
| |
| |
|
| | | | | | |
| /s/ F. Patrick Smith | | Chairman of the Board and Chief | | January 27, 2006 |
| | Executive Officer | | | |
| F. Patrick Smith | | | | | |
| |
| |
| /s/ James E. Condon | | Chief Financial Officer and Director | | January 27, 2006 |
| | (principal financial and accounting officer) | | | |
| James E. Condon | | | | | |
II-14
EXHIBIT INDEX
Exhibit
No. | Description | Page |
|
|
|
| 3.1 | Amended and Restated Certificate of Incorporation of Tekni-Plex, Inc.8 | |
| |
| 3.2 | Amended and Restated By-laws of Tekni-Plex, Inc.1 | |
| |
| 3.3 | Certificate of Incorporation of PureTec Corporation.1 | |
| |
| 3.4 | By-laws of PureTec Corporation.1 | |
| |
| 3.5 | Certificate of Incorporation of Tri-Seal Holdings, Inc.1 | |
| |
| 3.6 | By-laws of PTI Plastics, Inc.1 | |
| |
| 3.7 | Certificate of Incorporation of Natvar Holdings, Inc.1 | |
| |
| 3.8 | By-laws of Natvar Holdings.1 | |
| |
| 3.9 | Certificate of Incorporation of Plastic Specialities and Technologies, Inc.1 | |
| |
| 3.1 | By-laws of Plastic Specialities and Technologies, Inc.1 | |
| |
| 3.11 | Certificate of Incorporation of Plastic Specialities and Technologies Investments, Inc.1 | |
| |
| 3.12 | By-laws of Plastic Specialities and Technologies Investments, Inc.1 | |
| |
| 3.13 | Certificate of Incorporation of Burlington Resins, Inc.1 | |
| |
| 3.14 | By-laws of Burlington Resins, Inc1 | |
| |
| 3.15 | Certificate of Incorporation of TPI Acquisition Subsidiary, Inc.2 | |
| |
| 3.16 | By-laws of TPI Acquisition Subsidiary, Inc.2 | |
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| 3.17 | Certificate of Incorporation of Distributors Recycling, Inc.1 | |
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| 3.18 | By-laws of Distributors Recycling, Inc.1 | |
| |
| 3.19 | Certificate of Incorporation of TP-Elm Acquisition Subsidiary, Inc.2 | |
| |
| 3.20 | By-laws of TP-Elm Acquisition Subsidiary, Inc.2 | |
| |
| 4.1 | Indenture, dated as of November 21, 2003 among Tekni-Plex, Inc., the Guarantors listed therein and HSBC Bank USA, as Trustee.3 | |
| |
| 4.2 | Purchase Agreement, dated as of November 12, 2003 among Tekni-Plex, Inc., the Guarantors listed therein, and Lehman Brothers Inc. and Citigroup Global Markets Inc.3 | |
| |
| 4.3 | Registration Right Agreement, dated as of November 21, 2003 among Tekni-Plex, Inc., the Guarantors listed therein, and Lehman Brothers Inc. and Citigroup Global Markets Inc.3 | |
| |
| 4.4 | Indenture, dated as of June 21, 2000 among Tekni-Plex, Inc., the Guarantors listed therein and HSBC Bank USA, as Trustee1 | |
| |
| 4.5 | First Supplemental Indenture, dated as of May 6, 2002 among Tekni-Plex, Inc., TPI Acquisition Subsidiary, Inc. and HSBC Bank USA, as Trustee.2 | |
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II-15
Exhibit
No. | Description | Page |
|
|
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| 4.6 | Second Supplemental Indenture, dated as of August 22, 2002 among Tekni-Plex, Inc., TP- Elm Acquisition Subsidiary, Inc. and HSBC Bank USA, as Trustee.2 | |
| |
| 4.7 | Third Supplemental Indenture, dated as of April 25, 2005 among Tekni-Plex, Inc., the Guarantors listed therein and HSBC Bank USA, National Association, as Trustee.7 | |
| |
| 4.8 | Indenture, dated as of June 10, 2005 among Tekni-Plex, Inc., the guarantors party thereto and HSBC Bank USA, National Association, as Trustee.7 | |
| |
| 5.1 | Opinion of Davis Polk & Wardwell.7 | |
| |
| 5.2 | Opinion of Pitney Hardin LLP.8 | |
| |
| 8.1 | Opinion of Davis Polk & Wardwell as to tax matters.3 | |
| |
| 10.1 | Credit Agreement, dated as of June 21, 2000, among Tekni-Plex, Inc., the Guarantors party thereto, the Lenders party thereto, the LC Issuing Banks referred to therein and Morgan Guaranty Trust Company of New York.1 | |
| |
| 10.1.1 | First Amendment to the Credit Agreement dated September 26, 2001.3 | |
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| 10.1.2 | Second Amendment to the Credit Agreement dated November 1, 2001.3 | |
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| 10.1.3 | Third Amendment to the Credit Agreement dated September 22, 2003.3 | |
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| 10.2 | Second Amended and Restated Employment Agreement dated May 13, 2005.6 | |
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| 10.3 | Credit Agreement, dated as of June 10, 2005 among the Company, the lenders and issuers party thereto, Citicorp USA, Inc., as Administrative Agent and General Electric Capital Corporation, as Syndication Agent.7 | |
| |
| 12 | Statement regarding Computation of Ratios.9 | |
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| 23.1 | Consent of BDO Seidman, LLP.9 | |
| |
| 23.2 | Consent of Davis Polk & Wardwell (included in Exhibit 5.1 and Exhibit 8.1). | |
| |
| 24.1 | Power of Attorney (included on signature page). | |
| |
| 25.1 | Statement of Eligibility of Trustee, HSBC Bank USA, on Form T-1.3 | |
| |
| 25.2 | Statement of Eligibility of Trustee, HSBC Bank USA, National Association (successor by merger to HSBC Bank USA), on Form T-1.8 | |
| |
| 99.1.1 | Form of Letter of Transmittal.3 | |
| |
| 99.1.2 | Amended Form of Letter of Transmittal.9 | |
| |
| 99.2 | Form of Notice of Guaranteed Delivery.3 | |
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| 99.3 | Form of Tender Instructions.3 | |
| |
| 99.4 | Form of Exchange Agent Agreement.3 | |
| |
| 99.5 | Instruction to Registered Holders and/or Book-Entry Transfer Facility Participants.3 | |
| |
| 99.6 | Broker’s Letter to Clients.3 | |
| |
II-16
| 1 | Filed previously as an Exhibit to the Form S-4 (File No. 333-43800) filed on August 15, 2000. |
| |
| 2 | Filed previously as an Exhibit to our Registration Statement on Form S-4 (File No. 333-98561) filed on August 22, 2002. |
| |
| 3 | Filed previously as an Exhibit to our Registration Statement on Form S-4 (File No. 333-111778) filed on January 8, 2004. |
| |
| 4 | Filed previously as an Exhibit to our Registration Statement on Form S-4 (File No. 333-111778) filed on March 10, 2004. |
| |
| 5 | Filed previously as an Exhibit to our Registration Statement on Form S-4 (File No. 333-111778) filed on May 14, 2004. |
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| 6 | Filed previously as an Exhibit to our Form 8-K filed on May 19, 2005. |
| |
| 7 | Filed previously as an Exhibit to our Form 8-K filed on June 16, 2005. |
| |
| 8 | Filed previously as an Exhibit to our Registration Statement on Form S-4 (File No. 333-111778) filed on July 13, 2005. |
| |
| 9 | Filed herewith. |
| |
II-17
$275,000,000
Tekni-Plex, Inc.
Offer to Exchange All Outstanding
8¾% Senior Secured Notes Due 2013
for
8¾% Senior Secured Exchange Notes Due 2013
Which Have Been Registered Under
The Securities Act of 1933
Until _________, 2006 (180 days after the date of this prospectus), all dealers that effect transactions in these securities, whether or not participating in this offering, may be required to deliver a prospectus. This is in addition to the dealers’ obligation to deliver a prospectus when acting as underwriters and with respect to their unsold allotment or subscription.
