As filed with the Securities and Exchange Commission on April 21, 1998
Registration No. ____
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM S-4
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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TEKNI-PLEX, INC*
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(Exact name of Registrant as specified in its charter)
Delaware 3086, 3052 22-3286312
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(State or jurisdiction (Primary Standard Industrial (I.R.S. Employer
of incorporation Classification Code Number) Identification No.)
or organization)
201 Industrial Parkway
Somerville, New Jersey 08876
(908) 722-4800
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(Address, including zip code, and telephone number, including area code,
of Registrant's principal executive offices)
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Dr. F. Patrick Smith
Chief Executive Officer
Tekni-Plex, Inc.
201 Industrial Parkway
Somerville, New Jersey 08876
(908) 722-4800
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(Name, address, including zip code, and telephone number,
including area code, of agent for service)
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Copies to:
Winthrop B. Conrad, Jr.
Davis Polk & Wardwell
450 Lexington Avenue
New York, New York 10017
(212) 450-4000
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Approximate date of commencement of proposed sale to the public: As soon as
practicable after this Registration Statement becomes effective.
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If the securities being registered on this Form are being offered in
connection with the formation of a holding company and there is compliance
with General Instruction G, check the following box. [ ]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, check the following box and
list the Securities Act registration statement number of the earlier effective
registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(d) under
the Securities Act, check the following box and list the Securities Act
registration number of the earlier effective registration statement for the
same offering. [ ]
CALCULATION OF REGISTRATION FEE
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Proposed Proposed
Maximum Maximum
Offering Aggregate Amount of
Title of Each Class of Amount to Be Price Per Offering Registration
Securities to Be Registered Registered(1) Unit(1) Price(1) Fee
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Series B 9(1)/(4)% Senior
Subordinated Notes due
2008........................ $200,000,000 100% $200,000,000 $59,000
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Guarantees of Series B
9(1)/(4)% Senior
Subordinated Notes
due 2008(2)................. -- -- -- None
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(1) Estimated solely for the purpose of calculating the registration fee.
(2) The Series B 9 1/4% Senior Subordinated Notes due 2008 are guaranteed
by each of the entities listed in the Table of Additional Registrants.
The Registrants hereby amend this Registration Statement on such date or dates
as may be necessary to delay its effective date until the Registrants shall
file a further amendment which specifically states that this Registration
Statement shall thereafter become effective in accordance with Section 8(A) of
the Securities Act of 1933 or until the Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section
8(A), may determine.
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*TABLE OF ADDITIONAL REGISTRANTS
State or Other
Jurisdiction of I.R.S. Employer
Incorporation or Identification
Name, Address and Telephone Number Organization Number
- -------------------------------------- ---------------- ---------------
PureTec Corporation(1)................ Delaware 22-3376449
PTI Plastics, Inc.(1)................. Delaware 22-3207289
Ozite Corporation(1).................. Delaware 36-3484843
Plastic Specialties and
Technologies, Inc.(1)................. Delaware 22-2515864
Plastic Specialties and
Technologies Investments, Inc.(1)..... Delaware 22-2663552
Burlington Resins, Inc.(1)............ Delaware 22-3334106
Pure Tech APR, Inc.(1)................ New York 11-3065942
Multi Container Recycler, Inc.(1)..... Michigan 38-2959009
Coast Recycling North, Inc.(1)........ California 68-0200870
Distributors Recycling, Inc.(1)....... New Jersey 22-2466975
REI Distributors, Inc.(1)............. New Jersey 22-2418824
Pure Tech Recycling of California(1).. California 77-0356589
Alumet Smetling Corp.(1).............. New Jersey 22-2054447
Conconre Corp.(1)..................... Connecticut 06-1012426
- ---------------------
(1) The address of these additional registrants is: 201 Industrial Parkway,
Somerville, New Jersey 08876. Their telephone number of (908) 722-4800.
Subject to Completion, dated April 21, 1998
PROSPECTUS
TEKNI-PLEX, INC.
OFFER TO EXCHANGE ITS
SERIES B 9(1)/(4)% SENIOR SUBORDINATED NOTES DUE 2008
FOR ANY AND ALL OF ITS OUTSTANDING
9(1)/(4)% SENIOR SUBORDINATED NOTES DUE 2008
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THE EXCHANGE OFFER WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME, ON
______________, 1998, UNLESS EXTENDED
Tekni-Plex, Inc., a Delaware corporation ("Tekni-Plex" or the "Company"),
hereby offers (the "Exchange Offer"), upon the terms and subject to the
conditions set forth in this Prospectus (the "Prospectus") and the
accompanying Letter of Transmittal (the "Letter of Transmittal"), to exchange
$1,000 principal amount of its Series B 9(1)/(4)% Senior Subordinated Notes
due 2008 (the "Exchange Notes") which will have been registered under the
Securities Act of 1933, as amended (the "Securities Act"), pursuant to a
Registration Statement of which this Prospectus is a part, for each $1,000
principal amount of its outstanding 9(1)/(4)% Senior Subordinated Notes due
2008 (the "Old Notes") which were offered (the "Offering") by Tekni-Plex, of
which $200,000,000 aggregate principal amount is outstanding. The form and
terms of the Exchange Notes are substantially identical to the form and terms
of the Old Notes except that the Exchange Notes will bear a Series B
designation and will have been registered under the Securities Act and,
therefore, will not bear legends restricting their transfer and will not
contain certain provisions relating to an increase in the interest rate which
were included in the terms of the Old Notes in certain circumstances relating
to the timing of the Exchange Offer. The Exchange Notes will evidence the
same debt as the Old Notes (which they replace) and will be issued under and
be entitled to the benefits of the Indenture dated as of March 1, 1998 (the
"Indenture") among Tekni-Plex, the Guarantors, and Marine Midland Bank, as
trustee (the "Trustee"), governing the Old Notes. The Exchange Notes will be
fully and unconditionally guaranteed (the "Exchange Guarantee") by the
Guarantors in and on substantially identical form and terms as the guarantee
by the Guarantors of the Old Notes (the "Old Guarantee"). See "The Exchange
Offer" and "Description of Exchange Notes."
As of March 27, 1998, the Company's total debt was $400.9 million (including
the Old Notes) and, in addition, the Company could have borrowed up to $90
million of secured senior indebtedness under the New Credit Facility (as
defined) without requiring the consent of the holder of Exchange Notes. Other
than the foregoing, the Company does not intend or plan to incur any
significant indebtedness in the near future.
Tekni-Plex will accept for exchange any and all Old Notes validly tendered and
not withdrawn prior to 5:00 p.m., New York City time, on _________, 1998,
unless extended by Tekni-Plex in its sole discretion (the "Expiration Date").
Notwithstanding the foregoing, Tekni-Plex will not extend the Expiration Date
beyond _________, 1998 (which, if extended to such date, would represent a
maximum Exchange Offer period of ___ days). Tenders of Old Notes may be
withdrawn at any time prior to 5:00 p.m. on the Expiration Date. The Old
Notes may be tendered only in integral multiples of $1,000 principal amount.
The Exchange Offer is subject to certain customary conditions. See "The
Exchange Offer."
The Old Notes were sold on March 3, 1998 (the "Issue Date") to the Initial
Purchaser (as defined) in a transaction not registered under the Securities
Act in reliance upon an exemption under the Securities Act. The Initial
Purchaser subsequently placed the Old Notes with qualified institutional
buyers in reliance upon Rule 144A under the Securities Act and outside the
United States in reliance on Regulation S under the Securities Act.
Accordingly, the Old Notes may not be reoffered, resold or otherwise
transferred in the United States unless registered under the Securities Act or
unless an applicable exemption from the registration requirements of the
Securities Act is available. The Exchange Notes are being offered hereunder
in order to satisfy certain obligations of Tekni-Plex under the Registration
Rights Agreement (as defined) entered into in connection with the offering of
the Old Notes. See "The Exchange Offer."
Information contained herein is subject to completion or amendment. A
registration statement relating to these securities has been filed with the
Securities and Exchange Commission. These securities may not be sold nor may
offers to buy be accepted prior to the time the registration statement becomes
effective. This prospectus shall not constitute an offer to sell or the
solicitation of an offer to buy nor shall there be any sale of these
securities in any State in which such offer, solicitation or sale would be
unlawful prior to the registration statement or qualification under the
securities laws of any such state.
Based on no-action letters issued by the staff of the Securities and
Exchange Commission (the "Commission") to third parties, Tekni-Plex
believes the Exchange Notes issued pursuant to the Exchange Offer may be
offered for resale, resold and otherwise transferred by any holder thereof
(other than any such holder that is an "affiliate" of Tekni-Plex within the
meaning of Rule 405 under the Securities Act) without compliance with the
registration and prospectus delivery requirements of the Securities Act,
provided that such Exchange Notes are acquired in the ordinary course of
such holder's business and such holder has no arrangement or understanding
with any person to participate in the distribution of such Exchange Notes.
See "The Exchange Offer--Purpose and Effect of the Exchange Offer" and "The
Exchange Offer--Resale of the Exchange Notes." Each broker-dealer (a
"Participating Broker-Dealer") that receives Exchange Notes for its own
account pursuant to the Exchange Offer must acknowledge that it will
deliver a prospectus in connection with any resale of such Exchange Notes.
The Letter of Transmittal states that by so acknowledging and by delivering
a prospectus, a Participating Broker-Dealer will not be deemed to admit
that it is an "underwriter" within the meaning of the Securities Act. This
Prospectus, as it may be amended or supplemented from time to time, may be
used by a Participating Broker-Dealer in connection with resales of
Exchange Notes received in exchange for Old Notes where such Old Notes were
acquired by such Participating Broker-Dealer as a result of market-making
activities or other trading activities. Tekni-Plex has agreed that, for a
period of 180 days after the Expiration Date, it will make this Prospectus
available to any Participating Broker-Dealer for use in connection with any
such resale. See "Plan of Distribution."
Holders of Old Notes not tendered and accepted in the Exchange Offer will
continue to hold such Old Notes and will be entitled to all the rights and
benefits and will be subject to the limitations applicable thereto under the
Indenture and with respect to transfer under the Securities Act. Tekni-Plex
will pay all the expenses incurred by it incident to the Exchange Offer. See
"The Exchange Offer."
SEE "RISK FACTORS" BEGINNING ON PAGE 22 FOR A DESCRIPTION OF CERTAIN FACTORS
THAT SHOULD BE CONSIDERED IN CONNECTION WITH THE EXCHANGE OFFER AND IN
EVALUATING AN INVESTMENT IN THE EXCHANGE NOTES OFFERED HEREBY.
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THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
The date of this Prospectus is April ___, 1998.
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR MAKE ANY
REPRESENTATION NOT CONTAINED IN THIS PROSPECTUS IN CONNECTION WITH THE
EXCHANGE OFFER MADE BY THIS PROSPECTUS. IF GIVEN OR MADE, SUCH INFORMATION OR
REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE
COMPANY. THIS PROSPECTUS DOES NOT CONSTITUTE AN EXCHANGE OFFER TO, AND THE
COMPANY WILL NOT ACCEPT SURRENDERS FOR EXCHANGE FROM, HOLDERS OF OLD NOTES IN
ANY JURISDICTION IN WHICH THE EXCHANGE OFFER OR THE ACCEPTANCE THEREOF WOULD
BE UNLAWFUL. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY EXCHANGE MADE
HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE AN IMPLICATION THAT THERE HAS
NOT BEEN ANY CHANGE IN THE FACTS SET FORTH IN THIS PROSPECTUS OR IN THE
AFFAIRS OF THE COMPANY SINCE THE DATE HEREOF OR THAT INFORMATION SET FORTH
HEREIN IS CORRECT AS OF ANY DATE SUBSEQUENT TO THE DATE HEREOF.
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TABLE OF CONTENTS
Page
Prospectus Summary...........................................................5
Risk Factors................................................................22
Capitalization..............................................................29
Pro Forma Unaudited Condensed Financial Information.........................30
Tekni-Plex Selected Historical Financial Information........................35
Tekni-Plex Management's Discussion and Analysis of
Financial Condition and Results of Operations.............................37
Business....................................................................43
Management..................................................................61
Security Ownership..........................................................63
Certain Transactions........................................................64
Description of Certain Indebtedness.........................................65
The Exchange Offer..........................................................67
Description of Exchange Notes...............................................76
Certain United States Federal Income Tax Considerations....................101
Plan of Distribution.......................................................103
Legal Matters..............................................................103
Experts....................................................................103
Available Information......................................................104
Index to Financial Statements..............................................F-1
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There has not previously been any public market for the Old Notes or the
Exchange Notes. Tekni-Plex does not intend to list the Exchange Notes on any
securities exchange or to seek approval for quotation through any automated
quotation system. There can be no assurance that an active market for the
Exchange Notes will develop. See "Risk Factors--Lack of Public Market for the
Notes." Moreover, to the extent that Old Notes are tendered and accepted in
the Exchange Offer, the trading market for untendered and tendered but
unaccepted Old Notes could be adversely affected.
Initially, the Exchange Notes will be available only in book-entry form.
Tekni-Plex expects that the Exchange Notes issued pursuant to this Exchange
Offer will be issued in the form of a Global Note (as defined), which will be
deposited with, or on behalf of, The Depository Trust Company (the
"Depositary" or "DTC") and registered in its name or in the name of Cede &
Co., its nominee. Beneficial interests in the Global Note representing the
Exchange Notes will be shown on, and transfers thereof to qualified
institutional buyers will be effected through, records maintained by DTC and
its participants. After the initial issuance of the Global Note, Exchange
Notes in certified form will be issued in exchange for the Global Note only on
the terms set forth in the Indenture. See "Description of Exchange Notes--Book
Entry; Delivery and Form."
DISCLOSURE REGARDING FORWARD-LOOKING STATEMENTS
THIS PROSPECTUS INCLUDES "FORWARD-LOOKING STATEMENTS" WITHIN THE MEANING OF
SECTION 27A OF THE SECURITIES ACT AND SECTION 21E OF THE EXCHANGE ACT, AS
AMENDED (THE "EXCHANGE ACT"). ALL STATEMENTS OTHER THAN STATEMENTS OF
HISTORICAL FACTS INCLUDED IN THIS OFFERING MEMORANDUM, INCLUDING, WITHOUT
LIMITATION, CERTAIN STATEMENTS UNDER THE "PROSPECTUS SUMMARY,"
"MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS," "INDUSTRY," AND "BUSINESS" AND LOCATED ELSEWHERE HEREIN
REGARDING THE COMPANY'S FINANCIAL POSITION AND BUSINESS STRATEGY, MAY
CONSTITUTE FORWARD-LOOKING STATEMENTS. ALTHOUGH THE COMPANY BELIEVES THAT
THE EXPECTATIONS REFLECTED IN SUCH FORWARD-LOOKING STATEMENTS ARE
REASONABLE, IT CAN GIVE NO ASSURANCE THAT SUCH EXPECTATIONS WILL PROVE TO
HAVE BEEN CORRECT. IMPORTANT FACTORS THAT COULD CAUSE ACTUAL RESULTS TO
DIFFER MATERIALLY FROM THE COMPANY'S EXPECTATION ("CAUTIONARY STATEMENTS")
ARE DISCLOSED IN THIS PROSPECTUS, INCLUDING, WITHOUT LIMITATION, IN
CONJUNCTION WITH THE FORWARD-LOOKING STATEMENTS INCLUDED IN THIS PROSPECTUS
AND UNDER "RISK FACTORS." ALL SUBSEQUENT WRITTEN AND ORAL FORWARD-LOOKING
STATEMENTS ATTRIBUTABLE TO THE COMPANY OR PERSONS ACTING ON ITS BEHALF ARE
EXPRESSLY QUALIFIED IN THEIR ENTIRETY BY THE CAUTIONARY STATEMENTS.
PROSPECTUS SUMMARY
The following summary is qualified in its entirety by the more detailed
information and financial statements, including the notes thereto,
appearing elsewhere in this Offering Memorandum. Unless the context
otherwise requires, references in this Offering Memorandum to "Tekni-Plex"
refer to Tekni-Plex, Inc., and references to the "Company" refer to Tekni-
Plex, Inc. and its consolidated subsidiaries. Unless the context otherwise
requires, references in this Offering Memorandum to "PureTec" refer to
PureTec Corporation and its consolidated subsidiaries. All references in
this Offering Memorandum to the "fiscal year" of the Company refer to the
Company's fiscal year which ends on the Friday closest to June 30 of that
calendar year. For example, fiscal year 1997 refers to the year ended June
27, 1997. All references in this Offering Memorandum to the fiscal year of
PureTec refer to PureTec's fiscal year ended July 31. The Company's
unaudited pro forma financial information for the fiscal year ended June
27, 1997 and the six months ended December 26, 1997 presented herein
reflects PureTec's historical results for fiscal year ended July 31, 1997
and the six months ended January 31, 1998. Substantially all of the
information with respect to PureTec included herein (except for certain
market share data and financial information for the six months ended
January 31, 1998 which have been supplied by PureTec's management) has been
taken from PureTec's Annual Report on Form 10-K for the fiscal year ended
July 31, 1997, as amended. Unless otherwise noted, all references in this
Offering Memorandum to market share refer to market share within the United
States.
The Company
Overview
The Company designs, manufactures and markets packaging materials primarily
for the pharmaceutical and food industries. The Flexible Packaging Group sells
primarily flexible packaging materials to customers including pharmaceutical
companies. The Company is the market leader for clear, high-barrier
laminations for pharmaceutical blister packaging. The Company believes, based
upon its knowledge and experience in the industry, that it has a greater than
90% share of the market for such products. These packaging materials are used
for fast- acting pharmaceuticals that are generally highly reactive to
moisture. The Foam Products Group sells primarily foamed polystyrene packaging
products such as egg cartons and processor trays to the poultry and meat
industries. The Company believes, based upon its knowledge and experience in
the industry, that it produces in excess of 80% of all foam egg cartons and
has approximately 40% of the egg carton market. The Company has also built a
strong presence in the processor tray market, where it believes, based upon
its knowledge and experience in the industry, that it has an estimated share
of greater than 25%.
On March 3, 1998, the Company completed the merger of P.T. Holding, Inc.
("Merger Sub"), a wholly-owned subsidiary of Tekni-Plex, with and into PureTec
pursuant to the Agreement and Plan of Merger (the "Merger Agreement") dated as
of November 11, 1997 among Tekni-Plex, PureTec, Merger Sub, and Plastic
Specialties and Technologies, Inc. Tekni-Plex purchased all of the
outstanding shares of PureTec for $109.5 million in the aggregate. The total
consideration paid by the Company for the PureTec Acquisition was
approximately $296.5 million, which includes the repayment of debt and the
elimination of minority interests at certain subsidiaries of PureTec, and
excludes fees and expenses.
PureTec is the leading domestic producer of garden hose, medical-grade vinyl
compounds and precision tubing and gaskets and the second leading domestic
producer of disposable medical tubing. PureTec also produces plastic materials
that are used in various specialty applications and is the leading non-captive
supplier of recycled polyethylene terephthalate ("PET") suitable for reuse in
new bottles, as well as plastic sheet and other specialized applications.
Following completion of the PureTec Acquisition, the Company's pro forma
revenues and pro forma EBITDA (as defined below) for the fiscal year ended
June 27, 1997 would have been $460.1 million and $69.8 million, respectively,
for the six months ended December 26, 1997 would have been $214.3 million and
$32.9 million, respectively. See "Pro Forma Unaudited Condensed Financial
Information."
The management of the Company focuses on organizational development, imparting
a results-oriented culture to all areas of its businesses. Management seeks
and implements product and process improvements to produce higher quality
products, improve efficiencies, reduce labor and material costs, and create
differentiated products and product line extensions. The Company also expands
its product offerings by acquiring synergistic companies and significantly
reduces costs through product line rationalization and realizing economies of
scale. Management believes that this focus will continue with respect to the
Company's on-going business and will be the basis for successfully integrating
the PureTec Acquisition.
The Company believes that the PureTec Acquisition will have many significant
strategic benefits, including:
o Strong market shares in core businesses. PureTec has leading market
positions in most of its core product lines, a characteristic shared by the
Company. Management believes that Tekni-Plex's strong market presence in
its core businesses has been a key element in achieving consistent earnings
growth since acquiring the Company in 1994, and that the combined entity's
strong market presence in its core businesses will provide the merged group
with even greater consistency of earnings and cash flow.
o Diverse product mix and expanded geographic presence. The combined group
will offer a more diverse range of products over a wider geographic area
and provide a broader base for manufacturing and distribution. The Company
currently has sales offices in London and Manila, as well as sales
representatives in Europe, China (including Hong Kong) and Mexico. The
Company also has distribution networks and manufacturing liaisons in Europe
and Southeast Asia (including Australia). PureTec currently has
manufacturing and sales offices in Europe and Canada. The Company believes
that the combination of its operations with PureTec will provide a
foundation for further international expansion.
o Technically sophisticated products; technology sharing. Both the Company
and PureTec generally compete in the most technically sophisticated end of
each of their markets, such as primary pharmaceutical packaging, medical
tubing and medical plastics which are subject to strict Federal Food and
Drug Administration ("FDA") regulatory requirements. The manufacturing
operations of each entity employ similar core technical competencies, as
both involve plastic extrusion and compounding. The Company believes that
the PureTec Acquisition provides an opportunity to enhance both companies'
operations by combining and sharing the two companies' common and
complementary technologies.
o Cost savings and synergies. The Company expects to realize significant
cost savings and synergy benefits from (i) improved manufacturing and
production efficiencies, (ii) economies of scale and raw material purchasing
efficiencies and (iii) the elimination of certain duplicate overhead and
operating expenses.
o Significantly increased size. The PureTec Acquisition provides the Company
with "critical mass" creating a stronger business than either of the
companies operating on a stand-alone basis. The Company believes that its
significantly increased size will enhance its ability to access the capital
markets.
Overview of Tekni-Plex
In March 1994, the Company was acquired by its current controlling shareholder
and Dr. F. Patrick Smith who was elected Chief Executive Officer. Kenneth W.R.
Baker, the Company's Chief Operating Officer, was appointed in April 1994. At
the time of the acquisition, the Company had two operating facilities located
in Somerville, New Jersey ("Somerville"), and Brooklyn, New York ("Brooklyn"),
and its principal product lines were clear, high-barrier laminations and
closure liners sold primarily to the pharmaceutical industry, and foam
processor trays used predominantly for poultry packaging. In December 1995,
the Company acquired the Flemington, New Jersey, operation ("Flemington") of
Hargro Flexible Packaging Corporation ("Hargro"), thereby expanding the
Company's flexible packaging product line. In February 1996, the Company
acquired Dolco Packaging Corp ("Dolco"), the nation's leading supplier of foam
egg cartons (the "Dolco Acquisition"). In July 1997, the Company acquired
PurePlast Inc., a Canadian producer of calendered polyvinyl chloride (PVC)
sheet for pharmaceutical, food and electronic packaging applications. On March
3, 1998 the Company acquired PureTec, a manufacturer of specialty plastic
products and materials. See "-- Overview of PureTec" and "Description of the
Transactions."
Since its acquisition by the current owners, the Company has achieved
significant improvements in profitability. For the trailing twelve months
ended December 26, 1997 (without giving effect to the PureTec Acquisition),
the Company had revenues of $148.8 million, income before extraordinary item
of $9.1 million and EBITDA of $32.3 million for an EBITDA margin of 21.7%,
compared with revenues of $44.9 million, net income of $2.8 million and EBITDA
of $3.8 million for an EBITDA margin of 8.5% for the year ended December 31,
1993. "EBITDA" is defined as net income before interest, income taxes,
depreciation and amortization. EBITDA is presented because it is a widely
accepted financial indicator of a company's ability to incur and service debt
and may be defined differently for different companies. "EBITDA margin" is
calculated as the ratio of EBITDA to net sales for the period.
Overview of PureTec
PureTec is a vertically integrated manufacturer of specialty plastic products
and has leading market positions in most of its core product lines. With more
than 40% of the market in the United States, PureTec, through its Colorite
Plastics division, is the leading producer of garden hose. Through its Action
Technology division, PureTec is the leading producer of precision tubing and
gaskets for packaging applications, with over 90% of the domestic, non-captive
markets for such products. PureTec's specialty tubing and gasket product line
consists of (i) extruded plastic tubing, sold primarily to manufacturers of
aerosol valves, dispenser pumps, and writing instruments; (ii) rubber and
thermoplastic gaskets for the aerosol and dispenser pump markets; and (iii)
consumer products, chiefly consisting of swimming pool and other corrugated
hose. Action's products are manufactured in the United States and Europe and
are sold throughout the world.
PureTec's Plastron division is the second largest non-captive manufacturer of
medical tubing with approximately 60% of the market for cardiovascular tubing
and 50% of the intravenous tubing market. The Colorite Polymers division is
the largest producer of medical-grade vinyl compounds for FDA-regulated
applications, with approximately 50% of the domestic, non-captive market.
These compounds are sold to leading manufacturers of medical devices and
equipment. They are also sold to producers of tubing and closures for the food
and beverage industry and used in a variety of food-contact applications.
PureTec's specialty vinyl polymers business consists of two divisions of the
Colorite Polymers group: Burlington Resins, Inc., doing business as Colorite
Specialty Vinyl Resins ("SVR"); and Cybertech Polymers. SVR employs
specialized technology to produce dispersion, blending, and copolymer
suspension resins for a variety of industries, including floor covering,
automotive sealants and adhesives, coil coatings, plastisol compounding and
PVC packaging. Cybertech Polymers produces a variety of specialized and
general purpose vinyl compounds.
PureTec is also a leading plastics recycler. PureTec believes that its Pure
Tech Plastics division is the leading non-captive supplier of high-quality
recycled PET suitable for reuse in new bottles, as well as plastic sheet
and other specialized applications. The division has developed proprietary
processes for cleaning, sorting, and recycling post-consumer plastic
bottles into clean PET flakes or pellets. Raw materials used by the Pure
Tech Plastics division consist mostly of post-consumer soft drink bottles,
purchased from various suppliers who obtain bottles in states with "deposit
laws," or who conduct curb-side pickup operations.
For the six months ended January 31, 1998, PureTec had net sales of $138.7
million, a net loss from continuing operations of $3.4 million and EBITDA
(defined as net income before minority interest, equity in loss of affiliates,
income taxes, interest, depreciation and amortization and write offs of
goodwill, intangibles and obsolete equipment) of $15.6 million for an EBITDA
margin of 11.2%, compared with net sales of $123.4 million, a net loss from
continuing operations of $4.8 million and EBITDA of $14.5 million for an
EBITDA margin of 11.8% for the six months ended January 31, 1997. For the
fiscal year ended July 31, 1997, PureTec had net sales of $315.3 million, net
income from continuing operations of $1.3 million and EBITDA of $39.6 million
for an EBITDA margin of 12.6%, compared with net sales of $326.3 million, a
net loss from continuing operations of $4.4 million and EBITDA of $37.2
million for an EBITDA margin of 11.4% for the year ended July 31, 1996.
Competitive Strengths
The Company believes that its competitive strengths include:
o Producer of high quality, technically sophisticated products. The
Company believes, based upon its knowledge and experience in the
industry, that it has a long-standing reputation as a manufacturer of
high-quality, high performance primary packaging products (where the
packaging material comes into direct contact with the end- product).
The Company's emphasis on quality is evidenced by its product lines
which address the high-end of their respective markets. The Company
competes in technically sophisticated areas such as the high-barrier
pharmaceutical blister packaging market. Over the years, PureTec's
operating companies have developed a reputation for high-quality
products in their niche markets. PureTec's product lines include
technically sophisticated products such as medical and specialty tubing
manufactured to precise customer specifications as well as highly
specialized medical-grade vinyl compounds.
o Cost efficient producer. The Company continually focuses on improving
underlying operations and reducing costs. Since the 1994 acquisition,
current management has improved the Company's cost structure from an EBITDA
margin of 8.5% and income before income taxes as a percent of sales of 6.8%
on sales of $44.9 million for the twelve months ended December 31, 1993 to
an EBITDA margin of 21.7% and income before income taxes and extraordinary
item as a percent of sales of 9.7% on sales of $148.8 million for the
trailing twelve months ended December 26, 1997. The Company believes that
the PureTec Acquisition provides significant opportunities to realize cost
savings and synergies in the combined businesses through the sharing of
complementary technologies and manufacturing techniques, as well as
economies of scale including the purchase of raw materials. In addition,
the Company believes that cost savings can be achieved through the
elimination of certain duplicate overhead and operating expenses.
o Experienced management team. The Company's management team has been
successful in selecting and integrating strategic acquisitions as well as
improving underlying business fundamentals. After significantly improving
the business of Tekni-Plex following the 1994 acquisition of the Company by
the current owners, management successfully integrated both the Flemington
and Dolco operations during 1996, the latter being a public company then
nearly twice the Company's size. During the same period, the Brooklyn and
Flemington operations were merged, substantially improving production
efficiencies and reducing waste. In July 1997, the Company acquired
PurePlast Inc. of Ontario, Canada whose operations have already been
successfully integrated with those of the Company. Members of the
management team have integrated acquisitions, effected turnarounds,
provided strategic direction and leadership, increased sales and market
share, improved manufacturing efficiencies and productivity, and developed
new technologies to enhance the competitive strengths of the companies they
have managed. The Company believes that its track record of integrating
acquisitions will serve as the basis for the successful integration of
PureTec. In addition, PureTec has managers in each of its business units
with extensive experience and expertise as well as thorough technical and
operating skills.
o Strong market share in core businesses. The Company has a strong market
presence in its core product lines. The Company believes that it
produces in excess of 80% of all foam egg cartons and has approximately
40% of the overall egg carton market which is split approximately
equally between foam and pulp-based products. The Company believes that
it has greater than a 90% share of the market for clear, high-barrier
laminations for pharmaceutical blister packaging. The Company has also
built a strong presence in the processor tray market where it believes
that it has greater than a 25% share. PureTec has leading market
positions in most of its core product lines. PureTec believes that it
is the leading producer of garden hose in the United States with over
40% of the market and that it is the second largest non-captive
manufacturer of medical tubing with approximately 60% of the market for
cardiovascular tubing and 50% of the intravenous tubing market. PureTec
is also the leading producer of precision tubing and gaskets for
packaging applications, with over 90% of the domestic, non-captive
markets for such products. PureTec's management believes that it is the
world's largest producer of high-quality vinyl compounds for the medical
industry with approximately 50% of the domestic, non-captive market. In
addition, PureTec is the leading non-captive supplier of recycled PET
suitable for reuse in new bottles, as well as plastic sheet and other
specialized applications.
o Strong customer relationships. Both the Company and PureTec have
long-standing relationships with many of their customers. The Company
estimates the average tenure among the Company's ten largest customers at
more than 14 years. The Company attributes its long relationships with its
customers to the ability to consistently manufacture high quality products
and to consistently provide a superior level of customer service. The
Company routinely wins recognition for its superior products and customer
service including a recent Outstanding Supplier Award from Pharmacia &
Upjohn, and an Outstanding Quality Award from Abbott Laboratories. PureTec
estimates the average tenure among PureTec's ten largest customers at more
than 14 years. PureTec has a significant base of large, stable customers
who purchase PureTec's products on a repeat basis. PureTec attributes its
long relationships with customers to its ability to produce consistent,
high-quality products with on-time delivery.
Business Strategy
The Company seeks to maximize its growth and profitability and take advantage
of its competitive strengths by pursuing the following business strategy:
o Ongoing cost reduction through technical process improvement. The Company
has an ongoing program to improve manufacturing and other processes in
order to drive down costs. Examples of cost improvement programs include:
(i) material and energy conservation through enhanced process controls;
(ii) reduction in machine set-up time through the use of proprietary
technology; (iii) continual product line rationalization; and (iv)
development of backward integration opportunities. The Company believes
that the PureTec Acquisition will give rise to significant cost savings
from improved manufacturing efficiencies, economies of scale and reduced
operating and overhead expenses.
o Internal growth through product line extension and improvement. The
Company continually seeks to improve and extend its product lines and
leverage its existing technological capabilities in order to increase
market share and improve profitability. The Company believes that it has a
significant opportunity to increase sales of its foamed polystyrene
packaging products by focusing on incremental improvements to these
products. The Company's strategy is to emphasize its expertise in providing
primary packaging materials with specific high performance characteristics
through the use of various plastic materials (and combinations thereof) and
proprietary manufacturing process techniques. PureTec has also developed a
successful track record of new and improved products. PureTec's garden hose
business has introduced patented Colorite(R) Evenflow(R) design and drinking
water safe product lines. PureTec's medical tubing business has introduced
microbore tubing, silicone substitute formulations, and trilayer tubing
substitutes. In PureTec's medical-grade vinyl compounds business, PureTec's
chemists work closely with customers to develop compounds that address
their specific requirements. Through this custom work, PureTec has
introduced a number of breakthroughs to the medical device industry by
developing formulations with unique physical characteristics. For example,
PureTec has recently developed a new family of flexible vinyl compounds
designed to replace silicone rubber in a variety of medical and commercial
applications. The Company believes that the PureTec Acquisition may
accelerate new product introduction through the sharing of technological
and manufacturing expertise and the joint development of new products.
o Growth through international expansion. The Company believes that there is
significant opportunity to expand international sales. The Company
currently has sales offices in London and Manila as well as sales
representatives in Europe, China (including Hong Kong) and Mexico. The
Company also has distribution networks and manufacturing liaisons in Europe
and Southeast Asia (including Australia). PureTec's international operations
give the Company a manufacturing and direct sales force presence in Europe
and also strengthen the Company's existing presence in Canada. The Company
expects that the combination of its operations with PureTec will provide a
foundation for the further expansion of both companies' products in other
overseas markets.
o Growth through acquisitions. The PureTec Acquisition is consistent with
the Company's objective of pursuing acquisitions which provide the Company
with the opportunity to gain economies of scale and reduce costs through,
among other things, technology sharing and synergistic cost reduction. The
Company will continue to selectively pursue acquisitions when the
opportunity arises.
The PureTec Acquisition
On March 3, 1998 the Company acquired all of the outstanding shares of PureTec
Common Stock. Pursuant to the Merger Agreement, P.T. Holding, a wholly-owned
subsidiary of Tekni-Plex, merged into PureTec with PureTec continuing as the
surviving corporation and becoming a wholly-owned subsidiary of Tekni-Plex.
Under the terms of the Merger, each stockholder of PureTec received $3.50 per
share in cash ($109.5 million in the aggregate).
Pursuant to the Merger Agreement, PureTec caused Plastic Specialties and
Technologies ("PS&T"), a 96%-owned subsidiary of PureTec, to commence a
combined consent solicitation and offer to purchase (the "Debt Tender Offer")
all of its 11.25% Senior Secured Notes due 2003 (the "PS&T Notes"). In
addition, simultaneously with the Merger, PureTec repayed and caused each of
its subsidiaries to repay substantially all of its and their outstanding
domestic debt (the "Debt Retirement"). PS&T also eliminated its 4% minority
shareholders' interest prior to the Merger (the "PS&T Minority Buyout" and
together with the Debt Tender Offer and the Debt Retirement, the "Related
Transactions"). The Merger and the Related Transactions are referred to
herein, collectively, as the "Transactions". See "Description of the
Transactions."
The Exchange Offer
All capitalized terms used without definition within this section shall have
the respective meanings set forth under "Description of Exchange Notes" below.
Old Notes........................... The Old Notes were sold on March 3,
1998 to J.P. Morgan Securities Inc.
(the "Initial Purchaser") pursuant to a
Purchase Agreement dated February 25,
1998 (the "Purchase Agreement") between
the Company and the Initial Purchaser.
The Initial Purchaser subsequently
resold the Old Notes to qualified
institutional buyers pursuant to Rule
144A under the Securities Act and
outside the United States in reliance
on Regulation S under the Securities
Act.
Registration Rights Agreement....... Pursuant to the Purchase Agreement, the
Company and the Initial Purchaser
entered into a Registration Rights
Agreement dated as of March 3, 1998
(the "Registration Rights Agreement"),
which grants to the holders of the Old
Notes certain exchange and registration
rights. The Exchange Offer is intended
to satisfy certain of such exchange
rights which will terminate upon the
consummation of the Exchange Offer.
The Exchange Offer.................. The Company is offering to exchange
$1,000 principal amount of Exchange
Notes for each $1,000 principal amount
of Old Notes. As of the date hereof,
$200,000,000 aggregate principal amount
of Old Notes are outstanding.
Based on an interpretation by the staff
of the Commission set forth in
no-action letters issued to third
parties, the Company believes that
Exchange Notes issued pursuant to the
Exchange Offer in exchange for Old
Notes may be offered for resale, resold
and otherwise transferred by any holder
thereof (other than any such holder
which is an "affiliate" of the Company
within the meaning of Rule 405 under the
Securities Act) without compliance with
the registration and prospectus
delivery requirements of the Securities
Act, provided that such Exchange Notes
are acquired in the ordinary course of
such holder's business and that such
holder does not intend to participate
and has no arrangement or understanding
with any person to participate in the
distribution of such Exchange Notes.
Each Participating Broker-Dealer
that receives Exchange Notes for its
own account pursuant to the Exchange
Offer must acknowledge that it will
deliver a prospectus in connection
with any resale of such Exchange
Notes. The Letter of Transmittal
states that by so acknowledging and
by delivering a prospectus, a
Participating Broker-Dealer will not
be deemed to admit that it is an
"underwriter" within the meaning of
the Securities Act. This
Prospectus, as it may be amended or
supplemented from time to time, may
be used by a Participating Broker-
Dealer in connection with resales of
Exchange Notes received in exchange
for Old Notes where such Old Notes
were acquired by such Participating
Broker-Dealer as a result of market-
marking activities or other trading
activities. The Company has agreed
that, for a period of 180 days after
the Expiration Date, it will make
this Prospectus available to any
Participating Broker-Dealer for use
in connection with any such resale.
See "Plan of Distribution."
Any holder of Old Notes who tenders in
the Exchange Offer with the intention
to participate, or for the purpose of
participating, in a distribution of the
Exchange Notes could not rely on the
position of the staff of the Commission
enunciated in no-action letters and, in
the absence of an exemption therefrom,
must comply with the registration and
prospectus delivery requirements of the
Securities Act in connection with any
resale transaction. Failure to comply
with such requirements in such instance
may result in such holder incurring
liability under the Securities Act for
which the holder is not indemnified by
the Company.
Expiration Date..................... 5:00 p.m., New York City time, on
_______, 1998 unless the Exchange Offer
is extended by the Company in its sole
discretion, in which case the term
"Expiration Date" means the latest date
and time to which the Exchange Offer is
extended. Notwithstanding the
foregoing, the Company will not extend
the Expiration Date beyond, _______,
1998 (which, if extended to such date,
would represent a maximum Exchange
Offer period of _______ days).
Interest............................ Interest on Exchange Notes shall accrue
from the last interest payment date on
which interest was paid on the Old
Notes so surrendered, or, if no
interest has been paid on such Old
Notes, from March 3, 1998. No interest
will be paid on the Old Notes accepted
for exchange.
Conditions to the Exchange Offer.... The Exchange Offer is subject to
certain customary conditions, which may
be waived by the Company. See "The
Exchange Offer--Conditions."
Procedures for Tendering Old Notes.. Each holder of Old Notes wishing to
accept the Exchange Offer must
complete, sign and date the
accompanying Letter of Transmittal, or
a facsimile thereof, in accordance with
the instructions contained herein and
therein, and mail or otherwise deliver
such Letter of Transmittal, or such
facsimile, together with the Old Notes
and any other required documentation to
the Exchange Agent (as defined) at the
address set forth herein. By executing
the Letter of Transmittal, each holder
will be deemed to represent to the
Company, among other things, that (i)
the Exchange Notes acquired pursuant to
the Exchange Offer are being obtained
in the ordinary course of business of
the person receiving such Exchange
Notes, whether or not such person is
the holder, (ii) neither the holder nor
any such other person has any
arrangement or understanding with any
person to participate in the
distribution of such Exchange Notes in
violation of the Securities Act, (iii)
neither the holder nor any such other
person is an "affiliate," as defined
under Rule 405 of the Securities Act,
of the Company and (iv) such holder has
full power and authority to exchange
the Old Notes for the Exchange Notes.
See "The Exchange Offer--Purpose and
Effect of the Exchange Offer" and
"--Procedures for Tendering."
Untendered Notes.................... Following the consummation of the
Exchange Offer, holders of Old Notes
eligible to participate but who do not
tender their Old Notes will not have
any further registration rights and
such Old Notes will continue to be
subject to certain restrictions on
transfer. Accordingly, the liquidity
of the market for such Old Notes could
be adversely affected.
Consequences of Failure to
Exchange.......................... Old Notes that are not exchanged
pursuant to the Exchange Offer will
remain restricted securities.
Accordingly, such Old Notes may be
resold only (i) to the Company, (ii)
pursuant to Rule 144A or Rule 144 under
the Securities Act or pursuant to some
other exemption under the Securities
Act, (iii) outside the United States to
a foreign person pursuant to the
requirements of Rule 904 under the
Securities Act, or (iv) pursuant to an
effective registration statement under
the Securities Act. See "The Exchange
Offer--Consequences of Failure to
Exchange."
Shelf Registration Statement........ If any holder of the Old Notes (other
than any such holder which is an
"affiliate" of the Company within the
meaning of Rule 405 under the
Securities Act) is not eligible under
applicable securities laws to
participate in the Exchange Offer, and
such holder has provided information
regarding such holder and the
distribution of such holder's Old Notes
to the Company for use therein, the
Company has agreed to register the Old
Notes on a shelf registration statement
(the "Shelf Registration Statement")
and to use its best efforts to cause it
to be declared effective by the
Commission as promptly as reasonably
practical on or after the consummation
of the Exchange Offer. The Company has
agreed to maintain the effectiveness of
the Shelf Registration Statement, under
certain circumstances, until the date on
which the Old Notes are no longer
"restricted securities" (within the
meaning of Rule 144 under the
Securities Act).
Special Procedures for
Beneficial Owners................. Any beneficial owner whose Old Notes
are registered in the name of a broker,
dealer, commercial bank, trust company
or other nominee and who wishes to
tender should contact such registered
holder promptly and instruct such
registered holder to tender on such
beneficial owner's behalf. If such
beneficial owner wishes to tender on
such owner's own behalf, such owner
must, prior to completing and executing
the Letter of Transmittal and
delivering its Old Notes, either make
appropriate arrangements to register
ownership of the Old Notes in such
owner's name or obtain a properly
completed bond power from the
registered holder. The transfer of
registered ownership may take
considerable time.
Guaranteed Delivery Procedures...... Holders of Old Notes who wish to
tender their Old Notes and whose Old
Notes are not immediately available
or who cannot deliver their Old
Notes, the Letter of Transmittal or
any other documents required by the
Letter of Transmittal to the
Exchange Agent (or comply with the
procedures for book- entry transfer)
prior to the Expiration Date, must
tender their Old Notes according to
the guaranteed delivery procedures
set forth in "The Exchange Offer--
Guaranteed Delivery Procedures."
Withdrawal Rights................... Tenders may be withdrawn at any time
prior to 5:00 p.m., New York City time,
on the Expiration Date.
Acceptance of Old Notes and
Delivery of Exchange Notes....... The Company will accept for exchange
any and all Old Notes which are
properly tendered in the Exchange Offer
prior to 5:00 p.m., New York City time,
on the Expiration Date. The Exchange
Notes issued pursuant to the Exchange
Offer will be delivered on the earliest
practicable date following the
Expiration Date. See "The Exchange
Offer--Terms of the Exchange Offer."
Use of Proceeds..................... The Company will not receive any cash
proceeds from the issuance of the
Exchange Notes in the Exchange Offer.
See "Use of Proceeds."
Exchange Agent...................... Marine Midland Bank, as Trustee, is
serving as Exchange Agent in connection
with the Exchange Offer.
General............................. The form and terms of the Exchange
Notes are substantially identical to
the form and terms of the Old Notes
except that (i) the Exchange Notes bear
a Series B designation, (ii) the
Exchange Notes have been registered
under the Securities Act and,
therefore, will not bear legends
restricting the transfer thereof, and
(iii) the holders of Exchange Notes
will not be entitled to certain rights
under the Registration Rights
Agreement, including the provisions
providing for an increase in the
interest rate on the Old Notes in
certain circumstances relating to the
timing of the Exchange Offer, which
rights will terminate when the Exchange
Offer is consummated. See "The
Exchange Offer--Purpose and Effect of
the Exchange Offer." The Exchange
Notes will evidence the same debt as
the Old Notes (which they replace) and
will be entitled to the benefits of the
Indenture. See "Description of Exchange
Notes." The Old Notes and/or the
Exchange Notes, whichever was, is or
will be outstanding in the particular
context, are referred to herein
collectively as the "Notes".
Securities Offered.................. $200,000,000 aggregate principal amount
of Series B 9(1)/(4)% Senior
Subordinated Notes due 2008 of the
Company.
Maturity Date....................... March 1, 2008.
Interest Payment Dates.............. March 1 and September 1 of each year,
commencing September 1, 1998.
Ranking............................. The Exchange Notes will constitute
unsecured obligations of the Company
and will rank subordinate in right of
payment to all existing and future
Senior Debt of the Company, including
any Indebtedness (as defined) under the
Term Loan Facilities and the Revolving
Credit Facility. At March 27, 1998,
there was $400.9 million of outstanding
indebtedness to which the Notes were
subordinated. In addition, the Company
could have borrowed up to $90 million of
Indebtedness under the Revolving Credit
Facility, all of which would constitute
Senior Debt. See "Description of
Certain Indebtedness."
Exchange Guarantee.................. The Exchange Notes will be fully and
unconditionally guaranteed on a senior
subordinated basis by the Guarantors
(as defined). The form and terms of
the Exchange Guarantees will be
substantially identical to the form and
terms of the Old Guarantee. The
Exchange Guarantees will be general
unsecured obligations of the Guarantors
and will rank subordinate in right of
payment to all existing and future
Senior Debt of such Guarantors,
including such Guarantors' guarantee of
Indebtedness under the Bank Financing.
The Exchange Guarantees will rank pari
passu in right of payment with any
other senior subordinated indebtedness
of the Guarantors. The Old Guarantees
and/or the Exchange Guarantees,
whichever was, is or will be
outstanding in the particular context,
are referred to herein collectively as
the "Guarantees".
Optional Redemption................. The Exchange Notes will be redeemable
at the option of the Company, in whole
or in part, at any time on or after
March 1, 2003, at the redemption prices
set forth herein, plus accrued and
unpaid interest to the redemption date.
In addition, prior to March 1, 2001,
the Company may redeem up to 35% of the
principle amount of the Exchange Notes
at a redemption price of 109.25% of the
principal amount thereof, plus accrued
and unpaid interest to the redemption
date, with the net cash proceeds
received by the Company from one or
more public offerings of its Capital
Stock (as defined) other than
Disqualified Stock (as defined);
provided, however, that at least $130
million in aggregate principal amount
of the Notes remains outstanding
immediately after any such redemption
(excluding any Notes owned by the
Company or any of its Affiliates (as
defined)). See "Description of
Exchange Notes--Optional Redemption."
Change of Control................... Upon a Change of Control (as defined),
each holder of the Exchange Notes may
require the Company to repurchase such
holder's Exchange Notes, in whole or in
part, at a purchase price equal to 101%
of the principal amount thereof plus
accrued and unpaid interest to the
purchase date. See "Description of
Exchange Notes--Change of Control." The
Bank Financing prohibits the purchase
of outstanding Exchange Notes prior to
repayment of the borrowings under the
Bank Financing. There can be no
assurance that upon a Change of Control
the Company will have sufficient funds
to repurchase any of the Exchange
Notes. See "Description of Certain
Indebtedness."
Modifications of the Indenture...... The Company and the Trustee, with the
consent of the holders of a majority in
aggregate principal amount of the
outstanding Notes, may amend the
Indenture, provided, however, that
consent is required from the holder of
each Note affected thereby in instances
such as reductions in the amount or
changes in the timing of interest
payments, reductions in the principal
and changes in the maturity, redemption
or repurchase dates of the Notes. See
"Description of Exchange
Notes--Modification and Waiver."
Events of Default................... An Event of Default (as defined) occurs
under the Indenture in instances such
as the failure to pay principal when
due, the failure to pay any interest
within 30 days of when due and payable,
the failure to perform or comply with
various covenants under the Indenture
or the default under the terms of
certain other indebtedness of the
Company. See "Description of Exchange
Notes--Events of Default."
Covenants........................... The Indenture contains certain
covenants that, among other things,
limit the ability of the Company or any
of its Restricted Subsidiaries (as
defined) to incur additional
Indebtedness, make certain Restricted
Payments (as defined) and Investments
(as defined), create Liens (as defined),
permit dividend or other payment
restrictions to apply to Subsidiaries
(as defined), enter into certain
transactions with Affiliates or Related
Persons (as defined) or consummate
certain merger, consolidation or
similar transactions. In addition, in
certain circumstances, the Company will
be required to offer to purchase
Exchange Notes at 100% of the principal
amount thereof with the net proceeds of
certain asset sales. These covenants
are subject to a number of significant
exceptions and qualifications. See
"Description of Exchange Notes."
For additional information regarding the Exchange Notes, see "Description of
Exchange Notes."
Risk Factors
Prospective investors should carefully consider the specific matters set forth
under "Risk Factors" as well as the other information and data included in
this Prospectus in evaluating the Exchange Offer and an investment in the
Exchange Notes.
Summary Pro Forma Financial Information
(Dollars in thousands)
The accompanying summary unaudited pro forma financial information is based
upon the historical consolidated financial statements of Tekni-Plex and
PureTec, adjusted to give effect to the PureTec Acquisition (accounted for as a
purchase) and the Transactions, as if the PureTec Acquisition and the
Transactions had occurred at June 29, 1996. The unaudited pro forma statement
of operations data for the year ended June 27, 1997 reflects PureTec's
historical results of operations for the year ended July 31, 1997. The
unaudited pro forma statement of operations data for the six months ended
December 26, 1997 reflects PureTec's historic results of operations for the
six months ended January 31, 1998. The pro forma condensed statements of
operations are not necessarily indicative of the results that would have been
obtained if the PureTec Acquisition and the Transactions had occurred on the
dates indicated or for any future period or date. The pro forma adjustments
give effect to available information and assumptions that the Company believes
are reasonable. The summary pro forma financial information should be read in
conjunction with the pro forma unaudited condensed financial information and
notes thereto, the Company's historical consolidated financial statements and
notes thereto and the historical consolidated financial statements of PureTec
and the notes thereto. See "Pro Forma Unaudited Condensed Financial
Information" and "Management's Discussion and Analysis of Financial Condition
and Results of Operations."
Pro Forma
Six Months
Ended
Year Ended December 26,
June 27, 1997 1997
--------------- ------------
Statement of Operations Data:
Net sales.......................................... $ 460,070 $ 214,312
Gross profit....................................... 104,644 48,527
Income from operations............................. 40,703 16,644
Interest expense, net.............................. 36,656 18,328
Other expense...................................... 2,605 301
Pre-tax income (loss) from continuing operations... 1,442 (1,990)
Income tax provision............................... 4,947 1,389
Income (loss) from continuing operations before
minority interest, discontinued
operations and extraordinary item................. (3,505) (3,379)
Net income (loss)(a)............................... $ (29,736) $ (3,864)
Other Financial Data:
EBITDA(b).......................................... $ 69,818 $ 32,862
EBITDA margin...................................... 15.2% 15.3%
Depreciation and amortization...................... $ 31,088 $ 15,630
Capital expenditures............................... 15,225 5,501
Cash flows:
From operations.................................... 14,093 (4,434)
From investing..................................... (17,537) (5,308)
From financing..................................... 15,606 6,659
Ratios:
Ratio of earnings to fixed charges(c).............. 1.0x 1.0x
Ratio of EBITDA to interest expense................ 1.9x 1.8x
Balance Sheet Data (End of Period):
Working capital.................................... $ 76,100 $ 84,241
Total assets....................................... 535,853 528,599
Total debt (including current portion)............. 394,805 394,850
Stockholders' equity............................... 30,397 35,071
- ------------
(a) Net loss for the year ended June 27, 1997 includes an extraordinary loss
comprised of (i) a prepayment penalty of $1.2 million and the write-off of
deferred financing costs and debt discounts of $3.4 million, net of the
combined tax benefit of $1.8 million, in connection with the early
repayment of debt and (ii) a loss of $17.8 million on the repurchase of
redeemable warrants. See "Tekni-Plex Management's Discussion and Analysis
of Financial Condition and Results of Operations--Results of Operations."
(b) Pro forma EBITDA is defined as net income before interest, income taxes,
depreciation and amortization, (and for this pro forma presentation)
minority interest, equity in loss of affiliates and write offs of
goodwill, intangibles and obsolete equipment and reflects certain
adjustments for the Transactions (see "Pro Forma Unaudited Condensed
Financial Information"). EBITDA is presented because it is a widely
accepted financial indicator of a company's ability to incur and service
debt. However, EBITDA should not be considered in isolation as a
substitute for net income or cash flow data prepared in accordance with
generally accepted accounting principles or as a measure of the Company's
profitability or liquidity. In addition, this measure of EBITDA may not be
comparable to similar measures reported by other companies. EBITDA margin
is calculated as the ratio of EBITDA to net sales for the period.
(c) For purposes of the pro forma ratio of earnings to fixed charges (i)
earnings are calculated as the Company's pro forma earnings before income
taxes, extraordinary item and fixed charges and (ii) fixed charges include
interest on all indebtedness, amortization of deferred financing costs and
accretion of all warrants.
Tekni-Plex Summary Financial Information
(Dollars in thousands)
The following table sets forth summary historical consolidated financial
information of the Company for the periods provided below. The information
contained in the table has been derived from, and should be read in conjunction
with, the audited and unaudited consolidated financial statements of the
Company, including the notes thereto.
<TABLE>
<CAPTION>
For the Six Months
For the Periods For the Years Ended Ended
---------------------------------- -------------------------------- -----------------------
January 1
to January 1 March 19
December to March to July 1, June 30, June 28, June 27, December December
31, 1993 18, 1994 1994 1995 1996 1997 27, 1996 26, 1997
--------- --------- ---------- -------- -------- ---------- ---------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Statement of Operations Data:
Net sales..................... $ 44,878 $ 9,418 $ 12,723 $ 44,688 $ 80,917 $ 144,736 $ 71,595 $ 75,622
Gross profit.................. 8,274 1,494 2,762 9,747 18,582 37,729 18,135 20,398
Income from operations........ 3,198 892 1,241 4,933 8,243 21,843 10,984 12,142
Interest expense, net......... 160 22 1,141 4,322 5,816 8,094 4,129 4,336
Other expense................. 7 45 62 234 469 646 440 158
Pre-tax income before
extraordinary item........... 3,031 825 38 377 1,958 13,103 6,415 7,648
Income tax provision(a)....... 267 56 17 211 982 4,675 2,255 2,907
Income before extraordinary
item......................... 2,764 769 21 166 976 8,428 4,160 4,741
Net income (loss)............. $ 2,764 $ 769 $ 21 $ 166 $ 976 $ (12,238)(b) $ 4,160 $ 4,741
Other Financial Data:
EBITDA(c)..................... $ 3,800 $ 985 $ 1,988 $ 7,922 $ 14,157 $ 30,221 $ 15,062 $ 17,137
EBITDA margin(c).............. 8.5% 10.5% 15.6% 17.7% 17.5% 20.9% 21.0% 22.7%
Depreciation and
amortization................. $ 608 $ 138 $ 879 $ 3,462 $ 6,821 $ 9,551 $ 4,816 $ 4,793
Capital expenditures.......... 1,423 420 157 614 2,275 3,934 1,402 1,939
Cash flows:
From operations............... 3,512 (564) 1,147 2,354 6,568 19,536 9,908 4,966
From investing................ (1,871) 315 (45,567) (614) (49,522) (6,273) (1,771) (7,009)
From financing................ (570) (1,121) 44,465 (1,451) 43,669 (3,217) (6,565) (1,860)
Ratios:
Ratio of earnings to fixed
charges(d)................... 19.9x 38.5x 1.0x 1.1x 1.3x 2.6x 2.6x 2.8x
Ratio of EBITDA to interest
expense...................... -- -- 1.7x 1.8x 2.4x 3.7x 3.6x 3.9x
Balance Sheet Data
(End of Period):
Working capital............... $ 6,023 $ 4,565 $ 1,673 $ 3,173 $ 11,660 $ 25,950 $ 13,299 $ 28,400
Total assets.................. 15,701 14,900 53,724 53,415 121,770 129,029 120,046 130,684
Total debt (including current
portion)..................... 1,616 588 36,396 35,004 70,436 75,000 64,031 75,608
Stockholders' equity.......... 10,086 10,855 11,521 11,687 24,162 30,397 28,322 35,071
</TABLE>
- ------------
(a) Prior to the acquisition of Tekni-Plex by the current owners, the previous
owners elected to be taxed as an "S" corporation for federal income tax
purposes. Accordingly, there was no provision for federal income taxes for
periods prior to March 18, 1994 as such income was reported on the federal
income tax returns of the shareholders.
(b) Net loss for the year ended June 27, 1997 includes an extraordinary
loss comprised of (i) a prepayment penalty of $1.2 million and the
write-off of deferred financing costs and debt discounts of $3.4
million, net of the combined tax benefit of $1.8 million, in connection
with the early repayment of debt and (ii) a loss of $17.8 million on
the repurchase of redeemable warrants. See "Tekni-Plex Management's
Discussion and Analysis of Financial Condition and Results of
Operations--Results of Operations."
(c) EBITDA is defined as net income before interest, income taxes,
depreciation and amortization. EBITDA is presented because it is a widely
accepted financial indicator of the Company's ability to incur and service
debt. However, EBITDA should not be considered in isolation as a substitute
for net income or cash flow data prepared in accordance with generally
accepted accounting principles or as a measure of a company's profitability
or liquidity. In addition, this measure of EBITDA may not be comparable to
similar measures reported by other companies. EBITDA margin is calculated as
the ratio of EBITDA to net sales for the period.
(d) For purposes of the ratio of earnings to fixed charges, (i) earnings are
calculated as the Company's earnings before income taxes, extraordinary item
and fixed charges and (ii) fixed charges include interest on all
indebtedness, amortization of deferred financing costs and accretion of the
warrant.
RISK FACTORS
Holders of Old Notes should consider carefully the following factors as well
as the other information and data included in this Prospectus prior to
tendering their Old Notes in the Exchange Offer.
Substantial Leverage; Restrictions Imposed by the Terms of the Company's
Indebtedness
The Company's total debt and stockholder's equity was $75.6 million and $35.1
million, respectively, as of December 26, 1997. Following completion of the
Transactions, the Company will be highly leveraged. On a pro forma basis after
giving effect to the Transactions, the Company's total debt would have been
$394.9 million at December 26, 1997 and its annual debt service would have
been $39.8 million and the ratio of earnings to fixed charges would have been
2 to 1 for the twelve months ended December 26, 1997. The Company's leverage
and obligations could have important consequences to the holders of Notes,
including: (i) the impairment of the Company's ability to obtain additional
financing for working capital, capital expenditures, acquisitions or other
purposes; (ii) the use of a substantial portion of the Company's cash flow
from operations for debt service; (iii) the competitive disadvantages that may
result from the Company being more highly leveraged than some of its
competitors; and (iv) making the Company more vulnerable to economic downturns
and limiting its ability to withstand competitive pressures.
In addition, the Company's operating flexibility with respect to certain
business matters will be limited by covenants contained in the Indenture, the
indenture (the "11(1)/(4)% Indenture") with respect to the 11(1)/(4)% Notes
and the Bank Financing. Among other things, these covenants will limit the
ability of the Company and its subsidiaries to incur additional indebtedness,
create liens upon assets, apply the proceeds from disposal of assets, make
dividend payments and other distributions on capital stock and redeem capital
stock. There can be no assurance that such covenants will not adversely affect
the Company's ability to finance its future operations or capital needs or to
engage in other business activities that may be in the interest of the
Company. See "Description of Certain Indebtedness" and "Description of
Notes--Covenants."
On a pro forma basis as of December 26, 1997 after giving effect to the
Transactions, and subject to certain restrictions, the Company could have
borrowed up to $90.0 million of additional senior indebtedness under the
Revolving Credit Facility without requiring the consent of the holders of
Notes. If the entire $90.0 million under the Revolving Credit Facility had
been outstanding from the beginning of fiscal year 1997, the Company's annual
debt service (all interest) for such fiscal year would have increased by
approximately $6.6 million based on an assumed fixed interest rate of 7.35%.
The Company expects that its cash flow will be sufficient to cover its
expenses, including fixed charges. However, no assurance can be given that the
Company's operating results will be sufficient for the Company to meet such
obligations. The Company's ability to satisfy its obligations will be
dependent upon its future performance, which is subject to prevailing economic
conditions and financial, business and other factors, including factors beyond
the Company's control.
Ranking of the Exchange Notes
The Exchange Notes will be senior subordinated unsecured obligations of the
Company and will rank subordinate in right of payment to all existing and
future senior indebtedness of the Company. In addition, the Exchange Notes
will be effectively subordinated in right of payment to all existing and
future secured indebtedness of the Company and the Company's subsidiaries,
including indebtedness under the Bank Financing. Loans under the Bank
Financing will be secured by substantially all of the assets of the Company.
On a pro forma basis as of December 26, 1997, there was $119.9 million of
outstanding indebtedness to which the Exchange Notes were subordinated.
Included in such amount is $4.9 million of indebtedness of foreign
subsidiaries, which subsidiaries will not be Guarantors. In addition, the
Company could have borrowed up to $90.0 million of indebtedness under the
Revolving Credit Facility without the consent of the holders of the Exchange
Notes, all of which would constitute Senior Debt. The Guarantees will be senior
subordinated unsecured obligations of the Guarantors, and will rank
subordinate in right of payment to all existing and future senior indebtedness
of each such Guarantor, including its Guarantee under the Bank Financing.
Under the terms of the Indenture, the Company will be permitted, upon the
satisfaction of certain conditions, to incur additional senior indebtedness.
See "Description of Certain Indebtedness," "Description of Exchange
Notes--Ranking" and "--Covenants."
Raw Material Price Volatility and Availability
The Company's polystyrene foam products are manufactured from high heat
crystal polystyrene resin ("polystyrene resin"). Polystyrene resin is a
commodity petrochemical that is readily available in bulk quantities from
numerous large, vertically integrated chemical companies. The Company
purchases polystyrene resin from several of the top suppliers. Prices for
polystyrene resin have fluctuated in the past and may continue to do so in the
future. Historically, the Company has been able to pass on substantially all
of the price increases in raw materials to its customers. However, there can
be no assurance that the Company will be able to do so in the future. The
primary materials used by PureTec in the manufacture of its products are
plastic resins, primarily polyvinyl chloride, polypropylene and polyethylene,
and also plasticizers. All of these materials are widely available from
numerous sources and PureTec currently purchases these raw materials from
multiple suppliers. Prices for these materials have fluctuated in the past and
may continue to do so in the future. PureTec historically has set prices for
its garden hose products in advance of each season and, to the extent that raw
material costs increase more than anticipated, the additional costs generally
cannot be passed on to its customers during that season. However, with respect
to its other markets, PureTec has generally been able to pass on substantially
all of the price increases to its customers. If raw material prices increase
and the Company is unable to pass such price increases on to its customers,
employ successful hedging strategies, enter into supply contracts at favorable
prices or buy on the spot market at favorable prices, the Company's
profitability may be adversely affected.
A key raw material used in manufacturing the Company's clear, laminated
blister packaging materials is Aclar(R), a proprietary material produced by
Allied Signal. Allied Signal is currently the sole manufacturer and supplier of
Aclar(R). There is no long-term supply contract with Allied Signal. If the
supply of Aclar(R)is significantly interrupted, the Company would begin
substituting alternative blister packaging materials. Depending on the extent
of the disruption, the Company's profitability may be adversely affected.
Competition
Many of the Company's competitors are larger and, in some cases, have
significantly greater financial resources than the Company. See
"Business--Competition." While the packaging industry overall is relatively
large, the market for high performance pharmaceutical-type packaging materials
is considerably smaller, and the Company's achievement of its internal
expansion goals assumes expansion of its customers' volume for its products,
finding new applications for its existing high performance materials, and
development of new materials for new applications. In addition, many of the
markets for PureTec's products are highly competitive. Depending on the
particular product category, competition is based on breadth of product line,
quality, pricing, technical service and servicing the specialized needs of
customers. See "Business--Competition--PureTec" for a discussion of the
specific competitive factors applicable to each of PureTec's divisions.
Integration of PureTec and Other Acquisitions
The integration of PureTec will require substantial management time and other
resources and may pose risks with respect to production, customer service and
market share. While the Company believes that it has sufficient management and
other resources to accomplish the rationalization and integration of PureTec,
there can be no assurance in this regard or that the Company will not
experience difficulties with customers, suppliers, personnel or others. In
addition, although the Company believes that the PureTec Acquisition will
enhance the competitive position and business prospects of the Company, there
can be no assurance that such benefits will be realized or that the
combination of the Company and PureTec will be more successful than the
companies would have been if they had remained independent. There can be no
assurance that the Company will achieve synergies in the PureTec Acquisition
comparable to those from recent acquisitions.
Although PureTec recorded a net profit from continuing operations of $1.3
million for the year ended July 31, 1997, PureTec experienced net losses from
continuing operations for the 1996, 1995 and 1994 fiscal years of $4.4 million,
$7.5 million and $14.8 million, respectively. For the six months ended January
31, 1998, PureTec recorded a net loss from continuing operations of $3.4
million. The ability to generate positive net income in the future will be
dependent upon many factors, including the ability to obtain new customers and
retain existing customers, the degree of competition encountered by PureTec,
the level of PureTec's capital expenditures and operating expenses and general
economic conditions in any one, or all, of PureTec's markets. There can be no
assurance that PureTec will be profitable in the future.
As part of its business strategy, the Company may pursue suitable additional
acquisitions. Nonetheless, there can be no assurance that the Company will
identify suitable acquisitions or that such acquisitions can be made at an
acceptable price. In the event the Company acquires additional businesses, it
may require substantial capital. Although the Company will be able to borrow
under the Revolving Credit Facility under certain circumstances to fund
acquisitions, there can be no assurance that such borrowings will be available
in sufficient amounts or that other financing will be available in amounts and
on terms that the Company deems acceptable. Furthermore, the integration of
acquired businesses may result in unforeseen difficulties that require a
disproportionate amount of management's attention and other Company resources.
There can be no assurance that the Company will achieve synergies comparable
to those from recent acquisitions.
Dependence on Key Personnel
The Company is dependent on the management experience and continued services
of its executive officers, including Dr. F. Patrick Smith and Kenneth W.R.
Baker. See "Management." The loss of the services of these officers could
have a material adverse effect on the Company's business. In addition, the
Company's continued growth depends on its ability to attract and retain
experienced key employees.
Seasonality
The market for PureTec's garden hose is highly seasonal, with approximately
75% of the sales occurring in the second half of PureTec's fiscal year. As a
result of the need to build up inventories in anticipation of such second-half
sales, PureTec's working capital requirements have historically peaked in the
second and third quarters of its fiscal year. In addition, this seasonality
has a significant impact on PureTec's net income from quarter to quarter.
PureTec's Colorite Plastics division, the manufacturing division which
produces garden hose, historically operates the first two quarters of the
fiscal year at a loss. To the extent such sales peak later in any fiscal year
compared to other fiscal years, cash flows may not be comparable on an interim
period basis.
PureTec Foreign Operations
PureTec's European operations, representing approximately $35.3 million of
PureTec's sales (before eliminations) for the fiscal year ended July 31, 1997,
are subject to special risks inherent in doing business outside the United
States, including governmental instability, war and other international
conflicts, civil and labor disturbances, requirements of local ownership,
partial or total expropriation, nationalization, currency devaluation, foreign
exchange controls, and foreign laws and policies, each of which may limit the
movement of assets or funds or result in the deprivation of contract rights or
the taking of property without fair compensation. Although most of PureTec's
international revenues are derived from transactions denominated in United
States dollars, PureTec has and likely will continue to conduct some business
in currencies other than the United States dollar. PureTec only engages in
some limited hedging of specific transactions to hedge against foreign
currency fluctuations. Accordingly, its profitability has been and will
continue to be affected by fluctuations in foreign exchange rates. In
addition, PureTec's foreign operations are conducted primarily through its
foreign subsidiaries which will not guarantee the Notes.
Environmental Matters
Like similar companies, the Company's and PureTec's facilities, operations,
and properties are subject to foreign, federal, state, and local environmental
laws and regulations. As a result, the Company and PureTec are involved from
time to time in administrative or legal proceedings relating to environmental
matters and have in the past and will continue to incur capital costs and
other expenditures relating to environmental matters. Liability under
environmental laws may be imposed on current and prior owners and operators of
property or businesses without regard to fault or to knowledge about the
condition or action causing the liability. The Company and PureTec may be
required to incur costs relating to the remediation of property, including
property at which waste they dispose of is located, and environmental
conditions could lead to claims for personal injury, property damage or
damages to natural resources. The Company and PureTec are aware of
environmental conditions at certain properties which they now or previously
owned or leased which are undergoing remediation by third parties. Although
based on current information the Company and PureTec have no reason to believe
otherwise, there can be no assurance that such third parties will complete any
required remediation.
Both the Company and PureTec believe, based on current information, that any
costs they may incur relating to environmental matters will not have a
material adverse effect on their respective businesses, financial condition or
results of operations. There can be no assurance, however, that the Company or
PureTec will not incur significant fines, penalties, capital costs, or other
liabilities associated with noncompliance, remediation or natural resource
damage liability, or that future events, such as changes in laws or the
interpretation thereof, the development of new facts, or the failure of third
parties to perform remediation at current or former facilities, will not cause
the Company or PureTec to incur additional costs that could have a material
adverse effect on their respective businesses, financial condition or results
of operations. See "Business--Legal Proceedings and Environmental Matters."
Prior to the 1994 acquisition of the Company, public awareness and interest in
environmental issues adversely affected the polystyrene foam packaging
industry. In particular, in 1990, McDonald's discontinued its well-recognized
polystyrene foam clam shell sandwich package in favor of paper packaging. In
response, various recycling programs were commenced in the United States.
Although the Company believes that the environmental concerns that negatively
affected demand for these products in the 1980s have subsided and, to some
extent, given way to a view by many that polystyrene foam does not have
significantly worse environmental problems than other materials, there can be
no assurance that public awareness and interest in environmental issues will
not adversely affect the plastics and polystyrene industry.
Control of the Company
The Company is owned by Tekni-Plex Partners L.P., a limited partnership
organized under the laws of the State of Delaware, and its related investors
(the "Tekni-Plex Partnership"). Tekni-Plex Partnership beneficially owns 100%
of the outstanding shares of the Company and 95.1% of the Company on a fully
diluted basis and controls the affairs and policies of the Company. Tekni-Plex
Partnership is controlled by MST/TP Partners, L.P. ("MST/TP L.P."), which in
turn is controlled, directly or indirectly, by J. Andrew McWethy, Barry A.
Solomon, and Stephen A. Tuttle, who are all directors of the Company.
Circumstances may occur in which the interests of Tekni-Plex Partnership,
MST/TP L.P. and the three individuals could be in conflict with the interests
of the holders of the Notes. In addition, Tekni-Plex Partnership may have an
interest in pursuing acquisitions, divestitures or other transactions that, in
its judgment, could enhance the value of its individual partners' equity
investments in the partnership, even though such transactions may involve
risks to the holders of the Notes.
Change of Control
Upon the occurrence of a Change of Control, each holder of Exchange Notes may
require the Company to repurchase all or a portion of such holder's Exchange
Notes. If a Change of Control were to occur, there can be no assurance that
the Company would have sufficient financial resources, or would be able to
arrange financing to pay the repurchase price for all Exchange Notes tendered
by holders thereof. Further, the provisions of the Indenture may not afford
holders of Exchange Notes protection in the event of a highly leveraged
transaction, reorganization, restructuring, merger or similar transaction
involving the Company that may adversely affect holders of Exchange Notes, if
such transaction does not result in a Change of Control. In addition, the
terms of the Bank Financing limit the Company's ability to repurchase any
Exchange Notes and also identify certain events that would constitute a change
of control, as well as certain other events with respect to the Company or
certain of its subsidiaries, that would constitute an event of default under
the Bank Financing. The 11(1)/(4)% Indenture contains substantially similar
change of control provisions to those contained in the Exchange Notes. Any
future credit agreements or other agreements relating to other indebtedness to
which the Company becomes a party may contain similar restrictions and
provisions. In the event a Change of Control occurs at a time when the Company
is prohibited from repurchasing Exchange Notes, the Company could seek the
consent of its lenders to repurchase Exchange Notes or could attempt to
refinance the borrowings that contain such prohibition. If the Company does
not obtain such consent or repay such borrowing, the Company would remain
prohibited from repurchasing Exchange Notes. In such case, the Company's
failure to repurchase tendered Exchange Notes would constitute an Event of
Default under the Indenture, which would, in turn, constitute a further
default under certain of the Company's existing debt agreements and may
constitute a default under the terms of other indebtedness that the Company
may enter into from time to time. See "Description of Exchange Notes--Change of
Control."
Lack of Public Market for the Notes
Prior to the Exchange Offer, there has not been any public market for the Old
Notes. The Old Notes have not been registered under the Securities Act and
will be subject to restrictions on transferability to the extent that they are
not exchanged for Exchange Notes by holders who are entitled to participate in
the Exchange Offer. The holders of Old Notes (other than any such holder that
is an "affiliate" of the company within the meaning of Rule 405 under the
Securities Act) who are not eligible to participate in the Exchange Offer are
entitled to certain registration rights, and the Company is required to file a
Shelf Registration Statement with respect to such Old Notes. The Exchange Notes
will constitute a new issue of securities with no established trading market,
and there can be no assurance as to (i) the liquidity of any such market that
may develop, (ii) the ability of holders of Exchange Notes to sell their
Exchange Notes or (iii) the price at which the holders of Exchange Notes would
be able to sell their Exchange Notes. If such a market were to exist, the
Exchange Notes could trade at prices that may be higher or lower than their
principal amount or purchase price, depending on many factors, including
prevailing interest rates, the market for similar notes and the financial
performance of the Company and its subsidiary. The Company does not intend to
list the Exchange Notes on any national securities exchange or to seek the
admission thereof to trading in the National Association of Securities Dealers
Automated Quotation System. The Company has been advised by the Initial
Purchaser that, following completion of the Exchange Offer, the Initial
Purchaser presently intends to make a market in the Exchange Notes. However,
the Initial Purchaser is not obligated to do so, and any market-making
activity with respect to the Exchange Notes may be discontinued at any time
without notice. In addition, such market-making activity will be subject to the
limits imposed by the Securities Act and the Securities Exchange Act of 1934,
as amended (the "Exchange Act"), and may be limited during such exchange offer
or the pendency of an applicable shelf registration statement. There can be
no assurance that an active trading market will develop for the Exchange Notes
or that such trading market will be liquid. If a trading market does not
develop or is not maintained, holders of the Exchange Notes may experience
difficulty in reselling the Exchange Notes or may be unable to sell them at
all. if a market for the Exchange Notes develops, any such market may be
discontinued at any time.
Fraudulent Conveyance Considerations
In the event U.S. federal and state fraudulent conveyance or similar laws were
applied to the issuance of a Guarantee, if any Guarantor, at the time it
incurs such Guarantee, (i) (a) was or is insolvent or rendered insolvent by
reason of such incurrence, (b) was or is engaged in a business or transaction
for which the assets remaining with such Guarantor constituted unreasonably
small capital or (c) intended or intends to incur, or believed or believes
that it would incur, debts beyond its ability to pay such debts as they mature
and (ii) received or receives less than reasonably equivalent value or fair
consideration, the obligations of such Guarantor under its Guarantee could be
avoided, or claims in respect of such Guarantee could be subordinated to all
other debts of such Guarantor. Among other things, a legal challenge of a
Guarantee on fraudulent conveyance grounds may focus on the benefits, if any,
realized by such Guarantor as a result of the issuance by the Company of the
Notes. To the extent that any Guarantee were held to be a fraudulent
conveyance or unenforceable for any other reason, the holders of the Notes
would cease to have any claim in respect of the Guarantor issuing such
Guarantee and would be solely creditors of the Company and any other
Guarantors whose Guarantees were not avoided or held unenforceable. There can
be no assurance that, after providing for all prior claims, there would be
sufficient assets to satisfy claims of the holders of the Notes relating to
any avoided portion of the Guarantee.
Management believes that, for purposes of U.S. federal and state fraudulent
conveyance or similar laws, the Guarantees are being incurred without the
intent to hinder, defraud or delay creditors, for proper purposes and in good
faith, that the Guarantors have received reasonably equivalent value or fair
consideration for incurring such Guarantees and that each of the Guarantors
are and, after the issuance of the Guarantees and the application of the
proceeds thereof, will be solvent, will have sufficient capital for carrying
on its business and will be able to pay its debts as they mature. There can be
no assurance, however, that a court passing on such questions would agree with
management's view.
Exchange Offer Procedures
Issuance of the Exchange Notes in exchange for the Old Notes pursuant to the
Exchange Offer will be made only after a timely receipt by the Company of such
Old Notes, a properly completed and duly executed Letter of Transmittal and
all other required documents. Therefore, holders of the Old Notes desiring to
tender such Old Notes in exchange for Exchange Notes should allow sufficient
time to ensure timely delivery. The Company is under no duty to give
notification of defects or irregularities with respect to the tenders of Old
Notes for exchange. Old Notes that are not tendered or are tendered but not
accepted will, following the consummation of the Exchange Offer, continue to be
subject to the existing restrictions upon transfer thereof and, upon
consummation of the Exchange Offer, certain registration rights under the
Registration Rights Agreement will terminate. In addition, any holder of Old
Notes who tenders in the Exchange Offer for the purpose of participating in a
distribution of the Exchange Notes may be deemed to have received restricted
securities and, if so, will be required to comply with the registration and
prospectus delivery requirements of the Securities Act in connection with any
resale transactions. Each Participating Broker-Dealer that receives
Exchange Notes for its own account in exchange for Old Notes, where such
Old Notes were acquired by such Participating Broker-Dealer as a result of
market-making activities or other trading activities, must acknowledge that
it will deliver a prospectus in connection with any resale of such Exchange
Notes. See "Plan of Distribution." To the extent that Old Notes are
tendered and accepted in the Exchange Offer, the trading market for
untendered and tendered but unaccepted Old Notes could be adversely
affected. See "The Exchange Offer."
USE OF PROCEEDS
(Dollars in millions)
The Exchange Offer is intended to satisfy certain of the Company's obligations
under the Registration Rights Agreement. The Company will not receive any
cash proceeds from the issuance of the Exchange Notes in the Exchange Offer.
Concurrently with the completion of the Offering, the Company entered into a
senior secured bank financing (the "Bank Financing"). The Bank Financing
consists of a $90 million revolving credit facility (the "Revolving Credit
Facility") and an aggregate of $115 million in Term Facilities (the "Term Loan
Facilities"), which is made up of a $50 million term loan facility (the "A
Term Loan Facility"), and a $65 million term loan facility (the "B Term Loan
Facility"). See "Description of Certain Indebtedness--Bank Financing."
The net proceeds of the Offering were approximately $193.5 million, after
deducting estimated discounts and commissions and other expenses payable by
the Company. The Offering was made together with the execution of the Bank
Financing to fund the purchase price of the PureTec Acquisition and the
Related Transactions.
CAPITALIZATION
(Dollars in thousands)
The following table sets forth the actual capitalization of the Company as of
December 26, 1997, and the pro forma capitalization of the Company as of
December 26, 1997 after giving effect to the Transactions. See "Use of
Proceeds."
----------------------------
Tekni-Plex at Pro Forma at
December 26, December 26,
1997 1997
------------- ------------
Revolving credit facilities........... -- --
Bank Financing:
Revolving Credit Facility(a).......... -- --
A Term Loan Facility............ -- $ 50,000
B Term Loan Facility............ -- 65,000
11 1/4% Senior Subordinated Notes.... $ 75,000 75,000
9 1/4% Senior Subordinated Notes
offered hereby....................... -- 200,000
PureTec 11 1/4% Senior Secured
Notes due 2003 (b)................... -- --
Other PureTec Indebtedness............ -- 4,242
Other................................. 608 608
------------- ------------
Total debt............................ 75,608 394,850
------------- ------------
Stockholders' equity:
Common stock and additional
paid-in capital............... 41,473 41,473
Foreign currency translation.... (67) (67)
Retained earnings............... (6,335) (6,335)
------------- ------------
Total stockholders' equity............ 35,071 35,071
------------- ------------
Total capitalization.................. $ 110,679 $ 429,921
============= ============
- ------------
(a) As of December 26, 1997, on a pro forma basis, the Company had $90.0
million unused and available, subject to certain restrictions, under
the Revolving Credit Facility. The Revolving Credit Facility replaces
the Company's existing $75.0 million credit facility. No amounts were
outstanding under the Tekni-Plex existing credit facility at December
26, 1997.
(b) Assumes 100% of the PS&T Notes are tendered in the Debt Tender Offer.
As of February 25, 1998, 97% were tendered and cannot be withdrawn.
PRO FORMA UNAUDITED CONDENSED FINANCIAL INFORMATION
The accompanying pro forma unaudited condensed statements of operations are
based upon the historical consolidated financial statements of Tekni-Plex and
PureTec, adjusted to give effect to the PureTec Acquisition (accounted for as a
purchase) and the Transactions, as if the PureTec Acquisition and the
Transactions had occurred at June 29, 1996. The unaudited pro forma condensed
statement of operations for the year ended June 27, 1997 reflects PureTec's
historical results of operations for the year ended July 31, 1997. The
unaudited pro forma condensed statement of operations for the six months ended
December 26, 1997 reflects PureTec's historical results of operations for six
months ended January 31, 1998. The pro forma condensed statements of
operations are not necessarily indicative of the results that would have been
obtained if the PureTec Acquisition and the Transactions had occurred on the
dates indicated or for any future period or date. The pro forma adjustments
give effect to available information and assumptions that the Company believes
are reasonable. The pro forma condensed financial information should be read
in conjunction with the Company's historical consolidated financial statements
and notes thereto and the historical consolidated financial statements of
PureTec and the notes thereto. See "Management's Discussion and Analysis of
Financial Condition and Results of Operations."
Pro Forma Unaudited Condensed Statements of Operations
(Dollars in thousands)
<TABLE>
<CAPTION>
--------------------------------------------------------------------------------
Year Ended
--------------------------------------------------------------------------------
Tekni-Plex PureTec July PureTec Acquisition Transaction Pro Forma
June 27, 1997 31, 1997 Adjustments Adjustments June 27, 1997
------------- ------------ ------------------- ------------ -------------
<S> <C> <C> <C> <C> <C>
Net sales........................... $ 144,736 $ 315,334 -- $ -- $ 460,070
Cost of sales....................... 107,007 248,419 -- 355,426
---------- ---------- --------(a) ------------ -----------
Gross profit........................ 37,729 66,915 -- 104,644
Selling, general and administrative
expenses........................... 15,886 40,298 7,757(b) -- 63,941
-- -- (a) -- --
-- -- -- -- --
---------- ---------- -------- ------------ -----------
Income from operations.............. 21,843 26,617 (7,757) -- 40,703
Other expenses (income):
Interest...................... 8,094 19,749 -- 8,813(c) 36,656
Equity in loss of affiliates.. -- 1,824 -- -- 1,824
Other......................... 646 135 -- -- 781
---------- ---------- -------- ------------ -----------
Income from continuing operations
before minority interest and
provision for income taxes......... 13,103 4,909 (7,757) (8,813) 1,442
Provision for income taxes.......... 4,675 3,131 666 (3,525)(d) 4,947
---------- ---------- -------- ------------ -----------
Income (loss) from continuing
operations before minority
interest........................... 8,428 1,778 (8,423) (5,288) (3,505)
Minority interest................... -- (433) -- -- (433)
Income (loss) from continuing ---------- ---------- -------- ------------ -----------
operations.......................... $ 8,428 $ 1,345 $ (8,423) $ (5,288) $ (3,938)
========== ========== ========== ============ ===========
Other Financial Data:
EBITDA.............................. $ 30,221 $ 39,597 -- -- 69,818
EBITDA margin....................... 20.9% 12.6% -- -- 15.2%
Depreciation and amortization....... $ 9,551 $ 13,780 $ 7,757 -- 31,088
Capital expenditures................ 3,934 11,291 -- -- 15,225
Ratio of earnings to fixed charges.. 2.6x 1.2x -- -- 1.0x
Ratio of EBITDA to interest......... 3.7x 2.0x -- -- 1.9x
</TABLE>
<TABLE>
<CAPTION>
Six Months Ended
Tekni-Plex PureTec Pro Forma
December 26, January 31, PureTec Acquisition Transaction December 26,
1997 1998 Adjustments Adjustments 1997
------------ ------------- ----------------------- ------------- ------------
(Dollars in thousands)
<S> <C> <C> <C> <C> <C>
Net sales.......................... $ 75,622 $ 138,690 -- -- $ 214,312
Cost of sales...................... 55,224 110,561 -- 165,785
--------- --------- ------(a) --------- ------------
Gross profit....................... 20,398 28,129 -- 48,527
Selling, general and
administrative expenses........... 8,256 19,748 3,879(b) -- 31,883
(a) --
--
--------- --------- ------ --------- ------------
Income from operations............. 12,142 8,381 (3,879) -- 16,664
Other expenses (income):
Interest..................... 4,336 10,149 -- 3,843(c) 18,328
Equity in loss of affiliates. -- 387 -- -- 387
Other........................ 158 (239) -- -- (81)
--------- --------- ------ --------- ------------
Income (loss) before provision for
income taxes...................... 7,648 (1,916) (3,879) (3,843) (1,990)
Provision for income taxes......... 2,907 1,439 (1,420) (1,537) 1,389
Income (loss) from continuing --------- --------- ------ -------(d) ------------
operations......................... $ 4,741 $(3,355) $(2,459) $(2,306) (3,379)
========= ========= ====== ======= ============
Other Financial Data:
EBITDA............................. $ 17,137 $ 15,578 -- -- $ 32,862
EBITDA margin...................... 22.7% 11.2% -- 15.3%
Depreciation and amortization...... $ 4,793 $ 6,958 $ 3,879 -- $ 15,630
Capital expenditures............... 1,939 3,562 -- -- 5,501
Ratio of earnings to fixed charges. 2.8x 0.7x -- -- 1.0x
Ratio of EBITDA to interest........ 3.9x 1.5x -- -- 1.8x
</TABLE>
See Notes to Pro forma Unaudited condensed Statements of Operations,
on page 32.
Notes to Pro Forma Unaudited Condensed Statements of Operations
Adjustments to reflect the Transactions, as if they had occurred as of
June 29, 1996, reflect the following:
(a) The Company anticipates annual savings in raw materials purchases of
$3,000 and general and administrative expenses of $6,800 as a result of
elimination of duplicate overhead. These amounts have not been reflected
above.
(b) The pro forma adjustments to goodwill amortization to reflect the
following:
<TABLE>
<CAPTION>
--------------------------------------
Six Months
Year Ended June Ended December
27, 1997 26, 1997
----------------- ----------------
<S> <C> <C>
Elimination of historical amortization............................ $ (3,168) $ (1,584)
Amortization of new goodwill of $163.9 million over
15 years.................................................... 10,925 5,463
----------------- ----------------
$ 7,757 $ 3,879
================= ================
</TABLE>
(c) The pro forma adjustments to interest expense reflect the following:
<TABLE>
<CAPTION>
--------------------------------------------------
Six Months
Year Ended June Ended December
27, 1997 26, 1997
---------- ----------------- ----------------
<S> <C> <C> <C>
Elimination of Tekni-Plex interest.............. $ (8,094) $ (4,336)
Elimination of PureTec interest................. (19,749) (10,149)
Interest on new debt as follows:
A Term Loan Facility ($50MM at 7.35%)..... $ 3,675
B Term Loan Facility ($65MM at 7.85%)..... 5,103
Notes offered hereby ($200MM at 9.25%).... 18,500
11(1)/(4)% Notes ($75MM at 11.25%)........ 8,438
Amortization of financing fees and
expenses........................................ 940
----------
36,656 18,328
------------------ ----------------
$ 8,813 $ 3,843
================== ================
</TABLE>
(d) Tax benefit for the year ended June 27, 1997, calculated at the Company's
marginal effective tax rate of 40%.
Pro Forma Unaudited Condensed Balance Sheet
(Dollars in thousands)
<TABLE>
<CAPTION>
Tekni-Plex at PureTec at Pro Forma at
December 26, January 31, Transaction PureTec Acquisition December 26,
1997 1998 Proceeds Adjustments 1997
------------- ----------- ------------ ------------------- ------------
<S> <C> <C> <C> <C> <C>
Assets
Current:
Cash......................... $ 9,235 $ 2,200 $ 305,600(a) $ (184,765)(c) $ 12,435
(119,835)(d)
Accounts receivable, net of an
allowance................. 15,055 48,830 -- -- 63,885
Inventory.................... 13,893 68,672 -- -- 82,565
Other current assets......... 3,263 2,513 -- -- 5,776
------------- ----------- ------------ ------------------- ------------
Total current assets....... 41,446 122,215 305,600 (304,600) 164,661
Property, plant and equipment,
net........................ 41,646 87,252 -- -- 128,898
Intangible assets, net of
accumulated amortization... 37,391 87,331 9,400(a) (87,331)(b) 201,269
157,478 (d)
Loan receivable-- PureTec....... 5,000 -- -- (5,000)(e) --
Other assets.................... 5,201 10,470 18,100 (d) 33,771
------------- ----------- ------------ ------------------- ------------
$ 130,684 $ 307,268 $ 315,000 $(224,353) $ 528,599
============= =========== ============ =================== ============
Liabilities and Stockholders' Equity
Current liabilities:
Short-term borrowings and
current portion of long-term
debt....................... $ 564 $ 54,766 -- $ (48,260)(c) 2,070
(5,000)(e)
Accounts payable-trade and
accrued liabilities........ 12,482 47,868 -- 18,000 (d) 78,350
------------- ----------- ------------ ------------------- ------------
Total current liabilities.. 13,046 102,634 -- (35,260) 80,420
------------- ----------- ------------ ------------------- ------------
Long-term debt.................. 44 2,942 115,000(a) (206)(c) 117,780
Notes........................... 75,000 125,000 200,000(a) (125,000)(c) 275,000
Other liabilities............... 7,523 12,857 -- (52)(d) 20,328
Stockholders' equity:
Capital stock and additional
paid-in capital............ 41,406 132,569 -- (132,569)(b) 41,406
Cumulative foreign currency
translation................ -- (3,432) -- 3,432 (b) --
Retained earnings
(deficit).................. (6,335) (65,302) -- 65,302 (b) (6,335)
------------- ----------- ------------ ------------------- ------------
Total stockholders' equity... 35,071 63,855 (63,835) 35,071
Total liabilities and ------------- ----------- ------------ ------------------- ------------
stockholders' equity...... $ 130,684 $307,268 $ 315,000 $(224,353) $ 528,599
============= =========== ============ =================== ============
</TABLE>
- ------------
(a) Issuance of $200,000 of Notes and $115,000 of term loans, including debt
issue costs of $9,400.
Record purchase of PureTec for $314,000 as follows:
(b) elimination of PureTec pre-acquisition equity and goodwill:
<TABLE>
<S> <C>
Capital Stock and additional paid-in capital.............. $132,569
Retained earnings (deficit)............................... (65,302)
Cumulative foreign currency translation adjustment........ (3,432)
Goodwill.................................................. (87,331)
</TABLE>
(c) redemption of PureTec Notes and repayment of other debt:
<TABLE>
<S> <C>
Notes................................................... $125,000
Current portion of long-term debt....................... 48,260
Other long-term debt.................................... 206
Cash, including premium on redemption of Notes.......... (184,765)
</TABLE>
(d) allocation of purchase price of $119,835 including estimated costs of
the transaction totaling $8,000, based on fair market value of the
acquired assets and liabilities, as follows:
<TABLE>
<S> <C>
Deferred tax benefit................................... $18,100
Minority interest...................................... 52
Accrued liabilities in connection with restructuring
and integration.................................... (18,000)
Cash................................................... (119,835)
--------
Goodwill............................................... $154,478
========
</TABLE>
(e) elimination of intercompany loan of $5,000.
TEKNI-PLEX SELECTED HISTORICAL FINANCIAL INFORMATION
(Dollars in thousands)
The following table sets forth selected historical consolidated financial
information of the Company, and has been derived from and should be read in
conjunction with the Company's audited and unaudited consolidated financial
statements, including the notes thereto. Unaudited interim data reflect, in
the opinion of the Company's management, all adjustments (consisting solely of
normal recurring adjustments) considered necessary for a fair presentation of
results for such interim periods. Results of operations for the unaudited
interim periods are not necessarily indicative of the results that may be
expected for any other interim or annual period. In addition, on March 18,
1994, Tekni-Plex was acquired by the current owners, in a transaction
accounted for under the purchase method of accounting. The financial
statements for the periods prior to March 18, 1994 are presented on the
predecessors' basis of accounting and accordingly, are not comparable to the
periods subsequent to March 18, 1994.
<TABLE>
<CAPTION>
For the Years Ended For the Periods For the Years Ended For the Six Months
Ended
------------------- ----------------------- ------------------------------ -------------------
January 1
December December to March March 19 to June 30, June 28, June 27, December December
31, 1992 31, 1993 18, 1994 July 1, 1994 1995 1996 1997 27, 1996 26, 1997
-------- -------- --------- ------------ --------- --------- --------- -------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Statement of Operations Data:
Net sales.................. $ 43,453 $ 44,878 $ 9,418 $ 12,723 $ 44,688 $ 80,917 $ 144,736 $ 71,595 $ 75,622
Cost of goods sold......... 35,860 36,604 7,924 9,961 34,941 62,335 107,007 53,460 55,224
Gross profit............... 7,593 8,274 1,494 2,762 9,747 18,582 37,729 18,135 20,398
Selling, general and
administrative expense.... 4,057 5,076 602 1,521 4,814 10,339 15,886 7,151 8,255
Income from operations..... 3,536 3,198 892 1,241 4,933 8,243 21,843 10,984 12,142
Interest expense, net...... 196 160 22 1,141 4,322 5,816 8,094 4,129 4,336
Other (income) expense..... (33) 7 45 62 234 469 646 440 158
Pre-tax income before
extraordinary item........ 3,373 3,031 825 38 377 1,958 13,103 6,415 7,648
Income tax provision(a).... 305 267 56 17 211 982 4,675 2,255 2,907
Income before
extraordinary item........ 3,068 2,764 769 21 166 976 8,428 4,160 4,741
Extraordinary item (loss).. -- -- -- -- -- -- (20,666)(b) -- --
Net income (loss).......... $ 3,068 $ 2,764 $ 769 $ 21 166 $ 976 $ (12,238) $ 4,160 4,741
Other Financial Data:
EBITDA(c).................. $ 4,204 $ 3,800 $ 985 $ 1,988 7,922 $ 14,157 $ 30,221 $ 15,062 17,137
EBITDA margin(c)........... 9.7% 8.5% 10.5% 15.6% 17.7% 17.5% 20.9% 21.0% 22.7%
Depreciation and
amortization.............. $ 636 $ 608 $ 138 $ 879 3,462 $ 6,821 $ 9,551 $ 4,816 4,793
Capital expenditures....... 502 1,423 420 157 614 2,275 3,934 1,402 1,939
Cash flows:
From operations............ 2,181 3,512 (564) 1,147 2,354 6,568 19,536 9,908 4,966
From investing............. (1,295) (1,871) 315 (45,567) (614) (49,522) (6,273) (1,771) (7,009)
From financing............. (680) (570) (1,121) 44,465 (1,451) 43,669 (3,217) (6,565) (1,860)
Ratios:
Ratio of earnings to fixed
charges(d)................ 18.2x 19.9x 38.5x 1.0x 1.1x 1.3x 2.6x 2.6x 2.8x
Ratio of EBITDA to
interest expense.......... -- -- -- 1.7x 1.8x 2.4x 3.7x 3.6x 3.9x
Balance Sheet Data
(End of Period):
Working capital............ $ 5,307 $ 6,023 $ 4,565 $ 1,673 3,173 $ 11,660 $ 25,950 $ 13,299 28,400
Total assets............... 13,204 15,701 14,900 53,724 53,415 121,770 129,029 120,046 130,684
Total debt (including
current portion).......... 1,913 1,616 588 36,396 35,004 70,436 75,000 64,031 75,608
Stockholders' equity....... 7,565 10,086 10,855 11,521 11,687 24,162 30,397 28,322 35,071
</TABLE>
- ------------
(a) Prior to the acquisition of Tekni-Plex by the current owners, the
previous owners elected to be taxed as an "S" corporation for federal
income tax purposes. Accordingly, there was no provision for federal
income taxes for periods prior to March 18, 1994 as such income was
reported on the federal income tax returns of the shareholders.
(b) Net loss for the year ended June 27, 1997 includes an extraordinary
loss comprised of (i) a prepayment penalty of $1.2 million and the
write-off of deferred financing costs and debt discounts of $3.4
million, net of the combined tax benefit of $1.8 million, in connection
with the early repayment of debt and (ii) a loss of $17.8 million on
the repurchase of redeemable warrants. See "Tekni-Plex Management's
Discussion and Analysis of Financial Condition and Results of
Operations--Results of Operations."
(c) EBITDA is defined as net income before interest, income taxes,
depreciation and amortization. EBITDA is presented because it is a
widely accepted financial indicator of the Company's ability to incur
and service debt. However, EBITDA should not be considered in
isolation as a substitute for net income or cash flow data prepared in
accordance with generally accepted accounting principles or as a
measure of a company's profitability or liquidity. In addition, this
measure of EBITDA may not be comparable to similar measures reported by
other companies. EBITDA margin is calculated as the ratio of EBITDA to
net sales for the period.
(d) For purposes of the ratio of earnings to fixed charges, (i) earnings
are calculated as the Company's earnings before income taxes,
extraordinary item and fixed charges and (ii) fixed charges include
interest on all indebtedness, amortization of deferred financing costs
and accretion of the warrant.
TEKNI-PLEX MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Comparability of Periods
Financial results for the year ended June 27, 1997 are not fully comparable to
the year ended June 28, 1996, and financial results for the year ended June
28, 1996 are not fully comparable to the year ended June 30, 1995, because of
the acquisition of Flemington on December 22, 1995 (although the Company does
not consider this acquisition in itself to be substantial in the overall
context) and the acquisition of Dolco on February 21, 1996.
Results of Operations
The following discussion and analysis should be read in conjunction with the
"Tekni-Plex Selected Historical Financial Information" and the Tekni-Plex
Financial Statements included elsewhere in this Offering Memorandum. The
following table sets forth, for the periods indicated, selected operating data
as a percentage of net sales.
Selected Financial Information
(Percentage of net sales)
<TABLE>
<CAPTION>
----------------------------------------------------------------------------------
Years Ended Six Months Ended
--------------------------------------------------- -----------------------------
December 27, December 26,
June 30, 1995 June 28, 1996 June 27, 1997 1996 1997
------------- ------------- ------------- ------------- -------------
<S> <C> <C> <C> <C> <C>
Net sales....................... 100.0% 100.0% 100.0% 100.0% 100.0%
Cost of sales................... 78.2 77.0 73.9 74.7 73.0
Gross profit.................... 21.8 23.0 26.1 25.3 27.0
Selling, general and
administrative expenses........ 10.8 12.8 11.0 10.0 10.9
Income from operations.......... 11.0 10.2 15.1 15.3 16.1
Interest expense................ 9.7 7.2 5.6 5.8 5.7
Provision for income taxes...... 0.5 1.2 3.2 3.1 3.8
Income before extraordinary
item........................... 0.4 1.2 5.8 5.8 6.3
Extraordinary item (loss)....... -- -- (14.3) -- --
Net income (loss)............... 0.4 1.2 (8.5) 5.8 6.3
Depreciation and amortization... 7.7 8.4 6.6 6.7 6.3
EBITDA(a)....................... 17.7 17.5 20.9 21.0 22.7
</TABLE>
- ------------
(a) EBITDA is defined as net income before interest, income taxes,
depreciation and amortization. EBITDA is presented because it is a widely
accepted financial indicator of a company's ability to incur and service
debt. However, EBITDA should not be considered in isolation as a substitute
for net income or cash flow data prepared in accordance with generally
accepted accounting principles or as a measure of the Company's
profitability or liquidity. In addition, this measure of EBITDA may not be
comparable to similar measures reported by other companies.
Six Months Ended December 26, 1997 Compared to Six Months Ended
December 27, 1996
Net sales increased to $75.6 million for the six months ended December 26,
1997 from $71.6 million for the six months ended December 27, 1996. This
represents an increase of $4.0 million or 5.6%. The increased sales are
primarily attributed to increased demand for pharmaceutical packaging products.
Cost of sales increased to $55.2 million for the six months ended December 26,
1997 from $53.5 million for the six months ended December 27, 1996. Expressed
as a percentage of net sales, cost of goods sold fell to 73.0% for the six
months ended December 26, 1997 from 74.7% for the six months ended December
27, 1996. The decline in cost of goods sold as a percentage of net sales was
due primarily to a decline in raw material costs, continued reductions in
overhead costs and improved fixed cost absorption from higher sales volumes.
Gross profit as a result, increased to $20.4 million or 27.0% of net sales for
the six months ended December 26, 1997, from $18.1 million or 25.3% of net
sales for the same period in 1996.
Selling, general and administrative expenses increased to $8.3 million or
10.9% of net sales for the six months ended December 26, 1997 from $7.2
million or 10.0% of net sales for the same period in 1996. This is due
primarily to increases in administrative costs and higher selling expenses
associated with the global expansion of the Company's pharmaceutical packaging
business.
Operating profit increased to $12.1 million or 16.1% of net sales for the six
months ended December 26, 1997, from $11.0 million or 15.3% for the same
period in 1996, for the reasons stated above.
Interest expense increased to $4.3 million or 5.7% of net sales for the six
months ended December 26, 1997, from $4.1 million or 5.8% of net sales for the
same period in 1996 due primarily to a restructuring of the Company's debt from
notes to bonds.
Provision for income taxes increased to $2.9 million or 3.8% of net sales for
the six months ended December 26, 1997, from $2.3 million or 3.1% for the same
period in 1996. The Company's effective tax rate was 38% for the six months
ended December 26, 1997 compared to 35% for the same period in 1996. The
increase between periods is due primarily to the depletion of tax carryover
losses and credits.
Net income increased to $4.7 million or 6.3% of net sales for the six months
ended December 26, 1997, from $4.2 million or 5.8% of net sales for the same
period in 1996, for the same reasons discussed above.
Depreciation and amortization remained at $4.8 million for the six months
ended December 26, 1997, as compared to the same period of 1996. As a
percentage of net sales, depreciation and amortization decreased to 6.3% from
6.7% for the same period in 1996 due to the increase in sales.
EBITDA increased to $17.1 million or 22.7% on net sales for the six months
ended December 26, 1997, from $15.1 million or 21.0% of net sales for the same
period in 1996, for the same reasons discussed above.
Year Ended June 27, 1997 Compared to Year Ended June 28, 1996
Net sales for the year ended June 27, 1997 were $144.7 million, a 78.9%
increase over net sales of $80.9 million for the year ended June 28, 1996. The
increase was due primarily to the acquisition of Dolco in February 1996, which
accounted for $55.2 million, and to a much lesser extent to the acquisition of
Flemington in December 1995. The level of growth for the year ended June 27,
1997, is not necessarily indicative of future operations.
Cost of sales increased to $107.0 million for the year ended June 27, 1997, of
which the Dolco operation accounted for $40.3 million of such increase, from
$62.3 million for the same period in 1996. Expressed as a percentage of net
sales, cost of sales improved to 73.9% for the year ended June 27, 1997 from
77.0% for the same period in 1996. The decline in cost of sales as a
percentage of net sales was due primarily to a decline in raw material costs
resulting from improved market conditions and the increased purchasing power
of the Company. This level of increase in costs and decrease as a percent of
sales may not be indicative of future operations.
Gross profit, as a result, increased to $37.7 million or 26.1% of net sales
for the year ended June 27, 1997, from $18.6 million or 23.0% of net sales for
the same period in 1996.
Selling, general and administrative expenses increased to $15.9 million or
11.0% of net sales for the year ended June 27, 1997, from $10.3 million or
12.8% of net sales for the same period in 1996. Selling, general and
administrative expenses decreased as a percentage of net sales due primarily
to the acquisition of Dolco with no relatively comparable increase in the
general and administrative staff of the Company. See also note 9 to the
financial statements of the Company regarding stock options.
Income from operations increased to $21.8 million or 15.1% of net sales for
the year ended June 27, 1997, from $8.2 million or 10.2% of net sales for the
same period in 1996, for the reasons stated above.
Interest expense increased to $8.1 million or 5.6% of net sales for the year
ended June 27, 1997, from $5.8 million or 7.2% of net sales for the same
period in 1996 due primarily to increased borrowings related to the Dolco
Acquisition which accounted for an increase of $2.4 million. Expressed as a
percentage of net sales, interest expense for the 1997 period fell to 5.6%
from 7.2% for the 1996 period as a result of the decreasing debt as a
percentage of net sales following the Dolco and Flemington acquisitions.
Provision for income taxes increased to $4.7 million or 3.2% of net sales for
the year ended June 27, 1997, from $1.0 million or 1.2% of net sales for the
same period in 1996. The Company's effective tax rate was 36% for the year
ended June 27, 1997. The decrease from the Company's expected rate of 38% was
a result of the realization of certain state tax benefits.
Income before extraordinary item increased to $8.4 million or 5.8% of net
sales for the year ended June 27, 1997, from $1.0 million or 1.2% of net sales
for the same period in 1996, for the reasons discussed above.
Extraordinary loss on early extinguishment of debt was $20.7 million for the
year ended June 27, 1997. On April 4, 1997, the Company issued $75.0 million
of 11(1)/(4)% Notes. Interest on the 11(1)/(4)% Notes is payable semi-
annually. The Company also received approximately $18.4 million in additional
capital contribution. These proceeds were used to repay the balance of $36.8
million on the Company's then outstanding credit facility, repay the then
existing senior subordinated notes for $25.2 million, including a prepayment
penalty of $1.2 million, and repurchase the redeemable warrants for $20.0
million. The extraordinary loss comprised of (i) the prepayment penalty of
$1.2 million and the write-off of deferred financing costs and debt discount
of $3.4 million, net of the combined tax benefit of $1.8 million, and (ii) the
loss on the repurchase of the warrants of $17.8 million.
Net income (loss) decreased to a loss of $12.2 million or 8.5% of net sales
for the year ended June 27, 1997 from a net income of $1.0 million or 1.2% of
net sales for the same period in 1996, for the reasons discussed above.
Depreciation and amortization increased to $9.6 million or 6.6% of net sales
for the year ended June 27, 1997 from $6.8 million or 8.4% of net sales for
the same period in 1996. The increase in depreciation and amortization is due
to the acquisition of Dolco which represented $4.0 million of depreciation and
amortization.
EBITDA increased to $30.2 million or 20.9% of net sales for the year ended
June 27, 1997, from $14.2 million or 17.5% of net sales or the same period in
1996, for the reasons stated above.
Year Ended June 28, 1996 Compared to Year Ended June 30, 1995
Net sales increased to $80.9 million in fiscal year 1996, representing an
increase of $36.2 million or 81.0% over net sales of $44.7 million in fiscal
year 1995. The increase in net sales was primarily the effect of four full
months of Dolco results.
Cost of sales increased to $62.3 million in fiscal year 1996 from $34.9
million in fiscal year 1995, primarily due to the acquisitions. However, when
expressed as a percent of net sales, cost of sales decreased to 77.0% for
fiscal year 1996 from 78.2% for fiscal year 1995. The decline in cost of sales
as a percentage of net sales was due primarily to the increased purchasing
power of the Company and reductions in manufacturing overhead as a result of
the Dolco Acquisition.
Gross profit, as a result, increased to $18.6 million or 23.0% of net sales in
fiscal year 1996 from $9.7 million or 21.8% of net sales in fiscal year 1995.
Selling, general and administrative expenses increased to $10.3 million or
12.8% of net sales in fiscal year 1996, from $4.8 million or 10.8% of net
sales in fiscal year 1995. The increase in selling, general and administrative
expenses was due primarily to the Dolco Acquisition. The increase in selling,
general and administrative expenses as a percentage of net sales was due to
the to the historically higher selling, general and administrative expenses as
a percentage of net sales in the Dolco operation.
Income from operations increased to $8.2 million or 10.2% of net sales in
fiscal year 1996 from $4.9 million or 11.0% of net sales for the same period
in 1995. As a percentage of net sales, the increase in gross profit was more
than offset by the increase in selling, general and administrative expenses.
Interest expense increased to $5.8 million or 7.2% of net sales in fiscal year
1996, from $4.3 million or 9.7% of net sales in fiscal year 1995 due primarily
to an increase in borrowings related to the Dolco Acquisition. The lower
percentage of net sales for 1996 interest expenses reflects the decreasing
debt as a percentage of net sales following the Dolco Acquisition.
Provision for income taxes increased to $1.0 million and an effective tax rate
of 50.2% in fiscal year 1996, from $0.2 million and an effective tax rate of
56.0% in fiscal year 1995. The effective tax rate is higher than the Company's
expected rate of 38% due to certain state and local taxes incurred which
relate to prior periods in both fiscal years.
Net income increased to $1.0 million or 1.2% of net sales in fiscal year 1996
from $0.2 million or 0.4% of net sales in fiscal year 1995, for the reasons
discussed above.
Depreciation and amortization increased to $6.8 million or 8.4% of net sales
for the year ended June 28, 1996 from $3.5 million or 7.7% of net sales for
the same period in 1995. The increase in depreciation and amortization is due
to the acquisition of Dolco.
EBITDA increased to $14.2 million or 17.5% of net sales in fiscal year 1996
from $7.9 million or 17.7% of net sales for fiscal year 1995, for the reasons
stated above.
Liquidity and Capital Resources
The Company's principal sources of funds since March 1994 consisted of cash
from operations and financing sources. For the six months ended December 26,
1997, net cash provided by operating activities was $5.0 million compared to
$9.9 million for the same period in 1996. For the year ended June 27, 1997,
net cash provided by operating activities was $19.5 million compared to net
cash provided by operating activities of $6.6 million for the year ended June
28, 1996, and $2.4 million for the year ended June 30, 1995.
The Company's working capital at December 26, 1997 was $28.4 million compared
to $26.0 million at June 27, 1997 and $11.7 million at June 28, 1996. The
increase in working capital at December 26, 1997 was due primarily to higher
accounts receivable and inventory associated with increased sales. The
increase in working capital at June 27, 1997 compared to the prior fiscal year
was due primarily to the restructuring of the Company's debt, which resulted
in a build up of cash and a decrease of liabilities.
The estimated aggregate amount of funds required for the Transactions was
approximately $314.0 million, including approximately $215 million in debt or
other obligations that were repaid or assumed. The financing for the
Transactions was provided by the Offering, the Bank Financing and cash on hand.
Concurrently with the Offering, the Company entered into a Bank Financing
which consisted of a $50 million A Term Loan Facility, a $65 million B Term
Loan Facility and $90 million Revolving Credit Facility. The Revolving Credit
Facility replaced the Company's $75 million existing revolving credit
facility. As of December 26, 1997 and June 27, 1997, there was no outstanding
balance under the existing credit facility. The proceeds of the Term
Facilities were used to fund the Transactions. As of March 27, 1998 the
Company had $90.0 million undrawn and available under the Revolving Credit
Facility to fund ongoing general corporate and working capital requirements.
Borrowings under the A Term Loan Facility shall be subject to annual
amortization, payable in quarterly installments, beginning in June 1998 and
ending in March 2004, with payments totaling $35 million due in the final two
years. Borrowings under the B Term Loan Facility shall be subject to annual
amortization, payable in quarterly installments, beginning in June 1998 and
ending in March 2006, with payments totaling approximately $61 million due in
the final two years. The full amount outstanding under the Revolving Credit
Facility must be paid in March 2004. See "Description of Certain
Indebtedness--The Bank Financing." In April 1997, the Company issued $75
million aggregate principal amount of 11(1)/(4)% Notes. The 11(1)/(4)% Notes
mature on April 1, 2007. See "Description of Certain Indebtedness--The
11(1)/(4)% Notes." The Indenture, the 11(1)/(4)% Indenture and the Bank
Financing each include various covenants which limit the Company's ability to
incur additional debt. See "Description of Certain Indebtedness." Also see
"Description of Notes--Covenants--Limitation on Indebtedness."
The Company's capital expenditures for the six months ended December 26, 1997
and the years ended June 27, 1997 and June 28, 1996 were $1.9 million, $3.9
million and $2.3 million, respectively. Management expects that annual capital
expenditures will increase from historical levels during the next few years as
the Company makes improvements needed to address air emissions at three of the
Company's manufacturing facilities, and the Company pursues new development
and cost-reduction opportunities. Management has identified potential capital
investment opportunities of approximately $5.1 million for the calendar year
1998 in addition to approximately $3.0 million of non-discretionary capital
expenditures anticipated during such period. PureTec has historically financed
its ongoing capital expenditure requirements from its cash flow provided from
operations and borrowings under its credit facilities. Prior to the execution
of the Merger Agreement, PureTec management had budgeted capital expenditures
of approximately $23.5 million, including approximately $11.5 million for
various expansion and cost improvement projects. The Company is currently
reviewing PureTec's capital expenditure budget, particularly in light of the
ongoing integration of PureTec, and certain adjustments to this budget may be
made.
The Company's principal uses of cash for the next several years will be debt
service, capital expenditures and working capital requirements. Management
believes that cash generated from operations plus funds from the credit
facilities will be sufficient to meet the Company's expected debt service
requirements, planned capital expenditures, and operating needs. However,
there can be no assurance that sufficient funds will be available from
operations or borrowings under credit facilities to meet the Company's cash
needs to the extent management anticipates.
Part of the Company's strategy is to explore possible future acquisitions. To
the extent the Company pursues future acquisitions, the Company may be
required to obtain additional financing. There can be no assurance that it
will be able to obtain such financing in amounts and on terms acceptable to it.
New Accounting Pronouncements
In June 1997, SFAS 130, Reporting Comprehensive Income, and SFAS 131,
Disclosures about Segments of an Enterprise and Related Information, were
issued. SFAS 130 addresses standards for reporting and display of
comprehensive income and its components, and SFAS 131 requires disclosure of
reportable operating segments. In February 1998, SFAS 132, Employer's
Disclosures About Pensions and Other Post-Retirement Plans, was issued. SFAS
132 standardizes pension disclosures. These statements are effective for the
Company's 1999 fiscal year. The Company will be reviewing these pronouncements
to determine their applicability to the Company, if any.
Seasonality
Although certain different product lines of the Company experience some
seasonality, their effects are generally offsetting, and the Company overall
has not experienced any material seasonality in the periods reflected herein.
Effects of Inflation
The Company believes that inflation has not significantly affected its results
of operation in the periods reflected herein.
Year 2000 Issues
In mid-1997, the Company acquired and installed a new, large, mainframe
computing system with software that is "Year 2000 compliant". Since that time,
the Company has been in the process of converting its various older computer
systems to this mainframe system. At this time, all of the Company's systems,
with the exception of the systems for the former Dolco and PurePlast
operations, have been successfully converted. The Company expects that the
conversion of these remaining systems will be completed prior to year-end.
Management does not expect costs associated with completion of the conversion
process to have a material impact on the Company's operations or financial
condition.
BUSINESS
Overview
The Company designs, manufactures and markets packaging materials primarily
for the pharmaceutical and food industries. The Flexible Packaging Group sells
primarily flexible packaging materials to customers including pharmaceutical
companies. The Company is the market leader for clear, high-barrier
laminations for pharmaceutical blister packaging. The Company believes, based
upon its knowledge and experience in the industry, that it has a greater than
90% share of the market for such products. These packaging materials are used
for fast-acting pharmaceuticals that are generally highly reactive to
moisture. The Foam Products Group sells primarily foamed polystyrene packaging
products such as egg cartons and processor trays to the poultry and meat
industries. The Company believes, based upon its knowledge and experience in
the industry, that it produces in excess of 80% of all foam egg cartons and
has approximately 40% of the egg carton market. The Company has also built a
strong presence in the processor tray market, where it believes, based upon
its knowledge and experience in the industry, that it has an estimated share
of greater than 25%.
On March 3, 1998, the Company completed the merger of Merger Sub, a
wholly-owned subsidiary of Tekni-Plex, with and into PureTec pursuant to the
Merger Agreement among Tekni-Plex, PureTec, Merger Sub, and Plastic Specialties
and Technologies, Inc. The total consideration paid by the Company for the
PureTec Acquisition was approximately $296.5 million, which includes the
repayment of debt and the elimination of minority interests at certain
subsidiaries of PureTec, and excludes fees and expenses.
PureTec is the leading domestic producer of garden hose, medical-grade vinyl
compounds and precision tubing and gaskets and the second leading domestic
producer of disposable medical tubing. PureTec also produces plastic materials
that are used in various specialty applications and is the leading non-captive
supplier of recycled "PET" suitable for reuse in new bottles, as well as
plastic sheet and other specialized applications.
Following completion of the PureTec Acquisition, the Company's pro forma
revenues and EBITDA for the fiscal year ended June 27, 1997 would have been
$460.1 million and $69.8 million, respectively, for the six months ended
December 26, 1997 would have been $214.3 million and $32.9 million,
respectively. See "Pro Forma Unaudited Condensed Financial Information."
The management of the Company focuses on organizational development, imparting
a results-oriented culture to all areas of its businesses. Management seeks
and implements product and process improvements to produce higher quality
products, improve efficiencies, reduce labor and material costs, and create
differentiated products and product line extensions. The Company also expands
its product offerings by acquiring synergistic companies and significantly
reduces costs through product line rationalization and realizing economies of
scale. Management believes that this focus will continue with respect to the
Company's on-going business and will be the basis for successfully integrating
the PureTec Acquisition.
Company History
Tekni-Plex was founded as a Delaware corporation in 1967 to acquire the
General Felt Products division of Standard Packaging Corporation. In 1970, the
Company built an additional manufacturing facility in Somerville, New Jersey,
diversifying into the business of producing polystyrene foam trays for the
poultry processing industry. The Somerville facility serves as the current
headquarters of the Company.
1994--Acquisition by the Current Owner
In March 1994, Tekni-Plex was acquired by its current controlling
shareholder and Dr. F. Patrick Smith who was elected Chief Executive
Officer. Kenneth W.R. Baker, the Company's Chief Operating Officer, was
appointed in April 1994. At that time, the principal product lines in the
Flexible Packaging Group consisted of clear, high-barrier laminations for
pharmaceutical blister packaging, and closure (bottle cap) liners,
primarily for pharmaceutical end-uses. The principal product lines in the
Foam Products Group consisted of padded and unpadded foam processor trays
primarily for the poultry industry. At the time of the 1994 acquisition,
the current management was faced with three distinctly different situations
in Tekni-Plex's three primary product lines: (i) the clear, high-barrier
blister packaging product line, produced in Somerville, had achieved good
operating margins, but, because it was limited to a relatively narrow (but
important) range of performance characteristics, it was not positioned to
take full advantage of the trends in new drug development in the
pharmaceutical industry; (ii) the closure liner products, produced in the
Brooklyn plant, had consistently generated operating losses; and (iii) the
foam processor tray market had become intensely competitive as to price and
Tekni-Plex's heavy duty products were too costly and thus ill-suited to
compete in this environment.
In the ensuing months, management changed the Company's culture into a
focused, results-oriented, professional organization capable of managing
change and addressed each of the strategic issues facing the principal product
lines. New lines of clear, high-barrier laminations were developed that
extended the range of pharmaceutical packaging applications and laid the
groundwork for future sales growth. In the Brooklyn operation, management
developed and implemented an item-specific, customer-specific, product-costing
system. Once the true costs of the 600-plus basic items were understood, a
rational pricing policy was established. The Brooklyn operation was moved and
consolidated into the Flemington operation for further efficiencies, as
described below. The foam processor tray operation was reorganized, primarily
to establish a clear delineation of responsibilities. A new line of
material-efficient products was introduced with increased strength and lower
production costs, allowing the Company to participate in the price competitive
market place. In addition, the manufacturing operation was reconfigured to
improve material flows, and focus was brought to bear on the padding
operations to reduce waste and inefficiency.
1995--Flemington Acquisition
In December 1995, Tekni-Plex acquired the Flemington, New Jersey, plant and
business of Hargro for approximately $7.5 million. The Flemington plant
utilizes lamination and coating technology to produce packaging materials for:
(i) pharmaceutical products (transdermal patches, sutures, iodine and alcohol
swabs, aspirin and other physician samples); (ii) electronics and
telecommunications products (optical fiber and conventional cable shielding,
transformer and ballast insulation); (iii) industrial products (photographic
and automotive); and (iv) food products (snack foods, dry powders). Management
believed that the Flemington acquisition offered significant benefits by
providing a modern facility that increased capacity and removed physical
limitations associated with the older Brooklyn plant, adding new technologies
complimentary to Tekni- Plex's then existing capabilities, and avoiding
capital expenditures for environmental compliance that would have been
required at the Brooklyn plant. The Company relocated the Brooklyn equipment,
personnel and business into the Flemington facility during the quarter ending
in June 1996, which was concurrent with the expiration of the Brooklyn lease.
Having similar technologies under one roof led to improved efficiencies as
each group learned the subtle enhancements developed over the years by the
other. The result has been a combined operation with considerably higher
efficiencies and lower costs than the sum of the stand-alone operations.
1996--Dolco Acquisition
In February 1996, as Tekni-Plex was integrating the Flemington acquisition
from eight weeks earlier, it completed its acquisition of Dolco, a
publicly-traded $81 million foam products company which at the time was nearly
twice the size of Tekni-Plex. Dolco had been in the business of producing foam
packaging products since the 1960s and had attained the leading share of foam
egg carton sales in the United States. Following the acquisition, management
closed Dolco's headquarters in California and absorbed the requisite functions
into the Company. The Dolco research and development facility in
Lawrenceville, Georgia, was also closed and, in part, moved to the nearby
Dolco plant also in Lawrenceville. Dolco's operations in Wenatchee
(Washington), Dallas and Lawrenceville were reorganized. Management negotiated
more favorable material supply agreements, instituted pricing policies
consistent with those of the Company, and devised strategies to address the
environmental issues facing the Company. In August 1997, Dolco, which was then
a wholly owned subsidiary of Tekni-Plex, was merged into Tekni-Plex.
1997--PurePlast Acquisition
In July 1997, Tekni-Plex acquired the business and operating facility of
PurePlast Inc. of Cambridge, Ontario, Canada for $2.3 million. PurePlast
produces calendered polyvinyl chloride (PVC) sheet for pharmaceutical, food
and electronic packaging applications. Calendered PVC sheet is one of the
critical components of the Company's clear high barrier laminations for
pharmaceutical blister applications. Management has since negotiated more
favorable material supply agreements, expanded PurePlast pharmaceutical sales
globally and reorganized operations, thus effecting the integration of
PurePlast with the Company.
Overview of PureTec
PureTec is a vertically integrated manufacturer of specialty plastic products
and has leading market positions in most of its core product lines. With more
than 40% of the market in the United States, PureTec, through its Colorite
Plastics division, is the leading producer of garden hose. Through its Action
Technology division, PureTec is the leading producer of precision tubing and
gaskets for packaging applications, with over 90% of the domestic, non-captive
markets for such products. PureTec's specialty tubing and gasket product line
consists of (i) extruded plastic tubing, sold primarily to manufacturers of
aerosol valves, dispenser pumps, and writing instruments; (ii) rubber and
thermoplastic gaskets for the aerosol and dispenser pump markets; and (iii)
consumer products, chiefly consisting of swimming pool and other corrugated
hose. Action's products are manufactured in the United States and Europe and
are sold throughout the world.
PureTec's Plastron division is the second largest non-captive manufacturer of
medical tubing with approximately 60% of the market for cardiovascular tubing
and 50% of the intravenous tubing market. The Colorite Polymers division is
the largest producer of medical-grade vinyl compounds for FDA-regulated
applications, with approximately 50% of the domestic, non-captive market.
These compounds are sold to leading manufacturers of medical devices and
equipment. They are also sold to producers of tubing and closures for the food
and beverage industry and used in a variety of food-contact applications.
PureTec's specialty vinyl polymers business consists of two divisions of the
Colorite Polymers group: Burlington Resins, Inc., doing business as SVR; and
Cybertech Polymers. SVR employs specialized technology to produce dispersion,
blending, and copolymer suspension resins for a variety of industries,
including floor covering, automotive sealants and adhesives, coil coatings,
plastisol compounding and PVC packaging. Cybertech Polymers produces a variety
of specialized and general purpose vinyl compounds.
PureTec is also a leading plastics recycler. PureTec believes that its
Pure Tech Plastics division is the leading non-captive supplier of high-
quality recycled PET suitable for reuse in new bottles, as well as plastic
sheet and other specialized applications. The division has developed
proprietary processes for cleaning, sorting, and recycling post-consumer
plastic bottles into clean PET flakes or pellets. Raw materials used by
the Pure Tech Plastics division consist mostly of post-consumer soft drink
bottles, purchased from various suppliers who obtain bottles in states with
"deposit laws," or who conduct curb-side pickup operations.
For the six months ended January 31, 1998, PureTec had net sales of $138.7
million, a net loss from continuing operations of $3.3 million and EBITDA
(defined as net income before minority interest, equity in loss of affiliates,
income taxes, interest, depreciation and amortization and write-offs of
goodwill, intangibles and obsolete equipment) of $15.6 million for an EBITDA
margin of 11.2%, compared with net sales of $123.4 million, a net loss from
continuing operations of $4.8 million and EBITDA of $14.5 million for an
EBITDA margin of 11.8% for the six months ended January 31, 1997. For the
fiscal year ended July 31, 1997, PureTec had net sales of $315.3 million, net
income from continuing operations of $1.3 million and EBITDA of $39.6 million
for an EBITDA margin of 12.6%, compared with net sales of $326.3 million, a
net loss from continuing operations of $4.4 million and EBITDA of $37.2
million for an EBITDA margin of 11.4% for the year ended July 31, 1996.
The Company believes that the PureTec Acquisition will have many significant
strategic benefits, including:
o Strong market shares in core businesses. PureTec has leading market
positions in most of its core product lines, a characteristic shared by the
Company. Management believes that Tekni-Plex's strong market presence in
its core businesses has been a key element in achieving consistent earnings
growth since acquiring the Company in 1994, and that the combined entity's
strong market presence in its core businesses will provide the merged group
with even greater consistency of earnings and cash flow.
o Diverse product mix and expanded geographic presence. The combined group
will offer a more diverse range of products over a wider geographic area
and provide a broader base for manufacturing and distribution. The Company
currently has sales offices in London and Manila, as well as sales
representatives in Europe, China (including Hong Kong) and Mexico. The
Company also has distribution networks and manufacturing liaisons in Europe
and Southeast Asia (including Australia). PureTec currently has
manufacturing and sales offices in Europe and Canada. The Company believes
that the combination of its operations with PureTec will provide a
foundation for further international expansion.
o Technically sophisticated products; technology sharing. Both the Company
and PureTec generally compete in the most technically sophisticated end of
each of their markets, such as primary pharmaceutical packaging, medical
tubing and medical plastics which are subject to strict FDA regulatory
requirements. The manufacturing operations of each entity employ similar
core technical competencies, as both involve plastic extrusion and
compounding. The Company believes that the PureTec Acquisition provides an
opportunity to enhance both companies' operations by combining and sharing
the two companies' common and complementary technologies.
o Cost savings and synergies. The Company expects to realize significant
cost savings and synergy benefits from (i) improved manufacturing and
production efficiencies, (ii) economies of scale and raw material purchasing
efficiencies and (iii) the elimination of certain duplicate overhead and
operating expenses.
o Significantly increased size. The PureTec Acquisition provides the Company
with "critical mass" creating a stronger business than either of the
companies operating on a stand-alone basis. The Company believes that its
significantly increased size will enhance its ability to access the capital
markets.
Competitive Strengths
The Company believes that its competitive strengths include:
o Producer of high quality, technically sophisticated products. The
Company believes, based upon its knowledge and experience in the
industry, that it has a long-standing reputation as a manufacturer of
high-quality, high performance primary packaging products (where the
packaging material comes into direct contact with the end- product).
The Company's emphasis on quality is evidenced by its product lines
which address the high-end of their respective markets. The Company
competes in technically sophisticated areas such as the high-barrier
pharmaceutical blister packaging market. Over the years, PureTec's
operating companies have developed a reputation for high-quality
products in their niche markets. PureTec's product lines include
technically sophisticated products such as medical and specialty tubing
manufactured to precise customer specifications as well as highly
specialized medical-grade vinyl compounds.
o Cost efficient producer. The Company continually focuses on improving
underlying operations and reducing costs. Since the 1994 acquisition,
current management has improved the Company's cost structure from an EBITDA
margin (as defined) of 8.5% and income before income taxes as a percent of
sales of 6.8% on sales of $44.9 million for the twelve months ended
December 31, 1993 to an EBITDA margin of 21.7% and income before income
taxes and extraordinary item as a percent of sales of 9.7% on sales of
$148.8 million for the trailing twelve months ended December 26, 1997. The
Company believes that the PureTec Acquisition provides significant
opportunities to realize cost savings and synergies in the combined
businesses through the sharing of complementary technologies and
manufacturing techniques, as well as economies of scale including the
purchase of raw materials. In addition, the Company believes that cost
savings can be achieved through the elimination of certain duplicate
overhead and operating expenses.
o Experienced management team. The Company's management team has been
successful in selecting and integrating strategic acquisitions as well as
improving underlying business fundamentals. After significantly improving
the business of Tekni-Plex following the 1994 acquisition of the Company by
the current owners, management successfully integrated both the Flemington
and Dolco operations during 1994, the latter being a public company then
nearly twice the Company's size. During the same period, the Brooklyn and
Flemington operations were merged, substantially improving production
efficiencies and reducing waste. In July 1997, the Company acquired
PurePlast Inc. of Ontario, Canada whose operations have already been
successfully integrated with those of the Company. Members of the
management team have integrated acquisitions, effected turnarounds,
provided strategic direction and leadership, increased sales and market
share, improved manufacturing efficiencies and productivity, and developed
new technologies to enhance the competitive strengths of the companies they
have managed. The Company believes that its track record of integrating
acquisitions will serve as the basis for the successful integration of
PureTec. In addition, PureTec has managers in each of its business units
with extensive experience and expertise as well as thorough technical and
operating skills.
o Strong market share in core businesses. The Company has a strong market
presence in its core product lines. The Company believes that it
produces in excess of 80% of all foam egg cartons and has approximately
40% of the overall egg carton market which is split approximately
equally between foam and pulp-based products. The Company believes that
it has greater than a 90% share of the market for clear, high-barrier
laminations for pharmaceutical blister packaging. The Company has also
built a strong presence in the processor tray market where it believes
that it has greater than a 25% share. PureTec has leading market
positions in most of its core product lines. PureTec believes that it
is the leading producer of garden hose in the United States with over
40% of the market and that it is the second largest non-captive
manufacturer of medical tubing with approximately 60% of the market for
cardiovascular tubing and 50% of the intravenous tubing market. PureTec
is also the leading producer of precision tubing and gaskets for
packaging applications, with over 90% of the domestic, non-captive
markets for such products. PureTec's management believes that it is the
world's largest producer of high-quality vinyl compounds for the
medical industry with approximately 50% of the domestic, non- captive
market. In addition, PureTec is the leading non-captive supplier of
recycled PET suitable for reuse in new bottles, as well as plastic sheet
and other specialized applications.
o Strong customer relationships. Both the Company and PureTec have
long-standing relationships with many of their customers. The Company
estimates the average tenure among the Company's ten largest customers at
more than 14 years. The Company attributes its long relationships with its
customers to the ability to consistently manufacture high quality products
and to consistently provide a superior level of customer service. The
Company routinely wins recognition for its superior products and customer
service including a recent Outstanding Supplier Award from Pharmacia &
Upjohn, and an Outstanding Quality Award from Abbott Laboratories. PureTec
estimates the average tenure among PureTec's ten largest customers at more
than 14 years. PureTec has a significant base of large, stable customers
who purchase PureTec's products on a repeat basis. PureTec attributes its
long relationships with customers to its ability to produce consistent,
high-quality products with on-time delivery.
Business Strategy
The Company seeks to maximize its growth and profitability and take advantage
of its competitive strengths by pursuing the following business strategy:
o Ongoing cost reduction through technical process improvement. The Company
has an ongoing program to improve manufacturing and other processes in
order to drive down costs. Examples of cost improvement programs include:
(i) material and energy conservation through enhanced process controls;
(ii) reduction in machine set-up time through the use of proprietary
technology; (iii) continual product line rationalization; and (iv)
development of backward integration opportunities. The Company believes
that the PureTec Acquisition will give rise to significant cost savings
from improved manufacturing efficiencies, economies of scale and reduced
operating and overhead expenses.
o Internal growth through product line extension and improvement. The
Company continually seeks to improve and extend its product lines and
leverage its existing technological capabilities in order to increase
market share and improve profitability. The Company believes that it has a
significant opportunity to increase sales of its foamed polystyrene
packaging products by focusing on incremental improvements to these
products. The Company's strategy is to emphasize its expertise in providing
primary packaging materials with specific high performance characteristics
through the use of various plastic materials (and combinations thereof) and
proprietary manufacturing process techniques. PureTec has also developed a
successful track record of new and improved products. PureTec's garden hose
business has introduced patented Colorite(R) Evenflow(R) design and drinking
water safe product lines. PureTec's medical tubing business has introduced
microbore tubing, silicone substitute formulations, and trilayer tubing
substitutes. In PureTec's medical-grade vinyl compounds business, PureTec's
chemists work closely with customers to develop compounds that address
their specific requirements. Through this custom work, PureTec has
introduced a number of breakthroughs to the medical device industry by
developing formulations with unique physical characteristics. For example,
PureTec has recently developed a new family of flexible vinyl compounds
designed to replace silicone rubber in a variety of medical and commercial
applications. The Company believes that the PureTec Acquisition may
accelerate new product introduction through the sharing of technological
and manufacturing expertise and the joint development of new products.
o Growth through international expansion. The Company believes that there is
significant opportunity to expand international sales. The Company
currently has sales offices in London and Manila as well as sales
representatives in Europe, China (including Hong Kong) and Mexico. The
Company also has distribution networks and manufacturing liaisons in Europe
and Southeast Asia (including Australia). PureTec's international operations
give the Company a manufacturing and direct sales force presence in Europe
and also strengthen the Company's existing presence in Canada. The Company
expects that the combination of its operations with PureTec will provide a
foundation for the further expansion of both companies' products in other
overseas markets.
o Growth through acquisitions. The PureTec Acquisition is consistent with
the Company's objective of pursuing acquisitions which provide the Company
with the opportunity to gain economies of scale and reduce costs through,
among other things, technology sharing and synergistic cost reduction. The
Company will continue to selectively pursue acquisitions when the
opportunity arises.
Products
Tekni-Plex
Flexible Packaging Group. The Flexible Packaging Group sells printed and
unprinted multi-layer constructions of plastic, paper and metal films and
sheets combined with layers of other materials for particular purposes, with
emphasis on pharmaceutical and food applications. The principal product lines
in this group are clear, high-barrier laminations for pharmaceutical blister
packaging, and closure (bottle cap) liner products primarily for pharmaceutical
end-uses.
Transparent, high-barrier blister packaging is primarily used to protect
over-the-counter and ethical drugs from moisture vapor infiltration or
desiccation. Blister packaging is the preferred packaging form when
dispenser handling can affect shelf life or drug efficacy, or when unit
dose packaging is needed. Unit dose packaging is being used to improve
patient compliance with regard to dosage regimen, and has been identified
as the packaging form of choice in addressing child safety aspects of drug
packaging. The advantages of transparent blisters, as opposed to opaque
foil-based materials, include the ability to visually inspect the contents
of the blister and to present the product with maximum confidence.
Before 1994, the Company's line of blister laminations addressed a
relatively small (although important) range of performance requirements,
namely, the high-barrier category. New products developed since the 1994
acquisition have extended the Company's offerings to include the ultra-
high-barrier category, previously confined to foil-based (non-transparent)
products, and the low-to-medium barrier category, previously confined to
solution-coated products (as opposed to laminated products).
Closure liners perfect the seal between a container and its closure, for
example, between a bottle and its cap. The liner material has become an
integral part of the container/closure package. Without the gasketing effect
of the liner, most container/closure packages would not be secure enough to
protect the contents from contamination or loss of freshness.
The Company has a broad range of closure liner products currently available in
the marketplace including some of the most innovative structures available for
tamper protection and special barrier applications. The Company's major
closure liner products include PS22 (a pressure sensitive coated polystyrene
foam generally used for over-the-counter and ethical drugs and vitamins),
VapoSeal(R) (vinyl coated aluminum foil used for highly hygroscopic products
such as antacid), Heat Sealable Innerseals (high-barrier seals for
highly-sensitive products), and Tekniseal(R) 33 (extruded polyethylene liner
used generally as a backing for aqueous applications).
The Flemington acquisition added strategically important new pharmaceutical
products to the Company's line for the packaging of transdermal patches,
sutures, iodine and alcohol swabs, aspirin and other physician samples. In
addition, the Company manufactures food packaging laminations, optical fiber
cable shielding materials, specialty wire and cable wrap, electrical
laminates, and other specialty coating laminates for industrial applications.
The Company's line of calendered PVC sheet, obtained through the Pure Plast
acquisition, is used by the pharmaceutical industry for unit dose blister
packaging of less hydroscopic over-the-counter and ethical drugs. PVC sheet is
also one of the critical components in the Company's line of clear
high-barrier laminations. The Company also produces PVC sheet with
electrostatic dissipation formulations which is used by the electronics
industry to protect sensitive components.
Foam Products Group. The Foam Products Group sells a wide variety of foamed
polystyrene products, including egg packaging, processor trays for the
poultry, pork and sausage industries, apple packaging, mushroom tills,
containers for food products and baked goods, supermarket meat trays,
disposable plates, and hinged-lid containers for the food service industry.
These products are primarily used for the sale of food items and are designed
for protection, freshness, insulation, sanitation, and merchandising impact.
Some of the foam products are further laminated and/or coated with other
materials prior to being sold to customers.
In terms of economic and functional characteristics, foamed polystyrene
products offer a combination of high strength, minimum material content and
superior moisture barrier performance. Foamed polystyrene products also offer
greater dimensional consistency that enhances the high speed mechanical
feeding of cartons and trays into automated package filling operations.
The Company is the leading manufacturer of foam egg packaging products and
offers the broadest product line in the industry. Egg cartons may be printed,
embossed, or laminated to meet customer specifications. The Company's
extensive line of egg packaging is marketed in seven basic foam colors (often
used to distinguish the various grades of eggs) and is almost always printed
in multiple colors. Foam egg cartons (unlike pulp-based cartons) have smooth
surfaces, inside and out, that are suitable for high-definition printing. By
utilizing both the inside and outside surfaces for printing, foam egg cartons
maximize the amount of space available for each customer's unique advertising
requirements. The precise dimensions of polystyrene foam cartons lend
themselves to automated, high-speed, mechanized dispensing systems used in the
egg packing industry. The Company has been the innovator of new packaging
concepts and designs and was the first to manufacture foam egg cartons in
eight, twelve, and eighteen egg configurations. In addition, the Company was
the first to manufacture foam egg cartons with post-consumer recycle content
with the approval of the FDA.
Processor trays require greater dimensional consistency, strength and higher
resiliency than trays used by supermarkets because of their use in high-speed
automated poultry and meat packaging machines and because of handling during
shipping. The Company's processor trays are widely recognized for their high
performance qualities. Since the 1994 acquisition, the Company, through
proprietary technological advances, has developed a new line of products that
have a lower density of polystyrene foam but still meet all customer
requirements for strength and durability. Processor trays may also be printed,
embossed or laminated to meet customer specifications. Processor trays are
most often sold with an absorbent pad fixed to the tray bottom. The trays and
pads are generally designed to the customer's specifications to meet
functionality requirements.
PureTec
PureTec's operations consist of two manufacturing categories, "Plastic
Products," with approximately 60% of total sales; and "Plastic Materials,"
with approximately 40% of total sales. PureTec's major product lines are
listed below, with the manufacturing division names in parentheses:
<TABLE>
<CAPTION>
Plastic Products Plastic Materials
- ---------------------------------------------------------------------------
<S> <C>
Garden Hose (Colorite Plastics) Medical-grade Vinyl Compounds
(Colorite Polymers)
Medical Tubing (Plastron) Specialty Vinyl Polymers (Colorite
Polymers; Cybertech Polymers)
Specialty Tubing & Gaskets (Action Recycled Plastics (Pure Tech Plastics)
Technology; American Gasket &
Rubber)
</TABLE>
Garden Hose. PureTec believes that its Colorite Plastics division is the
leading producer of garden hose in the United States, with more than 40% of
the market. Colorite Plastics' market strategy is to provide a complete line
of innovative, high-quality products along with superior customer service.
Innovations have included the patented Colorite(R) EvenFlow(R) design and the
"drinking water safe" product lines. In addition to its core garden hose
business, Colorite Plastics has launched new products, such as a new line of
irrigation products for the do-it-yourself markets. For example, in recent
years the division has introduced an irrigator "soaker hose," composed of 65%
recycled rubber, and the Auto-Moist(TM) line of drip irrigation and watering
products. Colorite Plastics also manufactures specialty hose products such as
air hose.
Medical tubing. PureTec's Plastron division has been a leader in disposable
medical tubing for more than 40 years. Plastron specializes in high-quality,
close tolerance tubing for various surgical procedures and related medical
applications. These applications include intravenous ("IV") therapy,
hemodialysis therapy, cardiovascular procedures such as coronary bypass
surgery, suction and aspiration products, and urinary drainage and catheter
products. New products include microbore tubing, silicone substitute
formulations, and trilayer tubing substitutes. Plastron has developed
microbore tubing with extremely small internal diameters which can be used to
regulate the delivery of intravenous fluids without the need for more
expensive drip control devices.
Specialty Tubing & Gaskets. PureTec's specialty tubing and gasket product
line consists of (i) extruded plastic tubing, sold primarily to manufacturers
of aerosol valves, dispenser pumps, and writing instruments; (ii) rubber and
thermoplastic gaskets for the aerosol and dispenser pump markets; and (iii)
consumer products, chiefly consisting of swimming pool and other corrugated
hose. These products are manufactured primarily by PureTec's Action Technology
("Action") division, which includes the American Gasket and Rubber Company
("AGR"), Plastron, and Action-Europe. Most of Action's products are
manufactured by the plastic extrusion process and are sold throughout the
United States, Europe, and selected worldwide markets. Writing instrument
products include pen barrels and ink tubing as well as ink reservoirs for
felt-tip pens. Action's sales to the dispenser industry are comprised of dip
tubes which transmit the contents of a dispenser can to the nozzle, and
plastic and rubber gaskets and seals used in the manufacture of dispenser
valves and pumps. These products are manufactured to very precise tolerances,
according to the specifications developed by Action and its customers for
specific applications. Other OEM (Original Equipment Manufacturer) sales
include corrugated hose to manufacturers of floor care products, and various
types of hoses and tubing for other industrial applications. Action also
manufactures consumer products which are primarily sold to retail
merchandisers, including swimming pool and spa hose.
Medical-grade Vinyl Compounds. PureTec believes that its Colorite Polymers
division is the world's largest producer of high-quality vinyl compounds for
use in the medical industry with approximately 50% of the domestic, non-captive
market. Medical-grade compounds are sold primarily under the "Unichem
Products" brand. For more than 30 years, Colorite Polymers has been supplying
specialized vinyl compounds to leading manufacturers of medical devices and
equipment for FDA-regulated applications. Colorite Polymers' chemists work
closely with customers to develop compounds that address their specific
requirements. Through this custom work, PureTec has introduced a number of
breakthroughs to the medical device industry by developing formulations with
unique physical characteristics. For example, Colorite Polymers has recently
developed a new family of flexible vinyl compounds designed to replace
silicone rubber in a variety of medical and commercial applications.
Special Vinyl Polymers. PureTec's specialty vinyl polymers business consists
of two divisions of the Colorite Polymers group: Burlington Resins, Inc.,
doing business as Colorite Specialty Vinyl Resins ("SVR"); and Cybertech
Polymers. SVR employs specialized technology to produce dispersion, blending,
and copolymer suspension resins for a variety of industries, including floor
covering, automotive sealants and adhesives, coil coatings, plastisol
compounding and PVC packaging. SVR is actively developing new products to
serve specific customer applications. The SVR division has also added to its
product line by initiating a technology exchange with Vinnolit Kunstsoff of
Ismaning, Germany. The exchange agreement enhances PureTec's breadth of
product line by offering specialty resin formulations not previously available
in North America. The Cybertech Polymers division produces a variety of
specialized and general purpose vinyl compounds. Approximately 70% of
Cybertech Polymers' outside sales are to manufacturers of wire and cable, with
the remaining outside sales going to the footwear, general purpose extrusion
and molding markets.
Recycled Plastics. PureTec believes that its Pure Tech Plastics division
is the leading non-captive supplier of high-quality recycled PET suitable
for reuse in new bottles, as well as plastic sheet and other specialized
applications. The division has developed proprietary processes for
cleaning, sorting, and recycling post-consumer plastic bottles into clean
PET flakes or pellets. This technology has been optimized to produce
extremely high quality recycled PET, suitable for reuse in new bottles.
This technology continues to be refined by PureTec engineers, and has been
licensed to other companies in a number of countries, including Taiwan,
South Korea, Canada and Japan.
Sales, Marketing and Customers
Tekni-Plex
As of June 27, 1997, the Company had a sales team comprised of 41 people,
covering both domestic and international sales. There were 14 salespeople in
the Flexible Packaging Group and 27 in the Foam Products Group. The Company
believes it has earned a solid reputation with its customers for high quality
service. The Company engages in various marketing activities such as
participation in trade shows, mailings of samples, direct calls to potential
customers and advertising. The Company is currently developing its own
web-site on the Internet.
The Company's high-barrier, blister laminations are sold directly to the major
pharmaceutical companies (or their designated contract packagers), while
closure liners are sold to the closure (bottle cap) producers who, in turn,
supply these same pharmaceutical companies.
Distribution is accomplished from the manufacturing locations to the customers
via common carrier and/or customer pick up. In the Foam Products Group, most
sales are in full truckload quantities.
The Company has begun to market its full pharmaceutical product line directly
on a worldwide basis and is assembling a global network of sales personnel
(both direct and outside manufacturer's representatives).
The Company's customer base includes most of the major pharmaceutical
manufacturers, most egg packers (including those owned by egg retailers) and
many poultry processors. The Company estimates the average tenure among the
Company's ten largest customers at more than 14 years. Overall customer
concentration is low with the largest single customer accounting for less than
9% of total sales and the top ten customers generating approximately 38% of
sales for the trailing twelve months ended December 26, 1997.
PureTec
Colorite Plastics' garden hose products are sold primarily to home centers,
hardware cooperatives, food, automotive, drug and mass merchandising chains
and catalog companies throughout the United States and Canada. Colorite
Plastics' largest customers include some of the fastest growing and most
widely respected retail chains in North America including Wal-Mart, Home Depot
and ACE Hardware. Colorite Plastics, like other PureTec divisions, is also
expanding to international markets. Products are sold directly through
Colorite Plastics' salespeople and also through approximately 20 independent
representatives. The division sells both private label and brand-name products
to the retail market. Advertising is limited to trade journals and advertising
allowances to retailers.
Plastron division's medical tubing is sold primarily to a small number of
manufacturers of medical devices. Products are sold directly through
Plastron's salespeople. Advertising is conducted primarily through trade
journals and trade shows.
Action's OEM sales are conducted by technically trained full-time employees
who coordinate marketing activities directly with the managers of each plant.
Action also uses independent representatives to sell its pool hose products. In
addition, Action manufactures and markets pool hose nationwide under a joint
agreement with Haviland Consumer Products. This agreement utilizes the
technology and marketing strengths of both companies in their effort to build a
leadership position in the market for pool hose.
PureTec's Colorite Polymers division sells medical-grade compounds to leading
manufacturers of medical devices and equipment and to producers of tubing and
closures for the food and beverage industry. Colorite Polymers sells medical
grade compounds in worldwide markets. Products are sold directly though
PureTec's salespeople. Advertising is limited to trade journals and trade
shows.
SVR's products are sold throughout the United States through SVR's
salespeople. PureTec's management believes that SVR has built a relatively
unique position in the specialty resins market by offering customized products
for niche markets that the larger commodity producers do not serve.
Cybertech Polymers' compounds are sold throughout the United States by an
internal sales force and eight independent representatives. Approximately 50%
of Cybertech Polymers' overall production is used internally by PureTec's
Colorite Plastics division in the manufacture of garden hose.
PureTec's PET recycling operations (Pure Tech Plastics) involve the processing
of used and discarded PET containers back into raw material forms that can be
substituted for virgin PET material. The selling price for recycled PET
material reflects a discount from the market price of virgin PET. PureTec
attempts to negotiate contracts for the supply of used bottles that link their
cost for the bottles to the price of virgin PET thereby reducing the
volatility of the differential between PureTec's cost of raw materials versus
its selling price for recycled PET. Sales of recycled material are
accomplished by an internal sales force.
Each of PureTec's core product lines are sold in different markets with
different customers, competitors, and pricing structures. PureTec estimates
the average tenure among PureTec's ten largest customers at more than 14 years.
Although in a number of these product lines the ten largest customers
represent more than 75% of sales, PureTec's overall customer concentration is
low. PureTec's largest customer accounts for about 12% of gross sales and the
top ten customers generated approximately 30% of sales for the year ended July
31, 1997.
On a pro forma basis as of December 26, 1997 after consummation of the
Transactions, the combined entity's largest single customer would have
accounted for less than 9% of total sales and the top ten customers would have
generated approximately 28% of sales.
Manufacturing
The Company and PureTec employ similar core technical competencies in their
respective manufacturing operations, as both utilize the processes of plastic
extrusion and compounding.
Tekni-Plex
Flexible Packaging. The Company manufactures primary flexible packaging
materials in three locations: Somerville, New Jersey; Flemington, New Jersey
and Cambridge, Ontario (Canada). Both New Jersey locations have thermal
oxidation devices that provide the controls necessary to meet clean air
emissions standards. The Cambridge facility meets the applicable emissions
standards without such a device.
The manufacturing processes involve compounding, calendering, extrusion and
adhesive laminating, coating, printing and slitting. Raw materials used
include plastic films, metal foils, plastic resins, plasticizers, paper,
adhesives, inks and coatings. The Company has what it considers to be numerous
proprietary methods and formulations that are used to manufacture products
with specific sets of functional properties suited for specific packaging end
uses. For example, the Company's line of pharmaceutical-grade, clear,
high-barrier laminations utilizes proprietary adhesive technology to laminate
Aclar(R) films, a material that does not lend itself easily to adhesion onto
other plastic films and sheets.
The packaging materials for pharmaceutical applications require special
documentation of material sources and uses within the manufacturing process as
well as heightened quality assurance measures. See "--Competition."
Foam Products. The Company manufactures foamed polystyrene packaging and food
service products in five locations: Somerville, Wenatchee (Washington),
Decatur (Indiana), Dallas (Texas) and Lawrenceville (Georgia).
The manufacturing processes include compounding, extrusion, thermoforming,
printing and application of absorbent padding. Raw materials used are
polystyrene, blowing agents, color concentrates, inks, tray padding materials
and plastic bags. The Company has what it considers to be numerous proprietary
methods and formulations that are used to produce a wide variety of structures
which have specific sets of functional properties suited for specific uses.
PureTec
PureTec's manufacturing operations are conducted in 22 plants worldwide, and
are organized under four principal operating groups: Colorite Plastics,
Colorite Polymers, Action Technology, and Pure Tech Plastics.
Founded in 1949 in Garfield, New Jersey, Colorite Plastics manufactures vinyl
garden hose in five modern facilities located throughout the United States. In
1996, it began serving the Canadian market with a new facility in Mississauga,
Ontario. In five of these six locations, Colorite Plastics manufactures vinyl
garden hose by the plastic extrusion process. The sixth facility, located in
Tonawanda, New York, manufactures brass couplings used in the production of
garden hoses.
Colorite Polymers manufactures medical-grade vinyl in facilities in
Ridgefield, New Jersey; Sparks, Nevada; and Belfast, Northern Ireland. Vinyl
is sold primarily in the form of pellets, which are manufactured by
compounding vinyl resins with plasticizers, stabilizers, and other additives.
The Cybertech Polymers division of Colorite Polymers also produces vinyl
compounds using similar techniques and equipment. Approximately 50% of
Cybertech Polymers' overall production is used internally by PureTec's
Colorite Plastics division in the manufacture of garden hose. The SVR
division, located in Burlington, New Jersey, produces vinyl resins with
specialized reactors found in only one other plant in the world. In addition
to internal uses, these resins are used in a variety of industries, including
floor covering, automotive sealants and adhesives, coil coatings, plastisol
compounding and PVC packaging.
PureTec's specialty tubing and gasket products are manufactured by the
Action division, AGR, Plastron, and Action-Europe. Except for gaskets,
most of Action's products are manufactured by the plastic extrusion
process. Most gaskets are punched from proprietary rubber and plastic
formulations that are developed and manufactured by AGR and Action-Europe.
Each Action facility is strategically located to supply multi-national
customers on a timely basis. In the United States, Action maintains plants
in New Jersey and Illinois. AGR's facilities are in Illinois and Action's
Plastron subsidiary operates in California and Georgia. Action's three
European plants, located in Belgium and Italy, serve the European, Asian,
and African markets with products similar to those manufactured in the
United States.
The Pure Tech Plastics division uses proprietary technology for cleaning,
sorting, and processing post-consumer plastic bottles into clean PET flakes or
pellets. This technology has been optimized to produce extremely high quality
recycled PET, suitable for reuse in new bottles. Pure Tech Plastics operates
three recycling facilities in Michigan, Maine, and New York. A new
state-of-the-art facility is currently planned to open in Huntington, West
Virginia in 1998.
Raw Materials
Tekni-Plex
Polystyrene resin is the Company's largest single raw material component.
Polystyrene resin is widely available and is purchased by the Company from
several of the top suppliers. Aclar[Registered], a specialty film material
produced by Allied Signal and used in clear, high-barrier laminations, is the
second largest material component. Allied Signal, which has been supplying
Aclar[Registered] films to Tekni-Plex for nearly 30 years, is the sole
manufacturer and supplier of Aclar[Registered]films. In the history of this
relationship with Allied Signal, there has never been a significant
interruption in the supply of Aclar[Registered]. If the supply of
Aclar[Registered] were to be significantly interrupted, the Company would
begin substituting alternative blister packaging materials.
Historically, the Company has been able to pass through substantially all of
the price increases in raw materials to its customers. For example, over the
18 month period from January 1994 to June 1995, polystyrene prices rose by a
total of approximately 49%. Over that same period, the Company's gross margin,
expressed as a percentage of sales, rose from 18.4% to 21.8%. However, there
can be no assurance that the Company will be able to pass on raw material price
increases in the future.
PureTec
The primary materials used by PureTec in the manufacture of its products are
plastic resins, primarily polyvinyl chloride, polypropylene and polyethylene,
and also plasticizers. All of these materials are widely available from
numerous sources and PureTec currently purchases these raw materials from
multiple suppliers.
The Colorite Plastics division typically sets prices for its garden hose
products in advance of each season and, to the extent that raw material costs
increase more than anticipated, the additional costs generally cannot be
passed on during that season. However, with respect to its other markets,
PureTec has generally been able to pass on substantially all of the price
increases to its customers.
Proprietary Technology and Trademarks
Each of the Company and PureTec seeks to safeguard its respective proprietary
technology through the filing and registering of patents and trademarks, the
use of confidentiality agreements, and by restricting access to its plants.
However, in the opinion of management, none of the Company's or PureTec's
patents or trademarks is material to their respective operations.
Competition
Tekni-Plex
Flexible Packaging Group. The Company considers itself to be the market
leader in clear, high-barrier laminated blister materials with a greater than
90% share of the market for these products. These clear, laminated products
primarily compete with solution-coated and foil-based products manufactured by
various competitors.
The Company believes that pharmaceutical packaging products sold in the United
States enjoy a significant barrier to entry due to the stringent approval
process employed by the FDA. The entire process for new drug approval in the
past has averaged approximately 10 years, beginning with clinical trials and
ending with stability testing. The stability step requires that the drug be
tested in the packaging materials intended for commercial use. The cost of
stability testing is substantial. Therefore, when FDA approval is finally
attained, the drug companies are generally compelled, as a practical matter,
either to use the same packaging materials (from the same supplier) or to
re-submit to the stability test phase all over again. If the drug company opts
to re-submit to the stability test phase, it risks the uncertainty of renewed
scrutiny by the FDA. Manufacturers of primary packaging materials for
pharmaceutical products (where the drug is in direct contact with the
material) must maintain a confidential Drug Master File at the FDA that
describes each of its products. Manufacturers of primary packaging materials
for pharmaceutical products must also submit to regular, on-site compliance
audits performed by the major pharmaceutical companies. Pharma-class Good
Manufacturing Practices must be followed, and documentation of each production
run must provide an audit trail to allow the drug companies to identify the
genesis of each single package released to the market. Suppliers that have a
long history of consistently meeting the rigid requirements of the
pharmaceutical industry, such as the Company, are generally considered a
valuable asset to their pharmaceutical customers.
Foam Products Group. The Company believes that competition within the foam
processor tray market is based primarily on customer service, product quality
and price. There are two other domestic companies that are significant in the
foam processor tray market. The Company estimates, based on its own views of
the market, that it has in excess of 25% of the processor tray market.
The Company is one of the market leaders in producing egg cartons taking into
account both foam and pulp-based cartons. The Company believes that it
currently produces more than 80% of all foam egg cartons, and has
approximately a 40% share of the overall egg carton market. In this product
line, the Company's primary competitor is a manufacturer of pulp-based egg
cartons.
The Company believes that, for its foam egg packaging products, there are
significant disincentives for new competitors that include: (i) high capital
costs, including high opportunity costs associated with switching assets
presently dedicated to other uses to egg carton production; (ii) the high
level of technical competence required for the associated manufacturing
processes; and (iii) the high cost of meeting required customer order response
times in a job-shop environment.
PureTec
PureTec believes that Colorite Plastics is the leading producer of garden hose
in the United States, with more than 40% of the market. There are two
principal competitors in the United States and several smaller companies have
substantially smaller market shares.
PureTec's Plastron division has been a leader in disposable medical tubing for
more than 40 years. PureTec's Plastron division is the second largest
non-captive manufacturer of medical tubing with approximately 60% of the
market for cardiovascular tubing and 50% of the intravenous tubing market.
There are four other principal competitors serving the medical tubing market.
Many of the Plastron division's products are subject to FDA approval which
creates a significant barrier to entry for competition.
Action is the leading producer of precision tubing and gaskets for packaging
applications, with over 90% of the domestic, non-captive markets for such
products. Action's principal competitive pressure is the possibility of
internal production by its customers. The Company believes Action's products
compete successfully based on product quality, prompt delivery, technical
service and price. Action believes that its ability to produce high volumes of
products to exact specifications has been a key to its success in the
marketplace and the longevity of its customer relationships.
The Colorite Polymers division is the largest producer of medical-grade vinyl
compounds, with approximately 50% of the domestic, non-captive market. The
market for medical-grade vinyl compounds is highly specialized, with two
significant competitors. For more than 30 years, Colorite Polymers has been
supplying these specialized vinyl compounds for FDA-required applications.
PureTec believes it competes effectively based on product quality and
performance and prompt delivery, and that price is a secondary consideration
for its customers.
PureTec's management believes that SVR has built a relatively unique position
in the specialty resins market by offering customized products for niche
markets that larger commodity producers do not serve. Although SVR's market
share in the overall specialty resins market is about 7%, SVR's market share
in its target markets exceeds 20%. The division has in the past experienced
competitive pressure from large chemical companies who offer a greater breadth
of products.
The markets for Cybertech Polymers' vinyl compounds are highly fragmented, and
neither PureTec nor any competitor has a controlling share. PureTec believes
it competes effectively based on product quality, performance, prompt
delivery, and price.
PureTec believes that its Pure Tech Plastics division is the leading
non-captive supplier of high-quality recycled PET suitable for reuse in new
bottles, as well as plastic sheet and other specialized applications. Pure
Tech Plastics competes with other recycling facilities both to obtain
materials for recycling and to sell recycled materials to manufacturers.
Competition for supplies of recyclable material is based upon price and
promptness of service in collecting or accepting material. Competition for
sales of recycled material is based on price and consistency of quality.
Prices for recycled PET have been volatile in recent years, causing wide
swings in the division's revenues and earnings. Recognizing the connection
between the pricing of virgin PET and recycled PET, PureTec management has
begun to negotiate contracts for the supply of used bottles that link the
purchase price of the bottles to the market price of virgin PET. This strategy
is expected to reduce the volatility of the differential between PureTec's
effective raw material cost and its selling price for finished product.
Facilities
Tekni-Plex
The Company operates seven manufacturing facilities, including the Somerville,
New Jersey plant where the Company's headquarters are located. The Company
owns all of its manufacturing facilities with the exception of the Dallas
manufacturing facility which is currently leased. The Decatur, Lawrenceville,
and Wenatchee plants also lease additional warehousing space. The Company owns
or leases manufacturing, office and warehouse facilities at the locations
shown in the following table:
<TABLE>
<CAPTION>
-------------------------------------------------------------------
Size
(Approximate Type of Product
Owned/Leased Square Feet) Facility(a) Category(b)
-------------- -------------- ------------- --------------
<S> <C> <C> <C> <C>
Location
- ------------------------------------
Somerville, NJ..................... O 122,960 M/W/O P/F
Flemington, NJ..................... O 145,000 M/W/O F
Lawrenceville, GA.................. O 150,000 M/W/O P
L 31,662 W P
Wenatchee, WA...................... O 99,000 M/W/O P
L 26,400 W P
Decatur, IN........................ O 187,000 M/W/O P
L 3,750 W P
Dallas, TX......................... L 139,000 M/W/O P
Cambridge, Ontario, Canada......... O/L 14,000 M/W/O F
</TABLE>
- ------------
(a) M=Manufacturing; W=Warehouse; O=Office.
(b) P=Foam Products; F=Flexible Packaging.
The Company believes that its present facilities are adequate for its current
and projected operations.
PureTec
PureTec believes that its facilities are suitable and have sufficient
productive capacity for its current and foreseeable operational and
administrative needs. Set forth below is a list and brief description of all
of PureTec's offices and facilities, all of which are owned unless otherwise
indicated.
<TABLE>
<CAPTION>
Size
(Approximate
Location Function Square Feet)
- ------------------------------------- ----------------------------------------------------- ------------
<S> <C> <C>
Ridgefield, NJ(a).................... PureTec Corporate Headquarters 9,900
Tonawanda, NY(a)..................... Manufactures brass couplings 31,000
Piscataway, NJ(c).................... Manufactures general purpose vinyl compounds 150,000
Ridgefield, NJ....................... Manufactures garden hose and medical-grade vinyl
compounds 328,000
Ridgefield, NJ(c).................... Warehouse 70,000
Sparks, NV(c)........................ Manufactures garden hose and medical-grade vinyl
compounds 250,000
Waco, TX............................. Manufactures garden hose 104,600
McKenzie, TN(b)...................... Manufactures porous pipe 20,000
Mississauga, Ontario(d).............. Manufactures garden hose 150,000
City of Industry, CA(e).............. Manufactures medical tubing and other specialty tubing 110,000
Clinton, IL.......................... Manufactures dip tubes, writing instrument products and
corrugated hose 62,500
Dalton, GA........................... Manufactures medical tubing and other specialty tubing 40,000
Erembodegem (Aalst), Belgium......... Manufactures medical tubing and other speciality tubing 88,200
Milan (Gaggiano), Italy(f)........... Manufactures rubber compounds 15,000
Milan (Gaggiano), Italy.............. Manufactures dispenser gaskets and rubber injection-
molded parts 25,800
Milan (Gaggiano), Italy(c)........... Manufactures specialty tubing and related products 24,000
Rockaway, NJ......................... Manufactures specialty tubing and related products 98,600
Schiller Park, IL.................... Manufactures rubber compounds 20,000
Schaumburg, IL(g).................... Manufactures dispenser gasket 58,000
Howell, MI........................... PET recycling plant (inactive) 18,400
Livonia, MI(e)....................... PET recycling plant 60,000
East Farmingdale, NY(a).............. PET recycling plant 49,000
Auburn, ME(e)........................ Plastics and aluminum baling operation 22,000
Lawrence Twp., NJ(h)................. PET recycling plant (inactive) 80,000
Hillside, NJ(i)...................... Glass recycling plant (discontinued) 15,000
Newark, NJ........................... Glass recycling plant & MRF (discontinued) 101,000
Burlington, NJ....................... Manufactures specialty PVC resin 107,000
Belfast, Northern Ireland(j)......... Manufactures specialty compound 45,000
Under
Huntington, WV....................... PET recycling plant construction
</TABLE>
- ------------
(Years relate to calendar years)
(a) Lease expires in 2001.
(b) Leased on a month-to-month basis.
(c) Lease expires in 2002.
(d) Lease expires in 2005.
(e) Lease expires in 1999.
(f) Lease expires in 2000, with an option to renew for another
six year period.
(g) Lease expires in 2020.
(h) Facility not active. Lease expires in June 1998.
(i) Lease expires in 2000.
(j) Lease expires 2017.
Employees
Tekni-Plex
As of June 27, 1997, the Company employed an average of 757 hourly and 127
salaried persons. The Company provides a competitive employee benefits package
that includes medical insurance, life insurance, holiday pay, vacations and a
401(k) savings plan. There is also a performance based incentive compensation
program for selected managers.
Among the Company's approximately 884 total employees, all are non-union with
the exception of approximately 85 employees in the Flemington, New Jersey,
manufacturing facility who are represented by a collective bargaining agent.
Their collective bargaining agreement will expire on September 30, 1999. The
Company believes that its relations with all of its employees are good.
PureTec
As of July 31, 1997, PureTec employed approximately 1,900 full-time employees,
of which approximately 1,650 were employed in the United States and the
balance in Europe and Canada. Certain employees at facilities in Ridgefield and
Rockaway, New Jersey are represented by the International Brotherhood of
Teamsters under contracts that expire August 1, 2000. Certain employees at the
Burlington, New Jersey facility are represented by the Oil Chemical & Atomic
Workers International Union, AFL-CIO, under contracts that expire July 1,
2001. Contracts with both of the above unions were successfully renegotiated
in 1997. Certain employees in East Farmingdale, New York are represented by
the Waste Material Sorters, Trimmers & Handlers Union, under a contract that
expires on April 30, 1998. Approximately 45% of all employees are members of
unions including a majority of the European and Canadian employees. PureTec
believes that employee relations at all of its manufacturing facilities are
good, and it has not experienced any work stoppage since its formation.
Legal Proceedings and Environmental Matters
Tekni-Plex
The Company is regularly involved in legal proceedings arising in the ordinary
course of business, none of which is currently expected to have a material
adverse effect on the Company's businesses, financial condition, or results of
operations.
Like similar companies, the Company's facilities, operations, and properties
are subject to foreign, federal, state, and local laws and regulations
relating to, among other things, emissions to air, discharges to water, the
generation, handling, storage, transportation and disposal of hazardous and
nonhazardous materials and wastes and the health and safety of employees. The
Company maintains a primary commitment to employee health and safety, and
environmental responsibility. The Company's intention and policy are to be at
all times a responsible corporate citizen.
The Company's management includes a Director of Environmental Affairs who is
primarily engaged in making certain that the Company is in compliance in all
material respects with all foreign, federal, state and local laws and
regulations relating to the environment, and health and safety. This director
performs internal auditing procedures at all of the Company's facilities and
provides direction to local facility managers in the compliance areas. The
Director of Environmental Affairs and the President of the Company direct
outside environmental counsel and outside environmental consulting firms to
ensure that regulations are properly interpreted and reporting requirements
are met.
With respect to air emissions, in each state where the Company operates a
manufacturing facility, the Company has obtained or is in the process of
obtaining an agreement with the regulatory authorities to ensure that it has
their consent for current operations and, where necessary, to place the
Company on an approved compliance schedule. There are currently no known
environmental improvements required in respect of the manufacturing facilities
of the Company used for laminated and coated materials. In respect of foam
products, the Company expects improvements will be needed to address air
emissions at three of its manufacturing facilities. The Company has
established a capital budget to address such issues.
Although the Company believes that, based on historical experience, the costs
of achieving and maintaining compliance with environmental laws and
regulations are unlikely to have a material adverse effect on the Company's
business, financial condition or results of operations, it is possible that
the Company could incur significant fines, penalties, capital costs or other
liabilities associated with any confirmed noncompliance or remediation of
natural resource damage liability at or related to any of its current or
former facilities, the precise nature of which the Company cannot now predict.
Furthermore, there can be no assurance that future environmental laws or
regulations will not require substantial expenditures by the Company or
significant modifications of the Company's operations. See "Risk
Factors--Environmental Matters."
PureTec
PureTec is party to certain litigation and environmental proceedings in the
ordinary course of business, none of which are believed to be likely to have a
material adverse effect on the PureTec's consolidated financial position or
results of operations.
Ozite settled litigation with the former owner of Dalen, a discontinued
segment of Ozite. In December 1987, Ozite commenced legal proceedings against
the seller of Dalen, seeking monetary damages and other equitable relief from
the seller for various misrepresentations made in its financial statements and
other miscellaneous information, based on which Ozite elected to proceed with
the purchase of Dalen. The seller counterclaimed for the recovery of the
balance of the purchase price in an amount approximately equal to $3,000,000
plus accrued interest, amounts claimed to be due under a consulting agreement,
and punitive damages. The settlement agreement with Dalen provided for Ozite
to make two (2) payments of $500,000 each by October 15, 1997 and a payment
for $2,250,000 during the first quarter of 1998. Interest accrued on the final
payment of $2,250,000 from October 15, 1997 until March 3, 1998, the day the
final payment was made. PureTec has made the required payments.
PureTec's facilities, operations, and properties, and its prior ownership of
businesses or properties are also subject to foreign, federal, state and local
environmental laws and regulations relating to, among other things, emissions
to air, discharges to water, the generation, handling, storage, transportation
and disposal of hazardous and non-hazardous materials and waste, the
investigation and remediation of soil and ground water and the health and
safety of employees. Based on historical experience and currently available
information, PureTec believes that the costs of maintaining compliance with
environmental laws and regulations are unlikely to have a material adverse
effect on PureTec. No assurances can be given, however, that PureTec will
continue to be able to secure, renew, and maintain compliance with the terms
and conditions of the required environmental permits and approvals, that other
environmental permits or approvals may not be required for PureTec's
operations, or that significant fines or penalties will not be imposed by
regulatory entities for any failures to have secured all required
environmental permits or approvals. Certain environmental laws, such as the
Comprehensive Environmental Response, Compensation and Liability Act ("CERCLA"
or "Superfund") and similar state laws, provide for strict, joint and several
liability for investigation and remediation of spills or other releases of
hazardous substances. Such laws may apply to conditions at properties
presently or formerly owned or operated by PureTec or by its predecessors or
previously owned business entities, as well as to conditions at properties at
which wastes or other contamination attributable to PureTec or its
predecessors or previously owned business entities come to be located. With
respect to certain properties which are undergoing or may be required to
undergo remediation in the future, PureTec believes that prior owners or
operators are or will be obligated to perform any required remediation, or to
indemnify PureTec pursuant to agreements with such parties, should PureTec be
required to perform such remediation. There can be no assurance, however, that
such third parties will perform their obligations under such agreements and as
a result it is possible PureTec will be required to make material expenditures
relating to those matters in the future. Further, there can be no assurance
that new facts regarding potential liabilities will not arise or that more
stringent statutory or regulatory environmental or work place safety
requirements will not be enacted or adopted in the future which could have a
material adverse effect on PureTec's business, financial condition or results
of operation, or materially restrict PureTec's operations or business. See
"Risk Factors--Environmental Matters."
PureTec recently received a correspondence from a customer claiming damages
relating to an alleged defective product sold by Plastron. The customer
alleges that it has suffered direct and indirect damages in a yet to be
determined amount but which the customer initially projected to be between $1
million and $10 million. PureTec is currently investigating the merits of this
correspondence and whether it would be covered by insurance. PureTec intends
to contest any claim that might arise from this correspondence vigorously.
There can be no assurances as to the ultimate outcome of these litigations or
proceedings or their possible impact on PureTec.
General
The Company's executive offices are located at 201 Industrial Parkway,
Somerville, New Jersey 08876, and its telephone number is (908) 722-4800.
MANAGEMENT
The directors and executive officers of Tekni-Plex are listed below. Each
director is elected at the annual meeting of the stockholders of Tekni-Plex to
serve a one year term until the next annual meeting or until a successor is
elected and qualified, or until his earlier resignation. Each executive
officer holds his office until a successor is chosen and qualified or until
his earlier resignation or removal. Pursuant to its by-laws, Tekni-Plex
indemnifies its officers and directors to the fullest extent permitted by the
General Corporation Law of the State of Delaware and Tekni-Plex's certificate
of incorporation.
<TABLE>
<CAPTION>
Name Age Position
- ------------------------- --- -------------------------------------------------
<S> <C> <C>
Dr. F. Patrick Smith..... 50 Chairman of the Board and Chief Executive Officer
Kenneth W.R. Baker....... 52 President and Chief Operating Officer
Arthur P. Witt........... 67 Corporate Secretary and Director
William H. Kaplan........ 46 Controller
Marvin Weintraub......... 51 Director of Management and Information Systems
J. Andrew McWethy........ 57 Director
Barry A. Solomon......... 49 Director
Stephen A. Tuttle........ 57 Director
Michael F. Cronin........ 43 Director
</TABLE>
Dr. F. Patrick Smith has been Chairman of the Board and Chief Executive
Officer of Tekni-Plex since March 1994. He received his doctorate degree
in chemical engineering from Texas A&M University in 1975. He served as
Senior Chemical Engineer to Texas Eastman Company, a wholly owned chemical
and plastics subsidiary of Eastman Kodak, where he developed new grades of
polyolefin resins and hot melt and pressure sensitive adhesives. In 1979,
he became Technical Manager of the Petrochemicals and Plastics Division of
Cities Service Company, and a Member of the Business Steering Committee of
that division. From 1982 to 1984, Dr. Smith was Vice President of R&D and
Marketing for Guardian Packaging Corporation, a diversified flexible
packaging company. Thereafter, he joined Lily-Tulip, Inc. and managed
their research and marketing functions before becoming Senior Vice
President of Manufacturing and Technology. Following the acquisition of
Lily-Tulip by Fort Howard Corporation in 1986, he became the Corporate Vice
President of Fort Howard, responsible for the manufacturing and technical
functions of the combined Sweetheart Products and Lily-Tulip operations.
From 1987 to 1990, Dr. Smith was Chairman and Chief Executive Officer of
WFP Corporation. Since 1990, Dr. Smith has been a principal of Brazos
Financial Group, a business consulting firm. Dr. Smith is a limited
partner of the Tekni-Plex Partnership.
Kenneth W.R. Baker has served as Tekni-Plex's Chief Operating Officer since
April 1994 and as President since July 1995. He joined the Lily Division of
Owens-Illinois, Inc. in 1975, serving as its Manager of Systems Development
from 1975 to 1977 and as its Financial and Planning Manager from 1977 to 1980.
Since 1980, he has served in a number of technical and managerial positions.
These include Manager, Industrial Engineering at the Lily Division from 1980 to
1981, Director, Corporate Technology at Lily-Tulip, Inc. from 1981 to 1986 and
Vice President, Operations at Fort Howard Cup Corporation from 1986 to 1987.
In 1987, Mr. Baker joined WFP Corporation, Inc. as Senior Vice President,
Operations and eventually became the company's President and CEO before
leaving the company in 1992. Thereafter, Mr. Baker became Vice President,
Research and Development at the Molded Products Division of Carlisle Plastics,
Inc. where he stayed until joining the Company. Mr. Baker is a limited partner
of the Tekni-Plex Partnership.
Arthur P. Witt has been a director of Tekni-Plex since March 1994 and was
appointed Secretary in January 1997. Since July 1989, he has been president of
PAJ Investments which is involved in financial consulting and property
management. Over the same period, Mr. Witt also served as a temporary chief
financial officer for WFP Corporation and Flexible Technology. Prior to 1989,
Mr. Witt served in a number of senior management positions for companies such
as Lily-Tulip, Inc., BMC Industries and Fort Howard Paper Co. Mr. Witt is a
limited partner of the Tekni-Plex Partnership.
William H. Kaplan joined Tekni-Plex in August 1992 and has been the Company's
Controller since March 1994. From 1977 until 1992, Mr. Kaplan was a manager
with Rich Baker Berman & Co., P.A.
Marvin Weintraub has served as Tekni-Plex's Director of Management and
Information Systems since August 1996. From 1980 until joining the Company,
Mr. Weintraub served as the MIS Director for N. Erlanger Blumgart Inc. where
he was responsible for all of that company's data processing activities.
J. Andrew McWethy has served as a director of Tekni-Plex since March 1994. He
is a co-founder of MST Partners L.P. ("MST L.P.") and MST Offshore Partners,
C.V. (together with MST L.P., the "MST Investment Partnerships"), each of
which was formed in 1989, and is a general partner of MST Management, L.P., a
general partner of MST Investment Partnerships. Prior to 1989, Mr. McWethy was
employed by Irving Trust Company for twelve years where he held various
positions including most recently that of President of Irving Capital
Corporation.
Barry A. Solomon has served as a director of Tekni-Plex since March 1994. He
is a co-founder of the MST Investment Partnerships and is a general partner of
MST Management, L.P. Prior to 1989, Mr. Solomon was employed by Irving Trust
Company for ten years as Vice President of Irving Capital Corporation.
Stephen A. Tuttle has served as a director of Tekni-Plex since March 1994. He
is a co-founder of the MST Investment Partnerships and is a general partner of
MST Management, L.P. Prior to 1989, Mr. Tuttle was employed by Irving Trust
Company for four years as Vice President of Irving Capital Corporation.
Michael F. Cronin has served as a director of Tekni-Plex since March 1994. He
has invested in emerging growth companies and various industrial and service
businesses since 1978. Since June 1991, Mr. Cronin has been a general partner
of Weston Presidio Capital.
Compensation of Directors
Tekni-Plex reimburses directors for any reasonable out-of-pocket expenses
incurred by them in connection with services provided in such capacity. In
addition, Tekni-Plex compensates outside directors for services provided in
such capacity of up to $15,000 per fiscal year for each such director.
Compensation of Executive Officers
The following table sets forth the remuneration paid by Tekni-Plex to the
Chief Executive Officer and the next most highly compensated executive officer
of Tekni-Plex whose salary and bonus exceeded $100,000 for the years indicated
in connection with his position with Tekni-Plex:
Summary Compensation Table
<TABLE>
<CAPTION>
------------------------------------------------------------
Annual Compensation
----------------------------
Other Annual
Name & Principal Position Fiscal Year Salary Bonus Compensation
- --------------------------------------------------- ------------- ------------ ------------ -------------
<S> <C> <C> <C> <C>
Dr. F. Patrick Smith,............................... 1997 $ 490,385 $ 1,921,291 $ 15,417(a)
Chairman of the Board and Chief Executive Officer
1996 351,923 859,248 21,245(a)
1995 300,000 333,678 6,624(a)
Mr. Kenneth W.R. Baker,............................. 1997 $ 260,096 $ 960,645 $ 32,136(a)
President and Chief Operating Officer
1996 217,308 429,624 13,870(a)
1995 162,500 166,839 --
</TABLE>
- ------------
(a) Amount reimbursed during the fiscal year for payment of taxes.
Employment Agreements
Tekni-Plex recently renewed its employment agreements with Dr. F. Patrick
Smith and Mr. Kenneth W.R. Baker. Both Dr. Smith and Mr. Baker's
employment agreements expire June 30, 2000 and have renewal provisions.
The employment agreements provide, among other things, for (i) payment of a
base annual salary in the amount of $650,000 in the case of Dr. Smith and
$325,000 in the case of Mr. Baker, and that these salaries may be
increased (but not decreased) at the sole discretion of Tekni-Plex's Board
of Directors, (ii) payment of bonuses based on Tekni-Plex's performance,
and (iii) certain fringe benefits. Each employment agreement provides that
the executive may be terminated by Tekni-Plex upon the following bases:
(i) for cause or (ii) death or disability of the executive. Each of Dr.
Smith and Mr. Baker are entitled to severance benefits if he is terminated
due to the occurrence of an event specified in the preceding sentence.
The employment agreements also provide that the executives may not compete
with Tekni-Plex or its subsidiaries during the period of employment and for
one year thereafter.
Compensation Committee Interlocks and Insider Participation
Mr. Witt, who is also the corporate secretary of Tekni-Plex, has served as a
member of the compensation committee of Tekni-Plex's board of directors. In
addition, as Chief Executive Officer of Tekni-Plex, Dr. Smith participated in
deliberations concerning the compensation of certain executive officers of
Tekni-Plex (but not the compensation for himself or Mr. Witt).
SECURITY OWNERSHIP
Tekni-Plex Partnership owns 100% of the outstanding shares of Tekni-Plex and
95.1% of Tekni-Plex on a diluted basis.
Tekni-Plex Partnership has one general partner and six limited partners.
Messrs. McWethy, Solomon and Tuttle are affiliated with the general partner of
Tekni-Plex Partnership which owns an aggregate interest in the net profits of
Tekni-Plex Partnership equal to approximately 55% and Dr. Smith owns an
interest in the net profits of Tekni-Plex Partnership equal to approximately
18%, in each case, subject to certain conditions contained in Tekni-Plex
Partnership's agreement of limited partnership.
In 1994, Kenneth W.R. Baker was granted options on 2.5% of Tekni-Plex's common
stock, with anti-dilution provisions. Mr. Baker's option has a term of fifteen
years from the date of the grant. The option terminates immediately upon Mr.
Baker's termination for cause from Tekni-Plex. If Mr. Baker for any other
reason ceases to be employed by Tekni-Plex or is terminated by reason of a
disability, the option may be exercised for a period of six months following
Mr. Baker's cessation of employment. The option may be exercised by Mr.
Baker's estate for a year following Mr. Baker's death.
In April 1997, Tekni-Plex, Tekni-Plex Partnership and Dr. F. Patrick Smith
entered into an agreement pursuant to which: (i) so long as Tekni-Plex
Partnership continues, Dr. Smith has an option to acquire an interest in
Tekni-Plex Partnership representing up to 1.4% of the outstanding equity
interest in Tekni-Plex Partnership; and (ii) if Tekni-Plex Partnership has
been dissolved, Dr. Smith has an option to acquire shares of common stock of
Tekni-Plex representing up to 1.4% (less any options exercised pursuant to
clause (i) above) of the outstanding common stock. These options have a term
of five years from the date of the grant.
In January 1998, Tekni-Plex adopted an incentive stock plan (the "Stock
Incentive Plan"). Under the Stock Incentive Plan, 45.75206 shares are
available for awards to employees of Tekni-Plex. Options will be granted at
fair market value on the date of grant. Upon adoption of the Stock Incentive
Plan, options for 9.15 and 13.73 shares were granted to Dr. Smith and Mr.
Baker, respectively.
CERTAIN TRANSACTIONS
Tekni-Plex has a management consulting agreement with MST Management Company
and MST/TP Holding, Inc., both of whom are affiliated with Tekni-Plex's
controlling shareholder. Pursuant to their respective agreements, MST
Management Company and MST/TP Holding, Inc. provide regular and customary
management consulting services to Tekni-Plex. The terms of each agreement
require Tekni-Plex to pay a monthly management fee to MST Management Company
and MST/TP Holding, Inc. for a period of ten years from March 18, 1994.
Consulting service fees were in the aggregate approximately $274,000 for
fiscal year 1996 and increased to approximately $400,000 for fiscal year 1997
as a result of the Dolco Acquisition. The Company's policy is not to enter
into any significant transaction with an affiliate of the Company unless a
majority of the disinterested directors of the board of directors of the
Company determines, in such majority's sole discretion (making such
assumptions and determinations of fact as such majority sees fit), that the
terms of such transaction are, in all material respects or taken as a whole,
at least as favorable as the terms that could be obtained by the Company in a
comparable transaction made on an arm's-length basis between unaffiliated
parties.
Tekni-Plex has an arrangement with Arthur P. Witt, a director of Tekni-Plex,
whereby Mr. Witt provides customary management consulting services to
Tekni-Plex on an "as needed" basis. For the fiscal year 1997, compensation
paid to Mr. Witt for consulting services rendered on behalf of Tekni-Plex
equaled $70,800.
In connection with the Dolco Acquisition, Tekni-Plex loaned to Arthur P. Witt
$100,000, at 8% annual interest, enabling Mr. Witt to acquire a partnership
interest in Tekni-Plex Partnership as a limited partner.
Tekni-Plex also loaned to Kenneth W.R. Baker $100,000, at 8% annual interest,
enabling Mr. Baker to acquire a partnership interest in Tekni-Plex Partnership
as a limited partner.
DESCRIPTION OF CERTAIN INDEBTEDNESS
The Bank Financing
Concurrently with the Offering, the Company entered into a Bank Financing
pursuant to a credit agreement (the "Credit Agreement") which consisted of a
$50 million A Term Loan Facility, a $65 million B Term Loan Facility and a $90
million Revolving Credit Facility. Amounts borrowed under the Term Loan
Facilities were used to finance the Transactions and amounts borrowed under
the Revolving Credit Facility may be used for general corporate and working
capital purposes. In addition, up to $20 million of the amounts borrowed under
the Revolving Credit Facility will be available for the issuance of letters of
credit.
Loans under the Bank Financing will be secured by substantially all of the
assets of Tekni-Plex and PureTec and their domestic subsidiaries and will be
guaranteed by each domestic subsidiary of Tekni-Plex and PureTec.
Loans under the Bank Financing bear interest, at the Company's option, by
reference to a Base Rate or a reserve adjusted Eurodollar Rate in each case
plus an Applicable Margin, as each such term is defined in the Credit
Agreement. The actual interest rates applicable to borrowings under the Term
Loan Facilities and the Revolving Credit Facilities, as well as fees imposed
for issuance of letters of credit, are determined based upon the Company's then
existing Leverage Ratio as defined in the Credit Agreement.
Borrowings under the A Term Loan Facility shall be subject to annual
amortization, payable in quarterly installments, beginning in June 1998 and
ending in March 2004, with payments totaling $35 million due in the final two
years. Borrowings under the B Term Loan Facility shall be subject to annual
amortization, payable in quarterly installments, beginning in June 1998 and
ending in March 2006, with payments totaling approximately $61 million due in
the final two years. The full amount outstanding under the Revolving Credit
Facility must be paid in March 2004. In addition, under certain circumstances,
borrowings under the Term Loan Facilities are subject to mandatory prepayment
from the proceeds of asset sales and issuances of debt or equity securities
and out of the Company's excess cash flow as set forth in the Credit Agreement.
The Credit Agreement imposes certain affirmative and negative covenants on the
Company and its subsidiaries. As part of these covenants, the Company is
required to meet certain financial tests, including a minimum consolidated
EBITDA (as defined in the Credit Agreement), a minimum fixed charge coverage
ratio and a maximum leverage ratio. The negative covenants in the Credit
Agreement restrict or limit, among other things, (i) the incurrence of certain
debt by the Company and its subsidiaries, (ii) the pledge of assets of the
Company and its subsidiaries, (iii) capital expenditures, (iv) certain
mergers, consolidations and sales of assets by the Company and its
subsidiaries, (v) the payment of certain dividends or distributions by the
Company and the redemption, purchase, retirement or other acquisition of the
equity interests of the Company, (vi) certain investments and acquisitions by
the Company and its subsidiaries and (vii) certain other transactions with
affiliates of the Company.
The Credit Agreement provides that certain events will constitute events of
default under the Credit Agreement, which events include the failure by the
Company to pay when due amounts owed under the Credit Agreement, the failure by
the Company or its subsidiaries to observe or perform the covenants set forth
in the Credit Agreement, the inaccuracy of the representations and warranties
set forth in the Credit Agreement, the imposition of certain judgments against
the Company or its subsidiaries, the failure by the Company or its
subsidiaries to pay certain other debt of the Company and its subsidiaries,
the acceleration of the maturity of Material Debt (as defined), the occurrence
of certain bankruptcy or insolvency proceedings or events with respect to the
Company or its subsidiaries, the invalidity or unenforceability of any lien or
guarantee securing the obligations of the Company under the Credit Agreement,
and the occurrence of a change of control (as defined in the Credit Agreement)
of the Company.
The 11 1/4% Notes
In April 1997, the Company issued the 11 1/4% Notes pursuant to an
indenture (the "11 1/4% Indenture") dated April 1, 1997 among the Company,
Dolco, the Company's subsidiary, and Marine Midland Bank, as Trustee. The
aggregate cash proceeds from the sale of 11 1/4% Notes were $75,000,000.
The 11 1/4% Notes mature on April 1, 2007. Subsequent to the issuance of
the 11 1/4% Notes, Dolco was merged into the Company.
The 11 1/4% Notes are unsecured senior subordinate obligations of the
Company ranking equally with the Notes offered hereby. The 11 1/4%
Indenture provides that the Company shall not create or acquire any Domestic
Restricted Subsidiary (as defined in the 11 1/4% Indenture) having assets
or stockholder's equity in excess of $25,000 unless such Domestic Restricted
Subsidiary unconditionally guarantees the Company's obligations under the
11 1/4% Notes and the 11 1/4% Indenture on the terms set forth in the
11 1/4% Indenture. As a result of this requirement, the Guarantors of the
Notes will also guarantee the Company's obligations under the 11 1/4% Notes
and the 11 1/4% Indenture.
The 11 1/4% Notes accrue interest at a rate of 11 1/4% per annum payable
semi-annually in arrears on April 1, and October 1 of each year, commencing
October 1, 1997. The 11 1/4% Notes are redeemable, at the option of the
Company, at any time after April 1, 2002 at various redemption prices set
forth in the 11 1/4% Indenture, plus accrued and unpaid interest to the
date of redemption. In addition, on or prior to April 1, 2000, the Company may
redeem up to 33% in aggregate principal amount of the 11 1/4% Notes at
redemption price of 111.25% of the principal amount thereof, plus accrued and
unpaid interest to the date of redemption, with the net proceeds of one or
more public offerings of capital stock of the Company provided that at least
$60 million in aggregate principal amount of 11 1/4% Notes remain
outstanding immediately after the occurrence of each such redemption. Upon the
occurrence of a Change of Control (as defined in the 11 1/4% Indenture),
the Company is required to make an offer to repurchase the 11 1/4% Notes at
an offer price of 101% of the principal amount thereof, plus accrued and
unpaid interest to the date of repurchase.
The 11 1/4% Indenture sets forth various occurrences each of which would
constitute an event of default. If an event of default occurs, other than for
the bankruptcy or insolvency of the Company, holders of not less than 25% of
the principal amount of 11 1/4% Notes outstanding may declare the accreted
value of the securities together with any accrued interest to be due and
payable. If an act of bankruptcy or insolvency occurs, the 11 1/4% Notes
immediately become due and payable without any action required by the
noteholders.
The 11 1/4% Indenture contains covenants that, among other things, limit
(i) the issuance of additional debt, (ii) the payment of dividends and other
distributions to shareholders and affiliated persons or companies, (iii)
investments, (iv) certain transactions with affiliated companies, (v) the
incurrence of liens, (vi) sales of assets, including capital stock of
subsidiaries, and (vii) certain mergers, consolidations and sales of
substantially all of the Company's assets.
The foregoing summary describes certain provisions of the 11 1/4% Indenture
and the 11 1/4% Notes, but does not purport to be complete and is subject
to and is qualified by reference to the 11 1/4% Indenture and the
11 1/4% Notes.
THE EXCHANGE OFFER
Purpose and Effect of the Exchange Offer
The Old Notes were originally sold on March 3, 1998 to the Initial Purchaser
pursuant to the Purchase Agreement. The Initial Purchaser subsequently resold
the Notes to qualified institutional buyers in reliance on Rule 144A under the
Securities Act and outside the United States in reliance on Regulation S under
the Securities Act. As a condition to the Purchase Agreement, the Company
entered into the Registration Rights Agreement with the Initial Purchaser
pursuant to which the Company has agreed, for the benefit of the holders of
the Old Notes, at the Company's cost, to use its best efforts (i) to file the
Exchange Registration Statement (as defined) within 90 days after the Issue
Date of the Old Notes (March 3, 1998) with the Commission with respect to the
Exchange Offer for the Exchange Notes and (ii) to cause the Exchange
Registration Statement to be declared effective under the Securities Act
within 180 days after the date of original issuance of the Old Notes. Upon the
Exchange Registration Statement being declared effective, the Company will
offer the Exchange Notes in exchange for surrender of the Old Notes. The
Company will keep the Exchange Offer open for not less than 20 calendar days
(or longer if required by applicable law) after the date on which notice of
the Exchange Offer is mailed to the holders of the Old Notes. For each Old
Note surrendered to the Company pursuant to the Exchange Offer, the holder of
such Old Note will receive an Exchange Note having a principal amount equal to
that of the surrendered Old Note. Interest on Exchange Notes will accrue from
the last interest payment date on which interest was paid on the Old Notes so
surrendered, or, if no interest has been paid on such Old Notes, from March 3,
1998. No interest will be paid on the Old Notes accepted for exchange.
Under existing interpretations of the staff of the Commission contained in
several no-action letters to third parties, the Exchange Notes would in
general be freely tradeable after the Exchange Offer without further
registration under the Securities Act. However, any purchaser of Old Notes who
is an "affiliate" of the Company or who intends to participate in the Exchange
Offer for the purpose of distributing the Exchange Notes (i) will not be able
to rely on the interpretation of the staff of the Commission, (ii) will not be
able to tender its Old Notes in the Exchange Offer and (iii) must comply with
the registration and prospectus delivery requirements of the Securities Act in
connection with any sale or transfer of the Old Notes, unless such sale or
transfer is made pursuant to an exemption from such requirements.
Each holder of the Old Notes (other than certain specified holders) who wishes
to exchange the Old Notes for Exchange Notes in the Exchange Offer will be
deemed to represent in the Letter of Transmittal that (i) it is not an
affiliate of the Company, (ii) the Exchange Notes to be received by it were
acquired in the ordinary course of its business, (iii) at the time of
commencement of the Exchange Offer, it has no arrangement or understanding
with any person to participate in the distribution (within the meaning of the
Securities Act) of the Exchange Notes in violation of the Securities Act and
(iv) such holder has full power and authority to tender the Old Notes in
exchange for the Exchange Notes. In addition, in connection with any resales
of Exchange Notes, any Participating Broker-Dealer who acquired the Old Notes
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
Commission has taken the position that Participating Broker-Dealers may
fulfill their prospectus delivery requirements with respect to the Exchange
Notes (other than a resale of an unsold allotment from the original sale of
the Old Notes) with the prospectus contained in the Exchange Registration
Statement. Under the Registration Rights Agreement, the Company is required to
allow Participating Broker-Dealers and other persons, if any, subject to
similar prospectus delivery requirements to use the prospectus contained in
the Exchange Registration Statement in connection with the resale of such
Exchange Notes.
In the event that changes in the law or the applicable interpretations of the
staff of the Commission do not permit the Company to effect such an Exchange
Offer, or if for any other reason the Exchange Offer is not consummated within
180 days after the original issue date of the Old Notes, or if any holder of
the Old Notes (other than an "affiliate" of the Company or the Initial
Purchaser) is not eligible to participate in the Exchange Offer, or upon the
request of the Initial Purchaser under certain circumstances, the Company
will, at its cost, (a) as promptly as practicable, file the Shelf Registration
Statement covering resales of the Old Notes, (b) use its best efforts to cause
the Shelf Registration Statement to be declared effective under the Securities
Act and (c) use its best efforts to keep effective the Shelf Registration
Statement until the earlier of the date on which the Old Notes are no longer
"restricted securities" (within the meaning of Rule 144 under the Securities
Act) and such time as all of the applicable Old Notes have been sold
thereunder. The Company will, in the event of the filing of the Shelf
Registration Statement, provide to each applicable holder of the Old Notes
copies of the prospectus which is a part of the Shelf Registration Statement,
notify each such holder when the Shelf Registration Statement has become
effective and take certain other actions as are required to permit
unrestricted resales of the Old Notes. A holder of Old Notes that sells such
Old Notes pursuant to the Shelf Registration Statement generally will be
required to be named as a selling securityholder in the related prospectus and
to deliver a prospectus to purchasers, will be subject to certain of the civil
liability provisions under the Securities Act in connection with such sales
and will be bound by the provisions of the Registration Rights Agreement which
are applicable to such a holder (including certain indemnification
obligations). In addition, each holder of the Old Notes will be required to
deliver information to be used in connection with the Shelf Registration
Statement and to provide comments on the Shelf Registration Statement within
the time periods set forth in the Registration Rights Agreement in order to
have their Old Notes included in the Shelf Registration Statement and to
benefit from the provisions set forth in the following paragraph.
If the Company fails to comply with the above provisions or if such
registration statement fails to become effective, then, as liquidated damages,
additional interest (the "Additional Interest") shall become payable with
respect to the Old Notes as follows:
(i) if neither the Exchange Registration Statement nor the Shelf
Registration Statement is filed on or prior to the 90th day after the Issue
Date, Additional Interest shall be accrued on the Old Notes over and above the
stated interest at a rate of 0.25% per annum for the first 90 days commencing
on the 91st day after the Issue Date, such Additional Interest rate increasing
by an additional 0.25% per annum at the beginning of each subsequent 90-day
period;
(ii) if neither the Exchange Registration Statement nor Shelf
Registration Statement is declared effective by the Commission on or prior to
the 180th day after the Issue Date, Additional Interest shall be accrued on the
Old Notes over and above the stated interest at a rate of 0.25% per annum for
the first 90 days commencing on the 181st day after the Issue Date, such
Additional Interest rate increasing by an additional 0.25% per annum at the
beginning of each subsequent 90-day period; or
(iii) if (A) the Company has not exchanged Exchange Notes for all
Old Notes validly tendered in accordance with the terms of the Exchange Offer
on or prior to the 225th day after the Issue Date or (B) the Exchange
Registration Statement ceases to be effective at any time prior to the time
that the Exchange Offer is consummated or (C) if applicable, the Shelf
Registration Statement has been declared effective and such Shelf Registration
Statement ceases to be effective at any time prior to the date on which the
Old Notes are no longer "restricted securities" (within the meaning of Rule
144 under the Securities Act) (unless all the Old Notes have been sold
thereunder), then Additional Interest shall be accrued on the Old Notes over
and above the stated interest at a rate of 0.25% per annum for the first 90
days commencing on (x) the 226th day after the Issue Date, in the case of (A)
above, or (y) the day the Exchange Registration Statement ceases to be
effective or usable for its intended purpose in the case of (B) above, or (z)
the day such Shelf Registration Statement ceases to be effective in the case
of (C) above, such Additional Interest rate increasing by an additional 0.25%
per annum at the beginning of each subsequent 90-day period;
provided, however, that the Additional Interest rate on the Old Notes may not
exceed at any one time in the aggregate 1.0% per annum; and provided, further,
that (1) upon the filing of the Exchange Registration Statement or a Shelf
Registration Statement (in the case of clause (i) above), (2) upon the
effectiveness of the Exchange Registration Statement or a Shelf Registration
Statement (in the case of clause (ii) above), or (3) upon the exchange of
Exchange Notes for all Old Notes validly tendered (in the case of clause
(iii)(A) above), or upon the effectiveness of the Exchange Registration
Statement which had ceased to remain effective (in the case of clause (iii)(B)
above), or upon the effectiveness of the Shelf Registration Statement which
had ceased to remain effective (in the case of clause (iii)(C) above),
Additional Interest on the Old Notes as a result of such clause (or the
relevant subclause thereof), as the case may be, shall cease to accrue.
Any amounts of Additional Interest due pursuant to clauses (i), (ii) or (iii)
above will be payable in cash, on the same original interest payment dates as
the Old Notes. The amount of Additional Interest will be determined by
multiplying the applicable Additional Interest rate by the principal amount of
the Old Notes, multiplied by a fraction, the numerator of which is the number
of days such Additional Interest rate was applicable during such period
(determined on the basis of a 360-day year comprised of twelve 30-day months
and, in the case of a partial month, the actual number of days elapsed), and,
the denominator of which is 360.
The statements made in this Prospectus relating to the Registration Rights
Agreement are intended to be summaries of all material elements of such
agreement in connection with the Exchange Offer and, as such, do not purport
to be complete. Reference is made to the Registration Rights Agreement, a copy
of which is filed as an exhibit to the Exchange Registration Statement of
which this Prospectus is a part, for a more complete description of the
agreement or matter involved.
Following the consummation of the Exchange Offer, holders of the Old Notes who
were eligible to participate in the Exchange Offer but who did not tender
their Old Notes will not have any further registration rights and such Old
Notes will continue to be subject to certain restrictions on transfer.
Accordingly, the liquidity of the market for such Old Notes could be adversely
affected.
Terms of the Exchange Offer
Upon the terms and subject to the conditions set forth in this Prospectus and
in the Letter of Transmittal, the Company will accept any and all Old Notes
validly tendered and not withdrawn prior to 5:00 p.m., New York City time, on
the Expiration Date. The Company will issue $1,000 principal amount of
Exchange Notes in exchange for each $1,000 principal amount of outstanding Old
Notes accepted in the Exchange Offer. Holders may tender some or all of their
Old Notes pursuant to the Exchange Offer. However, Old Notes may be tendered
only in integral multiples of $1,000.
The form and terms of the Exchange Notes are substantially identical to the
form and terms of the Old Notes except that (i) the Exchange Notes bear a
Series B designation and a different CUSIP Number from the Old Notes, (ii) the
Exchange Notes have been registered under the Securities Act and hence will
not bear legends restricting the transfer thereof and (iii) the holders of the
Exchange Notes will not be entitled to certain rights under the Registration
Rights Agreement, including the provisions providing for an increase in the
interest rate on the Old Notes in certain circumstances relating to the timing
of the Exchange Offer, all of which rights will terminate when the Exchange
Offer is terminated. The Exchange Notes will evidence the same debt as the Old
Notes (which they replace) and will be entitled to the benefits of the
Indenture.
The Exchange Notes will be fully and unconditionally guaranteed on a senior
subordinated basis by the Guarantors. The form and terms of the Exchange
Guarantees will be substantially identical to the form and terms of the Old
Guarantees.
Solely for reasons of administration (and for no other purpose) the Company
has fixed the close of business on __________, 1998 as the record date for the
Exchange Offer for purposes of determining the persons to whom this Prospectus
and the Letter of Transmittal will be mailed initially. Only a registered
holder of Old Notes (or such holder's legal representative or
attorney-in-fact) as reflected on the records of the Trustee under the
Indenture may participate in the Exchange Offer. There will be no fixed record
date for determining registered holders of Old Notes entitled to participate
in the Exchange Offer.
Holders of Old Notes do not have any appraisal or dissenters' rights under the
General Corporation Law of Delaware or the Indenture in connection with the
Exchange Offer. The Company intends to conduct the Exchange Offer in
accordance with the applicable requirements of the Securities Exchange Act of
1934, as amended (the "Exchange Act"), and the rules and regulations of the
Commission thereunder.
The Company shall be deemed to have accepted validly tendered Old Notes when,
as and if the Company has given oral or written notice thereof to the Exchange
Agent. The Exchange Agent will act as agent for the tendering holders of Old
Notes and for the purpose of receiving the Exchange Notes from the Company.
If any tendered Old Notes are not accepted for exchange because of an invalid
tender, the occurrence of certain other events set forth herein or otherwise,
the certificates for any such unaccepted Old Notes will be returned (or in the
case of Old Notes tendered by book-entry transfer through DTC, will be
credited to an account maintained with DTC), without expense, to the tendering
holder thereof as promptly as practicable after the Expiration Date.
Holders who tender Old Notes in the Exchange Offer will not be required to pay
brokerage commissions or fees or, subject to the instructions in the Letter of
Transmittal, transfer taxes with respect to the exchange of Old Notes pursuant
to the Exchange Offer. The Company will pay all charges and expenses, other
than transfer taxes in certain circumstances, in connection with the Exchange
Offer. See "--Fees and Expenses."
Expiration Date; Extensions; Amendments
The term "Expiration Date" shall mean 5:00 p.m., New York City time, on
__________, 1998, unless the Company, in its sole discretion, extends the
Exchange Offer, in which case the term "Expiration Date" shall mean the latest
date and time to which the Exchange Offer is extended. Notwithstanding the
foregoing, the Company will not extend the Expiration Date beyond __________,
1998 (which, if extended to such date, would represent a maximum Exchange
Offer period of __ days).
In order to extend the Exchange Offer, the Company will notify the Exchange
Agent of any extension by oral or written notice and will mail to the
registered holders an announcement thereof, each prior to 9:00 a.m., New York
City time, on the next business day after the previously scheduled expiration
date.
The Company reserves the right, in its reasonable discretion, (i) to delay
accepting any Old Notes, to extend the Exchange Offer or to terminate the
Exchange Offer if any of the conditions set forth below under "--Conditions"
shall not have been satisfied, by giving oral or written notice of such delay,
extension or termination to the Exchange Agent or (ii) to amend the terms of
the Exchange Offer in any manner. Any such delay in acceptance, extension,
termination or amendment will be followed as promptly as practicable by oral
or written notice thereof to the registered holders.
Interest on the Exchange Notes
Interest on Exchange Notes shall accrue from the last interest payment date on
which interest was paid on the Old Notes so surrendered, or, if no interest
has been paid on such Old Notes, from March 3, 1998. No interest will be paid
on the Old Notes accepted for exchange.
Procedures for Tendering
For a holder of Old Notes to tender Old Notes validly pursuant to the
Exchange Offer, a properly completed and duly executed Letter of
Transmittal (or facsimile thereof), with any required signature guarantee,
or (in the case of a book-entry transfer) an Agent's Message in lieu of the
Letter of Transmittal, and any other required documents, must be received
by the Exchange Agent at the address set forth below under "--Exchange
Agent" prior to 5:00 p.m., New York City time, on the Expiration Date. In
addition, prior to 5:00 p.m., New York City time, on the Expiration Date,
either (a) certificates for tendered Old Notes must be received by the
Exchange Agent at such address or (b) such Old Notes must be transferred
pursuant to the procedures for book-entry transfer described below (and a
confirmation of such tender received by the Exchange Agent, including an
Agent's Message if the tendering holder has not delivered a Letter of
Transmittal).
The term "Agent's Message" means a message transmitted by DTC, received by the
Exchange Agent and forming part of the confirmation of a book-entry transfer,
which states that DTC has received an express acknowledgment from the
participant in DTC tendering Old Notes which are the subject of such
book-entry confirmation, that such participant has received and agrees to be
bound by the terms of the Letter of Transmittal and that the Company may
enforce such agreement against such participant. In the case of an Agent's
Message relating to guaranteed delivery, the term means a message transmitted
by DTC and received by the Exchange Agent, which states that DTC has received
an express acknowledgment from the participant in DTC tendering Old Notes that
such participant has received and agrees to be bound by the Notice of
Guaranteed Delivery.
By tendering Old Notes pursuant to the procedures set forth above, each holder
will be deemed to make to the Company the representations set forth above in
the third paragraph under the heading "--Purpose and Effect of the Exchange
Offer."
The tender by a holder of Old Notes and the acceptance thereof by the Company
will constitute agreement between such holder and the Company in accordance
with the terms and subject to the conditions set forth herein and in the
Letter of Transmittal.
THE METHOD OF DELIVERY OF OLD NOTES AND THE LETTER OF TRANSMITTAL AND ALL OTHER
REQUIRED DOCUMENTS TO THE EXCHANGE AGENT IS AT THE ELECTION AND SOLE RISK OF
THE HOLDER. AS AN ALTERNATIVE TO DELIVERY BY MAIL, HOLDERS MAY WISH TO
CONSIDER OVERNIGHT OR HAND DELIVERY SERVICE. IN ALL CASES, SUFFICIENT TIME
SHOULD BE ALLOWED TO ASSURE DELIVERY TO THE EXCHANGE AGENT BEFORE THE
EXPIRATION DATE. NO LETTER OF TRANSMITTAL OR OLD NOTES SHOULD BE SENT TO THE
COMPANY. HOLDERS MAY REQUEST THEIR RESPECTIVE BROKERS, DEALERS, COMMERCIAL
BANKS, TRUST COMPANIES OR NOMINEES TO EFFECT THE ABOVE TRANSACTIONS FOR SUCH
HOLDERS.
Any beneficial owner whose Old Notes are registered in the name of a broker,
dealer, commercial bank, trust company or other nominee and who wishes to
tender should contact the registered holder promptly and instruct such
registered holder to tender on such beneficial owner's behalf. See
"Instruction to Registered Holder and/or Book-Entry Transfer Facility
Participant from Owner" included with the Letter of Transmittal.
Signatures on a Letter of Transmittal or a notice of withdrawal, as the case
may be, must be guaranteed by an Eligible Institution (as defined below)
unless the Old Notes tendered pursuant thereto are tendered (i) by a
registered holder who has not completed the box entitled "Special Registration
Instructions" or "Special Delivery Instructions" on the Letter of Transmittal
or (ii) for the account of an Eligible Institution. In the event that
signatures on a Letter of Transmittal or a notice of withdrawal, as the case
may be, are required to be guaranteed, such guarantee must be by a member firm
of a recognized signature guarantee medallion program within the meaning of
Rule 17Ad-15 of the Securities Exchange Act of 1934, as amended, approved
by the Securities Transfer Association, Inc. (an "Eligible Institution").
If the Letter of Transmittal is signed by a person other than the registered
holder of any Old Notes listed therein, such Old Notes must be endorsed or
accompanied by a properly completed bond power, signed by such registered
holder as such registered holder's name appears on such Old Notes with the
signature thereon guaranteed by an Eligible Institution.
If the Letter of Transmittal or any Old Notes or bond powers are signed by
trustees, executors, administrators, guardians, attorneys-in-fact, officers of
corporations or others acting in a fiduciary or representative capacity, such
persons should so indicate when signing, and evidence satisfactory to the
Company of their authority to so act must be submitted with the Letter of
Transmittal.
The Company understands that the Exchange Agent will make a request promptly
after the date of this Prospectus to establish accounts with respect to the
Old Notes at the book-entry transfer facility, The Depository Trust Company
("DTC" or the "Book-Entry Transfer Facility"), for the purpose of facilitating
the Exchange Offer, and subject to the establishment thereof, any financial
institution that is a participant in the Book-Entry Transfer Facility's system
may make book-entry delivery of Old Notes by causing such Book-Entry Transfer
Facility to transfer such Old Notes into the Exchange Agent's account with
respect to the Old Notes in accordance with the Book-Entry Transfer Facility's
procedures for such transfer. Although delivery of the Old Notes may be
effected through book-entry transfer into the Exchange Agent's account at the
Book-Entry Transfer Facility, an appropriate Letter of Transmittal properly
completed and duly executed with any required signature guarantee, or, in the
case of a book-entry transfer, an Agent's Message in lieu of the Letter of
Transmittal and all other required documents must in each case be transmitted
to and received or confirmed by the Exchange Agent at its address set forth
below on or prior to the Expiration Date, or, if the guaranteed delivery
procedures described below are complied with, within the time period provided
under such procedures. Delivery of documents to the Book-Entry Transfer
Facility does not constitute delivery to the Exchange Agent.
The Exchange Agent and DTC have confirmed that the Exchange Offer is eligible
for the DTC Automated Tender Offer Program ("ATOP"). Accordingly, DTC
participants may electronically transmit their acceptance of the Exchange Offer
by causing DTC to transfer Old Notes to the Exchange Agent in accordance with
DTC's ATOP procedures for transfer. DTC will then send an Agent's Message to
the Exchange Agent.
All questions as to the validity, form, eligibility (including time of
receipt), acceptance of tendered Old Notes and withdrawal of tendered Old
Notes will be determined by the Company in its reasonable discretion, which
determination will be final and binding. The Company reserves the absolute
right to reject any and all Old Notes not properly tendered or any Old Notes
the Company's acceptance of which would, in the opinion of counsel for the
Company, be unlawful. The Company also reserves the right in its reasonable
discretion to waive any defects, irregularities or conditions of tender as to
particular Old Notes. The Company's interpretation of the terms and conditions
of the Exchange Offer (including the instructions in the Letter of
Transmittal) will be final and binding on all parties. Unless waived, any
defects or irregularities in connection with tenders of Old Notes must be
cured within such time as the Company shall determine. Although the Company
intends to notify holders of defects or irregularities with respect to tenders
of Old Notes, neither the Company, the Exchange Agent nor any other person
shall incur any liability for failure to give such notification. Tenders of
Old Notes will not be deemed to have been made until such defects or
irregularities have been cured or waived. Any Old Notes received by the
Exchange Agent that are not properly tendered and as to which the defects or
irregularities have not been cured or waived will be returned by the Exchange
Agent to the tendering holders, unless otherwise provided in the Letter of
Transmittal, as soon as practicable following the Expiration Date.
Guaranteed Delivery Procedures
Holders who wish to tender their Old Notes and (i) whose Old Notes are not
immediately available, (ii) who cannot deliver their Old Notes, the Letter of
Transmittal or any other required documents to the Exchange Agent or (iii) who
cannot complete the procedures for book-entry transfer, prior to the
Expiration Date, may effect a tender if:
(a) the tender is made through an Eligible Institution;
(b) prior to the Expiration Date, the Exchange Agent receives
from such Eligible Institution a properly completed and duly executed Notice
of Guaranteed Delivery (by facsimile transmission, mail or hand delivery)
setting forth the name and address of the holder, the certificate number(s) of
such Old Notes and the principal amount of Old Notes tendered, stating that
the tender is being made thereby and guaranteeing that, within three New York
Stock Exchange trading days after the Expiration Date, the Letter of
Transmittal (or facsimile thereof) together with the certificate(s)
representing the Old Notes (or a confirmation of book-entry transfer of such
Old Notes into the Exchange Agent's account at the Book-Entry Transfer
Facility), and any other documents required by the Letter of Transmittal will
be deposited by the Eligible Institution with the Exchange Agent; and
(c) such properly completed and executed Letter of Transmittal
(or facsimile thereof), as well as the certificate(s) representing all
tendered Old Notes in proper form for transfer (or a confirmation of book-entry
transfer of such Old Notes into the Exchange Agent's account at the Book-Entry
Transfer Facility), and all other documents required by the Letter of
Transmittal are received by the Exchange Agent upon three New York Stock
Exchange trading days after the Expiration Date.
Upon request to the Exchange Agent, a Notice of Guaranteed Delivery will be
sent to holders who wish to tender their Old Notes according to the guaranteed
delivery procedures set forth above.
Withdrawal of Tenders
Except as otherwise provided herein, tenders of Old Notes may be withdrawn at
any time prior to 5:00 p.m., New York City time, on the Expiration Date.
To withdraw a tender of Old Notes in the Exchange Offer, a telegram, telex,
letter or facsimile transmission notice of withdrawal must be received by the
Exchange Agent at its address set forth herein prior to 5:00 p.m., New York
City time, on the Expiration Date. Any such notice of withdrawal must (i)
specify the name of the person having deposited the Old Notes to be withdrawn
(the " Depositor"), (ii) identify the Old Notes to be withdrawn (including the
certificate number(s) and principal amount of such Old Notes, or, in the case
of Old Notes transferred by book-entry transfer, the name and number of the
account at the Book-Entry Transfer Facility to be credited), (iii) be signed
by the holder in the same manner as the original signature on the Letter of
Transmittal by which such Old Notes were tendered (including any required
signature guarantees) or be accompanied by documents of transfer sufficient to
have the Trustee with respect to the Old Notes register the transfer of such
Old Notes into the name of the person withdrawing the tender and (iv) specify
the name in which any such Old Notes are to be registered, if different from
that of the Depositor. All questions as to the validity, form and eligibility
(including time of receipt) of such notices will be determined by the Company,
whose determination shall be final and binding on all parties. Any Old Notes so
withdrawn will be deemed not to have been validly tendered for purposes of the
Exchange Offer and no Exchange Notes will be issued with respect thereto
unless the Old Notes so withdrawn are validly retendered. Any Old Notes which
have been tendered but which are not accepted for exchange will be returned to
the holder thereof without cost to such holder as soon as practicable after
withdrawal, rejection of tender or termination of the Exchange Offer. Properly
withdrawn Old Notes may be retendered by following one of the procedures
described above under "--Procedures for Tendering" at any time prior to the
Expiration Date.
Conditions
Notwithstanding any other term of the Exchange Offer, the Company shall not be
required to accept for exchange, or Exchange Notes for, any Old Notes, and may
terminate or amend the Exchange Offer as provided herein before the acceptance
of such Old Notes, if:
(a) any action or proceeding is instituted or threatened in any
court or by or before any governmental agency with respect to the Exchange
Offer (or other similar exchange offers) which, in the sole judgment of the
Company, might materially impair the ability of the Company to proceed with
the Exchange Offer or any material adverse development has occurred in any
existing action or proceeding with respect to the Company or any of its
subsidiaries;
(b) any law, statute, rule, regulation or interpretation by the
staff of the Commission is proposed, adopted or enacted, which, in the
reasonable judgment of the Company, might materially impair the ability of the
Company to proceed with the Exchange Offer or materially impair the
contemplated benefits of the Exchange Offer to the Company; or
(c) any governmental approval has not been obtained, which
approval the Company shall, in its reasonable discretion, deem necessary for
the consummation of the Exchange Offer as contemplated hereby.
If the Company determines in its reasonable discretion that any of the
conditions are not satisfied, the Company may (i) refuse to accept any Old
Notes and return all tendered Old Notes to the tendering holders, (ii) extend
the Exchange Offer and retain all Old Notes tendered prior to the expiration
of the Exchange Offer, subject, however, to the rights of holders to withdraw
such Old Notes (see "--Withdrawal of Tenders") or (iii) waive such unsatisfied
conditions with respect to the Exchange Offer and accept all properly tendered
Old Notes which have not been withdrawn.
Exchange Agent
Marine Midland Bank has been appointed as Exchange Agent for the Exchange
Offer. Questions and requests for assistance, requests for additional copies
of this Prospectus or of the Letter of Transmittal and requests for Notice of
Guaranteed Delivery should be directed to the Exchange Agent addressed as
follows:
<TABLE>
<S> <C>
By Registered or Certified Mail,
Overnight Courier or Hand: By Facsimile:
Marine Midland Bank Marine Midland Bank
140 Broadway--A Level Attention: Frank Godino
New York, New York 10005-1180 (212) 658-2292
Attention: Corporate Trust Operations
Tel: (212) 658-5931
</TABLE>
Originals of all documents submitted by facsimile should be sent promptly by
registered or certified mail, overnight courier or hand. Delivery to an
address other than as set forth above will not constitute a valid delivery.
Fees and Expenses
The expenses of soliciting tenders will be borne by the Company. The principal
solicitation is being made by mail; however, additional solicitation may be
made by telegraph, facsimile, telephone or in person by officers and regular
employees of the Company and its affiliates.
The Company has not retained any dealer-manager in connection with the
Exchange Offer and will not make any payments to brokers, dealers, or others
soliciting acceptances of the Exchange Offer. The Company, however, 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
therewith.
The cash expenses to be incurred in connection with the Exchange Offer will be
paid by the Company. Such expenses include fees and expenses of the Exchange
Agent and Trustee, accounting and legal fees and printing costs, among others.
Accounting Treatment
The Exchange Notes will be recorded at the same carrying value as the Old
Notes, which is face value, as reflected in the Company's accounting records
on the date of exchange. Accordingly, no gain or loss for accounting purposes
will be recognized by the Company. The expenses of the Exchange Offer will be
expensed over the term of the Exchange Notes.
Consequences of Failure to Exchange
The Old Notes that are not exchanged for Exchange Notes pursuant to the
Exchange Offer will remain restricted securities. Accordingly, such old Notes
may be resold only (i) to the Company (upon redemption thereof or otherwise),
(ii) so long as the Old Notes are eligible for resale pursuant to Rule 144A,
to a person inside the United States whom the seller reasonably believes is a
qualified institutional buyer within the meaning of Rule 144A under the
Securities Act in a transaction meeting the requirements of Rule 144A, in
accordance with Rule 144 under the Securities Act, or pursuant to another
exemption from the registration requirements of the Securities Act (and based
upon an opinion of counsel reasonably acceptable to the Company), (iii)
outside the United States to a foreign person in a transaction meeting the
requirements of Rule 904 under the Securities Act, or (iv) pursuant to an
effective registration statement under the Securities Act, in each case in
accordance with any applicable securities laws of any state of the United
States.
Resale of the Exchange Notes
With respect to resales of Exchange Notes, based on interpretations by the
staff of the Commission set forth in no-action letters issued to third
parties, the Company believes that a holder or other person who receives
Exchange Notes, whether or not such person is the holder (other than a
person that is an "affiliate" of the Company within the meaning of Rule 405
under the Securities Act) who receives Exchange Notes in exchange for Old
Notes in the ordinary course of business and who is not participating, does
not intend to participate, and has no arrangement or understanding with any
person to participate, in the distribution of the Exchange Notes, will be
allowed to resell the Exchange Notes to the public without further
registration under the Securities Act and without delivering to the
purchasers of the Exchange Notes a prospectus that satisfies the
requirements of Section 10 of the Securities Act. However, if any holder
acquires Exchange Notes in the Exchange Offer for the purpose of
distributing or participating in a distribution of the Exchange Notes, such
holder cannot rely on the position of the staff of the Commission
enunciated in such no-action letters or any similar interpretive letters,
and must comply with the registration and prospectus delivery requirements
of the Securities Act in connection with any resale transaction, unless an
exemption from registration is otherwise available. Further, each
Participating Broker-Dealer that receives Exchange Notes for its own
account in exchange for Old Notes where such Old Notes were acquired by
such Participating Broker-Dealer as a result of market-making activities or
other trading activities, must acknowledge that it will deliver a
prospectus in connection with any resale of such Exchange Notes.
As contemplated by these no-action letters and the Registration Rights
Agreement, each holder accepting the Exchange Offer is required to represent
to the Company in the Letter of Transmittal that (i) the Exchange Notes are to
be acquired by the holder or the person receiving such Exchange Notes, whether
or not such person is the holder, in the ordinary course of business, (ii) the
holder or any such other person (other than a broker-dealer referred to in the
next sentence) is not engaging and does not intend to engage, in the
distribution of the Exchange Notes, (iii) the holder or any such other person
has no arrangement or understanding with any person to participate in the
distribution of the Exchange Notes, (iv) neither the holder nor any such other
person is an "affiliate" of the Company within the meaning of Rule 405 under
the Securities Act, and (v) the holder or any such other person acknowledges
that if such holder or other person participates in the Exchange Offer for the
purpose of distributing the Exchange Notes it must comply with the
registration and prospectus delivery requirements of the Securities Act in
connection with any resale of the Exchange Notes and cannot rely on those
no-action letters. As indicated above, each Participating Broker-Dealer that
receives an Exchange Note for its own account in exchange for Old Notes must
acknowledge that it will deliver a prospectus in connection with any resale of
such Exchange Notes. For a description of the procedures for such resales by
Participating Broker-Dealers, see "Plan of Distribution."
DESCRIPTION OF EXCHANGE NOTES
As used below in this "Description of Exchange Notes" section, the "Company"
means Tekni-Plex, Inc. but not any of its subsidiaries. The Old Notes were,
and the Exchange Notes will be, issued under the Indenture, dated as of March
1, 1998 (the "Indenture"), among the Company, the Guarantors and Marine
Midland Bank, as Trustee (the "Trustee"). The terms of the Exchange Notes
include those stated in the Indenture and those made part of the Indenture by
reference to the Trust Indenture Act of 1939, as amended (the "Trust Indenture
Act"). The Exchange Notes are subject to all such terms, and holders of the
Exchange Notes are referred to the Indenture and the Trust Indenture Act for a
statement thereof. A copy of the proposed form of the Indenture and the
Registration Rights Agreement described below has been filed as an exhibit to
the Registration Statement of which this Prospectus is a part. The statements
made under this caption relating to the Notes, the Indenture and the
Registration Rights Agreement are intended to be summaries of all material
elements of such documents and, as such, do not purport to be complete and
where reference is made to particular provisions of the Indenture and
Registration Rights Agreement, such provisions, including the definitions of
certain terms, are qualified in their entirety by such reference.
The Old Notes are, and the Exchange Notes will be, general unsecured
obligations of the Company, limited to $275,000,000 aggregate principal amount
of which $200,000,000 aggregate principal was issued in the offering of the
Old Notes. Additional amounts may be issued in one or more series from time
to time subject to the limitations set forth under "Covenants--Limitation on
Indebtedness" and restrictions contained in the Credit Agreement. The Exchange
Notes will be senior subordinated obligations of the Company, subordinated in
right of payment to all Senior Debt of the Company. The Exchange Notes will be
issued only in fully registered form, without coupons, in denominations of
$1,000 and any integral multiple thereof. No service charge will be made for
any registration of transfer or exchange of Notes, but the Company may require
payment of a sum sufficient to cover any tax or other governmental charge
payable in connection therewith. Initially, the Trustee will act as paying
agent and registrar for the Exchange Notes. The form and terms of the
Exchange Notes are substantially identical to the form and terms of the Old
Notes except that (i) the Exchange Notes bear a Series B designation, (ii) the
Exchange Notes have been registered under the Securities Act and, therefore,
will not bear legends restricting the transfer thereof, and (iii) the holders
of Exchange Notes will not be entitled to certain rights under the
Registration Rights Agreement, including the provisions providing for an
increase in the interest rate on the Old Notes in certain circumstances
relating to the timing of the Exchange Offer, which rights will terminate when
the Exchange Offer is consummated.
Principal, Maturity and Interest
The Notes will mature on March 1, 2008 and will bear interest at the rate per
annum shown on the cover page hereof from March 3, 1997 or from the most
recent interest payment date to which interest has been paid or provided for.
Interest will be payable semiannually on March 1 and September 1 of each year,
commencing September 1, 1998, to the Person in whose name a Note is registered
at the close of business on the preceding February 15 or August 15 (each, a
"Record Date"), as the case may be. Interest on the Notes will be computed on
the basis of a 360-day year of twelve 30-day months. Holders must surrender
the Notes to the paying agent for the Notes to collect principal payments. The
Company will pay principal and interest by check and may mail interest checks
to a holder's registered address.
Optional Redemption
The Notes will be subject to redemption, at the option of the Company, in
whole or in part, at any time on or after March 1, 2003 and prior to maturity,
upon not less than 30 nor more than 60 days' notice mailed to each holder of
Notes to be redeemed at his address appearing in the register for the Notes,
in amounts of $1,000 or an integral multiple of $1,000, at the following
redemption prices (expressed as percentages of principal amount) plus accrued
interest to but excluding the date fixed for redemption (subject to the right
of holders of record on the relevant Record Date to receive interest due on an
interest payment date that is on or prior to the date fixed for redemption), if
redeemed during the 12-month period beginning March 1 of the years indicated:
<TABLE>
<CAPTION>
Year Percentage
- ---- ----------
<S> <C>
2003...................................... 104.625%
2004...................................... 103.083%
2005...................................... 101.542%
2006 and thereafter....................... 100.000%
</TABLE>
In addition, prior to March 1, 2001, the Company may redeem up to 35% of the
principal amount of the Notes with the net cash proceeds received by the
Company from one or more public offerings of Capital Stock (other than
Disqualified Stock) of the Company, at a redemption price (expressed as a
percentage of the principal amount) of 109.25% of the principal amount
thereof, plus accrued and unpaid interest to the date fixed for redemption;
provided, however, that at least 65% of the aggregate principal amount of the
Notes originally issued pursuant to the Offering remains outstanding
immediately after any such redemption (excluding any Notes owned by the
Company or any of its Affiliates). Notice of redemption pursuant to this
paragraph must be mailed to holders of Notes not later than 60 days following
the consummation of such public offering.
Selection of Notes for any partial redemption shall be made by the Trustee, in
accordance with the rules of any national securities exchange on which the
Notes may be listed or, if the Notes are not so listed, pro rata or by lot or
in such other manner as the Trustee shall deem appropriate and fair. Notes in
denominations larger than $1,000 may be redeemed in part but only in integral
multiples of $1,000. Notice of redemption will be mailed before the date fixed
for redemption to each holder of Notes to be redeemed at his or her registered
address. On and after the date fixed for redemption, interest will cease to
accrue on Notes or portions thereof called for redemption.
The Notes will not have the benefit of any sinking fund.
Ranking
The payment of principal, premium, if any, and interest on the Notes and any
claims arising out of or with respect to the Indenture is subordinated and
subject in right of payment, to the extent and in the manner provided in the
Indenture, to the prior payment in full of all Senior Debt of the Company.
Upon any payment or distribution of assets or securities of the Company of any
kind or character, whether in cash, property or securities, upon any
dissolution or winding up or total or partial liquidation or reorganization of
the Company, whether voluntary or involuntary or in bankruptcy, insolvency,
receivership or other proceedings, all amounts due or to become due with
respect to Senior Debt of the Company (including any interest accruing on or
after, or which would accrue but for, an event of bankruptcy, regardless of
whether such interest is an allowed claim enforceable against the debtor under
the Bankruptcy Code) shall first be paid in full, or payment provided for, in
either case in cash or cash equivalents or otherwise in a form satisfactory to
the holders of Senior Debt, before the Holders of the Notes or the Trustee on
behalf of such Holders shall be entitled to receive any payment by the Company
of the principal of, premium, if any, or interest on the Notes, or any payment
to acquire any of the Notes for cash, property or securities, or any
distribution with respect to the Notes of any kind or character, whether in
cash, property or securities, by set-off or otherwise (all such payments and
distributions referred to individually and collectively, as a "Securities
Payment"). Before any payment may be made by, or on behalf of, the Company of
the principal of, premium, if any, or interest on the Notes upon any such
dissolution or winding up or liquidation or reorganization, any payment or
distribution of assets or securities of the Company of any kind or character,
whether in cash, property or securities, to which the Holders of the Notes or
the Trustee on their behalf would be entitled, but for the subordination
provisions of the Indenture, shall be made by the Company or by any receiver,
trustee in bankruptcy, liquidating trustee, agent or other person making such
payment or distribution, directly to the holders of Senior Debt of the Company
(pro rata to such holders on the basis of the respective amounts of Senior
Debt held by such holders) or their representatives or to the trustee or
trustees under any indenture pursuant to which any such Senior Debt may have
been issued as their respective interests may appear, to the extent necessary
to pay all such Senior Debt in full in cash or cash equivalents or otherwise
in a form satisfactory to the holders of such Senior Debt after giving effect
to any concurrent payment, distribution or provision therefor to or for the
holders of such Senior Debt.
No Securities Payment by or on behalf of the Company, whether pursuant to the
terms of the Notes or upon acceleration or otherwise, will be made if, at the
time of such payment, there exists a default in the payment of all or any
portion of the obligations on any Designated Senior Debt, whether at maturity,
on account of mandatory redemption or prepayment, acceleration or otherwise,
and such default shall not have been cured or waived or the benefits of this
sentence waived by or on behalf of the holders of such Designated Senior Debt.
In addition, during the continuance of any non-payment default or non-payment
event of default with respect to any Designated Senior Debt pursuant to which
the maturity thereof may be accelerated, and upon receipt by the Trustee of
notice (a "Payment Blockage Notice") from a holder or holders of such
Designated Senior Debt or the trustee or agent acting on behalf of such
Designated Senior Debt, then, unless and until such default or event of
default has been cured or waived or has ceased to exist or such Designated
Senior Debt has been discharged or repaid in full in cash or cash equivalents
or otherwise in a form satisfactory to the holders of such Designated Senior
Debt, no Securities Payment will be made by or on behalf of the Company,
except from those funds held in trust for purposes of defeasance for the
benefit of the Holders of any Notes to such Holders, during a period (a
"Payment Blockage Period") commencing on the date of receipt of such Payment
Blockage Notice by the Trustee and ending 179 days thereafter. Notwithstanding
anything herein to the contrary, (x) in no event will a Payment Blockage
Period extend beyond 179 days from the date of the Payment Blockage Notice in
respect thereof was given and (y) there must be 180 days in any 365 day period
during which no Payment Blockage Period is in effect. Not more than one
Payment Blockage Period may be commenced with respect to the Notes during any
period of 365 consecutive days. No default or event of default that existed or
was continuing on the date of commencement of any Payment Blockage Period with
respect to the Designated Senior Debt initiating such Payment Blockage Period
may be, or be made, the basis for the commencement of any other Payment
Blockage Period by the holder or holders of such Designated Senior Debt or the
trustee or agent acting on behalf of such Designated Senior Debt, whether or
not within a period of 365 consecutive days, unless such default or event of
default has been cured or waived for a period of not less than 90 consecutive
days (it being acknowledged that any subsequent action or any breach of any
financial covenants for a period commencing after the date of commencement of
such Payment Blockage Period that, in either case, would give rise to an event
of default pursuant to any provision under which an event of default
previously existed or was continuing, shall constitute a new event of default
for this purpose).
The failure to make any payment or distribution for or on account of the Notes
by reason of the provisions of the Indenture described under this section will
not be construed as preventing the occurrence of an Event of Default described
in clause (a), (b) or (c) of the first paragraph under "--Events of Default."
By reason of the subordination provisions described above, in the event of
insolvency of the Company, funds which would otherwise be payable to Holders
of the Notes will be paid to the holders of Senior Debt of the Company to the
extent necessary to repay such Senior Debt in full, and the Company may be
unable to fully meet its obligations with respect to the Notes. Subject to the
restrictions set forth in the Indenture, in the future the Company may incur
additional Senior Debt.
At December 26, 1997, after giving pro forma effect to the Transactions, there
would have been $119.9 million of Senior Debt outstanding. However, the
Company could also have borrowed up to $90.0 million of Indebtedness under the
Credit Agreement, all of which would have constituted Senior Debt.
The Guarantees
The Indenture provides that the Guarantors will fully and unconditionally
guarantee, jointly and severally, on a senior subordinated basis all of the
obligations of the Company under the Indenture, including its obligation to
pay principal, premium, if any, and interest with respect to the Notes. The
obligation of each Guarantor is limited to the maximum amount which, after
giving effect to all other contingent and fixed liabilities of such Guarantor,
will result in the obligations of such Guarantor under the Guarantee not
constituting a fraudulent conveyance or fraudulent transfer under federal or
state law. Except as provided in "--Covenants" below, the Company is not
restricted from selling or otherwise disposing of a Guarantor.
The Indenture provides that if the Notes are defeased in accordance with the
terms of the Indenture, or if all or substantially all of the assets of a
Guarantor or all of the Capital Stock of a Guarantor is sold (including by
issuance or otherwise) by the Company or any of its Restricted Subsidiaries in
a transaction constituting an Asset Disposition, and if (x) the Net Available
Proceeds from such Asset Dispositions are used in accordance with the covenant
described under "--Covenants--Limitation on Certain Asset Dispositions" or (y)
the Company delivers to the Trustee an Officers' Certificate to the effect
that the Net Available Proceeds from such Asset Disposition shall be used in
accordance with the covenant described under "--Covenants--Limitation on
Certain Asset Dispositions" and within the time limits specified by such
covenant, then such Guarantor (in the event of a sale or other disposition of
all or substantially all of its assets) shall be released and discharged from
its Guarantee obligations.
The obligations of each Guarantor under the Guarantee are subordinated to the
prior payment in full of all Senior Debt of such Guarantor on the same basis
as the obligations of the Company on the Notes are subordinated to Senior Debt
of the Company. The Guarantee will be pari passu in right of payment with any
other senior subordinated indebtedness of each Guarantor and senior to any
future Subordinated Indebtedness of each Guarantor.
Covenants
The Indenture contains, among others, the following covenants:
Limitation on Indebtedness
The Indenture provides that the Company will not, and will not permit any
of its Restricted Subsidiaries to, directly or indirectly, Incur any
Indebtedness (including Acquired Indebtedness), except: (i) Indebtedness
of the Company or any of its Restricted Subsidiaries, if immediately after
giving effect to the Incurrence of such Indebtedness and the receipt and
application of the net proceeds thereof, the Consolidated Cash Flow Ratio
of the Company for a year consisting of the four full fiscal quarters for
which quarterly or annual financial statements are available next preceding
the Incurrence of such Indebtedness (calculated on a pro forma basis in
accordance with Article 11 of Regulation S-X under the Securities Act or
any successor provision as if such Indebtedness had been Incurred on the
first day of such year) would be greater than 2.0 to 1.0; (ii)
Indebtedness of the Company and its Restricted Subsidiaries Incurred under
the Credit Agreement in an amount not to exceed $120.0 million in aggregate
principal amount less the amount of any such Indebtedness that is
permanently repaid or, without duplication, the amount by which commitments
thereunder are permanently reduced, in either case, from the proceeds of
Asset Dispositions (it being understood that the amount incurred under the
Credit Agreement may be increased as a result of the operation of clause
(xv) below); (iii) Indebtedness owed by the Company to any direct or
indirect Wholly Owned Subsidiary of the Company or Indebtedness owed by a
direct or indirect Restricted Subsidiary of the Company to the Company or a
direct or indirect Wholly Owned Subsidiary of the Company; provided,
however, upon either (I) the transfer or other disposition by such direct
or indirect Wholly Owned Subsidiary or the Company of any Indebtedness so
permitted under this clause (iii) to a Person other than the Company or
another direct or indirect Wholly Owned Subsidiary of the Company or (II)
the issuance (other than directors' qualifying shares), sale, transfer or
other disposition of shares of Capital Stock or other ownership interests
(including by consolidation or merger) of such direct or indirect Wholly
Owned Subsidiary to a Person other than the Company or another such Wholly
Owned Subsidiary of the Company, the provisions of this clause (iii) shall
no longer be applicable to such Indebtedness and such Indebtedness shall be
deemed to have been Incurred at the time of any such issuance, sale,
transfer or other disposition, as the case may be; (iv) Indebtedness of
the Company or any Restricted Subsidiary under any interest rate or foreign
currency hedge or exchange or other similar agreement to the extent entered
into to hedge any other Indebtedness permitted under the Indenture
(including the Notes); (v) Indebtedness Incurred to defer, renew, extend,
replace, refinance or refund, whether under any amendment, supplement or
otherwise (collectively for purposes of this clause (v) to "refund") any
Indebtedness outstanding on the Issue Date (including Indebtedness under
clause (xiv) below and Indebtedness under the Term Loan Facilities), any
Indebtedness Incurred under the prior clause (i) above or the Notes and the
Guarantees of the Notes; provided, however, that (I) such Indebtedness does
not exceed the principal amount (or accrual amount, if less) of
Indebtedness so refunded plus the amount of any premium required to be paid
in connection with such refunding pursuant to the terms of the Indebtedness
refunded or the amount of any premium reasonably determined by the issuer
of such Indebtedness as necessary to accomplish such refunding by means of
a tender offer, exchange offer, or privately negotiated repurchase, plus
the expenses of such issuer reasonably incurred in connection therewith and
(II)(A) in the case of any refunding of Indebtedness that is pari passu
with the Notes, such refunding Indebtedness is made pari passu with or
subordinate in right of payment to the Notes, and, in the case of any
refunding of Indebtedness that is subordinate in right of payment to the
Notes, such refunding Indebtedness is subordinate in right of payment to
the Notes on terms no less favorable to the holders of the Notes than those
contained in the Indebtedness being refunded, (B) in either case, the
refunding Indebtedness by its terms, or by the terms of any agreement or
instrument pursuant to which such Indebtedness is issued, does not have an
Average Life that is less than the remaining Average Life of the
Indebtedness being refunded and does not permit redemption or other
retirement (including pursuant to any required offer to purchase to be made
by the Company or a Restricted Subsidiary of the Company) of such
Indebtedness at the option of the holder thereof prior to the final stated
maturity of the Indebtedness being refunded, other than a redemption or
other retirement at the option of the holder of such Indebtedness
(including pursuant to a required offer to purchase made by the Company or
a Restricted Subsidiary of the Company) which is conditioned upon a change
of control of the Company pursuant to provisions substantially similar to
those contained in the Indenture described under "--Change of Control"
below and (C) any Indebtedness Incurred to refund any Indebtedness is
Incurred by the obligor on the Indebtedness being refunded or by the
Company; provided, further, that clause (II) of the immediately preceding
proviso shall not apply to any Indebtedness incurred to refinance term
loans under the Credit Agreement outstanding on the Issue Date or to
subsequent refinancings of any such refinancing Indebtedness; (vi)
commodity agreements of the Company or any of its Restricted Subsidiaries
to the extent entered into to protect the Company and its Restricted
Subsidiaries from fluctuations in the prices of raw materials used in their
businesses; (vii) Indebtedness of the Company under the Exchange Notes
and Indebtedness of the Guarantors under the Guarantees incurred in
accordance with the Indenture; (viii) Indebtedness outstanding on the
Issue Date; (ix) guarantees by the Company or its Restricted Subsidiaries
of Indebtedness otherwise permitted to be incurred hereunder; (x)
Indebtedness the net proceeds of which are applied to defease the Notes in
their entirety; (xi) Indebtedness of the Company or any of its
Subsidiaries that is an endorsement of bank drafts and similar negotiable
instruments for collection or deposit in the ordinary course of business;
(xii) Indebtedness incurred by the Company or any of its Restricted
Subsidiaries constituting reimbursement obligations with respect to letters
of credit issued in the ordinary course of business, including, without
limitation, letters of credit in respect of workers' compensation claims or
self-insurance, or other Indebtedness with respect to reimbursement type
obligations regarding workers' compensation claims or self-insurance and
obligations in respect of performance and surety bonds and completion
guarantees provided by the Company or any Restricted Subsidiary of the
Company in the ordinary course of business not in excess of $5.0 million;
(xiii) guarantees by the Guarantors of the 11 1/4% Notes pursuant to the 11
1/4% Notes Indenture; (xiv) Indebtedness of PureTec and its subsidiaries
outstanding on the Issue Date, including Indebtedness under any PS&T Notes
which are not tendered pursuant to and remain outstanding following the
PS&T Tender Offer; and (xv) Indebtedness of the Company or its Restricted
Subsidiaries not otherwise permitted to be Incurred pursuant to clauses (i)
through (xiv) above which, together with any other outstanding Indebtedness
Incurred pursuant to this clause (xv), has an aggregate principal amount
not in excess of $40.0 million at any time outstanding, which Indebtedness
may be incurred under the Credit Agreement or otherwise.
Limitation on Restricted Payments
The Indenture provides that the Company will not, and will not permit any of
its Restricted Subsidiaries to, directly or indirectly, (i) declare or pay any
dividend, or make any distribution of any kind or character (whether in cash,
property or securities), on or in respect of any class of the Capital Stock of
the Company or any of its Restricted Subsidiaries excluding any (x) dividends
or distributions payable solely in shares of Capital Stock of the Company
(other than Disqualified Stock) or in options, warrants or other rights to
acquire Capital Stock of the Company (other than Disqualified Stock), or (y)
in the case of any Restricted Subsidiary of the Company, dividends or
distributions payable to the Company or a Restricted Subsidiary of the Company
or to the extent payable on a pro rata basis to all holders of Capital Stock
of such Restricted Subsidiary, (ii) purchase, redeem, or otherwise acquire or
retire for value shares of Capital Stock of the Company or any of its
Restricted Subsidiaries, any options, warrants or rights to purchase or
acquire shares of Capital Stock of the Company or any of its Restricted
Subsidiaries or any securities convertible or exchangeable into shares of
Capital Stock of the Company or any of its Restricted Subsidiaries, excluding
any such shares of Capital Stock, options, warrants, rights or securities
which are owned by the Company or a Restricted Subsidiary of the Company,
(iii) make any Investment in (other than a Permitted Investment), or make any
payment on a guarantee of any obligation of, any Person, other than the
Company or a direct or indirect Wholly Owned Subsidiary of the Company, or
(iv) redeem, defease, repurchase, retire or otherwise acquire or retire for
value, prior to any scheduled maturity, repayment or sinking fund payment,
Subordinated Indebtedness (each of the transactions described in clauses (i)
through (iv) (other than any exception to any such clause) being a "Restricted
Payment"), if at the time thereof: (1) a Default or an Event of Default shall
have occurred and be continuing, or (2) upon giving effect to such Restricted
Payment, the Company could not Incur at least $1.00 of additional Indebtedness
pursuant to the terms of the Indenture described in clause (i) of
"--Limitation on Indebtedness" above, or (3) upon giving effect to such
Restricted Payment, the aggregate of all Restricted Payments made on or after
April 4, 1997 exceeds the sum of: (a) 50% of cumulative Consolidated Net
Income of the Company (or, in the case cumulative Consolidated Net Income of
the Company shall be negative, less 100% of such deficit) since April 4, 1997,
plus (b) 100% of the aggregate net proceeds received after April 4, 1997,
including the fair market value of property other than cash (determined in good
faith by the Board of Directors of the Company as evidenced by a resolution of
such Board of Directors filed with the Trustee) from the issuance of, or
equity contribution with respect to, Capital Stock (other than Disqualified
Stock) of the Company and warrants, rights or options on Capital Stock (other
than Disqualified Stock) of the Company (other than in respect of any such
issuance to a Restricted Subsidiary of the Company) and the principal amount of
Indebtedness of the Company or any of its Restricted Subsidiaries that has
been converted into or exchanged for Capital Stock of the Company which
Indebtedness was Incurred after April 4, 1997; plus (c) $7,325,000; plus (d)
100% of the aggregate after-tax net cash proceeds, of the sale or other
disposition of any Investment constituting a Restricted Payment made after
April 4, 1997; provided that any gain on the sale or disposition to the extent
included in this clause (d) shall not be included in determining Consolidated
Net Income for purposes of clause (a) above; provided, further, that amounts
included in this clause (d) shall not exceed the Net Investment by the Company
in the asset so sold or disposed.
The foregoing provision will not be violated by (i) any dividend on any class
of Capital Stock of the Company or any of its Restricted Subsidiaries paid
within 60 days after the declaration thereof if, on the date when the dividend
was declared, the Company or such Restricted Subsidiary, as the case may be,
could have paid such dividend in accordance with the provisions of the
Indenture, (ii) the renewal, extension, refunding or refinancing of any
Indebtedness otherwise permitted pursuant to the terms of the Indenture
described in clause (v) of "--Limitation on Indebtedness" above, (iii) the
exchange or conversion of any Indebtedness of the Company or any of its
Restricted Subsidiaries for or into Capital Stock of the Company (other than
Disqualified Stock), (iv) so long as no Default or Event of Default has
occurred and is continuing, any Investment made with the proceeds of a
substantially concurrent sale (other than in respect of any issuance to a
Restricted Subsidiary of the Company) for cash of Capital Stock of the Company
(other than Disqualified Stock); provided, however, that the proceeds of such
sale of Capital Stock, to the extent used in any such Investment, shall not be
(and have not been) included in subclause (b) of clause (3) of the preceding
paragraph, (v) the redemption, repurchase, retirement or other acquisition of
any Capital Stock of the Company in exchange for or out of the net cash
proceeds of a substantially concurrent sale (other than to a Restricted
Subsidiary of the Company) of Capital Stock of the Company (other than
Disqualified Stock); provided, however, that the proceeds of such sale of
Capital Stock, to the extent used for such redemption, repurchase, retirement
or other acquisition or retirement, shall not be (and have not been) included
in subclause (b) of clause (3) of the preceding paragraph, (vi) payments made
to purchase, redeem or otherwise acquire or retire for value shares of Capital
Stock of the Company or any of its Restricted Subsidiaries at no more than
fair market value (determined in good faith by the Board of Directors of the
Company as evidenced by a resolution of such Board of Directors filed with the
Trustee) from present and former employees and directors of the Company or any
such Restricted Subsidiary and present and former limited partners of
Tekni-Plex Partnership (in each case other than F. Patrick Smith, J. Andrew
McWethy, Barry A. Solomon and Stephen A. Tuttle) in an amount not in excess of
up to $4.0 million for each fiscal year and $10.0 million in the aggregate
commencing with the fiscal year ended June 27, 1997, (vii) all payments, not
exceeding $600,000 in the aggregate, for each fiscal year, required to be made
to Tekni-Plex Partnership, MST/TP Partners, L.P., MST Management, L.P., MST
Partners L.P. or their respective Affiliates or partners under the terms of
existing agreements and notes, (viii) so long as no Default or Event of
Default has occurred and is continuing, the redemption, repurchase or
retirement of Subordinated Indebtedness of the Company in exchange for, by
conversion into, or out of the net proceeds of, a substantially concurrent
sale or incurrence of Subordinated Indebtedness (other than any Indebtedness
owed to a Subsidiary) of the Company that is contractually subordinated in
right of payment to the Notes to at least the same extent, and which has an
Average Life at least as long, in each case, as the subordinated Indebtedness
being redeemed, repurchased or retired, (ix) so long as no Default or Event of
Default has occurred and is continuing, Investments not otherwise permitted
pursuant to the clauses above up to $20.0 million in the aggregate from and
after April 4, 1997, (x) so long as no Default or Event of Default has
occurred and is continuing, Restricted Payments not otherwise permitted
pursuant to the clauses above up to $5.0 million in the aggregate from and
after April 4, 1997, (xi) any Permitted Investment and (xii) so long as no
Default or Event of Default has occurred and is continuing, Investments in any
Person the primary business of which is located outside the United States and
is related, ancillary or complementary to the business of the Company or its
Restricted Subsidiaries, provided that the aggregate amount of Investments
pursuant to this clause does not exceed $15 million. Each Restricted Payment
described in clauses (i) (to the extent not already taken into account for
purposes of computing the aggregate amount of all Restricted Payments pursuant
to clause (3) above), (iv), (vi), (vii), (ix), (x) and (xii) of the previous
sentence shall be taken into account for purposes of computing the aggregate
amount of all Restricted Payments pursuant to clause (3) of the preceding
paragraph.
The Indenture provides that for purposes of this covenant, (i) an "Investment"
shall be deemed to have been made at the time any Restricted Subsidiary is
designated as an Unrestricted Subsidiary in an amount (proportionate to the
Company's equity interest in such Subsidiary) equal to the net worth of such
Restricted Subsidiary at the time that such Restricted Subsidiary is
designated as an Unrestricted Subsidiary; (ii) at any date the aggregate of
all Restricted Payments made as Investments since April 4, 1997 shall exclude
and be reduced by an amount (proportionate to the Company's equity interest in
such Subsidiary) equal to the net worth of an Unrestricted Subsidiary at the
time that such Unrestricted Subsidiary is designated a Restricted Subsidiary,
not to exceed, in the case of any such redesignation of an Unrestricted
Subsidiary as a Restricted Subsidiary, the amount of Investments previously
made by the Company and the Restricted Subsidiaries in such Unrestricted
Subsidiary (in each case (i) and (ii) "net worth" to be calculated based upon
the fair market value of the assets of such Subsidiary as of any such date of
designation); and (iii) any property transferred to or from an Unrestricted
Subsidiary shall be valued at its fair market value at the time of such
transfer.
Limitations Concerning Distributions and Transfers by Restricted Subsidiaries
The Indenture provides that the Company will not, and will not permit any of
its Restricted Subsidiaries to, directly or indirectly, create or otherwise
cause or suffer to exist any consensual encumbrance or restriction on the
ability of any Restricted Subsidiary of the Company to (i) pay, directly or
indirectly, dividends or make any other distributions in respect of its
Capital Stock or pay any Indebtedness or other obligation owed to the Company
or any Restricted Subsidiary of the Company, (ii) make loans or advances to
the Company or any Restricted Subsidiary of the Company or (iii) transfer any
of its property or assets to the Company or any Restricted Subsidiary of the
Company, except for such encumbrances or restrictions existing under or by
reason of (a) any agreement in effect on the Issue Date as any such agreement
is in effect on such date, (b) the Credit Agreement, (c) any agreement
relating to any Indebtedness Incurred by such Restricted Subsidiary prior to
the date on which such Restricted Subsidiary was acquired by the Company and
outstanding on such date and not Incurred in anticipation or contemplation of
becoming a Restricted Subsidiary and provided such encumbrance or restriction
shall not apply to any assets of the Company or its Restricted Subsidiaries
other than such Restricted Subsidiary, (d) customary provisions contained in
an agreement which has been entered into for the sale or disposition of all or
substantially all of the Capital Stock or assets of a Restricted Subsidiary;
provided, however, that such encumbrance or restriction is applicable only to
such Restricted Subsidiary or assets, (e) an agreement effecting a renewal,
exchange, refunding, amendment or extension of Indebtedness Incurred pursuant
to an agreement referred to in clause (a) or (c) above; provided, however,
that the provisions contained in such renewal, exchange, refunding, amendment
or extension agreement relating to such encumbrance or restriction are no more
restrictive in any material respect than the provisions contained in the
agreement that is the subject thereof in the reasonable judgment of the Board
of Directors of the Company as evidenced by a resolution of such Board of
Directors filed with the Trustee, (f) the Indenture, (g) applicable law, (h)
customary provisions restricting subletting or assignment of any lease
governing any leasehold interest of any Restricted Subsidiary of the Company,
(i) restrictions contained in Indebtedness permitted to be incurred subsequent
to the Issue Date pursuant to the provisions of the covenant described under
"--Limitation on Indebtedness"; provided that any such restrictions are
ordinary and customary with respect to the type of Indebtedness incurred, (j)
purchase money obligations for property acquired in the ordinary course of
business that impose restrictions of the type referred to in clause (iii) of
this covenant or (k) restrictions of the type referred to in clause (iii) of
this covenant contained in security agreements securing Indebtedness of a
Restricted Subsidiary of the Company to the extent that such Liens were
otherwise incurred in accordance with "--Limitation on Liens" below and
restrict the transfer of property subject to such agreements.
Limitation on Liens
The Indenture provides that the Company will not, and will not permit any of
its Restricted Subsidiaries to, incur any Lien on or with respect to any
property or assets of the Company or such Restricted Subsidiary owned on the
Issue Date or thereafter acquired or on the income or profits thereof to
secure Indebtedness, without making, or causing any such Restricted Subsidiary
to make, effective provision for securing the Notes and all other amounts due
under the Indenture (and, if the Company shall so determine, any other
Indebtedness of the Company or such Restricted Subsidiary, including
Subordinated Indebtedness; provided, however, that Liens securing the Notes
and any Indebtedness pari passu with the Notes are senior to such Liens
securing such Subordinated Indebtedness) equally and ratably with such
Indebtedness or, in the event such Indebtedness is subordinate in right of
payment to the Notes or the Guarantee, prior to such Indebtedness, as to such
property or assets for so long as such Indebtedness shall be so secured.
The foregoing restrictions shall not apply to (i) Liens existing on the Issue
Date securing Indebtedness existing on the Issue Date; (ii) Liens securing
Senior Debt (including Liens securing Indebtedness outstanding under the Credit
Agreement) and any guarantees thereof to the extent that the Indebtedness
secured thereby is permitted to be incurred under the covenant described under
"--Limitation on Indebtedness" above; provided, however, that Indebtedness
under the Credit Agreement shall be deemed not to have been Incurred in
violation of such provisions for purposes of this clause (ii) if the holder(s)
of such Indebtedness or their agent or representative shall have received a
representation from the Company to the effect that the Incurrence of such
Indebtedness does not violate such provision; (iii) Liens securing only the
Notes and the Guarantees; (iv) Liens in favor of the Company or a Guarantor;
(v) Liens to secure Indebtedness Incurred for the purpose of financing all or
any part of the purchase price or the cost of construction or improvement of
the property (or any other capital expenditure financing) subject to such
Liens; provided, however, that (a) the aggregate principal amount of any
Indebtedness secured by such a Lien does not exceed 100% of such purchase
price or cost, (b) such Lien does not extend to or cover any other property
other than such item of property and any improvements on such item, (c) the
Indebtedness secured by such Lien is Incurred by the Company within 180 days
of the acquisition, construction or improvement of such property and (d) the
Incurrence of such Indebtedness is permitted by the provisions of the
Indenture described under "--Limitation on Indebtedness" above; (vi) Liens on
property existing immediately prior to the time of acquisition thereof (and
not created in anticipation or contemplation of the financing of such
acquisition); (vii) Liens on property of a Person existing at the time such
Person is acquired or merged with or into or consolidated with the Company or
any such Restricted Subsidiary (and not created in anticipation or
contemplation thereof); (viii) Liens to secure Indebtedness Incurred to
extend, renew, refinance or refund (or successive extensions, renewals,
refinancings or refundings), in whole or in part, any Indebtedness secured by
Liens referred to in clauses (i)-(vii), (ix)-(xii) and (xiv) of this paragraph
so long as such Liens do not extend to any other property and the principal
amount of Indebtedness so secured is not increased except for the amount of any
premium required to be paid in connection with such renewal, refinancing or
refunding pursuant to the terms of the Indebtedness renewed, refinanced or
refunded or the amount of any premium reasonably determined by the Company as
necessary to accomplish such renewal, refinancing or refunding by means of a
tender offer, exchange offer or privately negotiated repurchase, plus the
expenses of the issuer of such Indebtedness reasonably incurred in connection
with such renewal, refinancing or refunding; (ix) 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 (x) Liens securing a tax,
assessment or other governmental charge or levy or the claim of a materialman,
mechanic, carrier, warehouseman or landlord for labor, materials, supplies or
rentals incurred in the ordinary course or business; (xi) Liens consisting of a
deposit or pledge made in the ordinary course of business in connection with,
or to secure payment of, obligations under worker's compensation, unemployment
insurance or similar legislation; (xii) Liens arising pursuant to an order of
attachment, distraint or similar legal process arising in connection with
legal proceedings; (xiii) Liens incurred in the ordinary course of business
securing assets not having a fair market value in excess of $500,000 and (xiv)
Liens in favor of the trustee under the 11 1/4% Notes Indenture as provided
for in the 11 1/4% Notes Indenture on money or property held or collected by
such trustee in its capacity as trustee under the 11 1/4% Notes Indenture.
Limitation on Certain Asset Dispositions
The Indenture provides that the Company will not, and will not permit any of
its Restricted Subsidiaries to, directly or indirectly, make one or more Asset
Dispositions unless: (i) the Company or such Restricted Subsidiary, as the case
may be, receives consideration for such Asset Disposition at least equal to
the fair market value of the assets sold or disposed of as determined by the
Board of Directors of the Company in good faith and evidenced by a resolution
of such Board of Directors filed with the Trustee; (ii) not less than 75% of
the consideration for the disposition consists of (a) cash or readily
marketable cash equivalents or the assumption of Indebtedness (other than
non-recourse Indebtedness or any Subordinated Indebtedness) of the Company or
such Restricted Subsidiary or other obligations relating to such assets (and
release of the Company or such Restricted Subsidiary from all liability on the
Indebtedness or other obligations assumed) or (b) assets which constitute or
are part of businesses which are related to the business of the Company or its
Restricted Subsidiaries as of the Issue Date or which assets consist of the
issued and outstanding Capital Stock of a person (which becomes a Restricted
Subsidiary as a result of the transaction) the assets of which are principally
comprised of such assets; and (iii) all Net Available Proceeds, less any
amounts invested within 360 days of such Asset Disposition in assets related
to the business of the Company or its Restricted Subsidiaries (including in
the Capital Stock of another Person (other than any Person that is a
Restricted Subsidiary of the Company immediately prior to such investment);
provided, however, that immediately after giving effect to any such investment
in Capital Stock (and not prior thereto) such Person shall be a Restricted
Subsidiary of the Company), are applied, on or prior to the 360th day (or
390th day in the case of clause (y) below) after such Asset Disposition,
unless and to the extent that the Company shall determine to make an Offer to
Purchase, (x) to the permanent reduction and prepayment of any Senior Debt of
the Company or any of its Subsidiaries then outstanding (including a permanent
reduction of commitments in respect thereof) or (y) to the repurchase of the
Company's 11 1/4% Notes pursuant to the 11 1/4% Notes Indenture. Any Net
Available Proceeds from any Asset Disposition which is subject to the
immediately preceding sentence that are not applied as provided in the
immediately preceding sentence shall be used promptly after the expiration of
the 390th day after such Asset Disposition, or promptly after the Company
shall have earlier determined to not apply any Net Available Proceeds
therefrom as provided in clause (iii) of the immediately preceding sentence, to
make an Offer to Purchase outstanding Notes at a purchase price in cash equal
to 100% of their principal amount plus accrued interest to the Purchase Date.
Notwithstanding the foregoing, the Company may defer making any Offer to
Purchase outstanding Notes until there are aggregate unutilized Net Available
Proceeds from Asset Dispositions otherwise subject to the two immediately
preceding sentences equal to or in excess of $15.0 million (at which time, the
entire unutilized Net Available Proceeds from Asset Dispositions otherwise
subject to the two immediately preceding sentences, and not just the amount in
excess of $15.0 million, shall be applied as required pursuant to this
paragraph). Any remaining Net Available Proceeds following the completion of
the required Offer to Purchase may be used by the Company for any other
purpose (subject to the other provisions of the Indenture) and the amount of
Net Available Proceeds then required to be otherwise applied in accordance
with this covenant shall be reset to zero, subject to any subsequent Asset
Disposition. These provisions will not apply to a transaction consummated in
compliance with the provisions of the Indenture described under "--Mergers,
Consolidations and Certain Sales of Assets" below.
In the event that the Company makes an Offer to Purchase the Notes, the
Company shall comply with any applicable securities laws and regulations,
including any applicable requirements of Section 14(e) of, and Rule 14e-1
under, the Exchange Act.
Limitation on Senior Subordinated Indebtedness
The Indenture provides that the Company will not (i) directly or indirectly
Incur any Indebtedness that by its terms would expressly rank senior in right
of payment to the Notes and expressly rank subordinate in right of payment to
any Senior Debt and (ii) permit a Guarantor to, and no Guarantor will,
directly or indirectly Incur any Indebtedness that by its terms would
expressly rank senior in right of payment to the Guarantee of such Guarantor
and expressly rank subordinate in right of payment to any Senior Debt of such
Guarantor.
Limitation on Issuance and Sale of Capital Stock of Restricted Subsidiaries
The Indenture provides that the Company will not, and will not permit any of
its Restricted Subsidiaries to, (a) transfer, convey, sell or otherwise
dispose of any shares of Capital Stock of any Restricted Subsidiary of the
Company (other than to the Company or a Wholly Owned Subsidiary of the
Company), except that the Company and any such Restricted Subsidiary may, in
any single transaction, sell all, but not less than all, of the issued and
outstanding Capital Stock of any such Restricted Subsidiary to any Person,
subject to complying with the provisions of the Indenture described under
"--Limitation on Certain Asset Dispositions" above and (b) issue shares of
Capital Stock of a Restricted Subsidiary of the Company (other than directors'
qualifying shares), or securities convertible into, or warrants, rights or
options to subscribe for or purchase shares of, Capital Stock of a Restricted
Subsidiary of the Company to any Person other than to the Company or a Wholly
Owned Subsidiary of the Company and other than to the holders of the Capital
Stock of such Restricted Subsidiary made pro rata to the relative amounts of
such Capital Stock held by such holders.
Limitation on Transactions with Affiliates and Related Persons
The Indenture provides that the Company will not, and will not permit any of
its Restricted Subsidiaries to, enter into directly or indirectly any
transaction with any of their respective Affiliates or Related Persons (other
than the Company or a Restricted Subsidiary of the Company), including,
without limitation, the purchase, sale, lease or exchange of property, the
rendering of any service, or the making of any guarantee, loan, advance or
Investment, either directly or indirectly, involving aggregate consideration
in excess of $2.0 million unless a majority of the disinterested directors of
the Board of Directors of the Company determines, in its good faith judgment
evidenced by a resolution of such Board of Directors filed with the Trustee,
that the terms of such transaction are at least as favorable as the terms that
could be obtained by the Company or such Restricted Subsidiary, as the case
may be, in a comparable transaction made on an arm's-length basis between
unaffiliated parties; provided, however, that if the aggregate consideration
is in excess of $15.0 million the Company shall also obtain, prior to the
consummation of the transaction, the favorable opinion as to the fairness of
the transaction to the Company or such Restricted Subsidiary, from a financial
point of view from an independent financial advisor. The provisions of this
covenant shall not apply to (i) transactions permitted by the provisions of
the Indenture described above under the caption "--Limitation on Restricted
Payments" above and (ii) reasonable fees and compensation paid to, and
indemnity provided on behalf of, officers, directors and employees of the
Company and its Restricted Subsidiaries as determined in good faith by the
Board of Directors or authorized executive officers, as the case may be, of
the Company.
Change of Control
Within 30 days following the date of the consummation of a transaction
resulting in a Change of Control, the Company will commence an Offer to
Purchase all outstanding Notes at a purchase price in cash equal to 101% of
their principal amount plus accrued interest to the Purchase Date. Such Offer
to Purchase will be consummated not earlier than 30 days and not later than 60
days after the commencement thereof. Each holder shall be entitled to tender
all or any portion of the Notes owned by such holder pursuant to the Offer to
Purchase, subject to the requirement that any portion of a Note tendered must
bear an integral multiple of $1,000 principal amount. A "Change of Control"
will be deemed to have occurred in the event that (whether or not otherwise
permitted by the Indenture), after the Issue Date (a) any Person or any
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" (as defined in Rule 13d-3 under the Exchange Act, or any
successor provision thereto), directly or indirectly, at least (i) 50% of the
voting power of the outstanding Voting Stock of the Company or (ii) 40% of the
voting power of the outstanding Voting Stock of the Company and in the case of
clause (ii) the Permitted Holders own less than such Person or Group (in doing
the "own less than" comparison in this clause (ii), 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); (b) any sale, lease or
other transfer (in one transaction or a series of related transactions) is
made by the Company or any of its Restricted Subsidiaries of all or
substantially all of the consolidated assets of the Company and its Restricted
Subsidiaries to any Person; (c) the Company consolidates with or merges with
or into another Person or any Person consolidates with, or merges with or
into, the Company, in any such event pursuant to a transaction in which
immediately after the consummation thereof Persons owning a majority of the
Voting Stock of the Company immediately prior to such consummation shall cease
to own a majority of the Voting Stock of the Company or the surviving entity
if other than the Company; (d) Continuing Directors cease to constitute at
least a majority of the Board of Directors of the Company; or (e) the
stockholders of the Company approve any plan or proposal for the liquidation or
dissolution of the Company. In no event would the sale of common stock of the
Company to an underwriter or a group of underwriters in privity of contract
with the Company (or anybody in privity of contract 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 the outstanding Voting Stock of the Company by a Person
or any Group unless such common stock is not held in an investment account in
which case the investment account would be treated without giving effect to
the foregoing part of this sentence.
The Indenture acknowledges that, prior to the mailing of a notice to each
holder regarding the Offer to Purchase, but in any event within 30 days
following the date on which a Change of Control occurs, the Company will be
obligated under the Credit Agreement as in effect on the Issue Date to (i)
repay in full all Indebtedness under the Credit Agreement (and terminate all
such commitments) or offer to repay in full all such Indebtedness (and
terminate all such commitments) and to repay the Indebtedness owed to (and
terminate the commitments of) each lender which has accepted such offer or
(ii) obtain the requisite consents under the Credit Agreement to permit the
repurchase of the Notes as provided below. The Company will first comply with
its obligations described in the preceding sentence before it will be required
to offer to repurchase Notes pursuant to the provisions described below,
provided that nothing in this paragraph shall eliminate the obligation of the
Company to consummate an Offer to Purchase the Notes within 90 days of the
consummation of a transaction resulting in a Change of Control.
In the event that the Company makes an Offer to Purchase the Notes, the
Company shall comply with any applicable securities laws and regulations,
including any applicable requirements of Section 14(e) of, and Rule 14e-1
under, the Exchange Act.
With respect to the sale of assets referred to in the definition of "Change of
Control," the phrase "all or substantially all" of the assets of the Company
will likely be interpreted under applicable law and will be dependent upon
particular facts and circumstances. As a result, there may be a degree of
uncertainty in ascertaining whether a sale or transfer of "all or
substantially all" of the assets of the Company has occurred. In addition, no
assurances can be given that the Company will be able to acquire Notes
tendered upon the occurrence of a Change of Control. The ability of the
Company to pay cash to the holders of Notes upon a Change of Control may be
limited by its then existing financial resources. The Credit Agreement will
contain certain covenants prohibiting, or requiring waiver or consent of the
lenders thereunder prior to, the repurchase of the Notes upon a Change of
Control and future debt agreements of the Company may provide the same. If the
Company does not obtain such waiver or consent to repay such Indebtedness, the
Company will remain prohibited from repurchasing the Notes. In such event, the
Company's failure to purchase tendered Notes would constitute an Event of
Default under the Indenture (without any further grace period) which would in
turn constitute a default under the Credit Agreement and possibly other
Indebtedness. If such a cross-default leads to an acceleration of the
obligations under the Credit Agreement or any other Senior Debt, the payment
on the Notes would be effectively subordinated to any such Senior Debt. In
addition, the 11 1/4% Notes Indenture contains provisions relating to a
Change of Control substantially identical to those in the Indenture. As a
result, upon a Change of Control under the Indenture, a Change of Control
under the 11 1/4% Notes Indenture would also have occurred, and the Company
would be required to make an offer to purchase the 11 1/4% Notes as well as
the Notes. None of the provisions relating to a repurchase upon a Change of
Control are waivable by the Board of Directors of the Company or the Trustee.
The foregoing provisions will not prevent the Company from entering into
transactions of the types described above with management or their affiliates.
In addition, such provisions may not necessarily afford the holders of the
Notes protection in the event of a highly leveraged transaction, including a
reorganization, restructuring, merger or similar transaction involving the
Company that may adversely affect the holders because such transactions may
not involve a shift in voting power or beneficial ownership, or even if they
do, may not involve a shift of the magnitude required under the definition of
Change of Control to trigger the provisions. Nonetheless, such provisions may
have the effect of deterring certain mergers, tender offers, takeover attempts
or similar transactions by increasing the cost of such a transaction and may
limit the Company's ability to obtain additional equity financing in the
future.
Future Guarantors
The Indenture provides that the Company shall not create or acquire, nor
permit any of its Domestic Restricted Subsidiaries to create or acquire, any
Domestic Restricted Subsidiary after the Issue Date unless, at the time such
Domestic Restricted Subsidiary has either assets or stockholder's equity in
excess of $25,000, such Domestic Restricted Subsidiary (a) executes and
delivers to the Trustee a supplemental indenture in form reasonably
satisfactory to the Trustee pursuant to which such Domestic Restricted
Subsidiary shall unconditionally guarantee all of the Company's obligations
under the Notes and the Indenture on the terms set forth in the Indenture and
(b) delivers to the Trustee an opinion of counsel that such supplemental
indenture has been duly authorized, executed and delivered by such Domestic
Restricted Subsidiary and constitutes a legal, valid, binding and enforceable
obligation of such Domestic Restricted Subsidiary.
Provision of Financial Information
Whether or not the Company is subject to Section 13(a) or 15(d) of the
Exchange Act, or any successor provision thereto, the Company shall file with
the Commission the annual reports, quarterly reports and other documents which
the Company would have been required to file with the Commission pursuant to
such Section 13(a) or 15(d) or any successor provision thereto if the Company
were so required, such documents to be filed with the Commission on or prior
to the respective dates (the "Required Filing Dates") by which the Company
would have been required so to file such documents if the Company were so
required. The Company shall also in any event (a) within 15 days of each
Required Filing Date (i) transmit by mail to all holders of Notes, as their
names and addresses appear in the Note Register, without cost to such holders,
and (ii) file with the Trustee, copies of the annual reports, quarterly
reports and other documents which the Company is required to file with the
Commission pursuant to the preceding sentence, and (b) if, notwithstanding the
preceding sentence, filing such documents by the Company with the Commission
is not permitted under the Exchange Act, promptly upon written request supply
copies of such documents to any prospective holder of Notes.
Mergers, Consolidations and Certain Sales of Assets
The Company will not consolidate or merge with or into any Person, or sell,
assign, lease, convey or otherwise dispose of (or cause or permit any
Restricted Subsidiary of the Company to consolidate or merge with or into any
Person or sell, assign, lease, convey or otherwise dispose of) all or
substantially all of the Company's assets (determined on a consolidated basis
for the Company and its Restricted Subsidiaries), whether as an entirety or
substantially an entirety in one transaction or a series of related
transactions, including by way of liquidation or dissolution, to any Person
unless, in each such case: (i) the entity formed by or surviving any such
consolidation or merger (if other than the Company or such Restricted
Subsidiary, as the case may be), or to which such sale, assignment, lease,
conveyance or other disposition shall have been made (the "Surviving Entity"),
is a corporation organized and existing under the laws of the United States,
any state thereof or the District of Columbia; (ii) if there is a Surviving
Entity, the Surviving Entity assumes by supplemental indenture all of the
obligations of the Company (or in the case a Restricted Subsidiary is the
Surviving Entity, the obligations of such Restricted Subsidiary) on the Notes
and under the Indenture; (iii) immediately after giving effect to such
transaction and the use of any net proceeds therefrom on a pro forma basis,
the Company or the Surviving Entity, as the case may be, (A) shall have a
Consolidated Net Worth equal to or greater than the Consolidated Net Worth of
the Company immediately prior to such transaction and (B) could Incur at least
$1.00 of Indebtedness pursuant to clause (i) of the provisions of the
Indenture described under "--Limitation on Indebtedness" above; (iv)
immediately before and after giving effect to such transaction and treating
any Indebtedness which becomes an obligation of the Company or any of its such
Restricted Subsidiaries as a result of such transaction as having been
incurred by the Company or such Restricted Subsidiary, as the case may be, at
the time of the transaction, no Default or Event of Default shall have
occurred and be continuing; and (v) if, as a result of any such transaction,
property or assets of the Company or a Restricted Subsidiary would become
subject to a Lien not excepted from the provisions of the Indenture described
under "--Limitation on Liens" above, the Company, Restricted Subsidiary or the
Surviving Entity, as the case may be, shall have secured the Notes as required
by said covenant. The provisions of this paragraph shall not apply to any
merger of a Restricted Subsidiary of the Company with or into the Company or a
Wholly Owned Subsidiary of the Company or any transaction pursuant to which a
Guarantor, is to be released in accordance with the terms of the Guarantee and
the Indenture in connection with any transaction complying with the provisions
of the Indenture described under "--Limitation on Certain Asset Dispositions"
above.
Termination of Certain Covenants if Notes Rated Investment Grade
Notwithstanding the foregoing, the Company's obligation to comply with the
provisions of the Indenture described above under the captions
"--Covenants--Limitation on Indebtedness," "--Limitation on Restricted
Payments," "--Limitations Concerning Distributions and Transfers by Restricted
Subsidiaries," "--Limitation on Certain Asset Dispositions," "Limitation on
Issuance and Sale of Capital Stock of Restricted Subsidiaries" and
"--Limitation on Transactions with Affiliates and Related Persons" will
terminate if the Notes are rated Investment Grade.
Events of Default
The following will be Events of Default under the Indenture: (a) failure to
pay principal of (or premium, if any, on) any Note when due (whether or not
prohibited by the provisions of the Indenture described under "--Ranking"
above); (b) failure to pay any interest on any Note when due, and the default
continues for 30 days (whether or not prohibited by the provisions of the
Indenture described under "--Ranking" above); (c) default in the payment of
principal of and interest on Notes required to be purchased pursuant to an
Offer to Purchase as described under "--Covenants--Change of Control" and
"--Covenants--Limitation on Certain Asset Dispositions" above when due and
payable (whether or not prohibited by the provisions of the Indenture
described under "--Ranking" above); (d) failure to perform or comply with any
of the provisions described under "--Covenants--Mergers, Consolidations and
Certain Sales of Assets" above; (e) failure to perform any other covenant or
agreement of the Company under the Indenture or the Notes and the default
continues for 60 days after written notice to the Company by the Trustee or
holders of at least 25% in aggregate principal amount of outstanding Notes;
(f) default under the terms of one or more instruments evidencing or securing
Indebtedness of the Company or any of its Restricted Subsidiaries having an
outstanding principal amount of $15 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; (g) the rendering of a final judgment or judgments (not
subject to appeal) against the Company or any of its Restricted Subsidiaries
in an amount of $5 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;
(h) certain events of bankruptcy, insolvency or reorganization affecting the
Company or any of its Material Subsidiaries; and (i) any Guarantee 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 its liability under the Guarantee
(other than by reason of a release of such Guarantor from the Guarantee in
accordance with the terms of the Indenture and the Guarantee).
If an Event of Default (other than an Event of Default with respect to the
Company described in clause (h) of the preceding paragraph) shall occur and be
continuing, either the Trustee or the holders of at least 25% in aggregate
principal amount of the outstanding Notes may accelerate the maturity of all
Notes; provided, however, that after such acceleration, but before a judgment
or decree based on acceleration, the holders of a majority in aggregate
principal amount of outstanding Notes may, under certain circumstances,
rescind and annul such acceleration if all Events of Default, other than the
non-payment of accelerated principal, have been cured or waived as provided in
the Indenture; and provided, further, 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 (h) above), the Notes
shall not become due and payable until the earlier to occur of (x) 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 (y) the acceleration
of any Indebtedness under the Credit Agreement. If an Event of Default
specified in clause (h) of the preceding paragraph with respect to the Company
occurs, the outstanding Notes will ipso facto become immediately due and
payable without any declaration or other act on the part of the Trustee or any
holder. For information as to waiver of defaults, see "--Modification and
Waiver."
The Indenture provides that the Trustee shall, within 30 days after the
occurrence of any Default or Event of Default with respect to the Notes, give
the holders thereof notice of all uncured Defaults or Events of Default known
to it; provided, however, that, except in the case of an Event of Default or a
Default in payment with respect to the Notes or a Default or Event of Default
in complying with "--Covenants--Mergers, Consolidations and Certain Sales of
Assets," the Trustee shall be protected in withholding such notice if and so
long as the Board of Directors or responsible officers of the Trustee in good
faith determine that the withholding of such notice is in the interest of the
holders of the Notes.
No holder of any Note will have any right to institute any proceeding with
respect to the Indenture or for any remedy thereunder, unless such holder
shall have previously given to the Trustee written notice of a continuing
Event of Default and unless the holders of at least 25% in aggregate principal
amount of the outstanding Notes shall have made written request, and offered
reasonable indemnity, to the Trustee to institute such proceeding as Trustee,
and the Trustee shall not have received from the holders of a majority in
aggregate principal amount of the outstanding Notes a direction inconsistent
with such request and shall have failed to institute such proceeding within 60
days. However, such limitations do not apply to a suit instituted by a holder
of a Note for enforcement of payment of the principal of and premium, if any,
or interest on such Note on or after the respective due dates expressed in
such Note.
The Company will be required to furnish to the Trustee annually a statement as
to its performance of certain of its obligations under the Indenture and as to
any default in such performance.
Satisfaction and Discharge of Indenture; Defeasance
The Company may terminate its substantive obligations and the substantive
obligations of the Guarantors in respect of the Notes and the Guarantees by
delivering all outstanding Notes to the Trustee for cancellation and paying
all sums payable by the Company on account of principal of, premium, if any,
and interest on all Notes or otherwise. In addition to the foregoing, the
Company may, provided that no Default or Event of Default has occurred and is
continuing or would arise therefrom (or, with respect to a Default or Event of
Default specified in clause (h) of "--Events of Default" above, any time on or
prior to the 91st calendar day after the date of such deposit (it being
understood that this condition shall not be deemed satisfied until after such
91st day)) and provided that no default under any Senior Debt would result
therefrom, terminate its substantive obligations and the substantive
obligations of the Guarantors in respect of the Notes and the Guarantees
(except for the Company's obligation to pay the principal of (and premium, if
any, on) and the interest on the Notes and such Guarantors' guarantee thereof)
by (i) depositing with the Trustee, under the terms of an irrevocable trust
agreement, money or United States Government Obligations sufficient (without
reinvestment) to pay all remaining indebtedness on the Notes, (ii) delivering
to the Trustee either an Opinion of Counsel or a ruling directed to the
Trustee from the Internal Revenue Service to the effect that the holders of
the Notes will not recognize income, gain or loss for federal income tax
purposes as a result of such deposit and termination of obligations, (iii)
delivering to the Trustee an Opinion of Counsel to the effect that the
Company's exercise of its option under this paragraph will not result in the
Company, the Trustee or the trust created by the Company's deposit of funds
pursuant to this provision becoming or being deemed to be an "investment
company" under the Investment Company Act of 1940, as amended, and (iv)
complying with certain other requirements set forth in the Indenture. In
addition, the Company may, provided that no Default or Event of Default has
occurred, and is continuing or would arise therefrom (or, with respect to a
Default or Event of Default specified in clause (h) of "--Events of Default"
above, any time on or prior to the 91st calendar day after the date of such
deposit (it being understood that this condition shall not be deemed satisfied
until after such 91st day)) and provided that no default under any Senior Debt
would result therefrom, terminate all of its substantive obligations and all
of the substantive obligations of the Guarantors in respect of the Notes and
the Guarantees (including the Company's obligation to pay the principal of
(and premium, if any, on) and interest on the Notes and such Guarantors'
guarantee thereof by (i) depositing with the Trustee, under the terms of an
irrevocable trust agreement, money or United States Government Obligations
sufficient (without reinvestment) to pay all remaining indebtedness on the
Notes, (ii) delivering to the Trustee either a ruling directed to the Trustee
from the Internal Revenue Service to the effect that the holders of the Notes
will not recognize income, gain or loss for federal income tax purposes as a
result of such deposit and termination of obligations or an Opinion of Counsel
based upon such a ruling addressed to the Trustee or a change in the
applicable Federal tax law since the date of the Indenture, to such effect,
(iii) delivering to the Trustee an Opinion of Counsel to the effect that the
Company's exercise of its option under this paragraph will not result in the
Company, the Trustee or the trust created by the Company's deposit of funds
pursuant to this provision becoming or being deemed to be an "investment
company" under the Investment Company Act of 1940, as amended, and (iv)
complying with certain other requirements set forth in the Indenture.
The Company may make an irrevocable deposit pursuant to this provision only if
at such time it is not prohibited from doing so under the subordination
provisions of the Indenture or certain covenants in the instruments governing
Senior Debt and the Company has delivered to the Trustee and any Paying Agent
an Officers' Certificate to that effect.
Governing Law
The Indenture, the Notes and the Guarantees will be governed by the laws of
the State of New York without regard to principles of conflicts of laws.
Modification and Waiver
Modifications and amendments of the Indenture may be made by the Company and
the Trustee with the consent of the holders of a majority in aggregate
principal amount of the outstanding Notes; provided, however, that no such
modification or amendment may, without the consent of the holder of each Note
affected thereby, (a) change the Stated Maturity of the principal of or any
installment of interest on any Note or alter the optional redemption or
repurchase provisions of any Note or the Indenture in a manner adverse to the
holders of the Notes, (b) reduce the principal amount of (or the premium) of
any Note, (c) reduce the rate of or extend the time for payment of interest on
any Note, (d) change the place or currency of payment of principal of (or
premium) or interest on any Note, (e) modify any provisions of the Indenture
relating to the waiver of past defaults (other than to add sections of the
Indenture subject thereto) or the right of the holders to institute suit for
the enforcement of any payment on or with respect to any Note or the
Guarantee, or the modification and amendment of the Indenture and the Notes
(other than to add sections of the Indenture or the Notes which may not be
amended, supplemented or waived without the consent of each holder affected),
(f) reduce the percentage of the principal amount of outstanding Notes
necessary for amendment to or waiver of compliance with any provision of the
Indenture or the Notes or for waiver of any Default, (g) waive a default in the
payment of principal of, interest on, or redemption payment with respect to,
any Note (except a rescission of acceleration of the Notes by the holders as
provided in the Indenture and a waiver of the payment default that resulted
from such acceleration), (h) modify the ranking or priority of the Notes or
the Guarantee, or modify the definition of Senior Debt or Designated Senior
Debt or amend or modify the subordination provisions of the Indenture in any
manner adverse to the Holders, (i) release the Guarantors from any of their
respective obligations under the Guarantee or the Indenture otherwise than in
accordance with the Indenture, or (j) modify the provisions relating to any
Offer to Purchase required under the covenants described under
"--Covenants--Limitation on Certain Asset Dispositions" or
"--Covenants--Change of Control" in a manner materially adverse to the holders
of Notes with respect to any Asset Disposition that has been consummated or
Change of Control that has occurred.
The holders of a majority in aggregate principal amount of the outstanding
Notes, on behalf of all holders of Notes, may waive compliance by the Company
with certain restrictive provisions of the Indenture. Subject to certain
rights of the Trustee, as provided in the Indenture, the holders of a majority
in aggregate principal amount of the outstanding Notes, on behalf of all
holders of Notes, may waive any past default under the Indenture, except a
default in the payment of principal, premium or interest or a default arising
from failure to purchase any Note tendered pursuant to an Offer to Purchase,
or a default in respect of a provision that under the Indenture cannot be
modified or amended without the consent of the holder of each outstanding Note
affected.
The Trustee
The Indenture provides that, except during the continuance of a Default, the
Trustee will perform only such duties as are specifically set forth in the
Indenture. During the existence of a Default, the Trustee will exercise such
rights and powers vested in it under the Indenture and use the same degree of
care and skill in their exercise as a prudent person would exercise under the
circumstances in the conduct of such person's own affairs. The Indenture and
provisions of the Trust Indenture Act incorporated by reference therein
contain limitations on the rights of the Trustee, should it become a creditor
of the Company, the Guarantors, or any other obligor upon the Notes, to obtain
payment of claims in certain cases or to realize on certain property received
by it in respect of any such claim as security or otherwise. The Trustee is
permitted to engage in other transactions with the Company or an Affiliate of
the Company; provided, however, that if it acquires any conflicting interest
(as defined in the Indenture or in the Trust Indenture Act), it must eliminate
such conflict or resign.
Book-Entry; Delivery and Form
The Exchange Notes will initially be represented by one or more global Notes
in definitive, fully registered form without interest coupons (collectively,
the "Global Note") and will be deposited with the Trustee as custodian for the
Depositary in the name of a nominee of the Depositary.
Upon the issuance of the Global Note, the Depositary or its custodian will
credit, on its internal system, the respective principal amount of the
individual beneficial interests represented by such Global Note to the
accounts of persons who have accounts with such depositary. Ownership of
beneficial interests in the Global Note will be limited to persons who have
accounts with the Depositary ("participants") or persons who hold interests
through participants. Ownership of beneficial interests in the Global Note
will be shown on, and the transfer of that ownership will be effected only
through, records maintained by the Depositary or its nominee (with respect to
interests of participants) and the records of participants (with respect to
interests of persons other than participants).
So long as the Depositary, or its nominee, is the registered holder of the
Global Note, the Depositary or such nominee, as the case may be, will be
considered the sole owner or holder of the Exchange Notes represented by such
Global Note for all purposes under the Indenture and the Exchange Notes. No
beneficial owner of an interest in a Global Note will be able to transfer that
interest except in accordance with the Depositary's applicable procedures.
Payments of the principal of, and interest on, the Global Notes will be made
to the Depositary or its nominee, as the case may be, as the registered owner
thereof. None of the Company, the Trustee or any Paying Agent will have any
responsibility or liability for any aspect of the records relating to or
payments made on account of beneficial ownership interests in the Global Notes
or for maintaining, supervising or reviewing any records relating to such
beneficial ownership interests.
The Company expects that the Depositary or its nominee, upon receipt of any
payment of principal or interest in respect of a Global Note will credit
participants' accounts with payments in amounts proportionate to their
respective beneficial interests in the principal amount of such Global Note as
shown on the records of the Depositary or its nominee. The Company also
expects that payments by participants to owners of beneficial interests in
such Global Note held through such participants will be governed by standing
instructions and customary practices, as is now the case with securities held
for the accounts of customers registered in the name of nominees for such
customers. Such payments will be the responsibility of such participants.
Transfers between participants in the Depositary will be effected in the
ordinary way in accordance with the Depositary rules and will be settled in
same-day funds.
The Depositary has advised the Company that it will take any action permitted
to be taken by a holder of Notes (including the presentation of Notes for
exchange as described below) only at the direction of one or more participants
to whose accounts an interest in the Global Notes is credited and only in
respect of such portion of the aggregate principal amount of Notes as to which
such participant or participants has or have given such direction.
The Depositary has advised the Company as follows: the Depositary is a limited
purpose trust company organized under the laws of the State of New York, a
"banking organization" within the meaning of New York Banking Law, a member of
the Federal Reserve System, a "clearing corporation" within the meaning of the
Uniform Commercial Code and a "Clearing Agency" registered pursuant to the
provisions of Section 17A of the Exchange Act. The Depositary was created to
hold securities for its participants and facilitate the clearance and
settlement of securities transactions between participants through electronic
book-entry changes in accounts of its participants, thereby eliminating the
need for physical movement of certificates. Participants include securities
brokers and dealers, banks, trust companies and clearing corporations and
certain other organizations. Indirect access to the Depositary system is
available to others such as banks, brokers, dealers and trust companies that
clear through or maintain a custodial relationship with a participant, either
directly or indirectly ("indirect participants").
Although the Depositary, Euroclear and Cedel have agreed to the foregoing
procedures in order to facilitate transfers of interests in the Global Notes
among participants of the Depositary, Euroclear and Cedel, they are under no
obligation to perform or continue to perform such procedures, and such
procedures may be discontinued at any time. Neither the Company nor the
Trustee will have any responsibility for the performance by the Depositary,
Euroclear or Cedel or their respective participants or indirect participants
of their respective obligations under the rules and procedures governing their
operations.
Certificated Exchange Notes
If the Depositary is at any time unwilling or unable to continue as a
depositary for the Global Notes and a successor depositary is not appointed by
the Company within 90 days, the Company will issue certificated notes in
exchange for the Global Notes which will bear the legend referred to under the
heading "Notice to Investors."
Certain Definitions
Set forth below is a summary of certain of the defined terms used in the
Indenture or the Registration Rights Agreement. Reference is made to the
Indenture or the Registration Rights Agreement for the full definition of all
such terms, as well as any other terms used herein for which no definition is
provided.
"Acquired Indebtedness" means, with respect to any Person, Indebtedness of
such Person (i) existing at the time such Person becomes a Restricted
Subsidiary or (ii) assumed in connection with the acquisition of assets from
another Person, including Indebtedness Incurred in connection with, or in
contemplation of, such Person becoming a Restricted Subsidiary or such
acquisition, as the case may be.
"Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with any specified Person. For purposes of this definition, "control"
when used with respect to any Person means the power to direct the management
and policies of such Person, directly or indirectly, whether through the
ownership of voting securities, by contract or otherwise; and the terms
"controlling" and "controlled" have meanings correlative to the foregoing.
"Asset Disposition" means any sale, transfer or other disposition (including,
without limitation, by merger, consolidation or sale-and-leaseback
transaction) of (i) shares of Capital Stock of a Restricted Subsidiary of the
Company (other than directors' qualifying shares) or (ii) property or assets
of the Company or any Restricted Subsidiary of the Company other than in the
ordinary course of business; provided, however, that an Asset Disposition
shall not include (a) any sale, transfer or other disposition of shares of
Capital Stock, property or assets by a Restricted Subsidiary of the Company to
the Company or to any Wholly Owned Subsidiary of the Company, (b) any sale,
transfer or other disposition of defaulted receivables for collection or any
sale, transfer or other disposition of property or assets in the ordinary
course of business, (c) any isolated sale, transfer or other disposition that
does not involve aggregate consideration in excess of $2 million individually,
(d) the grant in the ordinary course of business of any non-exclusive license
of patents, trademarks, registrations therefor and other similar intellectual
property, (e) any Lien (or foreclosure thereon) securing Indebtedness to the
extent that such Lien is granted in compliance with "--Covenants--Limitation on
Liens" above, (f) any Restricted Payment permitted by "--Covenants--Limitation
on Restricted Payments" above, (g) any disposition of assets or property in
the ordinary course of business to the extent such property or assets are
obsolete, worn-out or no longer useful in the Company's or any of its
Restricted Subsidiaries' business, (h) the sale, lease, conveyance or
disposition or other transfer of all or substantially all of the assets of the
Company as permitted under "--Covenants--Mergers, Consolidations and Certain
Sales of Assets" above; provided, that the assets not so sold, leased,
conveyed, disposed of or otherwise transferred shall be deemed an Asset
Disposition, or (i) any disposition that constitutes a Change of Control.
"Average Life" means, as of the date of determination, with respect to any
Indebtedness for borrowed money or Preferred Stock, the quotient obtained by
dividing (i) the sum of the products of the number of years from the date of
determination to the dates of each successive scheduled principal or
liquidation value payments of such Indebtedness or Preferred Stock,
respectively, and the amount of such principal or liquidation value payments,
by (ii) the sum of all such principal or liquidation value payments.
"Capital Lease Obligations" of any Person means the obligations to pay rent or
other amounts under a lease of (or other Indebtedness arrangements conveying
the right to use) real or personal property of such Person which are required
to be classified and accounted for as a capital lease or liability on the face
of a balance sheet of such Person in accordance with GAAP. The amount of such
obligations shall be the capitalized amount thereof in accordance with GAAP
and the stated maturity thereof shall be the date of the last payment of rent
or any other amount due under such lease prior to the first date upon which
such lease may be terminated by the lessee without payment of a penalty.
"Capital Stock" of any Person means any and all shares, interests,
participations or other equivalents (however designated) of corporate stock of
such Person.
"Common Stock" of any Person means Capital Stock of such Person that does not
rank prior, as to the payment of dividends or as to the distribution of assets
upon any voluntary or involuntary liquidation, dissolution or winding up of
such Person, to shares of Capital Stock of any other class of such Person.
"Consolidated Cash Flow Available for Fixed Charges" of any Person means for
any period the Consolidated Net Income of such Person for such period
increased (to the extent Consolidated Net Income for such period has been
reduced thereby) by the sum of (without duplication) (i) Consolidated Interest
Expense of such Person for such period, plus (ii) Consolidated Income Tax
Expense of such Person for such period, plus (iii) the consolidated
depreciation and amortization expense included in the income statement of such
Person prepared in accordance with GAAP for such period, plus (iv) any other
non-cash charges to the extent deducted from or reflected in Consolidated Net
Income except for any non-cash charges that represent accruals of, or reserves
for, cash disbursements to be made in any future accounting period.
"Consolidated Cash Flow Ratio" of any Person means for any period the ratio of
(i) Consolidated Cash Flow Available for Fixed Charges of such Person for such
period to (ii) the sum of (A) Consolidated Interest Expense of such Person for
such period, plus (B) the annual interest expense with respect to any
Indebtedness proposed to be Incurred by such Person or its Restricted
Subsidiaries, minus (C) Consolidated Interest Expense of such Person to the
extent included in clause (ii)(A) with respect to any Indebtedness that will
no longer be outstanding as a result of the Incurrence of the Indebtedness
proposed to be Incurred, plus (D) the annual interest expense with respect to
any other Indebtedness Incurred by such Person or its Restricted Subsidiaries
since the end of such period to the extent not included in clause (ii)(A),
minus (E) Consolidated Interest Expense of such Person to the extent included
in clause (ii)(A) with respect to any Indebtedness that no longer is
outstanding as a result of the Incurrence of the Indebtedness referred to in
clause (ii)(D); provided, however, that in making such computation, the
Consolidated Interest Expense of such Person attributable to interest on any
Indebtedness bearing a floating interest rate shall be computed on a pro forma
basis as if the rate in effect on the date of computation (after giving effect
to any hedge in respect of such Indebtedness that will, by its terms, remain
in effect until the earlier of the maturity of such Indebtedness or the date
one year after the date of such determination) had been the applicable rate
for the entire period; provided, further, however, that, in the event such
Person or any of its Restricted Subsidiaries has made any Asset Dispositions
or acquisitions of assets not in the ordinary course of business (including
acquisitions of other Persons by merger, consolidation or purchase of Capital
Stock) during or after such period and on or prior to the date of measurement,
such computation shall be made on a pro forma basis as if the Asset
Dispositions or acquisitions had taken place on the first day of such period.
Calculations of pro forma amounts in accordance with this definition shall be
done in accordance with Article 11 of Regulation S-X under the Securities Act
or any successor provision and may include reasonably ascertainable cost
savings.
"Consolidated Income Tax Expense" of any Person means for any period the
consolidated provision for income taxes of such Person and its Restricted
Subsidiaries for such period calculated on a consolidated basis in accordance
with GAAP.
"Consolidated Interest Expense" for any Person means for any period, without
duplication, (a) the consolidated interest expense included in a consolidated
income statement (without deduction of interest or finance charge income) of
such Person and its Restricted Subsidiaries for such period calculated on a
consolidated basis in accordance with GAAP and (b) dividend requirements of
such Person and its Restricted Subsidiaries with respect to Disqualified Stock
and with respect to all other Preferred Stock of Restricted Subsidiaries of
such Person (in each case whether in cash or otherwise (except dividends
payable solely in shares of Capital Stock of such Person or such Restricted
Subsidiary)) paid, accrued or accumulated during such period times a fraction
the numerator of which is one and the denominator of which is one minus the
then effective consolidated Federal, state and local tax rate of such Person,
expressed as a decimal.
"Consolidated Net Income" of any Person means for any period the consolidated
net income (or loss) of such Person and its Restricted Subsidiaries for such
period determined on a consolidated basis in accordance with GAAP; provided,
however, that there shall be excluded therefrom (a) the net income (or loss)
of any Person acquired by such Person or a Restricted Subsidiary of such
Person in a pooling-of-interests transaction for any period prior to the date
of such transaction, (b) the net income (but not net loss) of any Restricted
Subsidiary of such Person which is subject to restrictions which prevent or
limit the payment of dividends or the making of distributions to such Person
to the extent of such restrictions (regardless of any waiver thereof), (c)
non-cash gains and losses due solely to fluctuations in currency values, (d)
the net income of any Person that is not a Restricted Subsidiary of such
Person, except to the extent of the amount of dividends or other distributions
representing such Person's proportionate share of such other Person's net
income for such period actually paid in cash to such Person by such other
Person during such period, (e) gains but not losses on Asset Dispositions by
such Person or its Restricted Subsidiaries, (f) all extraordinary gains and
losses determined in accordance with GAAP and (g) in the case of a successor
to the referent Person by consolidation or merger or as a transferee of the
referent Person's assets, any earnings (or losses) of the successor
corporation prior to such consolidation, merger or transfer of assets.
"Consolidated Net Worth" of any Person means the consolidated stockholders'
equity of such Person, determined on a consolidated basis in accordance with
GAAP, less (without duplication) amounts attributable to Disqualified Capital
Stock of such Person.
"Continuing Director" means a director who either was a member of the Board of
Directors of the Company on the Issue Date or who became a director of the
Company subsequent to the Issue Date and whose election, or nomination for
election by the Company's stockholders, was duly approved by a majority of the
Continuing Directors then on the Board of Directors of the Company, either by
a specific vote or by approval of the proxy statement issued by the Company on
behalf of the entire Board of Directors of the Company in which such
individual is named as nominee for director.
"Credit Agreement" means the Credit Agreement, to be dated as of March 3,
1998, among the Company as borrower thereunder, and Morgan Guaranty Trust
Company of New York, as agent on behalf of itself and the others named
therein, and any deferrals, renewals, extensions, replacements, refinancings
or refundings thereof, or amendments, modifications or supplements thereto or
replacements thereof (including, without limitation, any amendment increasing
the amount borrowed thereunder) and any agreement providing therefor whether
by or with the same or any other lender, creditors, or group of creditors and
including related notes, guarantee agreements, security agreements and other
instruments and agreements executed in connection therewith.
"Default" means any event that is, or after notice or lapse of time or both
would become, an Event of Default.
"Designated Senior Debt" means (i) so long as the Credit Agreement is in
effect, the Senior Debt incurred thereunder and (ii) thereafter, any other
Senior Debt which has at the time of initial issuance an aggregate outstanding
principal amount in excess of $25.0 million which has been so designated as
Designated Senior Debt by the Board of Directors of the Company at the time of
initial issuance in a resolution delivered to the Trustee.
"Disqualified Stock" of any Person means any Capital Stock of such Person
which, by its terms (or by the terms of any security into which it is
convertible or for which it is exchangeable), or upon the happening of any
event, matures or is mandatorily redeemable, pursuant to a sinking fund
obligation or otherwise, or is redeemable at the option of the holder thereof,
in whole or in part, on or prior to the final maturity of the Notes (other
than pursuant to change of control provisions similar to those applicable to
the Notes, provided that such provisions expressly provide that no payment can
be made on such Capital Stock until any Offer to Purchase the Notes required
pursuant to the provisions described under "--Change of Control" above shall
have been consummated and paid in full).
"Domestic Restricted Subsidiary" means any Restricted Subsidiary of the
Company organized and existing under the laws of the United States, any state
thereof or the District of Columbia.
"11 1/4% Notes" means the Company's 11 1/4% Senior Subordinated Notes
due 2007 issued pursuant to the 11 1/4% Notes Indenture.
"11 1/4% Notes Indenture" means the indenture dated as of April 1, 1997,
among the Company, the subsidiaries of the Company from time to time party
thereto as guarantors thereunder and Marine Midland Bank, as Trustee as
supplemented from time to time.
"Exchange Act" means the Securities Exchange Act of 1934, as amended, and the
rules and regulations promulgated by the Commission thereunder.
"GAAP" means generally accepted accounting principles, consistently applied,
as in effect on the Issue Date in the United States of America, as 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 is approved by a significant segment of the
accounting profession in the United States.
"Guarantee" means the guarantee of the Senior Subordinated Notes by each
Guarantor under the Indenture.
"Guarantor" means (i) each Domestic Restricted Subsidiary on the Issue Date
with assets or stockholder's equity in excess of $25,000 and (ii) each
Domestic Restricted Subsidiary, if any, of the Company formed or acquired
after the Issue Date, which pursuant to the terms of the Indenture executes a
supplement to the Indenture as a Guarantor.
"Incur" means, with respect to any Indebtedness or other obligation of any
Person, to create, issue, incur (including by conversion, exchange or
otherwise), assume, guarantee or otherwise become liable in respect of such
Indebtedness or other obligation or the recording, as required pursuant to
GAAP or otherwise, of any such Indebtedness or other obligation on the balance
sheet of such Person (and "Incurrence," "Incurred" and "Incurring" shall have
meanings correlative to the foregoing). Indebtedness of any Person or any of
its Restricted Subsidiaries existing at the time such Person becomes a
Restricted Subsidiary of the Company (or is merged into or consolidates with
the Company or any of its Restricted Subsidiaries), whether or not such
Indebtedness was incurred in connection with, or in contemplation of, such
Person becoming a Restricted Subsidiary of the Company (or being merged into
or consolidated with the Company or any of its Restricted Subsidiaries), shall
be deemed Incurred at the time any such Person becomes a Restricted Subsidiary
of the Company or merges into or consolidates with the Company or any of its
Restricted Subsidiaries.
"Indebtedness" means (without duplication), with respect to any Person,
whether recourse is to all or a portion of the assets of such Person and
whether or not contingent, (i) every obligation of such Person for money
borrowed, (ii) every obligation of such Person evidenced by bonds, debentures,
notes or other similar instruments, including obligations incurred in
connection with the acquisition of property, assets or businesses, (iii) every
reimbursement obligation of such Person with respect to letters of credit,
bankers' acceptances or similar facilities issued for the account of such
Person outstanding for more than 15 days, (iv) every obligation of such Person
issued or assumed as the deferred purchase price of property or services
outstanding for more than 15 days (but excluding trade accounts payable or
accrued liabilities arising in the ordinary course of business which are not
overdue or which are being contested in good faith), (v) every Capital Lease
Obligation of such Person, (vi) every net obligation under interest rate swap
or similar agreements or foreign currency hedge, exchange or similar
agreements of such Person and (vii) every obligation of the type referred to
in clauses (i) through (vi) of another Person and all dividends of another
Person the payment of which, in either case, such Person has guaranteed or is
responsible or liable for, directly or indirectly, as obligor, guarantor or
otherwise. Indebtedness shall include the liquidation preference and any
mandatory redemption payment obligations in respect of any Disqualified Stock
of the Company owned by any Person other than the Company or a Restricted
Subsidiary of the Company, and any Preferred Stock of a Restricted Subsidiary
of the Company. Indebtedness shall never be calculated taking into account any
cash and cash equivalents held by such Person. Indebtedness shall not include
obligations arising from agreements of the Company or a Restricted Subsidiary
of the Company to provide for indemnification, adjustment of purchase price,
earn-out, or other similar obligations, in each case, incurred or assumed in
connection with the disposition of any business or assets of a Restricted
Subsidiary of the Company.
"Investment" by any Person means any direct or indirect loan, advance,
guarantee or other extension of credit (excluding credit balances in bank
accounts or similar accounts with other financial institutions) or capital
contribution to (by means of transfers of cash or other property to others or
payments for property or services for the account or use of others, or
otherwise), or purchase or acquisition of Capital Stock, bonds, notes,
debentures or other securities or evidence of Indebtedness issued by any other
Person.
"Investment Grade Rated" means, with respect to the Notes, both a rating of
the Notes by S&P of BBB- or higher and a rating of the Notes by Moody's of
Baa3 or higher.
"Issue Date" means the original issue date of the Notes.
"Lien" means, with respect to any property or assets, any mortgage or deed of
trust, pledge, hypothecation, assignment, security interest, lien, charge,
easement (other than any easement not materially impairing usefulness or
marketability), encumbrance, preference, priority or other security agreement
with respect to such property or assets (including, without limitation, any
conditional sale or other title retention agreement having substantially the
same economic effect as any of the foregoing).
"Material Subsidiary" means, at any date of determination, any Subsidiary
that, together with its Subsidiaries, (i) for the most recent fiscal year of
the Company accounted for more than 5% of the consolidated revenues of the
Company or (ii) as of the end of such fiscal year, was the owner of more than
5% of the consolidated assets of the Company, all as set forth on the most
recently available consolidated financial statements of the Company for such
fiscal year prepared in conformity with GAAP.
"Moody's" means Moody's Investors Service, Inc. or any successor to its debt
rating business.
"Net Available Proceeds" from any Asset Disposition by any Person means cash
or readily marketable cash equivalents received (including by way of sale or
discounting of a note, installment receivable or other receivable, but
excluding any other consideration received in the form of assumption by the
acquiror of Indebtedness or other obligations relating to such properties or
assets or received in any other non-cash form) therefrom by such Person,
including any cash received by way of deferred payment or upon the
monetization or other disposition of any non-cash consideration (including
notes or other securities) received in connection with such Asset Disposition,
net of (i) all legal, title and recording tax expenses, commissions and other
fees and expenses incurred and all federal, state, foreign and local taxes
required to be accrued as a liability as a consequence of such Asset
Disposition, (ii) all payments made by such Person or its Restricted
Subsidiaries on any Indebtedness which is secured by such assets in accordance
with the terms of any Lien upon or with respect to such assets or which must
by the terms of such Lien, or in order to obtain a necessary consent to such
Asset Disposition or by applicable law, be repaid out of the proceeds from
such Asset Disposition, (iii) all payments made with respect to liabilities
associated with the assets which are the subject of the Asset Disposition,
including, without limitation, trade payables and other accrued liabilities,
(iv) appropriate amounts to be provided by such Person or any Restricted
Subsidiary thereof, as the case may be, as a reserve in accordance with GAAP
against any liabilities associated with such assets and retained by such
Person or any Restricted Subsidiary thereof, as the case may be, after such
Asset Disposition, including, without limitation, liabilities under any
indemnification obligations and severance and other employee termination costs
associated with such Asset Disposition, until such time as such amounts are no
longer reserved or such reserve is no longer necessary (at which time any
remaining amounts will become Net Available Proceeds to be allocated in
accordance with the provisions of clause (iii) of the covenant of the
Indenture described under "--Covenants--Limitation on Certain Asset
Dispositions") and (v) all distributions and other payments made to minority
interest holders in Restricted Subsidiaries of such Person or joint ventures
as a result of such Asset Disposition.
"Net Investment" means the excess of (i) the aggregate amount of all
Investments in Unrestricted Subsidiaries or joint ventures made by the Company
or any Restricted Subsidiary on or after the Issue Date (in the case of an
Investment made other than in cash, the amount shall be the fair market value
of such Investment as determined in good faith by the Board of Directors of
the Company or such Restricted Subsidiary) over (ii) the aggregate amount
returned in cash on or with respect to such Investments whether through
interest payments, principal payments, dividends or other distributions or
payments; provided, however, that such payments or distributions shall not be
(and have not been) included in subclause (b) of clause (3) of the first
paragraph described under "--Covenants--Limitation on Restricted Payments;"
provided, further that with respect to all Investments made in any
Unrestricted Subsidiary or joint venture the amounts referred to in clause
(ii) above with respect to such Investments shall not exceed the aggregate
amount of all such Investments made in such Unrestricted Subsidiary or joint
venture.
"Offer to Purchase" means a written offer (the "Offer") sent by the Company by
first class mail, postage prepaid, to each holder at his address appearing in
the register for the Notes on the date of the Offer offering to purchase up to
the principal amount of Notes specified in such Offer at the purchase price
specified in such Offer (as determined pursuant to the Indenture). Unless
otherwise required by applicable law, the Offer shall specify an expiration
date (the "Expiration Date") of the Offer to Purchase which shall be not less
than 30 days nor more than 60 days after the date of such Offer and a
settlement date (the "Purchase Date") for purchase of Notes within five
Business Days after the Expiration Date. The Company shall notify the Trustee
at least 15 Business Days (or such shorter period as is acceptable to the
Trustee) prior to the mailing of the Offer of the Company's obligation to make
an Offer to Purchase, and the Offer shall be mailed by the Company or, at the
Company's request, by the Trustee in the name and at the expense of the
Company. The Offer shall contain all the information required by applicable
law to be included therein. The Offer shall contain all instructions and
materials necessary to enable such holders to tender Notes pursuant to the
Offer to Purchase. The Offer shall also state:
(1) the Section of the Indenture pursuant to which the Offer to
Purchase is being made;
(2) the Expiration Date and the Purchase Date;
(3) the aggregate principal amount of the outstanding Notes
offered to be purchased by the Company pursuant to the Offer to Purchase
(including, if less than 100%, the manner by which such amount has been
determined pursuant to the Section of the Indenture requiring the Offer to
Purchase) (the "Purchase Amount");
(4) the purchase price to be paid by the Company for each $1,000
aggregate principal amount of Notes accepted for payment (as specified
pursuant to the Indenture) (the "Purchase Price");
(5) that the holder may tender all or any portion of the Notes
registered in the name of such holder and that any portion of a Note tendered
must be tendered in an integral multiple of $1,000 principal amount;
(6) the place or places where Notes are to be surrendered for
tender pursuant to the Offer to Purchase;
(7) that interest on any Note not tendered or tendered but not
purchased by the Company pursuant to the Offer to Purchase will continue to
accrue;
(8) that on the Purchase Date the Purchase Price will become due
and payable upon each Note being accepted for payment pursuant to the Offer to
Purchase and that interest thereon shall cease to accrue on and after the
Purchase Date;
(9) that each holder electing to tender all or any portion of a
Note pursuant to the Offer to Purchase will be required to surrender such Note
at the place or places specified in the Offer prior to the close of business on
the Expiration Date (such Note being, if the Company or the Trustee so
requires, duly endorsed by, or accompanied by a written instrument of transfer
in form satisfactory to the Company and the Trustee duly executed by, the
holder thereof or his attorney duly authorized in writing);
(10) that holders will be entitled to withdraw all or any portion
of Notes tendered if the Company (or its Paying Agent) receives, not later
than the close of business on the fifth Business Day next preceding the
Expiration Date, a telegram, telex, facsimile transmission or letter setting
forth the name of the holder, the principal amount of the Note the holder
tendered, the certificate number of the Note the holder tendered and a
statement that such holder is withdrawing all or a portion of his tender;
(11) that (a) if Notes in an aggregate principal amount less than
or equal to the Purchase Amount are duly tendered and not withdrawn pursuant
to the Offer to Purchase, the Company shall purchase all such Notes and (b)
if Notes in an aggregate principal amount in excess of the Purchase Amount are
tendered and not withdrawn pursuant to the Offer to Purchase, the Company
shall purchase Notes having an aggregate principal amount equal to the
Purchase Amount on a pro rata basis (with such adjustments as may be deemed
appropriate so that only Notes in denominations of $1,000 or integral
multiples thereof shall be purchased); and
(12) that in the case of any holder whose Note is purchased only
in part, the Company shall execute and the Trustee shall authenticate and
deliver to the holder of such Note without service charge, a new Note or Notes,
of any authorized denomination as requested by such holder, in an aggregate
principal amount equal to and in exchange for the unpurchased portion of the
Note so tendered.
An Offer to Purchase shall be governed by and effected in accordance with the
provisions above pertaining to any Offer.
"Permitted Holder" means any of any member of the Board of Directors of the
Company as of the Issue Date, Tekni-Plex Partnership, MST/TP Partners,
L.P., MST Management, L.P., MST Partners L.P., any Affiliate of or partner
in any of the foregoing (including any Person receiving common stock of the
Company upon a distribution by any of the foregoing partnerships, whether a
partner or designated by a partner for purposes of estate or similar
personal planning), or any group if the majority of the shares of Common
Stock of the Company owned by such group are beneficially owned by any or
all of the foregoing and their Related Persons and Affiliates.
"Permitted Investments" means (i) Investments in marketable, direct
obligations issued or guaranteed by the United States of America, or any
governmental entity or agency or political subdivision thereof (provided that
the full faith and credit of the United States of America is pledged in
support thereof), maturing within one year of the date of purchase; (ii)
Investments in commercial paper issued by corporations or financial
institutions maturing within 180 days from the date of the original issue
thereof, and rated "P-1" or better by Moody's Investors Service or "A-1" or
better by Standard & Poor's Corporation or an equivalent rating or better by
any other nationally recognized securities rating agency; (iii) Investments in
certificates of deposit issued or acceptances accepted by or guaranteed by any
bank or trust company organized under the laws of the United States of
America, any state thereof, the District of Columbia, Canada or any province
thereof, in each case having a combined capital, surplus and undivided profits
totaling more than $500,000,000, maturing within one year of the date of
purchase; (iv) Investments representing Capital Stock or obligations issued or
otherwise transferred to the Company or any of its Restricted Subsidiaries in
the course of the good faith settlement of claims against any other Person or
by reason of a composition or readjustment of debt or a reorganization of any
debtor of the Company or any of its Restricted Subsidiaries; (v) deposits,
including interest-bearing deposits, maintained in the ordinary course of
business in banks; (vi) any Investment in any Person; provided, however,
that (x) after giving effect to any such Investment such Person shall
become a Restricted Subsidiary of the Company or (y) such Person is merged
with or into, or substantially all of such Person's assets are transferred
to, the Company or a Restricted Subsidiary of the Company; (vii)
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; (viii) 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 receivables; (ix) any interest swap or hedging obligation
with an unaffiliated Person otherwise permitted by the Indenture; (x)
Investments received as consideration for an Asset Disposition in
compliance with the provisions of the Indenture described under "--
Covenants--Limitation on Certain Asset Dispositions" above; (xi)
Investments in Restricted Subsidiaries or by virtue of which a person
becomes a Restricted Subsidiary (including under circumstances in which
equity interests in a Restricted Subsidiary are acquired from third parties
subsequent to such Person becoming a Restricted Subsidiary pursuant to the
terms of any merger or acquisition or similar agreement in existence at the
time such Person became a Restricted Subsidiary); and (xii) loans and
advances to employees of the Company or any of its Restricted Subsidiaries
in the ordinary course of business.
"Person" means any individual, corporation, limited or general partnership,
joint venture, association, joint stock company, trust, unincorporated
organization or government or any agency or political subdivision thereof.
"Preferred Stock", as applied to the Capital Stock of any Person, means
Capital Stock of such Person of any class or classes (however designated) that
ranks prior, as to the payment of dividends or as to the distribution of
assets upon any voluntary or involuntary liquidation, dissolution or winding
up of such Person, to shares of Capital Stock of any other class of such
Person.
"PS&T" means Plastic Specialties and Technologies, Inc.
"PS&T Notes" means the 11 1/4% Senior Secured Notes due 2003 of PS&T.
"PS&T Tender Offer" means the tender offer and consent solicitation relating
to the PS&T Notes commenced February 2, 1998.
"Purchase Date" has the meaning set forth in the definition of "Offer to
Purchase" above.
"Related Person" of any Person means any other Person directly or indirectly
owning (a) 5% or more of the outstanding Common Stock of such Person (or, in
the case of a Person that is not a corporation, 5% or more of the equity
interest in such Person) or (b) 5% or more of the combined voting power of the
Voting Stock of such Person.
"Restricted Subsidiary" means any Subsidiary of the Company other than an
Unrestricted Subsidiary.
"S&P" means Standard & Poor's Ratings Group or any successor to its debt
rating business.
"Senior Debt" means, with respect to any Person at any date, (i) in the case
of the Company or the Guarantor, all Indebtedness and other obligations under
the Credit Agreement, including, without limitation, principal, premium, if
any, and interest on such Indebtedness and all other amounts due on or in
connection with such Indebtedness including all charges, fees and expenses,
(ii) all other Indebtedness of such Person for money borrowed, including
principal, premium, if any, and interest on such Indebtedness, unless the
instrument under which such Indebtedness for money borrowed is created,
incurred, assumed or guaranteed expressly provides that such Indebtedness for
money borrowed is not senior or superior in right of payment to the Notes, and
all renewals, extensions, modifications, amendments, refinancing or
replacements thereof and all other Indebtedness of such Person of the types
referred to in clauses (iii), (iv) (not including obligations issued or
assumed as the deferred purchase price of services) and (vi) of the definition
of Indebtedness and (iii) all interest on any Indebtedness referred to in
clauses (i) and (ii) accruing during, or which would accrue but for, the
pendency of any bankruptcy or insolvency proceeding, whether or not allowed
thereunder.
Notwithstanding the foregoing, Senior Debt shall not include (a)
Indebtedness which is pursuant to its terms or any agreement relating thereto
or by operation of law subordinated or junior in right of payment or otherwise
to any other Indebtedness of such Person; provided, however, that no
Indebtedness shall be deemed to be subordinate or junior in right of payment
or otherwise to any other Indebtedness of a Person solely by reason of such
other Indebtedness being secured and such Indebtedness not being secured, (b)
the Notes, (c) any Indebtedness of such Person to any of its Subsidiaries, (d)
Indebtedness Incurred in violation of the provisions of the Indenture described
under "--Covenants--Limitation on Indebtedness"; provided, however, that
Indebtedness under the Credit Agreement shall be deemed not to have been
Incurred in violation of such provisions for purposes of this clause (d) if
the holder(s) of such Indebtedness or their agent or representative shall have
received a representation from the Company to the effect that the Incurrence
of such Indebtedness does not violate such provision and (e) any Indebtedness
which, when incurred and without respect to any election under Section 1111(b)
of the Bankruptcy Code, is without recourse to the Company.
"Subordinated Indebtedness" means any Indebtedness (whether outstanding on the
date hereof or hereafter incurred) which is by its terms expressly subordinate
or junior in right of payment to the Notes.
"Subsidiary" of any Person means (i) a corporation more than 50% of the
outstanding Voting Stock of which is owned, directly or indirectly, by such
Person or by one or more other Subsidiaries of such Person or by such Person
and one or more other Subsidiaries thereof or (ii) any other Person (other
than a corporation) in which such Person, or one or more other Subsidiaries of
such Person or such Person and one or more other Subsidiaries thereof,
directly or indirectly, have at least a majority ownership and voting power
relating to the policies, management and affairs thereof.
"Unrestricted Subsidiary" means (i) any Subsidiary of the Company formed or
acquired after the Issue Date that at the time of determination is designated
an Unrestricted Subsidiary by the Board of Directors in the manner provided
below and (ii) any Subsidiary of an Unrestricted Subsidiary. Any such
designation by the Board of Directors will be evidenced to the Trustee by
promptly filing with the Trustee a copy of the board resolution giving effect
to such designation and an officers' certificate certifying that such
designation complied with the foregoing provisions. The Board of Directors of
the Company may not designate any Subsidiary of the Company to be an
Unrestricted Subsidiary if, after such designation, (a) the Company or any
other Restricted Subsidiary (i) provides credit support for, or a guarantee
of, any Indebtedness of such Subsidiary (including any undertaking, agreement
or instrument evidencing such Indebtedness) or (ii) is directly or indirectly
liable for any Indebtedness of such Subsidiary, (b) a default with respect to
any Indebtedness of such Subsidiary (including any right which the holders
thereof may have to take enforcement action against such Subsidiary) would
permit (upon notice, lapse of time or both) any holder of any other
Indebtedness of the Company or any Restricted Subsidiary to declare a default
on such other Indebtedness or cause the payment thereof to be accelerated or
payable prior to its final scheduled maturity or (c) such Subsidiary owns any
Capital Stock of, or owns or holds any Lien on any property of, any Restricted
Subsidiary which is not a Subsidiary of the Subsidiary to be so designated.
"Voting Stock" of any Person means the Capital Stock of such Person which
ordinarily has voting power for the election of directors (or persons
performing similar functions) of such Person, whether at all times or only so
long as no senior class of securities has such voting power by reason of any
contingency.
"Wholly Owned Subsidiary" of any 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) shall at the time be owned by
such Person or by one or more Wholly Owned Subsidiaries of such Person or by
such Person and one or more Wholly Owned Subsidiaries of such Person.
CERTAIN UNITED STATES FEDERAL INCOME TAX CONSIDERATIONS
The following is a discussion of certain material United States federal income
tax consequences of the Exchange Offer to holders of Old Notes. Unless
otherwise stated, this discussion addresses the United States federal income
tax consequences to persons that hold Old Notes as capital assets, and that
are (i) citizens or residents of the United States, (ii) corporations,
partnerships or other entities created or organized in or under the laws of
the United States or any political subdivision thereof or therein, (iii)
estates the income of which is subject to United States federal income tax
regardless of its source, or (iv) trusts the administration of which is
subject to the primary supervision of a court within the United States and for
which one or more United States fiduciaries have the authority to control all
substantial decisions ("U.S. Holders"). This discussion does not purport to
address specific tax consequences that may be relevant to particular persons
(including, for example, financial institutions, broker-dealers, insurance
companies, tax-exempt organizations, and persons in special situations, such
as those who hold Old Notes or Exchange Notes as part of a straddle, hedge,
conversion transaction, or other integrated investment). This discussion does
not address the tax consequences to persons that have a "functional currency"
other than the U.S. dollar. In addition, this discussion does not address
United States federal alternative minimum tax consequences or any aspect of
state, local or foreign taxation. This discussion is based upon the Internal
Revenue Code of 1986, as amended (the "Code"), the Treasury Department
regulations promulgated thereunder, and administrative and judicial
interpretations thereof, all as of the date hereof and all of which are
subject to change, possibly on a retroactive basis.
HOLDERS OF NOTES ARE URGED TO CONSULT THEIR TAX ADVISORS CONCERNING THE UNITED
STATES FEDERAL INCOME TAX CONSEQUENCES TO THEM OF ACQUIRING, OWNING AND
DISPOSING OF THE EXCHANGE NOTES, AS WELL AS THE APPLICATION OF STATE, LOCAL
AND FOREIGN INCOME AND OTHER TAX LAWS.
The Exchange
The exchange of an Old Note for an Exchange Note pursuant to the Exchange
Offer should not be treated as an exchange or otherwise as a taxable event for
U.S. federal income tax purposes. Accordingly, the Exchange Notes should have
the same issue price as the Old Notes and each holder should have the same
adjusted basis and holding period in the Exchange Notes as it had in the Old
Notes immediately before the Exchange Offer. It is assumed, for purposes of
the following discussion, that the consummation of the Exchange Offer will not
be treated as a taxable event and that the Exchange Notes and the Old Notes
will be treated as the same instruments for U.S. federal income tax purposes.
Disposition of Exchange Notes
If a U.S. Holder sells an Exchange Note between interest payment dates, the
U.S. Holder will recognize gain or loss equal to the difference between the
amount realized on the sale (except to the extent such amount is attributable
to accrued but previously unrecognized interest, which is taxable as ordinary
interest income) and the U.S. Holder's adjusted tax basis in the Exchange
Note. A U.S. Holder's adjusted tax basis in an Exchange Note will be equal to
the amount the U.S. Holder paid to purchase the Old Note, (i) increased by any
interest that has accrued since the last interest payment date, any "original
issue discount" within the meaning of Section 1273 of the Code, and any market
discount, in each case that has previously been included by such U.S. Holder
in taxable income with respect to such Note, and (ii) decreased by any bond
premium previously amortized and any principal payments previously received
by such U.S. Holder with respect to such Note. Subject to the market discount
rules, any such gain or loss will be capital gain or loss, long-term or
short-term depending upon whether the Holder has held such Note for more than
one year. Subject to certain limited exceptions, capital losses cannot be used
to offset ordinary income.
Foreign Holders
For purposes of this discussion, a "Foreign Holder" is any noteholder other
than a U.S. Holder.
A Foreign Holder generally will not be subject to United States federal
withholding tax on interest paid on the Exchange Notes so long as the Foreign
Holder (i) is not actually or constructively a "10 percent shareholder"' of the
Company or a "controlled foreign corporation" with respect to which the
Company is a "related person" within the meaning of the Code, and (ii)
provides an appropriate statement, signed under penalties of perjury,
certifying that the beneficial owner of the Exchange Note is a foreign person
and providing that foreign person's names and address. If the information
provided in this statement changes, the foreign person must so inform the
Company within 30 days of such change. The statement generally must be
provided in the year a payment occurs or in either of the two preceding years.
If the foregoing conditions are not satisfied, then interest paid on the
Exchange Notes will be subject to United States withholding tax at a rate of
30%, unless such rate is reduced or eliminated pursuant to an applicable tax
treaty.
Any capital gain a Foreign Holder realizes on the sale, redemption, retirement
or other taxable disposition of an Exchange Note will be exempt from United
States federal income and withholding tax, provided that (i) the gain is not
effectively connected with the Foreign Holder's conduct of a trade or business
in the United States, (ii) in the case of a Foreign Holder that is an
individual, the Foreign Holder is not present in the United States for 183
days or more in the taxable year of the disposition and (iii) the Foreign
Holder is not subject to tax pursuant to the provisions of U.S. tax law
applicable to certain U.S. expatriates.
If the interest, gain or other income a Foreign Holder recognizes on an
Exchange Note is effectively connected with the Foreign Holder's conduct of a
trade or business in the United States, the Foreign Holder (although exempt
from the withholding tax previously discussed if an appropriate statement is
furnished) generally will be subject to United States federal income tax on
the interest, gain or other income at regular federal income tax rates. In
addition, if the Foreign Holder is a foreign corporation, it may be subject to
a branch profits tax equal to 30% of its "effectively connected earnings and
profits," as adjusted for certain items, unless it qualifies for a lower rate
under an applicable tax treaty.
Information Reporting and Backup Withholding
The Company will be required to report annually to the IRS, and to each U.S.
Holder of record, the amount of interest paid on the Exchange Notes (and the
amount, if any, withheld) for each calendar year, except as to exempt holders
(generally, corporations, tax-exempt organizations, qualified pension and
profit-sharing trusts, individual retirement accounts, or non-resident aliens
that provide certification as to their status). Each U.S. Holder (other than
holders, including, among others, corporations, that are not subject to the
reporting requirements) will be required to provide to the Company, under
penalties of perjury, a certificate containing the U.S. Holder's name,
address, correct federal taxpayer identification number and a statement that
the U.S. Holder is not subject to backup withholding. Should a nonexempt U.S.
Holder fail to provide the required certificate, the Company will be required
to withhold 31% of the interest otherwise payable to the U.S. Holder and to
remit the withheld amount to the IRS as a credit against the U.S. Holder's
federal income tax liability.
PLAN OF DISTRIBUTION
Prior to the Exchange Offer, there has been no market for any of the Exchange
Notes. The Old Notes are eligible for trading in the Private Offerings,
Resales and Trading through Automatic Linkages ("PORTAL") market. There can be
no assurance that an active trading market will develop for, or as to the
liquidity of, any of the Notes.
Each Participating Broker-Dealer that receives Exchange Notes for its own
account pursuant to the Exchange Offer must acknowledge that it will deliver a
prospectus in connection with any resale of such Exchange Notes. This
Prospectus, as it may be amended or supplemented from time to time, may be
used by a Participating Broker-Dealer in connection with resales of Exchange
Notes received in exchange for Old Notes where such Old Notes were acquired as
a result of market-making activities or other trading activities. The Company
has agreed that for a period of 180 days after the Expiration Date, the
Company will make this Prospectus, as amended or supplemented, available to any
Participating Broker-Dealer for use in connection with any such resale.
The Company will not receive any proceeds from any sales of the Exchange Notes
by Participating Broker-Dealers. Exchange Notes received by Participating
Broker-Dealers for their own account pursuant to the Exchange Offer may be
sold from time to time in one or more transactions in the over-the-counter
market, in negotiated transactions, through the writing of options on the
Exchange Notes or a combination of such methods of resale, at market prices
prevailing at the time of resale, at prices related to such prevailing market
prices or negotiated prices. Any such resale may be made directly to purchaser
or to or through brokers or dealers who may receive compensation in the form
of commissions or concessions from any such Participating Broker-Dealer and/or
the purchasers of any such Exchange Notes. Any Participating Broker-Dealer
that resells the Exchange Notes that were received by it for its own account
pursuant to the Exchange Offer and any broker or dealer that participates in a
distribution of such Exchange Notes may be deemed to be an "underwriter"
within the meaning of the Securities Act and any profit on any such resale of
Exchange Notes and any commissions or concessions received by any such persons
may be deemed 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 Participating Broker-Dealer will not be deemed to
admit that it is an "underwriter" within the meaning of the Securities Act.
For a period of 180 days after the Expiration Date the Company will promptly
send additional copies of this Prospectus and any amendment or supplement to
this Prospectus to any Participating Broker-Dealer that requests such documents
in the Letter of Transmittal.
LEGAL MATTERS
Certain legal matters relating to the Exchange Notes offered hereby will be
passed upon for the Company by Davis Polk & Wardwell, New York, New York.
EXPERTS
The consolidated financial statements of Tekni-Plex included in this
Prospectus have been audited by BDO Seidman, LLP, independent certified public
accountants, to the extent and for the periods set forth in their report
appearing elsewhere herein, and are included in reliance upon such report
given upon the authority of said firm as experts in auditing and accounting.
The consolidated financial statements of PureTec Corporation and of Plastic
Specialties and Technologies, Inc. included in this Prospectus have been
audited by Deloitte & Touche LLP, independent auditors, as stated in their
reports appearing herein and are included in reliance upon the reports of such
firm given upon their authority as experts in accounting and auditing.
AVAILABLE INFORMATION
The Company has filed with the Commission a Registration Statement on Form S-4
(the "Exchange Registration Statement," which term shall encompass all
amendments, exhibits, annexes and schedules thereto) pursuant to the
Securities Act, and the rules and regulations promulgated thereunder relating
to the securities being offered hereby.
This Prospectus does not contain all the information set forth in the Exchange
Registration Statement. For further information with respect to Tekni-Plex
and the Exchange Offer, reference is made to the Exchange Registration
Statement. Statements made in this Prospectus as to the contents of any
contract, agreement or other document referred to are not necessarily
complete. With respect to each such contract, agreement or other document
filed as an exhibit to the Exchange Registration Statement, reference is made
to the exhibit for a more complete description of the document or matter
involved. The Exchange Registration Statement, including the exhibits
thereto, can be inspected and copied at the public reference facilities
maintained by the Commission at Room 1024, 450 Fifth Street, N.W., Washington,
D.C. 20549, at the Regional Offices of the Commission at 75 Park Place, New
York, New York 10007 and at Northwestern Atrium Center, 500 West Madison
Street, Suite 1400, Chicago, Illinois 60661. Copies of such materials can be
obtained from the Public Reference Section of the Commission at 450 Fifth
Street, N.W., Washington, D.C. 20549, at prescribed rates. Additionally, the
Commission maintains a web site (http://www.sec.gov) that contains reports,
proxy and information statements and other information regarding registrants
that file electronically with the Commission.
The Company is subject to the informational requirements of the Exchange Act,
and in accordance therewith is required to file periodic reports and other
information with the Commission. The Company has also agreed that, whether or
not it is required to do so by the rules and regulations of the Commission,
for so long as any of the Notes remain outstanding, it will furnish to the
holders of the Exchange Notes and file with the Commission (unless the
Commission will not accept such a filing) (i) all quarterly and annual
financial information that would be required to be contained in a filing with
the Commission on Forms 10-Q and 10-K if the Company was required to file such
forms, including a "Management's Discussion and Analysis of Financial
Condition and Results of Operations" and, with respect to the annual
information only, a report thereon by the Company's certified independent
accountants and (ii) all reports that would be required to be filed with the
Commission on Form 8-K if the Company was required to file such reports. In
addition, for so long as any of the Notes remain outstanding, the Company has
agreed to 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. Under the
Indenture, the Company shall file with the Trustee annual, quarterly and other
reports within fifteen days after it files such reports with the Commission.
Further, to the extent that annual, quarterly or other financial reports are
furnished by the Company to stockholders generally, it will mail such reports
to holders of Notes. The Company will furnish annual and quarterly financial
reports to stockholders of the Company and will mail such reports to holders
of Notes pursuant to the Indenture. Annual reports delivered to the Trustee
and the holders of Exchange Notes will contain financial information that has
been examined and reported upon, with an opinion expressed by an independent
public or certified public accountant. The Company will also furnish such
other reports as may be required by law.
INDEX TO FINANCIAL STATEMENTS
<TABLE>
<S> <C>
Page
---
Tekni-Plex, Inc.
Report of Independent Certified Public Accountants....................................................... F-2
Financial Statements:
Consolidated balance sheets as of June 28, 1996 and June 27, 1997 and December 26, 1997
(unaudited)........................................................................................... F-3
Consolidated statements of operations for the years ended June 30, 1995, June 28, 1996 and June
27, 1997 and the six months ended December 27, 1996 (unaudited) and December 26, 1997
(unaudited)........................................................................................... F-4
Statements of consolidated stockholders' equity for the years ended June 30, 1995, June 28, 1996
and June 27, 1997 and the six months ended December 26, 1997 (unaudited).............................. F-5
Consolidated statements of cash flows for the years ended June 30, 1995, June 28, 1996 and June
27, 1997 and the six months ended December 27, 1996 (unaudited) and December 26, 1997
(unaudited)........................................................................................... F-6
Notes to consolidated financial statements............................................................... F-8
PureTec Corporation
Independent Auditor's Report..............................................................................F-17
Independent Auditor's Report............................................................................. F-18
Consolidated Balance Sheets as of July 31, 1996 and 1997 and January 31, 1998 (unaudited)................ F-19
Consolidated Statements of Operations for the years ended July 31, 1995, 1996 and 1997 and for
the six months ended January 31, 1997 (unaudited) and January 31, 1998 (unaudited)...................... F-20
Consolidated Statements of Stockholders' Equity for the years ended July 31, 1995, 1996 and 1997 and
for the six months ended January 31, 1998 (unaudited)................................................... F-21
Consolidated Statements of Cash Flows for the years ended July 31, 1995, 1996 and 1997 and for
the six months ended January 31, 1997 (unaudited) and January 31, 1998 (unaudited)...................... F-23
Notes to Consolidated Financial Statements............................................................... F-24
Plastic Specialties and Technologies, Inc.
Independent Auditors' Report............................................................................. F-54
Consolidated Statement of Operations for the year ended July 31, 1995.................................... F-55
Consolidated Statement of Stockholders' Deficit for the year ended July 31, 1995......................... F-56
Consolidated Statement of Cash Flows for the year ended July 31, 1995.................................... F-57
Notes to Consolidated Financial Statements............................................................... F-58
</TABLE>
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
The Board of Directors
Tekni-Plex, Inc.
Somerville, New Jersey
We have audited the accompanying consolidated balance sheets of Tekni-Plex,
Inc. and its wholly owned subsidiary (the "Company") as of June 27, 1997 and
June 28, 1996, and the related consolidated statements of operations,
stockholders' equity and cash flows for each of the three years in the period
ended June 27, 1997. These consolidated financial statements are the
responsibility of the Company's management. Our responsibility is to express
an opinion on these consolidated financial statements based on our audit.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the consolidated financial
statements are free of material misstatement. An audit includes examining, on
a test basis, evidence supporting the amounts and disclosures in the
consolidated financial statements. An audit also includes assessing the
accounting principles used and significant estimates made by management, as
well as evaluating the overall financial statement presentation. We believe
that our audits provide a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the financial position of
Tekni-Plex, Inc. and its wholly owned subsidiary as of June 27, 1997 and June
28, 1996, and the results of their operations and their cash flows for each of
the three years in the period ended June 27, 1997, in conformity with
generally accepted accounting principles.
BDO SEIDMAN, LLP
August 26, 1997
Woodbridge, New Jersey
TEKNI-PLEX, INC.
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
[Years Ended]
------------------------------------------------------
December 26,
June 28, 1996 June 27, 1997 1997
---------------- ------------------ -----------------
<S> <C> <C> <C>
(unaudited)
Assets(Note 4)
Current assets:
Cash........................................................ $ 1,048,287 $ 11,095,061 $ 9,235,072
Accounts receivable, net of an allowance of $565,000,
$313,000 and $316,000 for possible losses...................... 12,955,647 12,688,165 15,054,734
Inventories................................................. 12,954,993 13,315,278 13,893,003
Income tax refund receivable................................ -- 1,082,800 --
Deferred income taxes....................................... 2,900,000 1,500,000 1,172,000
Prepaid and other current assets............................ 1,738,009 2,029,606 2,091,174
------------- ------------- ---------------
Total current assets........................................ 31,596,936 41,710,910 41,445,983
Property, plant and equipment, net................................ 44,506,233 42,389,315 41,645,861
Intangible assets, net of accumulated amortization of
$4,821,400, $7,700,300 and $9,227,000............................ 40,751,682 36,966,687 37,390,994
Deferred charges, net of accumulated amortization of $496,200,
$77,400 and $408,000............................................. 4,515,045 5,204,506 4,919,423
Loan receivable -- PureTec........................................ -- -- 5,000,000
Other assets...................................................... 400,142 2,757,946 281,341
------------- ------------- ---------------
Total assets................................................ $ 121,770,038 $ 129,029,364 130,683,602
============= ============= ===============
Liabilities and Stockholders' Equity
Current liabilities:
Current portion of long term debt........................... $ 3,226,149 $ -- $ 563,775
Accounts payable--trade..................................... 5,480,514 6,138,694 5,673,431
Accrued payroll and benefits................................ 3,917,404 5,189,683 1,956,164
Accrued interest............................................ 1,068,690 -- 2,119,378
Accrued liabilities--other.................................. 5,448,782 4,432,916 1,358,231
Income taxes payable........................................ 795,000 -- 1,375,000
------------- ------------- ---------------
Total current liabilities................................... 19,936,539 15,761,293 13,045,979
Long-term debt.................................................... 67,209,889 75,000,000 75,044,000
Deferred income taxes............................................. 7,655,000 7,255,000 6,967,000
Other liabilities................................................. 1,135,869 615,576 555,500
Redeemable warrants............................................... 1,670,374 -- --
------------- ------------- ---------------
Total liabilities........................................... 97,607,671 98,631,869 95,612,479
------------- ------------- ---------------
Commitments and contingencies
Stockholders' equity:
Common stock, $.01 par value, authorized 20,000 shares,
issued and outstanding 1,707 shares at June 28, 1996 and
June 27, 1997 and 850 shares at December 26, 1997.............. 17 17 9
Additional paid-in capital.................................. 22,999,983 41,473,251 41,473,259
Cumulative currency translation adjustment.................. $ (66,928)
Retained earnings (deficit) $ 1,162,367 $(11,075,773) $ (6,335,217)
------------- ------------- ---------------
Total stockholders' equity.................................. 24,162,367 30,397,495 35,071,123
------------- ------------- ---------------
Total liabilities and stockholders' equity..................... $ 121,770,038 $ 129,029,364 $ 130,683,602
============= ============= ===============
</TABLE>
See acompanying summary of accounting policies and notes to
consolidated financial statments.
TEKNI-PLEX, INC.
CONSOLIDATED STATEMENT OF OPERATIONS
<TABLE>
--------------------------------------------------------------------------------
Years ended Six months ended
----------------------------------------------- ------------------------------
December 27, December 26,
June 30, 1995 June 28, 1996 June 27, 1997 1996 1997
------------- ------------- ------------- ------------ --------------
(unaudited)
<S> <C> <C> <C> <C> <C>
Net sales...................... $ 44,688,453 $ 80,917,205 $ 144,735,927 $ 71,594,561 $ 75,621,895
Cost of sales.................. 34,941,442 62,335,102 107,006,755 53,459,922 55,224,465
------------ ------------ ------------- ------------ ------------
Gross profit................... 9,747,011 18,582,103 37,729,172 18,134,639 20,397,430
Operating expenses:
Selling, general and
administrative................ 4,813,583 10,338,632 15,886,002 7,150,191 8,255,574
------------ ------------ ------------- ------------ ------------
Income from operations......... 4,933,428 8,243,471 21,843,170 10,984,448 12,141,856
Other expenses:
Interest....................... 4,321,979 5,816,166 8,094,149 4,129,478 4,335,701
Other.......................... 234,743 469,370 646,433 440,106 158,599
Income before provision for
income taxes and
extraordinary item.......... 376,706 1,957,935 13,102,588 6,414,864 7,647,556
Provision for income taxes..... 211,000 982,200 4,675,000 2,255,000 2,907,000
------------ ------------ ------------- ------------ ------------
Income before extraordinary
item........................ 165,706 975,735 8,427,588 4,159,864 4,740,556
Extraordinary loss on
extinguishment of debt...... -- -- (20,665,728) -- --
------------ ------------ ------------- ------------ ------------
Net income (loss).............. $ 165,706 $ 975,735 $(12,238,140) $ 4,159,864 $ 4,740,556
============ ============ ============= ============ ============
</TABLE>
See acompanying summary of accounting policies and notes to
consolidated financial statments.
TEKNI-PLEX, INC.
STATEMENT OF CONSOLIDATED STOCKHOLDERS' EQUITY
<TABLE>
----------------------------------------------------------------------------------
Cumulative
Common Additional Paid- Foreign Currency Retained
Stock In Capital Adjustment Earnings Total
--------- ------------------- ---------------- -------------- --------------
<S> <C> <C> <C> <C> <C>
Balance, July 1, 1994............ $ 9 $ 1,499,991 $ 20,926 $ 11,520,926
Net income................. -- -- -- 165,706 165,706
------- ------------- ---------------- -------------- --------------
Balance, June 30, 1995........... 9 11,499,991 186,632 11,686,632
Proceeds from capital
contribution.................. 8 11,499,992 -- 11,500,000
Net income................. -- -- -- 975,735 975,735
------- ------------- ---------------- -------------- --------------
Balance, June 28, 1996........... 17 22,999,983 1,162,367 24,162,367
Proceeds from capital
contribution.................. -- 18,473,268 -- 18,473,268
Net loss................... -- -- -- (12,238,140) (12,238,140)
------- ------------- ---------------- -------------- --------------
Balance, June 27, 1997........... 17 41,473,251 (11,075,773) 30,397,495
Return of 857 shares to the
Company (unaudited)............. (8) 8 -- -- --
Foreign currency translation.....
Foreign currency translation
adjustment--(unaudited)......... -- -- (66,928) -- (66,928)
Net Income (unaudited)........... -- -- -- 4,740,556 4,740,556
------- ------------- ---------------- -------------- --------------
Balance, December 26, 1997
(unaudited)..................... $ 9 $ 41,473,259 $ (66,928) $ (6,335,217) $ 35,071,123
======= ============= =============== ============== ==============
</TABLE>
See acompanying summary of accounting policies and notes to
consolidated financial statments.
TEKNI-PEX, INC.
` CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
--------------------------------------------------------------------------------
Years ended Six months ended
------------------------------------------------ ----------------------------
December 27, December 26,
June 30, 1995 June 28, 1996 June 27, 1997 1996 1997
------------- ------------- -------------- ------------ ------------
(unaudited)
<S> <C> <C> <C> <C> <C>
Cash flows from operating activities:
Net income (loss)...................... $ 165,706 $ 975,735 $ (12,238,140) $ 4,159,864 $ 4,740,556
Adjustments to reconcile net income
to net cash provided by operating
activities:
Depreciation...................... 1,018,157 3,247,239 6,051,201 2,976,820 3,010,858
Amortization...................... 2,444,222 3,573,592 3,499,679 1,838,876 1,782,472
Deferred income taxes............. 210,000 63,700 1,000,000 705,000 40,000
Allowance for doubtful accounts... -- 120,614 200,000 200,000 3,000
Amortization of redeemable warrants 391,100 379,274 556,400 363,400 --
Extraordinary loss on extinguishment
of debt........................... -- -- 20,665,728 -- --
Changes in assets and liabilities, net
of acquisitions:
Accounts receivable............... (1,005,933) 1,160,960 67,482 (1,479,497) (1,456,965)
Inventories....................... (801,591) 1,394,980 (360,285) (860,458) (224,934)
Prepaid expenses and other current
assets............................ (128,978) (791,519) (291,597) 751,621 147,096
Deferred charges and other
assets............................ 44,637 163,146 12,108 (34,917) --
Accounts payable and other
current liabilities............... 16,681 (4,516,499) 495,368 297,291 (5,534,278)
Income taxes payable.............. -- 796,343 (121,100) 989,372 2,457,800
------------- ------------- -------------- ------------ ------------
Net cash provided by operating
activities........................ 2,354,001 6,567,565 19,536,844 9,908,372 4,965,605
Cash flows from investing activities:
Acquisitions of net assets including
acquisition costs, net of cash
acquired............................ -- (47,246,686) -- -- (2,292,000)
Capital expenditures.............. (614,344) (2,275,215) (3,934,283) (1,402,132) (1,939,190)
Investment/loan to PureTec........ -- (5,262,624)
Increase in deposits.............. -- -- (2,338,535) (369,047) 2,484,605
------------- ------------- -------------- ------------ ------------
Net cash used in investing
activities........................ (614,344) (49,521,901) (6,272,818) (1,771,179) (7,009,209)
------------- ------------- -------------- ------------ ------------
Cash flows from financing activities:
Proceeds from long-term debt...... -- 51,614,974 75,000,000 -- --
Repayments of long-term debt...... (1,500,000) (19,550,000) (64,551,149) (1,552,263) (29,783)
Borrowings/payments on line of
credit, net......................... 131,969 3,459,324 (6,857,505) (4,853,177) 213,398
Repayments of notes payable....... (83,380) (92,016) -- -- --
Proceeds from capital contribution -- 11,500,000 18,473,268 -- --
Debt financing costs.............. -- (3,713,039) (5,281,866) (159,895) --
Redemption of warrants............ -- -- (20,000,000) -- --
Proceeds from issuance of warrants -- 450,000
------------- ------------- -------------- ------------ ------------
Net cash provided by (used in)
financing activities.................. (1,451,411) 43,669,243 (3,217,252) (6,565,335) 183,615
------------- ------------- -------------- ------------ ------------
Net increase in cash................... 288,246 714,907 10,046,774 1,571,858 (1,859,989)
Cash, beginning of period.............. 45,134 333,380 1,048,287 1,048,287 11,095,061
------------- ------------- -------------- ------------ ------------
Cash, end of period.................... $ 333,380 $ 1,048,287 $ 11,095,061 $ 2,620,145 $ 9,235,072
============= ============= ============== ============ ============
</TABLE>
See acompanying summary of accounting policies and notes to
consolidated financial statments.
TEKNI-PLEX, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Information for the six months ended December 27, 1996 and December 26, 1997
is unaudited)
1. Summary of Accounting Policies
Nature of Business
Tekni-Plex, Inc. is a New Jersey based manufacturer of primary packaging
materials for the pharmaceutical, food, foodservice disposables and
telecommunications industries. The Company is organized into two operating
groups. The Flexible Packaging Group produces printed and unprinted
multi-layer constructions of plastic, paper and metal films and sheets, with
emphasis on pharmaceutical and telecommunications applications. The Foam
Products Group primarily produces polystyrene foam packaging products for the
food and foodservice disposables industries.
The Company operates seven manufacturing plants in New Jersey (2), Indiana,
Washington, Georgia, Texas and Cambridge, Ontario (Canada). All facilities are
owned with the exception of the Texas plant. The Company's products are sold
to both domestic and international customers.
On March 18, 1994, T.P. Acquisition Company, Inc. acquired Tekni-Plex, Inc.
for approximately $43,775,000. The companies were merged. The acquisition was
accounted for using the purchase method of accounting and, accordingly, the
purchase price was allocated to assets acquired and liabilities assumed based
on their fair market value on the closing date. The excess of cost over the
fair value of net assets acquired amounted to $31,035,000 after providing for
certain restructuring costs.
Consolidation Policy
The consolidated financial statements include the financial statements of
Tekni-Plex, Inc. and its wholly-owned subsidiary, Dolco Packaging Corp.
("Dolco"). All intercompany transactions and balances have been eliminated in
consolidation. In August 1997, Dolco was merged into Tekni-Plex, Inc.
Interim Financial Information
The unaudited balance sheet as of December 26, 1997, the unaudited
consolidated statements of earnings and cash flows for the six month periods
ended December 27, 1996 and December 26, 1997, and the unaudited statement of
stockholders' equity for the six month period ended December 26, 1997 have
been prepared in accordance with generally accepted accounting principles for
interim financial information. In the opinion of management, all adjustments
(which include normal recurring accruals) necessary to present fairly the
financial position, results of operations and cash flows at December 27, 1996
and December 26, 1997 and for the six month periods presented, have been
included.
The results of operations for the six months ended December 26, 1997 are not
necessarily indicative of the results to be expected for the entire fiscal
year.
Inventories
Inventories are stated at the lower of cost (weighted average) or market.
Property, Plant and Equipment
Property, plant and equipment are stated at cost. Depreciation and
amortization are computed over the estimated useful lives of the assets by the
straight-line method for financial reporting purposes and by accelerated
methods for income tax purposes.
Intangible Assets
The Company amortizes the excess of cost over the fair value of net assets
acquired on a straight-line basis over 15 years, and the cost of acquiring
certain patents and trademarks, over seventeen and ten years, respectively.
Recoverability is evaluated periodically based on the expected undiscounted
net cash flows of the related businesses.
Deferred Charges
The Company amortizes the deferred financing costs incurred in connection with
the Company's borrowings over the life of the related indebtedness (5-10
years). The covenant not to compete portion of the Consulting Agreement with
former management is amortized over its related term of 10 years (see Note 10).
Income Taxes
The Company accounts for income taxes under the provisions of Statement of
Financial Accounting Standards No. 109 ("SFAS 109"), "Accounting for Income
Taxes." Deferred income tax assets and liabilities are recognized for
differences between the financial statement and income tax basis of assets and
liabilities based upon statutory rates enacted for future periods. Valuation
allowances are established when necessary to reduce deferred tax assets to the
amount expected to be realized.
Statement of Cash Flows
For purposes of the statement of cash flows, the Company considers all highly
liquid debt instruments with a maturity of three months or less to be cash
equivalents.
Fiscal Year-End
The Company utilizes a 52/53 week fiscal year ending on the Friday closest to
June 30.
Significant Risks and Uncertainties
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions
that affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.
Long-Lived Assets
Effective June 29, 1996, the Company adopted SFAS No. 121, "Accounting for the
Impairment of Long-Lived Assets and Long-Lived Assets Being Disposed of,"
which provides guidance on how and when impairment losses are recognized on
long-lived assets. This statement did not have a material impact on the
financial position or results of operations of the Company.
Stock Based Compensation
Effective June 29, 1996, the Company adopted SFAS No. 123, "Accounting for
Stock-Based Compensation." The Company chose to apply APB Opinion 25 and
related interpretations in accounting for its stock options. As a result, this
statement did not have an effect on the financial position or results of
operations of the Company.
New Accounting Pronouncements
In June 1997, SFAS 130, "Reporting Comprehensive Income," and SFAS 131,
"Disclosures About Segments of an Enterprise and Related Information," were
issued. SFAS 130 addresses standards for reporting and display of
comprehensive income and its components and SFAS 131 requires disclosure of
reportable operating segments. Both statements are effective for the Company's
1999 fiscal year. The Company will be reviewing these pronouncements to
determine their applicability to the Company, if any.
2. Acquisitions
On July 3, 1997, the Company purchased 100% of the stock of PurePlast, Inc.
("PurePlast") for $2,292,000. Pro forma results of operations, assuming the
PurePlast acquisition had occurred on June 29, 1996, would not be materially
different from the results presented.
On February 22, 1996, the Company purchased 100% of the common stock of Dolco
Packaging Corp. ("Dolco") for approximately $40,000,000. Dolco is the nation's
leading producer of foamed egg cartons and various grocery store containers
for meat, poultry, baked goods and produce. The acquisition was recorded under
the purchase method and Dolco's operations have been reflected in the
statement of operations since that date. As a result of the acquisition,
goodwill of approximately $14,044,000 has been recorded, which is being
amortized over 15 years.
In connection with this acquisition, a reserve of $5,000,000 was established
for the costs to integrate Dolco's operations with the Company and to
eliminate duplicate personnel. At June 28, 1996, the Company had approximately
$4,200,000 remaining in this reserve. During the year ended June 27, 1997, the
Company reduced its estimate of these costs and, accordingly, reduced this
reserve and goodwill by $790,000. At June 27, 1997, the remaining balance in
this reserve was approximately $1,032,000.
The following table presents the unaudited pro forma results of operations as
though the acquisition of Dolco occurred on July 2, 1994:
<TABLE>
<CAPTION>
----------------------------------
June 30, 1995 June 28, 1996
--------------- ---------------
<S> <C> <C>
Net sales..................... $ 117,920,000 $ 135,800,000
Income from operations........ 10,748,000 11,753,000
Net income.................... 1,623,000 1,848,000
</TABLE>
The pro forma results are not necessarily indicative of what actually would
have occurred if the acquisition had been in effect for the entire periods
presented. In addition, they are not intended to be a projection of future
results and do not reflect any synergies that might be achieved from combined
operations.
On December 22, 1995, the Company purchased certain assets and assumed certain
liabilities of Hargro Flexible Packaging Corporation in Flemington, NJ, for
approximately $7,500,000, which approximated the fair value of the net assets
acquired. The acquisition was recorded under the purchase method. As a result
of this acquisition, the former Brooklyn, New York Closure Liners Operation of
Tekni-Plex was closed on May 31, 1996. The machinery and equipment along with
many of the employees have been relocated to the Flemington facility. Pro
forma results of operations, assuming the Hargro acquisition had been made on
July 2, 1994, would not be materially different from the unaudited pro forma
results presented above.
3. Inventories
Inventories are summarized as follows:
<TABLE>
---------------------------------------------------
December 26,
June 28,1996 June 27, 1997 1997
--------------- --------------- --------------
<S> <C> <C> <C>
Raw materials...... $ 3,642,000 $ 5,943,000 $ 6,226,000
Work-in-process.... 4,038,000 3,362,000 3,542,000
Finished goods..... 5,275,000 4,010,000 4,125,000
-------------- --------------- --------------
12,955,000 13,315,000 13,893,000
============== =============== ==============
</TABLE>
4. Property, Plant and Equipment
Property, plant and equipment consists of the following:
<TABLE>
<CAPTION>
--------------------------------------------------------------------------
December 26, Estimated useful
June 28, 1996 June 27, 1997 1997 lives
--------------- --------------- -------------- ------------------
<S> <C> <C> <C> <C>
Land................................ 1,886,000 1,901,000 1,901,000
Building and improvements........... 10,209,000 10,450,000 10,572,000 30-40 years
Machinery and equipment............. 35,837,000 38,375,000 39,050,000 5-10 years
Furniture and fixtures.............. 338,000 451,000 910,000 5-10 years
Construction in progress............ 660,000 2,138,000 2,722,000
--------------- --------------- --------------
48,930,000 53,315,000 55,155,000
Less: Accumulated depreciation...... 4,424,000 10,926,000 13,509,000
--------------- --------------- --------------
44,506,000 42,389,000 41,646,000
=============== =============== ==============
</TABLE>
5. Long-Term Debt
Long-term debt consists of the following:
<TABLE>
<CAPTION>
---------------------------------------------
December 26,
June 28, 1996 June 27, 1997 1997
--------------- ------------- ------------
<S> <C> <C> <C>
Senior Subordinated Notes(a).................................... $ -- $ 75,000,000 $ 75,000,000
Revolving line of credit(b)..................................... 6,858,000 -- --
Term loans(b)................................................... 39,250,000 -- --
Subordinated note payable I (less unamortized discount of
$330,000)(c)................................................... 11,670,000 -- --
Subordinated note payable II (less unamortized discount of
$432,000)(d)................................................... 11,568,000 -- --
Notes payable -- covenant not to compete (less unamortized
discount of $443,000)(e)....................................... 1,090,000 --
Other(g)........................................................ 608,000
------------ ------------- ------------
70,436,000 75,000,000 75,608,000
Less: Current maturities........................................ 3,226,000 -- 564,000
------------ ------------- ------------
$ 67,210,000 $ 75,000,000 $ 75,044,000
============ ============= ============
</TABLE>
- ------------
The recorded value of long-term debt approximates fair value based on current
rates available to the Company for debt of the same remaining maturities.
(a) On April 4, 1997, the Company issued $75,000,000 of 11 1/4% ten year
notes. Interest on the notes is payable semi-annually. These proceeds
along with a capital contribution of $18,373,000 were used to repay the
balance of $36,800,000 on the credit facility, repay the subordinated
notes of $25,200,000, including a prepayment penalty of $1,200,000 and
repurchase the redeemable warrants for $20,000,000. These transactions
resulted in an extraordinary loss of approximately $20,666,000. The
extraordinary loss was comprised of (i) the prepayment penalty of
$1,200,000 and the write-off of deferred financing costs and debt
discount of $3,449,000 net of the combined tax benefit of $1,757,000,
and (ii) the loss of the repurchase of the warrant of $17,773,000. The
fair value of the warrants was determined pursuant to the contractually
agreed value among the relevant parties.
(b) The Company maintained a revolving line of credit and two term notes
with a bank, expiring February 21, 2002. Advances under the revolving
line were limited to the sum of eligible accounts receivable and
inventory, not to exceed $19,000,000. Outstanding borrowings under the
revolving loan bore interest, payable monthly, at the bank's prime
rate, plus 1 1/2% (9 1/2% at June 28, 1996) or LIBOR, plus 2 3/4% (8.2%
at June 28, 1996). The maximum amount outstanding was $11,771,000 and
$4,525,000 for the years ended June 28, 1996 and June 30, 1995,
respectively. The average amount outstanding and average rate of
interest were $5,389,000 at 7.6% for the year ended June 28, 1996 and
$3,664,000 at 9.8% for the year ended June 30, 1995.
The term loans were payable in increasing quarterly principal
installments commencing May 31, 1996 with a final payment of $2,500,000
due on August 1, 2002. The term loans bore interest, payable monthly,
at LIBOR plus 2 3/4% and 3% (8.195% and 8.281% at June 28, 1996).
The loan agreement contained, among other things, provisions for
maximum capital expenditures and required the Company to comply with
certain financial ratios. Loans were secured by substantially all of
the Company's assets, including a first mortgage on the Company's
facilities.
(c) Subordinated note payable I in the original principal amount of
$12,000,000 was amended on February 21, 1996 and was due in two annual
principal installments of $6,000,000 on February 21 in 2003 and 2004,
with interest payable quarterly at 12 1/2%. In connection with this
note, the Company issued warrants for the purchase of 150 shares of the
Company's common stock exercisable at par value. The warrants are
effective as of March 18, 1994 and would have expired on February 21,
2004.
(d) Subordinated note payable II in the original principal amount of
$12,000,000, issued on February 21, 1996 was due in two annual
principal installments of $6,000,000 on February 21 in 2003 and 2004,
with interest payable quarterly at 12 1/2%. In connection with this
note, the Company issued warrants for the purchase of 150 shares of the
Company's common stock, exercisable at par value. The warrants were
effective as of February 21, 1996 and would have expired February 21,
2004.
Each of the subordinated notes were discounted by $450,000,
representing the estimated fair market value of the warrants at the
time of issuance. The discounts were being amortized on the interest
method over the terms of the notes.
The Company entered into a put option agreement ("agreement") with the
warrant holders that may have required the Company to acquire all or a
portion of shares of the Company's common stock issuable in connection
with the warrants at a price equal to, approximately, the greater of
book value or fair market value per share of common stock. At March
28, 1997, the estimated value of the put option was $5,438,000. The
difference between the calculated value and the recorded value was
being accreted, as a charge to interest expense, over the remaining
life of the put option.
(e) The Company entered into a Consulting Agreement with former
management, the terms of which call for 120 monthly payments of $16,667
through the year 2004, the total of such payments being $2,000,000.
The Company was amortizing the covenant not to compete portion over 10
years. The net present value was calculated using an implied interest
rate of 9 1/2% (see Note 10).
(f) On May 8, 1997, the Company entered into the New Credit Facility and
the Company has terminated the Existing Credit Facility. The New
Credit Facility includes various covenants including, but not limited
to, the maintenance of a minimum net worth, a minimum EBITDA, a ratio
of EBITDA to interest expense, and a ratio of debt to EBITDA. As of
December 26, 1997, there was no outstanding balance under the
$75,000,000 revolving credit line of the New Credit Facility.
(g) PurePlast has loan facilities as follows:
o Line of credit for $722,000 at the prime rate, plus 1/4%. The line is
due on demand and is unsecured. There is $515,000 outstanding at
December 26, 1997.
o Term loan in the amount of $109,000. The loan is due in monthly payments
of $4,000, plus interest at prime, plus 1 1/4%.
6. Income Taxes
The provision for income taxes is summarized as follows:
<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------
Years ended Six months ended
----------------------------------------------------- -------------- --------------
December 27, December 26,
June 30, 1995 June 28, 1996 June 27, 1997 1996 1997
--------------- --------------- --------------- -------------- --------------
<S> <C> <C> <C> <C> <C>
Current:
Federal................... $ -- $ 735,000 $ 3,425,000 $ 1,387,000 $ 2,355,000
State and local........... 1,000 183,000 250,000 163,000 512,000
--------------- --------------- --------------- -------------- --------------
1,000 918,000 3,675,000 1,550,000 2,867,000
Deferred.................. 210,000 64,000 1,000,000 705,000 40,000
--------------- --------------- --------------- -------------- --------------
Provision for income taxes $ 211,000 $ 982,000 $ 4,675,000 $ 2,255,000 $ 2,907,000
=============== =============== =============== ============== ==============
</TABLE>
The provision for income taxes differs from the amounts computed by applying
the applicable Federal statutory rates due to the following:
<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------
Years ended Six months ended
----------------------------------------------------- -------------- --------------
December 27, December 26,
June 30, 1995 June 28, 1996 June 27, 1997 1996 1997
--------------- --------------- --------------- -------------- --------------
<S> <C> <C> <C> <C> <C>
Provision for Federal income
taxes at statutory rate........ $ 128,000 $ 666,000 $ 4,455,000 $ 2,181,000 $ 2,600,000
State and local income taxes,
net of Federal benefit......... 81,000 305,000 165,000 64,000 343,000
Other, net...................... 2,000 11,000 55,000 10,000 (36,000)
--------------- --------------- --------------- -------------- --------------
Provision for income taxes...... $ 211,000 $ 982,000 $ 4,675,000 $ 2,255,000 $ 2,907,000
=============== =============== =============== ============== ==============
</TABLE>
Significant components of the Company's deferred tax assets and liabilities
are as follows:
<TABLE>
<CAPTION>
----------------------------------------------------
December 26,
June 28, 1996 June 27, 1997 1997
--------------- --------------- --------------
<S> <C> <C> <C>
Current deferred taxes:
Allowance for doubtful accounts..................... $ 226,000 $ 125,000 $ 126,000
Inventory........................................... 338,000 360,000 360,000
Tax credit and net operating loss carryforwards..... 1,002,000 298,000 --
Accrued expenses.................................... 1,334,000 717,000 686,000
--------------- --------------- --------------
Total current deferred taxes........................ 2,900,000 1,500,000 1,172,000
--------------- --------------- --------------
Long-term deferred taxes:
Net operating loss carryforwards 325,000 -- --
Difference in book vs tax basis of assets........... (7,980,000) (7,255,000) (6,967,000)
--------------- --------------- --------------
Total long-term deferred tax liabilities............ (7,655,000) (7,255,000) (6,967,000)
--------------- --------------- --------------
$(4,755,000) $(5,755,000) $(5,795,000)
=============== =============== ==============
</TABLE>
7. Employee Benefit Plans
The Company maintains a discretionary profit sharing plan covering all
eligible employees, excluding those employed by Dolco, with at least one year
of service. Contributions to the plan are determined annually by the Board of
Directors. There was no contribution for years ended June 27, 1997, June 28,
1996 and June 30, 1995.
The Company has a defined contribution profit sharing plan for the benefit of
all employees having completed one year of service with Dolco Packaging Corp.
The Company contributes 3% of each participant's compensation on a weekly
basis. In 1993, the plan was amended to reintroduce the company matching
contribution of up to 1% when an employee contributes 3% of compensation.
Contributions totaled approximately $475,000 for the year ended June 27, 1997
and approximately $188,000 for the period February 22, 1996 to June 28, 1996.
The Company also has a defined benefit pension plan for the benefit of all
employees having completed one year of service with Dolco. The Company's
policy is to fund the minimum amounts required by applicable regulations.
Dolco's Board of Directors approved a plan to freeze the pension plan on June
30, 1987, at which time benefits ceased to accrue. Dolco has not been required
to contribute to the plan since 1990.
8. Related Party Transactions
The Company has a management consulting agreement with an affiliate of a
stockholder. The terms of the agreement require the Company to pay a fee of
approximately $30,000 per month for a period of ten years. Consulting service
fees were approximately $390,000, $274,000 and $203,000 for the years ending
June 27, 1997, June 28, 1996 and June 30, 1995, respectively.
9. Stock Options
In April 1994, the Company granted options to an employee to acquire 2 1/2% of
the outstanding common stock with anti-dilution provisions. The options are
exercisable as to 33 1/3% of the shares on the first, second and third
anniversary dates of the original grant and expire fifteen years from the date
of the grant. No options have been exercised or forfeited as of June 27, 1997.
The Company applies APB Opinion 25 and related interpretations in accounting
for these options. Accordingly, no compensation cost has been recognized. Had
compensation cost been determine based on the fair value at the grant dates
for these awards consistent with the method of SFAS Statement 123, the
Company's net income (loss) would have been reduced to the pro forma amounts
indicated below. The calculations were based on a risk free interest rate of
6 3/4% and 6.24%.
<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------
Years ended Six months ended
----------------------------------------------------- --------------------------------
December 27, December 26,
June 30, 1995 June 28, 1996 June 27, 1997 1996 1997
--------------- --------------- --------------- -------------- --------------
<S> <C> <C> <C> <C> <C>
Income before extraordinary
item:
As reported............... $ 165,700 $ 975,700 $ 8,427,600 $ 4,160,000 $ --
Pro forma................. 127,600 904,100 8,323,500 4,086,000 --
=============== =============== =============== ============== ==============
</TABLE>
10. Commitments and Contingencies
Commitments
(a) The Company leases building space in Texas, California, Georgia and
Washington. At June 27, 1997, the Company's future minimum lease payments are
as follows:
<TABLE>
<S> <C>
1998............................... $667,000
1999............................... 649,000
2000............................... 591,000
2001............................... 122,000
2002............................... --
----------
$2,029,000
==========
</TABLE>
Rent expense, including escalation charges, amounted to approximately
$676,000, $614,000 and $343,000 for the years ended June 27, 1997, June 28,
1996 and June 30, 1995, respectively.
(b) The Company has employment contracts with two employees. These contracts
provide aggregate minimum annual compensation for the years ended June 30 as
follows: 1998 -- $825,000; 1999 -- $825,000; 2000 -- $825,000.
Contingencies
(a) The Company filed an action under the arbitration provisions of the
Merger and Acquisition Agreement, dated March 18, 1994 (the "Merger
Agreement") demanding a reduction in the purchase price paid due to a breach
of that agreement. In the above action, the Company also sought to nullify its
obligation under the Consulting Agreement (see Note 5).
On April 18, 1997, the Company and the former shareholder reached a settlement
in arbitration (the "Settlement"). All obligations of each party to the other
were nullified. This Settlement did not have a material impact on the financial
condition or results of operations of the Company.
(b) The Company is a party to various legal proceedings arising in the
normal conduct of business. Management believes that the final outcome of
these proceedings will not have a material adverse effect on the Company's
financial position.
11. Concentrations of Credit Risks
Financial instruments that potentially subject the Company to significant
concentrations of credit risk consist principally of cash deposits and trade
accounts receivable.
The Company provides credit to customers on an unsecured basis after
evaluating customer credit worthiness. Since the Company sells to a broad
range of customers, concentrations of credit risk are limited. The Company
provides an allowance for bad debts where there is a possibility for loss.
The Company maintains demand deposits at several major banks throughout the
United States. As part of its cash management process, the Company
periodically reviews the credit standing of these banks.
12. Supplemental Cash Flow Information
(a) Cash Paid
<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------
Years ended Six months ended
----------------------------------------------------- --------------------------------
December 27, December 26,
June 30, 1995 June 28, 1996 June 27, 1997 1996 1997
--------------- --------------- --------------- -------------- --------------
<S> <C> <C> <C> <C> <C>
Interest.......... $ 3,502,000 $ 4,730,000 $ 5,317,000 $ 3,330,000 $ 4,236,000
Income taxes...... 467,000 188,000 3,747,000 525,000 409,000
</TABLE>
(b) Acquisitions
The Company purchased certain assets and assumed certain liabilities of Hargro
Flexible Packaging Corporation, effective December 22, 1995, for approximately
$7,500,000 in cash. In conjunction with the acquisition, liabilities were
assumed as follows:
<TABLE>
<S> <C>
Fair value of assets acquired................. $10,592,000
Cash paid..................................... (7,543,000)
-----------
Liabilities assumed........................... $ 3,049,000
===========
</TABLE>
The Company purchased all of the outstanding common and preferred stock of
Dolco Packaging Corp, effective February 22, 1996, for approximately
$40,000,000 in cash. In conjunction with the acquisition, liabilities were
assumed as follows:
<TABLE>
<S> <C>
Fair value of assets acquired................. $46,293,000
Goodwill...................................... 14,044,000
Cash paid..................................... (39,434,000)
-----------
Liabilities assumed........................... $20,903,000
===========
</TABLE>
The Company purchased certain assets and assumed certain liabilities of
PurePlast, Inc. effective July 3, 1997, for approximately $2,292,000 in cash.
In conjunction with the acquisition, liabilities were assumed as follows:
<TABLE>
<S> <C>
Fair value of assets acquired.................. $1,802,000
Goodwill....................................... 1,734,000
Cash paid...................................... (2,292,000)
----------
Liabilities assumed............................ $1,244,000
==========
</TABLE>
INDEPENDENT AUDITORS' REPORT
To the Board of Directors and Stockholders of
PureTec Corporation
Ridgefield, New Jersey
We have audited the accompanying consolidated balance sheets of PureTec
Corporation and subsidiaries (the "Company") as of July 31, 1997 and 1996, and
the related consolidated statements of operations, stockholders' equity, and
cash flows for each of the three years in the period ended July 31, 1997.
These financial statements are the responsibility of the Company's management.
Our responsibility is to express an opinion on the financial statements based
on our audits. We did not audit the financial statements of Styrex Industries,
Inc. ("Styrex") (a consolidated subsidiary) for the year ended July 31, 1995,
which statements have been reclassified to discontinued operations and
represent 27% of the net loss for that year. Those statements were audited by
other auditors whose report has been furnished to us, and our opinion, insofar
as it relates to the amounts included for Styrex for the year ended July 31,
1995, is based solely on the report of such other auditors.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, based on our audits and the report of the other auditors, such
consolidated financial statements present fairly, in all material respects,
the financial position of the Company as of July 31, 1997 and 1996, and the
results of its operations and its cash flows for each of the three years in
the period ended July 31, 1997 in conformity with generally accepted
accounting principles.
/s/ Deloitte & Touche LLP
Parsippany, New Jersey
November 13, 1997
HOLTZ RUBENSTEIN & CO., LLP LETTERHEAD
Independent Auditors' Report
----------------------------
September 12, 1995 (except for Note 6, as
to which the date is November 9, 1995)
To the Board of Directors and Stockholders of
Styrex Industries, Inc.
We have audited the accompanying statements of operations and deficit and cash
flows of Styrex Industries, Inc. for the year ended July 31, 1995. These
financial statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audit provides a reasonable basis
for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the results of Styrex Industries, Inc.'s operations and
its cash flows for the year ended July 31, 1995, in conformity with generally
accepted accounting principles.
As discussed in Note 2 to the financial statements, the Company is a wholly-
owned subsidiary of PTI Plastics, Inc. The Company has received funding from
its parent in the form of loans and advances and at July 31, 1995 advances from
its parent company approximated $3,373,000.
Holtz Rubenstein & Co., LLP
PURETEC CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Dollars in thousands, except per share data)
<TABLE>
<CAPTION>
------------------------------------------------
July 31, 1996 July 31, 1997 January 31, 1998
------------- ------------- ---------------
(unaudited)
Assets
<S> <C> <C> <C>
Current assets:
Cash and cash equivalents.................................... $ 5,995 $ 6,745 $ 2,200
Accounts receivable, less allowance for doubtful accounts
of $980 as of July 31, 1996, $1,154 as of July 31, 1997
and $1,352 as of January 31, 1998.......................... 53,675 56,736 48,830
Inventories.................................................. 41,403 54,568 68,672
Prepaid expenses and other current assets.................... 3,955 3,962 2,513
------------- ----------- -----------
Total current assets....................................... 105,028 122,011 122,215
Property, plant and equipment, net.............................. 85,156 88,367 87,252
Goodwill, net of accumulated amortization of $3,168, $6,660
and $7,467 as of July 31, 1996 and 1997 and October 31,
1997, respectively........................................... 92,570 90,192 87,302
Other intangible assets, net.................................... 1,344 44 29
Other assets, net............................................... 12,592 11,209 10,470
------------- ----------- -----------
Total assets............................................... $ 296,690 $ 311,823 $ 307,268
============= =========== ===========
Liabilities and Stockholders' Equity
Current liabilities:
Short-term borrowings........................................ $ 20,170 $ 38,665 $ 49,759
Accounts payable............................................. 28,974 27,751 26,197
Accrued plant closing and disposal costs..................... 3,901 2,263 679
Accrued expenses............................................. 24,947 25,809 20,992
Current portion of long-term debt............................ 5,292 7,363 5,007
------------- ----------- -----------
Total current liabilities.................................... 83,284 101,851 102,634
Other long-term liabilities..................................... 2,923 3,464 3,483
Pension and post-retirement liabilities......................... 7,882 8,274 7,860
Deferred income taxes........................................... 1,280 1,457 1,462
Long-term debt.................................................. 130,587 129,504 127,942
------------- ----------- -----------
Total liabilities.......................................... 225,956 244,550 243,381
Commitments and contingencies (See notes 8, 9, 11, 18 and 20)...
Minority interest............................................... 26 96 52
Stockholders' equity:
Common stock, $.01 par value 50,000,000 authorized;
29,344,551, 31,574,199 and 31,605,707 shares issued;
29,197,051, 31,240,866 and 31,272,374 outstanding at
July 31, 1996 and 1997 and January 31, 1998,
respectively............................................... 293 315 316
Preferred stock, $.01 par value 1,000,000 authorized; and no
shares issued and outstanding.............................. -- -- --
Additional paid-in capital................................... 129,606 132,520 132,940
Accumulated deficit.......................................... (58,671) (61,462) (65,302)
Minimum pension liability.................................... (137) -- --
Cumulative foreign currency translation adjustment........... (383) (3,509) (3,432)
Treasury stock............................................... -- (687) (687)
------------- ----------- -----------
Total stockholders' equity................................. 70,708 67,177 63,835
------------- ----------- -----------
Total liabilities and stockholders' equity................. $ 296,690 $ 311,823 $ 307,268
============= =========== ===========
</TABLE>
See notes to consolidated financial statements.
PURETEC CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Dollars in thousands, except per share data)
<TABLE>
<CAPTION>
---------------------------------------------------------------------------
Years ended July 31, Six Months Ended January 31,
----------------------------------------- ------------------------------
1995 1996 1997 1997 - 1998
----------- ----------- ----------- --------------- ------------
(unaudited)
<S> <C> <C> <C> <C> <C>
Net sales................................ $ 30,189 $ 326,344 $ 315,334 $ 123,430 $ 138,690
Costs and expenses:
Cost of goods sold.................... 25,353 260,891 248,419 97,663 110,561
Selling, general and administrative... 301 35,555 36,091 16,880 17,833
Amortization of intangible assets..... 2,148 3,705 3,553 1,747 1,591
Write-off of goodwill and obsolete
assets/facilities................... 7,403 4,636 -- -- --
Research and development.............. 1,268 689 654 327 324
----------- ----------- ----------- ----------- ------------
36,473 305,476 288,717 116,617 130,309
----------- ----------- ----------- ----------- ------------
Income (loss) from operations............ (6,284) 20,868 26,617 6,813 8,381
Other expenses (income):
Interest expense...................... 419 18,702 18,108 9,281 9,242
Debt issuance cost and discount
amortization........................ -- 2,180 1,641 1,188 907
Gain on sale and assignment of
seccurities......................... (1,000) -- -- -- --
Equity in loss of affiliates.......... 2,050 2,175 1,824 265 387
Other, net............................ (234) (419) 135 (93) (239)
----------- ----------- ----------- ----------- ------------
1,235 22,638 21,708 10,641 10,297
----------- ----------- ----------- ----------- ------------
Income (loss) from continuing operations
before minority interest and income
taxes................................. (7,519) (1,770) 4,909 (3,828) (1,916)
Provision for income taxes............... -- 2,637 3,131 951 1,439
----------- ----------- ----------- ----------- ------------
Income (loss) from continuing operations
before minority interest.............. (7,519) (4,407) 1,778 (4,779) (3,355)
Minority interest........................ -- -- (433) -- 44
----------- ----------- ----------- ----------- ------------
Income (loss) from continuing
operations............................ (7,519) (4,407) 1,345 (4,779) (3,311)
Discontinued operations:
Loss from discontinued operations..... (4,580) (1,525) (1,226) (1,191) (529)
Loss on disposal of discontinued
operations.......................... (4,809) (2,241) (2,910) -- --
----------- ----------- ----------- ----------- ------------
(9,389) (3,766) (4,136) (1,191) (529)
Net loss................................. $ (16,908) $ (8,173) $ (2,791) $ (5,970) $ (3,840)
=========== =========== =========== ============ ============
Income (loss) per common share:
Income (loss) from continuing
operations............................ $ (0.42) $ (0.18) $ 0.05 $ (0.16) $ (0.11)
Loss from discontinued operations........ $ (0.53) $ (0.14) $ (0.14) $ (0.04) $ (0.01)
----------- ----------- ----------- ----------- ------------
Net loss.............................. $ (0.95) $ (0.32) $ (0.09) $ (0.20) $ (0.12)
=========== =========== =========== ============ ============
Weighted average number of common
shares outstanding.................... 7,751,141 27,268,435 29,429,415 29,339,172 31,269,950
=========== =========== =========== ============ ============
</TABLE>
See notes to consolidated financial statements.
PURETEC CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
(Dollars in thousands, except per share data)
<TABLE>
<CAPTION>
--------------------------------------------------------------------------------
Common Shares Treasury Shares Preferred Shares
--------------------------------- ------------------- ----------------------
Class A $.01
$.01 par $.05 par Amount Shares Amount par Amount
---------- ----------- ------ --------- ------ ------------ ------
<S> <C> <C> <C> <C> <C> <C> <C>
Balance July 31, 1994 -- 14,922,673 $ 746 -- -- $ -- $--
Issuance of common stock in
connection with acquisitions......... -- 533,191 27 350,000 -- -- --
Exercise of stock options.............. -- 33,534 2 -- -- -- --
Private placement, net of stock
issuance expense of $420............. -- 3,332,737 167 -- -- -- --
Debenture conversion -- 1,714,780 86 -- -- -- --
Issuance of common stock to settle
liabilities.......................... -- 113,890 5 -- -- -- --
Reclassifications and adjustments...... -- 76,636 3 -- -- -- --
Conversion of common stock in (20,727,441)
connection with Merger............... 20,727,441 (829) -- -- -- --
Issuance of common stock in
connection with Merger............... 5,705,555 -- 57 -- -- -- --
Issuance of common stock to settle
expenses of Merger................... 450,000 -- 5 -- -- -- --
Net loss............................... -- -- -- -- -- -- --
---------- ----------- ------ --------- ------ ------------ ------
Balance July 31, 1995.................. 26,882,996 -- 269 350,000 -- -- --
Preferred stock conversion............. 1,606,688 -- 16 -- -- -- --
Private placement...................... 585,000 -- 6 -- -- -- --
Debenture conversion................... 227,273 -- 2 -- -- -- --
Issuance of common stock to settle
liabilities.......................... 9,286 -- -- -- -- -- --
Contract requirements.................. 33,308 -- -- -- -- -- --
Common stock sales by Equity
affiliate............................ -- -- -- (202,500) -- -- --
Minimum pension liability.............. -- -- -- -- -- -- --
Foreign Exchange....................... -- -- -- -- -- -- --
Net loss............................... -- -- -- -- -- -- --
---------- ----------- ------ --------- ------ ------------ ------
Balance July 31, 1996.................. 29,344,551 -- 293 147,500 -- -- --
Foreign exchange....................... -- -- -- -- -- -- --
Receipt of share in settlement of note
receivable........................... -- -- -- 333,333 $ (687) -- --
Common stock sales by equity
affiliate............................ -- -- -- (147,500) -- -- --
Other.................................. (5,382) -- -- -- -- -- --
Private placement--PST exchange
offer................................ 2,235,030 -- 22 -- -- -- --
Reversal of minimum pension
liability............................ -- -- -- -- -- -- --
Net loss............................... -- -- -- -- -- -- --
---------- ----------- ------ --------- ------ ------------ ------
Balance July 31, 1997.................. 31,574,199 -- 315 333,333 (687) -- --
Warrant/Option exercise
(unaudited).......................... 31,508 -- 1 -- -- -- --
Foreign exchange (unaudited)........... -- -- -- -- -- -- --
Net loss (unaudited)................... -- -- -- -- -- -- --
Balance January 31, 1998
---------- ----------- ------ --------- ------ ------------ ------
(unaudited).......................... 31,605,707 -- $ 316 333,333 $ (687) -- --
========== =========== ====== ========= ====== ============ ======
---------------------------------------------------------------
Additional Minimum Total
Paid-in Accumulated Foreign Pension Stockholders'
Capital Deficit Exchange Liability Equity
---------- ----------- -------- --------- --------------
<C> <C> <C> <C> <C>
Balance July 31, 1994 $ 66,607 $ (33,066) -- -- $ 34,287
Issuance of common stock in
connection with acquisitions......... 808 -- -- -- 835
Exercise of stock options.............. 44 -- -- -- 46
Private placement, net of stock
issuance expense of $420............. 12,573 -- -- -- 12,740
Debenture conversion 7,285 -- -- -- 7,371
Issuance of common stock to settle
liabilities.......................... 433 -- -- -- 438
Reclassifications and adjustments...... (3) -- -- -- --
Conversion of common stock in
connection with Merger............... 829 -- -- -- --
Issuance of common stock in
connection with Merger............... 32,122 -- -- -- 32,179
Issuance of common stock to settle
expenses of Merger................... 2,526 -- -- -- 2,531
Net loss............................... -- (16,908) -- -- (16,908)
---------- ----------- -------- --------- --------------
Balance July 31, 1995.................. 123,224 (49,974) -- -- 73,519
Preferred stock conversion............. 3,782 (524) -- -- 3,274
Private placement...................... 994 -- -- -- 1,000
Debenture conversion................... 998 -- -- -- 1,000
Issuance of common stock to settle
liabilities.......................... 121 -- -- -- 121
Contract requirements.................. -- -- -- -- --
Common stock sales by Equity
affiliate............................ 487 -- -- -- 487
Minimum pension liability.............. -- -- -- (137) (137)
Foreign Exchange....................... -- -- $ (383) -- (383)
Net loss............................... -- (8,173) -- -- (8,173)
---------- ----------- -------- --------- --------------
Balance July 31, 1996.................. 129,606 (58,671) (383) (137) 70,708
Foreign exchange....................... -- -- (3,126) -- (3,126)
Receipt of share in settlement of note
receivable........................... -- -- -- -- (687)
Common stock sales by equity
affiliate............................ -- -- -- -- --
Other.................................. -- -- -- -- --
Private placement--PST exchange
offer................................ 2,914 -- -- -- 2,936
Reversal of minimum pension
liability............................ -- -- -- 137 137
Net loss............................... -- (2,791) -- -- (2,791)
---------- ----------- -------- --------- --------------
Balance July 31, 1997.................. 132,520 (61,462) (3,509) -- 67,177
Warrant/Option exercise
(unaudited).......................... 420 -- -- -- 421
Foreign exchange (unaudited)........... -- -- 77 -- 77
Net loss (unaudited)................... -- (3,840) -- -- (3,840)
Balance January 31, 1998
---------- ----------- -------- --------- --------------
(unaudited).......................... $ 132,940 $(65,302) $(3,432) -- $ 63,835
========== =========== ======== ========= ==============
</TABLE>
See notes to consolidated financial statements.
PURETEC CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Dollars in thousands)
<TABLE>
<CAPTION>
-----------------------------------------------------------------------
Six Months Ended January
Years ended July 31, 31,
------------------------------------- ------------------------------
1995 1996 1997 1997 1998
---------- ---------- --------- ------------ -------------
(unaudited)
<S> <C> <C> <C> <C> <C>
Net cash flows from operating activities:
Income (loss) from continuing operations $ (7,519) $ (4,407) $ 1,345 $ (4,779) $(3,311)
Adjustments to reconcile net loss to net cash used
in operating activities from continuing
operations:
Depreciation and amortization 2,861 13,427 13,780 7,603 6,958
Gain (Loss) on disposal of property and
equipment........................................ (8) 598 (17) (10) --
Gain on sale and assignment of securities.......... (1,000) -- -- -- --
Write-off of obsolete equipment and costs.......... 4,617 4,636 -- -- --
Write-off of goodwill and other intangible
assets........................................... 6,493 -- 976 -- --
Bad debt allowance................................. 129 879 182 (143) 317
Deferred income tax benefit........................ (377) 80 471 (1,252) --
Minority interest in consolidated
subsidiaries..................................... (114) (3) 433 -- (44)
Equity in loss of affiliates....................... 2,050 2,175 1,824 -- --
Changes in operating assets and liabilities
net of effects from acquisition:
(Increase) decrease in assets:
Accounts receivable................................ (379) (8,381) (9,361) 8,621 5,531
Accounts receivable factored....................... -- -- 2,087 -- 2,087
Inventories........................................ 958 4,288 (15,864) (36,328) (14,116)
Prepaid expenses and other current
assets........................................... 833 (1,519) (20) 658 1,448
Other assets....................................... (2,335) 7,199 (2,770) (589) (24)
Increase (decrease) in liabilities:
Accounts payable................................. 1,594 4,226 1,804 (2,640) (1,541)
Accrued plant closing and disposal
costs.......................................... (2,350) (1,784) (1,638) (1,389) (1,584)
Accrued expenses................................... 1,461 9,272 1,183 (3,233) (4,396)
Other liabilities.................................. -- 768 2,636 (372) (196)
---------- ---------- --------- ------------ -------------
Net cash (used in) provided by operating
activities from continuing operations.......... 6,914 31,454 (2,949) (33,853) (8,871)
---------- ---------- --------- ------------ -------------
Loss from discontinued operations.................. (9,389) (3,766) (4,136) (1,191) (529)
Depreciation of discontinued injection
molding operation.............................. 1,291 1,123 754 -- --
Change in net operating assets of
discontinued operations........................ 2,773 -- 887 -- --
---------- ---------- --------- ------------ -------------
Net cash used in operating activities from (5,325) (2,643) (2,495) (1,191) (529)
discontinued operations
Net cash (used in) provided by operating
activities......................................... 1,589 28,811 (5,444) (35,044) (9,400)
---------- ---------- --------- ------------ -------------
Net cash flows from investing activities:
Additions to property, plant and equipment......... (2,387) (10,509) (11,291) (3,844) (3,562)
Additions to intangibles........................... (2,776) -- -- -- --
Purchase of net assets............................. (155) (22,328) -- -- --
Proceeds from the sale of property, plant, &
equipment...................................... -- 1,368 27 20 --
Purchase of Ozite Corporation, net of cash
acquired of $4,741............................. (8,759) -- -- -- --
Investment used for Burlington purchase............ -- -- -- -- --
---------- ---------- --------- ------------ -------------
Net cash used in investing activities............... (14,077) (31,469) (11,264) (3,824) (3,562)
Net cash flows from financing activities:
Borrowing (repayments) under revolving
credit facility and short-term borrowing,
net............................................ (869) (10,840) 19,964 36,196 11,094
Proceeds from long-term debt....................... 687 18,630 4,150 2,288 5,205
Repayments of long-term debt....................... (2,227) (7,056) (5,292) (3,349) (7,780)
Proceeds from private placements and sale
by equity affiliate............................ 12,758 1,487 -- -- --
Proceeds from warrant/option exercise.............. 46 -- 1 1 --
Proceeds from the sale of debentures............... 8,371 -- -- -- --
---------- ---------- --------- ------------ -------------
Net cash provided by financing activities........... 18,766 2,221 18,823 35,136 8,519
---------- ---------- --------- ------------ -------------
Effect of exchange rate changes on cash............. -- (665) (1,365) (855) (102)
---------- ---------- --------- ------------ -------------
Net increase (decrease) in cash and cash
equivalents....................................... 6,278 (1,102) 750 (4,587) (4,545)
Cash and cash equivalents, beginning of the
period............................................ 819 7,097 5,995 5,995 6,745
---------- ---------- --------- ------------ -------------
Cash and cash equivalents, end of period............ $ 7,097 $ 5,995 $ 6,745 $ 1,408 $ 2,200
Supplemental disclosures of cash flow ========== ========== ========= ============ =============
information:
Cash paid during the year for:
Interest.......................................... $ 1,054 $ 22,113 $ 17,849 $ 9,304 $ 9,237
Income taxes...................................... -- 2,557 3,301 1,296 949
Non-cash transactions:
Debenture conversion.............................. -- 1,000 -- -- --
Preferred Stock conversion........................ -- (3,274) -- -- --
Issuance of common stock to settle
liabilities.................................... 438 121 -- -- --
Issuance of common stock in connection
with acquisitions.............................. 835 -- -- -- --
Issuance of common stock in connection
with the Merger................................ 34,710 -- -- -- --
Capitalized lease Colorite Europe Limited
premises....................................... -- -- 3,784 -- --
Acquisition of treasury stock to settle note
payable........................................ -- -- (687) -- --
Issuance of common stock in connection
with PS&T Exchange Offer....................... -- -- 2,936 -- --
Goodwill in connection with PS&T tender
offer.......................................... -- -- 2,316 -- --
Reduction of subordinated note regarding
Dalen settlement.................................. -- -- -- -- (1,320)
Adjustment of goodwill regarding Dalen
settlement........................................ -- -- -- -- 1,320
Exchange of equity investment stock for PureTec
stock (treasury).................................. -- -- -- 687 --
</TABLE>
See notes to consolidated financial statements.
PURETEC CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands, except per share amounts)
(Information for January 31, 1998 and 1997 is unaudited)
1. Organization, Description of Business and Acquisitions
PureTec's principal businesses are the manufacturing of garden hose, specialty
plastic compounds and fabricated precision plastic components for niche
consumer and industrial markets, the manufacturing of dispersion (plastisol)
and specialty suspension (copolymer and blending) polyvinyl chloride ("PVC")
resins and the recycling of plastics. The Company services its markets through
its network of 21 manufacturing facilities, located in key points throughout
the United States, with three locations in Europe and one in Canada.
At the shareholders' meeting on May 1, 1996, Pure Tech International Inc.,
changed its name to PureTec Corporation. PureTec Corporation (the "Company" or
"PureTec") was formed in July 1994 for the express purpose of becoming the
parent of PTI Plastics, Inc. ("PTIP") and Ozite Corporation ("Ozite"). On July
26, 1995, the respective shareholders of PTIP and Ozite approved the merger of
each of their corporations with wholly-owned subsidiaries of the Company (the
"Merger"), effective at the close of business on July 31, 1995. PTIP and Ozite
are now wholly-owned subsidiaries of the Company. For accounting purposes the
Merger has been accounted for as a purchase of Ozite by PureTec. For financial
reporting purposes, the results of operations, and the statement of cash flows
for the year ended July 31, 1995 are those of PTIP. The balance sheet
information as of July 31, 1997 and 1996 and the results of operations and the
statement of cash flows for the years ended July 31, 1997 and 1996 reflect the
combined entities, including Ozite.
In connection with these mergers, holders of Ozite Common Stock received an
aggregate of 1,028,915 shares of PureTec Common Stock. Holders of Ozite
Preferred Stock received an aggregate of 4,627,317 shares of PureTec Common
Stock. A portion of the securities otherwise issuable to Ozite preferred
stockholders were instead issued to creditors of Ozite. Holders of Ozite
Preferred Stock also received 5,000 shares, with a $5,000 redemption value, of
a new class of PureTec's non-convertible preferred stock (See Note 13 (a)) and
$3,750 in 10-year subordinated notes. The principal of the subordinated notes
will be payable at maturity. Interest on the subordinated notes will accrue at
7% and is payable quarterly, except that no interest will accrue during the
first four years. PTIP owned 300,000 shares of Ozite Class A Preferred Stock
and did not participate in the distribution of PureTec securities pursuant to
the Merger.
Holders of PTIP Common Stock received PureTec's Common Stock on a one-for-one
basis for approximately 78% of PureTec's total outstanding voting securities
after the Merger.
In connection with the Merger, PureTec issued 450,000 shares of Common Stock
in consideration for investment banking and finders services, 15,684 shares of
Common Stock to Ozite directors and officers in satisfaction of outstanding
options to acquire Ozite Common Stock and 33,639 shares of Common Stock to
holders of certain Ozite warrants who elected to receive such shares in
exchange for their Ozite warrants.
A summary of the transaction is as follows (reflecting the final adjustments
to the transaction made in 1996):
<TABLE>
<S> <C>
Fair Value of Net Assets Acquired:
Current assets...................................... $ 90,086
Non-current assets.................................. 72,368
Liabilities assumed................................. (189,036)
----------
(26,582)
Consideration Given:
6,155,555 Common shares including expenses.......... 34,710
Preferred Stock and subordinated notes issued....... 4,393
Cash and other amounts due.......................... 26,022
----------
65,125
----------
Goodwill (being amortized over 30 years)................. $ 91,707
==========
</TABLE>
Ozite is the majority stockholder of Plastic Specialties and Technologies,
Inc. ("PST") and a 100% shareholder of Burlington Resins, Inc. (See below). On
June 27, 1997, PureTec completed a private placement offer for most of the
stock of PST not already owned, in exchange for new unregistered shares of
PureTec common stock that were privately placed by PureTec. Prior to the
completion of the exchange offer, PureTec, through its ownership of Ozite,
indirectly owned 82.7% of the outstanding common stock of PST. In the exchange
offer, PureTec, through Ozite offered to exchange two new unregistered shares
of PureTec common stock for each share of PST common stock validly tendered.
In total, 1,117,515 shares, or 13.4%, of the PST common stock outstanding were
accepted for exchange by Ozite in the private exchange offer. The transaction
was accounted for as a step-acquisition by the Company, and resulted in an
increase to goodwill of approximately $2,300. As of July 31, 1997, Ozite owned
approximately 96% of the outstanding common stock of PST.
Burlington Resins, Inc. ("Burlington") is a special purpose subsidiary of the
Company. Burlington was formed on September 26, 1994 for the express purpose
of acquiring substantially all of the assets and assuming all of the
liabilities of Occidental Chemical Corporation's ("OxyChem") specialty PVC
resin manufacturing facility location in Burlington, New Jersey. On August 18,
1995, Burlington completed the acquisition from OxyChem, which was accounted
for as a purchase, and commenced operations.
In June 1997, the Company filed suit against OxyChem, alleging that certain
post-retirement benefit liabilities were substantially understated at the
acquisition date. In August 1997, the Company and OxyChem agreed to settle this
litigation. Pursuant to the terms of the settlement agreement, the Company has
agreed to release OxyChem from any claim related to this liability in exchange
for OxyChem's agreement to settle a $4 million subordinated term loan
including accrued interest ("seller financing") for $3 million. A portion of
the settlement has been accounted for as an adjustment to the purchase price,
with the offset recorded against goodwill, with the remainder adjusting accrued
interest based upon the seller financing. A summary of the original
transaction and the adjustments made as of July 31, 1997 are as follows:
<TABLE>
<CAPTION>
--------------------------------------------------
As originally As reported
recorded Adjustments herein
--------------- -------------- --------------
<S> <C> <C> <C>
Fair Value of Net Assets Acquired:
Current assets................................ $ 8,217 -- $ 8,217
Non-current asset............................. 21,495 -- 21,495
Liabilities assumed........................... (5,877) -- (5,877)
--------------- -------------- --------------
23,835 -- 23,835
--------------- -------------- --------------
Consideration Given:
Seller financing.............................. 4,000 (1,476) 2,524
Cash and other amounts due.................... 22,934 -- 22,934
--------------- -------------- --------------
26,934 (1,476) 25,458
--------------- -------------- --------------
Goodwill (being amortized over 30 years)............ $ 3,099 $ (1,476) $ 1,623
=============== ============== ==============
</TABLE>
Under the terms of the Asset Transfer Agreement, OxyChem has indemnified
Burlington for a period of eight years from any environmental liability
arising from conditions existing prior to August 18, 1995. Any liabilities
arising in the first five years subsequent to August 18, 1995 will be 100%
indemnified, and any liability through year eight will be 50% indemnified.
Management has not identified any material environmental matter, nor has
Burlington been identified as a potentially responsible party under the
Comprehensive Environmental Response, Compensation and Liability Act
("CERCLA") and corresponding state acts, in connection with any such matter.
As discussed in Note 18, on November 11, 1997 the Company entered into a
Merger Agreement with Tekni-Plex, Inc. ("Tekni-Plex"). Subject to the approval
of a majority of the shareholders at a shareholders' meeting that the Company
will arrange, the Merger Agreement contemplates Tekni-Plex (i) purchasing all
of the Company's outstanding Common Stock for cash consideration of $3.50 per
share, and (ii) assuming or refinancing all of the Company's debt. The Merger
Agreement and the Acquisition have been unanimously approved and recommended
to shareholders for adoption by the Company's Board of Directors.
2. Summary of Significant Accounting Policies
(a) Principles of Consolidation
The consolidated financial statements include the accounts of the Company and
its majority owned subsidiaries. All significant intercompany accounts and
transactions are eliminated.
(b) Interim Financial Information
The unaudited balance sheet as of October 31, 1997, the unaudited consolidated
statements of earnings and cash flows for the three month periods ended
October 31, 1996 and 1997, and the unaudited statement of stockholders' equity
for the three month period ended October 31, 1997 have been prepared in
accordance with generally accepted accounting principles for interim financial
information and with instructions to Form 10-Q and Rule 10-01 of Regulation
S-X. In the opinion of management, all adjustments (which include normal
recurring accruals) necessary to present fairly the financial position,
results of operations and cash flows at October 31, 1996 and 1997 and for the
three month periods presented, have been included.
The results of operations for the three months ended October 31, 1997 are not
necessarily indicative of the results to be expected for the entire fiscal
year.
(c) Cash and Cash Equivalents
Cash and cash equivalents consist of demand deposits, commercial paper, time
deposits, and cash on hand. For purposes of the consolidated statements of
cash flows, the Company considers all highly liquid debt instruments purchased
with original maturities of three months or less to be cash equivalents.
(d) Inventories
Inventories are valued at the lower of cost (determined by the first-in,
first-out method) or market.
(e) Goodwill
Goodwill, which relates primarily to the acquisition of Ozite, is being
amortized on a straight-line basis over the period expected to benefit, which
is estimated to be 30 years for current acquisitions and 10 to 40 years for
acquisitions prior to July 31, 1995.
The Company continually assesses the recoverability of its intangible assets
by determining whether the amortization of the excess of the cost of the
investment balance over its remaining useful life can be recovered through
projected undiscounted future cash flows. The amount of goodwill impairment,
if any, is measured based on projected undiscounted future cash flows in
accordance with Statement of Financial Accounting Standards ("SFAS") No. 121,
"Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets
to Be Disposed Of." Based on the Company's projected results of operations
over the remaining useful life, management believes that there has not been
an impairment in the value of the goodwill.
(f) Property, Plant and Equipment
Property, plant and equipment is stated at cost and is primarily depreciated
by the straight-line method over the estimated useful lives of the related
assets. Repairs and maintenance are charged to expense as incurred. Leasehold
improvements are depreciated over the lesser of the term of the lease,
including renewal options, or the useful life of the asset. Depreciation is
calculated using the modified units of production method for Burlington
machinery and equipment. Costs of the construction of certain long-term assets
include capitalized interest which is amortized over the estimated useful life
of the related asset. The Company capitalized interest costs of $290 and $220
in 1997 and 1996, respectively.
The principal estimated useful lives are as follows:
<TABLE>
<S> <C>
Building and improvements........................... 20-31 years
Machinery and equipment............................. 5-15 years
Office equipment, furniture and fixtures............ 5-10 years
</TABLE>
In the event that facts and circumstances indicate that the cost of assets may
be impaired, an evaluation of recoverability would be performed. If an
evaluation is required, the estimated fair value associated with the asset
would be compared to the asset's carrying amount to determine if a write-down
to fair value is required.
(g) Intangible Assets
Other intangible assets are amortized using the straight-line method over the
following periods (See Note 6):
<TABLE>
<S> <C>
Process technology....................... 10-20 years
Customer list............................ 7 years
Other.................................... 5 years
</TABLE>
(h) Deferred Financing Costs
The financing costs incurred in securing debt are deferred and amortized over
the life of the related debt (See Notes 7, 8 and 11).
(i) Income Taxes
The Company files a consolidated federal income tax return including all of
its qualifying domestic subsidiaries. Deferred tax assets and liabilities are
determined based on differences between financial reporting and tax bases of
assets and liabilities, and are measured using the enacted tax rates and laws
that will be in effect when the differences are expected to reverse.
(j) Revenue Recognition
The Company recognizes revenue when goods are shipped to customers. The
Company provides for returned goods and volume rebates on an estimated basis.
(k) Foreign Subsidiaries
The Company translates financial statements denominated in foreign currency by
translating balance sheet accounts at the end of the period exchange rate and
statement of operations accounts at the average exchange rate for the period.
Translation gains and losses are recorded in stockholders equity, and
transaction gains and losses are reflected in income.
(l) Foreign Exchange Contracts
During fiscal 1997, the Company's Belgian subsidiary entered into forward
foreign exchange contracts to hedge intercompany payables and non Belgian
Franc accounts receivables and payables. Market value gains and losses on such
contracts are currently recognized, and the resulting credit or debit offsets
foreign exchange gains or losses on the related balance sheet accounts. No
significant forward foreign exchange contracts were outstanding at July 31,
1997 and July 31, 1996.
(m) Stock Based Compensation
In 1997, the Company adopted SFAS No. 123, "Accounting for Stock Based
Compensation". SFAS No. 123 addresses the financial accounting and reporting
standards for stock based compensation plans and permits an entity to record
the effects of stock based employee compensation plans in its financial
statements or present Pro forma disclosures in the notes to the financial
statements. Compensation expense associated with awards to non-employees is
required to be measured using a fair value method. The Company has elected to
continue to account for employee compensation plans in accordance with
Accounting Principles Board Opinion No. 25 and has provided appropriate
disclosures in the notes to the consolidated financial statements.
(n) Income (Loss) Per Common Share
Income (loss) per common and common equivalent share is computed based upon
the weighted-average number of shares and common share equivalents outstanding
during the period. The calculation does not give effect to the conversion of
options and warrants to purchase common stock when such securities have an
anti-dilutive effect. Net loss per common share is based upon the
weighted-average number of shares outstanding, as the impact of common share
equivalents is anti-dilutive. Primary earnings per share and fully diluted
earnings per share, are the same for all periods presented.
In February 1997, the Financial Accounting Standards Board ("FASB") issued
SFAS No. 128, "Earnings Per Share". This new standard, which supersedes APB
Opinion No. 15, requires dual presentation of basic and diluted earnings per
share ("EPS") on the face of the income statement and a reconciliation of the
income available to common stockholders and weighted-average shares of the
basic EPS computation to the income available to common stockholders and
weighted-average shares plus dilutive potential common shares of the diluted
EPS computation. The objective of the statement is to make the computation
more comparable with international accounting standards. SFAS 128 is effective
for periods ending after December 15, 1997 (the Company's 1998 fiscal year).
SFAS No. 128 will require the Company to restate amounts previously reported
as EPS to comply with the new pronouncement. Had SFAS No. 128 been in effect
for the years ended July 31, 1997, 1996 and 1995, reported EPS would not have
been different from that reported under APB Opinion No. 15.
(o) Other Recent Accounting Pronouncements
In February 1997, the FASB issued Statement of Financial Accounting Standards
No. 129, "Disclosure of Information about Capital Structure" ("SFAS No. 129").
SFAS No. 129 requires companies to disclose descriptive information about
securities and information about the liquidation preferences of preferred
stock and redeemable stock. SFAS 129 is effective for financial statements for
periods ending after December 15, 1997 (the Company's fiscal 1998 year).
In June 1997, the FASB issued Statement of Financial Accounting Standards No.
130, Reporting Comprehensive Income ("SFAS No. 130"). SFAS No. 130 requires
companies to display, with the same prominence as other financial statements,
the components of other comprehensive income. SFAS No. 130 requires that an
enterprise classify items of other comprehensive income by their nature in a
financial statement and display the accumulated balance of other comprehensive
income separately from retained earnings and additional paid-in capital in the
equity section of the balance sheet. SFAS No. 130 is effective for fiscal
years beginning after December 15, 1997 (the Company's 1999 fiscal year).
Reclassification of financial statements for earlier periods provided for
comparative purposes is required.
In June 1997, the FASB issued Statement of Financial Accounting Standards No.
131, "Disclosures about Segments of an Enterprise and Related Information"
("SFAS No. 131"). SFAS No. 131 requires that an enterprise disclose certain
information about operating segments. SFAS No. 131 is effective for financial
statements for periods beginning after December 15, 1997 (the Company's 1998
fiscal year).
The Company has not determined the impact, if any, on the financial statements
or related matters of adopting these pronouncements.
(p) Investment in Unconsolidated Affiliates
The Company's investments in affiliated companies which are not majority owned
or controlled are accounted for using the equity or cost method. Investments
recorded under these methods and the percentage interest owned consist of
Masplas International (25%), Les Plastiques Petco, Inc. (49%), and Evolutions,
Inc. (42%).
(q) Environmental Costs
Environmental expenditures that relate to current operations are expensed or
capitalized as appropriate. Expenditures that relate to existing conditions
caused by past operations and that do not contribute to current or future
revenue generation are expensed. No costs relating to existing conditions
caused by past operations were incurred by the Company during the periods
ended July 31, 1997, 1996, or 1995.
Reserves for estimated costs are recorded when environmental remedial efforts
are probable and the costs can be reasonably estimated. In determining the
reserves, the Company uses the most current information available, including
similar past experiences, available technology, regulations in effect, the
timing of remediation and cost sharing arrangements. No environmental reserves
are required at July 31, 1997 and 1996.
(r) Use of Estimates
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions
that affect the reported amounts of assets and liabilities at the date of the
financial statements and the reported amount of revenues and expenses during
the reporting period. Actual results could differ from these estimates.
(s) Reclassifications
Certain reclassifications have been made to the 1996 and 1995 financial
statements to conform to the 1997 presentation.
3. Investments
(a) In June 1994, the Company acquired an 80% interest in Evolutions, Inc.
("Evolutions"), a marketing company focusing on consumer apparel products
manufactured from recycled material. The Company acquired newly issued shares
of Evolutions for cash and 153,850 shares of the Company's common stock,
valued at $4.55 per share (aggregating approximately $700). The aggregate
value of the acquisition was approximately $850. On March 1, 1995, the Company
acquired an additional interest in Evolutions, bringing its ownership up to
88%. The additional investment was 350,000 shares of the Company's common
stock, valued at $1,925 and provided for the cancellation of any and all stock
options outstanding prior to the acquisition. All shares issued by the Company
for the investment are considered as treasury shares until sold to third
parties. Such shares are then recognized as issued. During fiscal 1996, the
Company's ownership percentage fell below 50% and the Company began accounting
for this investment using the equity method. The statements of operations for
all periods presented have been restated to reflect this change in the
reporting entity. As a result of evaluating the operations and financial
position of Evolutions, the Company wrote-off the carrying value of its
investment in Evolutions, recording a charge of approximately $800 to equity
in loss of affiliates during 1997.
(b) In August 1994, the Company completed a transaction whereby it
acquired a 49% interest in Les Plastiques Petco, Inc., a Canadian
corporation ("Petco"). In consideration for this interest, the Company
issued 183,191 shares of Common stock valued at $817 (and issued an
additional 33,308 shares in fiscal 1996 as the market price of the stock
did not meet certain market price requirements), canceled $800 owed to the
Company for equipment previously sold to Petco and its affiliate by the
Company and agreed to provide additional equipment valued at $250. During
fiscal 1995, the Company made an additional cash investment in Petco of
$155. The Company and Petco also entered into a ten-year supply agreement
whereby Petco, in exchange for the cancellation of approximately $783 owed
to the Company by a Petco affiliate, will make available to the Company at
least six million pounds of post-consumer PET annually. The carrying value
of the supply contract was reduced to zero during 1997 as the future
benefit to be provided by the asset was uncertain. During 1997, the
Company's investment in Petco increased by $446 due to the conversion of a
note receivable into additional preferred shares. Prior to 1997, the
Company accounted for this investment using the equity method. During
1997, due to the level of influence the Company exerts over the operations
of Petco, the Company changed its method of accounting from the equity to
the cost basis.
(c) In August 1994, the Company completed a transaction whereby it acquired
a 25% interest in Masplas International, Compose de Plastique Inc. a Canadian
corporation ("Masplas") by converting $375 of a note receivable. Masplas is a
recycler of post-consumer PET, and is controlled by the same majority
shareholder as Petco. Prior to 1997, the Company accounted for this investment
using the equity method. During 1997, due to the level of influence the
Company exerts over the operations of Masplas, the Company changed its method
of accounting from the equity to the cost basis.
4. Inventories
<TABLE>
<CAPTION>
------------------------------------------------
July 31, 1996 July 31, 1997 January 31, 1998
------------- ------------- ----------------
(unaudited)
<S> <C> <C> <C>
Raw materials and supplies.. $ 16,028 $ 22,353 $ 20,403
Recycled material........... 1,944 779 733
Work-in-process............. 2,074 1,288 1,607
Finished goods.............. 21,357 30,148 45,929
------------- ------------- ----------------
$ 41,403 $ 54,568 $ 68,672
============= ============= ================
</TABLE>
5. Property, Plant and Equipment
<TABLE>
<CAPTION>
----------------------------------
July 31, 1996 July 31, 1997
--------------- ---------------
<S> <C> <C>
Land and land improvements.............. $ 13,138 $ 12,336
Buildings and leasehold improvements.... 15,361 18,416
Machinery and equipment................. 60,610 64,116
Furniture and fixtures.................. 2,727 2,577
Construction in progress................ 5,312 5,466
Property under lease.................... 1,200 1,200
--------------- ---------------
98,348 104,111
Accumulated depreciation................ (13,192) (15,744)
--------------- ---------------
$ 85,156 $ 88,367
=============== ===============
</TABLE>
6. Intangible Assets
<TABLE>
<CAPTION>
----------------------------------
July 31, 1996 July 31, 1997
--------------- ---------------
<S> <C> <C>
Process Technology............. $ 1,179 $ 108
Customer list.................. 770 770
Other.......................... 870 87
--------------- ---------------
2,819 965
Accumulated amortization....... (1,475) (921)
--------------- ---------------
$ 1,344 $ 44
=============== ===============
</TABLE>
During fiscal 1997, the Company has written off the Petco supply contract in
the amount of $541 (net of $242 of accumulated amortization) and licenses
related to the bottlewash system in the amount of $380 (net of accumulated
amortization of $691).
7. Other Assets
<TABLE>
<CAPTION>
July 31, 1996 July 31, 1997
--------------- ---------------
<S> <C> <C>
Deferred financing costs (net of accumulated amortization of $3,769 and $2,688
at July 31, 1997 and 1996, respectively)............................................ $ 4,566 $ 3,826
Investments in affiliates(1)......................................................... 3,097 2,635
Other................................................................................ 2,419 2,608
Grants(2)............................................................................ -- 985
Notes receivable..................................................................... 1,405 45
Notes and interest receivable from officers(3)....................................... 1,105 1,110
--------------- ---------------
$ 12,592 $ 11,209
=============== ===============
</TABLE>
- ------------
(1) Represents the investment in Masplas International and Petco. (See Note 3.)
(2) Represents a grant receivable from a government agency in Northern
Ireland, related to the start-up of Colorite Europe Limited.
(3) The notes and interest receivable from current and former officers of
$393 and $388 at July 31, 1997 and 1996, respectively, are due on
demand and bear interest at rates generally ranging from 75% of the
prime rate to the prime rate of interest. These notes receivable
relate primarily to the purchase of common and preferred stock of the
predecessor of Ozite, un-reimbursed moving expenses and a personal
loan. In addition, a note and interest receivable of $717 is due from
a stockholder of PureTec and a former director of Ozite.
8. Short-Term Borrowings
(a) Revolving Credit Advances:
On December 30, 1992, PST entered into a $50,000 Senior Loan Agreement (the
"Agreement") with a commercial lending company ("CLC"). The Agreement contains
covenants, the most restrictive of which are maintenance of certain financial
ratios, prohibition of the occurrence of additional indebtedness, the payment
of dividends, certain related party transactions and limitations on capital
expenditures. Borrowings under the Agreement are secured by substantially all
the domestic current assets of PST. Additionally, the CLC has a security
interest in PST's intangible assets, and this security interest ranks pari
passu with the security interest of the Senior Secured Notes (see Note 11) in
PST's intangible assets. Revolving credit advances under the Agreement are
based on eligible receivables and inventory.
Effective January 31, 1997, PST amended this Agreement with the CLC ("Amended
Agreement"), representing the fourth amendment to the Agreement. The Amended
Agreement provides, among other things, for revolving credit advances of up to
$50,000 through July 31, 2000 and letters of credit of up to $1,000. The
Amended Agreement provides for certain pricing performance adjustments based
on defined Performance Ratios. The Company will pay interest at a defined
Index Rate plus the Applicable Revolver Index Margin (ranging from 0.00% to
0.25%) or, at the election of PST, the LIBOR Rate plus the Applicable LIBOR
Margin (ranging from 2.50% to 3.00%). The Amended Agreement also provides that
outstanding revolving credit advances shall not exceed $20,000 for 30
consecutive days during the period from July 1 to September 30 for each year.
Furthermore, the Amended Agreement provides that domestic capital expenditures
are limited to $8,500, $9,000 and $9,500 in fiscal years ending 1997, 1998 and
1999 (and each fiscal year thereafter), respectively. The Company also has the
right to cancel the Agreement on 30 days written notice and pay the CLC an
early termination fee of $175 if such cancellation occurs prior to January 31,
1998, and $100 if cancellation occurs on or after January 31, 1998 and prior
to September 30, 1998.
At July 31, 1997, the Company was not in compliance with certain of the
covenants of the Amended Agreement, including the requirement to reduce
borrowing to $20 million and the limitation on capital expenditures. The CLC
has provided a waiver of this non-compliance as of July 31, 1997.
At July 31, 1997 and 1996, borrowings under the Amended Agreement with the CLC
totaled $36,772 and $14,138, respectively. Amounts outstanding are classified
as current liabilities.
In addition, on January 31, 1997, PST signed a Receivables Agreement with the
CLC that provides PST with the ability to sell a 100% ownership interest,
without recourse, in certain Eligible Receivables generated by PST. The CLC's
commitment to purchase said receivables from PST are restricted to the period
beginning each February 1 and ending on each May 31. The aggregate invoice
face amount of purchased receivables will not exceed $12,000. PST is obligated
to service the Eligible Receivables that it sells to the CLC. At July 31,
1997, PST is obligated to collect and remit $2,087 to the CLC for Eligible
Receivables sold without recourse. The CLC owes PST $422 related to such
receivables.
(b) Revolving Credit Facility:
In connection with the acquisition from OxyChem, Burlington has entered into a
Credit Agreement (the "Agreement") with a bank that includes a revolving
credit facility for up to $5,500 based on specified levels of eligible
inventory and accounts receivable. Interest on this facility, which expires on
August 18, 2002, is the prime rate plus 1.25% and is due quarterly. The
Agreement also contains a contingent fee agreement, payable annually, based on
earning levels obtained. The Agreement has been amended by Burlington and the
bank to provide for certain developments at Burlington. Outstanding borrowings
are $1,893 and $2,193 at July 31, 1997 and 1996, respectively.
The Agreement contains certain covenants, the most restrictive of which
pertain to the maintenance of certain financial ratios, prohibition of the
incurrence of additional indebtedness, the payment of dividends, and certain
related party transactions. Borrowings under the Agreement are secured by
substantially all the assets of Burlington. As of July 31, 1997, Burlington
was not in compliance with certain covenants of the Agreement. The Company has
received a waiver for the period of time that the default existed. The Company
intends to repay the borrowings outstanding under the Agreement during fiscal
1998, and as such, has included the revolving credit facility as a current
liability at July 31, 1997.
9. Plant Closing Costs
In October 1993, the Company decided to consolidate its plastic recycling
operations. In connection with this consolidation, the Company closed
substantially all of its operations in Lawrence Township, New Jersey. Costs
associated with the shut down of this facility consisted of labor during the
phase-out period, rubbish removal and clean-up costs and associated overhead
for the dismantling and moving of equipment as well as future rental costs
under noncancellable operating leases. In July 1995, the Company adjusted the
carrying value of all remaining assets to their net realizable value including
the write-off of $3,262 of costs associated with the Lawrence Township Plant
which no longer have any value. In addition, in July 1995, the Company wrote
off $210 of abandoned equipment relating to its old corporate office located
at the Lawrence Township location as a result of the move to its new quarters.
At July 31, 1997 and 1996, the Company has $196 and $430 accrued,
respectively, relating to the lease which expires on June 30, 1998. This
reserve is included in accrued plant closing and disposal costs.
In July 1995, the Company wrote off equipment of $1,145 at its Springfield,
Massachusetts plant related to the original wash system as the Plant was
completely modified with an expansion of the "Pure Tech Process" system in
fiscal 1995. The Company has no future plans for the old system, and was
unsuccessful in attempts to sell the system.
In July 1996, the Company evaluated the operations of its Springfield plant
and decided to close it. In connection with this plant closing, the Company
ceased substantially all operations except for minor production and clean-up
that was completed in fiscal 1997. The Company accrued for all costs
associated with the shut down of this facility, which consisted of clean-up
costs, the breakdown of machinery and equipment, and future rental costs under
a noncancellable operating lease. In July 1996, the Company adjusted the
carrying value of all remaining assets to be disposed to their net realizable
value. The total loss incurred on the shut down of the Springfield operations
of $4,236 is included on the consolidated statement of operations in the
write-off of goodwill and obsolete assets/facilities. At July 31, 1997 and
1996, the Company has accrued $1,397 and $2,387, respectively, relating to the
closure of this facility. The reserve is included in accrued plant closing and
disposal costs. The reserve at July 31, 1997 was predominantly related to the
remaining lease liability, which was settled subsequent to July 31, 1997. The
Company holds assets from the facility with a net realizable value of $1,910,
which are to be transferred to the new West Virginia facility in fiscal 1998.
In September 1994, the Company sold 40% of the capital stock of Multiple
Container Recycler, Inc. ("MCR") to a company owned by the son of a director
and officer of the Company. The sale price was $1,000. The Company received
a note for a total of $1,000 plus accrued interest payable in twelve equal
principal installments beginning October 1995, with a subsequent agreement
extending the due date six months until April 1996 (see below). All acquired
shares in MCR and 175,000 shares of previously acquired PureTec common stock
(which had a value approximating the note as of the date of sale) have been
pledged as collateral against the loan. The Company recognized a gain of
$1,000 on this transaction.
In fiscal year 1997, the Company agreed to transfer the net assets of MCR to
its minority owners. Under the terms of the agreement, the operations and all
existing assets were transferred effective September 1, 1996. The existing
liabilities as of that date were retained by the Company. Liabilities
remaining at July 31, 1997 were approximately $100. Upon consummation of the
agreement, 333,333 shares of PureTec stock were transferred to the Company in
satisfaction of the $1,000 note. The Company incurred a loss of $312 in
conjunction with this transaction, which was provided for in the prior year.
The above amounts include management's best estimates of the net realizable
value of certain fixed assets to be retained by the Company and estimated
expenditures to be incurred. The ultimate amounts could differ materially in
the near term from the amounts assumed in arriving at the loss on the shut
down of these facilities.
10. Accrued Expenses
<TABLE>
<CAPTION>
----------------------------------
July 31, 1996 July 31, 1997
--------------- ---------------
<S> <C> <C>
Salaries and wages................................................ $ 6,714 $ 4,519
Accrued interest.................................................. 3,317 3,569
Accrued expenses related to discontinued operations............... 566 656
Other(1).......................................................... 14,350 17,065
--------------- ---------------
$ 24,947 $ 25,809
=============== ===============
</TABLE>
- ------------
(1) Included in other in 1997 and 1996 is a $3,000 disputed note payable
which arose in connection with Ozite's acquisition of Dalen Trading Co.
("Dalen") in 1987. The note payable and related accrued interest
alleged to be due to Dalen's previous owner were in dispute and the
subject of litigation since 1987. Subsequent to July 31, 1997, this
litigation was settled (See Note 20(b)).
11. Long-Term Debt
<TABLE>
<CAPTION>
----------------------------------
July 31, 1996 July 31, 1997
--------------- ---------------
<S> <C> <C>
11 1/4% Senior Secured Notes due December 1, 2003(1) (discounted at an
estimated effective interest rate of 12.7%)......................................... $ 117,017 $ 118,248
7% Subordinated Notes (principal amount of $3,750) issued in connection with
the acquisition of Ozite (discounted at an estimated effective interest rate of
16%) (See Note 1)(2)................................................................ 1,606 1,860
7 1/10% Foreign Term Loan payable in Belgian Francs, with quarterly interest
payments, eight semi-annual principal payments of approximately $550 and a
balloon payment of $693 due on January 31, 1997. The loan is secured by a
pledge of working capital and a lien on certain fixed assets of the Company's
foreign operations.................................................................. 693 --
Mortgage payable, bearing interest at prime plus 1 1/2%, payable in monthly
installments of $4, plus interest with a balloon payment of $322 due in
January, 2000....................................................................... 372 329
Equipment financing loans and other notes payable in monthly installments
through October 1998 at interest ranging from 10.4% to 11.1%........................ 256 198
5.25% Direct Loan Promissory Note, payable in 24 equal monthly installments of
interest only commencing March 1996; and thereafter payable by 12 equal
monthly installments of $10 plus interest, commencing March 1998 through
February 1999....................................................................... 347 251
Term loan(6)......................................................................... 2,692 --
Equipment financing loans and other notes payable in monthly installments
through 1997 at interest rates ranging from 6 3/4% to 16%........................... 676 --
6.10% Foreign Term Loan payable in Belgium Francs, with interest in twenty
quarterly installments from June 1996 through March 2001 1,263 822
3.75% Foreign Term Loan payable in Belgium Francs, with five equal yearly
installments with first payment commencing December 1997............................ -- 791
9.93% Foreign Term Loan payable in Italian Lira...................................... 956 --
9.78% Foreign Term Loan payable in Italian Lira...................................... 1,090 --
8.40% Foreign Term Loan payable in Italian Lira, repayable semi-annually
including principal and interest through 2001....................................... -- 1,295
5.30% Foreign Term Loan payable in Italian Lira, with five equal yearly
installments with first payment commencing May 1998. Interest is payable
quarterly........................................................................... -- 1,065
Foreign Term Loan payable in British Pounds, in 13 equal semi-annual
installments of $151, commencing June 1998, with a final payment due
December 2004 at 1.75% plus LIBOR (approximately 7.75% at July 31,
1997)(3)............................................................................ -- 2,302
Capitalized Lease Obligation, 20 years, commencing February 1997..................... -- 3,841
Bank financing(4).................................................................... 4,911 3,341
Occidental Chemical Corporation(5)................................................... 4,000 2,524
--------------- ---------------
Less: current portion................................................................ 5,292 7,363
--------------- ---------------
$ 130,587 $ 129,504
=============== ===============
</TABLE>
- ------------
As described below, substantially all assets of the Company are pledged as
security under outstanding debt agreements.
(1) In November 1993, PST issued $125,000 principal amount of Senior
Secured Notes due 2003 (the "Senior Secured Notes"). Interest payments
on the Senior Secured Notes, at a rate of 11 1/4% are payable
semiannually and commenced June 1, 1994. For the years ended July 31,
1997 and 1996, the Company recorded $1,231 and $1,095, respectively, in
interest expense relating to the accretion of these notes.
The Senior Secured Notes are senior secured obligations of PST, ranking
pari passu in right of payment with all existing and future senior
indebtedness of PST and senior to all subordinated indebtedness of PST, if
any. The Senior Secured Notes are secured by substantially all real
property, machinery, equipment, general intangibles and other intellectual
property now owned or hereafter acquired by PST and by a pledge of all
outstanding capital stock of Plastic Specialties and Technologies
Investments, Inc., a wholly- owned subsidiary of PST. The indenture for the
Senior Secured Notes contains covenants which restrict, among other
matters, the ability of PST and its subsidiaries to incur additional
indebtedness, pay dividends (except as described in the indenture), redeem
capital stock, prepay subordinated indebtedness, create liens, dispose of
certain assets, engage in sale and merger transactions, make contributions,
loans or advances and enter into transactions with affiliates. At July 31,
1997, PST is unable to pay dividends.
(2) For the years ended July 31, 1997 and 1996, the Company recorded $254 and
$487, respectively, in interest expense relating to the accretion of these
notes.
(3) The Agreement with the UK Commercial Bank is payable in 13 equal
semi-annual installments of $151 commencing June 20, 1998 with a final
payment of $158 on December 31, 2004.
(4) The Term Loan Agreement with a Commercial Bank that Burlington has
entered into contains a $5,500 term loan payable in 28 quarterly
installments of approximately $196 plus interest accrued at the prime
rate plus 1.25% commencing October 31, 1995. In addition, the Company
is required to make yearly mandatory cash flow prepayments, as defined
in the Agreement. The loan is secured by the property, plant, and
equipment acquired from OxyChem. As described in Note 8(b), Burlington
is not in compliance with certain covenants of the Agreement for which
it has obtained a waiver. Additionally, as the Company intends to
repay the borrowings outstanding under the Agreement during 1998, the
entire amount has been classified in current portion of long-term debt
at July 31, 1997.
(5) As described in Note 1, this amount represents the renegotiated Seller
Financing, arising from the purchase of Burlington from OxyChem. This
loan was repaid subsequent to July 31, 1997 and as such has been
classified as a current liability.
(6) In February 1996, Styrex and Pure Tech Plastics, Inc. and subsidiaries
("PTP") entered into a Loan and Security Agreement with a bank
("Styrex/PTP Loan") providing an aggregate revolving credit line of
$7,500 and an aggregate term loan of $5,000. The proceeds of the loan
were used to pay off existing debt. As of July 31, 1996, there was
$3,839 outstanding under the revolving credit line, and $2,692 under
the term loan. In September 1996, the Company repaid the amount
outstanding at that time relating to PTP. Styrex subsequently paid off
its loans to the bank on November 11, 1996 when it signed a new Loan
and Security Agreement (the "Styrex Loan Agreement") with a Finance
Company for a period of three years. The Styrex Loan Agreement
provides for a term loan and revolving loans up to a maximum of $6,000
and letters of credit of up to $1,000 and is secured by all of the
assets of Styrex. Advances under the agreement bear interest at the
rate of prime plus 1 1/2%. The initial term loan of $1,360 has
scheduled repayments of $23 per month beginning December 1, 1996. As
of July 31, 1997 and 1996 the revolving loan and the term loan balances
were $1,086 and $1,156, respectively. The operations of Styrex were
sold in August 1997. Accordingly, these amounts are included in net
assets held for sale in the consolidated balance sheet which is
included in other current assets.
Maturities of long-term debt are as follows:
<TABLE>
<CAPTION>
Years Ending July 31,
- ---------------------
<S> <C>
1998....................................... $ 7,363
1999....................................... 1,626
2000....................................... 1,446
2001....................................... 1,308
2002....................................... 646
Thereafter................................. 124,478
---------
$ 136,867
=========
</TABLE>
12. Income Taxes
The provision for income taxes from continuing operations consists of the
following:
<TABLE>
<CAPTION>
------------------------------------
Years Ended July 31,
------------------------------------
1995 1996 1997
---------- --------- ---------
<S> <C> <C> <C>
Current Tax Provision
Federal....................... $ -- $ -- $ --
Foreign....................... -- 2,269 2,804
State......................... -- 288 150
---------- --------- ---------
-- 2,557 2,954
---------- --------- ---------
Deferred Tax Provision (Benefit)
Federal....................... -- -- --
Foreign....................... -- 80 177
State......................... -- -- --
---------- --------- ---------
-- 80 177
---------- --------- ---------
Total.............................. $ -- $ 2,637 $ 3,131
========== ========= =========
</TABLE>
The Company's tax provision for the year ended July 31, 1997 and 1996 are
primarily due to the Company's foreign operations. The Company's tax benefit
for the year ended July 31, 1995 reflects the reduction in previously recorded
temporary differences. The tax provision does not reflect the expected 34%
benefit based on existing federal tax rates due to the sizable operating
losses experienced in its domestic operations. The Company has not anticipated
the tax benefits of such losses as it is more likely than not that such
deferred tax asset would not be realizable at this time.
Deferred income taxes reflect the net tax effects of temporary differences
between the carrying amounts of assets and liabilities for financial reporting
purposes and the amounts used for income tax purposes, net of operating losses
and income tax credit carryforwards. The income tax effects of significant
items comprising the Company's net deferred tax liability are as follows:
<TABLE>
<CAPTION>
-----------------------------------------------------
July 31, 1996 July 31, 1997
---------------------------- ------------------------
Current Non-current Current Non-current
----------- --------------- ------- -------------
<S> <C> <C> <C> <C>
Assets
Net operating loss carry forward $ -- $ 31,363 $ -- $ 27,200
Expenses currently not deductible 2,044 -- 3,308 1,518
Allowance for doubtful accounts................... 200 -- 235 --
Capitalization of inventory costs................. 421 -- 556 --
Employee benefits liabilities..................... -- 2,218 -- 1,956
Pension........................................... -- 570 -- 638
Liabilities
Difference between book and tax basis of property
and equipment........................................ -- (11,531) -- (10,186)
Discount.......................................... -- (3,193) -- (2,701)
--------- ---------- ------- ----------
Net deferred tax asset.................................. 2,665 19,427 4,099 18,425
Less valuation allowance................................ (2,665) (20,707) (4,099) (19,882)
--------- ---------- ------- ----------
Net deferred income taxes............................... $ -- $ (1,280) $ -- $ (1,457)
========= ========== ======= ==========
</TABLE>
The net deferred tax asset has been subject to a valuation allowance except
for the net deferred tax liability as of July 31, 1997 and 1996 of $1,457 and
$1,280 which relates to income taxes in foreign jurisdictions which can not be
offset against U.S. income taxes. The valuation allowance has changed in the
current year due to revisions of previously estimated amounts, changes in the
deferred tax amounts and additions to the net operating losses, which are fully
reserved. The domestic net operating losses are subject to matters discussed
below and are subject to change due to the restructuring occurring at the
corporate subsidiary level, as well as adjustment for the timing of inclusion
of expenses and losses in the federal returns as compared to amounts included
for financial statement purposes.
Net Operating Losses
The Company and its U.S. subsidiaries will file a consolidated tax return for
the year ended July 31, 1997. The net operating loss ("NOL") carryforwards
involve complex issues of federal tax law and are subject to various
limitations as follows:
$55,200 Subject to IRC Section 382 annual limitation of approximately $3,900;
this includes $4,700 of losses incurred prior to 1992 which are
subject to additional limitations. Approximately $26,000 of these
losses were incurred after the IRC Section 382 change of ownership
occurred and are not subject to Section 382 limitations; expire
2001-2010.
$20,800 Subject to IRC Section 382 annual limitation of approximately $3,100,
Separate Return Limitation Year ("SRLY") as to Ozite Corporation;
expire 1997-2005.
$4,000 Subject to IRC Section 382 annual limitation of approximately $3,100.
(This is part of, and not in addition to, $3,100 IRC Section 382
limitation discussed immediately above). SRLY as to Ozite and Subs.;
expires 2009.
To the extent the Ozite amounts of NOL's are subsequently recognized, they
will cause changes in the goodwill arising from the transaction. In addition
to the domestic NOL balances, the Company has incurred losses relating to CEL,
a subsidiary of the Company, taxable in Northern Ireland. Fiscal 1997 losses
aggregated $1,430 which have no expiration date. The Company believes that it
is more likely than not that this deferred tax asset will not be realized and
has recorded a full valuation allowance on these amounts. Such temporary
differences do not include deferred United States income taxes on
undistributed earnings of approximately $25,833 of Ozite's foreign
subsidiaries as the Company has the ability and intent to permanently reinvest
such earnings.
See Note 20(b) for a discussion of Ozite's Belgian subsidiary income tax
assessment.
13. Stockholders' Equity
(a) Capitalization
The Company's authorized capital consists of 50,000,000 shares of common
stock, $.01 par value and 1,000,000 shares of preferred stock, $.01 value.
The holders of the Company's common stock are entitled to one vote for each
share held of record on all matters submitted to a vote of shareholders. The
holders of the Company's common stock have no cumulative voting rights in the
election of directors. Subject to the prior rights of the holders of the
Company's preferred stock, all holders of common stock are entitled to share
equally in dividends from sources available therefor when, as and if declared
by the Board of Directors, and upon liquidation or dissolution of the Company,
whether voluntary or involuntary, to share equally in the assets of the
Company available for distribution to stockholders. Stockholders have no
preemptive rights. There is no cumulative voting, redemption right or right of
conversion in existence with respect to the common stock. All outstanding
shares issued are fully paid and non-assessable and legally issued. The Board
of Directors is authorized to issue additional common stock within the limits
authorized by the Company's charter and without stockholder action.
The authorized shares of preferred stock, $.01 par value, are issuable at any
time and from time to time, by action of the Board of Directors without
further authorization from the stockholders, except as otherwise required by
applicable law or regulations, to such persons and for such consideration (but
not less than the par value thereof) as the Board of Directors determines. The
Board of Directors can fix the exact terms of each series of preferred stock,
including number of shares, designation, preferences, privileges, restriction
and rights with respect to dividends, conversion, voting, redemption and other
matters, at or before the time such series is to be sold or issued based upon
factors such as market conditions and negotiations with respective purchasers
existing at that time. There were 5,000 shares of preferred stock to be issued
which were considered outstanding at July 31, 1995 in connection with the
Ozite Merger. Such shares were issued in fiscal 1996.
Effective as of July 31, 1996, the holders of the then outstanding redeemable
preferred stock entered into an agreement with the Company to convert such
shares into 1,606,688 shares of common stock of the Company (the "Exchange
Agreement"). The exchange rate of this conversion was 321.3368 shares of
common stock for each preferred share, with fractional shares rounded up to
the next whole share. Of the total shares issued, 50%, or 803,344, were
delivered to the holders of the Preferred Stock and are restricted from sale
until October 1, 2001 (the "Exchange Shares"). The remaining 50% were
delivered to an escrow agent pending release as described below (the "Escrow
Shares").
Under the terms of the Exchange Agreement, Escrow Shares will be released back
to the Company if such specified litigation is settled prior to July 31, 2001
in excess of amounts defined in the Exchange Agreement. The shares released to
the Company will be based on an exchange price of $3.2016 per share or the
then market price of the common stock, whichever is greater. If the
incremental cost to the Company exceeds the released value of the Escrow
Shares, the Company will obtain Exchange Shares, valued as indicated above,
for the cost of the settlement in excess of the released value of the Escrow
Shares. Escrow Shares not released to the Company as indicated above by July
31, 2001, will then be released to the holders of the Preferred Stock. The
Exchange and Escrow Shares must be registered within 180 days of the
settlement of the specified litigation or July 31, 2001, whichever occurs
first.
In addition, pursuant to the terms of the Company's 7% Subordinated Notes (see
Note 11), the Company also has the ability to offset principal payments due on
these Subordinated Notes against any excess cost of settlement in the
litigation referred to above. See further discussion at Note 20(b).
The Exchange Shares have been valued by the Company at the date of conversion
at the five day trailing market price of the Company's common stock. The
Escrow Shares have been valued based on such price, less a liquidity discount
due to the nature of such shares. The total value of the Exchange and Escrow
Shares approximated the value of the Preferred Stock on the date of
conversion, July 31, 1996. Therefore, the above transaction has had no effect
on the net equity position of the Company.
(b) Stock Issuances
(i) Private Placements
Common Stock:
During the period from October 1994 to July 1995, the Company issued an
aggregate of 3,332,737 shares of common stock under three private placements
made entirely to foreign persons and companies under Regulation S of the
Securities Act of 1933. Net proceeds from these placements aggregated $13,160
before expenses.
In January 1996, the Company made a private placement of 250,000 shares of
common stock for proceeds of $500. In March 1996, the Company made an
additional private placement of 250,000 shares of common stock for proceeds of
$500. In both cases, the proceeds were used to reduce outstanding debt.
As described in Note 1, on June 27, 1997, PureTec completed a private
placement through Ozite, of 2,235,030 shares of its common stock, in exchange
for 1,117,515 shares, or an additional 13.4%, of PST common stock outstanding.
Convertible Debentures:
During the period from February 1995 to June 1995, the Company received $8,371
and, in exchange, issued Convertible Debentures in the same amount. The
debentures matured at various times from December 1, 1995 to February 1996 and
bore interest at 3% per annum. The holders of the debentures were entitled, at
their option, at any time after a three-month holding period, to convert the
principal amount, or any portion of the debenture, into shares of common stock
of the Company at 80% of the market price of the Company's common stock. As of
July 31, 1995, debentures in the amount of $7,371 were converted into
1,714,780 shares of the Company's common stock. In August 1995, the remaining
$1,000 was converted into 227,273 shares of common stock.
(ii) Other Issuances
In March 1995, the Company acquired an additional interest in Evolutions for
350,000 shares of common stock. The issued shares are accounted for by the
Company as Treasury stock. During 1996, Evolutions sold 202,500 shares of the
Company's common stock, resulting in an increase to paid-in capital of $487.
The Company issued 113,890 shares of Common Stock as the result of a
settlement of a lawsuit in October 1995. The value of the shares approximated
$438 at such date and has been charged to expense in 1995.
During fiscal 1997, 333,333 shares of common stock were transferred to the
Company in settlement of a $1,000 note in conjunction with the transfer of the
MCR Vending operations to its minority owners.
(c) Stock Option Plans
As part of the Merger, the Company has adopted a stock option plan (the "1995
Plan") covering 5,000,000 shares of the Company's common stock, par value
$.01, pursuant to which officers, directors, employees and consultants are
eligible to receive options. The options issued under this plan may be ISOs or
non-statutory options. No options may be granted after December 31, 2002. Each
option granted under the 1995 Plan may be exercised for a period of not more
than ten years after the date of grant, or until the expiration of the plan,
whichever occurs first. The option price must not be less than fair market
value for ISOs and 85% of fair market value for non-statutory options. In
total, options to acquire 1,068,366 shares of Company common stock have been
transferred from previously existing Pure Tech plans to the 1995 Plan at
exercise prices ranging from $2.03 to $6.88 per share.
In March 1995, the Company reclassified options to acquire 154,571 shares of
common stock as "plan" options. These options have exercise prices ranging
from $2.03 to $7.50.
In fiscal 1996, the Company issued 1,236,500 plan options at an exercise price
of $3.00 per share and 300,000 plan options with an exercise price of $4.25.
In fiscal 1997, the Company issued 840,000 plan options at an exercise price
of $2.25 per share.
The following summarizes transactions under the employee stock option plan for
the years ended July 31, 1997, 1996, and 1995.
<TABLE>
<CAPTION>
----------------------------------------
Weighted Average
Number of Shares Exercise Price
------------------ ------------------
<S> <C> <C>
Outstanding, June 30, 1994..... 710,404 $ 5.83
Granted........................ 427,000 5.97
Reclassified................... 154,571 5.83
Exercised and canceled......... (223,609) 5.83
--------- ---------------
Outstanding, July 31, 1995..... 1,068,366 3.62
Granted........................ 1,536,500 3.24
Canceled....................... (20,000) 6.57
--------- ---------------
Outstanding, July 31, 1996..... 2,584,866 3.32
Granted........................ 840,000 2.25
Canceled....................... (256,500) 3.49
--------- ---------------
Outstanding, July 31, 1997..... 3,168,366 $ 3.03
========= ===============
</TABLE>
At July 31, 1997 and 1996, approximately 1,372,000 and 923,000 options,
respectively, were vested and exercisable at weighted-average prices of $3.11
and $3.62, respectively.
The Company applies APB Opinion 25 and related Interpretations in accounting
for its stock plans. Accordingly, no compensation cost has been recognized for
stock option grants issued under any of the Company's stock option plans. Had
compensation cost for stock option grants issued during 1997 and 1996 been
determined under the provisions of SFAS No. 123, the Company's net loss and
loss per share would have been $3,475 and $.12 in 1997 and $9,741 and $.36 in
1996. The pro forma effect on net loss and net loss per share in 1996 includes
the effect of modifying the terms of approximately 771,000 options that were
granted prior to July 31, 1995. In November 1996, all options outstanding at
the beginning of the year with an exercise price of $7.50 or greater were
modified to reduce the exercise price to $3 or $4.25 per share. The pro forma
effect on net loss and loss per share for 1997 and 1996 is not representative
of the pro forma effect on net income in future years, because it does not
take into consideration pro forma compensation expense related to all other
grants made prior to 1996.
The fair value of each stock option granted in 1997 and 1996 under the
Company's plans was estimated on the date of grant using the Black-Scholes
option-pricing model. The following weighted-average assumptions were used to
value grants issued under the plans in 1997 and 1996:
<TABLE>
<CAPTION>
--------------------
1996 1997
-------- --------
<S> <C> <C>
Dividend yield.............................. N/A N/A
Volatility.................................. 34.36% 37.00%
Risk-free interest rate..................... 6.00% 6.00%
Expected term of options (in years)......... 9.80 8.30
</TABLE>
The weighted-average fair values per share of stock options granted during
1997 and 1996 were $1.29 and $.91, respectively.
The exercise price ranges and average remaining lives for options outstanding
and exercisable at July 31, 1997 were:
<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------
Number of
Shares Weighted Number of Weighted-
Outstanding at Remaining Life Average Shares Average
Range of Exercise Prices 7/31/97 (in Yrs.) Exercise Price Exercisable Exercise Price
- --------------------------- ---------------- ---------------- ---------------- ------------- ----------------
<S> <C> <C> <C> <C> <C>
2.03 -- 3.00............... 2,749,700 7.90 $ 2.74 1,020,322 $ 2.96
3.44 -- 6.88............... 418,666 8.00 4.88 351,966 4.88
--------- ---- ---- --------- ----------------
Total:..................... 3,168,366 7.91 $ 3.03 1,372,288 $ 3.11
========= ==== ==== ========= ================
</TABLE>
(d) Stock Warrants/Options
The following options and warrants were issued to non-employees of the Company:
In August 1994, the Company issued non-plan options to acquire 100,000 shares
of common stock. These options have an exercise price of $6.88.
In January 1995, the Company issued non-plan options to acquire 685,000 shares
of common stock. These options have exercise prices ranging between $5.50 and
$5.62.
In March 1995, the Company reclassified non-plan options to acquire 154,571
shares of common stock. These options have exercise prices ranging from $2.03
to $7.50.
The above transactions did not result in any compensation cost or expenses, as
the exercise prices equaled or exceeded the fair market value of the stock. In
the case of the reclassified options, the exercise price at the time of
original issue equaled or exceeded the fair market value of the stock.
In December 1994, the Company entered into a settlement of certain litigation
which provides for the issuance of 450,000 warrants to acquire the Company's
common stock at an exercise price of $4.61 per share (See Note 20(b)).
The following table summarizes the status of stock options and warrants issued
to non-employees of the Company:
<TABLE>
<CAPTION>
---------------------------------------------
Number of Shares Options/ Warrant Prices
----------------- ------------------------
<S> <C> <C>
Outstanding, June 30, 1994.. 521,000 $2.03 -- $22.00
Granted..................... 1,235,000 4.64 -- 6.88
Reclassified................ (154,571) 2.03 -- 7.50
Exercised and canceled...... (32,985) 7.50
---------
Outstanding, July 31, 1995.. 1,568,444 2.03 -- 22.00
Canceled.................... (200,000) 5.50
---------
Outstanding, July 31, 1996.. 1,368,444 4.25 -- 22.00
Exercised................... (122) 4.61
Canceled.................... (56,000) 4.25
---------
Outstanding, July 31, 1997.. 1,312,322 $4.25 -- $22.00
=========
</TABLE>
At July 31, 1997, all of the stock options/warrants issued to non-employees of
the Company were exercisable, and expired at various dates during fiscal 1998
and 1999.
14. Retirement Plans
(a) PST Pension Plan:
PST maintains a noncontributory defined benefit pension plan. The plan covers
substantially all employees of PST and substantially all salaried employees of
Burlington who are not covered by a collective bargaining agreement, who have
completed one year of service and are not participants in any other pension
plan. The funding policy of the Company is to make contributions to the plan
based on actuarial computations of the minimum required contribution for the
plan year. The plan's assets are invested primarily in the Master Trust Fund
of PST in accordance with the investment agreements of the plan.
Net pension costs consist of the following:
<TABLE>
<CAPTION>
--------------------------
Years Ended July 31,
--------------------------
1996 1997
----------- -----------
<S> <C> <C>
Service cost.................................... $ 647 $ 667
Interest cost on projected benefit obligation... 542 589
Actual return on plan assets.................... (557) (1,854)
Net amortization and deferrals.................. 88 1,287
----------- -----------
$ 720 $ 689
=========== ===========
</TABLE>
The funded status of the Plan is as follows:
<TABLE>
<CAPTION>
----------------------------------
July 31, 1996 July 31, 1997
--------------- ---------------
<S> <C> <C>
Vested benefit obligation............................................................. $ (5,831) $ (6,548)
============== ==============
Accumulated benefit obligation........................................................ $ (6,089) $ (6,843)
============== ==============
Projected benefit obligation.......................................................... $ (7,807) $ (8,540)
Plan assets at fair value............................................................. 6,029 8,339
Projected benefit obligation in excess of plan assets................................. (1,778) (201)
Unrecognized net gains................................................................ (415) (1,946)
Less unrecognized actuarial gains and losses and prior service costs attributable
to minority interest in PST.......................................................... 295 (15)
-------------- --------------
Accrued pension obligation............................................................ $ (1,898) $ (2,162)
============== ==============
</TABLE>
The expected long-term rate of return on plan assets of the plan was 9% for
all periods presented and the discount rate was 8% at July 31, 1997 and 1996.
(b) Burlington Hourly Pension Plan:
Burlington has a noncontributory defined benefit pension plan that covers
substantially all hourly compensated employees covered by a collective
bargaining agreement, who have completed one year of service. The funding
policy of the Company is to make contributions to this plan based on actuarial
computations of the minimum required contribution for the plan year. The
plan's assets are invested primarily in the Master Trust Fund of PST. Net
pension costs consist of the following:
<TABLE>
<CAPTION>
----------------------------
Years Ended July 31,
1996 1997
------------ ------------
<S> <C> <C>
Service cost........................................................... $ 108 $ 110
Interest cost on projected benefit obligation.......................... 278 309
Actual return on plan assets........................................... (165) (780)
Net amortization and deferrals......................................... (104) 487
------------ ------------
$ 117 $ 126
============ ============
Vested benefit obligation.............................................. $ (3,682) $ (4,103)
============ ============
Accumulated benefit obligation......................................... $ (3,888) $ (4,503)
============ ============
Projected benefit obligation........................................... $ (3,888) $ (4,503)
Plan assets at fair value.............................................. 3,222 4,169
------------ ------------
Projected benefit obligation in excess of plan assets.................. (666) (334)
Unrecognized net loss (gain)........................................... 180 (262)
Adjustment to recognize minimum required liability..................... (180) --
Unrecognized prior service cost........................................ -- 238
------------ ------------
Accrued pension costs.................................................. $ (666) $ (358)
============ ============
</TABLE>
The expected long-term rate of return on plan assets was 9% for the period and
the discount rate was 8% for the year ended July 31, 1997.
In July 1997, the Plan was amended due to an agreement reached with the labor
union representing the majority of hourly workers at Burlington. This
agreement increased retirement benefits from $25, multiplied by the number of
years of benefit service, to $26, effective June 1998, and $27, effective June
2000. These changes are reflected in the year-end disclosure information
above, with the increase in liability established as a prior service cost.
(c) Post-retirement Liabilities
In addition to providing pension benefits, the company also sponsors the
Burlington Retiree Welfare Plan, which provides certain health care benefits
for retired employees who were employed on an hourly basis and covered under a
collective bargaining agreement. Employees and their families become eligible
for these benefits after the employee completes five years of service, if
retiring at age fifty-five, or at age sixty-five, the normal retirement age.
Post retirement health care benefits paid during the year ended July 31, 1997
and 1996 amounted to $139 and $110, respectively.
Effective June 23, 1997, the plan was amended to provide a zero-premium
Medicare risk HMO coverage for all future post-age-65 retirees, as well as
many of the Company's current retirees. This amendment to the plan was
accounted for as a negative plan amendment pursuant to Statement of Financial
Accounting Standards No. 106. The resulting reduction in the accrued
post-retirement liability of $3,200 will be recognized and amortized as a
reduction of net periodic post retirement benefit cost over the next eight
years at the rate of $400 per year. The amortization period represents the
average period of time over which an under-55 employee attains full
eligibility for this post retirement benefit.
Net periodic post-retirement benefit cost for 1997 was $553 and was comprised
of $133 of service cost and $420 of interest cost. Net periodic
post-retirement benefit cost for 1996 was $513 and was comprised of $123 of
service cost and $390 of interest cost.
The funded status of the plan is as follows:
<TABLE>
<CAPTION>
----------------------------------
July 31, 1996 July 31, 1997
--------------- ---------------
<S> <C> <C>
Accumulated post-retirement benefit obligation
Retirees................................................................... $ (1,511) $ (1,099)
Fully eligible active plan participants.................................... (2,138) (408)
Other active participants.................................................. (1,672) (310)
--------------- ---------------
Total................................................................... (5,321) (1,817)
Unrecognized net gain...................................................... (19) (737)
--------------- ---------------
Sub-total............................................................... (5,340) (2,554)
Unrecognized prior service cost relating to negative plan amendment (see
above).................................................................. -- (3,200)
--------------- ---------------
Accrued Post retirement costs.............................................. $ (5,340) $ (5,754)
=============== ===============
</TABLE>
The accumulated post-retirement benefit obligation was determined using an 8%
discount rate for the years ended July 31, 1997 and 1996. The health care cost
trend rate for medical benefits was assumed to be 8% for 1996, gradually
declining until it reaches a constant annual rate of 5% in 2002. The health
care cost trend rate assumption has a significant effect on the amounts
reported. A 1% increase in health care trend rate would increase the
accumulated Post retirement benefit obligation by $943 and increase the
service and interest components by $100 at July 31, 1997.
(d) Savings Plans
Additionally, PST has a savings plan for all non-collective bargaining
employees whereby PST will match each employee's contribution up to 2% of the
employee's earnings. The savings plan is also made available to PST affiliates
who bear their respective costs. Such contribution amounted to approximately
$492 and $505 for the year ended July 31, 1997 and 1996, respectively.
Burlington employees who are covered under a collective bargaining agreement
participate in the Pure Tech International, Inc. Savings and Investment Plan
for Hourly Employees at Burlington, New Jersey. The Company will match each
employee's contribution up to 50% of the contributions not in excess of 6% of
the employee's compensation. Such contribution amounted to approximately $73
and $96 for the year ended July 31, 1997 and 1996, respectively.
15. Segment Information
The Company operates in three industry segments: plastic products, plastic
materials and recycling. The plastic products segment principally produces
lawn and garden hose, medical tubing and specialty tubing and gaskets. The
plastics materials segment principally produces recycled and general purpose
plastics and medical grade vinyl compounds. The recycling segment consists of
the operating of material recovery facilities and the recycling of plastics
and some aluminum. The plastic products segment has operations in the United
States, Europe and Canada (Canadian operations commencing in 1996, which are
included in the domestic amounts below). The plastic materials and recycling
segments operate principally in the United States.
Financial information concerning the Company's business segments and the
geographic areas in which it operates is as follows:
<TABLE>
<CAPTION>
-----------------------------------
Years ended July 31,
-----------------------------------
1995 1996 1997
--------- --------- ---------
<S> <C> <C> <C>
Net Sales:
Plastic Products:
Domestic......................... $ -- $ 152,352 $ 149,083
Europe........................... -- 34,158 35,300
Plastic Material..................... -- 142,314 154,064
Recycling............................ 30,189 34,248 18,681
Corporate & elimination.............. -- (36,728) (41,794)
--------- --------- ---------
Total Net Sales................ $ 30,189 $ 326,344 $ 315,334
========= ========= =========
Operating Income (Loss):
Plastic Products:
Domestic......................... $ -- $ 19,366 $ 21,822
Europe........................... -- 6,375 8,276
Plastic Material..................... -- 5,907 6,533
Recycling............................ 1,020 (5,088) (197)
Corporate & elimination.............. (7,304) (5,692) (9,817)
--------- --------- ---------
Total Operating Income
(Loss)...................... $ (6,284) $ 20,868 $ 26,617
========= ========= =========
Depreciation and Amortization:
Plastic Products:
Domestic......................... $ -- $ 4,622 $ 4,998
Europe........................... -- 1,496 1,641
Plastic Material..................... -- 3,589 3,123
Recycling............................ 2,473 1,263 1,101
Corporate & elimination.............. 388 2,457 2,917
--------- --------- ---------
Total Depreciation & Amortization $ 2,861 $ 13,427 $ 13,780
========= ========= =========
Capital Expenditures:
Plastic Products:
Domestic......................... $ -- $ 2,440 $ 2,553
Europe........................... -- 3,804 1,852
Plastic Material..................... -- 1,726 9,502
Recycling............................ 2,727 916 717
Corporate and discontinued operations 216 1,623 451
--------- --------- ---------
Total Capital Expenditures..... $ 2,943 $ 10,509 $ 15,075
========= ========= =========
Identifiable Assets:
Plastic Products:
Domestic......................... $ 134,147 $ 135,095 $ 145,150
Europe........................... 36,667 37,907 36,760
Plastic Material..................... 73,708 85,900 103,998
Recycling............................ 27,998 19,520 10,186
Corporate and discontinued operations 17,601 18,268 15,729
--------- --------- ---------
Total Identifiable Assets...... $ 290,121 $ 296,690 $ 311,823
========= ========= =========
</TABLE>
Operating income (loss) is total sales less cost of goods sold and operating
expenses of each segment before deductions for general corporate expenses not
directly related to an individual segment. In computing operating income
(loss), none of the following items have been added or deducted: interest
expense, income taxes (benefit) and loss from discontinued operations.
Identifiable assets by industry are those assets that are used in the
Company's operation in each industry segment, including assigned value of
goodwill. Corporate identifiable assets consist primarily of cash, prepaid
expenses, fixed assets and deferred debt costs offset by the elimination of
intersegment profit in ending inventories.
16. Fourth Quarter Adjustments
During the fourth quarter of 1997, the Company recorded certain adjustments
aggregating $1,200. The Company recorded additional inventory of approximately
$1,800 based on the results of a book to physical reconciliation.
Additionally, the Company recorded a charge of approximately $600 as the
result of reconciling intercompany accounts. It cannot be specifically
determined to which quarters in the year these amounts relate.
Additionally, during the fourth quarter of 1997, the Company recorded certain
adjustments aggregating $3,158. These adjustments relate to the write-off of
licenses and a supply agreement ($920), the reversal of a portion of the Dalen
litigation reserve ($2,000), the recording of the Circuit Chemistry settlement
($1,988), and the loss on disposal of Styrex ($2,250).
During the fourth quarter of 1996, the Company recorded certain adjustments
aggregating approximately $7,194. These adjustments related to the shut down
of the Springfield location ($4,236), losses recorded in connection with
equity investments ($1,188), the final exit of the Ozite Mfg. location ($570)
and the decision to dispose of the MCR operations ($400). In addition to the
above, certain adjustments were recorded at Burlington in the fourth quarter
($800) that related to operations throughout the year. It cannot be
specifically determined what quarters in the year these amounts relate to.
During the fourth quarter of 1995, the Company recorded certain adjustments
aggregating approximately $11,110. These adjustments were related to the
write-off of obsolete equipment ($4,617) and the write-off of intangibles
($6,493). The write-off of intangibles included $3,707 related to Styrex.
17. Discontinued Operations
The following table summarizes the loss from operations and disposal of
discontinued operations of the Company for the years ended July 31, 1997, 1996
and 1995:
<TABLE>
<CAPTION>
1995 1996 1997
----------- ----------- -----------
<S> <C> <C> <C>
Glass operations(1)
Loss from discontinued operations................... $ -- $ -- $ --
Loss on disposal from discontinued operations....... (4,809) -- --
----------- ----------- -----------
$ (4,809) $ -- $ --
=========== =========== ===========
Ozite Manufacturing(2)
Loss from discontinued operations................... $ -- $ (979) $ --
Loss on disposal from discontinued operations....... -- (2,241) (672)
----------- ----------- -----------
$ -- $ (3,220) $ (672)
=========== =========== ===========
Injection molding operations (Styrex)(3)
Loss from discontinued operations................... $ (4,580) $ (546) $ (1,226)
Loss on disposal from discontinued operations....... -- -- (2,250)
----------- ----------- -----------
$ (4,580) $ (546) $ (3,476)
=========== =========== ===========
Circuit Chemistry(4)
Loss from discontinued operations................... -- -- --
Loss on disposal from discontinued operations....... -- -- (1,988)
----------- ----------- -----------
$ -- $ -- $ (1,988)
=========== =========== ===========
Dalen(5)
Loss from discontinued operations................... -- -- --
Gain on disposal from discontinued operations....... -- -- 2,000
----------- ----------- -----------
$ -- $ -- $ 2,000
=========== =========== ===========
Total discontinued operations
Loss from discontinued operations................... $ (4,580) $ (1,525) $ (1,226)
Loss on disposal from discontinued operations....... (4,809) (2,241) (2,910)
----------- ----------- -----------
$ (9,389) $ (3,766) $ (4,136)
=========== =========== ===========
</TABLE>
- ------------
(1) Glass operations
During 1994 and 1995, the Company discontinued and arranged for the
disposal of its various glass, metal, and material recovery facility
("MRF") operations. In April 1995, the Company leased its Newark, New
Jersey glass processing and MRF facilities to Automated Recycling
Technologies, Inc. ("ARTS") for an initial period of two years. At
the conclusion of the initial two-year period, ARTS had the right, to
extend at its option, the lease agreement for eight consecutive one-
year periods. ARTS exercised that right and extended the lease at the
Newark glass processing operation, while vacating the MRF facility.
The Company has accrued $1,216 and $1,660 for various liabilities
related to these operations at July 31, 1997 and 1996, respectively.
These reserves are included in accrued plant closing and disposal costs
in current liabilities and long-term debt. These liabilities relate
primarily to rent, clean-up costs, and mortgage and equipment financing
loans.
(2) Ozite Manufacturing
On December 21, 1995, PST entered into an Asset Purchase Agreement with
Foss Manufacturing Company, Inc. ("Foss") for the sale of certain
assets of PST's Ozite Manufacturing Division ("Ozite Mfg.") in
Libertyville, Illinois to Foss as of January 31, 1996. Under the terms
of this agreement, Foss purchased Ozite Mfg's accounts receivable and
inventory, net of reserves, as well as certain prepaid expenses, trade
names, trademarks, and patents for approximately $3,025, which was
received by PST on February 12, 1996. Furthermore, the agreement
provided for the company to receive a minimum of $450 for all of its
machinery and equipment at the facility. During the fourth quarter of
fiscal 1996, adjustments were made to increase by $570 the estimated
loss on disposal recorded in the second quarter due to the final shut
down of these facilities.
Accordingly, the Ozite Mfg. operations have been reflected as
discontinued operations in the statement of operations for all periods
presented. Net sales generated from these operations amounted to
$4,882 and $11,714 for the years ended July 31, 1996 and 1995,
respectively. During fiscal 1997, the Company settled certain
litigation related to Ozite Mfg. (see Note 20(b)). These settlements
resulted in charges of $672. Certain litigation remains ongoing,
however management believes any potential exposure to the Company is
covered by insurance.
(3) Styrex
Styrex Industries, Inc. ("Styrex") was a wholly owned subsidiary of
the Company engaged in thermoplastic and injection molding operations.
In August 1997, the operations of Styrex were sold. In connection
therewith, the Company recorded a loss on disposal of $2,250.
Accordingly, operating results for Styrex have been shown as a
discontinued operation within the consolidated statement of operations
for the years 1997, 1996 and 1995. Net sales for this operation were
$14,767, $17,979 and $21,713 for the years ended July 31, 1997, 1996
and 1995, respectively. The net loss for this operation of $1,226 for
this operation for fiscal 1997 was also included within discontinued
operations. In addition, the net assets for Styrex of $270 have been
included in other current assets on the consolidated balance sheet at
July 31, 1997. The measurement date for this discontinued operation is
April 30, 1997. In August 1997, the operations of Styrex were sold for
cash. The Company has accrued $656 for various liabilities related to
the closing of this operation, which are included in accrued expenses.
(4) Relates to K&B Liquidating Corp. Lawsuit (see Note 20).
(5) Relates to reduction of accrued expenses for Dalen lawsuit (see Note 20).
18. Subsequent Events
In August 1997, the operations of Styrex were sold and the operating results
of Styrex for fiscal 1997 were included within discontinued operations (see
Note 17). Accordingly, results for fiscal 1996 and 1995 were also reclassed to
discontinued operations.
In September 1997, Burlington Resins, Inc. settled a lawsuit it had filed
against OxyChem. The result of this settlement was to reduce goodwill at
Burlington by $1,476. (See Note 1).
In October 1997, PST settled a lawsuit pertaining to Circuit Chemistry, and
Ozite settled the Dalen litigation. The impact of both settlements was
accounted for as adjustments to previously recorded discontinued operations
(see Notes 20(b) and Note 17).
On November 11, 1997, the Company announced that it had signed an Agreement
and Plan of Merger ("Agreement") with Tekni-Plex, Inc., ("Tekni-Plex") a
privately-owned company, pursuant to which the Company would, through a merger
("Merger") become a wholly-owned subsidiary of Tekni-Plex. The Agreement
provides that the owner of each share of common stock of the Company would
receive $3.50 in cash for that share in the Merger. The Agreement and the
Merger will be submitted to the shareholders of the Company for approval at
the Company's annual shareholders' meeting expected to be held in January
1998. The Agreement and the Merger have been unanimously approved, and
recommended to shareholders for adoption, by the Company's Board of Directors.
Officers and directors of the Company owning approximately 10% of the
outstanding common stock of the Company have agreed to vote their shares in
favor of the Merger.
The Agreement contains a number of conditions which must be satisfied in order
for the Merger to occur, including the successful completion of a consent
solicitation and tender offer for PST's 11.25% Senior Secured Notes due 2003,
the receipt of all necessary governmental and regulatory approvals, and the
absence of any changes occurring prior to the closing date which would have a
material adverse significance with respect to the value of the Company and its
subsidiaries, taken as a whole.
The Agreement also requires that the outstanding minority common shareholders'
interest in PST be eliminated, either through purchase or a short-form merger
procedure under Delaware law, not later than immediately prior to completion
of the Merger, at a price of $7.00 per share of PST common stock.
The Merger is further subject to the receipt by Tekni-Plex of sufficient
financing to pay for the Company shares, purchase the PST Notes tendered in
the tender offer, and fund all other cash requirements of the Merger.
Tekni-Plex has received commitments from Morgan Guaranty Trust Company of New
York to provide senior bank financing and subordinated bridge loans in an
aggregate amount which the parties believe will be sufficient to complete the
Merger, subject to a number of conditions.
The Agreement is terminable by Tekni-Plex, the Company, or either of them
under certain circumstances. In the event the Agreement is terminated because
the Company's Board of Directors withdraws or materially modifies its approval
or recommendation of the Merger or the Agreement or another person, entity or
group acquires beneficial ownership of 50% or more of the outstanding shares
of the Company's Common Stock, the Company is obligated to pay a fee of $10
million to Tekni-Plex and to reimburse Tekni-Plex for up to $5 million of its
expenses in connection with the Agreement and related transactions. The
Company expects the Merger to be completed in February 1998, but cannot assure
that all of the conditions to the Merger will be satisfied.
Concurrently with execution of the Merger Agreement, Tekni-Plex purchased a
Convertible Note issued by PureTec in the amount of $5 million. The loan will
assist PureTec and PST in meeting expected cash requirements in the period
prior to completion of the Merger. The Convertible Note bears interest at 13%
and is convertible at any time following the 60th day after any termination of
the Agreement into a number of shares of Common Stock sufficient to retire the
principal amount of the Note plus accrued interest or in any event at a base
conversion rate of one share of Common Stock per $2.72 of obligations owed
under the Note. The Company is required to file a registration statement with
respect to the Common Stock issuable upon conversion promptly following a
termination of the Merger Agreement. The Convertible Note matures on September
30, 1998. The Convertible Note is subject to prepayment by the Company in cash
at any time, and contains covenants and events of default customary for a debt
instrument of this type.
19. Fair Value of Financial Instruments and Concentration of Credit Risk
The estimated fair value of cash and cash equivalents, accounts receivable,
notes and interest receivable from officers, short-term borrowings, accounts
payable and long-term debt, excluding those items discussed below, approximate
those amounts reflected in the balance sheet based on pertinent information
available to management. Management estimates the fair value of the Senior
Secured Notes approximates $135,000 as these notes were trading at a price of
approximately 108 at July 31, 1997. Management estimates the fair value of the
OxyChem notes at July 31, 1997 approximates the carrying value.
In connection with the acquisition from OxyChem, Burlington entered into two
separate supply agreements and one supply and license agreement with OxyChem
to supply certain critical components and chemicals utilized in production of
the Company's products. These agreements extend for varying periods of time
and each contain specified purchase prices and minimum purchase requirements
for such materials. Burlington is entitled to search for new suppliers for
these components, but is required to allow OxyChem to requote the price of the
components if the price quote obtained in the market is more favorable to
Burlington. Management believes that other suppliers could provide similar
components to Burlington on comparable terms. During the years ended July 31,
1997 and 1996, Burlington purchased approximately $20,800 and $18,000,
respectively of products from OxyChem under such agreements. Amounts due to
OxyChem at July 31, 1997 and 1996 amounted to approximately $5,300 and $2,700,
respectively. In addition, Burlington recorded sales to OxyChem in the year
ended July 31, 1997 and 1996 of approximately $1,200 and $1,000, respectively.
The Company performs periodic credit evaluations of its customers' financial
condition and generally does not require collateral. Although credit risk
related to the Company's trade receivables is limited due to the large number
of customers in differing industries and geographic areas, sales to one
customer accounted for approximately 12.7%, 16.9% and 19.8% of the Company's
net sales for the years ended July 31, 1997, 1996 and 1995, respectively.
20. Commitments and Contingencies
(a) Leases
The Company leases certain facilities under non-cancelable operating leases
expiring through the year 2020. The Company is responsible for all taxes,
insurance and maintenance on the facilities.
Rent expense from continuing operations under operating leases approximated
$4,479, $5,250 and $1,855 for the years ended July 31, 1997, 1996 and 1995,
respectively. Included in rent expense for each year is approximately $150,
attributable to a lease from a related party.
A summary of the future minimum lease payments for continuing operations is as
follows:
<TABLE>
<S> <C>
Years Ending July 31,
- ---------------------
1998........................................ $ 4,719
1999........................................ 4,344
2000........................................ 4,112
2001........................................ 3,932
2002........................................ 3,302
Thereafter.................................. 3,735
----------
$ 24,144
==========
</TABLE>
(b) Litigation
On February 18, 1993, the Ware Chemical Co. ("Ware Chemical"), a former PST
subsidiary (now dormant) was served with a third party complaint in the matter
of United States v. Davis ("Davis"). In Davis, the United States has alleged
that certain private entities are liable, pursuant to the Comprehensive
Environmental Response Compensation and Liability Act ("CERCLA"), for cleanup
costs that have been incurred, and will be incurred in the future, with
respect to the remediation of the Davis Landfill site in Rhode Island. Ware
Chemical was owned by Dart Industries (now Kraft, Inc.) during the time in
question (1975 -- 1977), and Kraft has agreed to assume all responsibility.
In June 1997, the Company filed suit against Occidental Chemical Corporation
("OxyChem"), alleging that certain post-retirement benefit liabilities were
substantially understated when Burlington acquired the acquisition from
OxyChem (see Note 1). In August 1997, the Company and OxyChem agreed to settle
this litigation. Pursuant to the terms of the settlement agreement, the
Company has agreed to release OxyChem from any claim related to this liability
in exchange for OxyChem's agreement to settle a $4 million subordinated term
loan including accrued interest ("seller financing") for $3 million. A portion
of the settlement has been accounted for as an adjustment to the purchase
price, with the offset recorded against goodwill, with the remainder adjusting
accrued interest based upon the seller financing. This settlement was paid in
the first quarter of fiscal 1998.
Ozite is also engaged in litigation in which it seeks damages from the former
owner of Dalen, a discontinued segment of Ozite. In December 1987, Ozite
commenced legal proceedings against the seller of Dalen, seeking monetary
damages and other equitable relief from the seller for various
misrepresentations made in its financial statements and other miscellaneous
information presented on which Ozite elected to proceed with the purchase of
such assets. The seller has counterclaimed for the enforcement of the seller's
rights in the subject matter and for recovery of the balance of the purchase
price in an amount approximately equal to $3,000 plus accrued interest,
amounts claimed to be due under a consulting agreement, and punitive damages.
Subsequent to July 31, 1997, the Dalen litigation has been settled. The impact
of the settlement of the Dalen litigation has been reflected in the Company's
net loss from discontinued operations as of July 31, 1997, as Ozite had
previously reported the Dalen business which it had acquired as a discontinued
operation in 1988. The settlement agreement with Dalen provided for Ozite to
make two (2) payments of $500 each by October 15, 1997, and a payment for
$2,250 by January 31, 1998. Interest accrues on the final payment of $2,250
from October 15, 1997, until it is paid at the rate of 8% per annum. If Ozite
fails to make the payments required on October 15 and January 31, and such
failure continues for 30 days after notice to Ozite, then following procedural
steps, Ozite will be deemed to have confessed judgement on the amount due plus
interest and the court will be free to pursue any available remedy in order to
collect the amount due. Management believes that it has a number of
alternatives available to finance the settlement payments to Dalen, and
therefore it expects to be able to meet these final payment obligations by
January 31, 1998. The Company has adjusted the previously established reserves
for this litigation as the Company deems the settlement probable.
Pursuant to the terms of the Exchange Agreement and 7% Subordinated Notes,
upon the settlement of the Dalen litigation in excess of defined amounts, the
Company has the ability to reclaim Exchange and Escrow shares or to reduce
principal payments due on the 7% Subordinated Notes (see Note 13(a)). The
Dalen litigation was settled for approximately $2,800 in excess of the amount
defined in the agreements. At October 31, 1997 the Company recorded the effect
of the reduction of the principal amount of the 7% Subordinated Notes as a
result of the final determination of the excess costs of the Dalen settlement.
The principal amount of the 7% was reduced by $2,555, and unamortized discount
was reduced by $1,235 for a net reduction in the carrying value of the 7%
Subordinated Notes of $1,320. The Company also recorded a $1,320 reduction of
goodwill at October 31, 1997. As a result of these reductions, the
amortization expense and the interest expense recognized in connection with
goodwill and the 7% Subordinated Note will be reduced in the future.
In January 1993 and 1994, the Company's Belgian subsidiary received income tax
assessments aggregating approximately $2,114 (75,247,000 Belgian Francs) for
the disallowance of certain foreign tax credits and investment losses claimed
for the years ended July 31, 1990 and 1991. Additionally, in January 1995, the
subsidiary received an income tax assessment of approximately $902 (32,083,000
Belgian Francs) for the year ended July 31, 1992. Although the future outcome
of these matters are uncertain, the Company believes that its tax position was
appropriate and that the assessments are without merit. Therefore, the Company
has appealed and has not paid or accrued for the assessments. Based on the
advice of legal counsel in Belgium, the Company believes that the assessment
appeals will be accepted by the tax authorities in Belgium, although there can
be no assurance whether or when such appeals will be accepted.
PureTec Plastics ("PTIP"), certain of its directors, three former directors
and its President were defendants in a lawsuit brought in 1989 in New Jersey
Superior Court and are currently defendants in a lawsuit brought in 1989 in
New Jersey Superior Court by Frank Tammera, Sr., a stockholder and former
officer and director of PTIP and Frank Tammera, Jr., a former officer of PTIP.
Trial of the Frank Tammera, Sr. lawsuit commenced in April 1991 and concluded
in 1995. In March 1996, the New Jersey Superior Court decided that PTIP did
not have to reinstate Mr. Tammera, Sr., that his termination had been for
cause, and in March 1996 a NJ Superior Court decided for PTIP on all matters
except that PTIP was obligated to pay him only approximately $30 of
indebtedness, which PTIP had acknowledged, and $14 in royalties. Final
judgement in the Frank Tammera, Sr. suit was entered on June 6, 1996. In
August 1996, Mr. Tammera, Sr. appealed the court's decision. The Frank
Tammera, Jr. lawsuit and two similar lawsuits from Michael and Albert Tammera,
have been stayed pending the resolution of the Frank Tammera, Sr. lawsuit.
In May 1992, PST and all of its directors as of 1988, as well as K and B
Liquidating Corp. (a former subsidiary of PST which is being liquidated) were
named in two lawsuits filed in the Minnesota state courts. The plaintiffs are
Douglass Hutchinson (since deceased) and James Czaja, both of whom were former
employees of a former subsidiary of PST, Circuit Chemistry Manufacturing Corp.
("Circuit Chemistry"). The suits alleged several causes of action, all of which
center upon a claim that PST and/or other defendants did not adequately
disclose sufficient information to the plaintiffs in connection with the
acquisition from the plaintiffs by PST of their 20% equity interest in Circuit
Chemistry, and the termination of their employment agreements. Subsequent to
July 31, 1997, the cases brought by Czaja and Hutchinson have been settled by
PST. Previously, management had expected these cases to be litigated, and
management had expected that PST would win these cases. During fiscal 1997,
PST filed for a summary judgement to dismiss all claims from Czaja and
Hutchinson. This summary judgement motion was denied by the court. In light of
the growing costs of litigation, and the remaining uncertainty of the outcome
of a trial, management elected to settle these cases. The impact of the
settlement of these cases is reflected in the Company's net loss from
discontinued operations for the year ended July 31, 1997, as PST had
previously reported Circuit Chemistry as a discontinued operation as of 1989.
Total settlement payments to the plaintiffs in connection with this settlement
are $1,725, which are accrued together with related legal costs at October 31,
1997.
During February 1994, the Company and certain officers were named in five
lawsuits purporting to be class actions which essentially allege that the
Company failed to previously adequately disclose facts which resulted in
significant losses reported by the Company. The Company entered into a
settlement of these suits, whereby the Company (i) issued 450,000 warrants to
acquire the Company's common stock at an exercise price of $4.61 per share,
(ii) established an administration fund of $100 to cover the expenses and
costs of administering the settlement and (iii) paid certain out-of-pocket
costs not exceeding $50. The Company recorded $150 relating to items (ii) and
(iii) in the year ended July 31, 1995 and $100 in the year ended July 31,
1996, upon issuance of the warrants.
In the current year, litigation relating to Ozite Mfg. with MDC Wallcoverings
and Ashley Alsip was settled. (See Note 17)
Additionally, the Company is party to certain other litigations and
environmental proceedings in the ordinary course of business, none of which it
believes are likely to have a material adverse effect on its financial
position or results of operations.
(c) Employment Agreements
The following summarizes, in the aggregate, minimum annual salary and
consulting fees that are due under various agreements:
<TABLE>
<S> <C>
Minimum
Years Ending July 31, Commitment
- --------------------- ------------
1998....................................... $ 453
1999....................................... 175
2000....................................... 22
</TABLE>
(d) Letters of Credit
As of July 31, 1997, PST had available letters of credit of up to $1,000 from
the CLC, of which $353 was outstanding.
(e) Bonuses
Under the terms of the Asset Transfer Agreement with OxyChem, the Company is
required to pay annual bonuses to salaried employees still employed by the
Company through fiscal year 1998. For the years ended July 31, 1997 and 1996
these payments amounted to approximately $152 and $157, respectively.
INDEPENDENT AUDITORS' REPORT
To the Board of Directors and Stockholders of
Plastic Specialties and Technologies, Inc.
Ridgefield, New Jersey
We have audited the accompanying consolidated statements of operations,
stockholders' deficit, and cash flows of Plastic Specialties and Technologies,
Inc. (the "Company") for the year ended July 31, 1995. These financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audit provides a reasonable basis
for our opinion.
In our opinion, such consolidated financial statements present fairly, in all
material respects, the results of operations and cash flows of the Company for
the year ended July 31, 1995, in conformity with generally accepted accounting
principles.
/s/ Deloitte & Touche LLP
Parsippany, New Jersey
November 13, 1997
PLASTIC SPECIALTIES AND TECHNOLOGIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF OPERATIONS
(Dollars in thousands, except per share data)
<TABLE>
<CAPTION>
------------------
Year ended July
31, 1995
------------------
<S> <C>
Net Sales................................................................................. $ 221,190
Costs and Expenses:
Cost of goods sold.................................................................. 171,194
Selling, general and administrative................................................. 26,673
Research and development............................................................ 872
Amortization of intangible assets................................................... 1,369
-------------
200,108
-------------
Income From Operations.................................................................... 21,082
-------------
Other Expense (Income):
Interest expense.................................................................... 17,033
Debt issuance cost and discount amortization........................................ 785
Foreign exchange (gain) loss........................................................ 116
Other, net.......................................................................... 145
-------------
18,079
-------------
Income From Continuing Operations Before Income Taxes..................................... 3,003
Provision for income taxes.......................................................... 1,807
-------------
Income From Continuing Operations......................................................... 1,196
-------------
Discontinued Operations:
Loss from discontinued operations (net of tax benefit $440 in 1995)................. (1,294)
-------------
Net Income (Loss)......................................................................... $ (98)
=============
Income (Loss) Per Common Share:
Income from continuing operations................................................... $ 0.14
Loss from discontinued operations................................................... $ (0.15)
-------------
Net income (loss) per common share.................................................. $ (0.01)
=============
Weighted Average Number of Common Shares Outstanding...................................... 8,319,833
=============
</TABLE>
See notes to consolidated financial statements.
PLASTIC SPECIALTIES AND TECHNOLOGIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF STOCKHOLDERS' DEFICIT
(Dollars in thousands)
<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------
Receivable Cumulative
Receivable from Officer, Foreign
Additional from Including Minimum Currency
Common Paid-In Accumulated Majority Accrued Pension Translation
Stock Capital Deficit Stockholder Interest Liability Adjustment
------- ---------- ----------- ----------- ------------- --------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
Balance, July 31, 1994.... $ 83 $ 12,107 $ (16,950) $ (3,553) $ (717) $ 153
Net loss............... -- -- (98) -- -- -- --
Foreign currency
translation
adjustment.......... -- -- -- -- -- -- 781
Minimum pension
liability........... -- -- -- -- -- (250) --
Increase in receivable -- -- -- 300 -- -- --
from majority
stockholder.........
====== ========== =========== ========== ========= ======= =========
Balance, July 31, 1995.. $ 83 $ -- $ 667,000 $ (3,853) $ (717) $ (250) $ 934
====== ========== =========== ========== ========= ======= =========
</TABLE>
See notes to consolidated financial statements.
PLASTIC SPECIALITIES AND TECHNOLOGIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOWS
(Dollars in thousands)
<TABLE>
<CAPTION>
-------------
Year Ended
July 31, 1995
-------------
<S> <C>
Net Cash Flows From Operating Activities:
Income from continuing operations...................................................................... $ 1,196
Adjustment to reconcile net income to net cash used in operating activities from continuing
operations:
Amortization..................................................................................... 2,148
Depreciation..................................................................................... 5,134
Deferred income taxes............................................................................ 455
Provision for losses on accounts receivable and other reserves................................... 1,081
Changes in assets and liabilities:
(Increase) decrease in assets:
Accounts receivable............................................................................ (2,535)
Inventories.................................................................................... (15,411)
Prepaid expenses and other current assets...................................................... (801)
Other assets................................................................................... (25)
Notes and interest receivable from officers.................................................... (15)
Increase (decrease) in liabilities:
Accounts payable, other current liabilities, accrued interest, current deferred taxes and
current portion of long-term debt............................................................. (37)
Other long-term liabilities.................................................................... 166
------------
Net cash (used in) provided by operating activities from continuing operations................... (864)
------------
Loss from discontinued operations................................................................ (1,294)
------------
Net cash used in operating activities from discontinued operations............................... (1,294)
------------
Net cash (used in) provided by operating activities.......................................... (9,938)
------------
Cash Flows From Investing Activities:
Capital expenditures............................................................................. (7,251)
------------
Net cash used in investing activities........................................................ (7,251)
------------
Cash Flows From Financing Activities:
Borrowing (repayments) under revolving credit facility and short-term borrowing, net............. 19,478
Proceeds of term loans........................................................................... (1,185)
Advances to majority stockholders--Ozite Corporation............................................. (300)
------------
Net cash provided by (used in) financing activities.......................................... 17,993
Effect of exchange rate changes on cash................................................................ (360)
------------
Net increase in cash and cash equivalents.............................................................. 444
Cash and cash equivalents, beginning of the period..................................................... 4,297
------------
Cash and cash equivalents, end of period............................................................... $ 4,741
============
Supplemental Disclosures of Cash Flow Information:
Cash paid during the year for:
Interest......................................................................................... $ 17,068
Income taxes..................................................................................... 1,442
Non-cash financing transaction:
Changes in minimum pension liability............................................................. (250)
</TABLE>
See notes to consolidated financial statements.
PLASTIC SPECIALTIES AND TECHNOLOGIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands, except per share amounts)
1. Organization
Plastic Specialties and Technologies Inc.'s ("PST" or the "Company") principal
businesses are the manufacturing of garden hose, specialty plastic compounds
and fabricated precision plastic components for niche consumer and industrial
markets, and the recycling of plastics. PST services its markets through its
network of 20 manufacturing facilities, located in key points throughout the
United States, with three locations in Europe and one in Canada.
The Company was formed in 1984 by its senior management to acquire the plastic
specialty sector of Dart & Kraft through a leveraged buy out. PST Holdings,
Inc. ("Holdings") was incorporated in March 1987 as a wholly-owned subsidiary
of Sage Group, Inc. ("Sage") for the purpose of acquiring PST. On August 24,
1990, Sage was merged with and into Ozite Corporation ("Ozite") with Ozite
being the surviving corporation. On October 29, 1993, Holdings was merged with
and into PST with PST surviving the merger (the "PST Merger"). Ozite merged
with PureTec Corporation ("PureTec"), formerly known as Pure Tech
International, Inc., at the close of business on July 31, 1995 (the "Merger").
2. Summary of Significant Accounting Policies
(a) Principles of Consolidation
The consolidated financial statements include the accounts of the Company and
its wholly-owned subsidiaries. All significant intercompany accounts and
transactions have been eliminated.
(b) Cash and Cash Equivalents
Cash and cash equivalents consist of demand deposits, commercial paper, time
deposits, and cash on hand. For purposes of the consolidated statements of
cash flows, the Company considers all highly liquid debt instruments purchased
with original maturities of three months or less to be cash equivalents.
(c) Inventories
Inventories are valued at the lower of cost (determined by the first-in,
first-out method) or market.
(d) Goodwill
Goodwill is being amortized on a straight-line basis over the periods expected
to be benefitted, which is estimated to be 40 years. Goodwill resulted from
acquisitions which occurred prior to 1990.
The Company continually assesses the recoverability of its intangible assets
by determining whether the amortization of the goodwill over its remaining
useful life can be recovered through projected undiscounted future cash flows.
The amount of goodwill impairment, if any, is measured based on projected
undiscounted future cash flows in accordance with Statement of Financial
Accounting Standards (SFAS) No. 121, (Accounting for the Impairment of
Long-Lived Assets and for Long-Lived Assets to Be Disposed Of). Based on the
Company's projected results of operations over the remaining useful life,
management believes that there has not been an impairment in the value of the
goodwill.
(e) Property, Plant and Equipment
Property, plant and equipment is stated at cost and depreciated by the
straight-line method over the estimated useful lives of the related assets.
Repairs and maintenance are charged to expense as incurred. Depreciation
is computed on the straight-line method over the following estimated useful
lives: buildings and improvements, 20 years; furniture and fixtures, 10
years; machinery and equipment, 10 years; and leasehold improvements, the
lesser of the term of the lease, including renewal options, or the useful
life of the asset (See Note 4). Costs of the construction of certain long-
term assets include capitalized interest which is amortized over the
estimated useful life of the related asset.
In the event that facts and circumstances indicate that the cost of assets may
be impaired, an evaluation of recoverability would be performed. If an
evaluation is required, the estimated fair value associated with the asset
would be compared to the assets carrying amount to determine if a write-down
to fair value is required.
(f) Deferred Financing Costs
The financing costs incurred in securing debt have been deferred and are being
amortized over the life of the related debt.
(g) Income Taxes
For fiscal year 1995 and prior, PST and Ozite were parties to a tax sharing
agreement and filed a consolidated federal income tax return. The Company's
foreign subsidiaries file separate foreign income tax returns.
The Company files a consolidated federal tax return including all of its
qualifying domestic subsidiaries. Deferred tax assets and liabilities are
determined based on differences between financial reporting and tax bases of
assets and liabilities, and are measured using the enacted tax rates and laws
that will be in effect when the differences are expected to reverse.
(h) Revenue Recognition
The Company recognizes revenue when goods are shipped to customers. The
Company provides for returned goods and volume rebates on an estimated basis.
(i) Income (Loss) Per Common Share
Income (loss) per common and common equivalent share is computed based upon
the weighted-average number of shares outstanding during the period. Net loss
per common share is based upon the weighted-average number of shares
outstanding, as there are no common share equivalents outstanding. Primary
earnings per share and fully diluted earnings per share are the same for all
periods presented.
In February 1997, the Financial Accounting Standards Board ("FASB" issued SFAS
No. 128, "Earnings Per Share"). This new standard, which supersedes APB
Opinion No. 15, requires dual presentation of basic and diluted earnings per
share ("EPS") on the face of the income statement and a reconciliation of the
income available to common stockholders and weighted-average shares of the
basic EPS computation to the income available to common stockholders and
weighted average shares plus dilutive potential common shares of the diluted
EPS computation. The objective of the statement is to make the computation
more comparable with international accounting standards. SFAS 128 is effective
for periods ending after December 15, 1997 (the Company's 1998 fiscal year).
SFAS No. 128 will require the Company to restate amounts previously reported
as EPS to comply with the new pronouncement. Had SFAS No. 128 been in effect
for the year ended July 31, 1995, reported EPS would not have been different
from that reported under APB Opinion No. 15.
(j) Other Recent Accounting Pronouncements
In February 1997, the FASB issued Statement of Financial Accounting Standards
No. 129, (Disclosure of Information about Capital Structure) ("SFAS 129").
SFAS 129 requires companies to disclose descriptive information about
securities and information about the liquidation preferences of preferred
stock and redeemable stock. SFAS 129 is effective for financial statements for
periods ending after December 15, 1997 (the Company's fiscal 1998 year).
In June 1997, the FASB issued Statement of Financial Accounting Standards No.
130, (Reporting Comprehensive Income) ("SFAS 130"). SFAS 130 requires
companies to display, with the same prominence as other financial statements,
the components of other comprehensive income. SFAS 130 requires that an
enterprise classify items of other comprehensive income by their nature in a
financial statement and display the accumulated balance of other comprehensive
income separately from retained earnings and additional paid-in capital in the
equity section of the balance sheet. SFAS 130 is effective for fiscal years
beginning after December 15, 1997 (the Company's 1999 fiscal year).
Reclassification of financial statements for earlier periods provided for
comparative purposes is required.
In June 1997, the FASB issued Statement of Financial Accounting Standards No.
131, (Disclosures about Segments of an Enterprise and Related Information
("SFAS 131"). SFAS 131 requires that an enterprise disclose certain
information about operating segments. SFAS 131 is effective for financial
statements for periods beginning after December 15, 1997 (the Company's 1999
fiscal year).
The Company has not determined the impact, if any, on the financial statements
of adopting these pronouncements.
(k) Receivable from Majority Stockholder--Ozite Corporation
Due from majority stockholder is comprised of $3,253 of expenditures paid by
the Company on behalf of a predecessor of Ozite in connection with the
acquisition of PST in fiscal 1987 and $300 of cash advances in both fiscal
1995 and 1994. The outstanding balance is due on demand and is non-interest
bearing.
(l) Foreign Subsidiaries
The Company translates financial statements denominated in foreign currency by
translating balance sheet accounts at the end of the period exchange rate and
statement of operations accounts at the average exchange rate for the period.
Translation gains and losses are recorded in stockholders' equity, and
transaction gains and losses are reflected in income.
(m) Environmental Costs
Environmental expenditures that relate to current operations are expensed or
capitalized as appropriate. Expenditures that relate to existing conditions
caused by past operations and that do not contribute to current or future
revenue generation are expensed. No costs relating to existing conditions
caused by past operations were incurred by the Company during the period ended
July 31, 1995.
Reserves for estimated costs are recorded when environmental remedial efforts
are probable and the costs can be reasonably estimated. In determining the
reserves, the Company uses the most current information available, including
similar past experiences, available technology, regulations in effect, the
timing of remediation and cost sharing arrangements.
(n) Use of Estimates
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions
that affect the reported amounts of assets and liabilities at the date of the
financial statements and the reported amount of revenues and expenses during
the reporting period. Actual results could differ from these estimates.
3. Investments in Affiliates and Certain Related Party Transactions
The Company acquired from Bagcraft Corporation of America (Bagcraft) a $5,000
subordinated note bearing interest at a rate of 13 1/2% per annum and 50,000
shares of 13 1/2% cumulative redeemable preferred stock with a liquidation
preference of $5,000 in Bagcraft for $10,000 in 1987. Bagcraft is a
wholly-owned subsidiary of BCA Holdings, Inc. (ABCA) and BCA is wholly-owned
subsidiary of Artra Group, Inc. (Artra) an affiliated company. In March 1993,
the Company received 675 shares of BCA Preferred Stock having a liquidation
preference equal to the amount of interest due for the period from December 1,
1991 to November 30, 1992 ($675 in the aggregate) in lieu of receipt of payment
of interest from Bagcraft for such period.
In July 1993, the Company recorded an impairment of its investment in Bagcraft
by establishing a valuation reserve to write-off the $10,000 carrying value of
such investment as the Company was unable to determine, with reasonable
certainty, whether or when it would realize its investment in Bagcraft. On
December 28, 1993, PST received from Bagcraft $5,000 in cash and 3,000 shares
of BCA preferred stock as payment in full for the $5,000 subordinated note and
unpaid interest due from Bagcraft totaling $3,094, respectively. In 1994, the
Company recorded a $5,000 gain for the recovery of its investment in the
Bagcraft subordinated note. The interest due from Bagcraft had been fully
reserved and interest income was not recorded for the receipt of the BCA
preferred stock as such stock is not freely transferable. The cash received
was used to pay a portion of the PST dividend declared.
PST held 772,000 Artra Common Shares, which were accounted for on the equity
method (see 5a. above). Through the Company's recording of its share of the
net losses of Artra and other related items, the carrying value of the
investment in the Artra Common Shares had been reduced to zero.
In connection with the Merger (see Note 1), on July 13, 1995, PST declared a
dividend of the 772,000 Artra Common Shares and 3,675 shares of BCA preferred
stock to all stockholders of record as of July 31, 1995. Based on this
declaration, 638,444 shares of Artra common stock and 3,039.23 shares of BCA
preferred stock have been transferred to Ozite. The Company is in the process
of transferring 133,556 shares of Artra common stock and 635.77 shares of BCA
preferred stock to the minority stockholders that existed at the date of
declaration.
PST is due $1,089 from Ozite relating to a tax sharing agreement. The Company
has fully reserved for this receivable from Ozite due to Ozite's current
inability to settle this obligation.
The notes and interest receivable from officers are due on demand and bear
interest at rates generally ranging from 75% of the prime rate to the prime
rate of interest. The notes receivable relate primarily to the purchase of
common and preferred stock of the predecessor of Ozite by several officers,
unreimbursed moving expenses and a personal loan.
4. Short-Term Borrowings
Revolving Credit Advances:
On December 30, 1992, PST entered into a $50,000 Senior Loan Agreement (the
"Agreement") with a commercial lending company (CLC). The Agreement contains
covenants, the most restrictive of which are maintenance of certain financial
ratios, prohibition of the occurrence of additional indebtedness, the payment
of dividends, certain related party transactions and limitations on capital
expenditures. Borrowings under the Agreement are secured by substantially all
the domestic current assets of PST. Additionally, the CLC has a security
interest in PST' s intangible assets, and this security interest ranks pari
passu with the security interest of the Senior Secured Notes in PST's
intangible assets. Revolving credit advances under the Agreement are based on
eligible receivables and inventory.
Effective February 14, 1995, PST amended this Agreement with the CLC (the
"Amended Agreement"). The Amended Agreement also provides that outstanding
revolving credit advances shall not exceed $8,000 for 30 consecutive days
during the period from July 1 to September 30 for each year. Furthermore, the
Amended Agreement provides that domestic capital expenditures are limited to
$6,600 per year.
At July 31, 1995, the Company was not in compliance with certain of the
covenants of the Agreement, including the requirement to reduce borrowing to
$20 million and the limitation on capital expenditures. The CLC has provided a
waiver of this non-compliance as of July 31, 1995.
5. Long-Term Debt
<TABLE>
<CAPTION>
---------------
July 31, 1995
---------------
<S> <C>
11 1/4% Senior Secured Notes due December 1, 2003(1)................................................. $ 125,000
9.25% Foreign Term Loan payable in Belgian Francs, with quarterly interest payments, eight
semi-annual principal payments of approximately $550 which commenced January 31, 1993
and a balloon payment of $693 due on January 31, 1997. The loan was secured by a pledge of
working capital and a lien on certain fixed assets of the Company's foreign operations............... 2,012
---------------
127,012
Current Portion....................................................................................... 1,271
---------------
$ 125,741
===============
</TABLE>
- ------------
(1) The Senior Secured Notes, which require semi-annual interest payments
on June 1 and October 1, are senior secured obligations of PST, ranking
pari passu in right of payment with all existing and future senior
indebtedness of PST and senior to all subordinated indebtedness of PST,
if any. The Senior Secured Notes are secured by substantially all real
property, machinery, equipment, general intangibles and other
intellectual property now owned or hereafter acquired by PST and by a
pledge of all outstanding capital stock of Plastic Specialties and
Technologies Investments, Inc., a wholly-owned subsidiary of PST. The
indenture for the Senior Secured Notes contains covenants which
restrict, among other matters, the ability of PST and its subsidiaries
to incur additional indebtedness, pay dividends (except as described in
the indenture), redeem capital stock, prepay subordinated indebtedness,
create liens, dispose of certain assets, engage in sale and merger
transactions, make contributions, loans or advances and enter into
transactions with affiliates.
6. Income Taxes
The provision for income taxes from continuing operations consists of the
following:
<TABLE>
<CAPTION>
---------------
Year Ended
July 31, 1995
---------------
<S> <C>
Current Tax Provision (Benefit)
Federal...................................... $ (900)
Foreign...................................... 2,252
State........................................ --
---------------
1,352
---------------
Deferred Provision
Federal...................................... --
---------------
Foreign...................................... 455
Total......................................... $ 1,807
===============
</TABLE>
The following reconciles the provision for income taxes at the U.S.
statutory rate to the provision for income taxes from continuing
operations:
<TABLE>
<CAPTION>
-------------
Year Ended
July 31, 1995
-------------
<S> <C>
Computed tax provision at statutory rate.................................................. $ 581
Difference in foreign income tax rates.................................................... 397
Amortization of goodwill.................................................................. 464
Losses not currently deductible, foreign -- 1997, domestic -- 1995........................ 1,119
Reduction of previously provided taxes.................................................... (900)
Other nondeductible expenses.............................................................. 146
-----------
$ 1,807
===========
</TABLE>
Income (loss) from continuing operations before income taxes and
extraordinary items relating to foreign and domestic operations are as
follows:
<TABLE>
<CAPTION>
---------------
Year Ended
July 31, 1995
---------------
<S> <C>
United States......................... $ (3,791)
Europe................................ 6,794
---------------
$ 3,003
===============
</TABLE>
In January 1993 and 1994, the Company's Belgian subsidiary received income tax
assessments aggregating approximately $1,979 (75,247,000 Belgian Francs) for
the disallowance of certain foreign tax credits and investment losses claimed
for the years ended July 31, 1990 and 1991. Additionally, in January 1995, the
subsidiary received an income tax assessment of approximately $843 (32,083,000
Belgian Francs) for the year ended July 31, 1992. Although the future outcome
of these matters are uncertain, PST believes that its tax position was
appropriate and that the assessments are without merit. Therefore, PST has
appealed and has not paid or accrued for the assessments. Based on the advice
of legal counsel in Belgium, PST believes that the assessment appeals will be
accepted by the tax authorities in Belgium, although there can be no assurance
whether or when such appeals will be accepted.
7. Employee Benefit Plans
The Company maintains a noncontributory defined benefit pension plan which
covers substantially all employees of PST not covered by a collective
bargaining agreement, who have completed one year of service and are not
participants in any other pension plan. The plan is also available to
affiliates of PST who bear their respective costs for their covered employees.
The funding policy of the Company is to make contributions to the plan based
on actuarial computations of the minimum required contribution for the plan
year. The plans' assets are invested primarily in the Master Trust Fund of PST
in accordance with the investment agreements of the plan.
Net pension costs consists of the following:
<TABLE>
<CAPTION>
---------------
Year Ended
July 31, 1995
---------------
<S> <C>
Service cost.......................................... $ 486
Interest cost on projected benefit obligation......... 360
Actual return on plan assets.......................... (259)
Net amortization and deferrals........................ (131)
---------------
$ 456
===============
</TABLE>
The expected long-term rate of return on plan assets of the plan was 9% and
the discount rate was 8% for the year ended July 31, 1995.
Additionally, PST has a savings plan for all non-collective bargaining
employees whereby PST will match each employee's contribution up to 2% of the
employee's earnings. The plan is also made available to PST affiliates who
bear their respective costs. Such contribution amounted to approximately $504
for the year ended July 31, 1995.
The Company has made contributions to multi-employer pension plans in the
amount of approximately $62 for the year ended July 31, 1995.
8. Concentration of Credit Risk
The Company performs periodic credit evaluations of its customers' financial
condition and generally does not require collateral. Although credit risk
related to the Company's trade receivables is limited due to the credit
standing of its largest customers and the diversity of the remaining
customers, sales to one major nationwide retailer accounted for approximately
22.1% of the Company's net sales for the year ended July 31, 1995.
9. Segment Information
The Company operates in three industry segments: plastic products, plastic
materials and recycling. The plastic products segment principally produces
lawn and garden hose, medical tubing and specialty tubing and gaskets. The
plastics materials segment principally produces recycled and general purpose
plastics and medical grade vinyl compounds. The recycling segment consists of
the operating of material recovery facilities and the recycling of plastics
and some aluminum. The plastic products segment has operations in the United
States and Europe. The plastic materials and recycling segments operate
principally in the United States.
<TABLE>
<CAPTION>
---------------
Year Ended
July 31, 1995
---------------
<S> <C>
Net Sales:
Plastic Products:
Domestic..................................... $ 130,215
Europe....................................... 31,995
Plastic Materials.............................. 88,665
Corporate & Eliminations....................... (29,685)
---------------
Total Net Sales................................. $ 221,190
===============
Operating Income:
Plastic Products:
Domestic..................................... $ 15,046
Europe....................................... 8,373
Plastic Materials.............................. 2,621
Corporate & Eliminations....................... (4,958)
---------------
Total Operating Income.......................... $ 21,082
===============
Depreciation & Amortization:
Plastic Products:
Domestic..................................... $ 3,534
Europe....................................... 875
Plastic Materials.............................. 1,676
Corporate & Eliminations....................... 1,197
---------------
Total Depreciation & Amortization............... $ 7,282
===============
Capital Expenditures:
Plastic Products:
Domestic..................................... $ 3,778
Europe....................................... 1,098
Plastic Materials.............................. 1,778
Corporate & Eliminations....................... 597
---------------
Total Capital Expenditures...................... $ 7,251
===============
Identifiable Assets:
Plastic Products:
Domestic..................................... $ 102,871
Europe....................................... 24,621
Plastic Materials.............................. 40,027
Corporate & Eliminations....................... 14,773
---------------
Total Identifiable Assets....................... $182,292
===============
</TABLE>
Operating income represents net sales less cost of goods sold and selling,
general and administrative expenses of each segment before deductions for
general corporate expenses not directly related to an individual segment and
the elimination of intercompany profits principally due to Plastic Material
sales to Plastic Products. In continuing operating income, none of the
following items have been added or deducted: interest expense, income taxes,
and loss from discontinued operations. Identifiable assets are those used in
the operations of each segment, including an allocation of goodwill. Corporate
identifiable assets consist primarily of cash, prepaid expenses, fixed assets
and deferred debt costs offset by the elimination of intersegment profit in
ending inventories.
10. Discontinued Operations
On December 21, 1995, PST entered into an Asset Purchase Agreement (the
"Agreement") with Foss Manufacturing Company, Inc. ("Foss") for the sale of
certain assets of PST's Ozite Manufacturing Division ("Ozite Mfg.") in
Libertyville, Illinois to Foss as of January 31, 1996. The Company had been
exploring a relocation alternative until this unsolicited offer was accepted.
Under the terms of the Agreement, Foss purchased Ozite Mfg.'s accounts
receivable and inventory, net of reserves, as well as certain prepaid
expenses, trade names, trademarks, and patents for approximately $3,025, which
was received by PST on February 12, 1996. Furthermore, the Agreement provided
for the Company to receive a minimum of $450 for all of its machinery and
equipment at the facility.
Accordingly, the Ozite Mfg. operations have been reflected as discontinued
operations in the statement of operations for all periods presented. Net sales
generated from these operations amounted to $11,714 for the year ended July 31,
1995.
11. Subsequent Event
On November 11, 1997, PureTec announced that it had signed an Agreement and
Plan of Merger (Agreement) with Tekni-Plex, Inc., ("Tekni-Plex") a
privately-owned company, pursuant to which PureTec would, through a merger
("Merger") become a wholly-owned subsidiary of Tekni-Plex. The Agreement
provides that the owner of each share of common stock of PureTec would receive
$3.50 in cash for that share in the Merger. The Agreement and the Merger will
be submitted to the shareholders of PureTec for approval at PureTec's annual
shareholders meeting expected to be held in January 1998. The Agreement and
the Merger have been unanimously approved, and recommended to PureTec
shareholders for adoption by PureTec's Board of Directors. Officers and
directors of PureTec owning approximately 10% of the outstanding common stock
of PureTec have agreed to vote their shares in favor of the Merger.
The Agreement contains a number of conditions which must be satisfied in order
for the Merger to occur, including the successful completion of a consent
solicitation and tender offer for PST's 11.25% Senior Secured Notes due 2003,
the receipt of all necessary governmental and regulatory approvals, and the
absence of any changes occurring prior to the closing date which would have a
material adverse significance with respect to the value of PureTec and its
subsidiaries, taken as a whole.
The Agreement also requires that the outstanding minority common shareholders'
interest in PST be eliminated, either through purchase or a short-form merger
procedure under Delaware law, not later than immediately prior to completion
of the Merger, at a price of $7.00 per share of PST common stock.
The Merger is further subject to the receipt by Tekni-Plex of sufficient
financing to pay for PureTec shares, purchase the PST Notes tendered in the
tender offer, and fund all other cash requirements of the Merger. Tekni-Plex
has received commitments from Morgan Guaranty Trust Company of New York to
provide senior bank financing and subordinated bridge loans in an aggregate
amount which the parties believe will be sufficient to complete the Merger,
subject to a number of conditions.
The Agreement is terminable by Tekni-Plex, PureTec, or either of them under
certain circumstances. In the event the Agreement is terminated because
PureTec's Board of Directors withdraws or materially modifies its approval or
recommendation of the Merger or the Agreement or another person, entity or
group acquires beneficial ownership of 50% or more of the outstanding shares
of PureTec's Common Stock, the Company is obligated to pay a fee of $10
million to Tekni-Plex and to reimburse Tekni-Plex for up to $5 million of its
expenses in connection with the Agreement and related transactions. PureTec
expects the Merger to be completed in February 1998, but cannot assure that
all of the conditions to the Merger will be satisfied.
Concurrently with execution of the Merger Agreement, Tekni-Plex purchased a
Convertible Note issued by PureTec in the amount of $5 million. The loan will
assist PureTec and PST in meeting expected cash requirements in the period
prior to completion of the Merger. The Convertible Note bears interest at 13%
and is convertible at any time following the 60th day after any termination of
the Agreement into a number of shares of PureTec Common Stock sufficient to
retire the principal amount of the Note plus accrued interest or in any event
at a base conversion rate of one share of Common Stock per $2.72 of
obligations owed under the Note. PureTec is required to file a registration
statement with respect to the Common Stock issuable upon conversion promptly
following a termination of the Merger Agreement. The Convertible Note matures
on September 30, 1998. The Convertible Note is subject to prepayment by
PureTec in cash at any time, and contains covenants and events of default
customary for a debt instrument of this type.
12. Commitments and Contingencies
(a) Leases
The Company rents various warehouse, office and manufacturing facilities and
certain equipment under lease agreement classified as operating leases. Rent
expense was approximately $2,563 for the year ended July 31, 1995.
(b) Litigation
On February 18, 1993, the Ware Chemical Co. ("Ware Chemical"), a former PST
subsidiary (now dormant) was served with a third party complaint in the matter
of United States v. Davis ("Davis"). In Davis, the United States has alleged
that certain private entities are liable, pursuant to the Comprehensive
Environmental Response Compensation and Liability Act (CERCLA), for cleanup
costs that have been incurred, and will be incurred in the future, with
respect to the remediation of the Davis Landfill site in Rhode Island. Ware
Chemical was owned by Dart Industries (now Kraft, Inc.) during the time in
question (1975-1977), and Kraft has agreed to assume all responsibility.
In January 1993 and 1994, the Company's Belgian subsidiary received income tax
assessments aggregating approximately $1,979 (75,247,000 Belgian Francs) for
the disallowance of certain foreign tax credits and investment losses claimed
for the years ended July 31, 1990 and 1991. Additionally, in January 1995, the
subsidiary received an income tax assessment of approximately $843 (32,083,000
Belgian Francs) for the year ended July 31, 1992. Although the future outcome
of these matters are uncertain, the Company believes that its tax position was
appropriate and that the assessments are without merit. Therefore, the Company
has appealed and has not paid or accrued for the assessments. Based on the
advice of legal counsel in Belgium, the Company believes that the assessment
appeals will be accepted by the tax authorities in Belgium, although there can
be no assurance whether or when such appeals will be accepted.
In May 1992, PST and all of its directors (as of 1988), as well as K&B
Liquidating Corp. (a former subsidiary of PST which is being liquidated) were
named in two lawsuits filed in the Minnesota state courts. The plaintiffs are
Douglass Hutchinson (since deceased) and James Czaja, both of whom were former
employees of a former subsidiary of PST, Circuit Chemistry Manufacturing Corp.
("Circuit Chemistry"). The suits alleged several causes of action, all of which
center upon a claim that PST and/or other defendants did not adequately
disclose sufficient information to the plaintiffs in connection with the
acquisition from the plaintiffs by PST of their 20% equity interest in Circuit
Chemistry, and the termination of their employment agreements. Subsequent to
July 31, 1997, the cases brought by Czaja and Hutchinson have been settled by
PST. Previously, management had expected these cases to be litigated, and
management had expected that PST would win these cases. During fiscal 1997,
PST filed for a summary judgement to dismiss all claims from Czaja and
Hutchinson. This summary judgement motion was denied by the court. In light of
the growing costs of litigation, and the remaining uncertainty of the outcome
of a trial, management elected to settle these cases. The impact of the
settlement of these cases is reflected in the Company's net loss from
discontinued operations for the year ended July 31, 1997, as PST had
previously reported Circuit Chemistry as a discontinued operation as of 1989.
Total settlement payments to the plaintiffs in connection with this settlement
are $1,725, which are accrued for at July 31, 1997.
In the current year, litigation relating to Ozite Mfg. with MDC Wallcoverings
and Ashley Alsip was settled for $660 in the aggregate. The settlement of
these cases is reflected in the Company's net loss from discontinued
operations for the year ended July 31, 1997.
Additionally, the Company is party to certain other litigations and
environmental proceedings in the ordinary course of business, none of which it
believes are likely to have a material adverse effect on its financial
position or results of operations.
PART II
Information Not Required in Prospectus
Item 20. Indemnification of Directors and Officers
Tekni-Plex is incorporated under the laws of the State of Delaware. Section
145 of the Delaware General Corporation Law (as the same exists or may
thereafter be amended, the "DGCL") provides that a Delaware corporation may
indemnify any persons who were, are or are threatened to be made, parties to
any threatened, pending or completed action, suit or proceeding, whether
civil, criminal, administrative or investigative (other than an action by or
in the right of such corporation), by reason of the fact that such person is
or was a director, officer, employee or agent of such corporation, or is or
was serving at the request of such corporation as a director, officer,
employee or agent of another corporation or other enterprise. The indemnity
may include expenses (including attorneys' fees), judgments, fines and amounts
paid in settlement actually and reasonably incurred by such person in
connection with such action, suit or proceeding, provided such person acted in
good faith and in a manner such person reasonably believed to be in or not
opposed to the corporation's best interests and, with respect to any criminal
action or proceeding, had no reasonable cause to believe that such person's
conduct was unlawful. A Delaware corporation may indemnify any persons who are,
were or are threatened to be made, a party to any threatened, pending or
completed action or suit by or in the right of the corporation by reason of
the fact that such person is or was a director, officer, employee or agent of
such corporation, or is or was serving at the request of such corporation as a
director, officer, employee or agent of another corporation or other
enterprise. The indemnity may include expenses (including attorneys' fees)
actually and reasonably incurred by such person in connection with the defense
or settlement of such action or suit, provided such person acted in good faith
and in a manner such person reasonably believed to be in or not opposed to the
corporation's best interests, provided that no indemnification is permitted
without judicial approval if such person is adjudged to be liable to the
corporation. Where a director, officer, employee or agent is successful on the
merits or otherwise in the defense of any such action, suit or proceeding, the
corporation must indemnify such person against the expenses which such person
has actually and reasonably incurred. In addition, Section 145 of the DGCL
allows, subject to specified conditions and exclusions, the advancement of
expenses incurred in defending against such action, suit or proceeding, and
permits the corporation to purchase and maintain insurance on behalf of such
persons, whether or not the corporation would otherwise have the power to
indemnify such person under Section 145. The indemnification and advancement
of expenses provided by Section 145 are not exclusive of any other rights to
which those seeking indemnification or advancement may be entitled under any
by-laws, agreement, vote of stockholders or otherwise.
Tekni-Plex's Restated Certificate of Incorporation (the "Certificate")
provides that a director of the Company will not be liable to the Company or
its stockholders for monetary damages for breach of fiduciary duty as a
director, except for liability (i) for any breach of the director's duty of
loyalty to the Company or its stockholders, (ii) for acts or omissions not in
good faith or which involve intentional misconduct or a knowing violation of
law, (iii) under Section 174 of the DGCL, which concerns unlawful payments of
dividends, stock purchases or redemptions, or (iv) for any transactions from
which the director derived an improper personal benefit. While the Certificate
provides directors with protection from awards for monetary damages for breach
of their fiduciary duty, it does not eliminate such duty. Accordingly, the
Certificate will have no effect on the availability of equitable remedies such
as an injunction or rescission based on a director's breach of his or her duty
of care.
The Certificate as well as Tekni-Plex's Amended and Restated By-laws (the
"By-laws") provide for the indemnification of directors and officers of the
Company on substantially similar terms and conditions as Section 145 of the
DGCL. The By-laws provide for the advancement of expenses reasonably incurred
by a director or officer in defending a civil or criminal action, suit or
proceeding on substantially similar terms and conditions as Section 145, and
that all rights to indemnification and to the advancement of expenses under
the By-laws shall be deemed to be provided by a contract between the Company
and the director or officer who serves in such capacity at any time while the
By-Laws and any other relevant provisions of the DGCL and any other applicable
law, if any, are in effect. The By-laws further provide that references to
"the Company" in the above described section of the By-laws shall be deemed to
include any subsidiary of the Company now or hereafter organized under the
laws of the State of Delaware.
Item 21. Exhibits and Financial Statement Schedules
(a) Exhibits
3.1 Restated Certificate of Incorporation of Tekni-Plex, Inc. (Filed as
Exhibit 3.1 to Registrant's Registration Statement on Form S-4,
Commission File No. 333-28157, and incorporated herein by
reference).
3.2 Amended and Restated By-laws of Tekni-Plex, Inc. (Filed as Exhibit
3.3 to Registrant's Registration Statement on Form S-4, Commission
File No. 333-28157, and incorporated herein by reference).
3.3 Certificate of Incorporation of PureTec Corporation.*
3.4 By-laws of PureTec Corporation (Filed as Exhibit 3(b) to PureTec
Corporation's Registration Statement on Form S-4, Commission File
No. 33-82768, and incorporated herein by reference.)
3.5 Certificate of Incorporation of PTI Plastics, Inc.*
3.6 By-laws of PTI Plastics, Inc.*
3.7 Certificate of Incorporation of Ozite Corporation.*
3.8 By-laws of Ozite Corporation.*
3.9 Certificate of Incorporation of Plastic Specialities and
Technologies, Inc.*
3.10 By-laws of Plastic Specialities and Technologies, Inc.*
3.11 Certificate of Incorporation of Plastic Specialities and
Technologies Investments, Inc.*
3.12 By-laws of Plastic Specialities and Technologies Investments, Inc.*
3.13 Certificate of Incorporation of Burlington Resins, Inc.*
3.14 By-laws of Burlington Resins, Inc.*
3.15 Certificate of Incorporation of Pure Tech APR, Inc.*
3.16 By-laws of Pure Tech APR, Inc.*
3.17 Certificate of Incorporation of Multi Container Recycler, Inc.*
3.18 By-laws of Multi Container Recycler, Inc.*
3.19 Certificate of Incorporation of Coast Recycling North, Inc.*
3.20 By-laws of Coast Recycling North, Inc.*
3.21 Certificate of Incorporation of Distributors Recycling, Inc.*
3.22 By-laws of Distributors Recycling, Inc.*
3.23 Certificate of Incorporation of REI Distributors, Inc.*
3.24 By-laws of REI Distributors, Inc.*
3.25 Certificate of Incorporation of Pure Tech Recycling of California.*
3.26 By-laws of Pure Tech Recycling of California.*
3.27 Certificate of Incorporation of Alumet Smelting Corp.*
3.28 By-laws of Alumet Smelting Corp.*
3.29 Certificate of Incorporation of Conconre Corp.*
3.30 By-laws of Conconre Corp.*
4.1 Indenture, dated as of March 1, 1998 among Tekni-Plex, Inc., the
Guarantors listed therein and Marine Midland Bank, as Trustee.*
4.2 Senior Subordinated Note and Guarantee (original not included; form
of Note and Guarantee included in Exhibit 4.1).
4.3 Purchase Agreement, dated as of February 25, 1998 among Tekni-Plex,
Inc., the Guarantors listed therein, and J.P. Morgan Securities
Inc.*
4.4 Registration Right Agreement, dated as of March 3, 1998 among
Tekni-Plex, Inc., the Guarantors listed therein. and J.P. Morgan
Securities, Inc.*
5.1 Opinion of Davis Polk & Wardwell.*
10.1 Credit Agreement, dated as of March 3, 1998, 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, as Agent.*
10.2 Note (original not included; form of Note included in Exhibit
10.1).
10.3 Security Agreement, dated as of March 3, 1998, among Tekni-Plex,
Inc., the Guarantors listed therein and Morgan Guaranty Trust
Company of New York, as Collateral Agent (original not included;
form of Security Agreement included in Exhibit 10.1).
10.4 Pledge Agreement, dated as of March 3, 1998, between Tekni-Plex,
Inc. and Morgan Guaranty Trust Company of New York, as Agent
(original not included; form of Pledge Agreement included in
Exhibit 10.1).
10.5 Form of Mortgage, dated as of March 3, 1998, made by Tekni-Plex,
Inc. or the Guarantors listed therein. in favor of Morgan Guaranty
Trust Company, as Agent (originals not included; form of Mortgage
included in Exhibit 10.1).
10.6 Employment Agreement, dated as of January 30, 1997, between Dr. F.
Patrick Smith and Tekni-Plex, Inc. (Filed as Exhibit 10.6 to
Registrant's Registration Statement on Form S-4, Commission File
No. 333-28157, and incorporated herein by reference).
10.7 Employment Agreement, dated as of April 4, 1997, between Mr.
Kenneth W.R. Baker and Tekni-Plex, Inc. (Filed as Exhibit 10.7 to
Registrant's Registration Statement on Form S-4, Commission File
No. 333-28157, and incorporated herein by reference).
10.8 Form of Amended and Restated Option Agreement, dated as of April 4,
1997, among Tekni-Plex, Inc., Tekni-Plex Partners L.P. and F.
Patrick Smith (Filed as Exhibit 10.8 to Registrant's Amendment No.
2 to Registration Statement on Form S-4, Commission File No.
333-28157, and incorporated herein by reference).
10.9 Form of Amended and Restated Stock Option Agreement, dated as of
April 4, 1997, between Tekni- Plex, Inc. and Kenneth W.R. Baker
(Filed as Exhibit 10.9 to Registrant's Amendment No. 1 to
Registration Statement on Form S-4, Commission File No. 333-28157,
and incorporated herein by reference).
10.10 Management Fee Agreement, dated as of April 4, 1997, between
Tekni-Plex, Inc. and MST Management Company, Inc. (Filed as Exhibit
10.10 to Registrant's Registration Statement on Form S-4,
Commission File No. 333-28157, and incorporated herein by
reference).
10.11 Management Fee Agreement, dated as of April 4, 1997, between
Tekni-Plex, Inc. and MST/TP Holding, Inc. (Filed as Exhibit 10.11
to Registrant's Amendment No. 2 to Registration Statement on Form
S-4, Commission File No. 333-28157, and incorporated herein by
reference).
10.12 Indenture, dated as of April 1, 1997 among Tekni-Plex, Inc., Dolco
Packaging Corp. and Marine Midland Bank, as Trustee (Filed as
Exhibit 4.1 to Registrant's Registration Statement on Form S-4,
Commission File No. 333-28157, and incorporated herein by
reference).
10.13 Senior Subordinated Note and Guarantee (original not included; form
of Note and Guarantee included in Exhibit 10.12).
10.14 Agreement and Plan of Merger, dated as of November 11, 1997 among
Tekni-Plex, Inc., P.T. Holding, Inc. PureTec Corporation and
Plastic Specialties and Technologies, Inc. (Filed as Exhibit 2.1 to
PureTec Corporation's Annual Report on Form 10-K, Commission File
No. 0-26508 and incorporated herein by reference).
12.1 Statement regarding Computation of Ratios.*
23.1 Consent of BDO Seidman LLP.*
23.2 Consent of Deloitte & Touche LLP.*
23.3 Consent of Deloitte & Touche LLP.*
23.4 Consent of Holtz Rubenstein & Co., LLP.*
23.5 Consent of Davis Polk & Wardwell (included in Exhibit 5.1).
25.1 Statement of Eligibility of Trustee, Marine Midland Bank, on Form
T-1.*
27.1 Financial Data Schedule.*
99.1 Form of Letter of Transmittal.*
99.2 Form of Notice of Guaranteed Delivery.*
99.3 Form of Tender Instructions.*
99.4 Form of Exchange Agent Agreement.*
- ------------
* Filed herewith.
(b) Financial Statement Schedules
Schedule II - Valuation and Qualifying Accounts.
Other schedules required are not applicable.
Item 22. Undertakings
(a) The undersigned registrant hereby undertakes:
(i) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement:
(1) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(2) 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 set forth in the
registration statement;
(3) 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;
(ii) 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.
(iii) 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.
(b) The undersigned registrant hereby undertakes as follows: that prior to
any public reoffering of the securities registered hereunder through use of a
prospectus which is a part of this registration statement, by any person or
party who is deemed to be an underwriter within the meaning of Rule 145(c),
the issuer undertakes that such reoffering prospectus will contain the
information called for by the applicable registration form with respect to
reofferings by persons who may be deemed underwriters, in addition to the
information called for by the other items of the applicable form.
(c) The registrant undertakes that every prospectus: (i) that is filed
pursuant to paragraph (b) immediately preceding, or (ii) that purports to meet
the requirements of Section 10(a)(3) of the Act and is used in connection with
an offering of securities subject to Rule 415, will be filed as part of an
amendment to the registration statement and will not be used until such
amendment is effective, and that, for purposes 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.
(d) Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the registrant pursuant to the foregoing provisions or otherwise, the
registrant has 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 the
registrant of expenses incurred or paid by a director, officer or controlling
person in the successful defense of any action, suit or proceeding) is
asserted by such director, officer or controlling person in connection with
the securities being registered, the registrant 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 indemnification by
it is against public policy as expressed in the Act and will be governed by
the final adjudication of such issue.
(e) The undersigned registrant 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.
(f) The undersigned registrant hereby undertakes to supply by means of a
post-effective amendment all information concerning a transaction, and the
company being acquired involved therein, that was not subject of and included
in the registration statement when it became effective.
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 Somerville, New Jersey on April 21, 1998.
TEKNI-PLEX, 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, this Registration
Statement has been signed below on the 21st day of April, 1998 by the
following persons in the capacities indicated.
<TABLE>
<S> <C>
Signature Title
--------- -----
/s/ F. Patrick Smith
- ------------------------ Chairman of the Board and Chief Executive Officer
F. Patrick Smith
/s/ Kenneth W.R. Baker President and Chief Operating Officer (principal
- ------------------------ financial officer)
Kenneth W.R. Baker
/s/ William H. Kaplan
- ------------------------ Controller (principal accounting officer)
William H. Kaplan
/s/ Arthur P. Witt
- ------------------------ Corporate Secretary and Director
Arthur P. Witt
/s/ J. Andrew McWethy
- ------------------------ Director
J. Andrew McWethy
- ------------------------ Director
Barry A. Solomon
/s/ Stephen A. Tuttle
- ------------------------ Director
Stephen A. Tuttle
/s/ Michael F. Cronin
- ------------------------ Director
Michael F. Cronin
</TABLE>
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 Somerville, New Jersey on April 21, 1998.
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, this Registration
Statement has been signed below on the 21st day of April, 1998 by the
following persons in the capacities indicated.
<TABLE>
<S> <C>
Signature Title
--------- -----
/s/ F. Patrick Smith
- ------------------------ Chairman of the Board and Chief Executive Officer
F. Patrick Smith
/s/ Kenneth W.R. Baker
- ------------------------ Director
Kenneth W.R. Baker
/s/ Gerard Giordano Vice President and Corporate Controller (principal
- ------------------------ financial and accounting officer)
Gerard Giordano
</TABLE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, PTI
Plastics, Inc., a Delaware corporation, has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized in Somerville, New Jersey on April 21, 1998.
PTI PLASTICS, 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, this Registration
Statement has been signed below on the 21st day of April, 1998 by the
following persons in the capacities indicated.
<TABLE>
<S> <C>
Signature Title
--------- -----
/s/ F. Patrick Smith
- ------------------------ Chairman of the Board and Chief Executive Officer
F. Patrick Smith
/s/ Kenneth W.R. Baker
- ------------------------ Director
Kenneth W.R. Baker
/s/ Gerard Giordano Vice President and Corporate Controller (principal
- ------------------------ financial and accounting officer)
Gerard Giordano
</TABLE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, Ozite
Corporation, a Delaware corporation, has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized in Somerville, New Jersey on April 21, 1998.
OZITE 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, this Registration
Statement has been signed below on the 21st day of April, 1998 by the
following persons in the capacities indicated.
<TABLE>
<S> <C>
Signature Title
--------- -----
/s/F. Patrick Smith
- ------------------------ Chairman of the Board and Chief Executive Officer
F. Patrick Smith
/s/ Kenneth W.R. Baker
- ------------------------ Director
Kenneth W.R. Baker
/s/ Gerard Giordano Vice President and Corporate Controller (principal
- ------------------------ financial and accounting officer)
Gerard Giordano
</TABLE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended,
Plastics 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 Somerville, New Jersey on
April 21, 1998.
PLASTICS 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, this Registration
Statement has been signed below on the 21st day of April, 1998 by the
following persons in the capacities indicated.
<TABLE>
<S> <C>
Signature Title
--------- -----
/s/F. Patrick Smith
- ------------------------ Chairman of the Board and Chief Executive Officer
F. Patrick Smith
/s/ Kenneth W.R. Baker
- ------------------------ Director
Kenneth W.R. Baker
/s/Gerard Giordano Vice President and Corporate Controller (principal
- ------------------------ financial and accounting officer)
Gerard Giordano
</TABLE>
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 Somerville, New Jersey
on April 21, 1998.
PLASTICS 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, this Registration
Statement has been signed below on the 21st day of April, 1998 by the
following persons in the capacities indicated.
<TABLE>
<S> <C>
Signature Title
--------- -----
/s/F. Patrick Smith
- ------------------------ Chairman of the Board and Chief Executive Officer
F. Patrick Smith
/s/ Kenneth W.R. Baker
- ------------------------ Director and Vice President
Kenneth W.R. Baker
/s/Gerard Giordano Vice President and Corporate Controller (principal
- ------------------------ financial and accounting officer)
Gerard Giordano
</TABLE>
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 Somerville, New Jersey on April 21, 1998.
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, this Registration
Statement has been signed below on the 21st day of April, 1998 by the
following persons in the capacities indicated.
<TABLE>
<S> <C>
Signature Title
--------- -----
/s/F. Patrick Smith
- ------------------------ Chairman of the Board and Chief Executive Officer
F. Patrick Smith
/s/ Kenneth W.R. Baker
- ------------------------ Director
Kenneth W.R. Baker
/s/Gerard Giordano Vice President and Corporate Controller (principal
- ------------------------ financial and accounting officer)
Gerard Giordano
</TABLE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, Pure
Tech APR, Inc., a New York corporation, has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized in Somerville, New Jersey on April 21, 1998.
PURE TECH APR, INC.
By: /s/ F. Patrick Smith
-------------------------------
Name: F. Patrick Smith
Title: Chairman of the Board, Chief Executive
Officer and President
Pursuant to the requirements of the Securities Act of 1933, this Registration
Statement has been signed below on the 21st day of April, 1998 by the
following persons in the capacities indicated.
<TABLE>
<S> <C>
Signature Title
--------- -----
/s/F. Patrick Smith Chairman of the Board, Chief Executive Officer and
- ------------------------ President
F. Patrick Smith
/s/ Kenneth W.R. Baker Director and Vice President (principal financial and
- ------------------------ accounting officer)
Kenneth W.R. Baker
</TABLE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, Multi
Container Recycler, Inc., a Michigan corporation, has duly caused this
Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized in Somerville, New Jersey on April 21, 1998.
MULTI CONTAINER RECYCLER, INC.
By: /s/ F. Patrick Smith
---------------------------------
Name: F. Patrick Smith
Title: Chairman of the Board, Chief Executive
Officer and President
Pursuant to the requirements of the Securities Act of 1933, this Registration
Statement has been signed below on the 21st day of April, 1998 by the
following persons in the capacities indicated.
<TABLE>
<S> <C>
Signature Title
--------- -----
/s/F. Patrick Smith Chairman of the Board, Chief Executive Officer and
- ------------------------ President
F. Patrick Smith
/s/ Kenneth W.R. Baker Director, Secretary and Treasurer (principal financial
- ------------------------ and accounting officer)
Kenneth W.R. Baker
</TABLE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, Coast
Recycling North, Inc., a California corporation, has duly caused this
Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized in Somerville, New Jersey on April 21, 1998.
COAST RECYCLING NORTH, INC.
By: /s/ F. Patrick Smith
-------------------------------
Name: F. Patrick Smith
Title: Chairman of the Board, Chief Executive
Officer and President
Pursuant to the requirements of the Securities Act of 1933, this Registration
Statement has been signed below on the 21st day of April, 1998 by the
following persons in the capacities indicated.
<TABLE>
<S> <C>
Signature Title
--------- -----
/s/F. Patrick Smith Chairman of the Board, Chief Executive Officer and
- ------------------------ President
F. Patrick Smith
/s/ Kenneth W.R. Baker Director and Chief Financial Officer (principal
- ------------------------ financial and accounting officer)
Kenneth W.R. Baker
</TABLE>
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 Somerville, New Jersey on April 21, 1998.
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, this Registration
Statement has been signed below on the 21st day of April, 1998 by the
following persons in the capacities indicated.
<TABLE>
<S> <C>
Signature Title
--------- -----
/s/F. Patrick Smith
- ------------------------ Chairman of the Board and Chief Executive Officer
F. Patrick Smith
/s/ Kenneth W.R. Baker
- ------------------------ Director
Kenneth W.R. Baker
/s/Gerard Giordano Vice President and Corporate Controller (principal
- ------------------------ financial and accounting officer)
Gerard Giordano
</TABLE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, REI
Distributors, Inc., a New Jersey corporation, has duly caused this
Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized in Somerville, New Jersey on April 21, 1998.
REI DISTRIBUTORS, 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, this Registration
Statement has been signed below on the 21st day of April, 1998 by the
following persons in the capacities indicated.
<TABLE>
<S> <C>
Signature Title
--------- -----
/s/F. Patrick Smith
- ------------------------ Chairman of the Board and Chief Executive Officer
F. Patrick Smith
/s/ Kenneth W.R. Baker
- ------------------------ Director
Kenneth W.R. Baker
/s/Gerard Giordano Vice President and Corporate Controller (principal
- ------------------------ financial and accounting officer)
Gerard Giordano
</TABLE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended,
PureTech Recycling of California, a California corporation, has duly caused
this Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized in Somerville, New Jersey on April 21, 1998.
PURETECH RECYCLING OF CALIFORNIA
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, this Registration
Statement has been signed below on the 21st day of April, 1998 by the
following persons in the capacities indicated.
<TABLE>
<S> <C>
Signature Title
--------- -----
/s/F. Patrick Smith
- ------------------------ Chairman of the Board and Chief Executive Officer
F. Patrick Smith
/s/ Kenneth W.R. Baker Director, Vice President and Chief Financial Officer
- ------------------------ (principal financial and accounting officer)
Kenneth W.R. Baker
</TABLE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, Alumet
Smelting Corp., a New Jersey corporation, has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized in Somerville, New Jersey on April 21, 1998.
ALUMET SMELTING CORP.
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, this Registration
Statement has been signed below on the 21st day of April, 1998 by the
following persons in the capacities indicated.
<TABLE>
<S> <C>
Signature Title
--------- -----
/s/F. Patrick Smith
- ------------------------ Chairman of the Board and Chief Executive Officer
F. Patrick Smith
/s/ Kenneth W.R. Baker
- ------------------------ Director
Kenneth W.R. Baker
/s/Gerard Giordano Vice President and Corporate Controller (principal
- ------------------------ financial and accounting officer)
Gerard Giordano
</TABLE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended,
Conconre Corp., a Connecticut corporation, has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized in Somerville, New Jersey on April 21, 1998.
CONCONRE CORP.
By: /s/ F. Patrick Smith
--------------------------------
Name: F. Patrick Smith
Title: Chairman of the Board, Chief Executive
Officer and President
Pursuant to the requirements of the Securities Act of 1933, this Registration
Statement has been signed below on the 21st day of April, 1998 by the
following persons in the capacities indicated.
<TABLE>
<S> <C>
Signature Title
--------- -----
/s/F. Patrick Smith Chairman of the Board, Chief Executive Officer
- ------------------------ and President
F. Patrick Smith
/s/ Kenneth W.R. Baker Director, Secretary and Treasurer (principal
- ------------------------ financial and accounting officer)
Kenneth W.R. Baker
</TABLE>
EXHIBIT INDEX
Exhibit
No. Description Page
- ------- -------------------------------------------------------------- ----
3.1 Restated Certificate of Incorporation of Tekni-Plex, Inc. (Filed
as Exhibit 3.1 to Registrant's Registration Statement on Form
S-4, Commission File No. 333-28157, and incorporated herein by
reference).
3.2 Amended and Restated By-laws of Tekni-Plex, Inc. (Filed as
Exhibit 3.3 to Registrant's Registration Statement on Form S-4,
Commission File No. 333-28157, and incorporated herein by
reference).
3.3 Certificate of Incorporation of PureTec Corporation.*
3.4 By-laws of PureTec Corporation. (Filed as Exhibit 3(b) to PureTec
Corporation's Registration Statement on Form S-4, Commission File
No. 33-82768, and incorporated herein by reference.)
3.5 Certificate of Incorporation of PTI Plastics, Inc.*
3.6 By-laws of PTI Plastics, Inc.*
3.7 Certificate of Incorporation of Ozite Corporation.*
3.8 By-laws of Ozite Corporation.*
3.9 Certificate of Incorporation of Plastic Specialities and
Technologies, Inc.*
3.10 By-laws of Plastic Specialities and Technologies, Inc.*
3.11 Certificate of Incorporation of Plastic Specialities and
Technologies Investments, Inc.*
3.12 By-laws of Plastic Specialities and Technologies Investments, Inc.*
3.13 Certificate of Incorporation of Burlington Resins, Inc.*
3.14 By-laws of Burlington Resins, Inc.*
3.15 Certificate of Incorporation of Pure Tech APR, Inc.*
3.16 By-laws of Pure Tech APR, Inc.*
3.17 Certificate of Incorporation of Multi Container Recycler, Inc.*
3.18 By-laws of Multi Container Recycler, Inc.*
3.19 Certificate of Incorporation of Coast Recycling North, Inc.*
3.20 By-laws of Coast Recycling North, Inc.*
3.21 Certificate of Incorporation of Distributors Recycling, Inc.*
3.22 By-laws of Distributors Recycling, Inc.*
3.23 Certificate of Incorporation of REI Distributors, Inc.*
3.24 By-laws of REI Distributors, Inc.*
3.25 Certificate of Incorporation of Pure Tech Recycling of California.*
3.26 By-laws of Pure Tech Recycling of California.*
3.27 Certificate of Incorporation of Alumet Smelting Corp.*
3.28 By-laws of Alumet Smelting Corp.*
3.29 Certificate of Incorporation of Conconre Corp.*
3.30 By-laws of Conconre Corp.*
4.1 Indenture, dated as of March 1, 1998 among Tekni-Plex, Inc., the
Guarantors listed therein and Marine Midland Bank, as Trustee.*
4.2 Senior Subordinated Note and Guarantee (original not included;
form of Note and Guarantee included in Exhibit 4.1).
4.3 Purchase Agreement, dated as of February 25, 1998 among
Tekni-Plex, Inc., the Guarantors listed therein, and J.P. Morgan
Securities Inc.*
4.4 Registration Right Agreement, dated as of March 3, 1998 among
Tekni-Plex, Inc., the Guarantors listed therein. and J.P. Morgan
Securities, Inc.*
5.1 Opinion of Davis Polk & Wardwell.*
10.1 Credit Agreement, dated as of March 3, 1998, 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, as Agent.*
10.2 Note (original not included; form of Note included in Exhibit 10.1).
10.3 Security Agreement, dated as of March 3, 1998, among Tekni-Plex,
Inc., the Guarantors listed therein and Morgan Guaranty Trust
Company of New York, as Collateral Agent (original not included;
form of Security Agreement included in Exhibit 10.1).
10.4 Pledge Agreement, dated as of March 3, 1998, between Tekni-Plex,
Inc. and Morgan Guaranty Trust Company of New York, as Agent
(original not included; form of Pledge Agreement included in
Exhibit 10.1).
10.5 Form of Mortgage, dated as of March 3, 1998, made by Tekni-Plex,
Inc. or the Guarantors listed therein. in favor of Morgan
Guaranty Trust Company, as Agent (originals not included; form of
Mortgage included in Exhibit 10.1).
10.6 Employment Agreement, dated as of January 30, 1997, between Dr.
F. Patrick Smith and Tekni-Plex, Inc. (Filed as Exhibit 10.6 to
Registrant's Registration Statement on Form S-4, Commission File
No. 333-28157, and incorporated herein by reference).
10.7 Employment Agreement, dated as of April 4, 1997, between Mr.
Kenneth W.R. Baker and Tekni-Plex, Inc. (Filed as Exhibit 10.7 to
Registrant's Registration Statement on Form S-4, Commission File
No. 333-28157, and incorporated herein by reference).
10.8 Form of Amended and Restated Option Agreement, dated as of April
4, 1997, among Tekni- Plex, Inc., Tekni-Plex Partners L.P. and F.
Patrick Smith (Filed as Exhibit 10.8 to Registrant's Amendment
No. 2 to Registration Statement on Form S-4, Commission File No.
333-28157, and incorporated herein by reference).
10.9 Form of Amended and Restated Stock Option Agreement, dated as of
April 4, 1997, between Tekni-Plex, Inc. and Kenneth W.R. Baker
(Filed as Exhibit 10.9 to Registrant's Amendment No. 1 to
Registration Statement on Form S-4, Commission File No.
333-28157, and incorporated herein by reference).
10.10 Management Fee Agreement, dated as of April 4, 1997, between
Tekni-Plex, Inc. and MST Management Company, Inc. (Filed as
Exhibit 10.10 to Registrant's Registration Statement on Form S-4,
Commission File No. 333-28157, and incorporated herein by
reference).
10.11 Management Fee Agreement, dated as of April 4, 1997, between
Tekni-Plex, Inc. and MST/TP Holding, Inc. (Filed as Exhibit 10.11
to Registrant's Amendment No. 2 to Registration Statement on Form
S-4, Commission File No. 333-28157, and incorporated herein by
reference).
10.12 Indenture, dated as of April 1, 1997 among Tekni-Plex, Inc.,
Dolco Packaging Corp. and Marine Midland Bank, as Trustee (Filed
as Exhibit 4.1 to Registrant's Registration Statement on Form
S-4, Commission File No. 333-28157, and incorporated herein by
reference).
10.13 Senior Subordinated Note and Guarantee (original not included;
form of Note and Guarantee included in Exhibit 10.12).
10.14 Agreement and Plan of Merger, dated as of November 11, 1997 among
Tekni-Plex, Inc., P.T. Holding, Inc. Puretech Corporation and
Plastic Specialties and Technologies, Inc. (Filed as Exhibit 2.1
to PureTec Corporation's Annual Report on Form 10-K, Commission
File No. 0-26508 and incorporated herein by reference).
12.1 Statement regarding Computation of Ratios.*
23.1 Consent of BDO Seidman LLP.*
23.2 Consent of Deloitte & Touche LLP.*
23.3 Consent of Deloitte & Touche LLP.*
23.4 Consent of Holtz Rubenstein & Co., LLP.*
23.5 Consent of Davis Polk & Wardwell (included in Exhibit 5.1).
25.1 Amended and Restated Statement of Eligibility of Trustee, Marine
Midland Bank, on Form T-1.
27.1 Financial Data Schedule.*
99.1 Form of Letter of Transmittal.*
99.2 Form of Notice of Guaranteed Delivery.*
99.3 Form of Tender Instructions.*
99.4 Form of Exchange Agent Agreement.*
- ------------
* Filed herewith.
EXHIBIT 3.3
State of Delaware
Office of the Secretary of State PAGE 1
I, EDWARD J. FREEL, SECRETARY OF STATE OF THE STATE OF
DELAWARE, DO HEREBY CERTIFY THE ATTACHED IS A TRUE AND CORRECT COPY OF THE
CERTIFICATE OF AMENDMENT OF "PURE TECH INTERNATIONAL, INC.", CHANGING ITS
NAME FROM "PURE TECH INTERNATIONAL, INC." TO "PURETEC CORPORATION", FILED
IN THIS OFFICE ON THE SEVENTH DAY OF MAY, A.D. 1996, AT 9 O'CLOCK A.M.
/s/ Edward J. Freel
---------------------------------------
Edward J. Freel, Secretary of State
AUTHENTICATION: 8932680
DATE: 02-20-98
2416069 8100
981067438
STATE OF DELAWARE
SECRETARY OF STATE
DIVISION OF CORPORATIONS
FILED 09:00 AM 05/07/1996
Section 60131793 - 2416069
CERTIFICATE OF AMENDMENT
OF CERTIFICATE OF INCORPORATION
OF PURE TECH INTERNATIONAL, INC.
Pure Tech International, Inc., a corporation organized and
existing under and by virtue of the General Corporation Law of the State of
Delaware.
DOES HEREBY CERTIFY:
FIRST: That pursuant to the recommendation of the Board of
Directors of Pure Tech International, Inc., the following resolution
amending the Certificate of Incorporation of said corporation, has been
adopted by the vote of stockholders of said corporation holding a majority
of the outstanding stock entitled to vote thereon. The resolution setting
forth the amendment is as follows:
RESOLVED, that Paragraph First of the Certificate of
Incorporation shall be amended to read in its entirety as
follows:
"The name of the Corporation is PureTec
Corporation, a corporation formed in accordance with
the General Corporation Law of Delaware."
SECOND: That these resolutions have been adopted by the vote of
stockholders holding a majority of the outstanding stock entitled to vote hereon
in accordance with Section 228 of the General Corporation Law of the State of
Delaware.
THIRD: That said amendment was duly adopted in accordance with
the provisions of Section 242 of the General Corporation Law of the State
of Delaware.
FOURTH: That the capital of said corporation shall not be
reduced under or by reason of said amendment.
IN WITNESS WHEREOF, said Pure Tech International, Inc. has
caused this certificate to be signed by its President, and its Secretary,
this 1st day of May, 1996.
Pure Tech International, Inc.
By: /s/ David C. Katz
---------------------------------
David C. Katz, President
ATTEST:
/s/ Paul Litwinozuk
- ------------------------------
Paul Litwinozuk, Secretary
State of Delaware
Office of the Secretary of State PAGE 1
I, EDWARD J. FREEL, SECRETARY OF STATE OF THE STATE OF
DELAWARE, DO HEREBY CERTIFY THE ATTACHED IS A TRUE AND CORRECT COPY OF THE
CERTIFICATE OF AMENDMENT OF "PURE TECH NEWCO, INC.", CHANGING ITS NAME FROM
"PURE TECH NEWCO, INC." TO "PURE TECH INTERNATIONAL, INC.", FILED IN THIS
OFFICE ON THE THIRTY-FIRST DAY OF JULY, A.D. 1995, AT 4:30 O'CLOCK P.M.
/s/ Edward J. Freel
-------------------------------------------
Edward J. Freel, Secretary of State
AUTHENTICATION: 8932679
DATE: 02-20-98
2416069 8100
981067438
STATE OF DELAWARE
SECRETARY OF STATE
DIVISION OF CORPORATIONS
FILED 04:30 PM 07/31/1995
950171678 - 2416069
CERTIFICATE OF AMENDMENT
OF
CERTIFICATE OF INCORPORATION
OF
PURE TECH NEWCO, INC.
Pure Tech Newco, Inc., a corporation organized and existing
under and by virtue of the General Corporation Law of the State of Delaware,
DOES HEREBY CERTIFY:
FIRST: That pursuant to the recommendation of the Board of
Directors of Pure Tech Newco, Inc., the following resolution amending the
Certificate of Incorporation of said corporation, has been adopted by the
written consent of the directors of said corporation, no stock having been
issued. The resolution setting forth the amendment is as follows:
RESOLVED, that the Certificate of Incorporation of this
corporation be amended to change its corporate name to "PURE TECH
INTERNATIONAL, INC."; and be it further
RESOLVED, that Article FIRST of the certificate of
incorporation of this Corporation is amended to read in its entirety
as follows:
"The name of the Corporation is Pure Tech International,
Inc."
RESOLVED, that the Certificate of Incorporation of this
corporation be amended to provide that the total shares of capital
stock of this corporation shall be 51,000,000, par value $.01 per
share, divided into 50,000,000 shares of Common Stock and 1,000,000
shares of Preferred Stock, par value $.01 per share; and be it further
RESOLVED, that paragraph (a) of Article FOURTH of the
certificate of incorporation of this Corporation is amended to read in
its entirety as follows:
"(a) The aggregate number of shares which the
Corporation 'shall have the authority to issue is, 51,000,000, which
are divided into 50,000,000 shares of Common Stock, par value $.01 per
share, and 1,000,000 shares of Preferred Stock, par value $.01 per
share.
FURTHER RESOLVED, that the introductory paragraph of
Article FIFTH of the certificate of incorporation of this Corporation
is amended to conform to the par value established above, to read in
its entirety as follows:
"There is hereby created a series of the Preferred
stock of this corporation to consist of 5,000 shares of Preferred
Stock, $.01 par value per share, which this corporation now has the
authority to issue."
SECOND: That these resolutions have been adopted by written
consent of the directors of said corporation, no stock having been issued,
in accordance with Section 228 of the General Corporation Law of the State
of Delaware.
THIRD: That said amendment was duly adopted in accordance
with the provisions of Section 241 of the General Corporation Law of the
State of Delaware. The corporation has received no payment for stock.
FOURTH: That the capital of said corporation shall not be
reduced under or by reason of said amendment.
IN WITNESS WHEREOF, said Pure Tech Newco, Inc. has caused
this certificate to be signed by its President, and its Secretary, this
26th day of July, 1995.
Pure Tech Newco, Inc.
By: /s/ David C. Katz
---------------------------------
David C. Katz, President
State of Delaware
Office of the. Secretary of State PAGE 1
I, EDWARD J. FREEL, SECRETARY OF STATE OF THE STATE OF
DELAWARE, DO HEREBY CERTIFY THE ATTACHED IS A TRUE AND CORRECT COPY OF THE
CERTIFICATE OF INCORPORATION OF "PURE TECH NEWCO, INC.", FILED IN THIS
OFFICE ON THE FIFTH DAY OF JULY, A.D. 1994, AT 9 O'CLOCK A.M.
/s/ Edward I. Freel
-----------------------------------
Edward I. Freel, Secretary of State
AUTHENTICATION: 8932678
DATE: 02-20-98
2416069 8100
981067438
STATE OF DELAWARE
SECRETARY OF STATE
DIVISION OF CORPORATIONS
FILED 09:00 AM 07/O5/1994
944122519 - 2416069
CERTIFICATE OF INCORPORATION
OF
PURE TECH NEWCO, INC.
First: The name of the Corporation is Pure Tech Newco, Inc., a
corporation formed in accordance with the General Corporation Law of Delaware.
Second: The address of the Corporation's registered office in
the State of Delaware is 15 East North Street, Dover, Delaware 1990. The
registered agent at such address shall be United Corporate Services, Inc.
The county of Kent.
Third: The purpose of the Corporation is to engage in any
lawful act or activity for which corporations may be organized under the
General Corporation Law of Delaware.
Fourth:
(a) The aggregate number of shares which the Corporation shall
have the authority to issue is 50,000, which are divided into 45,000 shares
of Common Stock, par value $.O5 per share, and 5,000 shares of Preferred
Stock, par value of $.05 per share.
(b) Preferred Stock. (1) Shares of Preferred Stock may be
issued from time to time in one or more series as may from time to time be
determined by the Board of Directors, each of said series to be distinctly
designated. All shares of any one series of Preferred Stock shall be alike
in every particular, except that there may be different dates from which
dividends, if any, thereon shall be cumulative, if made cumulative. The
voting powers and the preferences and relative, participating, optional and
other special rights of each such series, and the qualifications,
limitations or restrictions thereof, if any, may differ from those of any
and all other series at any time outstanding; and the Board of Directors of
the Corporation is hereby expressly granted authority to fix by resolution
or resolutions adopt prior to the issuance of any shares of a particular
series of Preferred Stock, the voting powers and the designation,
preferences and relative, optional and other special rights, and the
qualifications, limitations and restrictions of such series, including, but
without limiting the generality of the foregoing, the following:
(A) The distinctive designation of, and the number of
shares of Preferred Stock which shall constitute such series, which
number may be increased (except where otherwise provided by the Board
of Directors) or decreased (but not below the number of shares thereof
then outstanding) from time to time by like action of the Board of
Directors;
(B) The rate and times at which, and the terms and
conditions on which, dividends, if any, on Preferred Stock of such
series shall be paid, the extent of the preference or relation, if
any, of such dividends to the dividends payable on any other class or
classes, or series of the same or other classes of stock and whether
such dividends shall be cumulative or non-cumulative;
(C) The right, if any, of the holders of Preferred Stock of
such series to convert the same into or exchange the same for, shares
of any other class or classes or of any series of the same or any
other class or classes of stock of the Corporation and the terms and
conditions of such conversion or exchange;
(D) Whether or not Preferred Stock of such series shall be
subject to redemption, and the redemption price or prices and the time
or times at which, and the terms and conditions on which, Preferred
stock of such series may be redeemed;
(E) The rights, if any, of the holders of Preferred Stock
of such series upon the voluntary or involuntary liquidation, merger,
consolidation, distribution or sale of assets, dissolution or winding-
up, of the Corporation;
(F) The terms of the sinking fund or redemption or purchase
account, if any, to be provided for the Preferred Stock of such
series; and
(G) The voting powers, if any, of the holders of such
series of Preferred Stock which may, without limiting the generality
of the foregoing, include the right, voting as a series or by itself
or together with other series of Preferred Stock or all series of
Preferred Stock as a class, to elect one or more directors of the
Corporation if there shall have been a default in the payment of
dividends on any one or more series of Preferred Stock or under such
other circumstances and on such conditions as the Board of Directors
may determine.
(2) The relative powers, preferences and rights of each series
of Preferred Stock in relation to the powers, preferences and rights of
each other series of Preferred Stock shall, in each case, be as fixed from
time to time by the Board of Directors in a revolution or resolutions
pursuant to authority granted in this Paragraph FOURTH, provided that, to
the extent set forth in Section 242 of the General Corporation law, the
consent, by class or series vote or otherwise, of the holders of such of
the series of Preferred Stock as are from time to time outstanding shall be
required for the issuance by the Board of Directors of any other series of
Preferred Stock for which the powers, preferences and rights shall be fixed
by the Board of Directors as senior to, or on a parity with, the powers,
preferences and rights of such outstanding series, or any of them.
(3) Subject to the provisions of subparagraph 2 of this
paragraph (c), shares of Common Stock or any series of Preferred Stock may be
issued from time to time as the Board of Directors of the Corporation shall
determine and on such terms and for such consideration as shall be fixed by
the Board of Directors.
(4) The authorized amount of shares of Common Stock and of
Preferred Stock may, without a class or series vote, be increased or
decreased from time to time by the affirmative vote of the holders of a
majority of the stock of the Corporation entitled to vote thereon.
Fifth:
There is hereby created a series of the Preferred Stock of
this corporation to consist of 5,000 shares of Preferred Stock, $.05 par
value per share, which this corporation now has authority to issue.
1. The distinctive designation of the series shall be
"Class A Preferred Stock"; the number of shares of Class A Preferred Stock
shall be 5,000. No fractional shares of Class A Preferred Stock shall be
issued.
2. The holders of the Class A Preferred Stock are not
entitled to any dividends.
3. The Class A Preferred Stock shall be preferred as to
assets over the Junior Stock so that, in the event of the voluntary or
involuntary liquidation, dissolution or winding-up of this corporation, the
holders of Class A Preferred Stock shall be entitled to have set apart for
them or to be paid out of the assets of this corporation (after provision
for the holders of Senior Stock) , before any distribution is made to or
set apart for the holders of Junior Stock, an amount in cash equal to, and
in no event more than, $1,000 per share of Class A Preferred Stock. If,
upon such liquidation, dissolution or winding-up of this corporation, the
assets of this corporation available for distribution to the holders of its
stock shall (after provision for the holders of Senior Stock) be
insufficient to permit the distribution in full of the amounts receivable
as aforesaid by the holders of Class A Preferred Stock, then all such
assets of this corporation shall be distributed ratably among the holders
of Class A Preferred Stock in proportion to the amounts which each would
have been entitled to receive if such assets were insufficient to permit
distribution in full as aforesaid. Neither the consolidation nor merger of
this corporation nor the sale, lease or transfer by this corporation of all
or any part of its assets shall be deemed to be a liquidation, dissolution
or winding-up of this corporation for the purposes of this paragraph 3.
4. (a) This corporation shall be obligated to redeem 1,000
shares of the Class A Preferred Stock on each of the first five
anniversaries of the date of issuance of the Class A Preferred Stock. The
redemption price shall at the option of the holder be payable either in
cash or in shares of restricted Common Stock of the corporation valued at
the average of the closing prices of the Common Stock on each of the 20
trading days ending prior to the redemption date. No fractional shares of
Common Stock will be issued.
(b) Notwithstanding the foregoing, the number of shares of
Class A Preferred Stock to be redeemed shall be reduced by one (1) for each
1,000 of the amount if any by which $1,100,000 is less than the sum of the
actual out of pocket cash loss to the corporation or its subsidiaries in
the Dalen vs. Ozite lawsuit, and the cost at settling such lawsuit,
including legal fees incurred at any time hereafter, and (ii) for each
$1,000 of the amount if any by which $1,500,000 is less than the sum of the
actual out of pocket cash loss to the corporation in the Ranger superfund
matter, and the cost of settling such matter, including legal fees incurred
at any time hereafter. Such reductions for any loss or cost ("Defined
Losses") shall be applied pro rata (based on principal amount to be
redeemed) among all redemptions required to be made after the date of such
loss.
5. Not less than 30 nor more than 120 days prior to each
date fixed for redemption, a notice referring to the redemption shall be
given by mail to the holders of record of the shares of Class A Preferred
Stock at their respective addresses an the same shall appear on the Class A
Preferred Stock books of this corporation. From and after the date fixed
for redemption (unless default be made by this corporation in providing
moneys for the payment of the redemption price) all rights of the holders
thereof as stockholders of this corporation (except the right to receive
payment of said redemption price) shall cease and terminate.
Shares of Class A Preferred Stock redeemed pursuant to the
provisions hereof shall thereupon be deemed retired and shall resume the
status of authorized but unissued shares of Preferred Stock (without serial
designation).
If the Shares of Class A Preferred Stock are held by more
than one holder, the shares to be redeemed on any date shall be allocated
among the holders pro rata with the number of shares owned by them, or as
they shall otherwise unanimously agree by joint notice to the corporation.
6. The Class A Preferred Stock shall not be convertible
into any other security, provided that such Class may be redeemed for
Common Stock as otherwise provided herein.
7. Except as otherwise expressly provided by law, the
holders of the Class A Preferred Stock shall have one vote per share on all
matters which are voted upon by the holders of Common Stock and the Class A
Common Stock, and they shall vote on all such matters as one class, and not
as a separate class.
8. The term "Junior Stock" shall mean the Common Stock and
those series of Preferred Stock which, by the terms of the Certificate of
Incorporation or of the instrument by which the Board of Directors, acting
pursuant to authority granted in the Certificate of Incorporation, shall
designate the special rights and limitations of each much class and series
of stock and series of Preferred Stock, shall be subordinate to the Class
A Preferred Stock in respect of the right of the holders thereof to receive
dividends or to participate in the assets of this corporation distributable
to stockholders upon any liquidation, dissolution or winding-up of this
corporation.
The term "Senior Stock" shall mean those series of Preferred
Stock which, by the terms of the Certificate of Incorporation or of the
instrument by which the Board of Directors, acting pursuant to authority
granted in the Certificate of Incorporation, shall designate the special
rights and limitations of each such class and series of stock and series of
Preferred Stock, shall be senior to the Class A Preferred Stock in respect
of the right of the holders thereof to receive dividends or to participate
in the assets of this corporation distributable to stockholders upon any
liquidation, dissolution or winding-up of this corporation.
Sixth: The corporation's right to amend any provision of
the Certificate of Incorporation shall be subject to the right of the
holders of all then outstanding shares of Preferred Stock which are set
forth in Section 242 (b) (2) of the General Corporation Law of the State of
Delaware.
Seventh: The name and mailing address of the incorporator are
as follows:
Oscar D. Folger
521 Fifth Avenue, 24th Floor
New York, NY 10175
Eighth: The original by-laws of the Corporation shall be
adopted by the incorporator. Thereafter, the power to make,
alter or repeal by-laws shall be in the Directors of the Corporation.
Ninth: A director, or former director, shall not be liable to
the corporation or to any of its stockholders for monetary damages for
breach of fiduciary duty as a director, provided that this provision shall
not eliminate or limit the liability of a director: (i) for any breach of
the director's duty of loyalty to the corporation or its stockholders;
(ii) for acts or omissions not in good faith or which involve intentional
misconduct or a knowing violation of law; (iii) under SS174 of the General
Corporation Law of the State of Delaware, pertaining to the liability of
directors for unlawful payment of dividends or unlawful stock purchase or
redemption; or (iv) for any transaction from which the director derived an
improper personal benefit.
Tenth:
The corporation shall indemnify its directors and officers,
and the directors and officers of its subsidiaries, to the maximum, extent
permitted by law.
/s/ Oscar D. Folger
---------------------------------
Oscar D. Folger, Incorporator
State of Delaware
Office of the Secretary of State PAGE 1
I, EDWARD J. FREEL, SECRETARY OF STATE OF THE STATE OF
DELAWARE, DO HEREBY CERTIFY THE ATTACHED IS A TRUE AND CORRECT COPY OF THE
CERTIFICATE OF AMENDMENT OF "PURE TECH INTERNATIONAL, INC.", FILED IN THIS
OFFICE ON THE THIRTIETH DAY OF MARCH, A.D. 1989, AT 9 O'CLOCK A.M.
/s/ Edward J. Freel
---------------------------------------
Edward J. Freel, Secretary of State
AUTHENTICATION: 8932689
DATE:02-20-98
2101655 8100
981067439
CERTIFICATE OF AMENDMENT
OF
CERTIFICATE OF INCORPORATION
OF
PURE TECH INTERNATIONAL, INC.
It is hereby certified as follows:
1. The name of the corporation is Pure Tech International,
Inc. Its Certificate of Incorporation was filed on September 16, 1986.
2. Article TENTH of the Certificate of Incorporation is
hereby deleted. With the same force and effect as if it has never been set
forth in the Certificate of Incorporation, so that, among other things, any
preemptive rights heretofore accrued are extinguished hereby.
3. The amendment was adopted in accordance with the
provisions of Sections 228 and 242 of the Delaware General Corporation Law.
/s/ David Katz
-----------------------------
David Katz, President
/s/ Yitz Grossman
-----------------------------
Yitz Grossman, Secretary
State of Delaware
Office of the Secretary of State PAGE 1
I, EDWARD J. FREEL, SECRETARY OF STATE OF THE STATE OF
DELAWARE, DO HEREBY CERTIFY THE ATTACHED IS A TRUE AND CORRECT COPY OF THE
CERTIFICATE OF AMENDMENT OF "PURE TECH INTERNATIONAL, INC.", FILED IN THIS
OFFICE ON THE SIXTEENTH DAY OF MARCH, A.D. 1989, AT 9 O'CLOCK A.M.
/s/ Edward J. Freel
---------------------------------------
Edward J. Freel, Secretary of State
AUTHENTICATION: 8932688
DATE:02-20-98
2101655 8100
981067439
CERTIFICATE OF AMENDMENT OF THE
CERTIFICATE OF INCORPORATION
OF
PURE TECH INTERNATIONAL, INC.
It is hereby certified as follows:
1. The name of the corporation is Pure Tech International,
Inc. Its certificate of incorporation was filed on September 16, 1986.
2. Article FOURTH of the certificate of incorporation is
amended to read as follows:
The corporation shall be authorized to issue 50,000,000
shares of Common Stock, par value $.01 per share, and
10,400,000 shares of Class A Common Stock, par value $.01
per share. Shares of Common Stock shall be identical to
shares of Class A Common Stock for all purposes on a share
for share basis, except that the Common Stock shall be
entitled to one vote per share on each matter on which is
voted on by stockholders, and the Class A Common Stock shall
have five votes per share on each matter voted on by
shareholders. The Common Stock and the Class A Common Stock
shall vote together as one class, and not as separate
classes. Shares of Class A Common Stock shall be
convertible by the respective holders thereof into shares of
Common Stock at any time on a share for share basis, and
upon the sale or transfer of any Class A Common Stock after
the effectiveness of any public offering by the corporation
under the Securities Act of 1933, or the death of the holder
thereof after such effectiveness, such conversion shall
occur automatically.
3. The amendment was adopted in accordance with the provisions of
Section 242 of the Delaware General Corporation Law.
/s/ Werner Haase
- --------------------------------
Werner Haase, President
Attest: /s/ Yitz Grossman
------------------------
Yitz Grossman, Secretary
State of Delaware
Office of the Secretary of State PAGE 1
I, EDWARD J. FREEL, SECRETARY OF STATE OF THE STATE OF
DELAWARE, DO HEREBY CERTIFY THE ATTACHED IS A TRUE AND CORRECT COPY OF THE
CERTIFICATE OF AMENDMENT OF "PURE TECH INTERNATIONAL, INC.", FILED IN THIS
OFFICE ON THE TWELFTH DAY OF OCTOBER, A.D. 1988, AT 9 O'CLOCK A.M.
/s/ Edward I. Freel
----------------------------------------
Edward I. Freel, Secretary of State
AUTHENTICATION: 8932687
DATE: 02-20-98
2101655 8100
981067439
CERTIFICATE OF AMENDMENT OF THE
CERTIFICATE OF INCORPORATION
OF
PURE TECH INTERNATIONAL, INC.
It is hereby certified as follows:
1. The name of the corporation is Pure Tech International,
Inc. Its certificate of incorporation was filed on September 16, 1986.
2. Article FOURTH of the certificate of incorporation is
amended to read as follows:
The corporation shall be authorized to issue 25,000,000
shares of Common Stock, par value $.01 per share, and
6,000,000 shares of Class A Common Stock, par value $. 01
per share. Shares of Common Stock shall be identical to
shares of Class A Common Stock for all purposes on a share
for share basis, except that the Common Stock shall be
entitled to one vote per share on each matter on which is
voted on by stockholders, and the Class A Common Stock shall
have five votes per share on each matter voted on by
shareholders. The Common Stock and the Class A Common Stock
shall vote together as one class, and not as separate
classes. Shares of Class A Common Stock shall be
convertible by the respective holders thereof into shares of
Common Stock at any time on a share for share basis, and
upon the sale or transfer of any Class A Common Stock after
the effectiveness of any public offering by the corporation
under the Securities Act of 1933, or the death of the holder
thereof after such effectiveness, such conversion shall
occur automatically.
3. All shares of common stock which are outstanding on the
date that this Certificate of Amendment is filed are hereby converted into
shares of Class A Common Stock on the basis of one share of Class A Common
Stock for each share of common stock which is outstanding on the date that
this Certificate of Amendment is filed.
4. The amendment was adopted in accordance with the
provisions of Section 242 Delaware General Corporation Law.
/s/ David C. Katz, President
- --------------------------------
David C. Katz, President
Attest: Yitz Grossman
------------------------
Yitz Grossman, Secretary
State of Delaware
Office of the Secretary of State PAGE 1
I, EDWARD J. FREEL, SECRETARY OF STATE OF THE STATE OF
DELAWARE, DO HEREBY CERTIFY THE ATTACHED IS A TRUE AND CORRECT COPY OF THE
CERTIFICATE OF AMENDMENT OF "PURE TECH INTERNATIONAL, INC.", FILED IN THIS
OFFICE ON THE TWENTY-FOURTH DAY OF DECEMBER, A.D. 1986, AT 9 O'CLOCK A.M.
/s/ Edward J. Freel
---------------------------------------
Edward J. Freel, Secretary of State
AUTHENTICATION: 8932686
DATE: 02-20-98
2101655 8100
981067439
CERTIFICATE OF AMENDMENT
OF CERTIFICATE OF INCORPORATION OF
PURE TECH INTERNATIONAL, INC.
Puree Tech International, Inc., a corporation organized and
existing under and by virtue of the General Corporation Law of the State of
Delaware does hereby certify:
First: That the Board of Directors of said corporation, at
a meeting duly convened and held, adopted a resolution proposing and
declaring advisable the following amendment to the Certification of
Incorporation of said corporation:
RESOLVED, that the Certificate of Incorporation of the
corporation be amended by adding article TENTH which shall read as
follows:
Article TENTH
Each holder of any of the shares of the corporation shall be
entitled to a preemptive right to purchase or subscribe for
(i) any unissued shares of any class of the corporation,
(ii) any additional shares of any class to be issued by
reason of any increase of the authorized capital stock of
the corporation of any class, (iii) bonds, certificates of
indebtedness, debentures or other securities convertible
into or exchangeable for stock of the corporation, and (iv)
options, warrants or other rights to purchase stock and
other securities of any class, whether said unissued stock
or other securities dm1l be issued for cash, property, or
any other lawful consideration, and, without limitation of
the foregoing, shall have such a preemptive right with
respect to shares or other securities offered for sale if
they (a) are issued or optioned by the board of directors to
effect a merger or consolidation or for a consideration
other than cash; or (b) are shares or other securities
theretofore reacquired by the corporation after having been
duly issued and not restored to the status of authorized but
unissued shares; however, there shall be no preemptive right
with respect to stock options granted to employees of the
corporation and shares of capital stock issued pursuant to
such stock options, provided that such stock options have
received the unanimous consent of the entire board of
directors of the corporation and the total stock options,
collectively, granted by the board of directors do not
exceed 200,000 shares. Provided, further, that there shall
be no preemptive rights with respect to any public offering
or issue of shares to the public pursuant to a registration
statement under the Securities Act of 1933.
Second: That in lieu of a meeting and vote of stockholders,
the stockholders have given written consent to said amendment in accordance
with provisions of Section 228 of the General Corporation Law of the State
of Delaware and said written consent was filed with the corporation.
Third: That the Aforesaid amendment was duly adopted in
accordance with the applicable provisions of Sections 242 and 228 of Title
8 of the Delaware Code of 1953.
Fourth: That the capital of said corporation will not be
reduced under or by reason of said amendment.
IN WITNESS WHEREOF, said corporation this certificate to be
signed by Joon K. Kim, its President and Joon K. Kim, its Secretary this 22rd
day of December, 1986.
/s/ Joon K. Kim
---------------------------
Joon K. Kim, President
STATE OF MINNESOTA )
)ss
COUNTY OF HENNEPIN )
This instrument was acknowledged before me on December 22,
1996, by Joon K. Kim as President of Pure Tech international, Inc. to be
the act of deed of said corporation.
/s/ David F. Sen_____
---------------------------
Notary Public
STATE OF MINNESOTA )
)ss
COUNTY OF HENNEPIN )
This instrument was acknowledged before me on December 22, 1986
by Joon K. Kim, as Secretary of Pure Tech Inc. to be the act and deed of
said corporation.
/s/ David F. Sen_____
---------------------------
Notary Public
State of Delaware
Office of the Secretary of State PAGE 1
I, EDWARD J. FREEL, SECRETARY OF STATE OF THE STATE OF
DELAWARE, DO HEREBY CERTIFY THE ATTACHED IS A TRUE AND CORRECT COPY OF THE
CERTIFICATE OF INCORPORATION OF "PURE TECH INTERNATIONAL, INC.", FILED IN
THIS OFFICE ON THE SIXTEENTH DAY OF SEPTEMBER, A.D. 1986, AT 9 O'CLOCK A.M.
/s/ Edward J. Freel
---------------------------------------
Edward J. Freel, Secretary of State
AUTHENTICATION: 8932685
DATE: 02-20-98
2101655 8100
981067439
CERTIFICATE OF INCORPORATION
OF
PURE TECH INTERNATIONAL, INC.
The undersigned, being of legal age, in order to form a
corporation under and pursuant to the laws of the State of Delaware, does
hereby set forth as follows:
FIRST: The name of the corporation is
PURE TECH INTERNATIONAL, INC.
SECOND: The address of the initial registered office and
registered agent in this state is c/o United Corporate Services, Inc., 410
South State Street, in the City of Dover, County of Kent, State of
Delaware 19901 and the name of the registered agent at said address is
United Corporate Services, Inc.
THIRD: The purpose of this corporation is to engage in any
lawful act or activity for which corporations say be organized under the
corporation laws of the State of Delaware.
FOURTH: The corporation shall be authorized to issue the
following shares:
Class Number of Shares Par Value
----- ---------------- ---------
COMMON 10,000,000 $.01
FIFTH: The name and address of the incorporator are as follows:
NAME ADDRESS
---- -------
Ray A. Barr 9 East 40th Street
New York, Now York 10016
SIXTH: The following provisions are Inserted for the
management of the business and for the conduct of the affairs of the
corporation, and for further definition, limitation and regulation of the
powers of the corporation and of Its directors and stockholders:
(1) The number of directors of the corporation shall be
such as from time to time shall be fixed by, or in the manner provided in
the by-laws. Election of directors need not be by ballot unless the by-laws
so provide.
(2) The Board of Directors shall have power without the
assent or vote of the stockholders:
(a) To sake, alter, amend, change, add to or repeal
the By-Laws of the corporation; to fix and vary the amount
to be reserved for any proper purpose; to authorize and
cause to be executed mortgages and liens upon all or any
part of the property of the corporation; to determine the
use and disposition of any surplus or not profits; and to
fix the times for the declaration and payment of dividends.
(b) To determine from time to time whether, and to
what times and places, and under what conditions the
accounts and books of the corporation (other than the
stockledger) or any of them, shall be open to the inspection
of the stockholders.
(3) The directors in their discretion may submit any
contract or act for approval or ratification at any annual meeting of the
stockholders or at any meeting of the stockholders called for the purpose
of considering any such act or contract, and any contract or act that shall
be approved or be ratified by the vote of the holders of a majority of the
stock of the corporation which is represented in person or by proxy at such
meeting and entitled to vote thereat (provided that lawful quorum of
stockholders be there represented in person or by proxy) shall be as valid
and as binding upon the corporation and upon all the stockholders as though
it had been approved or ratified by every stockholder of the corporation,
whether or not the contract or act would otherwise be open to legal attack
because of directors' interest or for any other reason.
(4) In addition to the powers and authorities hereinbefore
or by statute expressly conferred upon them the directors are hereby
empowered to exercise all such powers and do all such acts and things as
may be exercised or done by the corporation; subject, nevertheless, to the
provisions of the statutes of Delaware, of this certificate, and to any by-
laws from time to time made by the stockholders; provided, however, that no
by-laws so made shall invalidate any prior act of the directors which would
have been valid if such by-law had not been made.
SEVENTH: No director shall be liable to the corporation or
any of its stockholders for monetary damages for broach of fiduciary duty
as a director, except with respect to (1) a breach of the director's duty
of loyalty to the corporation or its stockholders. (2) acts or omissions
not in good faith or which involve Intentional misconduct or a knowing
violation of law, (3) liability under Section 174 of the Delaware General
Corporation Law or (4) a transaction from which the director derived an
improper personal benefit, it being the intention of the foregoing
provision to eliminate the liability of the corporation's directors to the
corporation or its stockholders to the fullest extent permitted by Section
102(b)(7) of the Delaware General Corporation Law, as amended from time to
time. The corporation shall indemnify to the fullest extent permitted by
Sections 102(b)(7) and 145 of the Delaware General Corporation Law, as
amended from time to time, each person that such Sections grant the
corporation the power to indemnify.
EIGHTH: Whenever a compromise or arrangement is proposed
between this corporation and its creditors or any class of them and/or
between this corporation and its stockholders or any class of them, any
court of equitable jurisdiction within the State of Delaware, may, on the
application in a summary way of this corporation or of any creditor or
stockholder thereof or on the application of any receiver or receivers
appointed for this corporation under the provisions of Section 291 of Title
8 of the Delaware Code or on the application of trustees in dissolution or
of any receiver or receivers appointed for this corporation under the
provisions of Section 279 Title 8 of the Delaware Code order a meeting of
the creditors or class of creditors, and/or of the stockholders or class of
stockholders of this corporation, and the case may be, to be summoned in
such manner as the said court directs. If a majority in number
representing three-fourths (3/4) in value of the creditors or class of
creditors, and/or of the stockholders or class of stockholders of this
corporation, as the case my be, agree to any compromise or arrangement and
to any reorganization of this corporation as consequence of such compromise
or arrangement, the said compromise or arrangement and the said
reorganization shall, if sanctioned by the court to which the said
application has been made, be binding on all the creditors or class of
creditors, and/or on all the stockholders or class of stockholders, of this
corporation, as the case may be, and also on this corporation.
NINTH: The corporation reserves the right to amend, alter,
change or repeal any provision contained in this certificate of
incorporation in the manner now or hereafter prescribed by law, and all
rights and powers conferred heroin on stockholders, directors and officers
are subject to this reserved power.
IN WITNESS WHEREOF, the undersigned hereby executes this
document and affirms that the facts set forth herein are true under the
penalties of perjury this fifteenth day of September, 1986.
/s/ Ray A. Barr
-----------------------------
Ray A. Barr, Incorporator
EXHIBIT 3.5
State of Delaware
Office of the Secretary of State
PAGE 1
I, EDWARD J. FREEL, SECRETARY OF STATE OF THE STATE OF DELAWARE, DO
HEREBY CERTIFY THE ATTACHED IS A TRUE AND CORRECT COPY OF THE CERTIFICATE OF
RENEWAL OF "PTI PLASTICS, INC.", FILED IN THIS OFFICE ON THE THIRTEENTH DAY OF
AUGUST, A.D. 1997, AT 5:10 O'CLOCK P.M.
[seal of Secretary's Office State of Delaware]
/s/Edward J. Freel
-----------------------------------
2101655 8100 Edward J. Freel, Secretary of State
981067439 AUTHENTICATION: 8932695
DATE: 02-20-98
STATE OF DELAWARE
CERTIFICATE FOR RENEWAL
AND REVIVAL OF CHARTER
PTI PLASTICS, INC., a corporation organized under the laws of Delaware, the
charter of which was voided for non-payment of taxes, now desires to procure a
restoration, renewal and revival of its charter, and hereby certifies as
follows:
1. The name of this corporation is PTI PLASTICS, INC.
2. Its registered office in the State of Delaware is located at
15 East North Street, City of Dover Zip Code 19901 County of
Kent the name and address of its registered agent is UNITED
CORPORATE SERVICES, INC.
3. The date of filing of the original Certificate of
Incorporation in Delaware was September 16, 1986.
4. The date when restoration, renewal, and revival of the
charter of this company is to commence is the 28th day of
February 1997, same being prior to the date of the
expiration of the charter. This renewal and revival of
the charter of this corporation is to be perpetual.
5. This corporation was duly organized and carried on the
business authorized by its charter until the 1st day of March
A.D. 1997, at which time its charter became inoperative and
void for non-payment of taxes and this certificate for renewal
and revival is filed by authority of the duly elected
directors of the corporation in accordance with the laws of
the State of Delaware.
IN TESTIMONY WHEREOF, and in compliance with the provisions of Section
312 of the General Corporation Law of the State of Delaware, as amended,
providing for the renewal, extension and restoration of charters, Gerard N.
Giordano the last and acting authorized officer hereunto set his/her hand to
this certificate this 12th day of August 1997.
BY: /s/Gerard N. Giordano
--------------------------
TITLE OF OFFICER: Vice President of Finance
Gerard N. Giordano
STATE OF DELAWARE
SECRETARY OF STATE
DIVISION OF CORPORATIONS
FILED 05:10 PM 08/13/1997
971271181 - 2101655
State of Delaware
Office of the Secretary of State
I, EDWARD J. FREEL, SECRETARY OF STATE OF THE STATE OF DELAWARE, DO
HEREBY CERTIFY THE ATTACHED IS A TRUE AND CORRECT COPY OF THE CERTIFICATE OF
MERGER, WHICH MERGES:
"PURE TECH NEWCO (PTI), INC.", A DELAWARE CORPORATION,
WITH AND INTO "PURE TECH INTERNATIONAL, INC." UNDER THE NAME OF "PTI PLASTICS,
INC.", A CORPORATION ORGANIZED AND EXISTING UNDER THE LAWS OF THE STATE OF
DELAWARE, AS RECEIVED AND FILED IN THIS OFFICE THE THIRTY-FIRST DAY OF JULY,
A.D. 1995, AT 4:29 O'CLOCK P.M.
[seal of Secretary's Office State of Delaware]
/s/Edward J. Freel
-----------------------------------
Edward J. Freel, Secretary of State
2101655 8100M AUTHENTICATION: 8932694
981067439 DATE: 02-20-98
STATE OF DELAWARE
SECRETARY OF STATE
DIVISION OF
CORPORATIONS
FILED 04:29 PM 07/31/1995
950171675 - 2101655
CERTIFICATE OF MERGER
OF
PURE TECH NEWCO (PTI), INC.
INTO
PURE TECH INTERNATIONAL, INC.
The undersigned corporation organized and existing under and by virtue
of the General Corporation Law of Delaware,
DOES HEREBY CERTIFY:
FIRST: That the name and state of each of the constituent corporations
of the merger is as follows:
NAME STATE OF INCORPORATION
---- ----------------------
Pure Tech International, Inc. Delaware
Pure Tech Newco (PTI), Inc. Delaware
SECOND: That an agreement of merger between the parties to the merger
has been approved, adopted, certified, executed and acknowledged by each of the
constituent corporations in accordance with the requirements of section 251 of
the General Corporation Law of Delaware.
THIRD: That the name of the surviving corporation of the merger is PURE
TECH INTERNATIONAL, INC.
FOURTH: a) That the Certificate of Incorporation of Pure Tech
International, Inc., a Delaware corporation which will survive the merger, shall
be the Certificate of Incorporation of the surviving corporation.
b) That Article FIRST of the Certificate of Incorporation is
hereby amended to read as follows:
"The name of the corporation is PTI PLASTICS, INC."
FIFTH: That the executed Agreement of Merger is on file at the
principal place of business of the surviving corporation, the address of which
is 65 Railroad Avenue, Ridgefield, NJ 07657.
SIXTH: That a copy of the Agreement of Merger will be furnished by the
surviving corporation, on request and without cost, to any stockholder of any
constituent corporation.
SEVENTH: That this Certificate of Merger shall be effected
on July 31 1995.
Dated: July 26, 1995
PURE TECH INTERNATIONAL, INC.
By: /s/David C. Katz
---------------------------
President,
State of Delaware
Office of the Secretary of State PAGE 1
I, EDWARD J. FREEL, SECRETARY OF STATE OF THE STATE OF DELAWARE, DO
HEREBY CERTIFY THE ATTACHED IS A TRUE AND CORRECT COPY OF THE CERTIFICATE OF
AMENDMENT OF "PURE TECH INTERNATIONAL, INC.", FILED IN THIS OFFICE ON THE
TWENTY-SECOND DAY OF AUGUST, A.D. 1994, AT 9 O'CLOCK A.M.
[seal of Secretary's Office, Delaware]
/s/Edward J. Freel
---------------------------
Edward J. Freel, Secretary of State
2101655 8100 AUTHENTICATION: 8932693
DATE: 02-20-98
981067439
STATE OF DELAWARE
SECRETARY OF STATE
DIVISION OF CORPORATIONS
FILED 09:00 AM 08/22/1994
944156759-2101655
CERTIFICATE OF AMENDMENT
OF
CERTIFICATE OF INCORPORATION
OF
PURE TECH INTERNATIONAL, INC.
Pure Tech International, Inc., a corporation organized and existing
under and by virtue of the General Corporation Law of the State of Delaware.
DOES HEREBY CERTIFY:
FIRST: That pursuant to the recommendation of the Board of
Directors of Pure Tech International, Inc., the following resolution
amending the Certificate of Incorporation of said corporation, has been
adopted by the vote of stockholders of said corporation holding a majority
of the outstanding stock entitled to vote thereon. The resolution setting
forth the amendment is as follows:
RESOLVED, that Paragraph 4(a) of the Certificate of
Incorporation shall be amended to read in its entirety as
follows:
"(a) The aggregate number of shares which the Corporation shall have
the authority to issue is 56,080,000, which are divided into 50,000,000 shares
of Common Stock, par value $.05 per share, 2,080,000 shares of Class A Common
Stock, par value $.05 per share, and 4,000,000 shares of Preferred Stock, par
value $.05 per share."
RESOLVED, that except as expressly amended, the Fourth Article
of the Certificate of Incorporation of this corporation shall
hereby remain in effect an heretofore set forth and shall be
unchanged in any respect by any provision hereof.
SECOND: That these resolutions have been adopted by the vote of stock
holders holding a majority of the outstanding stock entitled to vote hereon in
accordance with Section 228 of the General Corporation Law of the State of
Delaware.
THIRD: That said amendment was duly adopted in accordance with the
provisions of Section 242 of the General Corporation Law of the State of
Delaware.
FOURTH: That the capital of said corporation shall not be reduced under
or by reason of said amendment.
IN WITNESS WHEREOF, said Pure Tech International, Inc. has caused this
certificate to be signed by its Vice President, and its Assistant Secretary,
this 19th day of August, 1994.
Pure Tech International, Inc.
BY: /s/Michael Nafash
------------------------------
Michael Nafash, Vice President
ATTEST: /s/Paul Litwinczuk
-------------------------
Paul Litwinczuk
Assistant Secretary
State of Delaware
Office of the Secretary of State PAGE 1
I, EDWARD J. FREEL, SECRETARY OF STATE OF THE STATE OF DELAWARE, DO
HEREBY CERTIFY THE ATTACHED IS A TRUE AND CORRECT COPY OF THE CERTIFICATE OF
AMENDMENT OF "PURE TECH INTERNATIONAL, INC.", FILED IN THIS OFFICE ON THE
SEVENTH DAY OF NOVEMBER, A.D. 1991, AT 9 O'CLOCK A.M.
Seal of Secretary's Office, Delaware]
/s/Edward J. Freel
------------------------------
Edward J. Freel, Secretary of State
2101655 8100 AUTHENTICATION: 8932692
981067439 DATE: 02-20-98
STATE OF DELAWARE
SECRETARY OF STATE
DIVISION OF CORPORATIONS
FILED 09:00 AM 11/07/1991
913115030 - 2101655
CERTIFICATE OF AMENDMENT
OF
CERTIFICATE OF INCORPORATION
OF
PURE TECH INTERNATIONAL. INC.
Pure Tech International, Inc. , a corporation organized and existing
under and by virtue of the General Corporation Law of the State of Delaware.
DOES HEREBY CERTIFY:
FIRST: That pursuant to the recommendation of the Board of Directors of
Pure Tech International, Inc., the following resolution amending the Certificate
of Incorporation of said corporation, has been adopted by the written consent of
stockholders of said corporation holding a majority of the outstanding stock
entitled to vote thereon. The resolution setting forth the amendment is as
follows:
RESOLVED, that the Certificate of Incorporation of this corporation be
amended to provide that the shares of capital stock of this corporation of each
and every class shall be combined on the basis of one (1) share for each five
(5) shares heretofore authorized so that the 90,400,000 shares of capital stock,
$.01 par value, this corporation is authorized to issue, shall be combined into
18,080,000 shares of capital stock, $.05 par value; and
be it further
RESOLVED, that Paragraph 4(a) of the Certificate of Incorporation shall
be amended to read in its entirety as follows:
"(a) The aggregate number of shares which the Corporation shall have
the authority to issue is 18,080,000, which are divided into 12,000,000 shares
of Common Stock, par value $.05 per share, 2,080,000 shares of Class A Common
Stock, par value $.05 per share, and 4,000,000 shares of Preferred Stock, par
value of $.05 per share."
AND BE IT FURTHER RESOLVED, that the introductory paragraph of
Article TENTH of the certificate of incorporation will be further
amended to read in its entirety as follows:
"There is hereby created a series of the Preferred Stock of the
Corporation to consist of 2,600,000 of the 4,000,000 shares of Preferred Stock,
$.05 par value per share, which the Corporation now has authority to issue."
It is further
RESOLVED that except as expressly amended, the Fourth and Tenth
Articles of the Certificate of Incorporation of this corporation shall hereby
remain in effect as heretofore set forth and shall be unchanged in any respect
by any provision hereof.
SECOND: That these resolutions have been adopted by written consents of
stock holders holding a majority of the outstanding stock entitled to vote
hereon in accordance with Section 228 of the General Corporation Law of the
State of Delaware.
THIRD: That said amendment was duly adopted in accordance with the
provisions of Section 242 of the General Corporation Law of the State of
Delaware.
FOURTH: That the capital of said corporation shall not be reduced under
or by reason of said amendment.
IN WITNESS WHEREOF, said Pure Tech International, Inc. has caused this
certificate to be signed by its President, and its Assistant Secretary, this 7th
day of November, 1991.
Pure Tech International, Inc.
BY: /s/David C. Katz
----------------------------
David Katz, President
ATTEST: /s/Joseph Mastroianni
------------------------
Joseph Mastroianni,
Assistant Secretary
State of Delaware
Office of the Secretary of State PAGE 1
I, EDWARD J. FREEL, SECRETARY OF STATE OF THE STATE OF DELAWARE, DO
HEREBY CERTIFY THE ATTACHED IS A TRUE AND CORRECT COPY OF THE CERTIFICATE OF
DESIGNATION OF "PURE TECH INTERNATIONAL, INC.", FILED IN THIS OFFICE ON THE
SEVENTEENTH DAY OF SEPTEMBER, A.D. 1991, AT 12:01 O'CLOCK P.M.
[seal of Secretary's Office, Delaware]
/s/Edward J. Freel
------------------------------
Edward J. Freel, Secretary of State
2101655 8100 AUTHENTICATION: 8932691
981067439 DATE: 02-20-98
STATE OF DELAWARE
SECRETARY OF STATE
DIVISION OF CORPORATIONS
FILED 12:01 PM 09/17/1991
912605261 - 2101655
CERTIFICATE OF DESIGNATION
OF
PURE TECH INTERNATIONAL, INC.
The undersigned corporation hereby certifies as follows:
FIRST: The name of the corporation is Pure Tech International, Inc.
SECOND: The following resolutions establishing a new series of
Preferred shares were adopted by the Board of Directors in accordance with
Section 151 of the General Corporation Laws of the State of Delaware and were
ratified by the shareholders on September 17, 1991:
RESOLVED, that 13,000,000 of the 20,000,000 Preferred Stock,
with a par value of $.01 dollars per share, are to be
designated Convertible Class A Preferred Stock; and be it
further
RESOLVED, that the relative rights, privileges, preferences,
restrictions and/or limitations of those shares designated
series are as follows:
1. The distinctive designation of the series shall be "Convertible
Class A Preferred Stock"; the number of shares of Convertible Class A Preferred
Stock shall be 13,000,000.
2. (a) The holders of the Convertible Class A Preferred Stock in
preference to the holders of Junior Stock (as hereinafter defined) shall be
entitled to receive cash dividends at a rate equal to the lesser of: (i)
$.07 per annum per share or (ii) 7% per annum per share of the fair market
value of a share of Convertible Class A Preferred Stock upon the date of
issuance. The Board of Directors shall determine the fair market value of
the shares of Convertible Class A Preferred Stock upon the date of issuance
and the Board of Directors' determination thereof shall be conclusive and
binding upon all holders at any time of Convertible Class A Preferred
Stock. No Board member who owns or has a right to receive Convertible
Class A Preferred Stock shall vote upon such determination. The Board will
notify holders of Convertible Class A Preferred Stock of the dividend rate
no later than 30 days after the issuance of the Convertible Class A
Preferred Stock. All dividends will be issuable only out of funds legally
available therefor when and as declared by the Board of Directors.
Dividends shall accrue commencing October 1, 1991 to the holders of record
each October 1, and shall be payable for each twelve month period ending
September 30 on the first business day of the following November commencing
November 2, 1992. Such dividends will be payable for five (5) years and
shall cease to accrue on September 30, 1996. The last payment date shall
be November 1, 1996. Such dividends shall be cumulative from and after
such dates of accrual and payment. Any accumulation of dividends on
Convertible Class A Stock shall not bear interest. The holders of
Convertible Class A Preferred Stock shall not be entitled to receive any
dividends thereon other than the dividends provided for in this paragraph
2.
(b) Notwithstanding anything to the contrary in subparagraph (a),
dividends on Class A Preferred stock shall be declared if, when and as the Board
of Directors shall in their sole discretion deem advisable, and only from
the net profits or surplus of the Corporation as such shall be fixed and
determined by the Board of Directors. The determination of the Board of
Directors at any time of the amount of net profits or surplus available for
dividend shall be binding and conclusive on the holders of all of the stock of
the Corporation at the time outstanding.
(c) So long as any of the Convertible Class A Preferred Stock
remains outstanding, no dividends whatever shall be paid or declared, nor shall
any distribution be made, on any Junior Stock, other than a dividend or
distribution payable in Junior Stock or rights or warrants to purchase Junior
Stock, unless all dividends on the Convertible Class A Preferred Stock for all
past dividend periods shall have been paid and the full dividends thereon for
the then current dividend period shall have been paid or declared and a sum
sufficient for the payment thereof set apart.
3. The Convertible Class A Preferred Stock shall be preferred as to
assets over the Junior Stock so that, in the event of the voluntary or
involuntary liquidation, dissolution or winding-up of this corporation, the
holders of Convertible Class A Preferred Stock shall be entitled to have set
apart for them or to be paid out of the assets of this corporation (after
provision for the holders of Senior Stock), before any distribution is made to
or set apart for the holders of Junior Stock, an amount in cash equal to the
lesser of: (i) $1.00 per share of Convertible Class A Preferred Stock or (ii)
the fair market value per share of Convertible Class A Preferred Stock on the
date of issuance thereof determined in connection with the provisions of
paragraph 2 (a)(ii) above, plus all accrued and unpaid dividends thereon. If,
upon such liquidation, dissolution or winding-up of this corporation, the assets
of this corporation available for distribution to the holders of its stock shall
(after provision for the holders of Senior Stock) be insufficient to permit the
distribution in full of the amounts receivable as aforesaid by the holders of
Convertible Class A Preferred Stock, then all such assets of this corporation
shall be distributed ratably among the holders of Convertible Class A Preferred
Stock in proportion to the amounts which each would have been entitled to
receive if such assets were sufficient to permit distribution in full as
aforesaid. Neither the consolidation nor merger of this corporation nor the
sale, lease or transfer by this corporation of all or any part of its assets
shall be deemed to be a liquidation, dissolution or winding-up of this
corporation for the purposes of this paragraph 3.
4. (a) Shares of the Convertible Class A Preferred Stock shall be
convertible at any time, and from time to time, at the option of the holder
thereof into shares of Common Stock, on the basis of one share of Common Stock
for each share of Convertible Class A Preferred Stock, by surrender of a
certificate or certificates for the convertible Class A Preferred Stock so to be
converted at the then principal office of this corporation (or at such other
place or places as may be designated by this corporation) at any time during
usual business hours, together with written notice that the holder elects to
convert said Convertible Class A Preferred Stock, or a stated number of shares
thereof, in accordance with the provisions of this paragraph. Such notice shall
also state the name or names (with addresses) in which the certificate or
certificates for Common Stock shall be issued.
(b) As promptly as practicable after the surrender for conversion
of any Convertible Class A Preferred Stock this corporation shall deliver
or cause to be delivered to or upon the written order of the holder of such
Convertible Class A Preferred Stock certificates representing the number of
shares of Common Stock issuable upon such conversion, issued in such name
or names as such holder may direct, together with any cash in respect of
any fractional interest in a share of Common Stork issuable upon such
conversion. Such conversion shall be deemed to have been made immediately
prior to the close of business on the day of surrender of the Convertible
Class A Preferred Stock for conversion, and the rights of the holder, as a
holder of the stock surrendered for conversion, shall cease at such time
and the person or persons in whose name or names the certificates for such
shares of Common Stock are to be issued shall be treated for all purposes
as having become the record holders thereof at such time. The certificates
representing shares of Common Stock shall contain an appropriate
restrictive legend under the securities law.
(c) The holder of shares of Convertible Class A Preferred Stock
which was surrendered for conversion shall be entitled, on the next dividend
payment date, to receive all dividends which shall have accrued on such shares
effective as of the last dividend accrual date prior to the date of conversion.
No adjustment shall be made for dividends on shares of Common Stock delivered
upon such conversion.
(d) In case any of the following shall occur: (i) any
reclassification or change of the outstanding shares of Common Stock (other
than a change in par value, or from par value to no par value, or from no
par value to par value, or as a result of a subdivision or combination); or
(ii) any consolidation or merger to which this corporation is a party
(other than a consolidation with a subsidiary or a merger of a subsidiary
into this corporation in which consolidation or merger this corporation is
the surviving corporation and which does not result in any reclassification
of, or change in, the outstanding shares of Common Stock), or (iii) any
sale or conveyance to another corporation of the property of this
corporation as an entirety or substantially as an entirety, then, subject
to the provisions of the next paragraph, effective provision shall be made
whereby the holders of the Convertible Class A Preferred Stock then
outstanding shall have the right to convert such Convertible Class A
Preferred Stock into the kind and amount of shares of stock and other
securities and property receivable upon such reclassification, change,
consolidation, merger, sale or conveyance by a holder of the number of
shares of Common Stock issuable upon conversion of such Convertible Class A
Preferred Stock immediately prior to such reclassification, change,
consolidation, merger, sale or conveyance.
(e) This corporation will at all times reserve and keep available
out of its authorized but unissued stock, solely for the purpose of issue upon
conversion of the Convertible Class A Preferred Stock, as provided in this
paragraph, such number of shares of Common Stock as shall from time to time be
sufficient to effect the conversion of all outstanding Convertible Class A
Preferred Stock.
(f) The Board of Directors may require the mandatory conversion
of all or a part of the Convertible Class A Preferred Stock, at any time, or
from time to time, by mailing a copy of notice thereof, postage prepaid, not
less than 30 days prior to the date designated for such mandatory conversion, to
the holders of record of the Convertible Class A Preferred Stock, addressed to
them at their respective addresses appearing on the books of the Corporation. In
the event of the mandatory conversion of a part only of the Convertible Class A
Preferred Stock, such mandatory conversion shall be an a pro rata basis.
Dividends under paragraph 2 (a) and any other dividends payable on Convertible
Class A Preferred Stock subject to mandatory conversion shall cease accruing as
of the date set forth in the notice of mandatory conversion. The Corporation
shall not require the mandatory conversion of any of its Convertible Class A
Preferred Stock unless full cumulative dividends to such date of conversion
shall have been either paid or declared and a sum sufficient for the payment
thereof set apart for payment on the next annual dividend payment date. If any
holder of Convertible Class A Preferred stock shall fail to surrender his
certificate(s) therefor for conversion on the date of conversion, the
Corporation shall be authorized to cancel such certificate(s) on the books of
the Corporation and to issue instead certificate(s) for the appropriate amount
of Common Stock. Holders of Convertible Class A Preferred Stock shall cease to
have any rights as such with respect to converted shares of Convertible Class A
Preferred Stock from and after such date of mandatory conversion.
5. Each share of the Convertible Class A Preferred Stock shall
have a vote equal to the voting rights of one share of Common Stock and shall
vote together with the shares of Common Stock as a single class unless otherwise
required by law.
6. The term "Junior Stock" shall mean the Common Stock and those series
of Preferred Stock which, by the terms of the Certificate of Incorporation or of
the instrument by which the Board of Directors, acting pursuant to authority
granted in the Certificate of Incorporation, shall designate the special rights
and limitations of each such class and series of stock and series of Preferred
Stock, shall be subordinate to the Convertible Class A Preferred Stock in
respect of the right of the holders thereof to receive dividends or to
participate in the assets of this corporation distributable to stockholders upon
any liquidation, dissolution or winding-up of this corporation."
IN WITNESS WHEREOF, the corporation has caused this certificate to be
executed under its corporate seal this 17th day of September, 1991.
PURE TECH INTERNATIONAL, INC.
BY: /s/ David C. Katz
-------------------------------
David C. Katz, President
ATTEST:
/s/James W. Lucas
- -------------------------
James Lucas
Ass't Secretary
State of Delaware
Office of the Secretary of State PAGE 1
I, EDWARD J. FREEL, SECRETARY OF STATE OF THE STATE OF DELAWARE, DO
HEREBY CERTIFY THE ATTACHED IS A TRUE AND CORRECT COPY OF THE CERTIFICATE OF
AMENDMENT OF "PURE TECH INTERNATIONAL, INC.", FILED IN THIS OFFICE ON THE
SEVENTEENTH DAY OF SEPTEMBER, A.D. 1991, AT 12 O'CLOCK P.M.
[seal of Secretary's Office, Delaware]
/s/Edward J. Freel
------------------------------
Edward J. Freel, Secretary of State
2101655 8100 AUTHENTICATION: 8932690
981067439 DATE: 02-20-98
STATE OF DELAWARE
SECRETARY OF STATE
DIVISION OF CORPORATIONS
FILED 12:00 PM 09/17/1991
912605260 - 2101655
CERTIFICATE OF AMENDMENT OF THE
CERTIFICATE OF INCORPORATION
OF
PURE TECH INTERNATIONAL, INC.
Pure Tech International, Inc., a corporation organized and existing
under and by virtue of the General Corporation Law of the State of Delaware does
hereby certify:
1. The name of the corporation is Pure Tech International, Inc. Its
certificate of incorporation was filed on September 16, 1986.
2. Article FOURTH of the certificate of incorporation is amended in its
entirety to read as follows:
"(a) The aggregate number of shares which the Corporation shall have
the authority to issue is 90,400,000, which are divided into 60,000,000 shares
of Common Stock, par value $.01 per share, 10,400,000 shares of Class A Common
Stock, par value $.01 par share, and 20,000,000 shares of Preferred Stock, par
value of $.01 per share.
(b) Class A Common Stock. Shares of Common Stock shall be identical to
shares of Class A Common Stock for all purposes on a share for share
basis. The Common Stock and the Class A Common Stock shall vote
together as one class, and not as separate classes. Shares of Class A
Common Stock shall be convertible by the respective holders thereof
into shares of Common Stock at any time on a share for share basis, and
upon the sale or transfer of any Class A Common Stock, or the death of
the holder thereof, such conversion shall occur automatically.
(c) Preferred Stock. (1) Shares of Preferred Stock may be issued from
time to time in one or more series as may from time to time be determined by the
Board of Directors, each of said series to be distinctly designated. All shares
of any one series of Preferred Stock shall be alike in every particular, except
that there may be different dates from which dividends, if any, thereon shall be
cumulative, if made cumulative. The voting powers and the preferences and
relative, participating, optional and other special rights of each such series,
and the qualifications, limitations or restrictions thereof, if any, may differ
from those of any and all other series at any time outstanding; and the Board of
Directors of the Corporation is hereby expressly granted authority to fix by
resolution or resolutions adopted prior to the issuance of any shares of a
particular series of Preferred Stock, the voting powers and the designation,
preferences and relative, optional and other special rights, and the
qualifications, limitations and restrictions of such series, including, but
without limiting the generality of the foregoing, the following:
(A) The distinctive designation of, and the number of shares of
Preferred Stock which shall constitute such series, which number may be
increased (except where otherwise provided by the Board of Directors) or
decreased (but not below the number of shares thereof then outstanding) from
time to time by like action of the Board of Directors;
(B) The rate and times at which, and the terms and conditions on which,
dividends, if any, on Preferred Stock of such series shall be paid, the extent
of the preference or relation, if any, of such dividends to the dividends
payable on any other class or classes, or series of the same or other classes of
stock and whether such dividends shall be cumulative or non-cumulative;
(C) The right, if any, of the holders of Preferred Stock of such series
to convert the same into or exchange the same for, shares of any other class or
classes or of any series of the same or any other class or classes of stock of
the Corporation and the terms and conditions of such conversion or exchange;
(D) Whether or not Preferred Stock of such series shall be subject to
redemption, and the redemption price or prices and the time or times at which,
and the terms and conditions on which, Preferred Stock of such series may be
redeemed;
(E) The rights, if any, of the holders of Preferred Stock of such
series upon the voluntary or involuntary liquidation, merger,
consolidation, distribution or sale of assets, dissolution or winding-up,
of the Corporation;
(F) The terms of the sinking fund or redemption or purchase account, if
any, to be provided for the Preferred Stock of such series; and
(G) The voting powers, if any, of the holders of such series of
Preferred Stock which may, without limiting the generality of the foregoing,
include the right, voting as a series or by itself or together with other series
of Preferred Stock or all series of Preferred Stock as a class, to elect one or
more directors of the Corporation if there shall have been a default in the
payment of dividends on any one or more series of Preferred Stock or under such
other circumstances and on such conditions as the Board of Directors may
determine.
(2) The relative powers, preferences and rights of each series of
Preferred Stock in relation to the powers, preferences and rights of each other
series of Preferred Stock shall, in each case, be as fixed from time to time by
the Board of Directors in the resolution or resolutions adopted pursuant
to authority granted in paragraph (e)(i) of this Paragraph FOURTH and the
consent, by class or series vote or otherwise, of the holders of such of
the series of Preferred Stock as are from time to time outstanding shall
not be required for the issuance by the Board of Directors of any other
series of Preferred Stock whether or not the powers, preferences and rights
of such other series shall be fixed by the Board of Directors as senior to,
or on a parity with, the powers, preferences and rights of such outstanding
series, or any of them; provided, however, that the Board of Directors may
provide in the resolution or resolutions as to any series of Preferred
Stock adopted pursuant to paragraph (c)(1) of this Paragraph FOURTH that
the consent of the holders of a majority (or such greater proportion as
shall be therein fixed) of the outstanding shares of such series voting
therein shall be required for the issuance of any or all other series of
Preferred Stock.
(3) Subject to the provisions of subparagraph 2 of this paragraph (c),
shares of Common Stock or any series of Preferred Stock may be issued
from time to time as the Board of Directors of the Corporation shall
determine and on such terms and for such consideration as shall be
fixed by the Board of Directors.
(4) The authorized amount of shares of Common Stock and of Preferred
Stock may, without a class or series vote, be increased or decreased from time
to time by the affirmative vote of the holders of a majority of the stock of the
Corporation entitled to vote thereon."
3. The aforesaid amendment was adopted in accordance with the
provisions of Section 242 of the Delaware General Corporation Law.
IN WITNESS WHEREOF, the undersigned hereby executes this document and
affirms that the facts set forth herein are true under the penalties of perjury
this 17th day of September, 1991.
/s/ David C. Katz
----------------------------
David C. Katz, President
ATTEST:
/s/James W. Lucas
- -----------------------------
James Lucas Ass't. Secretary
State of Delaware
Office of the Secretary of State PAGE 1
I, EDWARD J. FREEL, SECRETARY OF STATE OF THE STATE OF DELAWARE, DO
HEREBY CERTIFY THE ATTACHED IS A TRUE AND CORRECT COPY OF THE CERTIFICATE OF
MERGER, WHICH MERGES:
"PURE TECH NEWCO (PTI), INC.", A DELAWARE CORPORATION, WITH AND INTO
"PURE TECH INTERNATIONAL, INC." UNDER THE NAME OF "PTI PLASTICS, INC.", A
CORPORATION ORGANIZED AND EXISTING UNDER THE LAWS OF THE STATE OF DELAWARE, AS
RECEIVED AND FILED IN THIS OFFICE THE THIRTY-FIRST DAY OF JULY, A.D. 1995, AT
4:29 O'CLOCK P.M.
A CERTIFIED COPY OF THIS CERTIFICATE HAS BEEN
FORWARDED TO THE KENT COUNTY RECORDER OF DEEDS FOR
RECORDING.
[seal of Secretary's Office, Delaware]
/s/Edward J. Freel
-----------------------------------
Edward J. Freel, Secretary of State
2101655 8100M AUTHENTICATION: 7593359
DATE: 08 01 95
STATE OF DELAWARE
SECRETARY OF STATE
DIVISION OF CORPORATIONS
FILED 04:29 PM 07/31/1996
950171675 - 2101655
CERTIFICATE OF MERGER
of
PURE TECH NEWCO (PTI), INC.
INTO
PURE TECH INTERNATIONAL, INC.
The undersigned corporation organized and existing under and
by virtue of the General Corporation Law of Delaware,
DOES HEREBY CERTIFY:
FIRST: That the name and state of each of the constituent corporations
of the merger is as follows:
NAME STATE OF INCORPORATION
Pure Tech International, Inc. Delaware
Pure Tech Newco (PTI), Inc. Delaware
SECOND: That an agreement of merger between the parties to the merger
has been approved, adopted, certified, executed and acknowledged by each of the
constituent corporations in accordance with the requirements of section 251 of
the General Corporation Law of Delaware.
THIRD: That the name of the surviving corporation of the
merger is PURE TECH INTERNATIONAL, INC.
FOURTH: a) That the Certificate of Incorporation of Pure Tech
International, Inc., a Delaware corporation which will survive the merger, shall
be the Certificate of Incorporation of the surviving corporation.
b) That Article FIRST of the Certificate of Incorporation is
hereby amended to read as follows:
"The name of the corporation is PTI PLASTICS, INC."
FIFTH: That the executed Agreement of Merger is on file at the
principal place of business of the surviving corporation, the address of which
is 65 Railroad Avenue, Ridgefield, NJ 07657.
SIXTH: That a copy of the Agreement of Merger will be furnished by the
surviving corporation, on request and without cost, to any stockholder of any
constituent corporation.
SEVENTH: That this Certificate of Merger shall be affected
on July 31, 1995.
Dated: July 26, 1995
PURE TECH INTERNATIONAL, INC.
By: /s/David C. Katz
-------------------------------
President
State of Delaware
Office of the Secretary of State PAGE 1
I, DANIEL R. GRIFFITH, ACTING SECRETARY OF STATE OF THE STATE OF
DELAWARE, DO HEREBY CERTIFY THE ATTACHED IS A TRUE AND CORRECT COPY OF THE
CERTIFICATE OF INCORPORATION OF "PURE TECH INTERNATIONAL, INC." FILED IN THIS
OFFICE ON THE SIXTEENTH DAY OF SEPTEMBER, A.D. 1986, AT 9 O'CLOCK A.M.
[seal of Secretary's Office, Delaware]
/s/Daniel R. Griffith
------------------------------
Acting Secretary of State
930085439 Authentication: *3738494
Date: 01/08/1993
CERTIFICATE OF INCORPORATION
FILED
OF SEP 16 1986
/s/ SECRETARY OF STATE
PURE TECH INTERNATIONAL, INC.
The undersigned, being of legal age, in order to form a corporation
under and pursuant to the laws of the State of Delaware, does hereby set forth
as follows:
FIRST: The name of the corporation is
PURE TECH INTERNATIONAL, INC.
SECOND: The address of the initial registered office and registered
agent in this state is c/o United Corporate Services, Inc., 410 South State
Street, in the City of Dover, County of Kent, State of Delaware 19901 and the
name of the registered agent at said address is United Corporate Services, Inc.
THIRD: The purpose of the corporation is to engage in any lawful act or
activity for which corporations may be organized under the corporation laws of
the State of Delaware.
FOURTH: The corporation shall be authorized to issue the following
shares:
Class Number of Shares Par Value
Common 10,000,000 $.01
FIFTH: The name and address of the incorporator are as follows:
Name Address
Ray A. Barr 9 East 40th Street
New York, New York 10016
SIXTH: The following provisions are inserted for the management of the
business and for the conduct of the affairs of the corporation, and for further
definition, limitation and regulation of the powers of the corporation and of
its directors and stockholders:
(1) The number of directors of the corporation shall be such as from
time to time shall be fixed by, or in the manner provided in the by-laws.
Election of directors need not be by ballot unless the by-laws so provide. (2)
The Board of Directors shall have power without the assent or vote of the
stockholders:
(a) To make, alter, amend, change, add to or repeal the By-Laws of the
corporation; to fix and vary the amount to be reserved for any proper
purpose; to authorize and cause to be executed mortgages and liens upon
all or any part of the property of the corporation; to determine the
use and disposition of any surplus or net profits; and to fix the times
for the declaration and payment of dividends.
(b) To determine from time to time whether, and to what times and
places, and under what conditions the accounts and books of the corporation
(other than the stockledger) or any of them, shall be open to the inspection of
the stockholders.
(3) The directors in their discretion may submit any contract or act
for approval or ratification at any annual meeting of the stockholders or at any
meeting of the stockholders called for the purpose of considering any such act
or contract, and any contract or act that shall be approved or be ratified by
the vote of the holders of a majority of the stock of the corporation which is
represented in person or by proxy at such meeting and entitled to vote thereat
(provided that a lawful quorum of stockholders be there represented in person or
by proxy) shall be as valid and as binding upon the corporation and upon all the
stockholders as though it had been approved or ratified by every stockholder of
the corporation, whether or not the contract or act would otherwise be open to
legal attack because of directors' interest, or for any other reason.
(4) In addition to the powers and authorities hereinbefore or by
statute expressly conferred upon them, the directors are hereby empowered to
exercise all such powers and do all such acts and things as may be exercised or
done by the corporation; subject, nevertheless, to the provisions of the
statutes of Delaware, of this certificate, and to any by-laws from time to time
made by the stockholders; provided, however, that no by-laws so made shall
invalidate any prior act of the directors which would have been valid if
such by-law had not been made.
SEVENTH: No director shall be liable to the corporation or any of
its stockholders for monetary damages for breach of fiduciary duty as a
director, except with respect to (1) a breach of the director's duty of
loyalty to the corporation or its stockholders, (2) acts or omissions not
in good faith or which involve intentional misconduct or a knowing
violation of law, (3) liability under Section 174 of the Delaware General
Corporation Law or (4) a transaction from which the director derived an
improper personal benefit, it being the intention of the foregoing
provision to eliminate the liability of the corporation's directors to the
corporation or its stockholders to the fullest extent permitted by Section
102(b)(7) of the Delaware General Corporation Law, as amended from time to
time. The corporation shall indemnify to the fullest extent permitted by
Sections 102(b)(7) and 145 of the Delaware General Corporation Law, as
amended from time to time, each person that such Sections grant the
corporation the power to indemnify.
EIGHTH: Whenever a compromise or arrangement is proposed between this
corporation and its creditors or any class of them and/or between this
corporation and its stockholders or any class of them, any court of equitable
jurisdiction within the State of Delaware, may, on the application in a summary
way of this corporation or of any creditor or stockholder thereof or on the
application of any receiver or receivers appointed for this corporation under
the provisions of Section 291 of Title 8 of the Delaware Code or on the
application of trustees in dissolution or of any receiver or receivers appointed
for this corporation under the provisions of Section 279 Title 8 of the Delaware
Code order a meeting of the creditors or class of creditors, and/or of the
stockholders or class of stockholders of this corporation, as the case may be,
to be summoned in such manner as the said court directs. If a majority in number
representing three-fourths (3/4) in value of the creditors or class of
creditors, and/or of the stockholders or class of stockholders of this
corporation, as the case may be, agree to any compromise or arrangement and to
any reorganization of this corporation as consequence of such compromise or
arrangement, the said compromise or arrangement and the said reorganization
shall, if sanctioned by the court to which the said application has been made,
be binding on all the creditors or class of creditors, and/or on all the
stockholders or class of stockholders, of this corporation, as the case may be,
and also on this corporation.
NINTH: The corporation reserves the right to amend, alter, change
or repeal any provision contained in this certificate of incorporation in
the manner now or hereafter prescribed by law, and all rights and powers
conferred herein on stockholders, directors and officers are subject to
this reserved power.
IN WITNESS WHEREOF, the undersigned hereby executes this document
and affirms that the facts set forth herein are true under the penalties of
perjury this fifteenth day of September, 1986.
/s/Ray A. BARR
------------------------------
Ray A. Barr, Incorporator
State of Delaware
PAGE 1
Office of the Secretary of State
I, DANIEL R. GRIFFITH, ACTING SECRETARY OF STATE OF THE STATE OF
DELAWARE, DO HEREBY CERTIFY THE ATTACHED IS A TRUE AND CORRECT COPY OF THE
CERTIFICATE OF AMENDMENT OF "PURE TECH INTERNATIONAL, INC." FILED IN THIS
OFFICE ON THE TWENTY-FOURTH DAY OF DECEMBER, A.D. 1986, AT 9 O'CLOCK A.M.
* * * * * * * *
[Seal] /s/Daniel R. Griffith
----------------------------
ACTING SECRETARY OF STATE
930085439 AUTHENTICATION: *3738495
DATE: 01/08/1993
CERTIFICATE OF AMENDMENT FILED
OF CERTIFICATE OF INCORPORATION OF DEC 24 1984 9AM
PURE TECH INTERNATIONAL, INC. /s/
SECRETARY OF STATE
Pure Tech International, Inc., a corporation organized and
existing under and by virtue of the General Corporation Law of the State of
Delaware does hereby certify:
First: That the Board of Directors of said corporation, at a meeting
duly convened and held, adopted a resolution proposing and declaring advisable
the following amendment to the Certification of Incorporation of said
corporation:
RESOLVED, that the Certificate of Incorporation of the corporation be
amended by adding Article TENTH which shall read as follows:
Article TENTH
Each holder of any of the shares of the corporation shall be
entitiled to a preemptive right to purchase or subscribe for (i)
any unissued shares of any class of the corporation, (ii) any
additional shares of any class to be issued by reason of any
increase of the authorized capital stock of the corporation of any
class, (iii) bonds, certificates of indebtedness, debentures or
other securities convertible into or exchangeable for stock of the
corporation, and (iv) options, warrants or other rights to
purchase stock and other securities of any class, whether said
unissued stock or other securities shall be issued for cash,
property, or any other lawful consideration, and, without
limitation of the foregoing, shall have such a preemptive right
with respect to shares or other securities offered for sale if
they (a) are issued or optioned by the board of directors to
effect a merger or consolidation or for a consideration other than
cash; or (b) are shares or other securities theretofore reacquired
by the corporation after having been duly issued and not restored
to the status of authorized but unissued shares; however, there
shall be no preemptive right with respect to stock options granted
to employees of the corporation and shares of capital stock issued
pursuant to such stock options, provided that such stock options
have received the unanimous consent of the entire board of
directors of the corporation and the total stock options,
collectively, granted by the board of directors do not exceed
200,000 shares. Provided, further, that there shall be no
preemptive rights with respect to any public offering or issue of
shares to the public pursuant to a registration statement under
the Securities Act of 1933.
Second: That in lieu of a meeting and vote of stockholders, the
stockholders have given written consent to said amendment in accordance
with provisions of Section 228 of the General Corporation Law of the State
of Delaware and said written consent was filed with the corporation.
Third: That the aforesaid amendment was duly adopted in
accordance with the applicable provisions of Sections 242 and 228 of Title
8 of the Delaware Code of 1953.
Fourth: That the capital of said corporation will not be reduced
under or by reason of said amendment.
IN WITNESS WHEREOf, said corporation this certificate to be signed
by Joon K. Kim, its President and Joon K. Kim, its Secretary this 22 day
of December, 1986.
/s/Joon K. Kim
-----------------------
Joon K. Kim, President
/s/Joon K. Kim
-----------------------
Joon K. Kim, Secretary
STATE OF MINNESOTA )
)ss
COUNTY OF [Hennepin])
This instrum&nt was acknowledged before me on December 22, 1986, by
Joon K. Kim as President of Pure Tech International, Inc. to be the act of deed
of said corporation.
/s/Dave F. Senger
------------------------
Notary Public
STATE OF MINNESOTA )
)ss
COUNTY 0F [Hennepin])
This instrument was acknowledged before me on December 22, 1986,
by Joon K. Kim, as Secretary of Pure Tech International, Inc. to be the
act and deed of said corporation.
/s/Dave F. Senger
------------------------
Notary Public
State Of Delaware
PAGE 1
Office of the Secretary of State
I, DANIEL R. GRIFFITH, ACTING SECRETARY OF STATE OF THE STATE OF
DELAWARE, DO HEREBY CERTIFY THE ATTACHED IS A TRUE AND CORRECT COPY OF THE
CERTIFICATE OF AMENDMENT OF "PURE TECH INTERNATIONAL, INC." FILED IN THIS
OFFICE ON THE TWELFTH DAY OF OCTOBER, A.D. 1988, AT 9 O'CLOCK A.M.
* * * * * * * * * *
[seal of the Secretary's Office, Delaware]
930085439 /s/Daniel R. Griffith
-----------------------------
ACTING SECRETARY OF STATE
AUTHENTICATION: *3738496
DATE: 01/08/1993
CERTIFICATE OF AMENDMENT OF THE FILE
CERTIFICATE OF INCORPORATION OCT 12 1988 9AM
OF /s/
PURE TECH INTERNATIONAL, INC. SECRETARY OF STATE
It is hereby certified as follows:
1. The name of the corporation is Pure Tech International, Inc. Its
certificate of incorporation was filed on September 16, 1986.
2. Article FOURTH of the certificate of incorporation is amended to
read as follows:
The corporation shall be authorized to issue 25,000,000 shares of
Common Stock, par value $.01 per share, and 6,000,000 shares of
Class A Common Stock, par value $.01 per share. Shares of Common
Stock shall be identical to shares of Class A Common Stock for all
purposes on a share for share basis, except that the Common Stock
shall be entitled to one vote per share on each matter on which is
voted on by stockholders, and the Class A Common Stock shall have
five votes per share on each matter voted on by shareholders. The
Common Stock and the Class A Common Stock shall vote together as
one class, and not as separate classes. Shares of Class A Common
Stock shall be convertible by the respective holders thereof into
shares of Common Stock at any time on a share for share basis, and
upon the sale or transfer of any Class A Common Stock after the
effectiveness of any public offering by the corporation under the
Securities Act of 1933, or the death of the holder thereof after
such effectiveness, such conversion shall occur automatically.
3. All shares of common stock which are outstanding on the date
that this Certificate of Amendment is filed are hereby converted into
shares of Class A Common Stock on the basis of one share of Class A Common
Stock for each share of common stock which is outstanding on the date that
this Certificate of Amendment is filed.
4. The amendment was adopted in accordance with the provisions of
Section 242 of the Delaware General Corporation Law.
/s/David C. Katz
-----------------------------
David C. Katz, President
Attest: /s/Yitz Grossman
-----------------------------
Yitz Grossman, Secretary
State of Delaware
PAGE 1
Office of the Secretary of State
I, DANIEL R. GRIFFITH, ACTING SECRETARY OF STATE OF THE STATE OF
DELAWARE, DO HEREBY CERTIFY THE ATTACHED IS A TRUE AND CORRECT COPY OF
CERTIFICATE OF CHANGE OF ADDRESS OF REGISTERED AGENT AS IT APPLIES TO "PURE
TECH INTERNATIONAL, INC." AS RECEIVED AND FILED IN THIS OFFICE ON THE SIXTH
DAY OF MARCH, A.D. 1989, AT 8:30 O'CLOCK A.M.
* * * * * * * *
[seal of the Secretary's Office, Delaware]
/s/Daniel R. Griffith
-------------------------------
930085439 ACTING SECRETARY OF STATE
AUTHENTICATION: *3738497
DATE: 01/08/1993
CERTIFICATE OF CHANCE OF ADDRESS OF
REGISTERED OFFICE AND REGISTERED AGENT
OF
UNITED CORPORATE SERVICES, INC.
Pursuant to Section 134 of Title 8 of the Delaware Code
To:
DEPARTMENT OF STATE
Division of Corporations
Townsend Building
Dover, Delaware 19901
Pursuant to the provisions of Section 134 of Title 8 of the Delaware
Code, the undersigned Agent for service of process, in order to change the
address of the registered office of the corporation for which it is a
registered agent, hereby certifies that:
1. The name of the registered agent is UNITED CORPORATE SERVICES,
INC.
2. The address of the old registered office was:
410 South State Street
County of Kent
Dover, Delaware 19901
3. The address to which the registered office is to be changed
is:
15 East North Street
County of Kent
Dover, Delaware 19901
4. The names of the corporations represented by said agent are
set forth on the list annexed to this certificate and made a
part hereof by reference.
5. The new address will be effective upon filing of this
document.
IN WITNESS WHEREOF, said agent has caused this certificate to be signed on
its behalf by its President and Secretary this 6th day of March, A.D. 1989.
UNITED CORPORATE SERVICES, INC.
/s/Ray A. Barr
--------------------------------
Ray A. Barr, President
ATTEST:
/s/Robert F. Gilhooley
- -------------------------------
Robert F. Gilhooley, Secretary
STATE Of DELAWARE - DIVISION OF CORPORATIONS
CHANGE OF ADDRESS FILING FOR
UNITED CORPORATE SERVICES, INC. AS OF MARCH 6, 1989
** DOMESTIC **
2098077 ESSENCE BEAUTY EMPORIUM,INC. 08/05/1986 D DE
2098199 HARMON ASSIGNOR LIMITED PARTNER, INC. 08/06/1986 D DE
2098546 LETS YACHTING CORP. 08/11/1986 D DE
2098547 FINE FRENCH FOODS, INC. 08/11/1986 D DE
2098548 HARVARD SQUARE LOTTERY SYMPOSIUM, INC. 08/11/1986 D DE
2098634 HUNTER PUBLISHING COMPANY, INC. 08/12/1986 D DE
2098756 DFS ENTERTAINMENT CORPORATION 08/13/1986 D DE
2098885 PROFESSIONAL VENTURES, INC. 08/14/1986 D DE
2098886 RB SPRINGDALE CORP. 08/14/1986 D DE
2098944 SOUTHWEST INTERNATIONAL INVESTMENTS, INC. 08/14/1986 D DE
2099090 DOGWOOD PUBLISHERS INC. 08/18/1986 D DE
2099093 OAK CAPITAL CORP. 08/18/1986 D DE
2099323 INNOVATIVE MARBLE & TILE INCORPORATED 08/20/1986 D DE
2099676 PRUDENTIAL FUNDING INC. 08/22/1986 D DE
2099720 MULTI-LOCAL MEDIA CORPORATION 08/22/1986 D DE
2099786 STARLIGHT ADVERTISING AGENCY, INC. 08/25/1986 D DE
2099796 MASCO SPORTS, INC. 08/25/1986 D DE
2099900 COTE D'AZUR CORP. 08/26/1986 D DE
2099901 HOME HEALTHCARE SHOPPING, INC. 08/26/1986 D DE
2099903 BOXING BENEVOLENT ASSOCIATION, INC. 08/26/1986 D DE
2100143 HOYTS CORPORATION U.S. HOLDINGS INC. 08/28/1986 D DE
2100228 EXECUTIVE RE INC. 08/28/1986 D DE
2100441 TEMPLE APARTMENTS MANAGEMENT CORP. 09/02/1986 D DE
2100518 SPACE TIME ANALYSES, LTD. 09/03/1986 D DE
2100865 CONCORDE USA, INC. 09/08/1986 D DE
2100867 AVIATION SERVICE, INC. 09/08/1986 D DE
2100869 CABLEVISION INDUSTRIES Of TENNESSEE, INC. 09/08/1986 D DE
2100993 PETROQUEST INTERNATIONAL INC. 09/09/1986 D DE
2101127 STABROOK TECHNOLOGIES CORPORATION 09/10/1986 D DE
2101235 M & M FERROUS AMERICA, LTD. 09/11/1986 D DE
2101250 RICHCLIFF CORPORATION 09/11/1986 D DE
2101255 R.A. DESIGN INTERNATIONAL INC. 09/11/1986 D DE
2101257 AR PRODUCTIONS, INC. 09/11/1986 D DE
2101644 A.A. TRAVEL INC. 09/16/1986 D DE
2101655 PURE TECH INTERNATIONAL, INC. 09/16/1986 D DE
2101755 CSII OF MONTGOMERY, INC. 09/17/1986 D DE
2101757 PITTSFIELD CELLULAR COMMUNICATIONS CORP. 09/17/1986 D DE
2101759 CSII OF BATON ROUGE, INC. 09/17/1986 D DE
2101880 DEDANKA CORP. 09/18/1986 D DE
2102002 P & P MEDICAL DEVELOPMENT CORP. 09/19/1986 D DE
2102335 VAN BESTA SALES CO., INC. 09/23/1986 D DE
2102337 ENCORE COMMUNICATIONS, INC. 09/23/1986 D DE
2102481 THE EQUIVEST GROUP, INC. 09/24/1986 D DE
2102483 PHOTOVISION, INC. 09/24/1986 D DE
2102602 ISC EDUCATIONAL SYSTEMS, INC. 09/25/1986 D DE
2102649 BILATRIAL TRADING CORP. 09/25/1986 D DE
2102716 ISC TECHNOLOGIES, INC. 09/25/1986 D DE
State of Delaware
PAGE 1
Office of the Secretary of State
I, DANIEL R. GRIFFITH, ACTING SECRETARY OF STATE OF THE STATE OF
DELAWARE, DO HEREBY CERTIFY THE ATTACHED IS A TRUE AND CORRECT COPY OF THE
CERTFICATE OF AMENDMENT OF "PURE TECH INTERNATIONAL, INC." FILED IN THIS
OFFICE ON THE SIXTEENTH DAY OF MARCH, A.D. 1989, AT 9 O'CLOCK A.M.
* * * * * * * * * *
/s/Daniel R. Griffith
930085439 -----------------------------
ACTING SECRETARY OF STATE
AUTHENTICATION: *3738498
DATE: 01/08/1993
CERTIFICATE OF AMENDMENT OF THE FILED
CERTIFICATE OF INCORPORATION 9AM
OF MAR 16 1988
PURE TECH INTERNATIONAL, INC. DIV. OF CORPORATIONS
It is hereby certified as follows:
1. The name of the corporation is Pure Tech International, Inc. Its
certificate of incorporation was filed on September 16, 1986.
2. Article FOURTH of the certificate of incorporation is amended to
read as follows:
The corporation shall be authorized to issue 50,000,000 shares of
Common Stock, par value $.01 per share, and 10,400,000 shares of
Class A Common Stock, par value $.01 per share. Shares of Common
Stock shall be identical to shares of Class A Common Stock for all
purposes on a share for share basis, except that the Common Stock
shall be entitled to one vote per share on each matter on which is
voted on by stockholders, and the Class A Common Stock shall have
five votes per share on each matter voted on by shareholders. The
Common Stock and the Class A Common Stock shall vote together as
one class, and not as separate classes. Shares of Class A Common
Stock shall be convertible by the respective holders thereof into
shares of Common Stock at any time on a share for share basis, and
upon the sale or transfer of any Class A Common Stock after the
effectiveness of any public offering by the corporation under the
Securities Act of 1933, or the death of the holder thereof after
such effectiveness, such conversion shall occur automatically.
3. The Amendment was adopted in accordance with the provisions of
Section 242 of the Delaware General Corporation Law.
/s/Werner Haase
- -----------------------------------
Werner Haase, Vice President
Attest: /s/Yitz Grossman
---------------------------
Yitz Grossman, Secretary
State of Delaware
PAGE 1
Office of the Secretary of State
I, DANIEL R. GRIFFITH, ACTING SECRETARY OF STATE OF THE STATE OF
DELAWARE, DO HEREBY CERTIFY THE ATTACHED IS A TRUE AND CORRECT COPY OF THE
CERTIFICATE OF AMENDMENT OF "PURE TECH INTERNATIONAL, INC." FILED IN THIS
OFFICE ON THE THIRTIETH DAY OF MARCH, A.D. 1989, AT 9 O'CLOCK A.M.
* * * * * * * * * *
[seal of Secretary's Office, Delaware]
/s/Daniel R. Griffith
930085439 ----------------------------
ACTING SECRETARY OF STATE
AUTHENTICATION: *3738499
DATE: 01/08/1993
CERTIFICATE OF AMENDMENT FILED
OF MAR 30 1989 9AM
CERTIFICATE OF INCORPORATION /s/
OF SECRETARY OF STATE
PURE TECH INTERNATIONAL, INC.
It is hereby certified as follows:
1. The name of the corporation is Pure Tech International, Inc. Its
Certificate of Incorporation was filed on September 16, 1986.
2. Article TENTH of the Certificate of Incorporation is hereby
deleted. With the same force and effect as if it has never been set forth
in the Certificate of Incorporation, so that, among other things, any
preemptive rights heretofore accrued are extinguished hereby.
3. The amendment was adopted in accordance with the provisions of
Sections 228 and 242 of the Delaware General Corporation Law.
/s/David Katz
--------------------------
David Katz, President
/s/Yitz Grossman
--------------------------
Yitz Grossman, Secretary
State of Delaware
PAGE 1
Office of the Secretary of State
I, DANIEL R. GRIFFITH, ACTING SECRETARY OF STATE OF THE STATE OF
DELAWARE, DO HEREBY CERTIFY THE ATTACHED IS A TRUE AND CORRECT COPY OF THE
CERTIFICATE OF AMENDMENT OF "PURE TECH INTERNATIONAL, INC." FILED IN THIS
OFFICE ON THE SEVENTEENTH DAY OF SEPTEMBER, A.D. 1991, AT 12 O'CLOCK P.M.
* * * * * * * *
[Seal] /s/Daniel R. Griffith
-------------------------------
930085439 ACTING SECRETARY OF STATE
AUTHENTICATION: *3738500
DATE: 01/08/1993
SECRETARY OF STATE
DIVISION OF CORPORATIONS
FILED 12:00 PM 09/17/1991
912605260 - 2101655
CERTIFICATE OF AMENDMENT OF THE
CERTIFICATE OF INCORPORATION
OF
PURE TECH INTERNATIONAL, INC.
Pure Tech International, Inc., a corporation organized and existing
under and by virtue of the General Corporation Law of the State of Delaware
does hereby certify:
1. The name of the corporation is Pure Tech International, Inc. Its
certificate of incorporation was filed on September 16, 1986.
2. Article FOURTH of the certificate of incorporation is amended in its
entirety to read as follows:
"(a) The aggregate number of shares which the Corporation shall have the
authority to issue is 90,400,000, which are divided into 60,000,000 shares of
Common Stock, par value $.01 per share, 10,400,000 shares of Class A Common
Stock, par value $.01 par share, and 20,000,000 shares of Preferred Stock, par
value of $.01 per share.
(b) Class A Common Stock. Shares of Common Stock shall be identical to
shares of Class A Common Stock for all purposes on a share for share basis. The
Common Stock and the Class A Common Stock shall vote together as one class, and
not as separate classes. Shares of Class A Common Stock shall be convertible by
the respective holders thereof into shares of Common Stock at any time on a
share for share basis, and upon the sale or transfer of any Class A Common
Stock, or the death of the holder thereof, such conversion shall occur
automatically.
(c) Preferred Stock. (1) Shares of Preferred Stock may be issued from time
to time in one or more series as may from time to time be determined by the
Board of Directors, each of said series to be distinctly designated. All shares
of any one series of Preferred Stock shall be alike in every particular, except
that there may be different dates from which dividends, if any, thereon shall be
cumulative, if made cumulative. The voting powers and the preferences and
relative, participating, optional and other special rights of each such series,
and the qualifications, limitations or restrictions thereof, if any, may differ
from those of any and all other series at any time outstanding; and the Board of
Directors of the Corporation is hereby expressly granted authority to fix by
resolution or resolutions adopted prior to the issuance of any shares of a
particular series of Preferred Stock, the voting powers and the designation,
preferences and relative, optional and other special rights, and the
qualifications, limitations and restrictions of such series, including, but
without limiting the generality of the foregoing, the following:
(A) The distinctive designation of, and the number of shares of Preferred
Stock which shall constitute such series, which number may be increased (except
where otherwise provided by the Board of Directors) or decreased (but not below
the number of shares thereof then outstanding) from time to time by like action
of the Board of Directors;
(B) The rate and times at which, and the terms and conditions on which,
dividends, if any, on Preferred Stock of such series shall be paid, the extent
of the preference or relation, if any, of such dividends to the dividends
payable on any other class or classes, or series of the same or other classes of
stock and whether such dividends shall be cumulative or non-cumulative;
(C) The right, if any, of the holders of Preferred Stock of such series to
convert the same into or exchange the same for, shares of any other class or
classes or of any series of the same or any other class or classes of stock of
the Corporation and the terms and conditions of such conversion or exchange;
(D) Whether or not Preferred Stock of such series shall be subject to
redemption, and the redemption price or prices and the time or times at which,
and the terms and conditions on which, Preferred Stock of such series may be
redeemed;
(E) The rights, if any, of the holders of Preferred Stock of such series
upon the voluntary or involuntary liquidation, merger, consolidation,
distribution or sale of assets, dissolution or winding-up, of the Corporation;
(F) The term of the sinking fund or redemption or purchase account, if
any, to be provided for the Preferred Stock of such series; and
(G) The voting powers, if any, of the holders of such series of
Preferred Stock which may, without limiting the generality of the
foregoing, include the right, voting as a series or by itself or together
with other series of Preferred Stock or all series of Preferred Stock as a
class, to elect one or more directors of the Corporation if there shall
have been a default in the payment of dividends on any one or more series
of Preferred Stock or under such other circumstances and on such conditions
as the Board of Directors may determine.
(2) The relative powers, preferences and rights of each series of
Preferred Stock in relation to the powers, preferences and rights
of each other series of Preferred Stock shall, in each case, be as
fixed from time to time by the Board of Directors in the
resolution or resolutions adopted pursuant to authority granted in
paragraph (e)(1) of this Paragraph FOURTH and the consent, by
class or series vote or otherwise, of the holders of such of the
series of Preferred Stock as are from time to time outstanding
shall not be required for the issuance by the Board of Directors
of any other series of Preferred Stock whether or not the powers,
preferences and rights of such other series shall be fixed by the
Board of Directors as senior to, or on a parity with, the powers,
preferences and rights of such outstanding series, or any of them;
provided, however, that the Board of Directors may provide in the
resolution or resolutions as to any series of Preferred Stock
adopted pursuant to paragraph (c)(1) of this Paragraph FOURTH that
the consent of the holders of a majority (or such greater
proportion as shall be therein fixed) of the outstanding shares
of such series voting therein shall be required for the issuance
of any or all other series of Preferred Stock.
(3) Subject to the provisions of subparagraph 2 of this paragraph (c),
shares of Common Stock or any series of Preferred Stock may be issued from time
to time as the Board of Directors of the Corporation shall determine and on such
terms and for such consideration as shall be fixed by the Board of Directors.
(4) The authorized amount of shares of Common Stock and of Preferred Stock
may, without a class or series vote, be increased or decreased from time to time
by the affirmative vote of the holders of a majority of the stock of the
Corporation entitled to vote thereon."
3. The aforesaid amendment was adopted in accordance with the provisions
of Section 242 of the Delaware General Corporation Law.
IN WITNESS WHEREOF, the undersigned hereby executes this document and
affirms that the facts set forth herein are true under the penalties of perjury
this 17th day of September, 1991.
/s/ David C. Katz
---------------------------
David C. Katz, President
Attest: /s/ James W. Lucas
---------------------------
James Lucas, Ass't Secretary
State of Delaware
PAGE 1
Office of the Secretary of State
I, DANIEL R. GRIFFITH, ACTING SECRETARY OF STATE OF THE STATE OF
DELAWARE, DO HEREBY CERTIFY THE ATTACHED IS A TRUE AND CORRECT COPY OF THE
CERTIFICATE OF STOCK DESIGNATION OF "PURE TECH INTERNATIONAL, INC." FILED
IN THIS OFFICE ON THE SEVENTEENTH DAY OF SEPTEMBER, A.D. 1991, AT 12:01
O'CLOCK P.M.
* * * * * * * *
[Seal] /s/Daniel R. Griffith
930085439 -------------------------------
ACTING SECRETARY OF STATE
AUTHENTICATION: *3738502
DATE: 01/08/1993
STATE OF DELAWARE
SECRETARY OF STATE
DIVISION OF CORPORATIONS
FILED 12:00 PM 09/17/1991
912605261 - 2101655
CERTIFICATE OF DESIGNATION
OF
PURE TECH INTERNATIONAL, INC.
The undersigned corporation hereby certifies as follows:
FIRST: The name of the corporation is Pure Tech International, Inc.
SECOND: The following resolutions establishing a new series of
Preferred shares were adopted by the Board of Directors in accordance with
Section 151 of the General Corporation Laws of the State of Delaware and
were ratified by the shareholders on September 17, 1991:
RESOLVED, that 13,000,000 of the 20,000,000 Preferred Stock, with
a par value of $.01 dollars per share, are to be designated
Convertible Class A Preferred Stock; and be it further
RESOLVED, that the relative rights, privileges, preferences,
restrictions and/or limitations of those shares designated series
are as follows:
1. The distinctive designation of the series shall be "Convertible
Class A Preferred Stock"; the number of shares of Convertible Class A
Preferred Stock shall be 13,000,000.
2. (a) The holders of the Convertible Class A Preferred Stock in
preference to the holders of Junior Stock (as hereinafter defined) shall be
entitled to receive cash dividends at a rate equal to the lesser of: (i)
$.07 per annum per share or (ii) 7% per annum per share of the fair market
value of a share of Convertible Class A Preferred Stock upon the date of
issuance. The Board of Directors shall determine the fair market value of
the shares of Convertible Class A Preferred Stock upon the date of issuance
and the Board of Directors' determination thereof shall be conclusive and
binding upon all holders at any time of Convertible Class A Preferred
Stock. No Board member who owns or has a right to receive Convertible
Class A Preferred Stock shall vote upon such determination. The Board will
notify holders of Convertible Class A Preferred Stock of the dividend rate
no later than 30 days after the issuance of the Convertible Class A
Preferred Stock. All dividends will be issuable only out of funds legally
available therefor when and as declared by the Board of Directors.
Dividends shall accrue commencing October 1, 1991 to the holders of record
each October 1, and shall be payable for each twelve month period ending
September 30 on the first business day of the following November commencing
November 2, 1992. Such dividends will be payable for five (5) years and
shall cease to accrue on September 30, 1996. The last payment date shall
be November 1, 1996. Such dividends shall be cumulative from and after
such dates of accrual and payment. Any accumulation of dividends on
Convertible Class A Preferred Stock shall not bear interest. The holders
of Convertible Class A Preferred Stock shall not be entitled to receive any
dividends thereon other than the dividends provided for in this paragraph
2.
(b) Notwithstanding anything to the contrary in subparagraph (a),
dividends on Class A Preferred stock shall be declared if, when and as the
Board of Directors shall in their sole discretion deem advisable, and only
from the net profits or surplus of the corporation as such shall be fixed
and determined by the Board of Directors. The determination of the Board
of Directors at any time of the amount of net profits or surplus available
for dividend shall be binding and conclusive on the holders of all of the
stock of the Corporation at the time outstanding.
(c) So long as any of the Convertible Class A Preferred Stock remains
outstanding, no dividends whatever shall be paid or declared, nor shall any
distribution be made, on any Junior Stock, other than a dividend or distribution
payable in Junior Stock or rights or warrants to purchase Junior Stock, unless
all dividends on the Convertible Class A Preferred Stock for all past dividend
periods shall have been paid and the full dividends thereon for the then current
dividend period shall have been paid or declared and a sum sufficient for the
payment thereof set apart.
3. The Convertible Class A Preferred Stock shall be preferred as to
assets over the Junior Stock so that, in the event of the voluntary or
involuntary liquidation, dissolution or winding-up of this corporation,
the holders of Convertible Class A Preferred Stock shall be entitled to
have set apart for them or to be paid out of the assets of this corporation
(after provision for the holders of Senior Stock), before any distribution
is made to or set apart for the holders of Junior Stock, an amount in cash
equal to the lesser of: (i) $1.00 per share of Convertible Class A
Preferred Stock or (ii) the fair market value per share of Convertible
Class A Preferred Stock on the date of issuance thereof determined in
connection with the provisions of paragraph 2(a)(ii) above, plus all
accrued and unpaid dividends thereon. If, upon such liquidation,
dissolution or winding-up of this corporation, the assets of this
corporation available for distribution to the holders of its stock shall
(after provision for the holders of Senior Stock) be insufficient to permit
the distribution in full of the amounts receivable as aforesaid by the
holders of Convertible Class A Preferred Stock, then all such assets of
this corporation shall be distribluted ratably among the holders of
Convertible Class A Preferred Stock in proportion to the amounts which each
would have been entitled to receive if such assets were sufficient to
permit distribution in full as aforesaid. Neither the consolidation nor
merger of this corporation nor the sale, lease or transfer by this
corporation of all or any part of its assets shall be deemed to be a
liquidation, dissolution or winding-up of this corporation for the purposes
of this paragraph 3.
4. (a) Shares of the Convertible Class A Preferred Stock shall be
convertible at any time, and from time to time, at the option of the holder
thereof into shares of Common Stock, on the basis of one share of Common Stock
for each share of Convertible Class A Preferred Stock, by surrender of a
certificate or certificates for the Convertible Class A Preferred Stock so to be
converted at the then principal office of this corporation (or at such other
place or places as may be designated by this corporation) at any time during
usual business hours, together with written notice that the holder elects to
convert said Convertible Class A Preferred Stock, or a stated number of shares
thereof, in accordance with the provisions of this paragraph. Such notice shall
also state the name or names (with addresses) in which the certificate or
certificates for Common Stock shall be issued.
(b) As promptly as practicable after the surrender for conversion of
any Convertible Class A Preferred Stock this corporation shall deliver or cause
to be delivered to or upon the written order of the holder of such Convertible
Class A Preferred Stock certificates representing the number of shares of Common
Stock issuable upon such conversion, issued in such name or names as such holder
may direct, together with any cash in respect of any fractional interest in a
share of Common Stock issuable upon such conversion. Such conversion shall be
deemed to have been made immediately prior to the close of business on the day
of surrender of the Convertible Class A Preferred Stock for conversion, and the
rights of the holder, as a holder of the stock surrendered for conversion, shall
cease at such time and the person or persons in whose name or names the
certificates for such shares of Common Stock are to be issued shall be treated
for all purposes as having become the record holders thereof at such time. The
certificates representing shares of Common Stock shall contain an appropriate
restrictive legend under the securities law.
(c) The holder of shares of Convertible Class A Preferred Stock which
was surrendered for conversion shall be entitled, on the next dividend
payment date, to receive all dividends which shall have accrued on such
shares effective as of the last dividend accrual date prior to the date
of conversion. No adjustment shall be made for dividends on shares of
Common Stock delivered upon such conversion.
(d) In case any of the following shall occur: (i) any
reclassification or change of the outstanding shares of Common Stock (other
than a change in par value, or from par value to no par value, or from no
par value to par value, or as a result of a subdivision or combination); or
(ii) any consolidation or merger to which this corporation is a party
(other than a consolidation with a subsidiary or a merger of a subsidiary
into this corporation in which consolidation or merger this corporation is
the surviving corporation and which does not result in any reclassification
of, or change in, the outstanding shares of Common Stock), or (iii) any
sale or conveyance to another corporation of the property of this
corporation as an entirety or substantially as an entirety, then, subject
to the provisions of the next paragraph, effective provision shall be made
whereby the holders of the Convertible Class A Preferred Stock then
outstanding shall have the right to convert such Convertible Class A
Preferred Stock into the kind and amount of shares of stock and other
securities and property receivable upon such reclassification, change,
consolidation, merger, sale or conveyance by a holder of the number of
shares of Common Stock issuable upon conversion of such Convertible Class A
Preferred Stock immediately prior to such reclassification, change,
consolidation, merger, sale or conveyance.
(e) This corporation will at all times reserve and keep available out
of its authorized but unissued stock, solely for the purpose of issue upon
conversion of the Convertible Class A Preferred Stock, as provided in this
paragraph, such number of shares of Common Stock as shall from time to time be
sufficient to effect the conversion of all outstanding Convertible Class A
Preferred Stock.
(f) The Board of Directors may require the mandatory conversion of all
or a part of the Convertible Class A Preferred Stock, at any time, or from time
to time, by mailing a copy of notice thereof, postage prepaid, not less than 30
days prior to the date designated for such mandatory conversion, to the holders
of record of the Convertible Class A Preferred Stock, addressed to them at their
respective addresses appearing on the books of the Corporation. In the event of
the mandatory conversion of a part only of the Convertible Class A Preferred
Stock, such mandatory conversion shall be on a pro rata basis. Dividends under
paragraph 2(a) and any other dividends payable on Convertible Class A Preferred
Stock subject to mandatory conversion shall cease accruing as of the date set
forth in the notice of mandatory conversion. The Corporation shall not require
the mandatory conversion of any of its Convertible Class A Preferred Stock
unless full cumulative dividends to such date of conversion shall have been
either paid or declared and a sum sufficient for the payment thereof set apart
for payment on the next annual dividend payment date. If any holder of
Convertible Class A Preferred Stock shall fail to surrender his certificate(s)
therefor for conversion on the date of conversion, the Corporation shall be
authorized to cancel such certificate(s) on the books of the Corporation and to
issue instead certificate(s) for the appropriate amount of Common Stock. Holders
of Convertible Class A Preferred Stock shall cease to have any rights as such
with respect to converted shares of Convertible Class A Preferred Stock from and
after such date of mandatory conversion.
5. Each share of the Convertible Class A Preferred Stock shall have a vote
equal to the voting rights of one share of Common Stock and shall vote together
with the shares of Common Stock as a single class unless otherwise required by
law.
6. The term "Junior Stock" shall mean the Common Stock and those
series of Preferred Stock which, by the terms of the Certificate of
Incorporation or of the instrument by which the Board of Directors, acting
pursuant to authority granted in the Certificate of Incorporation, shall
designate the special rights and limitations of each such class and series
of stock and series of Preferred Stock, shall be subordinate to the
Convertible Class A Preferred Stock in respect of the right of the holders
thereof to receive dividends or to participate in the assets of this
corporation distributable to stockholders upon any liquidation, dissolution
or winding-up of this corporation.
IN WITNESS WHEREOF, the corporation has caused this certificate to be
executed under its corporate seal this 17th day of September, 1991.
PURE TECH INTERNATIONAL, INC.
By: /s/David C. Katz
--------------------------------------
David C. Katz, President
Attest: /s/James Lucas
----------------------------------
James Lucas, Assistant Secretary
State of Delaware
PAGE 1
Office of the Secretary of State
I, DANIEL R. GRIFFITH, ACTING SECRETARY OF STATE OF THE STATE OF
DELAWARE, DO HEREBY CERTIFY THE ATTACHED IS A TRUE AND CORRECT COPY OF THE
CERTIFICATE OF AMENDMENT OF "PURE TECH INTERNATIONAL, INC." FILED IN THIS
OFFICE ON THE SEVENTH DAY OF NOVEMBER, A.D. 1991, AT 9 O'CLOCK A.M.
* * * * * * * *
[Seal] /s/Daniel R. Griffith
930085439 ---------------------------------
ACTING SECRETARY OF STATE
AUTHENTICATION: *3738504
DATE: 01/08/1993
STATE OF DELAWARE
SECRETARY OF STATE
DIVISION OF CORPORATIONS
FILED 09:00 AM 11/07/1991
913115030 - 2101655
CERTIFICATE OF AMENDMENT
OF
CERTIFICATE OF INCORPORATION
OF
PURE TECH INTERNATIONAL, INC.
Pure Tech International, Inc., a corporation organized and existing under
and by virtue of the General Corporation Law of the State of Delaware.
DOES HEREBY CERTIFY:
FIRST: That pursuant to the recommendation of the Board of Directors of
Pure Tech International, Inc., the following resolution amending the
Cerrtificate of Incorporation of said corporation, has been adopted by the
written consent of stockholders of said corporation holding a majority of the
outstanding stock entiteld to vote thereon. The resolution setting forth the
amendment is as follows:
RESOLVED, that the Certificate of Incorporation of this corporation be
amended to provide that the shares of capital stock of this corporation of each
and every class shall be combined on the basis of one (1) share for each five
(5) shares heretofore authorized so that the 90,400,000 shares of capital stock,
$.01 par value, this corporation is authorized to issue, shall be combined into
18,080,000 shares of capital stock, $.05 par value;
and be it further
RESOLVED, that Paragraph 4(a) of the Certificate of Incorporation shall be
amended to read in its entirety as follows:
"(a) The aggregate number of shares which the Corporation shall have the
authority to issue is 18,080,000, which are divided into 12,000,000 shares of
Common Stock, par value $.05 per share, 2,080,000 shares of Class A Common
Stock, par value $.05 per share, and 4,000,000 shares of Preferred Stock, par
value of $.05 per share."
AND BE IT FURTHER RESOLVED, that the introductory paragraph of Article
TENTH of the certificate of incorporation will be further amended to read it its
entirety as follows:
"There is hereby created a series of the Preferred Stock of the
Corporation to consist of 2,600,000 of the 4,000,000 shares of Preferred Stock,
$.05 par value per share, which the Corporation now has authority to issue."
EXHIBIT 3.6
PURE TECH INTERNATIONAL, INC
(a Delaware corporation)
BY-LAWS
ARTICLE I
OFFICES
SECTION 1.1 REGISTERED OFFICE. The registered office shall be
maintained at 32 Loockerman Sq., Suite L-100, in the City of Dover, in the
County of Kent, in the State of Delaware and the Prentice-Hall Corporation
System, Inc. is the registered agent.
SECTION 1.2 OTHER OFFICES. The Corporation may also have other
offices, either within or without the State of Delaware, at such place or
places as the Board of Directors may from time to time appoint or the business
of the Corporation may require.
ARTICLE II
MEETINGS OF STOCKHOLDERS
SECTION 2.1 ANNUAL MEETINGS. The date of the annual meeting of
the stockholders for the election of directors and for the transaction of such
other business as properly may come before such meeting shall be determined by
resolution of the Board of Directors to be a specific day in each year, if
not a legal holiday, and, if a legal holiday, on the next succeeding business
day, at the time and place within or without the State of Delaware as may be
designated by the Board of Directors and set forth in the notice of the
meeting or a duly executed waiver of notice thereof.
SECTION 2.2 SPECIAL MEETINGS. Special meetings of the
stockholders for any proper purpose or purposes may be called at any time by
the Board of Directors, the Chairman of the Board, the President, or any Vice
President, to be held on the date, at the time and place within or without the
State of Delaware as the Board of Directors, the Chairman of the Board, the
President or Vice President, whichever has called the meeting, shall direct. A
special meeting of the stockholders shall be called by the Chairman of the
Board, the President, any Vice President or the Secretary whenever
stockholders owning a majority of the shares of the Corporation then issued
and outstanding and entitled to vote on all of the matters to be submitted to
stockholders of the Corporation at such special meeting shall make written
application to the Chairman of the Board, the President, any Vice President or
the Secretary. Any such written request shall state a proper purpose or
purposes of the meeting and shall be delivered to the Chairman of the Board,
President, any Vice President or the Secretary.
SECTION 2.3 NOTICE OF MEETING. Notice, signed by the Chairman
of the Board, the President, any Vice President, the Secretary or an Assistant
Secretary, of every annual or special meeting of stockholders stating the
purpose or purposes for which the meeting is called, and the date and time
when, and the place where it is to be held, shall be prepared in writing and
personally delivered or mailed, postage prepaid, to each stockholder entitled
to vote at such meeting not less than ten (10) nor more than sixty (60) days
before the meeting, except as otherwise provided by statute. If mailed, such
notice shall be directed to a stockholder at his address as it shall appear on
the stock record book of the Corporation, unless the stockholder shall have
filed with the Secretary a written request that notices intended for him or
her be mailed to some other address, in which case it shall be mailed to the
address designated in such request. Notice shall be deemed given when
personally delivered or deposited to the United States mail, as the case may
be; provided, however, that such notice may also be given by telegram,
cablegram or radiogram and in such case shall be deemed given when ordered or,
if a delayed delivery is ordered, as of such delayed delivery time.
SECTION 2.4 LIST OF STOCKHOLDERS. A complete list of the
stockholders entitled to vote at each meeting of stockholders, arranged in
alphabetical order and showing the address of each such stockholder and the
number of shares registered in the name of each such stockholder, shall be
open to the examination of any stockholder, for any purpose germane to such
meeting, during ordinary business hours, for a period of at least ten (10)
days prior to the meeting, either at a place within the city where the meeting
is to be held, which place shall be specified in the notice of such meeting,
or, if not so specified, at the place where the meeting is to be held. The
list shall also be produced and kept at the time and place of the meeting and
during the whole time thereof, and may be inspected by any stockholder who is
present.
SECTION 2.5 QUORUM. The presence at any meeting, in person or by
proxy, of the holders of record of a majority of the shares then issued and
outstanding and entitled to vote shall be necessary and sufficient to
constitute a quorum for the transaction of business, except where otherwise
provided by statute.
SECTION 2.6 ADJOURNMENTS. In the absence of a quorum,
stockholders representing a majority of the shares then issued and outstanding
and entitled to vote, present in person or by proxy, or, if no stockholder
entitled to vote is present in person or by proxy, any officer entitled to
preside at or act as secretary of such meeting, may adjourn the meeting from
time to time without notice other than announcement at the meeting, until a
quorum shall be present or represented. At such adjourned meeting at which a
quorum shall be present or represented, any business may be transacted which
might have been transacted at the meeting originally noticed. If the
adjournment is for more than thirty (30) days, or if after the adjournment a
new record date is fixed for the adjourned meeting, a notice of the adjourned
meeting shall be given to each stockholder of record entitled to vote at the
meeting.
SECTION 2.7 VOTING. When a quorum is present at any meeting, the
holders of a majority of the shares of the Corporation, present in person or by
proxy, shall decide any question brought before the meeting, unless the
question is one upon which by express provision of the statutes or of the
certificate of incorporation, a different vote is required in which case such
express provision shall govern and control the decision of such question.
SECTION 2.8 PROXIES. Any stockholders entitled to vote may vote
by proxy, provided that the instrument authorizing such proxy to act shall
have been executed in writing (which shall include telegraphing, cabling or
other means of electronically transmitted written copy) by the stockholder
himself or herself or by his or her duly authorized attorney-in-fact. No proxy
shall be voted or acted upon after three years from its date, unless the proxy
provides for a longer period.
SECTION 2.9 JUDGES OF ELECTION. The Board of Directors may
appoint judges of election to serve at any election of directors and at
balloting on any other matter that may properly come before a meeting of
stockholders. If no such appointment shall be made, or if any of the judges so
appointed shall fail to attend, or refuse or be unable to serve, then such
appointment may be made by the presiding officer of the meeting at the meeting.
SECTION 2.10 WRITTEN CONSENT. Any action which may be taken at
any annual or special meeting of stockholders may be taken without a meeting
and without a vote, if a consent in writing, setting forth the action so
taken, shall be signed by the holders of outstanding stock having not less
than the minimum number of votes that would be necessary to authorize or take
such action at a meeting at which all shares entitled to vote thereon were
present and voted. Whenever any such action is taken without a meeting by less
than unanimous consent, all stockholders who have not consented in writing
must be property informed in writing of such action.
ARTICLE III
BOARD OF DIRECTORS
SECTION 3.1 NUMBER. The initial number of directors which shall
constitute the whole Board of Directors shall be ten, unless fixed otherwise by
resolution of the Board of Directors.
SECTION 3.2 ELECTION AND TERM OF OFFICE. Directors shall be
elected at the annual (or special) meeting of the stockholders except as
provided in SECTION 3.3 of this Article. Each Director (whether elected at an
annual meeting or to fill a vacancy or otherwise) shall continue in office
until a successor shall have been elected and qualified or until his or her
death, resignation or removal in the manner hereinafter provided, whichever
shall first occur.
SECTION 3.3 VACANCIES AND ADDITIONAL DIRECTORSHIPS. If any
vacancy shall occur among the directors by reason of death, resignation, or
removal, or as the result of an increase in the number of directorships, the
directors then in office shall continue to act and may fill any such vacancy
by a vote of the majority of directors then in office, though less than a
quorum, and each director so chosen shall hold office until the next annual
election of directors and until his or her successor shall be duly elected and
shall qualify, or until his or her earlier death, resignation or removal.
Notwithstanding the foregoing, the corporation may grant to any person or
entity the right to designate and replace directors upon notice to the
corporation, and any person so designated shall be deemed to take office
promptly upon such notice.
SECTION 3.4 POWERS. The business of the Corporation shall be
managed by its Board of Directors, which may exercise all powers of the
Corporation and do all lawful acts and things as are not by law or by the
Certificate of Incorporation or these By-Laws reserved to the stockholders.
SECTION 3.5 RESIGNATION OF DIRECTORS. Any director may resign
at any time by giving written notice of such resignation to the Board of
Directors, the Chairman of the Board, the President, any Vice President or the
Secretary. Any such resignation shall take effect at the time specified
therein or, if no time be specified, upon receipt thereof by the Board of
Directors or one of the above named officers; and, unless specified therein,
the acceptance of such resignation shall not be necessary to make it effective.
SECTION 3.6 REMOVAL OF DIRECTORS. At the annual meeting or any
special meeting of the stockholders, duly called as provided in these By-
Laws, any director or directors may, by the affirmative vote of the holders of
a majority of the shares of stock issued and outstanding and entitled to vote
for the election of Directors, be removed from office, either with or without
cause. At such meeting a successor or successors may be elected by a majority
of the votes cast, or if any such vacancy is not so filled, it may be filled
by the directors as provided in SECTION 3.3 of this Article.
SECTION 3.7 COMPENSATION OF DIRECTORS. Directors shall receive
such reasonable compensation for their services as such, whether in the form
of salary or a fixed fee for attendance at meetings, with expenses, if any, as
the Board of Directors may from time to time determine. Nothing herein
contained shall be construed to preclude any director from serving the
Corporation in any other capacity and receiving compensation therefor.
ARTICLE IV
MEETINGS OF THE BOARD OF DIRECTORS
SECTION 4.1 PLACE. The Board of Directors of the Corporation may
hold meetings, both regular and special, either within or without the State of
Delaware.
SECTION 4.2 REGULAR MEETINGS. The Board of Directors by
resolution may provide for the holding of regular meetings and may fix the
times and places at which such meetings shall be held. Notice of regular
meetings shall not be required to be given, provided that whenever the time or
place of regular meetings shall be fixed or changed, notice of such action
shall be mailed promptly to each Director who shall not have been present at
the meeting at which such action was taken, addressed to him or her at his or
her residence or usual place of business, unless he or she shall have filed
with the Secretary a written request that notices intended for him or her be
mailed to some other address, in which case it shall be mailed to the address
designated in such request.
SECTION 4.3 SPECIAL MEETINGS. Special meetings of the Board of
Directors may be called by the Chairman of the Board or the President, and
shall be called by the President or Secretary at the written request of any
directors. Except as otherwise required by statute, notice of each special
meeting shall be given to each director, if by mail, when addressed to him or
her at his or her residence or usual place of business, unless he or she shall
have filed with the Secretary a written request that notices intended for him
or her be mailed to some other address, in which case it shall be mailed to
the address designated in such request, on five (5) days notice, or shall be
sent to him or her at such place by telegram, radiogram or cablegram, or
telephone or other electronic means, or delivered to him or her personally,
not later than two (2) days before the day on which the meeting is to be
held. Such notice shall state the time and place of such meeting, but need not
state the purposes thereof, unless otherwise required by statute, the
Certificate of Incorporation of the Corporation or these By-Laws.
SECTION 4.4 QUORUM. At any meeting of the Board of Directors a
majority of the whole Board of Directors shall constitute a quorum for the
transaction of business, and the act of the majority of those present at any
meeting at which a quorum is present shall be sufficient for the act of the
Board of Directors, except as may be otherwise specifically provided by law or
by the Certificate of Incorporation.
SECTION 4.5 ADJOURNED MEETINGS. If a quorum shall not be
present at a meeting of the Board of Directors, the directors present thereat
may adjourn the meeting from time to time, until a quorum shall be present.
Two (2) days' notice of any such adjournment shall be given personally to each
director who was not present at the meeting at which such adjournment was
taken and, unless announced at the meeting, to the other directors; provided,
that five (5) days' notice shall be given if notice is given by mail.
SECTION 4.6 WRITTEN CONSENT. Any action required or permitted to
be taken at any meeting of the Board of Directors may be taken without a
meeting if all the members of the Board consent thereto in writing, and the
writing or writings are filed with the minutes of the proceedings of the Board
of Directors.
SECTION 4.7 COMMUNICATIONS EQUIPMENT. Any one or more members
of the Board of Directors may participate in any meeting of the Board by means
of conference telephone or similar communications equipment by means of which
all persons participating in the meeting can hear each other, and
participation by such means shall be deemed to constitute presence in person at
such meeting.
SECTION 4.8 WAIVER OF NOTICE. Notice of any meeting need not be
given to any director who shall attend such meeting in person or shall waive
notice thereof, before or after such meeting, in writing or by telegram,
radiogram or cablegram or other means of electronically transmitted written
copy.
ARTICLE V
COMMITTEES OF THE BOARD
SECTION 5.1 MEMBERS AND TERM OF OFFICE. The Board of Directors
may, by resolution passed by three-quarters of the whole Board of Directors,
designate one (1) or more committees. Each such committee shall consist of one
(1) or more of the directors of the Corporation. Any such committee, to the
extent provided in such resolution, shall have and may exercise the power of
the Board of Directors in the management of the business and affairs of the
Corporation, and may authorize the seal of the corporation to be affixed to
all papers which may require it. The Board of Directors may designate one (1)
or more directors as alternate members of any committee who, in the order
specified by the Board of Directors, may replace any absent or disqualified
member at any meeting of the committee. The term of office of the members of
each committee shall be as fixed from time to time by the Board, subject to
the term of office of the directors and these By-Laws; provided, however, that
any committee member who ceases to be a member of the Board of Directors shall
ipso facto cease to be a committee member. Each committee shall appoint a
secretary, who may be the Secretary or an Assistant Secretary of the
Corporation.
SECTION 5.2 MEETINGS, NOTICES AND RECORDS. Each committee may
provide for the holding of regular meetings, with or without notice, and a
majority of the members of any such committee may fix the time, place and
procedure for any such meeting. Special meetings of each committee shall be
held upon call by or at the direction of its chairman or, if there be no
chairman, by or at the direction of any two (2) of its members, at the time
and place specified in the respective notices or waivers of notice thereof.
Notice of each special meeting of a committee shall be mailed to each member
of such committee, addressed to him or her at his or her residence or usual
place of business, unless he or she shall have filed with the Secretary a
written request that notices intended for him or her be mailed to some other
address, in which case it shall be mailed to the address designated in such
request, at least five (5) days before the day on which the meeting is to be
held, or shall be sent by telegram, radiogram or cablegram, or other means of
electronically transmitted written copy, addressed to him at such place, or
telephoned or delivered to him or her personally, not later than the two (2)
days before the day on which the meeting is to be held. Notice of any meeting
of a committee need not be given to any member thereof who shall attend the
meeting in person or who shall waive notice thereof by telegram, radiogram,
cablegram or other means of electronically transmitted written copy. Notice of
any adjourned meeting need not be given. Each committee shall keep a record of
its proceedings.
Each committee may meet and transact any and all business
delegated to that committee by the Board of Directors by means of a conference
telephone or similar communications equipment provided that all persons
participating in the meeting are able to hear and communicate with each other.
Participation in a meeting by means of conference telephone or similar
communication shall constitute presence in person at such meeting.
SECTION 5.3 QUORUM AND MANNER OF ACTING. At each meeting of any
committee the presence of a majority of its members then in office shall be
necessary and sufficient to constitute a quorum for the transaction of
business, and the act of a majority of the members present at any meeting at
which a quorum is present shall be the act of such committee; in the absence
of a quorum, a majority of the members present at the time and place of any
meeting may adjourn the meeting from time to time until a quorum shall be
present. Subject to the foregoing and other provisions of these By-Laws and
except as otherwise determined by the Board of Directors, each committee may
make rules for the conduct of its business. Any determination made in writing
and signed by all the members of such committee shall be as effective as if
made by such committee at a meeting.
SECTION 5.4 RESIGNATIONS. Any member of a committee may resign
at any time by giving written notice of such resignation to the Board of
Directors, the Chairman of the Board, the President, any Vice President or the
Secretary of the Corporation. Unless otherwise specified in such notice, such
resignation shall take effect upon receipt thereof by the Board of Directors
or any such officer.
SECTION.5.5 REMOVAL. Any member of any committee may be removed
at any time by the affirmative vote of a majority of the whole Board of
Directors with or without cause.
SECTION 5.6 VACANCIES. If any vacancy shall occur in any
committee by reason of death, resignation, disqualification, removal or
otherwise, the remaining members of such committee, though less than a quorum,
shall continue to act until such vacancy is filled by the Board of Directors.
SECTION 5.7 COMPENSATION. Committee members shall receive such
reasonable compensation for their services as such, whether in the form of
salary or a fixed fee for attendance at meetings, with reasonable expenses, if
any, as the Board of Directors may from time to time determine. Nothing herein
contained shall be construed to preclude any committee member from serving the
Corporation in any other capacity and receiving compensation therefor.
ARTICLE VI
OFFICERS
SECTION 6.1 OFFICERS. The officers of the Corporation shall be a
President, a Treasurer and a Secretary, and may also include a Chairman of the
Board, one or more Vice-Chairmen, one or more Vice Presidents, Assistant
Secretaries or Assistant Treasurers, each of whom shall be elected by the
directors and shall hold office until his or her successor is duly elected and
qualified or until his or her earlier resignation or removal. None of the
officers of the Corporation except the Chairman or any Vice-Chairman of the
Board need be directors. Any number of offices may be held by the same person;
provided, that a Chairman, President or Vice President may not hold the
additional office of Secretary, Assistant Secretary, Treasurer or Assistant
Treasurer unless another person holds such an office, with such title and
duties, as may be necessary to enable the Corporation to sign instruments and
stock certificates which comply with Sections 103 (a) (2) and 158,
respectively, of the General Corporation Law of the State of Delaware.
SECTION 6.2 DUTIES. All officers, as between themselves and the
Corporation, shall have such authority and perform such duties in the
management of the Corporation as may be provided in these By-Laws, or, to the
extent not so provided, as may be provided by resolution of the Board of
Directors or, as to all other officers except the Chairman of the Board, by
the President.
SECTION 6.3 RESIGNATIONS. Any officer may resign at any time by
giving written notice of such resignation to the Board of Directors, the
Chairman of the Board, the President, a Vice President or the Secretary.
Unless otherwise specified in such written notice, such resignation shall take
effect upon receipt thereof by the Board of Directors or any such officer.
SECTION 6.4 REMOVAL. Any officer may be removed at any time,
either with or without cause, by the vote of a majority of all the directors
then in office. Such power of removal from office shall not be abridged by any
employment contract or other agreement.
SECTION 6.5 VACANCIES. A vacancy in any office by reason of
death, resignation, removal, disqualification or any other cause shall be
filled for the unexpired portion of the term in the manner prescribed in these
By-Laws for regular election or appointment to such office.
SECTION 6.6 CHAIRMAN OF THE BOARD. The Chairman of the Board
shall be a director and the chief executive officer. He shall, when present,
preside as Chairman at all meetings of the stockholders and of the Board of
Directors. He may call meetings of the Board of Directors whenever he deems it
advisable. Unless otherwise provided by the Board of Directors, he may execute
and sign in the name of the Corporation deeds, mortgages, bonds, notes,
contracts, agreements and other instruments duly authorized by the Board of
Directors. The Chairman of the Board shall have such other powers and perform
such other duties as from time to time may be assigned to him by the Board of
Directors. From time to time he shall report to the Board of Directors all
matters within his knowledge which the interests of the Corporation may
require to be brought to its attention.
SECTION 6.7 PRESIDENT. The President shall be the chief
operating officer of the Corporation. In the absence or incapacity of Chairman
to act, the President shall perform all duties and functions and exercise all
the powers of the Chairman. Subject to the direction of the Chairman of the
Board of Directors, he or she shall supervise and direct the daily management
of the business, affairs and property of the Corporation. The Chairman of the
Board, if any, and the President shall each be charged with seeing that all
orders and resolutions of the Board of Directors are carried into effect.
Unless otherwise provided by the Board of Directors, the President may sign,
with any other officer thereunto duly authorized, certificates of stock of the
Corporation the issuance of which shall have been duly authorized (the
signature to which may be facsimile signature), and may sign and execute in
the name of the Corporation, deeds, mortgages, bonds, notes, contracts,
agreements, and other instruments duly authorized by the Board of Directors.
The President shall also perform such other duties as are assigned by these
By-Laws or as from time to time may be assigned to him by the Board of
Directors.
SECTION 6.8 VICE PRESIDENT. In the absence or disability of the
President, the Vice President, or if there be more than one, the Vice
Presidents in the order of priority determined by the Board of Directors,
shall perform all the duties of the President and, when so acting, shall have
all the powers of and be subject to all restrictions upon the President.
Unless otherwise provided by the Board of Directors, any Vice President may
also sign, with any other officer thereunto duly authorized, certificates of
stock of the Corporation the issuance of which shall have been duly authorized
(the signature to which may be a facsimile signature), and may sign and
execute in the name of the Corporation deeds, mortgages, bonds, notes,
contracts, agreements and other instruments duly authorized by the Board of
Directors. Each Vice President shall perform such other duties as are assigned
by these By-Laws or as from time to time may be assigned by the Board of
Directors, the Chairman of the Board or the President.
SECTION 6.9 SECRETARY. The Secretary shall: (i) record all the
proceedings of the meetings of the stockholders, the Board of Directors, and
all committees of the Board of Directors in a book or books to be kept for that
purpose; (ii) cause all notices to be duly given in accordance with the
provisions of these By-Laws as required by statute; (iii) whenever any
committee shall be appointed in pursuance of a resolution of the Board of
Directors, furnish the chairman of such committee with a copy of such
resolution; (iv) be custodian of the records and of the seal of the
Corporation, and cause such seal to be affixed to all certificates
representing capital stock of the Corporation prior to the issuance thereof
and to all instruments the execution of which on behalf of the Corporation
under its seal shall have been duly authorized; (v) see that the lists, books,
reports, statements, certificates and other documents and records required by
statute are properly kept and filed; (vi) have charge of the stock record and
stock transfer books of the Corporation, and exhibit such stock books at all
reasonable times to such persons as are entitled by statute to have access
thereto; (vii) sign (unless the Treasurer or an Assistant Secretary or an
Assistant Treasurer shall sign) certificates representing capital stock of the
Corporation the issuance of which shall have been duly authorized (the
signature to which may be a facsimile signature) and; (viii) in general,
perform all duties incident to the office of Secretary and such other duties
as are given to him or her by these By-Laws or as from time to time may be
assigned to him or her by the Board of Directors, the Chairman of the Board or
the President.
SECTION 6.10 ASSISTANT SECRETARIES. At the request of the
Secretary or in his or her absence or disability, the Assistant Secretary
designated by him or her (or in the absence of such designation, the Assistant
Secretary designated by the Board of Directors or the President) shall perform
all the duties of the Secretary, and, when so acting, shall have all the
powers of and be subject to all restrictions upon the Secretary. The Assistant
Secretaries shall perform such other duties as from time to time may be
assigned to them by the Board of Directors, the Chairman of the Board, the
President or the Secretary.
SECTION 6.11 TREASURER. The Treasurer shall: (i) have charge of
and supervision over and be responsible for the funds, securities, receipts and
disbursements of the Corporation; (ii) cause the monies and other valuable
effects of the Corporation to be deposited in the name and to the credit of
the Corporation in such banks or trust companies or with such bankers or other
depositaries as shall be selected in accordance with Section 8.2 of these
By-Laws or to be otherwise dealt with in such manner as the Board of Directors
may direct; (iii) cause the funds of the Corporation to be disbursed by checks
or drafts upon the authorized depositaries of the Corporation, and cause to be
taken and preserved proper vouchers for all monies disbursed; (iv) render to
the Board of Directors or the President, whenever requested, a statement of
the financial condition of the Corporation and of all his or her transactions
as Treasurer; (v) cause to be kept at the Corporation's principal office correct
books of account of all its business and transactions and such duplicate books
of account as he or she shall determine and upon application cause such books
or duplicates thereof to be exhibited to any Director; (vi) be empowered,
from time to time, to require from the officers or agents of the Corporation
reports or statements giving such information as he or she may desire with
respect to any and all financial transactions of the Corporation; (vii) sign
(unless the Secretary or an Assistant Secretary or Assistant Treasurer shall
sign) certificates representing stock of the Corporation the issuance of which
shall have been duly authorized (the signature to which may be a facsimile
signature); and (viii) in general, perform all duties incident to the office
of Treasurer and such other duties as are given to him or her by these By-
Laws or as from time to time may be assigned to him by the Board of Directors,
the Chairman of the Board or the President.
SECTION 6.12 ASSISTANT TREASURERS. At the request of the
Treasurer or in his or her absence or disability, the Assistant Treasurer
designated by him or her (or in the absence of such designation, the Assistant
Treasurer designated by the Board of Directors or the President) shall perform
all the duties of the Treasurer, and, when so acting, shall have all the
powers of and be subject to all restrictions upon the Treasurer. The Assistant
Treasurers shall perform such other duties as from time to time may be
assigned by the Board of Directors, the Chairman of the Board, the President
or the Treasurer.
SECTION 6.13 SALARIES. The salaries of the officers of the
Corporation shall be fixed from time to time by the Board of Directors. No
officer shall be prevented from receiving such salary by reason of the fact
that he or she is also a director of the Corporation.
ARTICLE VII
CERTIFICATES OF STOCK
SECTION 7.1 STOCK CERTIFICATES. Every holder of capital stock of
the Corporation shall be entitled to have a certificate or certificates in
such form as shall be approved by the Board of Directors, certifying the
number of shares of capital stock of the Corporation owned by him or her. The
certificates representing shares of capital stock shall be signed in the name
of the Corporation by the Chairman of the Board or the President, and by the
Secretary, an Assistant Secretary, the Treasurer or an Assistant Treasurer
(which signatures may be facsimiles) and sealed with the seal of the
Corporation (which seal may be a facsimile). In case any officer, transfer
agent or registrar who shall have signed or whose facsimile signature has been
placed upon such certificate shall have ceased to be such officer, transfer
agent or registrar before such certificates are issued, they may nevertheless
be issued by the corporation with the same effect as if such officer, transfer
agent, or registrar were still such at the date of their issue.
SECTION 7.2 BOOKS OF ACCOUNT AND RECORD OF STOCKHOLDERS. The
books and records of the Corporation may be kept at such places, within or
without the State of Delaware, as the Board of Directors may from time to time
determine. The stock record books and the blank stock certificate books shall
be kept by the Secretary or by any other officer or by the transfer agent or
registrar, if any, designated by the Board of Directors. There shall be
entered on the stock books of the Corporation the number of each certificate
issued, the number of shares represented thereby, the name of the person to
whom such certificate was issued and the date of issuance thereof.
SECTION 7.3 TRANSFERS OF SHARES. Transfers of shares of capital
stock of the Corporation shall be made on the stock records of the Corporation
only upon authorization by the registered holder thereof, or by his attorney
thereunto authorized by power of attorney duly executed and filed with the
Secretary or with the transfer agent, and on surrender of the certificate or
certificates for such shares properly endorsed or accompanied by a duly
executed stock transfer power and the payment of all taxes thereon, if any.
Except as otherwise provided by law, the Corporation shall be entitled to
recognize the exclusive right of a person in whose name any share or shares
stand on the record of stockholders as the owner of such share or shares for
all purposes including, without limitation, the rights to receive dividends or
other distributions, and to vote as such owner, and the Corporation shall not
be bound to recognize any equitable or legal claim to or interest in any such
share or shares on the part of any other person whether or not the Corporation
shall have express or other notice thereof.
SECTION 7.4 REGULATIONS. The Board of Directors may make such
additional rules and regulations, not inconsistent with these By-Laws, as it
may deem expedient concerning the issue, transfer and registration of
certificates for shares of the capital stock of the Corporation. It may
appoint, or authorize any officer or officers to appoint, one or more transfer
agents or one or more registrars and may further provide that no stock
certificate shall be valid until countersigned by one of such transfer agents
and registered by one of such registrars. Nothing herein shall be construed to
prohibit the Corporation from acting as its own transfer agent or registrar.
SECTION 7.5 LOST, STOLEN OR DESTROYED CERTIFICATES. The holder
of any certificate representing any share or shares of the capital stock of the
Corporation shall immediately notify the Corporation of any loss, theft or
destruction of such certificate. The Board of Directors may direct that a new
certificate or certificates be issued in the place of any certificate or
certificates theretofore issued by it which the owner thereof shall allege to
have been lost, stolen or destroyed upon the furnishing to the Corporation of
an affidavit to that effect by the person claiming that the certificate has
been lost, stolen or destroyed. When authorizing such issue of a new
certificate or certificates, the Board of Directors may, in its discretion,
require such owner or his or her legal representatives to give to the
Corporation and its transfer agent(s) and registrar(s) a bond in such sum,
limited or unlimited, and in such form and with such surety or sureties as the
Board of Directors in its absolute discretion shall determine, sufficient to
indemnify the Corporation against any claim that may be made against it on
account of the alleged loss, theft or destruction of any such certificate, or
the issuance of a new certificate.
SECTION 7.6 STOCKHOLDER'S RIGHT OF INSPECTION. Any stockholder
of record of the Corporation, in person or by attorney or other agent, shall
upon written demand under oath stating the purpose thereof, have the right
during the usual hours for business to inspect for any proper purpose the
Corporation's stock ledger, a list of its stockholders, and its other books and
records, and to make copies or extracts therefrom. A proper purpose shall mean
a purpose reasonably related to such person's interest as a stockholder. In
every instance where any attorney or other agent shall be the person who seeks
the right to inspection, the demand under oath shall be accompanied by a power
of attorney or such other writing which authorized the attorney or other agent
to so act on behalf of the stockholder. The demand under oath shall be
directed to the Corporation at its registered office in Delaware or at its
principal place of business.
ARTICLE VIII
DEPOSIT OF CORPORATE FUNDS
SECTION 8.1 BORROWING. No loans or advances shall be obtained or
contracted for, by or on behalf of the Corporation and no negotiable paper
shall be issued in its name, unless and except as authorized by the Board of
Directors. Such authorization may be general or confined to specific instances.
SECTION 8.2 DEPOSITS. All funds of the Corporation not otherwise
employed shall be deposited from time to time to its credit in such banks or
trust companies or with such banks or other depositaries as the Board of
Directors may select, or as may be selected by any officer or officers or
agent or agents authorized to do so by the Board of Directors.
SECTION 8.3 CHECKS, DRAFTS, ETC. A11 checks, drafts or other
orders for the payment of money, and all negotiable and non-negotiable notes or
other negotiable or non-negotiable evidences of indebtedness issued in the name
of the Corporation, shall be signed by such officer or officers or agent or
agents of the Corporation, and in such manner, as from time to time shall be
determined by the Board of Directors.
ARTICLE IX
INDEMNIFICATION
SECTION 9.1 RIGHT TO INDEMNIFICATION. The Corporation shall to
the maximum extent permitted by law indemnify its directors and officers, and
any agents who are designated by the Board for indemnity hereunder, and the
directors and officers of any subsidiary of the Corporation.
ARTICLE X
RECORD DATES
SECTION 10.1 In order that the Corporation may determine the
stockholders entitled to notice of or to vote at any meeting of stockholders
or any adjournment thereof, or to express consent to corporate action in
writing without a meeting, or entitled to receive payment of any dividend or
other distribution or allotment of any rights, or entitled to exercise any
rights in respect of any change, conversion or exchange of stock or for the
purpose of any other lawful action, the Board of Directors may fix, in
advance, a record date, which shall be not more than sixty (60) nor less than
ten (10) days before the date of such meeting, nor more than sixty (60) days
prior to any other action. Only those stockholders of record on the date so
fixed shall be entitled to any of the foregoing rights, notwithstanding the
transfer of any such stock on the books of the Corporation after any such
record date fixed by the Board of Directors.
ARTICLE XI
DIVIDENDS
SECTION 11.1 DIVIDENDS. Subject to any agreement to which the
Corporation is a party or by which it is bound, the Board of Directors may
declare to be payable, in cash, in other property or in stock of the
Corporation of any class or series, such dividends in respect of outstanding
stock of the Corporation of any class or series as the Board of Directors may
at any time deem to be advisable. Before declaring any such dividend, the
Board of Directors may cause to be set aside any funds or other property or
assets of the Corporation legally available for the payment of dividends.
ARTICLE XII
FISCAL YEAR
SECTION 12.1 FISCAL YEAR. The fiscal year of the Corporation
shall be determined by resolution of the Board of Directors.
ARTICLE XIII
CORPORATE SEAL
SECTION 13.1 The Corporate Seal shall be circular in form and
shall bear the name of the Corporation and the words and figures denoting its
organization under the laws of the State of Delaware and the year thereof and
otherwise shall be in such form as shall be approved from time to time by the
Board of Directors.
ARTICLE XIV
AMENDMENTS
SECTION 14.1 All By-Laws of the Corporation may be amended,
altered or repealed, and new By-Laws may be enacted, by the affirmative vote
of the holders of record of a majority of the issued and outstanding stock of
the Corporation entitled to vote at any annual or special meeting, or by the
affirmative vote of three-quarters of the directors present at any regular or
special meeting of the Board of Directors.
EXHIBIT 3.7
State of Delaware
Office of the Secretary of State PAGE 1
I, EDWARD J. FREEL, SECRETARY OF STATE OF THE STATE OF
DELAWARE, DO HEREBY CERTIFY THE ATTACHED IS A TRUE AND CORRECT COPY OF THE
CERTIFICATE OF RENEWAL OF "OZITE CORPORATION", FILED IN THIS OFFICE ON THE
TWENTY-SEVENTH DAY OF JUNE, A.D. 1997, AT 2:30 O'CLOCK P.M.
/s/ Edward J. Freel
---------------------------------------
[SEAL] Edward J. Freel, Secretary of State
AUTHENTICATION: 8932977
DATE: 02-21-98
2230842 8100
981067441
STATE OF DELAWARE
SECRETARY OF STATE
DIVISION OF CORPORATION
FILED 02:30 PM 06/27/1997
971214619 - 2230842
CERTIFICATE
FOR RENEWAL AND REVIVAL OF CERTIFICATE OF INCORPORATION
Ozite Corporation, a corporation organized under the laws of
Delaware, the Certificate of Incorporation of which was filed in the office of
the Secretary of State on the 15th day of May, 1990 and thereafter voided for
non-payment of taxes, now desiring to procure a revival of its Certificate of
Incorporation, hereby certifies as follows:
1. The name of the corporation is Ozite Corporation.
2. Its registered office in the State of Delaware is located
at Corporation Trust Center, 1209 Orange Street, City of Wilmington, County
of New Castle and the name of its registered agent at such address is The
Corporation Trust company.
3. The date when revival of the Certificate of Incorporation
of this corporation is to commence is the 28th day of February, 1997, the
same being prior to the date the Certificate of Incorporation became void.
Revival of the Certificate of Incorporation in to be perpetual.
4. This corporation was duly organized under the laws of
Delaware and carried on the business authorized by its Certificate of
Incorporation until the 1st day of March, 1997, at which time its
Certificate of Incorporation became inoperative and void for non-payment Of
taxes and this Certificate for Renewal and Revival is filed by authority of
the duly elected directors of the corporation with the laws of Delaware.
IN WITNESS WHEREOF, said Ozite Corporation in compliance
with Section 312 of Title 8 of the Delaware Code has caused this
Certificate to be signed by Thomas Gilboy, its last and acting Vice
President and Chief Financial Officer, this 27th day of June, 1997.
OZITE CORPORATION
By: /s/ Thomas Gilboy
----------------------------
Thomas Gilboy
Last Acting Vice President
and Chief Financial Officer
State of Delaware
Office of the Secretary of State PAGE 1
I, EDWARD J. FREEL, SECRETARY OF STATE OF THE STATE OF
DELAWARE, DO HEREBY CERTIFY THE ATTACHED IS A TRUE AND CORRECT COPY OF THE
CERTIFICATE OF MERGER, WHICH MERGES:
"PURE TECH NEWCO (OZITE), INC.", A DELAWARE CORPORATION,
WITH AND INTO "OZITE CORPORATION" UNDER THE NAME OF "OZITE CORPORATION", A
CORPORATION ORGANIZED AND EXISTING UNDER THE LAWS OF THE STATE OF DELAWARE, AS
RECEIVED AND FILED IN THIS OFFICE THE THIRTY-FIRST DAY OF JULY, A.D. 1995, AT
4:28 O'CLOCK P.M.
/s/ Edward J. Freel
-------------------------------------------
Edward J. Freel, Secretary of State
AUTHENTICATION: 8932976
DATE: 02-21-98
2230842 8100M
981067441
STATE OF DELAWARE
SECRETARY OF STATE
[SEAL] DIVISION OF CORPORATIONS
FILED 04:28 PM 07/31/1995
950171672 - 2230842
CERTIFICATE OF MERGER
Ozite Corporation and Pure Tech Newco (Ozite), Inc.
-------------------------
Pursuant to Section 251 of the
General Corporation Law of the State of Delaware
-------------------------
Ozite Corporation ("Ozite"), a corporation formed under the
laws of the State of Delaware, desiring to merge Pure Tech Newco (Ozite),
Inc. ("Newco-Ozite"), a corporation formed under the laws of the State of
Delaware pursuant to the provisions of Section 251 of the General
Corporation Law of the State of Delaware, DOES HEREBY CERTIFY as follows:
FIRST: That Ozite is a corporation reincorporated under the
laws of the State of Delaware, and its Certificate of Incorporation was
filed in the office of the Secretary of the State of Delaware on the 16th
day of May, 1990.
SECOND: That Newco-Ozite is a corporation formed under the
laws of the State of Delaware, and its Certificate of Incorporation was
filed in the office of the Secretary of State on the 29th day of January,
1990.
THIRD: That Ozite shall be the Surviving Corporation.
FOURTH: That an Agreement and Plan of Merger (the "Merger
Agreement") has been approved, adopted certified, executed and acknowledged
by each of the constituent corporations in accordance with Section 251 of
the General Corporation Law of the State of Delaware.
FIFTH: That at a meeting held on July 26, 1995, at least 50%
of the common stockholders of Ozite and at least 66.7% of each of the Class
A and Class B preferred stock holders determined to merge Newco-Ozite and
to assume all of its obligations, and that the Board of Directors of Ozite,
by resolution duly adopted as of the 26th day of July, 1995, determined to
merge Newco-Ozite and to assume all of its obligations; said resolutions
being as follows:
NOW, THEREFORE, BE IT RESOLVED, that Ozite merge Newco-
Ozite with and into itself pursuant to the laws of the
State of Delaware as hereinafter provided, so that the
separate existence of Newco-Ozite shall cease as soon as the
merger shall become effective, and thereupon Ozite and
Newco-Ozite will become a single corporation, which shall
continue to exist under and be governed by the laws of the
State of Delaware;
IT IS FURTHER RESOLVED, that the terms and conditions of the
proposed merger are as follows:
(a) From and after the effective time of the merger, all of
the estate and property rights, privileges, powers and
franchises of Newco-Ozite shall become vested in and beheld
by Ozite as fully and entirely and without change or
diminution as the same were before held and enjoyed by
Newco-Ozite and Ozite shall assume all of the liabilities
and obligations of Newco-Ozite.
(b) The issued shares of Newco-Ozite shall not be converted
in any manner but shall be terminated and extinguished at the
effective time of the merger. The sole shareholder of
Newco-Ozite shall, by virtue of this Certificate and Merger
Agreement, become the sole shareholder of the Surviving
Corporation, and the capital structure of Newco-Ozite shall
become the capital structure of the Surviving Corporation.
The issued common shares of Ozite shall, in the aggregate,
be converted into the right to receive 1,028,915 common
shares of Pure Tech Newco, Inc., a Delaware corporation
("Pure Tech Newco"). The issued preferred shares of Ozite
shall, in the aggregate, be converted into the right to
receive 4,627,317 common shares of Pure Tech Newco. The
issued preferred shares of Ozite shall also, in the
aggregate, be converted into the right to receive up to
5,000 shares of Pure Tech Newco non-convertible preferred
stock and up to $3,750,000 in Pure Tech Newco 10 year
subordinated notes.
(c) The following named individuals shall constitute the
Board of Directors and Officers of the Surviving
Corporation immediately subsequent to the effective time of
the merger:
Fred Broling Chairman
Terence Brennan Director/President/Treasurer
Peter R. Harvey Director
David Katz Director
Yitz Grossman Director
Craig Boss Secretary
IT IS FURTHER RESOLVED, that the proper officers of Ozite
be, and they hereby are, authorized and directed to make,
execute and deliver, in the name of Ozite and under its
corporate seal and to file in the proper public offices in
the State of Delaware, such documents as may be necessary to
accomplish the aforesaid purpose of merger.
SIXTH: That the Board of Directors of Newco-Ozite shall
cease to exist upon filing of this Certificate of Merger,
SEVENTH: That upon the filing of this Certificate of
Merger, the Certificate of Incorporation and By-laws of the Surviving
Corporation shall be the current and unchanged Certificate of Incorporation
and By-laws, respectively, of Ozite.
EIGHTH: That a copy of the executed Merger Agreement is on
file and available for review at the principal place of business of Ozite,
which is as follows:
Ozite Corporation
1755 Butterfield Road
Libertyville, IL 60048
NINTH: That a copy of the executed Merger Agreement shall
be furnished by Ozite upon request and without cost, to any stockholder of
the constituent corporations.
IN WITNESS WHEREOF, said Ozite has caused this Certificate
to be executed by its officers thereunto duly authorized this 31st day of
July, 1995.
OZITE CORPORATION
By: /s/ Terence K. Brennan
------------------------------
President: Terence K. Brennan
ATTEST:
/s/ Kenneth L. Kwiatt
- ----------------------------------
Ass't Secretary: Kenneth L. Kwiatt
State of Delaware
Office of the Secretary of State PAGE 1
I, EDWARD J. FREEL, SECRETARY OF STATE OF THE STATE OF
DELAWARE, DO HEREBY CERTIFY THE ATTACHED IS A TRUE AND CORRECT COPY OF THE
CERTIFICATE OF DESIGNATION OF "OZITE CORPORATION", FILED IN THIS OFFICE ON
THE TWENTY-FIFTH DAY OF MARCH, A.D. 1994, AT 9 O'CLOCK A.M.
/s/ Edward J. Freel
-------------------------------------------
[SEAL] Edward J. Freel, Secretary of State
AUTHENTICATION: 8932975
DATE: 02-21-98
2230842 8100
981067441
STATE OF DELAWARE
SECRETARY OF STATE
DIVISION OF CORPORATIONS
FILED 09:00 AM 03/25/1994
94405O546 - 2230842
OZITE CORPORATION
CERTIFICATE OF DESIGNATIONS
OZITE CORPORATION, a corporation organized and existing under
and by virtue of the General Corporation Law of the State of Delaware (the
"Corporation"), DOES HEREBY CERTIFY THAT:
1. Pursuant to Article FOURTH of the Corporation's
Certificate of Incorporation, 1,000,000 shares of Preferred Stock of the
Corporation have been authorized, subject to the authority of the Board of
Directors to fix the rights and preferences thereof; and
2. The following preamble and resolutions were duly adopted,
by the unanimous written consent of the Board of Directors dated December
29, 1993, setting forth the rights and preferences of 100,000 shares of Class
C Preferred Stock of the Corporation, pursuant to authority expressly vested
in the Board of Directors by the Certificate of Incorporation of the
Corporation, and in accordance with Section 151 of the Delaware General
Corporation Law:
WHEREAS, the Board of Directors has previously created two
series of preferred stock designated as the Class A
Preferred Stock and Class B Preferred Stock which have such
rights and preferences as were fixed by the Board; and
WHEREAS, the Board has authorized the issuance of up to
577,500 shares of Class A Preferred Stock and 122,500 shares
of Class B Preferred Stock, all of which authorized shares
are issued and outstanding as of the date hereof; and
WHEREAS, the Board of Directors desires to create a new series
of preferred stock designated as the Class C Preferred Stock
which shall have such rights and preferences junior in all
respects to those of the Class A and B Preferred Stock; and
WHEREAS, the Board is authorized by the Certificate of
Incorporation of the Corporation to create and fix the
rights and preferences of series or classes of preferred
stock, and to authorize the issuance of certificates
evidencing such number of shares of such newly-created stock
as the Board may elect, without the approval thereof by any
stockholders of the Corporation, so long as the rights and
preferences thereof are junior to the Corporation's existing
preferred stock.
NOW, THEREFORE, BE IT RESOLVED; that pursuant to authority
vested in the Board of Directors of the Corporation in
accordance with the Certificate of Incorporation of the
Corporation, the designation of the rights and preferences
of the Class C Preferred Stock of the Corporation shall be
as follows:
1. Designation and Number of Shares.
This series of Series Preferred Stock is designated
"Class C Preferred Stock", and the number of shares which shall
constitute such Series shall be 100,000 shares, par value of
$1.00 per share.
2. Dividends.
Holders of the Class C Preferred Stock shall be entitled
to receive dividends, when and as declared by the Board of
Directors, payable in cash out of funds legally available
therefor, at the rate of $6.00 per share per annum,
cumulating from and after the date of issuance, and shall
cumulate day to day, whether or not declared or earned and
legally payable from the Corporation's surplus or net profits
in accordance with Delaware law. Such dividends shall be
payable quarterly on January 2, April 1, July 7 and October
1 in each year. Such dividends shall be cumulative so that
if such dividends in respect of any previous quarterly
dividend period at the aforesaid rate shall not have been
paid or declared and set apart for all shares of the Class C
Preferred Stock at the time outstanding (whether or not
declared or earned and legally payable, when cumulated, from
the Corporation's surplus or net profits in accordance with
Delaware law), the deficiency shall be fully paid or
declared and set apart for said shares before any dividend
or other distribution may be paid or declared or set apart
for any shares of the Corporation's Common Stock ($.25 par
value) ("Common Stock"), or any shares of any other class
or series of capital stock of the Corporation ranking junior
to or on parity with the Class C Preferred Stock as to
payment of dividends. When dividends are not paid in full
upon the shares of Class C Preferred Stock and any other
preferred stock ranking on a parity as to payment of
dividends with Class C Preferred Stock, all dividends
declared upon shares of Class C Preferred Stock and any
other preferred stock ranking on a parity as to dividends
with Class C Preferred Stock shall be declared pro rata so
that the amount of dividends declared per share on Class C
Preferred Stock and such other preferred stock shall in all
cases bear to each other the same ratio that cumulated
dividends per share on the shares of Class C Preferred Stock
and such other preferred stock bear to each other.
No dividends shall be paid or declared and set apart for
any shares of the Class C Preferred Stock if at such time there
exists a deficiency in the payment of any cumulated
dividends (whether or not any such dividends have been
declared or earned or are then legally payable from the
Corporation's surplus or net profits) to the holders of any
shares of the Corporation's Class A and Class B Preferred
Stock then outstanding or any other class or series of the
Corporation's preferred stock then outstanding ranking
senior to the Class C Preferred Stock as to distributions.
3. Liquidation.
In the event of voluntary or involuntary liquidation,
dissolution, or winding up of the Corporation, holders of
the then outstanding shares of Class C Preferred Stock shall
be entitled to receive for each such share, payment in cash
equal to $100 plus any dividends cumulated and unpaid on
such shares (whether or not declared or earned and legally
payable, when cumulated, from the Corporation's surplus or
net profits in accordance with Delaware law) to the date
fixed for final distribution in such liquidation,
dissolution, or winding up before any distribution of assets
is made to holders of the Common Stock, or any other class
or series of capital stock of the Corporation ranking junior
to the Class C Preferred Stock as to distribution on
liquidation, dissolution, or winding up. Holders of Class C
Preferred Stock shall not be entitled to any further
distributions upon voluntary or involuntary liquidation,
dissolution, or winding up of the Corporation. If, upon
any such liquidation, dissolution, or winding up of the
Corporation, the assets of the Corporation available for
distribution to holders of Class C Preferred Stock shall be
insufficient to permit payment in full to such holders of the
preferential amounts aforesaid, then all such assets of the
Corporation shall be distributed ratably among holders of
Class C Preferred Stock and any other class of stock or
series thereof then outstanding ranking on a parity
therewith as to distribution or liquidation, dissolution, or
winding up in proportion to the full preferential amounts to
which they shall be entitled respectively entitled.
No payment on account of any voluntary or involuntary
liquidation, dissolution, or winding up of the Corporation
shall be made to holders of any class or series of stock
ranking on a parity with Class C Preferred Stock with
respect to distribution on liquidation, dissolution, or
winding up unless a payment on account of such liquidation,
dissolution, or winding up shall be made at the same time
to holders of Class C Preferred Stock in proportion to the
full distributive amounts to which they and holders of such
other parity stock are respectively entitled.
No payment on account of any voluntary or involuntary
liquidation, dissolution, or winding up of the Corporation
shall be made to holders of the Class C Preferred Stock with
respect to distribution on liquidation, dissolution, or
winding up if at such time there exists a deficiency in the
payment on account of such liquidation, dissolution, or
winding up of the full distributive amounts to which the
holders of any shares of the Corporation's Class A and Class
B Preferred Stock then outstanding or any other class or
series of the Corporation's preferred stock then outstanding
ranking senior to the Class C Preferred Stock as to
distribution or liquidation, dissolution, or winding up are
entitled.
Neither the merger nor consolidation of the Corporation
into or with any other corporation, nor the merger or
consolidation of any other corporation into or with the
Corporation, nor a sale, transfer, or lease of all or any
part of the assets of the Corporation, shall be deemed to be
a liquidation, dissolution, or winding up of the Corporation
within the meaning of this paragraph 3.
4. Voting Rights.
a. General. Except as otherwise provided by these
resolutions or by applicable law, the holders of the Class C
Preferred Stock shall not be entitled to vote on any matters
required or permitted to be submitted to the shareholders of
the Corporation for their approval. In each instance in
which the holders of the Class C Preferred Stock shall be
entitled to vote, each such holder shall be entitled to one
vote for each share of Class C Preferred Stock held by him.
b. Voting Rights. The holders of Class C Preferred Stock
shall be entitled to vote with respect to, and the
affirmative vote of the holders of at least 66-2/3% of the
shares of Class C Preferred Stock then outstanding shall be
required to authorize, each of the following:
(a) the authorization of any additional
shares of Class C Preferred Stock;
(b) the issuance of any additional shares of
a class or series of stock ranking prior to or on a parity
with the Class C Preferred Stock as to dividends or as to
distribution upon liquidation, dissolution, or winding-up;
(c) any amendment, alteration, or repeal of
any of the provisions of these resolutions or of the
Corporation's Articles of Incorporation so as to alter or
change the preferences, special rights, privileges or
voting or other powers of the Class C Preferred Stock, or
(d) any proposed consolidation or merger of
the Corporation with or into any other corporation or
corporations, any proposed reincorporation, dissolution,
liquidation or winding-up of the Corporation, or any
proposed sale, lease, transfer, or other disposition of all
or substantially all of the assets of the Corporation.
5. Redemption.
a. Optional Redemption. The Corporation may redeem
the shares of Class C Preferred Stock for cash, at its
option, in whole or in part, at any time, at a price per
share equal to $100 plus dividends cumulated and unpaid on
such share to the date fixed for redemption (whether or not
declared or earned and legally payable, when cumulated, from
the Corporation's surplus or net profits in accordance with
Delaware law); provided, however, that no shares of Class C
Preferred Stock shall be redeemed so long as (i) there exists
any deficiency in the payment of any cumulated dividends
(whether or not any such dividends have been declared or
earned or are then legally payable from the Corporation's
surplus or net profits) to which the holders of any shares
of the Corporation's Class A and Class B Preferred Stock
then outstanding or any other class or series of the
Corporation's preferred stock then outstanding ranking senior
to the Class C Preferred Stock as to distribution or
liquidation, dissolution, or winding up are entitled, or (ii)
any shares of the Corporation's Class A and Class B
Preferred Stock or any other class or series of the
Corporations preferred stock ranking senior to the Class C
Preferred Stock as to distribution or liquidation,
dissolution, or winding up which are held by any holders who
have elected (in accordance with an offer which will be made
to each of them, pursuant to reasonable procedures
implemented by the Corporation, prior to the redemption of
any shares of Class C Preferred Stock) to have any of such
shares redeemed (in accordance with the terms of the
designations of rights and preferences governing such class or
series of preferred stock), then remain outstanding.
b. Pro Rata Requirement. All redemptions of Class C
Preferred Stock shall be made on a pro rata basis (as nearly
as practicable) among the holders of Class C Preferred Stock
in proportion to the number of shares held by them.
c. Redemption Procedures. Any redemption of any or
all of the outstanding shares of Class C Preferred Stock shall
be effected in accordance with the provisions of this
paragraph 5.c. Any such redemption shall be effected by
written notice given by certified or registered mail, postage
prepaid, not less than 30 days nor more than 60 days prior
to the date fixed for redemption to the holders of record of
Class C Preferred Stock whose shares are to be redeemed at
their respective addresses as the same shall appear on the
books of the Corporation.
If notice of any such redemption by the Corporation
shall have been given as herein provided and if before the
redemption date specified in such notice all funds necessary
for such redemption shall have been set apart so as to be
available therefor and only therefor, then on and after the
close of business on the date fixed for redemption, the
shares of Class C Preferred Stock called for redemption,
notwithstanding that any certificate therefor shall not have
been surrendered, shall no longer be deemed outstanding and
all rights with respect to such shares shall forthwith cease
and terminate except the right of holders of such shares to
receive upon surrender of their certificates the amount
payable upon redemption thereof, but without interest.
FURTHER RESOLVED; that any proper officer of the
Corporation shall cause said designation of rights and
preferences to be filed with the Secretary of State of
Delaware and with the appropriate authority in any other
jurisdiction where such filing is deemed necessary or
appropriate by any such officer.
IN WITNESS WHEREOF, said Ozite Corporation has caused this
Certificate of Designations to be signed by Terence K. Brennan, its
President, and Kenneth L. Kwiatt, its Secretary, this l4th day of March,
1994.
By: /s/ Terence K. Brennan
------------------------------
Terence K. Brennan, President
Attest:
/s/ Kenneth L. Kwiatt
- --------------------------------
Kenneth L. Kwiatt, Secretary
State qf Delaware
Office of the Secretary of State PAGE 1
I, EDWARD J. FREEL, SECRETARY OF STATE OF THE STATE OF
DELAWARE, DO HEREBY CERTIFY THE ATTACHED IS A TRUE AND CORRECT
COPY OF THE CERTIFICATE OF DESIGNATION OF "OZITE CORPORATION",
FILED IN THIS OFFICE ON THE TWENTY-NINTH DAY OF JUNE, A.D. 1992,
AT 9 O'CLOCK A.M.
/s/ Edward J. Freel
-------------------------------------------
[SEAL] Edward J. Freel, Secretary of State
AUTHENTICATION: 8932974
DATE: 02-21-98
2230842 8100
981067441
STATE OF DELAWARE
SECRETARY OF STATE
DIVISION OF CORPORATIONS
FILED 09:00 AM 06/29/1992
921815122 - 2230842
OZITE CORPORATION
CERTIFICATE OF DESIGNATIONS
OZITE CORPORATION, a corporation organized and existing under
and by virtue of the General Corporation Law of the State of Delaware (the
"Corporation"), DOES HEREBY CERTIFY:
That the Board of Directors of the Corporation adopted, by
unanimous written consent dated December 27, 1991, the resolutions set
forth below which amend and restate the designations of rights and
preferences of 577,500 shares of Class A Preferred Stock and 122,500 shares
of Class B Preferred Stock pursuant to the authority expressly vested in
the Board by the Certificate of Incorporation of the Corporation, and in
accordance with Section 151 of the Delaware General Corporation Law, which
amendment and restatement of the rights and preferences of the Class A
Preferred Stock and Class B Preferred Stock was approved by unanimous
consent of the respective holders thereof, each voting as a class:
NOW, THEREFORE, BE IT RESOLVED; that pursuant to authority
vested in the Board of Directors of the Corporation in accordance with the
Certificate of Incorporation of the Corporation, subject only to the
approval of the holders of two-thirds of the shares of Class A Preferred
Stock of the Corporation, the designation of the rights and preferences of
the Class A Preferred Stock of the Corporation shall be amended and
restated as follows:
1. Designation and Number of Shares.
This series of Series Preferred Stock is designated "Class A
Preferred Stock", and the number of shares which shall constitute such
Series shall be 577,500 shares, par value of $1.00 per share.
2. Dividends.
Holders of the Class A Preferred Stock shall be entitled to
receive dividends, when and as declared by the Board of Directors, payable
in cash out of funds legally available therefor, at the rate of $6.00 per
share per annum, cumulating from and after the date of issuance, and shall
cumulate day to day, whether or not declared or earned and legally payable
from the Corporation's surplus or net profits in accordance with Delaware
law. Such dividends shall be payable quarterly on January 2, April 1, July
1 and October 1 in each year. Such dividends shall be cumulative so that
if such dividends in respect of any previous quarterly dividend period at
the aforesaid rate shall not have been paid or declared and set apart for
all shares of the Class A Preferred Stock at the time outstanding (whether
or not declared or earned and legally payable, when cumulated, from the
Corporation's surplus or net profits in accordance with Delaware law), the
deficiency shall be fully paid or declared and set apart for said shares
before any dividend or other distribution may be paid or declared or set
apart for any shares of the Corporation's Common Stock ($.25 par value)
("Common Stock"), the Corporation's Class B Preferred Stock ($1.00 par
value) ("Class B Preferred Stock") or any shares of any other class or
series of capital stock of the Corporation ranking junior to or on parity
with the Class A Preferred Stock as to payment of dividends. When
dividends are not paid in full upon the shares of Class A Preferred Stock,
Class B Preferred Stock and any other preferred stock ranking on a parity
as to payment of dividends with Class A Preferred Stock, all dividends
declared upon shares of Class A Preferred Stock, Class B Preferred Stock
and any other preferred stock ranking on a parity as to dividends with
Class A Preferred Stock shall be declared pro rata so that the amount of
dividends declared per share on Class A Preferred Stock, Class B Preferred
Stock and such other preferred stock shall in all cases bear to each other
the same ratio that cumulated dividends per share on the shares of Class A
Preferred Stock, Class B Preferred Stock and such other preferred stock
bear to each other.
3. Liquidation.
In the event of voluntary or involuntary liquidation,
dissolution, or winding up of the Corporation, holders of the then
outstanding shares of Class A Preferred Stock shall be entitled to receive
for each such share, payment in cash equal to $100 plus any dividends
cumulated and unpaid on such shares (whether or not declared or earned and
legally payable, when cumulated, from the Corporation's surplus or net
profits in accordance with Delaware law) to the date fixed for final
distribution in such liquidation, dissolution, or winding up before any
distribution of assets is made to holders of the Common Stock, or any other
class or series of capital stock of the Corporation ranking junior to the
Class A Preferred Stock as to distribution on liquidation, dissolution, or
winding up. Holders of Class A Preferred Stock shall not be entitled to
any further distributions upon voluntary or involuntary liquidation,
dissolution, or winding up of the Corporation. If, upon any such
liquidation, dissolution, or winding up of the Corporation, the assets of
the Corporation available for distribution to holders of Class A Preferred
Stock shall be insufficient to permit payment in full to such holders of
the preferential amounts aforesaid, then all such assets of the Corporation
shall be distributed ratably among holders of Class A Preferred Stock,
Class B Preferred Stock and any other class of stock or series thereof then
outstanding ranking on a parity therewith as to distribution or
liquidation, dissolution, or winding up in proportion to the full
preferential amounts to which they shall be entitled respectively.
No payment on account of any voluntary or involuntary
liquidation, dissolution, or winding up of the Corporation shall be made to
holders of Class B Preferred Stock or any other class or series of stock
ranking on a parity with Class A Preferred Stock with respect to
distribution on liquidation, dissolution, or winding up unless a payment on
account of such liquidation, dissolution, or winding up shall be made at
the same time to holders of Class A Preferred Stock in proportion to the
full distributive amounts to which they and holders of Class B Preferred
Stock and such other parity stock are respectively entitled.
Neither the merger nor consolidation of the Corporation into
or with any other corporation, nor the merger or consolidation of any other
corporation into or with the Corporation, nor a sale, transfer, or lease of
all or any part of the assets of the Corporation, shall be deemed to be a
liquidation, dissolution, or winding up of the corporation within the
meaning of this paragraph 3.
4. Voting Rights.
a. General. Except as otherwise provided by these
resolutions or by applicable law, the holders of the Class A Preferred
Stock shall not be entitled to vote on any matters required or permitted to
be submitted to the shareholders of the Corporation for their approval. In
each instance in which the holders of the Class A Preferred Stock shall be
entitled to vote, each such holder shall be entitled to one vote for each
share of Class A Preferred Stock held by him.
b. Voting Rights. The holders of Class A Preferred Stock
shall be entitled to vote with respect to, and the affirmative vote of
the holders of at least 66-2/3% of the shares of Class A Preferred Stock
then outstanding shall be required to authorize, each of the following:
(a) the issuance of any additional shares of Class A
Preferred Stock;
(b) the issuance of any additional shares of a class or
series of stock ranking prior to or on a parity with
the Class A Preferred Stock as to dividends or as to
distribution upon liquidation, dissolution, or
winding-up;
(c) any amendment, alteration, or repeal of any of the
provisions of these resolutions or of the
Corporation's Articles of Incorporation so as to
alter or change the preferences, special rights,
privileges or voting or other powers of the Class A
Preferred Stock; or
(d) any proposed consolidation or merger of the
Corporation with or into any other corporation or
corporations, any proposed reincorporation,
dissolution, liquidation or winding-up of the
Corporation, or any proposed sale, lease, transfer,
or other disposition of all or substantially all of
the assets of the Corporation.
5. Redemption.
a. Optional Redemption. The Corporation may redeem the shares
of Class A Preferred Stock for cash, at its option, in whole or in part, at
any time on or after January 1, 1991, at a price per share equal to $100
plus dividends cumulated and unpaid on such share to the date fixed for
redemption (whether or not declared or earned and legally payable, when
cumulated, from the Corporation's surplus or net profits in accordance with
Delaware law).
b. Pro Rata Requirement. All redemptions shall be made on
a pro rata basis (as nearly as practicable) between Class A Preferred Stock
and Class B Preferred Stock in such proportion as the number of shares of
Class A Preferred Stock outstanding at any time bears to the number of
shares of Class B Preferred Stock outstanding at such time. In addition,
all redemptions of Class A Preferred Stock shall be made on a pro rata
basis (as nearly as practicable) among the holders of Class A Preferred
Stock in proportion to the number of shares held by them.
c. Redemption Procedures. Any redemption of any or all of
the outstanding shares of Class A Preferred Stock shall be effected in
accordance with the provisions of this paragraph 5.c. Any such redemption
shall be effected by written notice given by certified or registered mail,
postage prepaid, not less than 30 days nor more than 60 days prior to the
date fixed for redemption to the holders of record of Class A Preferred
Stock whose shares are to be redeemed at their respective addresses as the
same shall appear on the books of the Corporation.
If notice of any such redemption by the Corporation shall
have been given as herein provided and if before the redemption date
specified in such notice all funds necessary for such redemption shall have
been set apart so as to be available therefor and only therefor, then on
and after the close of business on the date fixed for redemption, the
shares of Class A Preferred Stock called for redemption, notwithstanding
that any certificate therefor shall not have been surrendered, shall no
longer be deemed outstanding and all rights with respect to such shares
shall forthwith cease and terminate except the right of holders of such
shares to receive upon surrender of their certificates the amount payable
upon redemption thereof, but without interest.
FURTHER RESOLVED; that pursuant to authority vested in the
Board of Directors of the Corporation in accordance with the Certificate of
Incorporation of the Corporation, subject only to the approval of the
holders of two-thirds of the shares of Class B Preferred Stock of the
Corporation, the designation of the rights and preferences of the Class B
Preferred Stock of the Corporation shall be amended and restated in its
entirety as follows:
1. Designation and Number of Shares.
This series of Series Preferred Stock is designated "Class B
Preferred Stock", and the number of shares which shall constitute such
Series shall be 122,500 shares, par value of $1.00 per share.
2. Dividends.
Holders of the Class B Preferred Stock shall be entitled to
receive dividends, when and as declared by the Board of Directors, payable
in cash out of funds legally available therefor, at the rate of $6.00 per
share per annum, cumulating from and after the date of issuance, and shall
cumulate day to day, whether or not declared or earned and legally payable
from the Corporation's surplus or net profits in accordance with Delaware
law. Such dividends shall be payable quarterly on January 2, April 1, July
1 and October 1 in each year. Such dividends shall be cumulative so that
if such dividends in respect of any previous quarterly dividend period at
the aforesaid rate shall not have been paid or declared and set apart for
all shares of the Class B Preferred Stock at the time outstanding (whether
or not declared or earned and legally payable, when cumulated, from the
Corporation's surplus or net profits in accordance with Delaware law), the
deficiency shall be fully paid or declared and set apart for said shares
before any dividend or other distribution may be paid or declared or set
apart for any shares of the Corporation's Common Stock ($.25 par value)
("Common Stock"), the Corporations's Class A Preferred Stock ($1.00 par
value) (the "Class A Preferred Stock") or any shares of any other class or
series of capital stock of the Corporation ranking junior to or on parity
with the Class B Preferred Stock as to payment of dividends. When
dividends are not paid in full upon the shares of Class B Preferred Stock,
Class A Preferred Stock and any other preferred stock ranking on a parity
as to payment of dividends with Class B Preferred Stock, all dividends
declared upon shares of Class B Preferred Stock, Class A Preferred Stock
and any other preferred stock ranking on a parity as to dividends with
Class B Preferred Stock shall be declared pro rata so that the amount of
dividends declared per share on Class B Preferred Stock, Class A Preferred
Stock and such other preferred stock shall in all cases bear to each other
the same ratio that cumulated dividends per share on the shares of Class B
Preferred Stock, Class A Preferred Stock and such other preferred stock
bear to each other.
3. Liquidation.
In the event of voluntary or involuntary liquidation,
dissolution, or winding up of the Corporation, holders of the then
outstanding shares of Class B Preferred Stock shall be entitled to receive
for each such share, payment in cash equal to $100 plus any dividends
cumulated and unpaid on such shares (whether or not declared or earned and
legally payable, when cumulated, from the Corporation's surplus or not
profits in accordance with Delaware law) to the date fixed for final
distribution in such liquidation, dissolution, or winding up before any
distribution of assets is made to holders of the Common Stock or any other
class or series of capital stock of the Corporation ranking junior to the
Class B Preferred Stock as to distribution on liquidation, dissolution, or
winding up. Holders of Class B Preferred Stock shall not be entitled to
any further distributions upon voluntary or involuntary liquidation,
dissolution, or winding up of the Corporation. If, upon any such
liquidation, dissolution, or winding up of the Corporation, the assets of
the Corporation available for distribution to holders of Class B Preferred
Stock shall be insufficient to permit payment in full to such holders of
the preferential amounts aforesaid, then all such assets of the Corporation
shall be distributed ratably among holders of Class B Preferred Stock,
Class A Preferred Stock and any other class of stock or series thereof then
outstanding ranking on a parity therewith as to distribution or
liquidation, dissolution, or winding up in proportion to the full
preferential amounts to which they shall be entitled respectively.
No payment on account of any voluntary or involuntary
liquidation, dissolution, or winding up of the Corporation shall be made to
holders of Class A Preferred Stock or any other class or series of stock
ranking on a parity with Class B Preferred Stock with respect to
distribution on liquidation, dissolution, or winding up unless a payment on
account of such liquidation, dissolution, or winding up shall be made at
the same time to holders of Class B Preferred Stock in proportion to the
full distributive amounts to which they and holders of Class A Preferred
Stock and such other parity stock are respectively entitled.
Neither the merger nor consolidation of the Corporation into
or with any other corporation, nor the merger or consolidation of any other
corporation into or with the Corporation, nor a sale, transfer, or lease of
all or any part of the assets of the Corporation, shall be deemed to be a
liquidation, dissolution, or winding up of the Corporation within the
meaning of this paragraph 3.
4. Voting Rights.
a. General. Except as otherwise provided by these resolutions
or by applicable law, the holders of the Class B Preferred Stock shall not
be entitled to vote on any matters required or permitted to be submitted to
the shareholders of the Corporation for their approval. In each instance
in which the holders of the Class B Preferred Stock shall be entitled to
vote, each such holder shall be entitled to one vote for each share of
Class B Preferred Stock held by him.
b. Other Voting Rights. The holders of Class B Preferred
Stock shall be entitled to vote with respect to, and the affirmative vote
of the holders of at least 66-2/3% of the shares of Class B Preferred Stock
then outstanding shall be required to authorize, each of the following:
(a) the issuance of any additional shares of Class B
Preferred Stock;
(b) the issuance of any additional shares of a class or
series of stock ranking prior to or on a parity with
the Class B Preferred Stock as to dividends or as to
distribution upon liquidation, dissolution, or
winding-up;
(c) any amendment, alteration, or repeal of any of the
provisions of these resolutions or of the
Corporation's Articles of Incorporation so as to
alter or change the preferences, special rights,
privileges or voting or other powers of the Class B
Preferred Stock; or
(d) any proposed consolidation or merger of the Corporation
with or into any other corporation or corporations,
any proposed reincorporation, liquidation, dissolution
or winding-up of the corporation, or any proposed
sale, lease, transfer, or other disposition of all or
substantially all of the assets of the Corporation.
5. Redemption.
a. Optional Redemption. The Corporation may redeem the
shares of Class B Preferred Stock for cash, at its option, in whole or in
part, at any time on or after January 1, 1991, at a price per share equal
to $100 plus dividends cumulated and unpaid on such shares to the date
fixed for redemption (whether or not declared or earned and legally
payable, when cumulated, from the Corporation's surplus or net profits in
accordance with Delaware law).
b. Pro Rata Requirement. All redemptions shall be made on
a pro rata basis (as nearly as practicable) between Class B Preferred Stock
and Class A Preferred Stock in such proportion as the number of shares of
Class B Preferred Stock outstanding at any time bears to the number of
shares of Class A Preferred Stock outstanding at such time. In addition,
all redemptions of Class B Preferred Stock shall be made on a pro rata
basis (as nearly as practicable) among the holders of Class B Preferred
Stock in proportion to the number of shares held by them.
c. Redemption Procedures. Any redemption of any or all of
the outstanding shares of Class B Preferred Stock shall be effected in
accordance with the provisions of this paragraph 5.c. Any such redemption
shall be effected by written notice given by certified or registered mail,
postage prepaid, not less than 30 days nor more than 60 days prior to the
date fixed for redemption to the holders of record of Class B Preferred
Stock whose shares are to be redeemed at their respective addresses as the
same shall appear on the books of the Corporation.
If notice of any such redemption by the Corporation shall
have been given as herein provided and if before the redemption date
specified in such notice all funds necessary for such redemption shall have
been set apart so as to be available therefor and only therefor, then on
and after the close of business on the date fixed for redemption, the
shares of Class B Preferred Stock called for redemption, notwithstanding
that any certificate therefor shall not have been surrendered, shall no
longer be deemed outstanding and all rights with respect to such shares
shall forthwith cease and terminate except the right of holders of such
shares to receive upon surrender of their certificates the amount payable
upon redemption thereof, but without interest.
FURTHER RESOLVED; that the Secretary of the Corporation
shall cause to be circulated to each of the holders of Class B Preferred
Stock of the Corporation a consent to approve and adopt the aforesaid
designation of rights and preferences; and
FURTHER RESOLVED; that, upon approval of the aforesaid
designation of rights and preferences by the holders of Class B Preferred
Stock of the Corporation, any proper officer of the Corporation shall cause
said designation of rights and preferences to be filed with the Secretary
of State of Delaware and with the appropriate authority in any other
jurisdiction where such filing is deemed necessary or appropriate by any
such officer.
IN WITNESS WHEREOF, said Ozite Corporation has caused this
Certificate of Designations to be signed by John G. Hamm, its Vice
President-Finance, and Kenneth L. Kwiatt, its Secretary, this 23rd day of
June, 1992.
By: /s/ John G. Hamm
----------------------
John G. Hamm
Vice President-Finance
Attst:
/s/ Kenneth L. Kwiatt
- ----------------------------
Kenneth L. Kwiatt, Secretary
State of Delaware
Office of the Secretary of State PAGE 1
I, EDWARD J. FREEL, SECRETARY OF STATE OF THE STATE OF
DELAWARE, DO HEREBY CERTIFY THE ATTACHED IS A TRUE AND CORRECT COPY OF THE
CERTIFICATE OF DESIGNATION OF "OZITE CORPORATION", FILED IN THIS OFFICE ON
THE TENTH DAY OF MAY, A.D. 1991, AT 9 O'CLOCK A.M.
[SEAL] /s/ Edward J. Freel
-------------------------------------------
Edward J. Freel, Secretary of State
AUTHENTICATION: 8932973
DATE: 02-21-98
2230842 8100
981067441
STATE OF DELAWARE
SECRETARY OF STATE
DIVISION OF CORPORATIONS
FILED 09:00 AM 05/10/1991
911305106 - 2230842
OZITE CORPORATION
CERTIFICATE OF DESIGNATIONS
OZITE CORPORATION, a corporation organized and existing under and by virtue
of the General Corporation Law of the State of Delaware (the
"Corporation), DOES HEREBY CERTIFY:
That at a meeting of the Board of Directors of the Corporation, the
following preamble and resolutions were duly adopted setting forth
the rights and preferences of 577,500 shares of Class A Preferred
Stock and 122,500 shares of Class B Preferred Stock of the
Corporation, pursuant to authority expressly vested in the Board of
Directors by the Articles of Incorporation of the Corporation, and in
accordance with Section 151 of the Delaware General Corporation Law:
WHEREAS, pursuant to Article FOURTH of the Corporation's certificate of
Incorporation, 1,000,000 shares of Preferred Stock have been authorized,
subject to the authority of the Board to fix the rights and preferences
thereof;
NOW, THEREFORE, BE IT RESOLVED; that pursuant to the authority vested in the
Board of Directors of the Corporation in accordance with the provisions of its
Articles of Incorporation, a new series of Preferred Stock of the Corporation
be and hereby is created, of which the designation, preferences, limitations,
and relative rights shall be as follows:
1. Designation and Number of Shares.
This series of Series Preferred Stock is designated "Class A
Preferred Stock", and the number of shares which shall constitute such
Series shall be 577,500 shares, par value of $1.00 per share.
2. Dividends.
Holders of the Class A Preferred Stock shall be entitled to
receive dividends, when and as declared by the Board of Directors, payable
in cash out of funds legally available therefor, at the rate of $6.00 per
share per annum, accruing from and after the date of issuance, and shall
accrue from day to day, whether or not earned or declared. Such dividends
shall be payable quarterly on January 2, April 1, July 1 and October 1 in
each year. Such dividends shall be cumulative so that if such dividends in
respect of any previous semi-annual dividend period at the aforesaid rate
shall not have been paid or declared and set apart for all shares of the
Class A Preferred Stock at the time outstanding, the deficiency shall be
fully paid or declared and set apart for said shares before any dividend or
other distribution may be paid or declared or set apart for any shares of
the Corporation's Common Stock ($.25 par value) ("Common Stock"), the
Corporation's Class B Preferred Stock ($1.00 par value) ("Class B
Preferred Stock") or any shares of any other class or series of capital
stock of the Corporation ranking junior to or on parity with the Class A
Preferred Stock as to payment of dividends. When dividends are not paid in
full upon the shares of Class A Preferred Stock, Class B Preferred Stock
and any other preferred stock ranking on a parity as to payment of
dividends with Class A Preferred Stock, all dividends declared upon shares
of Class A Preferred Stock, Class B Preferred Stock and any other preferred
stock ranking on a parity as to dividends with Class A Preferred Stock
shall be declared pro rata so that the amount of dividends declared per
share on Class A Preferred Stock, Class B Preferred Stock and such other
preferred stock shall in all cases bear to each other the same ratio that
accrued dividends per share on the shares of Class A Preferred Stock, Class
B Preferred Stock and such other preferred stock bear to each other.
3. Liquidation.
In the event of voluntary or involuntary liquidation,
dissolution, or winding up of the Corporation, holders of the then
outstanding shares of Class A Preferred stock shall be entitled to receive
for each such share, payment in cash equal to $100 plus any dividends
accrued and unpaid on such shares to the date fixed for final distribution
in such liquidation, dissolution, or winding up before any distribution of
assets is made to holders of the Common Stock, or any other class or series
of capital stock of the Corporation ranking junior to the Class A Preferred
Stock as to distribution on liquidation, dissolution, or winding up.
Holders of Class A Preferred Stock shall not be entitled to any further
distributions upon voluntary or involuntary liquidation, dissolution, or
winding up of the Corporation. If, upon any such liquidation, dissolution,
or winding up of the Corporation, the assets of the Corporation available
for distribution to holders of Class A Preferred Stock shall be
insufficient to permit payment in full to such holders of the preferential
amounts aforesaid, then all such assets of the Corporation shall be
distributed ratably among holders of Class A Preferred Stock, Class B
Preferred Stock and any other class of stock or series thereof then
outstanding ranking on a parity therewith as to distribution or
liquidation, dissolution, or winding up in proportion to the full
preferential amounts to which they shall be entitled respectively.
No payment on account of any voluntary or involuntary
liquidation, dissolution, or winding up of the Corporation shall be made to
holders of Class B Preferred Stock or any other class or series of stock
ranking on a parity with Class A Preferred Stock with respect to
distribution on liquidation, dissolution, or winding up unless a payment on
account of such liquidation, dissolution, or winding up shall be made at
the same time to holders of Class A Preferred Stock in proportion to the
full distributive amounts to which they and holders of Class B Preferred
Stock and such other parity stock are respectively entitled.
Neither the merger nor consolidation of the Corporation into
or with any other corporation, nor the merger or consolidation of any other
corporation into or with the Corporation, nor a sale, transfer, or lease of
all or any part of the assets of the Corporation, shall be deemed to be a
liquidation, dissolution, or winding up of the Corporation within the
meaning of this paragraph 3.
4. Voting Richts.
a. General. Except as otherwise provided by these resolutions
or by applicable law, the holders of the Class A Preferred Stock shall not
be entitled to vote on any matters required or permitted to be submitted to
the shareholders of the Corporation for their approval. In each instance
in which the holders of the Class A Preferred Stock shall be entitled to
vote, each such holder shall be entitled to one vote for each share of
Class A Preferred Stock held by him.
b. Voting Rights. The holders of Class A Preferred Stock
shall be entitled to vote with respect to, and the affirmative vote of the
holders of at least 66-2/3% of the shares of Class A Preferred Stock then
outstanding shall be required to authorize, each of the following:
(a) the issuance of any additional shares of Class A
Preferred Stock;
(b) the issuance of any additional shares of a class or
series of stock ranking prior to or on a parity with
the Class A Preferred Stock as to dividends or as to
distribution upon liquidation, dissolution, or
winding-up;
(c) any amendment, alteration, or repeal of any of the
provisions of these resolutions or of the
Corporation's Articles of Incorporation so as to
alter or change the preferences, special rights,
privileges or voting or other powers of the Class A
Preferred stock; or
(d) any proposed consolidation or merger of the Corporation
with or into any other corporation or corporations,
any proposed reincorporation, dissolution,
liquidation or winding-up of the Corporation, or any
proposed sale, lease, transfer, or other disposition
of all or substantially all of the assets of the
Corporation.
5. Redemption.
a. Optional Redemption. The Corporation may redeem the
shares of Class A Preferred Stock for cash, at its option, in whole or in
part, at any time on or after January 1, 1991, at a price per share equal
to $100 plus dividends accrued and unpaid on such share to the date fixed
for redemption.
b. Pro Rata Requirement. All redemptions shall be made on
a pro rata basis (as nearly as practicable) between Class A Preferred stock
and Class B Preferred Stock in such proportion as the number of shares of
Class A Preferred Stock outstanding at any time bears to the number of
shares of Class B Preferred Stock outstanding at such time. In addition,
all redemptions of Class A Preferred Stock shall be made on a pro rata
basis (as nearly as practicable) among the holders of Class A Preferred
Stock in proportion to the number of shares held by them.
c. Redemption Procedures. Any redemption of any or all of the
outstanding shares of Class A Preferred Stock shall be effected in
accordance with the provisions of this paragraph 5.c. Any such redemption
shall be effected by written notice given by certified or registered mail,
postage prepaid, not less than 30 days nor more than 60 days prior to the
date fixed for redemption to the holders of record of Class A Preferred
Stock whose shares are to be redeemed at their respective addresses as the
same shall appear on the books of the Corporation.
If notice of any such redemption by the Corporation shall
have been given as herein provided and if before the redemption date
specified in such notice all funds necessary for such redemption shall have
been set apart so as to be available therefor and only therefor, then on
and after the close of business on the date fixed for redemption, the
shares of Class A Preferred Stock called for redemption, notwithstanding
that any certificate therefor shall not have been surrendered, shall no
longer be deemed outstanding and all rights with respect to such shares
shall forthwith cease and terminate except the right of holders of such
shares to receive upon surrender of their certificates the amount payable
upon redemption thereof, but without interest.
FURTHER RESOLVED; that pursuant to the authority vested in the
Board of Directors of the Corporation in accordance with the provisions of
its Articles of Incorporation, a new series of Preferred Stock of the
Corporation be and hereby is created, of which the designation,
preferences, limitations, and relative rights shall be as follows:
1. Designation and Number of Shares.
This series of Series Preferred Stock is designated "Class B
Preferred Stock," and the number of shares which shall constitute such
Series shall be 122,500 shares, par value of $1.00 per share.
2. Dividends.
Holders of the Class B Preferred Stock shall be entitled to
receive dividends, when and as declared by the Board of Directors, payable
in cash out of funds legally available therefor, at the rate of $6.00 per
share per annum, accruing from and after the date of issuance. Such
dividends accrue from the date of issuance, and shall accrue from day to
day, whether or not earned or declared. Such dividends shall be payable
quarterly, on January 2, April 1, July 1 and October 1 in each year. Such
dividends shall be cumulative so that if such dividends in respect of any
previous semi-annual dividend period at the aforesaid rate shall not have
been paid or declared and set apart for all shares of the Class B Preferred
Stock at the time outstanding, the deficiency shall be fully paid or
declared and set apart for said shares before any dividend or other
distribution may be paid or declared or set apart for any shares of the
Corporation's Common Stock ($.25 par value) ("Common Stock"), the
Corporations's Class A Preferred Stock ($1.00 par value) (the "Class A
Preferred Stock") or any shares of any other class or series of capital
stock of the Corporation ranking junior to or on parity with the Class B
Preferred Stock as to payment of dividends. When dividends are not paid in
full upon the shares of Class B Preferred Stock, Class A Preferred Stock
and any other preferred stock ranking on a parity as to payment of
dividends with Class B Preferred Stock, all dividends declared upon shares
of Class B Preferred Stock, Class A Preferred Stock and any other preferred
stock ranking on a parity as to dividends with Class B Preferred Stock
shall be declared pro rata so that the amount of dividends declared per
share on Class B Preferred Stock, Class A Preferred Stock and such other
preferred stock shall in all cases bear to each other the same ratio that
accrued dividends per share on the shares of Class B Preferred Stock, Class
A Preferred Stock and such other preferred stock bear to each other.
3. Liquidation.
In the event of voluntary or involuntary liquidation,
dissolution, or winding up of the Corporation, holders of the then
outstanding shares of Class B Preferred Stock shall be entitled to receive
for each such share, payment in cash equal to $100 plus any dividends
accrued and unpaid on such shares to the date fixed for final distribution
in such liquidation, dissolution, or winding up before any distribution of
assets is made to holders of the Common Stock or any other class or series
of capital stock of the Corporation ranking junior to the Class B Preferred
Stock as to distribution on liquidation, dissolution, or winding up.
Holders of Class B Preferred Stock shall not be entitled to any further
distributions upon voluntary or involuntary liquidation, dissolution, or
winding up of the Corporation. If, upon any such liquidation, dissolution,
or winding up of the Corporation, the assets of the Corporation available
for distribution to holders of Class B Preferred Stock shall be
insufficient to permit payment in full to such holders of the preferential
amounts aforesaid, then all such assets of the Corporation shall be
distributed ratably among holders of Class B Preferred Stock, Class A
Preferred Stock and any other class of stock or series thereof then
outstanding ranking on a parity therewith as to distribution or
liquidation, dissolution, or winding up in proportion to the full
preferential amounts to which they shall be entitled respectively.
No payment on account of any voluntary or involuntary
liquidation, dissolution, or winding up of the Corporation shall be made to
holders of Class A Preferred Stock or any other class or series of stock
ranking on a parity with Class B Preferred Stock with respect to
distribution on liquidation, dissolution, or winding up unless a payment on
account of such liquidation, dissolution, or winding up shall be made at
the same time to holders of Class B Preferred Stock in proportion to the
full distributive amounts to which they and holders of Class A Preferred
Stock and such other parity stock are respectively entitled.
Neither the merger nor consolidation of the Corporation into
or with any other corporation, nor the merger or consolidation of any other
corporation into or with the Corporation, nor a sale, transfer, or lease of
all or any part of the assets of the Corporation, shall be deemed to be a
liquidation, dissolution, or winding up of the Corporation within the
meaning of this paragraph 3.
4. Voting Rights.
a. General. Except as otherwise provided by these
resolutions or by applicable law, the holders of the Class B Preferred
Stock shall not be entitled to vote on any matters required or permitted to
be submitted to the shareholders of the Corporation for their approval. In
each instance in which the holders of the Class B Preferred Stock shall be
entitled to vote, each such holder shall be entitled to one vote for each
share of Class B Preferred Stock held by him.
b. Other Voting Rights. The holders of Class B Preferred Stock
shall be entitled to vote with respect to, and the affirmative vote of the
holders of at least 66-2/3% of the shares of Class B Preferred Stock than
outstanding shall be required to authorize, each of the following:
(a) the issuance of any additional shares of Class B Preferred
Stock;
(b) the issuance of any additional shares of a class or
series of stock ranking prior to or on a parity with the
Class B Preferred Stock as to dividends or as to
distribution upon liquidation, dissolution, or winding-
up;
(c) any amendment, alteration, or repeal of any of the
provisions of these resolutions or of the Corporation's
Articles of Incorporation so as to alter or change the
preferences, special rights, privileges or voting or
other powers of the Class B Preferred Stock; or
(d) any proposed consolidation or merger of the corporation
with or into any other corporation or corporations, any
proposed reincorporation, liquidation, dissolution or
winding-up of the Corporation, or any proposed sale,
lease, transfer, or other disposition of all or
substantially all of the assets of the Corporation.
5. Redemption.
a. Optional Redemption. The Corporation may redeem the
shares of Class B Preferred Stock for cash, at its option, in whole or in
part, at any time on or after January 1, 1991, at a price per share equal
to $100 plus dividends accrued and unpaid on such shares to the date fixed
for redemption.
b. Pro Rata Requirement. All redemptions shall be made on
a pro rata basis (as nearly as practicable) between Class B Preferred Stock
and Class A Preferred Stock in such proportion as the number of shares of
Class B Preferred Stock outstanding at any time bears to the number of
shares of Class A Preferred Stock outstanding at such time. In addition,
all redemptions of Class B Preferred Stock shall be made on a pro rata
basis (as nearly as practicable) among the holders of Class B Preferred
Stock in proportion to the number of shares hold by them.
c. Redemption Procedures. Any redemption of any or all of
the outstanding shares of Class B Preferred Stock shall be effected in
accordance with the provisions of this paragraph 5.c. Any such redemption
shall be effected by written notice given by certified or registered mail,
postage prepaid, not less than 30 days nor more than 60 days prior to the
date fixed for redemption to the holders of record of Class B Preferred
Stock whose shares are to be redeemed at their respective addresses as the
same shall appear on the books of the Corporation.
If notice of any such redemption by the Corporation shall
have been given as herein provided and if before the redemption date
specified in such notice all funds necessary for such redemption shall have
been set apart so as to be available therefor and only therefor, then on
and after the close of business on the date fixed for redemption, the
shares of Class B Preferred Stock called for redemption, notwithstanding
that any certificate therefor shall not have been surrendered, shall no
longer be deemed outstanding and all rights with respect to such shares
shall forthwith cease and terminate except the right of holders of such
shares to receive upon surrender of their certificates the amount payable
upon redemption thereof, but without interest.
IN WITNESS WHEREOF, said Ozite Corporation has caused this Certificate of
Designations to be signed by John G. Hamm, its Vice President-Finance, and
Kenneth L. Kwiatt, its Secretary, this 8th day of May, 1991.
By: /s/ John G. Hamm
----------------------
John G. Hamm
Vice President-Finance
Attest:
/s/ Kenneth L. Kwiatt
- ----------------------------
Kenneth L. Kwiatt, Secretary
State of Delaware
Office of the Secretary of State PAGE 1
I, EDWARD J. FREEL, SECRETARY OF STATE OF THE STATE OF
DELAWARE, DO HEREBY CERTIFY THE ATTACHED IS A TRUE AND CORRECT COPY OF THE
CERTIFICATE OF MERGER, WHICH MERGES:
"OZITE CORPORATION", A TEXAS CORPORATION, WITH AND INTO
"OZITE CORPORATION" UNDER THE NAME OF "OZITE CORPORATION", A CORPORATION
ORGANIZED AND EXISTING UNDER THE LAWS OF THE STATE OF DELAWARE, AS RECEIVED
AND FILED IN THIS OFFICE THE TWENTY-EIGHTH DAY OF AUGUST, A.D. 1990, AT
10:08 O'CLOCK A.M.
/s/ Edward J. Freel
-------------------------------------------
[SEAL] Edward J. Freel, Secretary of State
AUTHENTICATION: 8932972
DATE: 02-21-98
2230842 8100M
981067441
STATE OF DELAWARE
SECRETARY OF STATE
DIVISION OF CORPORATIONS
FILED 10:08 AM 08/28/1990
902405174 - 2230842
Certificate of Merger
of
Ozite Corporation
(a Texas corporation)
into
Ozite Corporation
(a Delaware corporation)
Pursuant to Section 252 of the General Corporation Law of the State of
Delaware, Ozite Corporation, a Delaware corporation ("Ozite Delaware"),
hereby certifies that:
1. The Agreement of Merger (the "Merger Agreement") between Ozite Delaware
and Ozite Corporation, a Texas corporation ("Ozite"), pursuant to which
Ozite shall be merged into Ozite Delaware, has been approved, adopted,
certified, executed and acknowledged by Ozite and Ozite Delaware in
accordance with Section 252(c) of the General Corporation Law of the
State of Delaware.
2. The name of the surviving corporation shall be Ozite Corporation.
3. The Certificate of Incorporation of the surviving corporation shall be the
Certificate of Incorporation of Ozite Delaware as in effect immediately
prior to the merger.
4. The Merger Agreement is on file at 1755 Butterfield Road, Libertyville,
Illinois 60048, the principal place of business of the surviving
corporation, which Merger Agreement shall be furnished by the surviving
corporation, on request and without cost, to any Shareholder of Ozite or
Ozite Delaware.
5. The authorized capital stock of Ozite immediately prior to the effective
time of the merger was 12,000,000 shares of Common Stock, 5,406,416
shares of which were issued and outstanding, and 1,000,000 shares of
Preferred Stock of which 577,500 shares of Class A Preferred Stock and
122,500 shares of Class B Preferred Stock were issued and outstanding.
IN WITNESS WHEREOF, this Certificate is executed and attested by the
undersigned duly authorized officers on behalf of Ozite Corporation, a
Delaware corporation, this 22th day of August, 1990.
Ozite Corporation
(a Delaware Coporation)
By: /s/ Terence K. Brennan
---------------------------
Name: Terence K. Brennan
Title: President
Attest:
/s/ Kenneth L. Kwiatt
- ----------------------------------
Name: Kenneth L. Kwiatt
Title: Secretary
State of Delaware
Office of the Secretary of State PAGE 1
I, EDWARD J. FREEL, SECRETARY OF STATE OF THE STATE OF
DELAWARE, DO HEREBY CERTIFY THE ATTACHED IS A TRUE AND CORRECT COPY OF THE
CERTIFICATE OF INCORPORATION OF "OZITE CORPORATION", FILED IN THIS OFFICE
ON THE SIXTEENTH DAY OF MAY, A.D. 1990, AT 9:01 O'CLOCK A.M.
/s/ Edward J. Freel
---------------------------------------
[SEAL] Edward J. Freel, Secretary of State
AUTHENTICATION:8932971
DATE: 02-21-98
2230842 8100
981067441
STATE OF DELAWARE
SECRETARY OF STATE
DIVISION OF CORPORATIONS
FILED 09:01 AM 05/16/1990
901365067 - 2230842
CERTIFICATE OF INCORPORATION
OF
OZITE CORPORATION
FIRST: The name of the Corporation is: OZITE CORPORATION
(the "Corporation").
SECOND: The registered office of the Corporation within the
State of Delaware is to be located at 32 Loockerman Square, Suite L-100, in
the City of Dover, County of Kent. The name of its registered agent at
such address is the Prentice-Hall Corporation System, Inc.
THIRD: The nature of the business or purposes for which the
Corporation is formed is to engage in any lawful act or activity for which
corporations may be organized under the General Corporation Law of the
State of Delaware, as amended (the "GCL").
FOURTH: The total number of shares which the Corporation shall
have authority to issue is thirteen million (13,000,000) shares, consisting
of twelve million (l2,000,000) shares of Common Stock with a par value of
twenty-five cents ($0.25) per share, and one million (1,000,000) shares of
Preferred Stock with a par value of one dollar ($1.00) per share. The Board
of Directors of the Corporation shall have authority to fix and determine
by resolution or resolutions such designations, powers, preferences,
rights, qualifications, limitations and restrictions of or with respect to
the Preferred Stock or any series or class thereof as may be permitted by
Section 151 of the GCL, as may be amended from time to time. Such
authority shall include, without limiting the foregoing, the power to cause
Preferred Stock to be issued in one or more series or class and to specify
the number of shares of any such series or class.
FIFTH: The name and mailing address of the incorporator is:
David G. Edwards, 500 North Central Avenue, Northfield, Illinois 60093.
SIXTH: The following provisions are inserted for the
management of the business and for the conduct of the affairs of the
Corporation, and for further definition, limitation and regulation of the
powers of the Corporation and of its directors and stockholders:
(a) Election of Directors need not be by written ballot
unless the By-Laws of the Corporation so provide.
(b) The Board of Directors shall have the power without the
assent or vote of the stockholders to make, alter,
amend, change, add to or repeal the By-Laws of the
Corporation.
(c) Whenever a compromise or arrangement is proposed
between the Corporation and its creditors or any class
of them and/or between the Corporation and its
stockholders or any class of them, any court of
equitable jurisdiction within the State of Delaware may,
on the application in a summary way of the Corporation
or of any creditor or stockholder thereof or on the
application of any receiver or receivers appointed for
the Corporation under the provisions of Section 291 of
the GCL or on the application of trustees in dissolution
or of any receiver or receivers appointed for the
Corporation under the provisions of Section 279 of the
GCL order a meeting of the creditors or class of creditors,
and/or of the stockholders or class of stockholders of the
Corporation, as the case may be, to be summoned in such
manner as the said court directs. If a majority in
number representing three-fourths in value of the creditors
or class of creditors, and/or of the stockholders or
class of stockholders of the Corporation as the case may
be, agree to any compromise or arrangement and to any
reorganization or the Corporation as a consequence of
such compromise of arrangement, the said compromise or
arrangement and the said reorganization shall, if
sanctioned by the court to which the said application
has been made, be binding on all the creditors or class
of creditors, and/or on all the stockholders or class of
stockholders, of the Corporation, as the case may be,
and also on the Corporation.
SEVENTH: The Corporation shall, to the fullest extent
permitted by Section 145 of the GCL, as amended from time to time, indemnify
all persons who may be indemnified by the Corporation pursuant thereto.
EIGHTH: The Corporation reserves the right to amend, alter,
change or repeal any provision contained in this Certificate of
Incorporation in the manner now or hereafter prescribed by law, and
all rights and powers conferred herein on stockholders, directors and
officers are subject to this reserved power.
NINTH: A Director of the Corporation shall not be personally
liable to the Corporation on its stockholders for monetary damages for
beach of fiduciary duty as a Director, except for liability (i) for any
breach of the Director's duty or loyalty to the Corporation or its
stockholders, (ii) for acts or omissions not in good faith or which involve
intentional misconduct or a knowing violation of law, (iii) under Section
174 of the GCL, or (iv) for any transaction from which the Director derives
an improper personal benefit.
TENTH: The Corporation elects not to be governed by the
provisions of Section 203 of the GCL.
IN WITNESS WHEREOF, the Incorporator has executed this
Certificate this 15th day of May, 1990.
/s/ David G. Edwards
----------------------------------
David G. Edwards, Incorporator
EXHIBIT 3.8
OZITE CORPORATION
(a Delaware corporation)
BY-LAWS
(as in effect July 12, 1990)
----------------------------
ARTICLE I
OFFICES
SECTION 1.1 REGISTERED OFFICE. The registered office shall be
maintained at 32 Loockerman Sq., Suite L-100, in the City of Dover, in the
County of Kent, in the State of Delaware and the Prentice-Hall Corporation
System, Inc. is the registered agent.
SECTION 1.2 OTHER OFFICES. The Corporation may also have
other offices, either within or without the State of Delaware, at such
place or places as the Board of Directors may from time to time appoint or
the business of the Corporation may require.
ARTICLE II
MEETINGS OF STOCKHOLDERS
SECTION 2.1 ANNUAL MEETINGS. The date of the annual meeting of
the stockholders for the election of directors and for the transaction of such
other business as properly may come before such meeting shall be determined by
resolution of the Board of Directors to be a specific day in each year, if not
a legal holiday, and, if a legal holiday, on the next succeeding business
day, at the time and place within or without the State of Delaware as may be
designated by the Board of Directors and set forth in the notice of the
meeting or a duly executed waiver of notice thereof.
SECTION 2.2 SPECIAL MEETINGS. Special meetings of the
stockholders for any proper purpose or purposes may be called at any time by
the Board of Directors, the Chairman of the Board, the President, or any Vice
President, to be held on the date, at the time and place within or without the
State of Delaware as the Board of Directors, the Chairman of the Board, the
President or Vice President, whichever has called the meeting, shall direct.
A special meeting of the stockholders shall be called by the Chairman of the
Board, the President, any Vice President or the Secretary whenever stockholders
owning a majority of the shares of the Corporation then issued and outstanding
and entitled to vote on all of the matters to be submitted to stockholders of
the Corporation at such special meeting shall make written application to the
Chairman of the Board, the President, any Vice President or the Secretary.
Any such written request shall state a proper purpose or purposes of the
meeting and shall be delivered to the Chairman of the Board, President, any
Vice President or the Secretary.
SECTION 2.3 NOTICE OF MEETING. Notice, signed by the Chairman
of the Board, the President, any Vice President, the Secretary or an Assistant
Secretary, of every annual or special meeting of stockholders stating the
purpose or purposes for which the meeting is called, and the date and time
when, and the place where it is to be held, shall be prepared in writing and
personally delivered or mailed, postage prepaid, to each stockholder entitled
to vote at such meeting not less than ten (10) nor more than sixty (60) days
before the meeting, except as otherwise provided by statute. If mailed, such
notice shall be directed to a stockholder at his address as it shall appear on
the stock record book of the Corporation, unless the stockholder shall have
filed with the Secretary a written request that notices intended for him or
her be mailed to some other address, in which case it shall be mailed to the
address designated in such request. Notice shall be deemed given when
personally delivered or deposited to the United States mail, as the case may
be; provided, however, that such notice may also be given by telegram,
cablegram or radiogram and in such case shall be deemed given when ordered or,
if a delayed delivery is ordered, as of such delayed delivery time.
SECTION 2.4 LIST OF STOCKHOLDERS. A complete list of the
stockholders entitled to vote at each meeting of stockholders, arranged in
alphabetical order and showing the address of each such stockholder and the
number of shares registered in the name of each such stockholder, shall be
open to the examination of any stockholder, for any purpose germane to such
meeting, during ordinary business hours, for a period of at least ten (10)
days prior to the meeting, either at a place within the city where the meeting
is to be held, which place shall be specified in the notice of such meeting,
or, if not so specified, at the place where the meeting is to be held. The
list shall also be produced and kept at the time and place of the meeting and
during the whole time thereof, and may be inspected by any stockholder who is
present.
SECTION 2.5 QUORUM. The presence at any meeting, in person or
by proxy, of the holders of record of a majority of the shares then issued and
outstanding and entitled to vote shall be necessary and sufficient to
constitute a quorum for the transaction of business, except where otherwise
provided by statute.
SECTION 2.6 ADJOURNMENTS. In the absence of quorum,
stockholders representing a majority of the shares then issued and
outstanding and entitled to vote, present in person or by proxy, or, if no
stockholder entitled to vote is present in person or by proxy, any officer
entitled to preside at or act as secretary of such meeting, may adjourn the
meeting from time to time without notice other than announcement at the
meeting, until a quorum shall be present or represented. At such adjourned
meeting at which a quorum shall be present or represented, any business may
be transacted which might have been transacted at the meeting originally
noticed. If the adjournment is for more than thirty (30) days, or if after
the adjournment a new record date is fixed for the adjourned meeting, a
notice of the adjourned meeting shall be given to each stockholder of
record entitled to vote at the meeting.
SECTION 2.7 VOTING. When a quorum is present at any meeting,
the holders of a majority of the shares of the Corporation, present in person
or by proxy, shall decide any question brought before the meeting, unless the
question is one upon which by express provision of the statutes or of the
certificate of incorporation, a different vote is required in which case such
express provision shall govern and control the decision of such question.
SECTION 2.8 PROXIES. Any stockholders entitled to vote may
vote by proxy, provided that the instrument authorizing such proxy to act
shall have been executed in writing (which shall include telegraphing,
cabling or other means of electronically transmitted written copy) by the
stockholder himself or herself or by his or her duly authorized
attorney-in-fact. No proxy shall be voted or acted upon after three years
from its date, unless the proxy provides for a longer period.
SECTION 2.9 JUDGES OF ELECTION. The Board of Directors may
appoint judges of election to serve at any election of directors and at
balloting on any other matter that may properly come before a meeting of
stockholders. If no such appointment shall be made, or if any of the judges
so appointed shall fail to attend, or refuse or be unable to serve, then such
appointment may be made by the presiding officer of the meeting at the meeting.
SECTION 2.10 WRITTEN CONSENT. Any action which may be taken
at any annual or special meeting of stockholders may be taken without a meeting
and without a vote, if a consent in writing, setting forth the action so
taken, shall be signed by the holders of outstanding stock having not less
than the minimum number of votes that would be necessary to authorize or take
such action at a meeting at which all shares entitled to vote thereon were
present and voted. Whenever any such action is taken without a meeting by
less than unanimous consent, all stockholders who have not consented in
writing must be properly informed in writing of such action.
ARTICLE III
BOARD OF DIRECTORS
SECTION 3.1 NUMBER. The initial number of directors which
shall constitute the whole Board of Directors shall be six (6). Effective
upon the merger of Ozite Corporation, a Texas corporation, with and into
the Corporation, the number of directors which shall constitute the whole
Board of Directors shall be nine (9). Thereafter, the number of directors
which shall constitute the whole Board of Directors shall be fixed from
time to time by resolution of the Board of Directors or stockholders at the
annual meeting or any special meeting called for that purpose.
SECTION 3.2 ELECTION AND TERM OF OFFICE. Directors shall be
elected at the annual (or special) meeting of the stockholders except as
provided in SECTION 3.3 of this Article. Each Director (whether elected at
an annual meeting see query, or to fill a vacancy or otherwise) shall
continue in office until a successor shall have been elected and qualified
or until his or her death, resignation or removal in the manner hereinafter
provided, whichever shall first occur.
SECTION 3.3 VACANCIES AND ADDITIONAL DIRECTORSHIPS. If any
vacancy shall occur among the directors by reason of death, resignation, or
removal, or as the result of an increase in the number of directorships, the
directors then in office shall continue to act and may fill any such vacancy
by a vote of the majority of directors then in office, though less than a
quorum, and each director so chosen shall hold office until the next annual
election of directors and until his or her successor shall be duly elected and
shall qualify, or until his or her earlier death, resignation or removal.
SECTION 3.4 POWERS. The business of the Corporation shall be
managed by its Board of Directors, which may exercise all powers of the
Corporation and do all lawful acts and things as are not by law or by the
Certificate of Incorporation or these By-Laws reserved to the stockholders.
SECTION 3.5 RESIGNATION OF DIRECTORS. Any director may resign
at any time by giving written notice of such resignation to the Board of
Directors, the Chairman of the Board, the President, any Vice President or the
Secretary. Any such resignation shall take effect at the time specified
therein or, if no time be specified, upon receipt thereof by the Board of
Directors or one of the above named officers; and, unless specified
therein, the acceptance of such resignation shall not be necessary to make
it effective.
SECTION 3.6 REMOVAL OF DIRECTORS. At the annual meeting or any
special meeting of the stockholders, duly called as provided in these By-
Laws, any director or directors may, by the affirmative vote of the holders of
a majority of the shares of stock issued and outstanding and entitled to vote
for the election of Directors, be removed from office, either with or without
cause. At such meeting a successor or successors may be elected by a majority
of the votes cast, or if any such vacancy is not so filled, it may be filled
by the directors as provided in SECTION 3.3 of this Article.
SECTION 3.7 COMPENSATION OF DIRECTORS. Directors shall receive
such reasonable compensation for their services as such, whether in the form
of salary or a fixed fee for attendance at meetings, with expenses, if any, as
the Board of Directors may from time to time determine. Nothing herein
contained shall be construed to preclude any director from serving the
Corporation in any other capacity and receiving compensation therefor.
ARTICLE IV
MEETINGS OF THE BOARD OF DIRECTORS
SECTION 4.1 PLACE. The Board of Directors of the Corporation
may hold meetings, both regular and special, either within or without the
State of Delaware.
SECTION 4.2 REGULAR MEETINGS. The Board of Directors by
resolution may provide for the holding of regular meetings and may fix the
times and places at which such meetings shall be held. Notice of regular
meetings shall not be required to be given, provided that whenever the time or
place of regular meetings shall be fixed or changed, notice of such action
shall be mailed promptly to each Director who shall not have been present at
the meeting at which such action was taken, addressed to him or her at his or
her residence or usual place of business, unless he or she shall have filed
with the Secretary a written request that notices intended for him or her be
mailed to some other address, in which case it shall be mailed to the address
designated in such request.
SECTION 4.3 SPECIAL MEETINGS. Special meetings of the Board of
Directors may be called by the Chairman of the Board or the President, and
shall be called by the President or Secretary at the written request of any
directors. Except as otherwise required by statute, notice of each special
meeting shall be given to each director, if by mail, when addressed to him or
her at his or her residence or usual place of business, unless he or she shall
have filed with the Secretary a written request that notices intended for him
or her be mailed to some other address, in which case it shall be mailed to
the address designated in such request, on five (5) days notice, or shall be
sent to him or her at such place by telegram, radiogram or cablegram, or
telephone or other electronic means, or delivered to him or her personally,
not later than two (2) days before the day on which the meeting is to be held.
Such notice shall state the time and place of such meeting, but need not state
the purposes thereof, unless otherwise required by statute, the Certificate of
Incorporation of the Corporation or these By-Laws.
SECTION 4.4 QUORUM. At any meeting of the Board of Directors a
majority of the whole Board of Directors shall constitute a quorum for the
transaction of business, and the act of the majority of those present at any
meeting at which a quorum is present shall be sufficient for the act of the
Board of Directors, except as may be otherwise specifically provided by law or
by the Certificate of Incorporation.
SECTION 4.5 ADJOURNED MEETINGS. If a quorum shall not be
present at a meeting of the Board of Directors, the directors present thereat
may adjourn the meeting from time to time, until a quorum shall be present.
Two (2) days' notice of any such adjournment shall be given personally to each
director who was not present at the meeting at which such adjournment was
taken and, unless announced at the meeting, to the other directors; provided,
that five (5) days' notice shall be given if notice is given by mail.
SECTION 4.6 WRITTEN CONSENT. Any action required or permitted
to be taken at any meeting of the Board of Directors may be taken without a
meeting if all the members of the Board consent thereto in writing, and the
writing or writings are filed with the minutes of the proceedings of the Board
of Directors.
SECTION 4.7 COMMUNICATIONS EQUIPMENT. Any one or more members
of the Board of Directors may participate in any meeting of the Board by means
of conference telephone or similar communications equipment by means of which
all persons participating in the meeting can hear each other, and
participation by such means shall be deemed to constitute presence in person
at such meeting.
SECTION 4.8 WAIVER OF NOTICE. Notice of any meeting need
not be given to any director who shall attend such meeting in person or
shall waive notice thereof, before or after such meeting, in writing or by
telegram, radiogram or cablegram or other means of electronically
transmitted written copy.
ARTICLE V
COMMITTEES OF THE BOARD
SECTION 5.1 MEMBERS AND TERM OF OFFICE. The Board of Directors
may, by resolution passed by a majority of the whole Board of Directors,
designate one (1) or more committees. Each such committee shall consist of
one (1) or more of the directors of the Corporation. Any such committee, to
the extent provided in such resolution, shall have and may exercise the power
of the Board of Directors in the management of the business and affairs of the
Corporation, and may authorize the seal of the Corporation to be affixed to
all papers which may require it. The Board of Directors may designate one (1)
or more directors as alternate members of any committee who, in the order
specified by the Board of Directors, may replace any absent or disqualified
member at any meeting of the committee. The term of office of the members of
each committee shall be as fixed from time to time by the Board, subject to
the term of office of the directors and these By-Laws; provided, however, that
any committee member who ceases to be a member of the Board of Directors shall
ipso facto cease to be a committee member. Each committee shall appoint a
secretary, who may be the Secretary or an Assistant Secretary of the
Corporation.
SECTION 5.2 MEETINGS, NOTICES AND RECORDS. Each committee may
provide for the holding of regular meetings, with or without notice, and a
majority of the members of any such committee may fix the time, place and
procedure for any such meeting. Special meetings of each committee shall be
held upon call by or at the direction of its chairman or, if there be no
chairman, by or at the direction of any two (2) of its members, at the time and
place specified in the respective notices or waivers of notice thereof.
Notice of each special meeting of a committee shall be mailed to each member
of such committee, addressed to him or her at his or her residence or usual
place of business, unless he or she shall have filed with the Secretary a
written request that notices intended for him or her be mailed to some other
address, in which case it shall be mailed to the address designated in such
request, at least five (5) days before the day on which the meeting is to be
held, or shall be sent by telegram, radiogram or cablegram, or other means of
electronically transmitted written copy, addressed to him at such place, or
telephoned or delivered to him or her personally, not later than the two (2)
days before the day on which the meeting is to be held. Notice of any meeting
of a committee need not be given to any member thereof who shall attend the
meeting in person or who shall waive notice thereof by telegram, radiogram,
cablegram or other means of electronically transmitted written copy. Notice
of any adjourned meeting need not be given. Each committee shall keep a
record of its proceedings.
Each committee may meet and transact any and all business
delegated to that committee by the Board of Directors by means of a conference
telephone or similar communications equipment provided that all persons
participating in the meeting are able to hear and communicate with each other.
Participation in a meeting by means of conference telephone or similar
communication shall constitute presence in person at such meeting.
SECTION 5.3 QUORUM AND MANNER OF ACTING. At each meeting of
any committee the presence of a majority of its members then in office shall
be necessary and sufficient to constitute a quorum for the transaction of
business, and the act of a majority of the members present at any meeting at
which a quorum is present shall be the act of such committee; in the absence
of a quorum, a majority of the members present at the time and place of any
meeting may adjourn the meeting from time to time until a quorum shall be
present. Subject to the foregoing and other provisions of these By-Laws and
except as otherwise determined by the Board of Directors, each committee may
make rules for the conduct of its business. Any determination made in writing
and signed by all the members of such committee shall be as effective as if
made by such committee at a meeting.
SECTION 5.4 RESIGNATIONS. Any member of a committee may resign
at any time by giving written notice of such resignation to the Board of
Directors, the Chairman of the Board, the President, any Vice President or the
Secretary of the Corporation. Unless otherwise specified in such notice, such
resignation shall take effect upon receipt thereof by the Board of Directors
or any such officer.
SECTION 5.5 REMOVAL. Any member of any committee may be
removed at any time by the affirmative vote of a majority of the whole Board of
Directors with or without cause.
SECTION 5.6 VACANCIES. If any vacancy shall occur in any
committee by reason of death, resignation, disqualification, removal or
otherwise, the remaining members of such committee, though less than a quorum,
shall continue to act until such vacancy is filled by the Board of Directors.
SECTION 5.7 COMPENSATION. Committee members shall receive such
reasonable compensation for their services as such, whether in the form of
salary or a fixed fee for attendance at meetings, with reasonable expenses, if
any, as the Board of Directors may from time to time determine. Nothing herein
contained shall be construed to preclude any committee member from serving the
Corporation in any other capacity and receiving compensation therefor.
ARTICLE VI
OFFICERS
SECTION 6.1 OFFICERS. The officers of the Corporation shall
be a President, a Treasurer and a Secretary, and may also include a
Chairman of the Board, one or more Vice-Chairmen, one or more Vice
Presidents, Assistant Secretaries or Assistant Treasurers, each of whom
shall be elected by the directors and shall hold office until his or her
successor is duly elected and qualified or until his or her earlier
resignation or removal. None of the officers of the Corporation except the
Chairman or any Vice-Chairman of the Board need be directors. Any number
of offices may be held by the same person; provided, that a Chairman,
President or Vice President may not hold the additional office of
Secretary, Assistant Secretary, Treasurer or Assistant Treasurer unless
another person holds such an office, with such title and duties, as may be
necessary to enable the Corporation to sign instruments and stock
certificates which comply with Section 103(a)(2) and 158, respectively, of
the General Corporation Law of the State of Delaware.
SECTION 6.2 DUTIES. All officers, as between themselves and the
Corporation, shall have such authority and perform such duties in the
management of the Corporation as may be provided in these By-Laws, or, to the
extent not so provided, as may be provided by resolution of the Board of
Directors or, as to all other officers except the Chairman of the Board, by
the President.
SECTION 6.3 RESIGNATIONS. Any officer may resign at any time by
giving written notice of such resignation to the Board of Directors, the
Chairman of the Board, the President, a Vice President or the Secretary.
Unless otherwise specified in such written notice, such resignation shall take
effect upon receipt thereof by the Board of Directors or any such officer.
SECTION 6.4 REMOVAL. Any officer may be removed at any time,
either with or without cause, by the vote of a majority of all the directors
then in office. Such power of removal from office shall not be abridged by any
employment contract or other agreement.
SECTION 6.5 VACANCIES. A vacancy in any office by reason of
death, resignation, removal, disqualification or any other cause shall be
filled for the unexpired portion of the term in the manner prescribed in these
By-Laws for regular election or appointment to such office.
SECTION 6.6 CHAIRMAN OF THE BOARD. The Chairman of the Board
shall be a director and the chief executive officer. He shall, when present,
preside as chairman at all meetings of the stockholders and of the Board of
Directors. He may call meetings of the Board of Directors whenever he deems it
advisable. Unless otherwise provided by the Board of Directors, he may execute
and sign in the name of the Corporation deeds, mortgages, bonds, notes,
contracts, agreements and other instruments duly authorized by the Board of
Directors. The Chairman of the Board shall have such other powers and perform
such other duties as from time to time may be assigned to him by the Board of
Directors. From time to time he shall report to the Board of Directors all
matters within his knowledge which the interests of the Corporation may
require to be brought to its attention.
SECTION 6.7 PRESIDENT. The President shall be the chief
operating officer of the Corporation. In the absence or incapacity of
Chairman to act, the President shall perform all duties and functions and
exercise all the powers of the Chairman. Subject to the direction of the
Chairman of the Board of Directors, he or she shall supervise and direct
the daily management of the business, affairs and property of the
Corporation. The Chairman of the Board, if any, and the President shall
each be charged with seeing that all orders and resolutions of the Board of
Directors are carried into effect. Unless otherwise provided in the Board
of Directors, the President may sign, with any other officer thereunto duly
authorized, certificates of stock of the Corporation the issuance of which
shall have been duly authorized (the signature to which may be facsimile
signature), and may sign and execute in the name of the Corporation, deeds,
mortgages, bonds, notes, contracts, agreements, and other instruments duly
authorized by the Board of Directors. The President shall also perform
such other duties as are assigned by these By-Laws or as from time to time
may be assigned to him by the Board of Directors.
SECTION 6.8 VICE PRESIDENT. In the absence or disability of
the President, the Vice President, or if there be more than one, the Vice
Presidents in the order of priority determined by the Board of Directors,
shall perform all the duties of the President and, when so acting, shall have
all the powers of and be subject to all restrictions upon the President.
Unless otherwise provided by the Board of Directors, any Vice President may
also sign, with any other officer thereunto duly authorized, certificates of
stock of the Corporation the issuance of which shall have been duly authorized
(the signature to which may be a facsimile signature), and may sign and
execute in the name of the Corporation deeds, mortgages, bonds, notes,
contracts, agreements and other instruments duly authorized by the Board of
Directors. Each Vice President shall perform such other duties as are
assigned by these By-Laws or as from time to time may be assigned by the Board
of Directors, the Chairman of the Board or the President.
SECTION 6.9 SECRETARY. The Secretary shall: (i) record all the
proceedings of the meetings of the stockholders, the Board of Directors, and
all committees of the Board of Directors in a book or books to be kept for that
purpose; (ii) cause all notices to be duly given in accordance with the
provisions of these By-Laws as required by statute; (iii) whenever any
committee shall be appointed in pursuance of a resolution of the Board of
Directors, furnish the chairman of such committee with a copy of such
resolution; (iv) be custodian of the records and of the seal of the
Corporation, and cause such seal to be affixed to all certificates
representing capital stock of the Corporation prior to the issuance thereof
and to all instruments the execution of which on behalf of the Corporation
under its seal shall have been duly authorized; (v) see that the lists, books,
reports, statements, certificates and other documents and records required by
statute are properly kept and filed; (vi) have charge of the stock record and
stock transfer books of the Corporation, and exhibit such stock books at all
reasonable times to such persons as are entitled by statute to have access
thereto; (vii) sign (unless the Treasurer or an Assistant Secretary or an
Assistant Treasurer shall sign) certificates representing capital stock of the
Corporation the issuance of which shall have been duly authorized (the
signature to which may be a facsimile signature); and (viii) in general,
perform all duties incident to the office of Secretary and such other duties
as are given to him or her by these By-Laws or as from time to time may be
assigned to him or her by the Board of Directors, the Chairman of the Board or
the President.
SECTION 6.10 ASSISTANT SECRETARIES. At the request of the
Secretary or in his or her absence of disability, the Assistant Secretary
designated by him or her (or in the absence of such designation, the Assistant
Secretary designated by the Board of Directors or the President) shall perform
all the duties of the Secretary, and, when so acting, shall have all the
powers of and be subject to all restrictions upon the Secretary. The
Assistant Secretaries shall perform such other duties as from time to time
may be assigned to them by the Board of Directors, the Chairman of the
Board, the President or the Secretary.
SECTION 6.11 TREASURER. The Treasurer shall: (i) have charge of
and supervision over and be responsible for the funds, securities, receipts and
disbursements of the Corporation; (ii) cause the monies and other valuable
effects of the Corporation to be deposited in the name and to the credit of
the Corporation in such banks or trust companies or with such bankers or other
depositaries as shall be selected in accordance with Section 8.2 of these
By-Laws or to be otherwise dealt with in such manner as the Board of Directors
may direct; (iii) cause the funds of the Corporation to be disbursed by checks
or drafts upon the authorized depositaries of the Corporation, and cause to be
taken and preserved proper vouchers for all monies disbursed; (iv) render to
the Board of Directors or the President, whenever requested, a statement of
the financial condition of the Corporation and of all his or her transactions
as Treasurer; (v) cause to be kept at the Corporation's principal office
correct books of account of all its business and transactions and such
duplicate books of account as he or she shall determine and upon application
cause such books or duplicates thereof to be exhibited to any Director; (vi)
be empowered, from time to time, to require from the officers or agents of the
Corporation reports or statements giving such information as he or she may
desire with respect to any and all financial transactions of the Corporation;
(vii) sign (unless the Secretary or an Assistant Secretary or Assistant
Treasurer shall sign) certificates representing stock of the Corporation the
issuance of which shall have been duly authorized (the signature to which may
be a facsimile signature); and (viii) in general, perform all duties incident
to the office of Treasurer and such other duties as are given to him or her by
these By-Laws or as from time to time may be assigned to him by the Board
of Directors, the Chairman of the Board or the President.
SECTION 6.12 ASSISTANT TREASURERS. At the request of the
Treasurer or in his or her absence of disability, the Assistant Treasurer
designated by him or her (or in the absence of such designation, the Assistant
Treasurer designated by the Board of Directors or the President) shall perform
all the duties of the Treasurer, and, when so acting, shall have all the
powers of and be subject to all restrictions upon the Treasurer. The
Assistant Treasurers shall perform such other duties as from time to time may
be assigned by the Board of Directors, the Chairman of the Board, the
President or the Treasurer.
SECTION 6.13 SALARIES. The salaries of the officers of the
Corporation shall be fixed from time to time by the Board of Directors. No
officer shall be prevented from receiving such salary by reason of the fact
that he or she is also a director of the Corporation.
ARTICLE VII
CERTIFICATES OF STOCK
SECTION 7.1 STOCK CERTIFICATES. Every holder of capital stock
of the Corporation shall be entitled to have a certificate or certificates in
such form as shall be approved by the Board of Directors, certifying the
number of shares of capital stock of the Corporation owned by him or her. The
certificates representing shares of capital stock shall be signed in the name
of the Corporation by the Chairman of the Board or the President, and by the
Secretary, an Assistant Secretary, the Treasurer or an Assistant Treasurer
(which signatures may be facsimiles) and sealed with the seal of the
Corporation (which seal may be a facsimile). In case any officer, transfer
agent or registrar who shall have signed or whose facsimile signature has been
placed upon such certificate shall have ceased to be such officer, transfer
agent or registrar before such certificates are issued, they may nevertheless
be issued by the Corporation with the same effect as if such officer, transfer
agent, or registrar were still such at the date of their issue.
SECTION 7.2 BOOKS OF ACCOUNT AND RECORD OF STOCKHOLDERS. The
books and records of the Corporation may be kept at such places, within or
without the State of Delaware, as the Board of Directors may from time to time
determine. The stock record books and the blank stock certificate books shall
be kept by the Secretary or by any other officer or by the transfer agent or
registrar, if any, designated by the Board of Directors. There shall be
entered on the stock books of the Corporation the number of each certificate
issued, the number of shares represented thereby, the name of the person to
whom such certificate was issued and the date of issuance thereof.
SECTION 7.3 TRANSFERS OF SHARES. Transfers of shares of capital
stock of the Corporation shall be made on the stock records of the Corporation
only upon authorization by the registered holder thereof, or by his attorney
thereunto authorized by power of attorney duly executed and filed with the
Secretary or with the transfer agent, and on surrender of the certificate or
certificates for such shares properly endorsed or accompanied by a duly
executed stock transfer power and the payment of all taxes thereon, if any.
Except as otherwise provided by law, the Corporation shall be entitled to
recognize the exclusive right of a person in whose name any share or shares
stand on the record of stockholders as the owner of such share or shares for
all purposes including, without limitation, the rights to receive dividends or
other distributions, and to vote as such owner, and the Corporation shall not
be bound to recognize any equitable or legal claim to or interest in any such
share or shares on the part of any other person whether or not the Corporation
shall have express or other notice thereof.
SECTION 7.4 REGULATIONS. The Board of Directors may make such
additional rules and regulations, not inconsistent with these By-Laws, as it
may deem expedient concerning the issue, transfer and registration of
certificates for shares of the capital stock of the Corporation. It may
appoint, or authorize any officer or officers to appoint, one or more transfer
agents or one or more registrars and may further provide that no stock
certificate shall be valid until countersigned by one of such transfer agents
and registered by one of such registrars. Nothing herein shall be construed
to prohibit the Corporation from acting as its own transfer agent or registrar.
SECTION 7.5 LOST, STOLEN OR DESTROYED CERTIFICATES. The holder
of any certificate representing any share or shares of the capital stock of
the Corporation shall immediately notify the Corporation of any loss, theft or
destruction of such certificate. The Board of Directors may direct that a new
certificate or certificates be issued in the place of any certificate or
certificates theretofore issued by it which the owner thereof shall allege to
have been lost, stolen or destroyed upon the furnishing to the Corporation of
an affidavit to that effect by the person claiming that the certificate has
been lost, stolen or destroyed. When authorizing such issue of a new
certificate or certificates, the Board of Directors may, in its discretion,
require such owner or his or her legal representatives to give to the
Corporation and its transfer agent(s) and registrar(s) a bond in such sum,
limited or unlimited, and in such form and with such surety or sureties as the
Board of Directors in its absolute discretion shall determine, sufficient to
indemnify the Corporation against any claim that may be made against it on
account of the alleged loss, theft or destruction of any such certificate, or
the issuance of a new certificate.
SECTION 7.6 STOCKHOLDER'S RIGHT OF INSPECTION. Any stockholder
of record of the Corporation, in person or by attorney or other agent, shall
upon written demand under oath stating the purpose thereof, have the right
during the usual hours for business to inspect for any proper purpose the
Corporation's stock ledger, a list of its stockholders, and its other books and
records, and to make copies or extracts therefrom. A proper purpose shall
mean a purpose reasonably related to such person's interest as a stockholder.
In every instance where any attorney or other agent shall be the person who
seeks the right to inspection, the demand under oath shall be accompanied by a
power of attorney or such other writing which authorized the attorney or other
agent to so act on behalf of the stockholder. The demand under oath shall be
directed to the Corporation at its registered office in Delaware or at its
principal place of business.
ARTICLE VIII
DEPOSIT OF CORPORATE FUNDS
SECTION 8.1 BORROWING. No loans or advances shall be obtained
or contracted for, by or on behalf of the Corporation and no negotiable paper
shall be issued in its name, unless and except as authorized by the Board of
Directors. Such authorization may be general or confined to specific
instances.
SECTION 8.2 DEPOSITS. All funds of the Corporation not
otherwise employed shall be deposited from time to time to its credit in such
banks or trust companies or with such bankers or other depositaries as the
Board of Directors may select, or as may be selected by any officer or
officers or agent or agents authorized to do so by the Board of Directors.
SECTION 8.3 CHECKS, DRAFTS, ETC. All checks, drafts or other
orders for the payment of money, and all negotiable and non-negotiable notes or
other negotiable or non-negotiable evidences of indebtedness issued in the name
of the Corporation, and in such manner, as from time to time shall be
determined by the Board of Directors.
ARTICLE IX
INDEMNIFICATION
SECTION 9.1 RIGHT TO INDEMNIFICATION. The Company shall, to
the fullest extent permitted by applicable law as then in effect, indemnify any
person (the "Indemnitee") who was or is involved in any manner (including,
without limitation, as a party or a witness) or was or is threatened to be
made so involved in any threatened, pending or completed investigation, claim,
action, suit or proceeding, whether civil, criminal, administrative or
investigative (including, without limitation, any action, suit or proceeding
by or in the right of the Company to procure a judgment in its favor) (a
"Proceeding") by reason of the fact that he is or was a director or officer of
the Company, or is or was serving at the request of the Company as a director
or officer of another corporation or of a partnership, joint venture, trust or
other enterprise (including, without limitation, service with respect to any
employee benefit plan), whether the basis of any such Proceeding is alleged
action in an official capacity as a director or officer or in any other
capacity while serving as a director or officer, against all expenses,
liability and loss (including, without limitation, attorney's fees, judgments,
fines, ERISA excise taxes or penalties and amounts paid or to be paid in
settlement) actually and reasonably incurred by him in connection with such
Proceeding, consistent with applicable law as then in effect. All right to
indemnification conferred in this Article IX, including such right to advance
payments and the evidentiary, procedural and other provisions of this Article
IX, shall be a contract right. The Company may, by action of its Board of
Directors, provide indemnification for employees, agents, attorneys and
representatives of the Company with up to the same scope and extent as
provided for officers and directors.
SECTION 9.2 INSURANCE, CONTRACTS AND FUNDING. The Company may
purchase and maintain insurance to protect itself and any person who is, was
or may become an officer, director, employee, agent, attorney or
representative of the Company or, at the request of the Company, an officer,
director, employee, agent, attorney or representative of another corporation or
entity, against any expenses, liability or loss asserted against him or
incurred by him in connection with any Proceeding in any such capacity, or
arising out of his status as such, whether or not the Company would have the
power to indemnify him against such expense, liability or loss under the
provisions of this Article IX, and may create a trust fund, grant a security
interest or use other means (including, without limitation, a letter of
credit) to ensure the payment of such amounts as may be necessary to effect
indemnification of any person entitled thereto.
SECTION 9.3 INDEMNIFICATION; NOT EXCLUSIVE RIGHT. The right of
indemnification provided in this Article IX shall not be exclusive of any
other rights to which any person seeking indemnification may otherwise be
entitled under any provision of the Certificate of Incorporation, By-Laws or
any agreement respecting indemnification, or otherwise. The provisions of this
Article IX shall inure to the benefit of the heirs and legal representatives
of any person entitled to indemnify under this Article IX and shall be
applicable to all Proceedings, whether arising from acts or omissions
occurring before or after the adoption of this Article IX. No amendment or
repeal of any provision of this Article IX shall remove, abridge or adversely
affect any right of indemnification or any other benefits of the Indemnitee
under the provisions of this Article IX with respect to any Proceeding
involving any act or omission which occurred prior to such amendment.
SECTION 9.4 ADVANCEMENT OF EXPENSES; PROCEDURES; PRESUMPTIONS
AND EFFECT OF CERTAIN PROCEEDINGS; REMEDIES. In furtherance, but not in
limitation, of the provisions of the Certificate of Incorporation or the
foregoing provisions of this Article IX, the following procedures,
presumptions and remedies shall apply with respect to advancement of
expenses and the right to indemnification under the Certificate of
Incorporation or this Article IX.
(a) Advancement of Expenses. All reasonable expenses
incurred by or on behalf of the Indemnitee in connection with any
Proceeding shall be advanced to the Indemnitee by the Company within 30
days after the receipt by the Company of a statement or statements from the
Indemnitee requesting such advance or advances from time to time, whether
prior to or after final disposition of such Proceeding. Such statement or
statements reasonably shall evidence the expenses incurred by the
Indemnitee and, if required by law at the time of such advance, shall
include or be accompanied by an undertaking by or on behalf of Indemnitee
to repay the amounts advanced if it should ultimately be determined that the
Indemnity is not entitled to be indemnified against such expenses pursuant
to this Article IX.
(b) Procedure for Determination of Entitlement to
Indemnification.
(i) To obtain indemnification, an Indemnitee shall submit
to the President of the Company a written request,
including such documentation and information as is
reasonably available to the Indemnitee and reasonably
necessary to determine whether and to what extent the
Indemnitee is entitled to indemnification (the
"Supporting Documentation"). The determination of the
Indemnitee's entitlement to indemnification shall be
made not later than 90 days after receipt by the
Company of the written request for indemnification
together with the Supporting Documentation. The
President of the Company shall, promptly upon receipt
of such a request for indemnification, advise the
Board of Directors in writing that the Indemnitee has
requested indemnification.
(ii) The Indemnitee's entitlement to indemnification shall
be determined in one of the following ways: (A) by a
majority vote of the Disinterested Directors (as
hereinafter defined) (or the Disinterested Director,
if only one); (B) by a written opinion of Independent
Counsel (as hereinafter defined) if (x) a Change of
Control (as hereinafter defined) shall have occurred
and the Indemnitee so requests or (y) there is no
Disinterested Director or a majority of the
Disinterested Directors (or the Disinterested
Director, if only one) so directs; (C) by the
stockholders of the Company but only if a majority of
the Disinterested Directors (or the Disinterested
Director, if only one) determines that the issue of
entitlement to indemnification should be submitted to
the stockholders for their determination; or (D) as
provided in Section 9.4(c).
(iii) In the event the determination of entitlement to
indemnification is to be made by Independent Counsel
pursuant to Section 9.4(b)(ii), a majority of the
Disinterested Directors (or the Disinterested
Director, if only one) shall select the Independent
Counsel, but only an Independent Counsel to which the
Indemnitee does not reasonably object; provided,
however, that if a Change of Control shall have
occurred, the Indemnitee shall select such Independent
Counsel, but only an Independent Counsel to which the
Board of Directors does not reasonably object.
(c) Presumptions and Effect of Certain Proceedings. Except as
otherwise expressly provided in this Article IX the Indemnitee shall be
presumed to be entitled to indemnification upon submission of a request for
indemnification together with the Supporting Documentation in accordance with
Section 9.4(b)(i), and thereafter the Company shall have the burden of proof
to overcome that presumption in reaching a contrary determination. In any
event, if the person or persons empowered under Section 9.4(b) to determine
entitlement to indemnification shall not have been appointed or shall not have
made a determination within 90 days after the receipt by the Company of the
request therefore together with the Supporting Documentation, the Indemnitee
shall be deemed to be entitled to indemnification. With regard to the right to
indemnification for expenses, if and to the extent that the Indemnitee has been
successful on the merits or otherwise in any Proceeding or if and to the
extent that the Indemnitee was not a party to the Proceeding or if a
Proceeding was terminated without a determination of liability on the part of
the Indemnitee with respect to any claim, issue or matter therein or without
any payments in settlement or compromise being made by the Indemnitee with
respect to a claim, issue or matter therein, the Indemnitee shall be deemed to
be entitled to indemnification, which entitlement shall not be diminished by
any determination which may be made pursuant to Sections 9.4(b)(ii)(A), (B) or
(C). In either case, the Indemnitee shall be entitled to such
indemnification, unless (A) the Indemnitee misrepresented or failed to
disclose a material fact in making the request for indemnification or in the
Supporting Documentation or (B) such indemnification is prohibited by law, in
either case as finally determined by adjudication or, at the Indemnitee's sole
option, arbitration (as provided in Section 9.4(d)(i)). The termination of
any Proceeding or of any claim, issue or matter therein, by judgment, order,
settlement or conviction, or upon a plea of nolo contendere or its equivalent,
shall not, of itself, adversely affect the right of the Indemnitee to
indemnification or create any presumption with respect to any standard of
conduct or belief or any other matter which might form a basis for a
determination that the Indemnitee is not entitled to indemnification.
(d) Remedies of Indemnitee.
(i) In the event that a determination is made pursuant to
Section 9.4(b) that the Indemnitee is not entitled to
indemnification under this Article IX, (A) the
Indemnitee shall be entitled to seek an adjudication
of his entitlement to such indemnification either, at
the Indemnitee's sole option, in (x) an appropriate
court of the State of Delaware or any other court of
competent jurisdiction or (y) an arbitration to be
conducted by three arbitrators (or, if the dispute
involves less than $100,000, by a single arbitrator)
pursuant to the rules of the American Arbitration
Association; (B) any such judicial proceeding or
arbitration shall be de novo and the Indemnitee shall
not be prejudiced by reason of such adverse
determination; and (C) in any such judicial proceeding
or arbitration the Company shall have the burden of
proof that the Indemnitee is not entitled to
indemnification under this Article IX.
(ii) If a determination shall have been made or deemed to
have been made pursuant to Section 9.4(b) or (c) that
the Indemnitee is entitled to indemnification, the
Company shall be obligated to pay the amounts
constituting such indemnification within 20 days after
such determination has been made or deemed to have
been made and shall be conclusively bound by such
determination, unless (A) the Indemnitee
misrepresented or failed to disclose a material fact
in making the request for indemnification or in the
Supporting Documentation or (B) such indemnification is
prohibited by law, in either case as finally
determined by adjudication or, at the Indemnitee's
sole option, arbitration (as provided in Section
9.4(d)(i)). In the event that (C) advancement of
expenses is not timely made pursuant to Section
9.4(a), or (D) payment of indemnification is not made
within 20 days after a determination of entitlement to
indemnification has been made or deemed to have been
made pursuant to Section 9.4(b) or (c), the Indemnitee
shall be entitled to seek judicial enforcement of the
Company's obligation to pay to the Indemnitee such
advancement of expenses or indemnification.
Notwithstanding the foregoing, the Company may bring
an action, in an appropriate court in the State of
Delaware or any other court of competent jurisdiction,
contesting the right of the Indemnitee to receive
indemnification hereunder due to the occurrence of an
event described in subclause (A) or (B) of this clause
(ii) (a "Disqualifying Event"), provided, however,
that if the Indemnitee shall elect, at his sole
option, that such dispute shall be determined by
arbitration (as provided in Section 9.4(d)(i), the
Company shall proceed by such arbitration. In any
such enforcement or other proceeding or action in
which whether a Disqualifying Event is an issue, the
Company shall have the burden of proving the
occurrence of such Disqualifying Event.
(iii) The Company shall be precluded from asserting in any
judicial proceeding or arbitration commenced pursuant
to this Section 9.4(d) that the procedures and
presumptions of this Article IX are not valid, binding
and enforceable and shall stipulate in any such court
or before any such arbitrator or arbitrators that the
Company is bound by all the provisions of this Article
IX.
(iv) In the event that the Indemnitee, pursuant to this
Article IX, seeks a judicial adjudication of or an
award in arbitration to enforce his rights under, or
to recover damages for breach of, this Article IX, or
is otherwise involved in any adjudication or
arbitration with respect to his right to
indemnification, the Indemnitee shall be entitled to
recover from the Company, and shall be indemnified by
the Company against, any expenses actually and
reasonably incurred by him if the Indemnitee prevails
in such judicial adjudication or arbitration. If it
shall be determined in such judicial adjudication or
arbitration that the Indemnitee is entitled to receive
part but not all of the indemnification or advancement
of expenses sought, the expenses incurred by the
Indemnitee in connection with such judicial
adjudication or arbitration shall be prorated
accordingly.
(e) Definitions. For purposes of this Section 9.4:
(i) "Change in Control" means a change in control of the
Company of a nature that would be required to be
reported in response to Item 5(f) of Schedule 14A of
Regulation 14A promulgated under the Securities
Exchange Act of 1934 (the "Act"), whether or not the
Company is then subject to such reporting requirement;
provided that, without limitation, such a change in
control shall be deemed to have occurred if (A) any
"person" (as such term is used in Sections 13(d) and
14(d) of the Act) is or becomes the "beneficial owner"
(as defined in rule 13d-3 under the Act), directly or
indirectly, of securities of the Company representing
20 percent or more of the combined voting power of the
Company's then outstanding securities without the
prior approval of at least two-thirds of the members
of the Board of Directors in office immediately prior
to such acquisition; (B) the Company is a party to a
merger, consolidation, sale of assets or other
reorganization, or a proxy contest, as a consequence of
which members of the Board of Directors in office
immediately prior to such transaction or event
constitute less than a majority of the Board of
Directors thereafter; or (C) during any period of two
consecutive years, individuals who at the beginning of
such period constituted the Board of Directors
(including for this purpose any new director whose
election or nomination for election by the Company's
stockholders was approved by a vote of at least
two-thirds of the directors then still in office who
were directors at the beginning of such period) cease
for any reason to constitute at least a majority of
the Board of Directors.
(ii) "Disinterested Director" means a director of the
Company who is not or was not a material party to the
Proceeding in respect of which indemnification is
sought by the Indemnitee.
(iii) "Independent Counsel" means a law firm or a member of a
law firm that neither presently is, nor in the past
five years has been, retained to represent: (A) the
Company or the Indemnitee in any matter or (B) any
other party to the Proceeding giving rise to a claim
for indemnification under this Article IX.
Notwithstanding the foregoing, the term "Independent
Counsel" shall not include any person who, under the
applicable standards of professional conduct then
prevailing under the law of the State of Delaware,
would have a conflict of interest in representing
either the Company or the Indemnitee in an action to
determine the Indemnitee's rights under this Article
IX.
SECTION 9.5 ACTS OF DISINTERESTED DIRECTORS. Disinterested
Directors considering or acting on any indemnification matter under this
Article IX or otherwise may consider or take action as the Board of Directors
or may consider or take action as a committee or individually or otherwise.
In the event Disinterested Directors consider or take action as the Board of
Directors, one-third of the total number of Directors shall constitute a
quorum.
SECTION 9.6 SEVERABILITY. If any provision or provisions of
this Article IX shall be held to be invalid, illegal or unenforceable for any
reason whatsoever: (i) the validity, legality and enforceability of the
remaining provisions of this Article IX (including, without limitation, all
portions of any paragraph of this Article IX containing any such provision
held to be invalid, illegal or unenforceable, that are not themselves invalid,
illegal or unenforceable) shall not in any way be affected or impaired
thereby; and (ii) to the fullest extent possible, the provisions of this
Article IX (including, without limitation, all portions of any Paragraph of
this Article IX containing any such provision held to be invalid, illegal or
unenforceable, that are not themselves invalid, illegal or unenforceable)
shall be construed so as to give effect to the intent manifested by the
provision held invalid, illegal or unenforceable.
ARTICLE X
RECORD DATES
SECTION 10.1 In order that the Corporation may determine the
stockholders entitled to notice of or to vote at any meeting of stockholders
or any adjournment thereof, or to express consent to corporate action in
writing without a meeting, or entitled to receive payment of any dividend or
other distribution or allotment of any rights, or entitled to exercise any
rights in respect of any change, conversion or exchange of stock or for the
purpose of any other lawful action, the Board of Directors may fix, in
advance, a record date, which shall be not more than sixty (60) nor less than
ten (10) days before the date of such meeting, nor more than sixty (60) days
prior to any other action. Only those stockholders of record on the date so
fixed shall be entitled to any of the foregoing rights, notwithstanding the
transfer of any such stock on the books of the Corporation after any such
record date fixed by the Board of Directors.
ARTICLE XI
DIVIDENDS
SECTION 11.1 DIVIDENDS. Subject to any agreement to which the
Corporation is a party or by which it is bound, the Board of Directors may
declare to be payable, in cash, in other property or in stock of the
Corporation of any class or series, such dividends in respect of outstanding
stock of the Corporation of any class or series as the Board of Directors may
at any time deem to be advisable. Before declaring any such dividend, the
Board of Directors may cause to be set aside any funds or other property or
assets of the Corporation legally available for the payment of dividends.
ARTICLE XII
FISCAL YEAR
SECTION 12.1 FISCAL YEAR. The fiscal year of the Corporation
shall be determined by resolution of the Board of Directors.
ARTICLE XIII
CORPORATE SEAL
SECTION 13.1 The Corporate Seal shall be circular in form and
shall bear the name of the Corporation and the words and figures denoting its
organization under the laws of the State of Delaware and the year thereof and
otherwise shall be in such form as shall be approved from time to time by the
Board of Directors.
ARTICLE XIV
AMENDMENTS
SECTION 14.1 All By-Laws of the Corporation may be amended,
altered or repealed, and new By-Laws may be enacted, by the affirmative vote
of the holders of record of a majority of the issued and outstanding stock of
the Corporation entitled to vote at any annual or special meeting, or by the
affirmative vote of a majority of the directors present at any regular or
special meeting of the Board of Directors.
EXHIBIT 3.9
State of Delaware
Office of the Secretary of State PAGE 1
I, EDWARD J. FREEL, SECRETARY OF STATE OF THE STATE OF
DELAWARE, DO HEREBY CERTIFY THE ATTACHED IS A TRUE AND CORRECT COPY OF THE
CERTIFICATE OF OWNERSHIP, WHICH MERGES:
"PST HOLDINGS, INC.", A DELAWARE CORPORATION, WITH AND INTO "PLASTIC
SPECIALTIES AND TECHNOLOGIES, INC." UNDER THE NAME OF "PLASTIC SPECIALTIES
AND TECHNOLOGIES, INC.", A CORPORATION ORGANIZED AND EXISTING UNDER THE
LAWS OF THE STATE OF DELAWARE, AS RECEIVED AND FILED IN THIS OFFICE THE
TWENTY-NINTH DAY OF OCTOBER, A.D. 1993, AT 2 O'CLOCK P.M.
/s/ Edward J. Freel
-----------------------------------
Edward J. Freel, Secretary of State
AUTHENTICATION: 8932992
DATE: 02-21-98
2031044 8100M
981067444
STATE OF DELAWARE
SECRETARY OF STATE
DIVISION OF CORPORATION
FILED 02:00 PM 10/29/1993
933025189 - 2031044
CERTIFICATE OF OWNERSHIP AND MERGER
MERGING
PST HOLDINGS, INC.
WITH AND INTO
PLASTIC SPECIALTIES AND TECHNOLOGIES, INC.
(Pursuant to Section 253 of the
General Corporation Law in Delaware)
PST HOLDINGS, INC., a Delaware corporation (the "Corporation"), hereby
certifies:
FIRST: That the Corporation is incorporated pursuant to the General
Corporation Law of the State of Delaware.
SECOND: That the Corporation owns more than ninety percent of the outstanding
shares of each class of the capital stock of Plastic Specialties and
Technologies. Inc., a Delaware corporation ("PST").
THIRD: That the name of the corporation surviving the merger is Plastic
Specialties and Technologies, Inc.
FOURTH: That the Corporation by resolutions (a true copy of which is attached
hereto as Exhibit A) of the Board of Directors duly adopted by written consent
on July 29, 1993, determined, among other things, to merge the Corporation
with and into PST upon the terms and subject to the conditions set forth in
such resolutions (the "Merger"). Such resolutions have not been modified or
rescinded and are in full force and effect on the date hereof.
FIFTH: That the Merger shall be effective on the date of filing of this
Certificate of Ownership and Merger.
SIXTH: The Merger contemplated herein was approved by the holders of a
majority of the common stock of the Corporation, by written consent dated July
29, 1993, pursuant to Section 228(a) of the General Corporation Law of the
State of Delaware, and prompt notice of such consent has been given to all
other holders of record of common stock of the Corporation in accordance with
Section 228(d) of the General Corporation Law of the State of Delaware.
IN WITNESS WHEREOF, the Corporation has caused this Certificate of Ownership
and Merger to be executed in its corporate name by its President, this 29th
day of
PST HOLDINGS, INC.
By: /s/
------------------------
Title: President
ATTEST:
By: /s/
-------------------------
Title: Secretary
State of Delaware
Office of the Secretary of State PAGE 1
I, EDWARD J. FREEL, SECRETARY OF STATE OF THE STATE OF
DELAWARE, DO HEREBY CERTIFY THE ATTACHED IS A TRUE AND CORRECT COPY OF THE
CERTIFICATE OF OWNERSHIP, WHICH MERGES:
"OZITE MANUFACTURING CO.", A ILLINOIS CORPORATION, WITH AND
INTO "PLASTIC SPECIALTIES AND TECHNOLOGIES, INC." UNDER THE NAME OF
"PLASTIC SPECIALTIES AND TECHNOLOGIES, INC.", A CORPORATION ORGANIZED AND
EXISTING UNDER THE LAWS OF THE STATE OF DELAWARE, AS RECEIVED AND FILED IN
THIS OFFICE THE THIRD DAY OF APRIL, A.D. 1992, AT 9 O'CLOCK A.M.
/s/ Edward J. Freel
-----------------------------------
Edward J. Freel, Secretary of State
AUTHENTICATION: 8932991
DATE: 02-21-98
2031044 8100M
981067444
STATE OF DELAWARE
SECRETARY OF STATE
DIVISION OF CORPORATIONS
FILED 09:00 AM 04/03/1992
920945268 - 2031044
Certificate of Ownership and Merger
of
Ozite Manufacturing Co.
(an Illinois corporation)
into
Plastic Specialties and Technologies, Inc.
(a Delaware corporation)
Pursuant to Section 253 of the General Corporation Law of the State of
Delaware, Plastic Specialties and Technologies, Inc., a Delaware corporation
("PS&T"), hereby certifies that:
The Plan of Merger (the "Plan of Merger") between Ozite Manufacturing Co.,
an Illinois corporation ("Ozite"), and PS&T, pursuant to which Ozite shall
be merged into PS&T, has been approved and adopted by the Board of
Directors of PS&T in accordance with Section 253(a) of the General
Corporation Law of the State of Delaware. The resolutions of the Board of
Directors of PS&T approving the merger were adopted by unanimous written
consent on March 25, 1992 as set forth below:
RESOLVED, that Ozite Manufacturing Co. ("Ozite"), an
Illinois corporation which is a wholly-owned subsidiary of
Plastic Specialties and Technologies, Inc. (the
"Corporation"), be merged with and into the Corporation
pursuant to the terms of a plan of merger (the "Plan of
Merger") which shall provide that: (i) the Corporation
shall be the surviving corporation; (ii) the Certificate of
Incorporation and By-laws of the Corporation as in effect
immediately prior to the merger shall continue to be the
Certificate of Incorporation and By-laws of the Corporation
(as the surviving corporation); (iii) the name of the
Corporation (as the surviving corporation) shall continue to
be "Plastic Specialties and Technologies, Inc." following
the merger; (iv) the Corporation (as the surviving
corporation) shall assume all of the liabilities and
obligations of Ozite; (v) the merger of Ozite into the
Corporation shall be effective immediately upon the filing
of a Certificate of Ownership and Merger with the Secretary
of State of Delaware and Articles of Merger, Consolidation,
Exchange with the Secretary of State of Illinois; (vi) that
the officers and directors of the Corporation as in effect
immediately prior to the merger shall continue to be the
officers and directors of the Corporation (as the surviving
corporation); and (vii) all of the issued and outstanding
shares of Ozite shall be cancelled, which Plan of Merger
shall be in such form as has been presented to the Board of
Directors of the Corporation and shall be filed in the
minutes of the Corporation.
FURTHER RESOLVED; that any proper officer of the Corporation
be and hereby is authorized and directed to execute, deliver
and perform the Plan of Merger, to cause to be filed with
the Secretary of States of Delaware and Illinois and the
Recorder of Deeds of Kent County, Delaware, such
Certificates of Ownership and Merger, Articles of Merger,
Consolidation, Exchange and such other certificates or
instruments as are necessary or appropriate to effectuate
the merger of Ozite into the Corporation, to file assumed
name certificates in any appropriate jurisdiction in order
that the Corporation can conduct the operations formerly
conducted by Ozite under the name "Ozite Company" or a
similar name, and to do all acts and things necessary or
appropriate to effectuate the interest and purposes of these
resolutions.
IN WITNESS WHEREOF, this Certificate is executed and attested by the
undersigned duly authorized officers on behalf of Plastic Specialties and
Technologies, Inc., a Delaware corporation, this 25th day of March, 1992.
Plastic Specialties and
Technologies, Inc.
(a Delaware corporation)
Attest: By: /s/ Fred W. Broling
-------------------------
/s/ Leo Gaus Name: Fred W. Broling
- ------------------------ Title: President
Name: Leo Gaus
Title: Secretary
State of Delaware
Office of the Secretary of State PAGE 1
I, EDWARD J. FREEL, SECRETARY OF STATE OF THE STATE OF
DELAWARE, DO HEREBY CERTIFY THE ATTACHED IS A TRUE AND CORRECT COPY OF THE
RESTATED CERTIFICATE OF "PLASTIC SPECIALTIES AND TECHNOLOGIES, INC.", FILED IN
THIS OFFICE ON THE FIRST DAY OF JUNE, A.D. 1987, AT 9 O'CLOCK A.M.
/s/ Edward J. Freel
-----------------------------------
Edward J. Freel, Secretary of State
AUTHENTICATION: 8932990
DATE:02-21-98
2031044 8100
981067444
RESTATED CERTIFICATE OF INCORPORATION
OF
PLASTIC SPECIALTIES AND TECHNOLOGIES, INC.
Plastic Specialties and Technologies, Inc. (the "Corporation"),
a corporation organized and existing under the laws of the State of Delaware,
hereby certifies as follows:
FIRST: The name of the Corporation is Plastic Specialties and
Technologies, Inc. The date of filing its original Certificate of
Incorporation with the Secretary of State was March 21, 1984.
SECOND: This Restated Certificate of Incorporation restates and
amends the Certificate of the Corporation, the text of which is set forth at
length in Exhibit A annexed hereto and made a part hereof.
THIRD: This Restated Certificate of Incorporation was duly
adopted by vote of the stockholders in accordance with Sections 242 and 245 of
the General Corporation Law of the State of Delaware.
FOURTH: This Restated Certificate of Incorporation shall be
effective as of June 1, 1987.
IN WITNESS WHEREOF, Plastic Specialties and Technologies has
caused this certificate to be signed by Fred W. Broling its President and
attested by Terence K. Brennan its Assistant Secretary this 28th day of May,
1987.
PLASTIC SPECIALTIES AND TECHNOLOGIES, INC.
By: /s/ Fred W. Broling
---------------------------
Fred W. Broling
President
Attest:
/s/ Terence K. Brennan
- -----------------------------
Terence K. Brennan
Assistant Secretary
Exhibit A
RESTATED CERTIFICATE OF INCORPORATION
OF
PLASTIC SPECIALTIES AND TECHNOLOGIES, INC.
Plastic Specialties and Technologies, Inc. (the "Corporation"),
a corporation organized and existing under the laws of the State of Delaware,
hereby certifies as follows:
FIRST: The name of the Corporation is Plastic Specialties
and Technologies, Inc.
SECOND: The registered office of the Corporation within the
State of Delaware is to be located at 1209 Orange Street, in the City of
Wilmington, County of New Castle. The name of its registered agent at the
address is The Corporation Trust Company.
THIRD: The nature of the business or purposes for which the
Corporation is formed are to engage in any lawful act or activity for which
corporations may be organized under the General Corporation Law of the
State of Delaware (the "GCL").
FOURTH: The total number of shares which the Corporation
shall have authority to issue is ten million (10,000,000) shares and the
par value of each such share shall be one cent ($.01), amounting in the
aggregate to one hundred thousand dollars ($100,000).
FIFTH: The following provisions are inserted for the
management of the business and for the conduct of the affairs of the
Corporation, and for further definition, limitation and regulation of the
powers of the Corporation and of its directors and stockholders:
(a) Election of directors need not be by written ballot
unless the By-Laws of the Corporation so provide.
(b) The Board of Directors shall have the power without the
assent or vote of the stockholders to make, alter, amend, change, add to or
repeal the By-Laws of the Corporation.
(c) Whenever a compromise or arrangement is proposed between
this Corporation and its creditors or any class of them and/or between this
Corporation and its stockholders or any class of them, any court of equitable
jurisdiction within the State of Delaware may, on the application in a summary
way of this Corporation or of any creditor or stockholder thereof or on the
application of any receiver or receivers appointed for this Corporation under
the provisions of Section 291 of Title 8 of the GCL or on the application of
trustees in dissolution or of any receiver or receivers appointed for this
Corporation under the provisions of Section 279 of Title 8 of the GCL order a
meeting of the creditors or class of creditors, and/or of the stockholders or
class of stockholders of this Corporation, as the case may be, to be summoned
in such manner as the said court directs. If a majority, in number
representing three-fourths in value of the creditors or class of creditors,
and/or of the stockholders or class of stockholders of this Corporation, as
the case may be, agree to any compromise or arrangement and to any
reorganization of this corporation as consequence of such compromise or
arrangement, the said compromise or arrangement and the said reorganization
shall, if sanctioned by the court to which the said application has been made,
be binding on all the creditors or class of creditors, and/or on all the
stockholders or class of stockholders, of this Corporation, as the case may
be, and also on this Corporation.
SIXTH: The Corporation shall, to the full extent permitted by
Section 145 of the GCL, as amended from time to time, indemnify all persons
whom it may indemnify pursuant thereto.
SEVENTH: That the Corporation reserves the right to amend,
alter, change or repeal any provisions contained in this Restated Certificate
of Incorporation in the manner now or hereafter prescribed by law, and all
rights and powers conferred herein on stockholders, directors and officers are
subject to this reserved power.
EIGHTH: A director of the Corporation shall not be personally
liable to the Corporation or its stockholders for monetary damages or breach of
fiduciary duty as a director, except for liability (i) for any breach of the
director's duty or loyalty to the Corporation, (ii) for acts or omissions not
in good faith or which involve intentional misconduct or a knowing violation
of law, (iii) under Section 174 of the GCL, or (iv) for any transaction from
which the director derived an improper personal benefit.
IN WITNESS WHEREOF, Plastic Specialties and Technologies has
caused this Certificate to be signed by Fred W. Broling, its
President and attested by Terence K. Brennan its Assistant
Secretary this 28th day of May, 1987.
ATTEST: PLASTIC SPECIALTIES AND TECHNOLOGIES, INC.
/s/ Terence K. Brennan By: /s/ Fred W. Broling
- -------------------------- ------------------------------------------
Terence K. Brennan Fred W. Broling
Assistant Secretary President
EXHIBIT 3.10
PLASTIC SPECIALTIES AND
TECHNOLOGIES, INC.
------------
BY-LAWS
ARTICLE I
Offices and Fiscal Year
SECTION 1.01. Registered Office. The registered office of the
Corporation shall be in the City of Wilmington, County of New Castle, State of
Delaware until otherwise established by a vote of a majority of the board of
directors in office, and a statement of such change is filed in the manner
provided by statute.
SECTION 1.02. Other Offices. The Corporation may also have offices at
such other places within or without the State of Delaware as the board of
directors may from time to time determine or the business of the Corporation
requires.
SECTION 1.03. Fiscal Year. The fiscal year of the Corporation shall
be such fiscal year as the Board of Directors from time to time by
resolution shall determine.
ARTICLE II
Meetings of Stockholders
SECTION 2.01. Place of Meeting. All meetings of the stockholders of
the Corporation shall be held at the registered office of the Corporation, or
at such other place within or without the State of Delaware as shall be
designated by the board of directors in the notice of such meeting.
SECTION 2.02. Annual Meeting. The board of directors may fix the date
and time of the annual meeting of the stockholders, but if no such date and
time is fixed by the board, the meeting for any calendar year shall be held
on the first Wednesday of November in such year, if not a legal holiday,
and if a legal holiday then on the next succeeding business day at 11:00
o'clock a.m., and at said meeting the stockholders then entitled to vote
shall elect directors and shall transact such other business as may
properly be brought before the meeting.
SECTION 2.03. Special Meetings. Special meetings of the stockholders
of the Corporation for any purpose or purposes for which meetings may
lawfully be called, may be called at any time by the chairman of the board,
the board of directors, the president, or at the request, in writing, of
stockholders owning at least 25% of the shares of Common Stock of the
Corporation issued and outstanding and entitled to vote. At any time, upon
written request of any person or persons who have duly called a special
meeting, which written request shall state the purpose or purposes of the
meeting, it shall be the duty of the secretary to fix the date of the
meeting to be held at such date and time as the secretary may fix, not less
than ten nor more than sixty days after the receipt of the request, and to
give due notice thereof. If the secretary shall neglect or refuse to fix
the time and date of such meeting and give notice thereof, the person or
persons calling the meeting may do so.
SECTION 2.04. Notice of Meetings. Written notice of the place, date
and hour of every meeting of the stockholders, whether annual or special,
shall be given to each stockholder of record entitled to vote at the meeting
not less than ten nor more than sixty days before the date of the meeting.
Every notice of a special meeting shall state the purpose or purposes thereof.
SECTION 2.05. Quorum, Manner of Acting and Adjournment. The holders
of a majority of the stock issued and outstanding (not including treasury
stock) and entitled to vote thereat, present in person or represented by
proxy, shall constitute a quorum at all meetings of the stockholders for
the transaction of business except as otherwise provided by statute, by the
certificate of incorporation or by these by-laws. If, however, such quorum
shall not be present or represented at any meeting of the stockholders, the
stockholders entitled to vote thereat, present in person or represented by
proxy, shall have power to adjourn the meeting from time to time, without
notice other than announcement at the meeting, until a quorum shall be
present or represented. At any such adjourned meeting, at which a quorum
shall be present or represented any business may be transacted which might
have been transacted at the meeting as originally notified. If the
adjournment is for more than thirty days, or if after the adjournment a new
record date is fixed for the adjourned meeting, a notice of the adjourned
meeting shall be given to each stockholder of record entitled to vote at
the meeting. The vote of the holders of the majority of the stock having
voting power at such meeting present in person or represented by proxy
shall decide any question brought before such meeting, unless the question
is one upon which, by express provision of the applicable statute, the
certificate of incorporation or these by-laws, a different vote is required
in which case such express provision shall govern and control the decision
of such question.
SECTION 2.06. Organization. At every meeting of the stockholders,
the chairman of the board, if there be one, or in the case of a vacancy in
the office or absence of the chairman of the board, one of the following
persons present in the order stated: the president, the vice presidents in
their order or rank, a chairman designated by the board of directors or a
chairman chosen by the stockholders entitled to cast a majority of the
votes which all stockholders present in person or by proxy are entitled to
cast, shall act as chairman, and the secretary, or, in his absence, an
assistant secretary, or in the absence of the secretary and the assistant
secretaries, a person appointed by the chairman, shall act as secretary.
SECTION 2.07. Voting. Each holder of stock entitled to vote at any
meeting of the stockholders shall be entitled at such meeting to one vote
in person or by proxy for each share of capital stock having voting power
held by such stockholder. No proxy shall be voted on after three years
from its date, unless the proxy provides for a longer period. Every proxy
shall be executed in writing by the stockholder or by his duly authorized
attorney-in-fact and filed with the secretary of the Corporation. A proxy,
unless coupled with an interest, shall be revocable at will,
notwithstanding any other agreement or any provision in the proxy to the
contrary, but the revocation of a proxy shall not be effective until notice
thereof has been given to the secretary of the Corporation. A duly
executed proxy shall be irrevocable if it states that it is irrevocable and
if, and only as long as, it is coupled with an interest sufficient in law
to support an irrevocable power. A proxy may be made irrevocable
regardless of whether the interest with which it is coupled is an interest
in the stock itself or an interest in the Corporation generally. A proxy
shall not be revoked by the death or incapacity of the maker unless, before
the vote is counted or the authority is exercised, written notice of such
death or incapacity is given to the secretary of the Corporation.
SECTION 2.08. Consent of Stockholders in Lieu of Meeting. Any
action required to be taken at any annual or special meeting of
stockholders of the Corporation, or any action which may be taken at any
annual or special meeting of such stockholders, may be taken without a
meeting, without prior notice and without a vote, if a consent in writing,
setting forth the action so taken, shall be signed by the holders of
outstanding stock having not less than the minimum number of votes that
would be necessary to authorize or take such action at a meeting at which
all shares entitled to vote thereon were present and voted. Prompt notice
of the taking of the corporate action without a meeting by less than
unanimous written consent shall be given to those stockholders who have not
consented in writing.
SECTION 2.09. Voting Lists. The officer who has charge of the stock
ledger of the Corporation shall prepare and make, at least ten days before
every meeting of stockholders, a complete list of the stockholders entitled
to vote at the meeting. The list shall be arranged in alphabetical order
showing the address of each stockholder and the number of shares registered
in the name of each stockholder. Such list shall be open to the
examination of any stockholder, for any purpose germane to the meeting,
during ordinary business hours, for a period of at least ten days prior to
the meeting either at a place within the city where the meeting is to be
held, which place shall be specified in the notice of the meeting, or, if
not so specified, at the place where the meeting is to be held. The list
shall also be produced and kept at the time and place of the meeting during
the whole time thereof, and may be inspected by any stockholder who is
present.
SECTION 2.10. Judges of Election. All elections of directors shall
be by written ballot, unless otherwise provided in the certificate of
incorporation; the vote upon any other matter need not be by ballot. In
advance of any meeting of stockholders the board of directors may appoint
judges of election, who need not be stockholders, to act at such meeting or
any adjournment thereof. If judges of election are not so appointed, the
chairman of any such meeting may, and upon the demand of any stockholder or
his proxy at the meeting and before voting begins shall, appoint judges of
election. The number of judges shall be either one or three, as
determined, in the case of judges appointed upon demand of a stockholder,
by stockholders present entitled to cast a majority of the votes which all
stockholders present are entitled to cash thereon. No person who is a
candidate for office shall act as a judge. In case any person appointed as
judge fails to appear or fails or refuses to act, the vacancy may be filled
by appointment made by the board of directors in advance of the convening
of the meeting, or at the meeting by the chairman of the meeting.
If judges of election are appointed as aforesaid, they shall
determine the number of shares outstanding and the voting power of each,
the shares represented at the meeting, the existence of a quorum, the
authenticity, validity and effect of proxies, receive votes or ballots,
hear and determine all challenges and questions in any way arising in
connection with the right to vote, count and tabulate all votes, determine
the result, and do such acts as may be proper to conduct the election or
vote with fairness to all stockholders. If there be three judges of
election, the decision, act or certificate of a majority shall be effective
in all respects as the decision, act or certificate of all.
On request of the chairman of the meeting or of any stockholder or
his proxy, the judges shall make a report in writing of any challenge or
question or matter determined by them, and execute a certificate of any
fact found by them.
ARTICLE III
Board of Directors
SECTION 3.01. Powers. The board of directors shall have full power
to manage the business and affairs of the Corporation; and all powers of
the corporation, except those specifically reserved or granted to the
stockholders by statute, the certificate of incorporation or these by-laws,
are hereby granted to and vested in the board of directors.
SECTION 3.02. Number and Term of Office. The board of directors
shall consist of seven directors. Each director shall serve until the next
annual meeting of the stockholders and until his successor shall have been
elected and qualified, except in the event of his death, resignation or
removal. All directors of the Corporation shall be natural persons, but
need not be residents of Delaware or stockholders of the Corporation.
SECTION 3.03. Vacancies. Vacancies and newly created directorships
resulting from any increase in the authorized number of directors may be
filled only by the stockholders of the Corporation.
SECTION 3.04. Resignations. Any director of the Corporation may
resign any time by giving written notice to the president or the secretary
of the Corporation. Such resignation shall take effect at the date of the
receipt of such notice or at any later time specified therein and, unless
otherwise specified therein, the acceptance of such resignation shall not
be necessary to make it effective.
SECTION 3.05. Organization. At every meeting of the board of
directors, the chairman of the board, if there be one, or, in the case of a
vacancy in the office or absence of the chairman of the board, one of the
following officers present in the order stated: the vice chairman of the
board, if there be one, the president, the vice presidents in their order
of rank and seniority, or a chairman chosen by a majority of the directors
present, shall preside, and the secretary, or, in his absence, an assistant
secretary, or in the absence of the secretary and the assistant
secretaries, any person appointed by the chairman of the meeting, shall act
as secretary.
SECTION 3.06. Place of Meeting. The board of directors may hold its
meetings, both regular and special, at such place or places within or
without the State of Delaware as the board of directors may from time to
time appoint, or as may be designated in the notice calling the meeting.
SECTION 3.07. Organization Meeting. The first meeting of each newly
elected board of directors shall be held at such time and place as shall be
fixed by the vote of the stockholders at the annual meeting and no notice
of such meeting shall be necessary to the newly elected directors in order
legally to constitute the meeting, provided a quorum shall be present. In
the event of the failure of the stockholders to fix the time or place of
such first meeting of the newly elected board of directors, or in the event
such meeting is not held at the time and place so fixed by the
stockholders, the meeting may be held at such time and place as shall be
specified in a notice given as hereinafter provided for special meetings of
the board of directors as shall be specified in a written waiver signed by
all of the directors.
SECTION 3.08. Regular Meetings. Regular meetings of the board of
directors may be held without notice at such time and place as shall be
designated from time to time by resolution of the board of directors. If
the date fixed for any such regular meeting be a legal holiday under the
laws of the State where such meeting is to be held, then the same shall be
held on the next succeeding business day, not a Saturday, or at such other
time as may be determined by resolution of the board of directors. At such
meetings, the directors shall transact such business as may properly be
brought before the meeting.
SECTION 3.09. Special Meetings. Special meetings of the board of
directors shall be held whenever called by the president or by three or
more of the directors. Notice of each such meeting shall be given to each
director by telephone or in writing at least 24 hours (in the case of
notice by telephone) or 48 hours (in the case of notice by telegram) or
five days (in the case of notice by mail) before the time at which the
meeting is to be held. Each such notice shall state the time and place of
the meeting to be so held.
SECTION 3.10. Quorum, Manner of Acting and Adjournment. At all
meetings of the board of directors four directors shall constitute a quorum
for the transaction of business, and the affirmative vote of a majority of
the directors present at any meeting shall be necessary for the transaction
of any business by the board of directors. If a quorum shall not be
present at any meeting of the board of directors, the directors present
thereat may adjourn the meeting from time to time, without notice other
than announcement at the meeting, until a quorum shall be present.
Unless otherwise restricted by the certificate of incorporation or
these by-laws, any action required or permitted to be taken at any meeting
of the board of directors or of any committee thereof may be taken without
a meeting, if all members of the board consent thereto in writing, and the
writing or writings are filed with the minutes of proceedings of the board.
SECTION 3.11. Compensation of Directors. Un1ess otherwise
restricted by the certificate of incorporation, the board of directors
shall have the authority to fix the compensation of directors. The
directors may be paid their expenses, if any, of attendance at each meeting
of the board of directors and may be paid a fixed sum for attendance at
each meeting of the board of directors or a stated salary as director. No
such payment shall preclude any director from serving the Corporation in
any other capacity and receiving compensation therefor. Members of special
or standing committees may be allowed like compensation for attending
committee meetings.
SECTION 3.12. Removal of Directors. Any director may be removed,
with or without cause, at any time upon the affirmative note of the holders
of a majority of the stock issued and outstanding having general voting
rights with respect to the election of directors.
ARTICLE IV
Notice - Waivers - Meetings
SECTION 4.01. Notice, What Constitutes. Whenever, under the
provisions of the statutes of Delaware or the certificate of incorporation
or of these by-laws, notice is required to be given to any director or
stockholder, it shall not be construed to mean personal notice, but such
notice may be given in writing, by mail, addressed to such director or
stockholder, at his address as it appears on the records of the
Corporation, with postage thereon prepaid, and such notice shall be deemed
to be given at the time when the same shall be deposited in the United
States mail. Notice to directors may also be given in accordance with
Section 3.09 of Article III hereof.
SECTION 4.02. Waivers of Notice. Whenever any written notice is
required to be given under the provisions of the certificate of
incorporation, these by-laws, or by statute, a waiver thereof in writing,
signed by the person or persons entitled to such notice, whether before or
after the time stated therein, shall be deemed equivalent to the giving of
such notice. Except in the case of a special meeting of stockholders,
neither the business to be transacted at, nor the purpose of, any regular
or special meeting of the stockholders, directors, or members of a
committee of directors need be specified in any written waiver of notice of
such meeting.
Attendance of a person, either in person or by proxy, at any meeting,
shall constitute a waiver of notice of such meeting, except where a person
attends a meeting for the express purpose of objecting to the transaction
of any business because the meeting was not lawfully called or convened.
SECTION 4.03. Conference Telephone Meetings. One or more directors
may participate in a meeting of the board by means of conference telephone
or similar communications equipment by means of which all persons
participating in the meeting can hear each other. Participation in a
meeting pursuant to this section shall constitute presence in person at
such meeting.
ARTICLE V
Officers
SECTION 5.01. Number, Qualifications and Designation. The officers
of the Corporation shall be chosen by the board of directors and shall be a
president, one or more vice presidents, a secretary, a treasurer, and such
other officers as may be elected by the board of directors. One person may
hold more than one office. Officers may be, but need not be, directors or
stockholders of the Corporation. The board of directors may elect from
among the members of the board of a chairman of the board and a vice
chairman of the board who shall be officers of the Corporation.
SECTION 5.02. Election and Term of Office. The officers of the
Corporation, except those elected by delegated authority pursuant to
Section 5.03 of this Article, shall be elected annually by the board of
directors, and each such officer shall hold his office until his successor
shall have been elected and qualified, or until his earlier resignation or
removal. Any officer may resign at any time upon written notice to the
Corporation.
SECTION 5.03. The Chairman and Vice Chairman of the Board. The
chairman of the board or in his absence, the vice chairman of the board,
shall preside at all meetings of the stockholders and of the board of
directors, and shall perform such other duties as may from time to time be
assigned to them by the board of directors.
SECTION 5.04. The President. The president shall be the chief
executive officer of the Corporation and shall have general supervision
over the business and operations of the Corporation, subject, however, to
the control of the board of directors. He shall sign, execute, and
acknowledge, in the name of the Corporation, deeds, mortgages, bonds,
contracts or other instruments, authorized by the board of directors,
except in case where the signing and execution thereof shall be expressly
delegated by the board of directors, or by these by-laws, to some other
officer or agent of the Corporation; and, in general, shall perform all
duties incident to the office of president, and such other duties as from
time to time may be assigned to him by the board of directors.
SECTION 5.05. The Vice Presidents. The vice presidents shall
perform the duties of the president in his absence and such other duties as
may from time to time be assigned to them by the board of directors or by
the president.
SECTION 5.06. The Secretary. The secretary, or an assistant
secretary, shall attend all meetings of the stockholders and of the board
of directors and shall record the proceedings of the stockholders and of
the directors and of committees of the board in a book or books to be kept
for that purpose; see that notices are given and records and reports
properly kept and filed by the Corporation as required by law; be the
custodian of the seal of the Corporation and see that it is affixed to all
documents to be executed on behalf of the Corporation under its seal; and,
in general, perform all duties incident to the office of secretary, and
such other duties as may from time to time be assigned to him by the board
of directors or the president.
SECTION 5.07. The Treasurer. The treasurer or an assistant
treasurer shall have or provide for the custody of the funds or other
property of the Corporation and shall keep a separate book account of the
same to his credit as treasurer; collect and receive or provide for the
collection and receipt of moneys earned by or in any manner due to or
received by the Corporation; deposit all funds in his custody as treasurer
in such banks or other places of deposit as the board of directors may from
time to time designate; whenever so required by the board of directors,
render an account showing his transactions as treasurer and the financial
condition of the Corporation; and, in general, discharge such other duties
as may from time to time be assigned to him by the board of directors or
the president.
SECTION 5.08. Officers' Bonds. No officer of the Corporation need
provide a bond to guarantee the faithful discharge of his duties unless the
board of directors shall by resolution so require a bond in which event
such officer shall give the Corporation a bond (which shall be renewed if
and as required) in such sum and with such surety or sureties as shall be
satisfactory to the board of directors for the faithful performance of the
duties of his office.
SECTION 5.09. Salaries. The salaries of the officers and agents of
the Corporation shall be fixed from time to time by the board of directors.
ARTICLE VI
Certificates of Stock, Transfer, Etc.
SECTION 6.01. Issuance. Each stockholder shall be entitled to a
certificate or certificates for shares of stock of the Corporation owned by
him. The stock certificates of the Corporation shall be numbered and
registered in the stock ledger and transfer books of the Corporation as
they are issued. They shall be signed by the president or a vice president
and by the secretary or an assistant secretary or the treasurer or an
assistant treasurer, and shall bear the corporate seal, which may be a
facsimile, engraved or printed. Any of or all the signatures upon such
certificate may be a facsimile, engraved or printed. In case any officer,
transfer agent or registrar who has signed, or whose facsimile signature
has been placed upon, any share certificate shall have ceased to be such
officer, transfer agent or registrar, before the certificate is issued, it
may be issued with the same effect as if he were such officer, transfer
agent or registrar at the date of its issue.
SECTION 6.02. Transfer. Upon surrender to the Corporation or the
transfer agent of the Corporation of a certificate for shares duly endorsed
or accompanied by proper evidence of succession, assignation or authority
to transfer, it shall be the duty of the Corporation to issue a new
certificate to the person entitled thereto, cancel the old certificate and
record the transaction upon its books. No transfer shall be made which
would be inconsistent with the provisions of Article 8, Title 6 of the
Delaware Uniform Commercial Code Investment -- Securities.
SECTION 6.03. Stock Certificates. Stock certificates of the
Corporation shall be in such forms as provided by statute and approved by
the board of directors. The stock record books and the blank stock
certificates shall be kept by the secretary or by any agency designated by
the board of directors for that purpose.
SECTION 6.04. Lost, Stolen, Destroyed or Mutilated Certificates.
The board of directors may direct a new certificate or certificates to be
issued in place of any certificate or certificates theretofore issued by
the Corporation alleged to have been lost, stolen or destroyed, upon the
making of an affidavit of that fact by the person claiming the certificate
of stock to be lost, stolen or destroyed. When authorizing such issue of a
new certificate or certificates, the board of directors may, in its
discretion and as a condition precedent to the issuance thereof, require
the owner of such lost, stolen or destroyed certificate or certificates, or
his legal representative, to advertise the same in such manner as it shall
require and/or to give the Corporation a bond in such sum as it may direct
as indemnity against any claim that may be made against the Corporation
with respect to the certificate alleged to have been lost, stolen or
destroyed.
SECTION 6.05. Record Holder of Shares. The Corporation shall be
entitled to recognize the exclusive right of a person registered on its
books as the owner of shares to receive dividends, and to vote as such
owner, and to hold liable for calls and assessments a person registered on
its books as the owner of shares, and shall not be bound to recognize any
equitable or other claim to or interest in such share or shares on the part
of any other person, whether or not it shall have express or other notice
thereof, except as otherwise provided by the laws of Delaware.
SECTION 6.06. Determination of Stockholders of Record. In order
that the Corporation may determine the stockholders entitled to notice of
or to vote at any meeting of stockholders or any adjournment thereof, or to
express consent to corporate action in writing without a meeting, or
entitled to receive payment of any dividend or other distribution or
allotment of any rights, or entitled to exercise any rights in respect of
any change, conversion or exchange of stock or for the purpose of any other
lawful action, the board of directors may fix, in advance, a record date,
which shall not be more than sixty nor less than ten days before the date
of such meeting, nor more than sixty days prior to any other action.
If no record date is fixed:
(1) The record date for determining stockholders entitled
to notice of or to vote at a meeting of stockholders shall be at the
close of business on the day next preceding the day on which notice
is given, or, if notice is waived, at the close of business on the
day on which the meeting is held.
(2) The record date for determining stockholders entitled
to express consent to corporate action in writing without a meeting,
when no prior action by the board of directors is necessary, shall be
the day on which the first written consent is expressed.
(3) The record date for determining stockholders for any
other purpose shall be at the close of business on the day on which
the board of directors adopts the resolution relating thereto.
A determination of stockholders of record entitled to notice of or to vote
at a meeting of stockholders shall apply to any adjournment of the meeting;
provided, however, that the board of directors may fix a new record date
for the adjourned meeting.
ARTICLE VII
Indemnification of Directors, Officers and Other Authorized
Representatives
SECTION 7.01. Indemnification of Authorized Representatives in Third
Party Proceedings. The Corporation shall indemnify any person who was or
is an "authorized representative" of the Corporation (which shall mean for
purposes of this Article a director or officer of the Corporation, or a
person serving at the request of the Corporation as a director, officer or
trustee of another Corporation, partnership, joint venture, trust or other
enterprise) and who was or is a "party" (which shall include for purposes
of this Article the giving of testimony or similar involvement) or is
threatened to be made a party to any "third party proceeding" (which shall
mean for purposes of this Article any threatened, pending or completed
action, suit or proceeding, whether civil, criminal, administrative, or
investigative, other than an action by or in the right of the Corporation)
by reason of the fact that such person was or is an authorized
representative of the corporation, against expenses (which shall include
for purposes of this Article attorneys' fees), judgments, penalties, fines
and amounts paid in settlement actually and reasonably incurred by such
person in connection with such third party proceeding if such person acted
in good faith and in a manner such person reasonably believed to be in, or
not opposed to, the best interests of the Corporation and, with respect to
any criminal third party proceeding (including any action or investigation
which could or does lead to a criminal third party proceeding) had no
reasonable cause to believe such conduct was unlawful. The termination of
any third party proceeding by judgment, order, settlement, indictment,
conviction or upon a plea of nolo contendere or its equivalent, shall not
of itself create a presumption that the authorized representative did not
act in good faith and in a manner which such person reasonably believed to
be in or not opposed to, the best interests of the Corporation, and, with
respect to any criminal third party proceeding, had reasonable cause to
believe that such conduct was unlawful.
SECTION 7.02. Indemnification of Authorized Representatives in
Corporate Proceedings. The Corporation shall indemnify any person who was
or is an authorized representative of the Corporation and who was or is a
party or is threatened to be made a party to any "corporate proceeding"
(which shall mean for purposes of this Article any threatened, pending or
completed action or suit by or in the right of the Corporation to procure a
judgment in its favor or investigative proceeding by the Corporation) by
reason of the fact that such person was or is an authorized representative
of the Corporation, against expenses actually and reasonably incurred by
such person in connection with the defense or settlement of such corporate
action if such person acted in good faith and in a manner reasonably
believed to be in, or not opposed to, the best interests of the
Corporation, except that no indemnification shall be made in respect of any
claim, issue or matter as to which such person shall have been adjudged to
be liable for negligence or misconduct in the performance of such person's
duty to the Corporation unless and only to the extent that the Court of
Chancery or the court in which such corporate proceeding was pending shall
determine upon application that, despite the adjudication of liability but
in view of all the circumstances of the case, such authorized
representative is fairly and reasonably entitled to indemnity for such
expenses which the Court of Chancery or such other court shall deem proper.
SECTION 7.03. Mandatory Indemnification of Authorized
Representatives. To the extent that an authorized representative of the
Corporation has been successful on the merits or otherwise in defense of
any third party or corporate proceeding or in defense of any claim, issue
or matter therein, such person shall be indemnified against expenses
actually and reasonably incurred by such person in connection therewith.
SECTION 7.04. Determination of Entitlement to Indemnification. Any
indemnification under Section 7.01, 7.02 or 7.03 of this Article (unless
ordered by a court) shall be made by the Corporation only as authorized in
the specific case upon a determination that indemnification of the
authorized representative is proper in the circumstances because such
person has either met the applicable standard of conduct set forth in
Section 7.01 or 7.02 or has been successful on the merits or otherwise set
forth in Section 7.03 and that the amount requested has been actually and
reasonably incurred. Such determination shall be made:
(1) By the board of directors by a majority of quorum
consisting of directors who were not parties to such third party or
corporate proceeding, or
(2) If such a quorum is not obtainable, or, even if
obtainable, a majority vote of such a quorum so directs, by
independent legal counsel in a written opinion, or
(3) By the stockholders.
SECTION 7.05. Advancing Expenses. Expenses actually and reasonably
incurred in defending a third party or corporate proceeding shall be paid
on behalf of an authorized representative by the Corporation in advance of
the final disposition of such third party or corporate proceeding as
authorized in the manner provided in Section 7.04 of this Article upon
receipt of an undertaking by or on behalf of the authorized representative
to repay such amount unless it shall ultimately be determined that such
person is entitled to be indemnified by the Corporation as authorized in
this Article. The financial ability of such authorized representative to
make such repayment shall not be a prerequisite to the making of an
advance.
SECTION 7.06. Employee Benefit Plans. For purpose of this Article,
references to "other enterprises" shall include employee benefit plans;
references to "fines" shall include any excise taxes assessed on a person
with respect to an employee benefit plan; and references to "serving at the
request of the Corporation" shall include any service as a director,
officer, employee or agent of the Corporation which imposes duties on, or
involves services by, such director, officer, employee, or agent with
respect to an employee benefit plan, its participants, or beneficiaries;
and a person who acted in good faith and in a manner he reasonably believed
to be in the interest of the participants and beneficiaries of an employee
benefit plan shall be deemed to have acted in a manner "not opposed to the
best interests of the Corporation" as referred to in this Article.
SECTION 7.07. Scope of Article. The indemnification of authorized
representatives, as authorized by this Article, shall (1) not be deemed
exclusive of any other rights to which those seeking indemnification may be
entitled under any statute, agreement, vote of stockholders or
disinterested directors or otherwise, both as to action in an official
capacity and as to action in another capacity, (2) continue as to a person
who has ceased to be an authorized representative and (3) inure to the
benefit of the heirs, executors and administrators of such a person.
SECTION 7.08. Reliance on Provisions. Each person who shall act as
an authorized representative of the Corporation shall be deemed to be doing
so in reliance upon rights of indemnification provided by this Article.
ARTICLE VIII
General Provisions
SECTION 8.01. Dividends. Dividends upon the capital stock of the
Corporation, subject to the provisions of the certificate of incorporation,
if any, may be declared by the board of directors at any regular or special
meeting, pursuant to law. Dividends may be paid in cash, in property, or
in shares of the capital stock of the Corporation, subject to the
provisions of the certificate of incorporation. Before payment of any
dividend, there may be set aside out of any funds of the Corporation
available for dividends such sum or sums as the directors from time to
times, in their absolute discretion, think proper as a reserve or reserves
to meet contingencies, or for equalizing dividends, or for repairing or
maintaining any property of the Corporation, or for such other purpose as
the directors shall think conducive to the interest of the Corporation, and
the directors may modify or abolish any such reserve in the manner in which
it was created.
SECTION. 8.02. Annual Statements. The board of directors shall
present at each annual meeting, and at any special meeting of the
stockholders when called for by vote of the stockholders, a full and clear
statement of the business and condition of the Corporation.
SECTION 8.03. Contracts. Except as otherwise provided in these by-
laws, the board of directors may authorize any officer or officers
including the chairman and vice chairman of the board of directors, or any
agent or agents, to enter into any contract or to execute or deliver any
instrument on behalf of the Corporation and such authority may be general
or confined to specific instances.
SECTION 8.04. Checks. All checks, notes, bills of exchange or other
orders in writing shall be signed by such person or persons as the board of
directors may from time to time designate.
SECTION 8.05. Corporate Seal. The corporate seal shall have
inscribed thereon the name of the Corporation, the year of its organization
and the words "Corporate Seal, Delaware". The seal may be used by causing
it or a facsimile thereof to be impressed or affixed or in any other manner
reproduced.
SECTION 8.06. Deposits. All funds of the Corporation shall be
deposited from time to time to the credit of the Corporation in such banks,
trust companies or other depositories as the board of directors may approve
or designate, and all such funds shall be withdrawn only upon checks signed
by such one or more officers or employees as the board of directors shall
from time to time determine.
SECTION 8.07. Corporate Records. At least ten days before every
meeting of stockholders, a complete list of the stockholders entitled to
vote at the meeting arranged in alphabetical order, and showing the address
of and number of shares registered in the name of each stockholder, shall
be open to the examination of any stockholder, for any purpose germane to
the meeting, either at a place within the city where the meeting is to be
held, which place shall he specified in the notice of the meeting, or if
not so specified, at the place where the meeting is to be held. The list
shall also be produced and kept at the time and place of the meeting during
the whole time thereof, and may be inspected by any stockholder who is
present.
Every stockholder shall, upon written demand under oath stating the
purpose thereof, have a right to examine, in person or by agent or
attorney, during the usual hours for business, for any proper purpose, the
stock ledger, books or records of account, and records of the proceedings
of the stockholders and directors, and make copies or extracts therefrom.
A proper purpose shall mean a purpose reasonably related to such person's
interest as a stockholder. In every instance where an attorney or other
agent shall be the person who seeks the right to inspection, the demand
under oath shall be accompanied by a power of attorney or such other
writing which authorize the attorney or other agent to so act on behalf of
the stockholder. The demand under oath shall be directed to the
Corporation at its registered office in Delaware or at its principal place
of business. Where the stockholder seeks to inspect the books and records
of the Corporation, other than its stock ledger or list of stockholders,
the stockholder shall first establish (1) compliance with the provisions of
this section respecting the form and manner of making demand for inspection
of such documents; and (2) that the inspection sought is for a proper
purpose. Where the stockholder seeks to inspect the stock ledger or list
of stockholders of the Corporation and has complied with provisions of this
section respecting the form and manner of making demand for inspection of
such documents, the burden of proof shall be upon the Corporation to
establish that the inspection sought is for an improper purpose.
Any director shall have the right to examine the Corporation's stock
ledger, a list of its stockholders and its other books and records for a
purpose reasonably related to his position as a director. The Court of
Chancery is hereby vested with the exclusive jurisdiction to determine
whether a director is entitled to the inspection sought. The court may
summarily order the Corporation to permit the director to inspect any and
all books and records, the stock ledger and the stock list and to make
copies or extracts therefrom. The court may, in its discretion, prescribe
any limitations or conditions with reference to the inspection, or award
such other and further relief as the court may deem just and proper.
SECTION 8.08. Amendment of By-Laws. These by-laws may be altered,
amended or repealed or new by-laws may be adopted only as provided in the
Certificate of Incorporation of the Company.
EXHIBIT 3.11
State of Delaware
Office of the Secretary of State PAGE 1
I, EDWARD J. FREEL, SECRETARY OF STATE OF THE STATE OF DELAWARE, DO HEREBY
CERTIFY THE ATTACHED IS A TRUE AND CORRECT COPY OF THE CERTIFICATE OF AMENDMENT
OF "PLASTIC SPECIALTIES AND TECHNOLOGIES HOLDINGS, INC.", CHANGING ITS NAME FROM
"PLASTIC SPECIALTIES AND TECHNOLOGIES HOLDINGS, INC." TO "PLASTIC SPECIALTIES
AND TECHNOLOGIES INVESTMENTS, INC.", FILED IN THIS OFFICE ON THE THIRTY-FIRST
DAY OF MARCH, A.D. 1987, AT 12:30 O'CLOCK P.M.
/s/Edward J. Freel
-------------------------------------------
Edward J. Freel, Secretary of State
2030289 8100 AUTHENTICATION: 8932998
981067446 DATE: 02-21-98
CERTIFICATE OF AMENDMENT
OF
CERTIFICATE OF INCORPORATION
Plastic Specialties and Technologies Holdings, Inc., a corporation
organized and existing under and by virtue of the General Corporation Law of the
State of Delaware, does hereby certify:
FIRST: That at a meeting of the Board of Directors of the Corporation,
resolutions were adopted setting forth a proposed amendment to the Certificate
of Incorporation of said corporation, declaring said amendment to be advisable
and calling a meeting of the Stockholders of said corporation for consideration
thereof. The resolution setting forth the proposed amendment reads as follows:
"RESOLVED, that the Certificate of Incorporation of this corporation
be amended by changing Article First thereof so that, as amended, said
Article shall read as follows:
First: The name of the Corporation is "Plastic
Specialties and Technologies Investments, Inc."
SECOND: That thereafter, pursuant to the resolution of its Board of
Directors, a special meeting of the Stockholders of said corporation was duly
called and held, upon notice in accordance with Section 222 of the General
Corporation Law of the State of Delaware at which meeting the necessary number
of shares required by statute were voted in form of the amendment.
THIRD: That said amendment was duly adopted in accordance with the
provisions of Section 242 of the General Corporation of the State of Delaware.
FOURTH: That the capital of said corporation shall not be reduced under or
by reason of said amendment.
IN WITNESS WHEREOF, said Plastic Specialties and Technologies Holdings,
Inc. has caused its corporate seal to be hereunto affixed and this Certificate
to be signed by Fred W. Broling, its President and Leo Gans, its secretary, this
31ST day of March, 1987.
FRED W. BROLING, President
TERENCE K. BRENNAN,
Assistant Secretary
State of Delaware
Office of the Secretary of State PAGE 1
I, EDWARD J. FREEL, SECRETARY OF STATE OF THE STATE OF DELAWARE, DO HEREBY
CERTIFY THE ATTACHED IS A TRUE AND CORRECT COPY OF THE CERTIFICATE OF AMENDMENT
OF "WILSON FIBERFIL HOLDINGS, INC.", CHANGING ITS NAME FROM "WILSON FIBERFIL
HOLDINGS, INC." TO "PLASTIC SPECIALTIES AND TECHNOLOGIES HOLDINGS, INC.", FILED
IN THIS OFFICE ON THE TWENTY-SEVENTH DAY OF MARCH, A.D. 1986, AT 10 O'CLOCK A.M.
/s/Edward J. Freel
-------------------------------------------
Edward J. Freel, Secretary of State
2030289 8100 AUTHENTICATION: 8932997
981067446 DATE: 02-21-98
CERTIFICATE OF AMENDMENT
OF
CERTIFICATE OF INCORPORATION
Wilson Fiberfil Holdings, Inc., a corporation organized and existing under
and by virtue of the General Corporation Law of the State of Delaware, does
hereby certify:
FIRST: That at a meeting of the Board of Directors of the Corporation,
resolutions were adopted setting forth a proposed amendment to the Certificate
of Incorporation of said corporation, declaring said amendment to be advisable
and calling a meeting of the Stockholders of said corporation for consideration
thereof. The resolution setting forth the proposed amendment reads as follows:
"RESOLVED, that the Certificate of Incorporation of this corporation
be amended by changing Article First thereof so that, as amended, said
Article shall read as follows:
First: The Name of the Corporation is
Plastic Specialties and Technologies Holdings, Inc."
SECOND: That thereafter, pursuant to the resolution of its Board of
Directors, a special meeting of the Stockholders of said corporation was duly
called and held, upon notice in accordance with Section 222 of the General
Corporation Law of the State of Delaware at which meeting the necessary number
of shares required by statute were voted in form of the amendment.
THIRD: That said amendment was duly adopted in accordance with the
provisions of Section 242 of the General Corporation Law of the State of
Delaware.
FOURTH: That the capital of said corporation shall not be reduced under or
by reason of said amendment.
IN WITNESS WHEREOF, said Wilson Fiberfil Holdings, inc. has caused its
corporate seal to be hereunto affixed and this Certificate to be signed by Fred
W. Broling, its President and Leo Gans, its Secretary, this 17th day of March,
1986.
FRED W. BROLING, President
Attest:
LEO GANS, Secretary
State of Delaware
Office of the Secretary of State PAGE 1
I, EDWARD J. FREEL, SECRETARY OF STATE OF THE STATE OF DELAWARE, DO HEREBY
CERTIFY THE ATTACHED IS A TRUE AND CORRECT COPY OF THE CERTIFICATE OF
INCORPORATION OF "WILSON FIBERFIL HOLDINGS, INC.", FILED IN THIS OFFICE ON THE
TWELFTH DAY OF MARCH, A.D. 1984, AT 3 O'CLOCK P.M.
/s/Edward J. Freel
-------------------------------------------
Edward J. Freel, Secretary of State
2030289 8100 AUTHENTICATION: 8932996
981067446 DATE: 02-21-98
CERTIFICATE OF INCORPORATION
OF
WILSON FIBERFIL HOLDINGS, INC.
FIRST: The name of the Corporation is
WILSON FIBERFIL HOLDINGS. INC.
SECOND: The address of the Corporation's registered office in the State of
Delaware is 100 West 10th Street, in the City of Wilmington, County of New
Castle, and the name of the Corporation's registered agent at such address is
The Corporation Trust Company.
THIRD: The purpose of the Corporation is to engage in any lawful act or
activity for which corporations may be organized under the General Corporation
Law of the State of Delaware.
FOURTH: The total number of shares of all classes of stock which the
Corporation shall have authority to issue is five thousand (5,000) shares of
Common Stock of the par value of two dollars and fifty cents ($2.50) each.
FIFTH: The name and mailing address of the incorporator is Kenneth S.
Kirsner. 2211 Sanders Road. Northbrook, Illinois 60062.
SIXTH: Unless and except to the extent that the By-laws of the Corporation
shall so require. the election of directors of the Corporation need not be by
written ballot.
SEVENTH: The Board of Directors is expressly authorized and empowered to
make, alter and repeal the By-laws of the Corporation.
EIGHTH: The Corporation reserves the right at any time to amend, alter,
change or repeal any provision contained in this Certificate of Incorporation,
in the manner now or hereafter prescribed by law, and all rights, preferences
and privileges of whatsoever nature conferred upon stockholders, directors or
any other persons whomsoever by and pursuant to this Certificate of
Incorporation in its present form or as hereafter amended are granted subject to
the right reserved herein.
IN WITNESS WHEREOF, the undersigned, for the purpose of forming a
corporation pursuant to the General Corporation Law of the State of Delaware.
has signed this Certificate of Incorporation, as incorporator, this 8th day of
March, 1984.
/s/Kenneth S. Kirsner
--------------------------
EXHIBIT 3.12
FORMALLY
WILSON FIBERFIL HOLDINGS, INC.
BY-LAWS
ARTICLE I
STOCKHOLDERS
Section 1. The annual meeting of the stockholders, commencing with the
year 1984, for the purpose of electing directors and transacting such other
business as may properly be brought before the meeting, shall be held at the
office of Dart & Kraft, Inc., Northbrook, Illinois, on the second Thursday in
September of each year (or if said day be a legal holiday, then on the next
succeeding day not a holiday) at 2:00 o'clock in the afternoon, or at such other
place, within or without the State of Delaware, date, and time as shall be
determined by the Board of Directors, the Chairman of the Board of Directors,
the President, any Vice President, or the holders of a majority of the issued
and outstanding stock entitled to vote at the meeting.
Section 2. Special meetings of the stockholders may be held upon call
of the Board of Directors, the Chairman of the Board of Directors, the
President, any Vice President, or the holders of a majority of the issued and
outstanding stock of the Corporation entitled to vote at the meeting, at such
time and at such place, within or without the State of Delaware, as shall be
provided in such call.
Section 3. The holders of a majority of the issued and outstanding
shares of stock entitled to vote at a meeting of stockholders, present in person
or represented by proxy, shall constitute a quorum for the transaction of
business at such meeting. The holders of a majority of such shares so present or
represented, whether or not constituting a quorum, may adjourn the meeting from
time to time. No notice of the time, place or purposes of adjourned meetings
need be given except as required by law.
Section 4. Except as may be provided by law, the vote of the holders of
a majority of the issued and outstanding shares of stock having voting power and
present in person or represented by proxy at any meeting of stockholders at
which a quorum is present shall decide any matter properly brought before such
meeting.
ARTICLE II
DIRECTORS
Section 1. The Board of Directors shall consist of three directors. Each
director shall hold office until his successor is elected and qualified, or
until his earlier resignation or removal. Any director may be removed from
office at any time by the stockholders, with or without cause. Vacancies in the
Board of Directors and newly created directorships resulting from any increase
in the authorized number of directors may be filled by a majority of the
directors then in office, although less than a quorum, or by the stockholders.
Section 2. Meetings of the Board of Directors may be held within or
without the State of Delaware. Regular meetings of the Board of Directors may be
held without notice at such time and place as shall from time to time be
determined by the Board of Directors. Special meetings of the Board of Directors
way be held upon call of a majority of the directors, the Chairman of the Board
of Directors, President, or any Vice President on not less than two full days'
oral, telegraphic, or written notice of the time and place of such meeting to
each director. A meeting of the Board of Directors may be held without notice
immediately after the annual meeting of the stockholders at the same place at
which such meeting is held.
Section 3. One third of the total number of directors shall constitute
a quorum for the transaction of business at any meeting of the Board of
Directors. If there be no such quorum, a majority of the directors present may
adjourn the meeting from time to time until a quorum is present and no further
notice shall be required. The vote of a majority of the directors present at a
meeting of the Board of Directors at which a quorum is present shall decide any
matter properly brought before such meeting.
ARTICLE III
OFFICERS
Section 1. The Board of Directors at its first meeting after each
annual meeting of the stockholders shall choose a President, one or more Vice
Presidents, a Secretary, and a Treasurer, and from time to time may choose such
other officers (including a Chairman of the Board at Directors) and such
assistant officers as it shall deem proper.
Section 2. Each officer shall hold office until his successor is chosen
and qualified, or until his earlier resignation or removal by the Board of
Directors, which removal may be with or without cause. A vacancy occurring in
any office may be filled at any time by the Board of Directors.
Section 3. All officers shall have such authority and perform such
duties in the management of the corporation as generally pertain to their
respective offices and shall also have such authority and perform such duties in
the management of the corporation as from time to time may be conferred by the
Board of Directors.
ARTICLE IV
CERTIFICATES OF STOCK
Certificates representing shares of stock shall be in such form as the
Board of Directors may from time to time prescribe. Such certificates shall be
signed by the Chairman of the Board of Directors, the President or a Vice
President, and by the Secretary or an Assistant Secretary, and be sealed with
the seal of the Corporation or a facsimile thereof.
ARTICLE V
FISCAL YEAR
The fiscal year of the corporation shall end as determined by the Board
of Directors.
ARTICLE VI
CORPORATE SEAL
The corporate seal shall have inscribed thereon the name of the
corporation, the year of its organization, and the words "Corporate Seal" and
"Delaware." The seal may be used by causing it or a facsimile thereof to be
impressed or affixed or in any manner reproduced.
ARTICLE VII
AMENDMENTS
The By-laws may at any time be altered, amended, or repealed by the
stockholders or the Board of Directors.
EXHIBIT 3.13
State of Delaware
Office of the Secretary of State
I, EDWARD J. FREEL, SECRETARY OF STATE OF THE STATE OF DELAWARE, DO HEREBY
CERTIFY THE ATTACHED IS A TRUE AND CORRECT COPY OF THE CERTIFICATE OF
INCORPORATION OF "BURLINGTON RESINS, INC.", FILED IN THIS OFFICE ON THE
TWENTY-SIXTH DAY OF SEPTEMBER, A.D. 1994, AT 9 O'CLOCK A.M.
/s/Edward J. Freel
---------------------------------------
Edward J. Freel, Secretary of State
2438167 8100 AUTHENTICATION: 8933001
981067448 DATE: 02-21-98
STATE OF DELAWARE
SECRETARY OF STATE
DIVISION OF CORPORATIONS
FILED 09:00 AM 09/26/1994
944181249 - 2438167
CERTIFICATE OF INCORPORATION
OF
BURLINGTON RESINS, INC.
FIRST. The name of this corporation shall be:
BURLINGTON RESINS, INC.
SECOND. Its registered office in the State of Delaware is to be located at
1013 Centre Road, in the City of Wilmington, County of New Castle and its
registered agent at such address is CORPORATION SERVICE COMPANY.
THIRD. The purpose or purposes of the corporation shall be:
To engage in any lawful act or activity for which corporations may be
organized under the General Corporation Law of Delaware.
FOURTH. The total number of shares of stock which this corporation is
authorized to issue is:
Six Thousand Five Hundred (6,500) shares of which Five Thousand (5,000) shares
with no par value are Common Stock and One Thousand Five Hundred (1,500) shares
with no par value are Preferred Stock.
FIFTH. The name and address of the incorporator is as follows:
Lisa G. Mulligan
Corporation Service Company
1013 Centre Road
Wilmington, DE 19805
SIXTH. The Board of Directors shall have the power to adopt, amend or
repeal the by-laws.
SEVENTH. No director shall be personally liable to the Corporation or its
stockholders for monetary damages for any breach of fiduciary duty by such
director as a director. Notwithstanding the foregoing sentence, a director shall
be liable to the extent provided by applicable law, (i) for breach of the
director's duty of loyalty to the Corporation or its stockholders, (ii) for acts
or omissions not in good faith or which involve intentional misconduct or a
knowing violation of law, (iii) pursuant to Section 174 of the Delaware General
Corporation Law or (iv) for any transaction from which the director derived an
improper personal benefit. No amendment to or repeal of this Article Seventh
shall apply to or have any effect on the liability or alleged liability of any
director of the Corporation for or with respect to any acts or omissions of such
director occurring prior to such amendment.
IN WITNESS WHEREOF, the undersigned, being the incorporator
hereinbefore named, has executed, signed and acknowledged this certificate of
incorporation this twenty-sixth day of September, A.D., 1994.
/s/ Lisa G. Mulligan
--------------------
Lisa G. Mulligan
Incorporator
EXHIBIT 3.14
BY-LAWS
OF
BURLINGTON RESINS, INC.
ARTICLE I -- OFFICES
The office of the Corporation shall be located in the City and
State designated in the Articles of Incorporation. The Corporation may also
maintain offices at such other places within or without the United States as
the Board of Directors may, from time to time, determine.
ARTICLE II -- MEETING OF SHAREHOLDERS
Section 1 -- Annual Meetings:
The annual meeting of the shareholders of the Corporation shall
be held within five months after the close of the fiscal year of the
Corporation, for the purpose of electing directors, and transacting such other
business as may properly come before the meeting.
Section 2 -- Special Meetings:
Special meetings of the shareholders may be called at any time
by the Board of Directors or by the President, and shall be called by the
President or the Secretary at the written request of the holders of ten
per cent (10%) of the shares then outstanding and entitled to vote thereat,
or as otherwise required under the provisions of the Business Corporation
Act.
Section 3 -- Place of Meetings:
All meetings of shareholders shall be held at the principal
office of the Corporation, or at such other places as shall be designated in
the notices or waivers of notice of such meetings.
Section 4 -- Notice of Meetings:
(a) Except as otherwise provided by Statute, written notice of
each meeting of shareholders, whether annual or special, stating the time when
and place where it is to be held, shall be served either personally or by
mail, not less than ten or more than fifty days before the meeting, upon each
shareholder of record entitled to vote at such meeting, and to any other
shareholder to whom the giving of notice may be required by law. Notice of a
special meeting shall also state the purpose or purposes for which the meeting
is called, and shall indicate that it is being issued by, or at the direction
of, the person or persons calling the meeting. If, at any meeting, action is
proposed to be taken that would, if taken, entitle shareholders to receive
payment for their shares pursuant to Statute, the notice of such meeting shall
include a statement of that purpose and to that effect. If mailed, such
notice shall be directed to each such shareholder at his address, as it
appears on the records of the shareholders of the Corporation, unless he shall
have previously filed with the Secretary of the Corporation a written request
that notices intended for him be mailed to the address designated in such
request.
(b) Notice of any meeting need not be given to any person who
may become a shareholder of record after the mailing of such notice and prior
to the meeting, or to any shareholder who attends such meeting, in person or
by proxy, or to any shareholder who attends such meeting, in person or by
proxy, or to any shareholder who, in person or by proxy submits a signed
waiver of notice either before or after such meeting. Notice of any adjourned
meeting of shareholders need not be given, unless otherwise required by
statute.
Section 5 -- Quorum:
(a) Except as otherwise provided herein, or by statute, or in
the Certificate of Incorporation (such Certificate and any amendments thereof
being hereinafter collectively referred to as the "Certificate of
Incorporation"), at all meetings of shareholders of the Corporation, the
presence at the commencement of such meetings in person or by proxy of
shareholders holding of record a majority of the total number of shares of the
Corporation then issued and outstanding and entitled to vote, shall be
necessary and sufficient to constitute a quorum for the transaction of any
business. The withdrawal of any shareholder after the commencement of a
meeting shall have no effect on the existence of a quorum, after a quorum has
been established at such meeting.
(b) Despite the absence of a quorum at any annual or special
meeting of shareholders, the shareholders, by a majority of the votes cast by
the holders of shares entitled to vote thereon, may adjourn the meeting. At
any such adjourned meeting at which a quorum is present, any business may be
transacted at the meeting as originally called if a quorum had been present.
Section 6 -- Voting:
(a) Except as otherwise provided by statute or by the
Certificate of Incorporation, any corporate action, other than the election of
directors to be taken by vote of the shareholders, shall be authorized by a
majority of votes cast at a meeting of shareholders by the holders of shares
entitled to vote thereon.
(b) Except as otherwise provided by statute or by the
Certificate of Incorporation, at each meeting of shareholders, each holder of
record of stock of the Corporation entitled to vote thereat, shall be entitled
to one vote for each share of stock registered in his name on the books of the
Corporation.
(c) Each shareholder entitled to vote or to express consent or
dissent without a meeting, may do so by proxy; provided, however, that the
instrument authorizing such proxy to act shall have been executed in writing
by the shareholder himself, or by his attorney-in-fact thereunto duly
authorized in writing. No proxy shall be valid after the expiration of eleven
months from the date of its execution, unless the persons executing it shall
have specified therein the length of time it is to continue in force. Such
instrument shall be exhibited to the Secretary at the meeting and shall be
filed with the records of the Corporation.
(d) Any resolution in writing, signed by all of the
shareholders entitled to vote thereon, shall be and constitute action by such
shareholders to the effect therein expressed, with the same force and effect
as if the same had been duly passed by unanimous vote at a duly called meeting
of shareholders and such resolution so signed shall be inserted in the Minute
Book of the Corporation under its proper date.
ARTICLE III -- BOARD OF DIRECTORS
Section 1 -- Number, Election and Term of Office:
(a) The number of the directors of the Corporation shall be
three (3), unless and until otherwise determined by vote of a majority of the
entire Board of Directors. The number of Directors shall not be less than
three, unless all of the outstanding shares are owned beneficially and of
record by less than three shareholders, in which event the number of directors
shall not be less than the number of shareholders permitted by statute.
(b) Except as may otherwise be provided herein or in the
Certificate of Incorporation, the members of the Board of Directors of the
Corporation, who need not be shareholders, shall be elected by a majority of
the votes cast at a meeting of shareholders, by the holders of shares, present
in person or by proxy, entitled to vote in the election.
(c) Each director shall hold office until the annual meeting of
the shareholders next succeeding his election, and until his successor is
elected and qualified, or until his prior death, resignation or removal.
Section 2 -- Duties and Powers:
The Board of Directors shall be responsible for the control and
management of the affairs, property and interests of the Corporation, and may
exercise all powers of the Corporation, except as are in the Certificate of
Incorporation or by statute expressly conferred upon or reserved to the
shareholders.
Section 3 -- Annual and Regular Meetings; Notice:
(a) A regular annual meeting of the Board of Directors shall be
held immediately following the annual meeting of the shareholders, at the
place of such annual meeting of shareholders.
(b) The Board of Directors, from time to time, may provide by
resolution for the holding of other regular meetings of the Board of
Directors, and may fix the time and place thereof.
(c) Notice of any regular meeting of the Board of Directors
shall not be required to be given and, if given, need not specify the purpose
of the meeting; provided, however, that in case the Board of Directors shall
fix or change the time or place of any regular meeting, notice of such action
shall be given to each director who shall not have been present at the meeting
at which such action was taken within the time limited, and in the manner set
forth in paragraph (b) of Section 4 of this Article III, with respect to
special meetings, unless such notice shall be waived in the manner set forth
in paragraph (c) of such Section 4.
Section 4 -- Special Meetings; Notice:
(a) Special meetings of the Board of Directors shall be held
whenever called by the President or by one of the directors, at such time and
place as may be specified in the respective notices or waivers of notice
thereof.
(b) Except as otherwise required by statute, notice of special
meeting shall be mailed directly to each director, addressed to him at his
residence or usual place of business, at least two (2) days before the day on
which the meeting is to be held, or shall be sent to him at such place by
telegram, telefax or cable, or shall be delivered to him personally or given
to him orally, not later than the day before the day on which the meeting is
to be held. A notice, or waiver of notice, except as required by Section 8 of
this Article III, need not specify the purpose of the meeting.
(c) Notice of any special meeting shall not be required to be
given to any director who shall attend such meeting without protesting prior
thereto or at its commencement, the lack of notice to him, or who submits a
signed waiver of notice, whether before or after the meeting. Notice of any
adjourned meeting shall not be required to be given.
Section 5 -- Chairman:
At all meetings of the Board of Directors the Chairman of the
Board, if any and if present, shall preside. If there shall be no Chairman,
or he shall be absent, then the President shall preside, and in his absence, a
Chairman chosen by the directors shall preside.
Section 6 -- Quorum and Adjournments:
(a) At all meetings of the Board of Directors, the presence of a
majority of the entire Board shall be necessary and sufficient to constitute a
quorum for the transaction of business, except as otherwise provided by law, by
the Certificate of Incorporation, or by these By-Laws.
(b) A majority of the directors present at the time and place
of any regular or special meeting, although less than a quorum, may adjourn
the same from time to time without notice, until a quorum shall be present.
Section 7 -- Manner of Acting:
(a) At all meetings of the Board of Directors, each director
present shall have one vote, irrespective of the number of shares of stock, if
any, which he may hold.
(b) Except as otherwise provided by statute, by the Certificate
of Incorporation, or these By-Laws, the action of a majority of the directors
present at any meeting at which a quorum is present shall be the act of the
Board of Directors. Any action authorized in writing, by all of the directors
entitled to vote thereon and filed with the minutes of the corporation shall
be the act of the Board of Directors with the same force and effect as if the
same had been passed by unanimous vote at a duly called meeting of the Board.
Section 8 -- Vacancies:
Any vacancy in the Board of Directors occurring by reason of an
increase in the number of directors, or by reason of the death, resignation,
disqualification, removal (unless a vacancy created by the removal of a
director by the shareholders shall be filled by the shareholders at the
meeting at which the removal was effected) or inability to act of any
director, or otherwise, shall be filled for the unexpired portion of the term
by a majority vote of the remaining directors, though less than a quorum, at
any regular meeting or special meeting of the Board of Directors called for
that purpose.
Section 9 -- Resignation:
Any director may resign at any time by giving written notice to
the Board of Directors, the President or the Secretary of the Corporation.
Unless otherwise specified in such written notice, such resignation shall take
effect upon receipt thereof by the Board of Directors or such officer, and the
acceptance of such resignation shall not be necessary to make it effective.
Section 10 -- Removal:
Any director may be removed with or without cause at any time
by the affirmative vote of shareholders holding of record in the aggregate at
least a majority of the outstanding shares of the Corporation at a special
meeting of the shareholders called for that purpose, and may be removed for
cause by action of the Board.
Section 11 -- Salary:
No stated salary shall be paid to directors, as such, for their
services, but by resolution of the Board of Directors a fixed sum and expenses
of attendance, if any, may be allowed for attendance at each regular or
special meeting of the Board; provided, however, that nothing herein contained
shall be construed to preclude any director from serving the Corporation in
any other capacity and receiving compensation therefor.
Section 12 -- Contracts:
(a) No contract or other transaction between this Corporation
and any other Corporation shall be impaired, affected or invalidated, nor
shall any director be liable in any way by reason of the fact that any one or
more of the directors of this Corporation is or are interested in, or is a
director or officer, or are directors or officers of such other Corporation,
provided that such facts are disclosed or made known to the Board of Directors.
(b) Any director, personally and individually, may be a party
to or may be interested in any contract or transaction of this Corporation,
and no director shall be liable in any way by reason of such interest,
provided that the fact of such interest be disclosed or made known to the
Board of Directors, and provided that the Board of Directors shall authorize,
approve or ratify such contract or transaction by the vote (not counting the
vote of any such director) of a majority of a quorum, notwithstanding the
presence of any such director at the meeting at which such action is taken.
Such director or directors may be counted in determining the presence of a
quorum at such meeting. This Section shall not be construed to impair or
invalidate or in any way affect any contract or other transaction which would
otherwise be valid under the law (common, statutory or otherwise) applicable
thereto.
Section 13 -- Committees:
The Board of Directors, by resolution adopted by a majority of
the entire Board, may from time to time designate from among its members an
executive committee and such other committees, and alternate members thereof,
as they deem desirable, each consisting of three or more members, with such
powers and authority (to the extent permitted by law) as may be provided in
such resolution. Each such committee shall serve at the pleasure of the Board.
ARTICLE IV -- OFFICERS
Section 1 -- Number, Qualifications, Election and Term of Office:
(a) The officers of the Corporation shall consist of a
President, a Secretary, a Treasurer, and such other officers, including a
Chairman of the Board of Directors, and one or more Vice Presidents, as the
Board of Directors may from time to time deem advisable. Any officer other
than the Chairman of the Board of Directors may be, but is not required to be,
a director of the Corporation. Any two or more offices may be held by the
same person.
(b) The officers of the Corporation shall be elected by the
Board of Directors at the regular annual meeting of the Board following the
annual meeting of shareholders.
(c) Each officer shall hold office until the annual meeting of
the Board of Directors next succeeding his election, and until his successor
shall have been elected and qualified, or until his death, resignation or
removal.
Section 2 -- Resignation:
Any officer may resign at any time by giving written notice of
such resignation to the Board of Directors, or to the President or the
Secretary of the Corporation. Unless otherwise specified in such written
notice, such resignation shall take effect upon receipt thereof by the Board
of Directors or by such officer, and the acceptance of such resignation shall
not be necessary to make it effective.
Section 3 -- Removal:
Any officer may be removed, either with or without cause, and a
successor elected by a majority of the Board of Directors at any time.
Section 4 -- Vacancies:
A vacancy in any office by reason of death, resignation,
inability to act, disqualification, or any other cause, may at any time be
filled for the unexpired portion of the term by the Board of Directors.
Section 5 -- Duties of Officers:
Officers of the Corporation shall, unless otherwise provided by
the Board of Directors, each have such powers and duties as generally pertain
to their respective offices as well as such powers and duties as may be set
forth in these By-laws, or may from time to time be specifically conferred or
imposed by the Board of Directors. The President shall be the chief executive
officer of the Corporation.
Section 6 -- Sureties and Bonds:
In case the Board of Directors shall so require, any officer,
employee or agent of the Corporation shall execute to the Corporation a bond
in such sum, and with such surety or sureties as the Board of directors may
direct, conditioned upon the faithful performance of his duties to the
Corporation, including responsibility for negligence and for the accounting
for all property, funds or securities of the Corporation which may come into
his hands.
Section 7 -- Shares of Other Corporations:
Whenever the Corporation is the holder of shares of any other
Corporation, any right or power of the Corporation as such shareholder
(including the attendance, acting and voting at shareholders' meetings and
execution of waivers, consents, proxies or other instruments) may be
exercised on behalf of the Corporation by the President, any Vice President,
or such other person as the Board of Directors may authorize.
ARTICLE V -- SHARES OF STOCK
Section 1 -- Certificate of Stock:
(a) The certificates representing shares of the Corporation
shall be in such form as shall be adopted by the Board of Directors, and shall
be numbered and registered in the order issued. They shall bear the holder's
name and the number of shares, and shall be signed by (i) the Chairman of the
Board or the President or a Vice President, and (ii) the Secretary or
Treasurer, or any Assistant Secretary or Assistant Treasurer, and shall bear
the corporate seal.
(b) No certificate representing shares shall be issued until
the full amount of consideration therefor has been paid, except as otherwise
permitted by law.
(c) To the extent permitted by law, the Board of Directors may
authorize the issuance of certificates for fractions of a share which shall
entitle the holder to exercise voting rights, receive dividends and
participate in liquidating distributions, in proportion to the fractional
holdings; or it may authorize the payment in cash of the fair value of
fractions of a share as of the time when those entitled to receive such
fractions are determined; or it may authorize the issuance, subject to such
conditions as may be permitted by law, of scrip in registered or bearer form
over the signature of an officer or agent of the Corporation, exchangeable as
therein provided for full shares, but such scrip shall not entitle the holders
to any rights of a shareholder, except as therein provided.
Section 2 -- Lost or Destroyed Certificates:
The holder of any certificate representing shares of the
Corporation shall immediately notify the Corporation of any loss or
destruction of the certificate representing the same. The Corporation may
issue a new certificate in the place of any certificate theretofore issued by
it, alleged to have been lost or destroyed. On production of such evidence of
loss or destruction as the Board of Directors in its discretion may require,
the Board of Directors may, in its discretion, require the owner of the lost
or destroyed certificate, or his legal representatives, to give the
Corporation a bond in such sum as the Board may direct, and with such surety
or sureties as may be satisfactory to the Board, to indemnify the Corporation
against any claims, loss, liability or damage it may suffer on account of the
issuance of the new certificate. A new certificate may be issued without
requiring any such evidence or bond when, in the judgment of the Board of
Directors, it is proper so to do.
Section 3 -- Transfer of Shares:
(a) Transfers of shares of the Corporation shall be made on the
share records of the Corporation only by the holder of record thereof, in
person or by his duly authorized attorney, upon surrender for cancellation of
the certificate or certificates representing such shares, with an assignment
or power of transfer endorsed thereon or delivered therewith, duly executed,
with such proof of the authenticity of the signature and of authority to
transfer and of payment of transfer taxes as the Corporation or its agents may
require.
(b) The Corporation shall be entitled to treat the holder of
record of any share or shares as the absolute owner thereof for all purposes
and, accordingly, shall not be bound to recognize any legal, equitable or
other claim to, or interest in, such share or shares on the part of any other
person, whether or not it shall have express or other notice thereof, except
as otherwise expressly provided by law.
Section 4 -- Record Date:
In lieu of closing the share records of the Corporation, the
Board of Directors may fix, in advance, a date not exceeding fifty days, nor
less than ten days, as the record date for the determination of shareholders
entitled to receive notice of, or to vote at, any meeting of shareholders, or
to consent to any proposal without a meeting, or for the purpose of
determining shareholders entitled to receive payment of any dividends, or
allotment of any rights, or for the purpose of any other action. If no record
date is fixed, the record date for the determination of shareholders
entitled to notice of or to vote at a meeting of shareholders shall be at
the close of business on the day next preceding the day on which notice is
given, or, if no notice is given, the day on which the meeting is held; the
record date for determining shareholders for any other purpose shall be at
the close of business on the day on which the resolution of the directors
relating thereto is adopted. When a determination of shareholders of record
entitled to notice of or to vote at any meeting of shareholders has been
made as provided for herein, such determination shall apply to any
adjournment thereof, unless the directors fix a new record date for the
adjourned meeting.
ARTICLE VI -- DIVIDENDS
Subject to applicable law, dividends may be declared and paid
out of any funds available therefor, as often, in such amounts, and at such
time or times as the Board of Directors may determine.
ARTICLE VII -- FISCAL YEAR
The fiscal year of the Corporation shall be fixed by the Board
of Directors from time to time, subject to applicable law.
ARTICLE VIII -- CORPORATE SEAL
The corporate seal, if any, shall be in such form as shall be
approved from time to time by the Board of Directors.
ARTICLE IX -- AMENDMENTS
Section 1 -- By Shareholders:
All by-laws of the Corporation shall be subject to alteration
or repeal, and new by-laws may be made, by the affirmative vote of
shareholders holding of record in the aggregate at least a majority of the
outstanding shares entitled to vote in the election of directors at any annual
or special meeting of shareholders, provided that the notice or waiver of
notice of such meeting shall have summarized or set forth in full therein, the
proposed amendment.
Section 2 -- By Directors:
The Board of Directors shall have power to make, adopt, alter,
amend and repeal, from time to time, by-laws of the Corporation; provided,
however, that the shareholders entitled to vote with respect thereto as in this
Article IX above-provided may alter, amend or repeal by-laws made by the Board
of Directors, except that the Board of Directors shall have no power to change
the quorum for meetings of shareholders or of the Board of Directors, or to
change any provisions of the by-laws with respect to the removal of directors
or the filling of vacancies in the Board resulting from the removal by the
shareholders. If any by-law regulating an impending election of directors is
adopted, amended or repealed by the Board of Directors, there shall be set
forth in the notice of the next meeting of shareholders for the election of
directors, the by-law so adopted, amended or repealed, together with a concise
statement of the changes made.
ARTICLE X -- INDEMNITY
(a) Any person made a party to any action, suit or proceeding,
by reason of the fact that he, his testator or intestate representative is or
was a director, officer or employee of the Corporation, or of any Corporation
in which he served as such at the request of the Corporation, shall be
indemnified by the Corporation against the reasonable expenses, including
attorney's fees, actually and necessarily incurred by him in connection with
the defense of such action, suit or proceedings, or in connection with any
appeal therein that such officer, director or employee is liable for
negligence or misconduct in the performance of his duties.
(b) The foregoing right of indemnification shall not be deemed
exclusive of any other rights to which any officer or director or employee may
be entitled apart from the provisions of this section.
(c) The amount of indemnity to which any officer or any
director may be entitled shall be fixed by the Board of Directors, except that
in any case where there is no disinterested majority of the Board available,
the amount shall be fixed by arbitration pursuant to then existing rules of
the American Arbitration Association.
The undersigned Secretary of the Corporation certifies that the
foregoing by-laws are the by-laws of the Corporation.
Dated: September 26, 1994
--------------------------------
THOMAS M. STUCKEY, Secretary
EXHIBIT 3.15
State of New York )
) ss:
Department of State )
I hereby certify that the annexed copy has been compared with the
original document in the custody of the Secretary of State and
that the same is a true copy of said original.
Witness my hand and seal of the Department of State on FEB 19 1998
[SEAL] /s/ J. Clark
---------------------------------
Special Deputy Secretary of State
DOS-1266 (5/96)
CERTIFICATE OF AMENDMENT
OF
THE CERTIFICATE OF INCORPORATION
OF
APR PLASTIC PROCESSING INC.
Under Section 805 of the
Business Corporation Law
Pursuant to the provisions of Section 805 of the Business Corporation
Law, the undersigned, being the Officers of the Corporation, hereby certify:
FIRST: That the name of the Corporation is APR Plastic Processing Inc.
SECOND: That the Certificate of Incorporation was filed with the Secretary
of State of New York on May 30, 1991.
THIRD: That the corporation hereby changes its name, and to that end amends
Article FIRST to read as follows:
FIRST: The name of the corporation is Pure Tech APR, Inc.
FOURTH: That the Corporation hereby changes the purpose for which the
Corporation was formed, and to that end amends Article SECOND to read as
follows:
SECOND: The purpose of the Corporation is to engage in any lawful act
or activity for which corporations may be organized pursuant to the
Business Corporation Law of the State of New York, provided that it is not
formed to engage in any act or activity which requires the consent or
approval of any state official, department, board, agency or other body
without such approval or consent first being obtained. For the
accomplishment of the aforesaid purposes, and in furtherance thereof, the
Corporation shall have, and may exercise, all of the powers conferred by
the Business Corporation Law upon corporations formed thereunder, subject
to any limitations contained in Article 2 of said law or in accordance with
the provisions of any other statute of the State of New York.
FIFTH: That the Corporation hereby changes the number of shares it is
authorized to issue by eliminating 9,800 unissued shares at no par value, and to
that end amends Article FOURTH to read as follows:
THIRD: The number of shares which the Corporation shall have authority
to issue is 200 shares at no par value.
SIXTH: That the Corporation hereby changes its mailing address to which a
copy of any process served on the Secretary of State as agent of the Corporation
shall be sent and to that end amends the last sentence of Article FIFTH to read
as follows:
The post office address to which the Secretary of State sha11 mail a
copy of any process against the Corporation served upon him shall be: 91 E.
Carmans Road, E. Farmingdale, NY 11735.
SEVENTH: That the corporation hereby wishes to provide for the
indemnification of certain persons, and to that end adds an Article to read as
follows:
SEVENTH: The corporation shall, to the fullest extent permitted by
Article 7 of the Business Corporation Law of the State of New York, as the
same may be amended and supplemented, indemnify any and all persons whom it
shall have the power to indemnify under said Article from and against any
and all of the expenses, liabilities, or other matters referred to in or
covered by said Article, and indemnification provided for herein shall not
be deemed exclusive of any other rights to which any person may be entitled
under any By-Law, resolution of shareholders, resolution of directors,
agreement, or otherwise, as permitted by said Article, as to action in any
capacity in which he served at the request of the Corporation.
EIGHTH: The amendments to the Certificate of Incorporation were authorized
by vote or written consent of the Board of Directors, followed by the unanimous
written consent of the holders of all outstanding shares entitled to vote
thereon.
IN WITNESS WHEREOF, we hereunto sign our names and affirm
that the statements made herein are true under the penalties of
perjury, this 20th day of July, 1993.
APR Plastic Processing Inc.
By: /s/ David Katz
--------------------------
David Katz, President
By: /s/ Paul Litwinczuk
--------------------------
Paul Litwinczuk, Secretary
CERTIFICATE OF AMENDMENT
OF
CERTIFICATE OF INCORPORATION
OF
APR PLASTIC PROCESSING INC.
Under Section 805 of the Business Corporation Law
STATE OF NEW YORK
DEPARTMENT OF STATE
JUL 20 1993
Filed By:
Louis A. Brillman, Esq.
Law offices of Oscar D. Folger
521 Fifth Avenue
New York, New York 10175
State of New York )
) ss:
Department of State )
I hereby certify that the annexed copy has been compared with the
original document in the custody of the Secretary of State and
that the same is a true copy of said original.
Witness my hand and seal of the Department of State on FEB 19 1998
[SEAL] /s/ J. Clark
---------------------------------
Special Deputy Secretary of State
DOS-1266 (5/96)
CERTIFICATE OF MERGER
PURE TECH SUB CORP.
INTO
APR PLASTIC PROCESSING INC.
Under Section 904 of the
Business Corporation Law
The undersigned corporations respectively set forth as follows:
FIRST: The name of each constituent corporation is as follows:
Pure Tech Sub Corp.
APR Plastic Processing Inc.
SECOND: The name of the surviving corporation is APR Plastic Processing
Inc., a New York corporation.
THIRD: The designation, number and voting rights of the outstanding shares
of each class and series of the constituent corporations are as follows:
Pure Tech Sub Corp.
Class Number Outstanding Entitled to Vote as a Class
Common 100 100
APR Plastic Processing Inc.
Class Number Outstanding Entitled to Vote as a Class
Common 7,537 7,537
FOURTH: The date when the Certificate of Incorporation of Pure Tech Sub
Corp. was filed by the Department of State is June 23, 1993. The date when the
Certificate of Incorporation of APR Plastic Processing Inc. was filed by the
Department of State is May 30, 1991.
FIFTH: This merger was authorized by an affirmative vote of the holders of
not less than two-thirds (2/3) of all the outstanding shares of each corporation
entitled to vote thereon at meetings of their respective shareholders.
IN WITNESS WHEREOF, the undersigned affirm that the statements made herein
are true under the penalties of perjury, this 19th day of July, 1993.
APR Plastic Processing Inc.
By: /s/ Anthony Conte
-----------------------
Anthony Conte, President
By: /s/ Enrico Gallo
-----------------------
Enrico Gallo, Secretary
Pure Tech Sub Corp.
By: /s/ David Katz
--------------------------
David Katz, President
By: /s/ Paul Litwinczuk
--------------------------
Paul Litwinczuk, Secretary
CERTIFICATE OF MERGER
OF
PURE TECH SUB CORP.
INTO
APR PLASTIC PROCESSING INC.
Under Section 904 of the Business Corporation Law
STATE OF NEW YORK
DEPARTMENT OF STATE
JUL 20 1993
Filed By:
Louis A. Brillman, Esq.
Law Offices of Oscar D. Folger
521 Fifth Avenue
New York, New York 10175
STATE OF NEW YORK )
) ss:
DEPARTMENT OF STATE )
I hereby certify that the annexed copy has been compared with the
original document in the custody of the Secretary of State and
that the same is a true copy of said original.
Witness my hand and seal of the Department of State on FEB 19 1998
[SEAL] /s/ J. Clark
---------------------------------
Special Deputy Secretary of State
DOS-1266 (5/96)
CERTIFICATE OF INCORPORATION
APR PLASTIC PROCESSING INC.
Under Section 402 of the Business Corporation Law.
The undersigned, for the purpose of forming a corporation pursuant to
Section 402 of the Business Corporation Law of the State of New York, does
hereby certify and set forth:
FIRST: The name of the corporation is APR PLASTIC PROCESSING INC.
SECOND: The purposes for which the corporation is formed are:
To engage in any lawful act or activity for which corporations may be
organized under the business corporation law, provided that the corporation is
not formed to engage in any act or activity which requires the act or approval
of any state official, department, board, agency or other body without such
approval or consent first being obtained.
To engage in the business of recycling of plastic, garbage, rubbish,
debris, trash, waste, rags cloth, paper, old household goods, soil, bricks,
stone and any other refuse into usable merchandise of every kind and
description; and also to sell or dispose of said recycled goods to any person
desiring to purchase the same; to process the same, and to maintain, acquire,
buy, sell, lot or otherwise deal in and with installations or facilities for
the processing of recycled goods, and the sale and disposal of the products of
such processing. To own, lease, buy, sell, operate, and maintain a fleet of
motor trucks and other modes of conveyances to carry out the purposes of this
corporation.
To carry on a general mercantile, industrial, investing and trading
business in all its branches; to devise, invent, manufacture, fabricate,
assemble, install, service, maintain, alter, buy, sell, import, export, license
as licensor or licensee, lease as lessor or lessee, distribute, job, enter into,
negotiate, execute, acquire, and assign contracts in respect of, acquire,
receive, grant, and assign licensing arrangements, options, franchises, and
other rights in respect of, and generally deal in and with, at wholesale and
retail, as principal, and as sales, business, special, or general agent,
representative, broker, factor, merchant, distributor, jobber, advisor, or in
any other lawful capacity, goods, wares, merchandise, commodities, and
unimproved, improved, finished, processed and other real, personal and mixed
property of any and all kinds, together with the components, resultants, and
by-products thereof.
To acquire by purchase, subscription, underwriting or otherwise, and to
own, hold for investment, or otherwise, and to use, sell, assign, transfer,
mortgage, pledge, exchange or otherwise dispose of real and personal property of
every sort and description and wheresoever situated, including shares of stock,
bonds, debentures, notes, scrip, securities, evidences of indebtedness,
contracts or obligations of any corporation or association, whether domestic or
foreign, or of any firm or individual or of the United States or any state,
territory or dependency of the United States or any foreign country, or any
municipality or local authority within or without the United States, and also to
issue in exchange therefor, stocks, bonds or other securities or evidences of
indebtedness of this corporation and, while the owner or holder of any such
property, to receive, collect and dispose of the interest, dividends and income
on or from such property and to possess and exercise in respect thereto all of
the rights, powers and privileges of ownership, including all voting powers
thereon.
To construct, build, purchase, lease or otherwise acquire, equip, hold,
own, improve, develop, manage, maintain, control, operate, lease, mortgage,
create liens upon, sell, convey or otherwise dispose of and turn to account, any
and all plants, machinery, works, implements and things or property, real and
personal, of every kind and description, incidental to, connected with, or
suitable, necessary or convenient for any of the purposes enumerated herein,
including all or any part or parts of the properties, assets, business and
goodwill of any persons, firms, associations or corporations.
The powers, rights and privileges provided in this certificate are not to
be deemed to be in limitation of similar, other or additional powers, rights and
privileges granted or permitted to a corporation by the Business Corporation
Law, it being intended that this corporation shall have all rights, powers and
privileges granted or permitted to a corporation by such statute.
THIRD: The office of the corporation is to be located in the County of
Suffolk, State of New York.
FOURTH: The aggregate number of shares which the corporation shall have the
authority to issue is Two Hundred (200), all of which shall be without par
value.
FIFTH: The Secretary of State is designated as the agent of the corporation
upon whom process against it may be served. The post office address to which the
Secretary of State shall mail a copy of any process against the corporation
served on him is:
Nine Suncrest Drive
Dix Hills, New York 11746
SIXTH: The personal liability of directors to the corporation or its
shareholders for damages for any breach of duty in such capacity is hereby
eliminated except that such personal liability shall not be eliminated if a
judgment or other final adjudication adverse to such director establishes that
his acts or omissions were in bad faith or involved intentional misconduct or a
knowing violation of law or that he personally gained in fact a financial profit
or other advantage to which he was not legally entitled or that his acts
violated Section 719 of the Business Corporation Law.
IN WITNESS WHEREOF, this certificate has been subscribed to this 14th day
of May, 1991 by the undersigned who affirms that the statements made herein are
true under the penalties of perjury.
/s/ Gerald Weinberg
-----------------------
GERALD WEINBERG
90 State Street
Albany, New York
CERTIFICATE OF INCORPORATION
OF
APR PLASTIC PROCESSING INC.
STATE OF NEW YORK
DEPARTMENT OF STATE
FILED MAY 30 1991
Filed by:
Glen G. Gelband, Esq.
19 Neville Drive
Lyncroft, New Jersey 07738
State of New York )
) ss:
Department of State )
I hereby certify that the annexed copy has been compared with the
original document in the custody of the Secretary of State and
that the same is a true copy of said original.
Witness my hand and seal of the Department of State on FEB 19 1998
[SEAL] /s/ J. Clark
---------------------------------
Special Deputy Secretary of State
DOS-1266 (5/96)
Certificate of Amendment of the
Certificate of Incorporation of
APR PLASTIC PROCESSING INC.
under Section 805 of the Business Corporation Law
IT IS HEREBY CERTIFIED THAT:
(1) The name of the corporation is:
APR PLASTIC PROCESSING INC.
(2) The certificate of incorporation was filed by the department of state
on the 30th day of May, 1991.
(3) The certificate of incorporation of this corporation is hereby amended
to effect the following change:
To increase the capitalization, from 200 shares without par
value to 10,000 shares without par value.
Paragraph FOURTH of the Certificate of Incorporation of APR Plastic
Processing Inc., is amended to read as follows:
FOURTH: The aggregate number of shares which the corporation shall have the
authority to issue is Ten Thousand (10,000), all of which shall be without par
value.
(4) The amendment to the certificate of incorporation was authorized:
first, by unanimous written consent of all the directors;
and then by unanimous written consent of the holders of all the outstanding
shares entitled to vote thereon;
and then at a meeting of shareholders by vote of APR PLASTIC PROCESSING
INC. of all the outstanding shares entitled to vote thereon as required by the
certificate of incorporation.
IN WITNESS WHEREOF, this certificate has been subscribed this 9th day of
October, 1992, by the undersigned who affirm that the statements made herein are
true under the penalties of perjury.
Capacity in which signed
Anthony Conte President /s/Anthony Conte
--------------------- ---------------------
Enrico Gallo Secretary /s/Enrico Gallo
--------------------- ---------------------
Pasquale Carbone Treasurer /s/Pasquale Carbone
--------------------- ---------------------
Certificate of Amendment of the Certificate of Incorporation of
APR PLASTIC PROCESSING INC.
under Section 805 of the Business Corporation Law
Filed by: Glenn Gelband, Esq.
7321 Fifth Avenue
Brooklyn, NY 11209
STATE OF NEW YORK
DEPARTMENT OF STATE
FILED OCT 26 1992
EXHIBIT 3.16
BY-LAWS
ARTICLE I
The Corporation
Section 1. Name. The legal name of this corporation
(hereinafter called the "Corporation") is APR PLASTIC PROCESSING INC.
Section 2. Offices. The Corporation shall have its principal
office in the State of New York. The Corporation may also have offices at such
other places within and without the United States as the Board of Directors
may from time to time appoint or the business of the Corporation may require.
Section 3. Seal. The corporate seal shall have inscribed
thereon the name of the Corporation, the year of its organization and the
words "Corporate Seal, New York". One or more duplicate dies for impressing
such seal may be kept and used.
ARTICLE II
Meetings of Shareholders
Section 1. Place of Meetings. All meetings of the shareholders
shall be held at the principal office of the Corporation in the State of New
York or at such other place, within or without the State of New York, as is
fixed in the notice of the meeting.
Section 2. Annual Meeting. An annual meeting of the
shareholders of the Corporation for the election of directors and the
transaction of such other business as may properly come before the meeting
shall be held on the first Monday of in each
year if not a legal holiday, and if a legal holiday, then on the next secular
day following, at ten o'clock A.M., Eastern Standard Time, or at such other
time as is fixed in the notice of the meeting. If for any reason any annual
meeting shall not be held at the time herein specified, the same may be held
at any time thereafter upon notice, as herein provided, or the business thereof
may be transacted at any special meeting called for the purpose.
Section 3. Special Meetings. Special meetings of shareholders
may be called by the President whenever he deems it necessary or advisable. A
special meeting of the shareholders shall be called by the President whenever
so directed in writing by a majority of the entire Board of Directors or
whenever the holders of one-third (1/3) of the number of shares of the capital
stock of the Corporation entitled to vote at such meeting shall, in writing,
request the same.
Section 4. Notice of Meetings. Notice of the time and place of
the annual and of each special meeting of the shareholders shall be given to
each of the shareholders entitled to vote at such meeting by mailing the same
in a postage prepaid wrapper addressed to each such shareholders at his
address as it appears on the books of the Corporation, or by delivering the
same personally to any such shareholder in lieu of such mailing, at least ten
(10) and not more than fifty (50) days prior to each meeting. Meetings may be
held without notice if all of the shareholders entitled to vote thereat are
present in person or by proxy, or if notice thereof is waived by all such
shareholders not present in person or by proxy, before or after the meeting.
Notice by mail shall be deemed to be given when deposited, with postage
thereon prepaid, in the United States mail. If a meeting is adjourned to
another time, not more than thirty (30) days hence, or to another place, and
if an announcement of the adjourned time or place is made at the meeting, it
shall not be necessary to give notice of the adjourned meeting unless the
Board of Directors, after adjournment fix a new record date for the adjourned
meeting. Notice of the annual and each special meeting of the shareholders
shall indicate that it is being issued by or at the direction of the person or
persons calling the meeting, and shall state the name and capacity of each
such person. Notice of each special meeting shall also state the purpose or
purposes for which it has been called. Neither the business to be transacted
at nor the purpose of the annual or any special meeting of the shareholders
need be specified in any written waiver of notice.
Section 5. Record Date for Shareholders. For the purpose of
determining the shareholders entitled to notice of or to vote at any meeting
of shareholders or any adjournment thereof, or to express consent to corporate
action in writing without a meeting, or for the purpose of determining
shareholders entitled to receive payment of any dividend or other distribution
or the allotment of any rights, or entitled to exercise any rights in respect
of any change, conversion, or exchange of stock or for the purpose of any
other lawful action, the Board of Directors may fix, in advance, a record
date, which shall not be more than fifty (50) days nor less than ten (10) days
before the date of such meeting, nor more than fifty (50) days prior to any
other action. If no record date is fixed, the record date for determining
shareholders entitled to notice of or to vote at a meeting of shareholders
shall be at the close of business on the day next preceding the day on which
notice is given, or, if no notice is given, the day on which the meeting is
held; the record date for determining shareholders entitled to express consent
to corporate action in writing without a meeting, when no prior action by the
Board of Directors is necessary, shall be the day on which the first written
consent is expressed; and the record date for determining shareholders for any
other purpose shall be at the close of business on the day on which the Board
of Directors adopts the resolution relating thereto. A determination of
shareholders of record entitled to notice of or to vote at any meeting of
shareholders shall apply to any adjournment of the meeting; provided, however,
that the Board of Directors may fix a new record date for the adjourned
meeting.
Section 6. Proxy Representation. Every shareholder may
authorize another person or persons to act for him by proxy in all matters in
which a shareholder is entitled to participate, whether by waiving notice of
any meeting, voting or participating at a meeting, or expressing consent or
dissent without a meeting. Every proxy must be signed by the shareholder or by
his attorney-in-fact. No proxy shall be voted or acted upon after eleven
months from its date unless such proxy provides for a longer period. Every
proxy shall be revocable at the pleasure of the shareholder executing it,
except as otherwise provided in Section 608 of the New York Business
Corporation Law.
Section 7. Voting at Shareholders' Meetings. Each share of
stock shall entitle the holder thereof to one vote. In the election of
directors, a plurality of the votes cast shall elect. Any other action shall
be authorized by a majority of the votes cast except where the New York
Business Corporation Law prescribes a different percentage of votes or a
different exercise of voting power. In the election of directors, and for any
other action, voting need not be by ballot.
Section 8. Quorum and Adjournment. Except for a special
election of directors pursuant to Section 603 of the New York Business
Corporation Law, the presence, in person or by proxy, of the holders of a
majority of the shares of the stock of the Corporation outstanding and
entitled to vote thereat shall be requisite and shall constitute a quorum at
any meeting of the shareholders. When a quorum is once present to organize a
meeting, it shall not be broken by the subsequent withdrawal of any
shareholders. If at any meeting of shareholders there shall be less than a
quorum so present, the shareholders present in person or by proxy and entitled
to vote thereat, may adjourn the meeting from time to time until a quorum
shall be present, but no business shall be transacted at any such adjourned
meeting except such as might have been lawfully transacted had the meeting not
adjourned.
Section 9. List of Shareholders. The officer who has charge of
the stock ledger of the Corporation shall prepare, make and certify, at least
ten (10) days before every meeting of shareholders, a complete list of the
shareholders, as of the record date fixed for such meeting, arranged in
alphabetical order, and showing the address of each shareholder and the number
of shares registered in the name of each shareholder. Such list shall be open
to the examination of any shareholder, for any purpose germane to the meeting,
during ordinary business hours, for a period of at least ten (10) days prior
to the meeting, either at a place within the city or other municipality or
community where the meeting is to be held. The list shall also be produced and
kept at the time and place of the meeting during the whole time thereof, and
may be inspected by any shareholder who is present. If the right to vote at
any meeting is challenged, the inspectors of election, if any, or the person
presiding thereat, shall require such list of shareholders to be produced as
evidence of the right of the persons challenged to vote at such meeting, and
all persons who appear from such list to be shareholders entitled to vote
thereat may vote at such meeting.
Section 10. Inspectors of Election. The Board of Directors, in
advance of any meeting, may, but need not, appoint one or more inspectors of
election to act at the meeting or any adjournment thereof. If an inspector or
inspectors are not appointed, the person presiding at the meeting may, and at
the request of any shareholder entitled to vote thereat shall, appoint one or
more inspectors. In case any person who may be appointed as an inspector fails
to appear or act, the vacancy may be filled by appointment made by the Board
of Directors in advance of the meeting or at the meeting by the person
presiding thereat. Each inspector, if any, before entering upon the discharge
of his duties, shall take and sign an oath faithfully to execute the duties of
inspector at such meeting with strict impartiality and according to the best
of his ability. The inspectors, if any, shall determine the number of shares
of stock outstanding and the voting power of each, the shares of stock
represented at the meeting, the existence of a quorum, the validity and effect
of proxies, and shall receive votes, ballots or consents, hear and determine
all challenges and questions arising in connection with the right to vote,
count and tabulate all votes, ballots or consents, determine the result, and
do such acts as are proper to conduct the election or vote with fairness to
all shareholders. On request of the person presiding at the meeting or any
shareholder entitled to vote thereat, the inspector or inspectors, if any,
shall make a report in writing of any challenge, question or matter determined
by him or them and execute a certificate of any fact found by him or them. Any
report or certificate made by the inspector or inspectors shall be prima facie
evidence of the facts stated and of the vote as certified by them.
Section 11. Action of the Shareholders Without Meetings. Any
action which may be taken at any annual or special meeting of the shareholders
may be taken without a meeting on written consent, setting forth the action so
taken, signed by the holders of all outstanding shares entitled to vote
thereon. Written consent thus given by the holders of all outstanding shares
entitled to vote shall have the same effect as a unanimous vote of the
shareholders.
ARTICLE III
Directors
Section 1. Number of Directors. The number of directors which
shall constitute the entire Board of Directors shall be at least three, except
that where all outstanding shares of the stock of the Corporation are owned
beneficially and of record by less than three shareholders, the number of
directors may be less than three but not less than the number of shareholders.
Subject to the foregoing limitation, such number may be fixed from time to
time by action of a majority of the entire Board of Directors or of the
shareholders at an annual or special meeting, or, if the number of directors
is not so fixed, the number shall be three or shall be equal to the number of
shareholders (determined as aforesaid), whichever is less. Until such time as
the corporation shall issue shares of its stock, the Board of Directors shall
consist of two persons. No decrease in the number of directors shall shorten
the term of any incumbent director.
Section 2. Election and Term. The initial Board of Directors
shall be elected by the incorporator and each initial director so elected
shall hold office until the first annual meeting of shareholders and until his
successor has been elected and qualified. Thereafter, each director who is
elected at an annual meeting of shareholders, and each director who is elected
in the interim to fill a vacancy or a newly created directorship, shall hold
office until the next annual meeting of shareholders and until his successor
has been elected and qualified.
Section 3. Filling Vacancies, Resignation and Removal. Any
director may tender his resignation at any time. Any director or the entire
Board of Directors may be removed, with or without cause, by vote of the
shareholders. In the interim between annual meetings of shareholders or
special meetings of shareholders called for the election of directors or for
the removal of one or more directors and for the filling of any vacancy in
that connection, newly created directorships and any vacancies in the Board of
Directors, including unfilled vacancies resulting from the resignation or
removal of directors for cause or without cause, may be filled by the vote of
a majority of the remaining directors then in office, although less than a
quroum, or by the sole remaining director.
Section 4. Qualifications and Powers. Each director shall be at
least eighteen years of age. A director need not be a shareholder, a citizen
of the United States or a resident of the State of New York. The business of
the Corporation shall be managed by the Board of Directors, subject to the
provisions of the Certificate of Incorporation. In addition to the powers and
authorities by these By-Laws expressly conferred upon it, the Board may
exercise all such powers of the Corporation and do all such lawful acts and
things as are not by statute or by the Certificate of Incorporation or by
these By-Laws directed or required to be exercised or done exclusively by the
shareholders.
Section 5. Regular and Special Meetings of the Board. The Board
of Directors may hold its meetings, whether regular or special, either within
or without the State of New York. The newly elected Board may meet at such
place and time as shall be fixed by the vote of the shareholders at the annual
meeting, for the purpose of organization or otherwise, and no notice of such
meeting shall be necessary to the newly elected directors in order legally to
constitute the meeting, provided a majority of the entire Board shall be
present; or they may meet at such place and time as shall be fixed by the
consent in writing of all directors. Regular meetings of the Board may be held
with or without notice at such time and place as shall from time to time be
determined by resolution of the Board. Whenever the time or place of regular
meetings of the Board shall have been determined by resolution of the Board, no
regular meetings shall be held pursuant to any resolution of the Board altering
or modifying its previous resolution relating to the time or place of the
holding of regular meetings, without first giving at least three days written
notice to each director, either personally or by telegram, or at least five
days written notice to each director by mail, of the substance and effect of
such new resolution relating to the time and place at which regular meetings of
the Board may thereafter be held without notice. Special meetings of the Board
shall be held whenever called by the President, Vice-President, the Secretary
or any director in writing. Notice of each special meeting of the Board shall
be delivered personally to each director or sent by telegraph to his residence
or usual place of business at least three days before the meeting, or mailed to
him to his residence or usual place of business at least five days before the
meeting. Meetings of the Board, whether regular or special, may be held at any
time and place, and for any purpose, without notice, when all the directors are
present or when all directors not present shall, in writing, waive notice of
and consent to the holding of such meeting, which waiver and consent may be
given after the holding of such meeting. All or any of the directors may waive
notice of any meeting and the presence of a director at any meeting of the
Board shall be deemed a waiver of notice thereof by him. A notice, or waiver of
notice, need not specify the purpose or purposes of any regular or special
meeting of the Board.
Section 6. Quorum and Action. A majority of the entire Board of
Directors shall constitute a quorum except that when the entire Board consists
of one director, then one director shall constitute a quorum, and except that
when a vacancy or vacancies prevents such majority, a majority of the
directors in office shall constitute a quorum, provided that such majority
shall constitute at lease one-third of the entire Board. A majority of the
directors present, whether or not they constitute a quorum, may adjourn a
meeting to another time and place. Except as herein otherwise provided, and
except as otherwise provided by the New York Business Corporation Law, the
vote of the majority of the directors present at a meeting at which a quorum
is present shall be the act of the Board.
Section 7. Telephonic Meetings. Any member or members of the
Board of Directors, or of any committee designated by the Board, may
participate in a meeting of the Board, or any such committee, as the case may
be, by means of conference telephone or similar communications equipment
allowing all persons participating in the meeting to hear each other at the
same time, and participation in a meeting by such means shall constitute
presence in person at such meeting.
Section 8. Action Without a Meeting. Any action required or
permitted to be taken at any meeting of the Board of Directors, or of any
committee thereof, may be taken without a meeting if all members of the Board
or committee, as the case may be, consent thereto in writing, and the writing
or writings are filed with the minutes of proceedings of the Board or
committee.
Section 9. Compensation of Directors. By resolution of the
Board of Directors, the directors may be paid their expenses, if any, for
attendance at each regular or special meeting of the Board or of any committee
designated by the Board and may be paid a fixed sum for attendance at such
meeting, or a stated salary as director, or both. Nothing herein contained
shall be construed to preclude any director from serving the Corporation in
any other capacity and receiving compensation therefor; provided however that
directors who are also salaried officers shall not receive fees or salaries as
directors.
ARTICLE IV
Committees
Section 1. In General. The Board of Directors may, by
resolution or resolutions passed by the affirmative vote therefore of a
majority of the entire Board, designate an Executive Committee and such other
committees as the Board may from time to time determine, each to consist of
three or more directors, and each of which, to the extent provided in the
resolution or in the certificate of incorporation or in the By-Laws, shall
have all the powers of the Board, except that no such Committee shall have
power to fill vacancies in the Board, or to change the membership of or to
fill vacancies in any Committee, or to make, amend, repeal or adopt By-Laws of
the Corporation, or to submit to the shareholders any action that needs
shareholder approval under these By-Laws or the New York Business Corporation
Law, or to fix the compensation of the directors for serving on the Board or
any committee thereof, or to amend or repeal any resolution of the Board which
by its terms shall not be so amendable or repealable. Each committee shall
serve at the pleasure of the Board. The Board may designate one or more
directors as alternate members of any committee, who may replace any absent or
disqualified member at any meeting of the committee. In the absence or
disqualification of a member of a committee, the member or members thereof
present at any meeting and not disqualified from voting, whether or not he or
they constitute a quorum, may unanimously appoint another member of the Board
of Directors to act at the meeting in the place of any such absent or
disqualified member.
Section 2. Executive Committee. Except as otherwise limited by
the Board of Directors or by these By-Laws, the Executive Committee, if so
designated by the Board of Directors, shall have and may exercise, when the
Board is not in session, all the powers of the Board of Directors in the
management of the business and affairs of the Corporation, and shall have
power to authorize the seal of the Corporation to be affixed to all papers
which may require it. The Board shall have the power at any time to change the
membership of the Executive Committee, to fill vacancies in it, or to dissolve
it. The Executive Committee may make rules for the conduct of its business and
may appoint such assistance as it shall from time to time deem necessary. A
majority of the members of the Executive Committee, if more than a single
member, shall constitute a quorum.
ARTICLE V
Officers
Section 1. Designation, Term and Vacancies. The officers of the
Corporation shall be a President, one or more Vice-Presidents, a Secretary, a
Treasurer, and such other officers as the Board of Directors may from time to
time deem necessary. Such officers may have and perform the powers and duties
usually pertaining to their respective offices, the powers and duties
respectively prescribed by law and by these By-Laws, and such additional
powers and duties as may from time to time be prescribed by the Board. The
same person may hold any two or more offices, except that the offices of
President and Secretary may not be held by the same person unless all the
issued and outstanding stock of the Corporation is owned by one person, in
which instance such person may hold all or any combination of offices.
The initial officers of the Corporation shall be appointed by
the initial Board of Directors, each to hold office until the meeting of the
Board of Directors following the first annual meeting of shareholders and
until his successor has been appointed and qualified. Thereafter, the officers
of the Corporation shall be appointed by the Board as soon as practicable
after the election of the Board at the annual meeting of shareholders, and
each officer so appointed shall hold office until the first meeting of the
Board of Directors following the next annual meeting of shareholders and until
his successor has been appointed and qualified. Any officer may be removed at
any time, with or without cause, by the affirmative note therefor of a
majority of the entire Board of Directors. All other agents and employees of
the Corporation shall hold office during the pleasure of the Board of
Directors. Vacancies occurring among the officers of the Corporation shall be
filled by the Board of Directors. The salaries of all officers of the
Corporation shall be fixed by the Board of Directors.
Section 2. President. The President shall preside at all
meetings of the shareholders and at all meetings of the Board of Directors at
which he may be present. Subject to the direction of the Board of Directors,
he shall be the chief executive officer of the Corporation, and shall have
general charge of the entire business of the Corporation. He may sign
certificates of stock and sign and seal bonds, debentures, contracts or other
obligations authorized by the Board, and may, without previous authority of
the Board, make such contracts as the ordinary conduct of the Corporation's
business requires. He shall have the usual powers and duties vested in the
President of a corporation. He shall have power to select and appoint all
necessary officers and employees of the Corporation, except those selected by
the Board of Directors, and to remove all such officers and employees except
those selected by the Board of Directors, and make new appointments to fill
vacancies. He may delegate any of his powers to a Vice-President of the
Corporation.
Section 3. Vice-President. A Vice-President shall have such of
the President's powers and duties as the President may from time to time
delegate to him, and shall have such other powers and perform such other
duties as may be assigned to him by the Board of Directors. During the absence
or incapacity of the President, the Vice-President, or, if there be more than
one, the Vice-President having the greatest seniority in office, shall perform
the duties of the President, and when so acting shall have all the powers and
be subject to all the responsibilities of the office of President.
Section 4. Treasurer. The Treasurer shall have custody of such
funds and securities of the Corporation as may come to his hands or be
committed to his care by the Board of Directors. Whenever necessary or proper,
he shall endorse on behalf of the Corporation, for collection, checks, notes,
or other obligations, and shall deposit the same to the credit of the
Corporation in such bank or banks or depositaries, approved by the Board of
Directors as the Board of Directors or President may designate. He may sign
receipts or vouchers for payments made to the Corporation, and the Board of
Directors may require that such receipts or vouchers shall also be signed by
some other officer to be designated by them. Whenever required by the Board of
Directors, he shall render a statement of his cash accounts and such other
statements respecting the affairs of the Corporation as may be required. He
shall keep proper and accurate books of account. He shall perform all acts
incident to the office of Treasurer, subject to the control of the Board.
Section 5. Secretary. The Secretary shall have custody of the
seal of the Corporation and when required by the Board of Directors, or when
any instrument shall have been signed by the President duly authorized to sign
the same, or when necessary to attest any proceedings of the shareholders or
directors, shall affix it to any instrument requiring the same and shall
attest the same with his signature, provided that the seal may be affixed by
the President or Vice-President or other officer of the Corporation to any
document executed by either of them respectively on behalf of the Corporation
which does not require the attestation of the Secretary. He shall attend to
the giving and serving of notices of meetings. He shall have charge of such
books and papers as properly belong to his office or as may be committed to
his care by the Board of Directors. He shall perform such other duties as
appertain to his office or as may be required by the Board of Directors.
Section 6. Delegation. In case of the absence of any officer of
the Corporation, or for any other reason that the Board of Directors may deem
sufficient, the Board may temporarily delegate the powers or duties, or any of
them, of such officer to any other officer or to any director.
ARTICLE VI
Stock
Section 1. Certificates Representing Shares. All certificates
representing shares of the capital stock of the Corporation shall be in such
form not inconsistent with the Certificate of Incorporation, these By-Laws or
the laws of the State of New York and shall set forth thereon the statements
prescribed by Section 508, and where applicable, by Sections 505, 616, 620,
709 and 1002 of the Business Corporation Law. Such shares shall be approved by
the Board of Directors, and shall be signed by the President or a
Vice-President and by the Secretary or the Treasurer and shall bear the seal
of the Corporation and shall not be valid unless so signed and sealed.
Certificates countersigned by a duly appointed transfer agent and/or
registered by a duly appointed registrar shall be deemed to be so signed and
sealed whether the signatures be manual or facsimile signatures and whether
the seal be a facsimile seal or any other form of seal. All certificates shall
be consecutively numbered and the name of the person owning the shares
represented thereby, his residence, with the number of such shares and the
date of issue, shall be entered on the Corporation's books. All certificates
surrendered shall be cancelled and no new certificates issued until the former
certificates for the same number of shares shall have been surrendered and
cancelled, except as provided for herein.
In case any officer or officers who shall have signed or whose
facsimile signature or signatures shall have been affixed to any such
certificate or certificates, shall cease to be such officer or officers of the
Corporation before such certificate or certificates shall have been delivered
by the Corporation, such certificate or certificates may nevertheless be
adopted by the Corporation, and may be issued and delivered as though the
person or persons who signed such certificates, or whose facsimile signature
or signatures shall have been affixed thereto, had not ceased to be such
officer or officers of the Corporation.
Any restriction on the transfer or registration of transfer of
any shares of stock of any class or series shall be noted conspicuously on the
certificate representing such shares.
Section 2. Fractional Share Interests. The Corporation may,
but shall not be required to, issue certificates for fractions of a share. If
the Corporation does not issue fractions of a share, it shall (1) arrange for
the disposition of fractional interests by those entitled thereto, (2) pay in
cash the fair value of fractions of a share as of the time when those entitled
to receive such fractions are determined, or (3) issue scrip or warrants in
registered or bearer form which shall entitle the holder to receive a
certificate for a full share upon the surrender of such scrip or warrants
aggregating a full share. A certificate for a fractional share shall, but
scrip or warrants shall not unless otherwise provided therein, entitle the
holder to exercise voting rights, to receive dividends thereon, and to
participate in any distribution of the assets of the Corporation in the event
of liquidation. The Board of Directors may cause scrip or warrants to be
issued subject to the conditions that they shall become void if not exchanged
for certificates representing full shares before a specified date, or subject
to the condition that the shares for which scrip or warrants are exchangeable
may be sold by the Corporation and the proceeds thereof distributed to the
holders of scrip or warrants, or subject to any other conditions which the
Board of Directors may impose.
Section 3. Addresses of Shareholders. Every shareholder shall
furnish the Corporation an address to which notices of meetings and all other
notices may be served upon or mailed to him, and in default thereof notices
may be addressed to him at his last known post office address.
Section 4. Stolen, Lost or Destroyed Certificates. The Board of
Directors may in its sole discretion direct that a new certificate or
certificates of stock be issued in place of any certificate or certificates of
stock theretofore issued by the Corporation, alleged to have been stolen, lost
or destroyed, and the Board of Directors when authorizing the issuance of such
new certificate or certificates, may, in its discretion, and as a condition
precedent thereto, require the owner of such stolen, lost or destroyed
certificate or certificates or his legal representatives to give to the
Corporation and to such registrar or registrars and/or transfer agent or
transfer agents as may be authorized or required to countersign such new
certificate or certificates, a bond in such sum as the Corporation may direct
not exceeding double the value of the stock represented by the certificate
alleged to have been stolen, lost or destroyed, as indemnity against any claim
that may be made against them or any of them for or in respect of the shares
of stock represented by the certificate alleged to have been stolen, lost or
destroyed.
Section 5. Transfers of Shares. Upon compliance with all
provisions restricting the transferability of shares, if any, transfers of
stock shall be made only upon the books of the Corporation by the holder in
person or by his attorney thereunto authorized by power of attorney duly filed
with the Secretary of the Corporation or with a transfer agent or registrar,
if any, upon the surrender and cancellation of the certificate or certificates
for such shares properly endorsed and the payment of all taxes due thereon.
The Board of Directors may appoint one or more suitable banks and/or trust
companies as transfer agents and/or registrars of transfers, for facilitating
transfers of any class or series of stock of the Corporation by the holders
thereof under such regulations as the Board of Directors may from time to time
prescribe. Upon such appointment being made all certificates of stock of such
class or series thereafter issued shall be countersigned by one of such
transfer agents and/or one of such registrars of transfers, and shall not be
valid unless so countersigned.
ARTICLE VII
Dividends and Finance
Section 1. Dividends. The Board of Directors shall have power
to fix and determine and to vary, from time to time, the amount of the working
capital of the Corporation before declaring any dividends among its
shareholders, and to direct and determine the use and disposition of any net
profits or surplus, and to determine the date or dates for the declaration and
payment of dividends and to determine the amount of any dividend, and the
amount of any reserves necessary in their judgment before declaring any
dividends among its shareholders, and to determine the amount of the net
profits of the Corporation from time to time available for dividends.
Section 2. Fiscal Year. The fiscal year of the Corporation
shall end on the last day of in each year and shall begin on the
next succeeding day, or shall be for such other period as the Board of
Directors may from time to time designate with the consent of the Department
of Taxation and Finance, where applicable.
ARTICLE VIII
Miscellaneous Provisions
Section 1. Stock of Other Corporations. The Board of Directors
shall have the right to authorize any director, officer or other person on
behalf of the Corporation to attend, act and vote at meetings of the
Shareholders of any corporation in which the Corporation shall hold stock, and
to exercise thereat any and all rights and powers incident to the ownership of
such stock, and to execute waivers of notice of such meetings and calls
therefor; and authority may be given to exercise the same either on one or
more designated occasions, or generally on all occasions until revoked by the
Board. In the event that the Board shall fail to give such authority, such
authority may be exercised by the President in person or by proxy appointed by
him on behalf of the Corporation.
Any stocks or securities owned by this Corporation may, if so
determined by the Board of Directors, be registered either in the name of this
Corporation or in the name of any nominee or nominees appointed for that
purpose by the Board of Directors.
Section 2. Books and Records. Subject to the New York Business
Corporation Law, the Corporation may keep its books and accounts outside the
State of New York.
Section 3. Notices. Whenever any notice is required by these
By-Laws to be given, personal notice is not meant unless expressly so stated,
and any notice so required shall be deemed to be sufficient if given by
depositing the same in a post office box in a sealed postpaid wrapper,
addressed to the person entitled thereto at his last known post office
address, and such notice shall be deemed to have been given on the day of such
mailing.
Whenever any notice whatsoever is required to be given under the
provisions of any law, or under the provisions of the Certificate of
Incorporation or these By-Laws a waiver thereof in writing, signed by the
person or persons entitled to said notice, whether before or after the time
stated therein, shall be deemed equivalent thereto.
Section 4. Amendments. Except as otherwise provided herein,
these By-Laws may be altered, amended or repealed and By-Laws may be made at
any annual meeting of the shareholders or at any special meeting thereof if
notice of the proposed alteration, amendment or repeal, or By-Law or By-Laws
to be made be contained in the notice of such special meeting, by the holders
of a majority of the shares of stock of the Corporation outstanding and
entitled to vote thereat; or by a majority of the Board of Directors at any
regular meeting of the Board of Directors, or at any special meeting of the
Board of Directors, if notice of the proposed alteration, amendment or repeal,
or By-Law or By-Laws to be made, be contained in the Notice of such Special
Meeting.
EXHIBIT 3.17
UNITED STATES OF AMERICA
THE STATE OF MICHIGAN
[SEAL]
Michigan Department of Consumer and Industry Services
Lansing, Michigan
This is to Certify That the Annexed Copy of
the one page document listing for:
MULTI CONTAINER RECYCLER, INC.
has been compared by me with the record on file in this Department and that
the same is a true copy thereof, and the whole of such record.
In testimony whereof, I have hereunto set my
hand and affixed the Seal of the Department,
in the City of Lansing, this 17th day of
February, 1998.
Julie Croll, Director
SEAL APPEARS ONLY ON ORIGINAL Corporation, Securities and Land Development
Bureau
MULTI-CONSUMER RECYCLER, INC., a Michigan profit corporation, filed Articles of
Incorporation in this office on June 10, 1993 ).
I FURTHER CERTIFY that
a Certificate of Amendment to the Articles of Incorporation, amending
Article I, was
filed on July 13, 1993, changing the corporate name to MULTIPLE CONTAINER
RECYCLER,
INC.
a Certificate of Assumed Name, for the name Multi-Container Recycler,
Inc., was filed
on August 13, 1993.
a Certificate of Assumed Name, for the name Multi container Recycler,
Inc., was filed on
August 13, 1993.
a Certificate of Assumed Name, for the name Multi Container Recycler,
Inc., was filed on
August 13, 1993.
a Certificate of Change of Registered Office and/or Change of Resident
Agent was filed
on June 1, 1994.
a Certificate of Termination of Assumed Name, for the name Multi
Container Recycler,
Inc., was filed on June 28, 1994.
a Certificate of Amendment to the Articles of Incorporation, amending
Article I, was
filed on June 28, 1994, changing the corporate name to MULTI CONTAINER
RECYCLER,
INC.
a Certificate of Assumed Name, for the name Multiple Container Recycler,
Inc., was filed
on June 2 8, 1994.
AND I FURTHER CERTIFY that the corporation has filed all the annual reports
and paid the fees in connection therewith up to and including the 1996
Michigan Annual Report.
AND I FURTHER CERTIFY that the above constitutes all documents on file in this
office for the corporation.
AND I FURTHER CERTIFY that the corporation is in good standing in this office
as of this date, and is duly authorized to transact business or conduct
affairs in Michigan and for no other purpose.
This certificate is in due form, made by me as the proper officer, and is
entitled to have full faith and credit given it in every court and office
within the United States.
UNITED STATES OF AMERICA
THE STATE OF MICHIGAN
[SEAL]
Michigan Department of Consumer and Industry Services
Lansing, Michigan
This is to Certify that the Annexed Copy has been compared by me with the
record on file in this Department and that the same is a true copy thereof.
In testimony whereof, I have hereunto set
my hand and affixed the Seal of the
Department, in the City of Lansing, this 17th day of February,
1998.
Julie Croll, Director
Corporation, Securities and Land Development Bureau
MICHIGAN DEPARTMENT OF COMMERCE -- CORPORATION AND SECURITIES BUREAU
Date Received Jun 04 1993
(FOR BUREAU USE ONLY)
FILED
JUN 10 1993
Administrator
MICHIGAN DEPARTMENT OF COMMERCE
Corporation of Securities Bureau
EFFECTIVE DATE:
Name
Jonathan R. Moothart
Address
620-A Woodmere
City State Zip Code
Traverse City MI 49684
Document will be returned to the name and address you enter above
453-923
ARTICLES OF INCORPORATION
For use by Domestic Profit Corporations
(Please read information and instructions on the last page)
Pursuant to the provisions of Act 284, Public Acts of 1972, the
undersigned corporation executes the following Articles:
ARTICLE I
The name of the corporation is: Multi-Consumer Recycler, Inc.
ARTICLE II
The purpose or purposes for which the corporation is formed is to engage
in any activity within the purposes for which corporations may be formed under
the Business Corporation Act of Michigan.
ARTICLE III
The total authorized shares:
1. Common Shares $2,000
Preferred Shares
2. A statement of all or any of the relative rights, preferences and
limitations of the shares of each class is as follows:
ARTICLE IV
1. The address of the registered office is:
620-A Woodmere Traverse City, Michigan 49684
(Street Address) (City) (Zip Code)
2. The mailing address of the registered office if different than above:
, Michigan
(P.O. Box) (City) (Zip Code)
3. The name of the resident agent at the registered office is: Jonathan
R. Moothart
ARTICLE V
The name(s) and address(es) of the incorporator(s) is (are) as follows:
Name Residence or Business Address
Jonathan R. Moothart 620-A Woodmere, Traverse City, MI 49684
ARTICLE VI (Optional. Delete if not applicable)
When a compromise or arrangement or a plan of reorganization of the
corporation is proposed between this corporation and its creditors or
any class of them or between this corporation and its shareholders or
any class of them, a court of equity jurisdiction within the state, on
application of this corporation or of a creditor or shareholder thereof,
or on application of a receiver appointed for the corporation, may order
a meeting of the creditors or class of creditors or of the shareholders
or class of shareholders to be affected by the proposed compromise or
arrangement or reorganization, to be summoned in such manner as the
court directs. It a majority in number representing 3/4 in value of the
creditors or class of creditors, or of the shareholders or class of
shareholders to be affected by the proposed compromise or arrangement or
a reorganization, agree to a compromise or arrangement or a
reorganization of this corporation as a consequence of the compromise or
arrangement, the compromise or arrangement and the reorganization, if
sanctioned by the court to which the application has been made, shall be
binding on all the creditors or class of creditors, or on all the
shareholders or class of shareholders and also on this corporation.
ARTICLE VII (Optional. Delete If not applicable)
Any action required or permitted by the Act to be taken at an annual or
special meeting of shareholders may be taken without a meeting, without
prior notice, and without a vote, if consents in writing, setting forth
the action so taken, are signed by the holders of outstanding shares
having not less than the minimum number of votes that would be necessary
to authorize or take the action at a meeting at which all shares
entitled to vote on the action were present and voted. The written
consents shall bear the date of signature of each shareholder who signs
the consent. No written consents shall be effective to take the
corporate action referred to unless, within 60 days after the record
date for determining shareholders entitled to express consent to or to
dissent from a proposal without a meeting, written consents signed by a
sufficient number of shareholders to take the action are delivered to
the corporation. Delivery shall be to the corporation's registered
office, its principal place of business, or an officer or agent of the
corporation having custody of the minutes of the proceedings of its
shareholders. Delivery made to a corporation's registered office shall
be by hand or by certified or registered mail, return receipt requested.
Prompt notice of the taking of the corporate action without a meeting by
less than unanimous written consent shall be given to shareholders who
have not consented in writing.
Use space below for additional Articles or for continuation of previous
Articles. Please identify any Article being continued or added. Attach
additional pages it needed.
Article VIII
All stock in this corporation is issued pursuant to Internal Revenue Code,
Section 1244.
Article IX
Elimination of Certain Liability of Directors - See attached Schedule "A".
Article X
Indemnification of Directors and Officers - See attached Schedule "A".
I (We), the incorporator(s) sign my (our) name(s) this 3d day of June, 1993.
______________________________ _________________________________
JONATHAN R. MOOTHART
______________________________ __________________________________
______________________________ __________________________________
______________________________ __________________________________
______________________________ __________________________________
ARTICLE IX
ELIMINATION OF CERTAIN LIABILITY
OF DIRECTORS
A director of the Corporation shall not be personally liable to the
Corporation or its shareholders for monetary damages for a breach of fiduciary
duty as a director, except for liability:
(a) For any breach of the director's duty of loyalty to the Corporation
or its shareholders;
(b) For acts or omissions not in good faith or that involve intentional
misconduct or a knowing violation of law;
(c) For a violation of Section 551(l) of the Michigan Business
Corporation Act;
(d) For any transaction from which the director derived an improper
personal benefit; and
(e) For any acts or omissions occurring before the date of this Article
is filed by the Michigan Department of Commerce.
If, after the adoption of this Article by the Shareholders of the
Corporation, the Michigan Business Corporation Act is hereafter amended to
further eliminate or limit the liability of a director, then a director of the
Corporation (in addition to the circumstances in which a director is not
personally liable as set forth in the preceding paragraph) shall not be liable
to the Corporation or its shareholders to the fullest extent permitted by the
Michigan Business Corporation Act, as so amended.
Any repeal or modification of this Article by the shareholders of the
Corporation shall not adversely affect any right or protection of a director
of the Corporation existing at the time of such repeal or modification.
Schedule "A"
Articles of Incorporation of
Multi-Consumer Recycler, Inc.
Page one of two
ARTICLE IX
INDEMNIFICATION OF DIRECTORS
AND OFFICERS
The Corporation shall indemnify any person, to the fullest extent
permitted by Michigan law, against all judgments, payments in settlement,
fines and other reasonable costs and expenses (including attorney fees)
incurred by such person in connection with the defense of any action, suit, or
proceeding, which is brought or threatened in which such person is a party or
is otherwise involved because he or she was or is a director or officer of the
Corporation or any affiliate. This right of indemnification shall continue as
to a person who ceases to be a director or officer, and shall inure to the
benefit of the heirs, executors, and administrators of that person.
Schedule "A"
Articles of Incorporation of
Multi-Consumer Recycler, Inc.
Page two of two
MICHIGAN DEPARTMENT OF COMMERCE -- CORPORATION AND SECURITIES BUREAU
Date Received Jun 30 1993
(FOR BUREAU USE ONLY)
FILED
JUN 13 1993
Administrator
MICHIGAN DEPARTMENT OF COMMERCE
Corporation of Securities Bureau
EFFECTIVE DATE:
Name
Jonathan R. Moothart
Address
620-A Woodmere
City State Zip Code
Traverse City MI 49684
DOCUMENT WILL BE RETURNED TO THE NAME AND ADDRESS YOU ENTER ABOVE
CERTIFICATE OF AMENDMENT OF ARTICLES OF INCORPORATION
For use by Domestic Profit Corporations
(Please read information and instructions on the last page)
Pursuant to the provisions of Act 284, Public Acts of 1972 (profit
corporations), or Act 162, Public Acts of 1982 (non-profit corporations), the
undersigned corporation executes the following Certificate:
1. The present name of the corporation is: Mutli-Consumer Recycler, Inc.
2. The corporation identification number (CID) assigned by the Bureau is:
453-923
3. The location of its registered office is:
620-A Woodmere Traverse City, Michigan 49684
(Street Address) (City) (Zip Code)
4. Article I of the Articles of Incorporation is hereby amended to read as
follows:
Article I
The name of the corporation is: Multiple Container Recycler, Inc.
5. COMPLETE SECTION (a) IF THE AMENDMENT WAS ADOPTED BY THE UNANIMOUS
CONSENT OF THE INCORPORATOR(S) BEFORE THE FIRST MEETING OF THE BOARD OF
DIRECTORS OR TRUSTEES; OTHERWISE, COMPLETE SECTION (b)
a. [X] The foregoing amendment to the Articles of Incorporation was duly
adopted on the 29th day of June, 1993, in accordance with the provisions
of the Act by the unanimous consent of the incorporator(s) before the
first meeting of the board of directors or trustees.
Signed this 29th day of June, 1993.
_______________________________ ______________________________
(Signature) (Signature)
Jonathan R. Moothart ______________________________
(Type or Print Name) (Type or Print Name)
_______________________________ ______________________________
(Signature) (Signature)
_______________________________ ______________________________
(Type or Print Name) (Type or Print Name)
b. [ ] The foregoing amendment to the Articles of Incorporation was duly
adopted on the ____ dat of _____________________, 19____. The amendment
(check one of the following)
[ ] was duly adopted in accordance with Section 611(2) of the Act by
the vote of the shareholders if a profit corporation, or by the
vote of the shareholders or members of a nonprofit corporation, or
by the vote of the directors if a nonprofit corporation organized
on a nonstock directorship basis. The necessary votes were cast in
favor of the amendment.
[ ] was duly adopted by the written consent of all the directors
pursuant to Section 525 of the Act and the corporation is a
nonprofit corporation organized on a nonstock directorship basis.
[ ] was duly adopted by the written consent of the shareholders or
members having not less than the minimum number of votes required
by statute in accordance with Section 407 (1) and (2) of the Act
it a nonprofit corporation, and Section 407 (1) of the Act of a
profit corporation. Written notice to shareholders or member who
have not consented in writing has been given. (Note: Written
consent by less than all of the shareholders or members is
permitted only if such provision appears in the Articles of
Incorporation.)
[ ] was duly adopted by the written consent of all the shareholders or
members entitled to vote in accordance with Section 407 (3) of the
Act if a non-profit corporation, and Section 407 (2) of the Act I
a profit corporation.
Signed this ______ day of ___________________, 19__
By___________________________________________
(Only signature of: President, Vice-President,
Chairperson and Vice-Chairperson)
______________________________________________
(Type or Print Name) (Type or Print Name)
MICHIGAN DEPARTMENT OF COMMERCE -- CORPORATION AND SECURITIES BUREAU
Date Received Aug 09 1993
(FOR BUREAU USE ONLY)
FILED
AUG 13 1993
Administrator
MICHIGAN DEPARTMENT OF COMMERCE
Corporation of Securities Bureau
EXPIRATION DATE: December 31, 1998
Name
Jonathan R. Moothart, Esq.
Address
620-A Woodmere
City State Zip Code
Traverse City MI 49684
Document will be returned to the name and address you enter above
CERTIFICATE OF ASSUMED NAME
For use by Corporations and Limited Partnerships
(Please read information and instructions on the reverse side)
Pursuant to the provisions of Act 284, Public Acts of 1972 (profit
corporations), or Act 162, Public Acts of 1982 (nonprofit corporations), or
Act 213, Public Acts of 1982 (limited partnerships), the corporation or
limited partnership in item one below executes the following Certificate:
1. The true name of the corporation is: Multiple Container Recycler, Inc.
2. The identification number assigned by the Bureau is: 453-923
3. The location of the corporate registered office or the office at which
the limited partnership records are maintained is:
620-A Woodmere Traverse City, Michigan 49684
(Street Address) (City) (Zip Code)
4. The assumed name under which business is to be transacted is:
Multi-Container Recycler, Inc.
Complete item 5 on page 3 if this name is assumed by more than one entity.
Signed this 5th day of August, 1993
By Brian C. Rode
(Signature)
Brian C. Rode President
(Type or Print Name) (Type or Print Name)
__________________________________________
(LIMITED PARTNERSHIPS ONLY -- INDICATE
NAME OF GENERAL PARTNER IF A CORPORATION OR
OTHER ENTITY)
MICHIGAN DEPARTMENT OF COMMERCE -- CORPORATION AND SECURITIES BUREAU
Date Received Aug 09 1993
(FOR BUREAU USE ONLY)
FILED
AUG 13 1993
Administrator
MICHIGAN DEPARTMENT OF COMMERCE
Corporation of Securities Bureau
EXPIRATION DATE: December 31, 1998
Name
Jonathan R. Moothart, Esq.
Address
620-A Woodmere
City State Zip Code
Traverse City MI 49684
Document will be returned to the name and address you enter above
CERTIFICATE OF ASSUMED NAME
For use by Corporations and Limited Partnerships
(Please read information and instructions on reverse side)
Pursuant to the provisions of Act 284, Public Acts of 1972 (profit
corporations), or Act 162, Public Acts of 1982 (nonprofit corporations), or
Act 213, Public Acts of 1982 (limited partnerships), the corporation or
limited partnership in item one below executes the following Certificate:
1. The true name of the corporation is: Multiple Container Recycler, Inc.
2. The identification number assigned by the Bureau is: 453-923
3. The location of the corporate registered office or the office at which
the limited partnership records are maintained is:
620-A Woodmere Traverse City, Michigan 49684
(Street Address) (City) (Zip Code)
4. The assumed named under which business is to be transacted is: Multi
container Recycler, Inc.
Complete item 5 on page 3 if this name is assumed by more than one entity.
Signed this 5th day of August, 1993
By Brian C. Rode
(Signature)
Brian C. Rode President
(Type or Print Name) (Type or Print Name)
__________________________________________
(LIMITED PARTNERSHIPS ONLY -- INDICATE
NAME OF GENERAL PARTNER IF A CORPORATION OR
OTHER ENTITY)
MICHIGAN DEPARTMENT OF COMMERCE -- CORPORATION AND SECURITIES BUREAU
Date Received Aug 09 1993
(FOR BUREAU USE ONLY)
FILED
AUG 13 1993
Administrator
MICHIGAN DEPARTMENT OF COMMERCE
Corporation of Securities Bureau
EXPIRATION DATE: December 31, 1998
Name
Jonathan R. Moothart, Esq.
Address
620-A Woodmere
City State Zip Code
Traverse City MI 49684
Document will be returned to the name and address you enter above
CERTIFICATE OF ASSUMED NAME
For use by Corporations and Limited Partnerships
(Please read information and instructions on reverse side)
Pursuant to the provisions of Act 284, Public Acts of 1972 (profit
corporations), or Act 162, Public Acts of 1982 (nonprofit corporations), or
Act 213, Public Acts of 1982 (limited partnerships), the corporation or
limited partnership in item one below executes the following Certificate:
1. The true name of the corporation is: Multiple Container Recycler, Inc.
2. The identification number assigned by the Bureau is: 453-923
3. The location of the corporate registered office or the office at which
the limited partnership records are maintained is:
620-A Woodmere Traverse City, Michigan 49684
(Street Address) (City) (Zip Code)
4. The assumed named under which business is to be transacted is: Multi
Container Recycler, Inc.
Complete item 5 on page 3 if this name is assumed by more than one entity.
Signed this 5th day of August, 1993
By Brian C. Rode
(Signature)
Brian C. Rode President
(Type or Print Name) (Type or Print Name)
__________________________________________
(LIMITED PARTNERSHIPS ONLY -- INDICATE
NAME OF GENERAL PARTNER IF A CORPORATION OR
OTHER ENTITY)
MICHIGAN ANNUAL REPORT
PROFIT CORPORATIONS
1994
COMPLETE BOTH SIDES
Identification Number 942A#1620 0519 P-MAR $15.00
453923 942A#1620 0519 DRG&FI $ 5.00
FOR BUREAU USE ONLY
REQUIRED BY SECTION 911, PUBLIC ACTS OF 1972, FAILURE TO FILE THIS REPORT MAY
RESULT IN THE AUTOMATIC DISSOLUTION/REVOCATION OF THE CORPORATION.
This Report must be filed on or before May 15, 1994.
If the Resident Agent Registered Office, or the mailing address of the
Registered Office has changed, enter the corrections below and add $5.00 to
the $15.00 filling fee. Make remittance payable to the State of Michigan.
1. Corporate Name
MULTIPLE CONTAINER SERVICE RECYCLER, INC.
620-A WOODMERE
TRAVERSE CITY, MI 49684
1a. Mailing address of registered office if different than 1
5001 KENDRICK S.E.
GRAND RAPIDS, MI 49512
2. Resident Agent
JONATHAN R. MOOTHART
2a. Resident Agent if different than 2
3. Registered Office Address in Michigan - NO., STREET, CITY, ZIP
620-A WOODMERE
TRAVERSE CITY 49684
3a. Address of registered office if different than 3 - NO., STREET, CITY, ZIP
THE CORPORATION STATES THAT THE ADDRESS OF ITS REGISTERED OFFICE
AND THE ADDRESS OF THE BUSINESS OFFICE OF ITS RESIDENT AGENT ARE
IDENTICAL. ANY CHANGES WERE AUTHORIZED BY RESOLUTION DULY ADOPTED
BY ITS BOARD OF DIRECTORS.
4. Federal Employer Number
38-3126195
5. Term of Existence (if not perpetual)
6. The Act under which incorporated
284-1972
7. State of Incorporation
MI
8. Incorporation Date
06/10/1933
9. FOREIGN CORPORATIONS ONLY
Date of Admittance
10. State the nature and type of business in which the corporation is
engaged:
MANUFACTURE/SELLER OF REVERSE VENDING EQUIPMENT
11. Single Business Tax Apportionment Percentage
Previous period most Recent (if changed)
% %
For year ended For year ended
12. Corporate Stock Report - Total Authorized Sales
2,000
13. Corporate Officers and Directors (Name, Street Address, City, State, ZIP
Code)
President
BRIAN C. RODE, 5001 KENDRICK S.E., GRAND RAPIDS, MI 49512
If
different Secretary
than
President Treasurer
Vice President
Director
If
different Director
than
Officers Director
I certify that for a Professional Service Corporation, the corporation meets
to requirements of Act 192, PA of 1962, as amended. If the Mailing Address of
the Registered Office is changed, the report must be SIGNED IN INK by either
the President, Vice-President, Chairperson, Vice-
Chairperson, Secretary, or Assistant Secretary of the corporation. Except, if
the registered office is changed, this report may be signed by the Resident
Agent.
Signature of Authorized Officer or Agent Title Date
Brian C. Rode PRESIDENT MAY 12, 1994
PREPARER's NAME DAYTIME TELEPHONE NUMBER
STEVEN L. FRIAR MAY 16, 1994 (616) 874-7749
IDENTIFICATION NUMBER
453923
14. The following is a statement of the assets and liabilities, within and
outside Michigan, as shown by the books of the corporation on December
31,1993 or JUNE 30, 1994 (enter the closing date of the latest corporate
fiscal year prior to May 15, 1994 ). The balance sheet of a Michigan
corporation must be the same as furnished to shareholders. NEW COMPANY -
HAVE NOT COMPLETED 1ST ACCOUNTING YEAR.
WITHIN OUTSIDE
ASSETS TOTAL MICHIGAN MICHIGAN
Cash
Notes and Accounts Receivable
Receivable
Inventories
Prepaid Expenses
Non-current Notes and
Accounts Receivable
Land
Depreciable Assets
Machinery and
Equipment
Furniture and Fixtures
Buildings
Other
Less Depreciation
Net Depreciable Assets
Investments
Investments in Subsidiaries
Other Investments
Other Assets
TOTAL ASSETS
LIABILITIES AND EQUITY
Notes and Accounts Payable, Trade
Notes and Accounts Payable, Other
Accrued Expenses
Long Term Indebtedness
Reserves and Contingent Liabilities
Deferred Income Tax
Stockholders Equity
Common Stock
Preferred Stock
Additional Paid-In Capital
Retained Earnings (deficit)
Other
Total Stockholders Equity
TOTAL LIABILITIES & EQUITY
15. Principal business office, and if different, principal place of business
in Michigan:
SAME AS 1a.
15a. Name of parent corporation:
PURE TECH INTERNATIONAL, INC.
15b. n/a
This report will be open to reasonable public inspection pursuant to Section
915, Act 284 of 1972, as amended.
RETURN TO: THE OFFICE IS LOCATED AT:
MICHIGAN DEPARTMENT OF COMMERCE 6546 MERCANTILE WAY
CORPORATION AND SECURITIES BUREAU LANSING, MI 48910
CORPORATION DIVISION (517) 334-6300
P.0. BOX 30067
LANSING, MI 48909
MICHIGAN DEPARTMENT OF COMMERCE -- CORPORATION AND SECURITIES BUREAU
Date Received Jun 24 1994
(FOR BUREAU USE ONLY)
FILED
JUN 28 1994
Administrator
MICHIGAN DEPARTMENT OF COMMERCE
Corporation of Securities Bureau
EFFECTIVE DATE:
1 of 3
Name
Jonathan R. Moothart, Esq.
Address
620-A Woodmere
City State Zip Code
Traverse City MI 49684
DOCUMENT WILL BE RETURNED TO THE NAME AND ADDRESS INDICATED ABOVE
CERTIFICATE OF TERMINATION OF ASSUMED NAME
For use by Corporations and Limited Partnerships
(Please read information and instructions on reverse side)
Pursuant to the provisions of Act 284, Public Acts of 1972 (profit
corporations), or Act 162, Public Acts of 1982 (nonprofit corporations), or
Act 213, Public Acts of 1982 (limited partnerships), the corporation or
limited partnership in item one below executes the following Certificate:
1. The true name of the corporation or limited partnership is:
Multiple Container Recycler, Inc.
2. The identification number (CID) assigned by the Bureau is: 453-923
3. The assumed name to be terminated is:
Multi Container Recycler, Inc.
4. The Certificate of Assumed Name filed on the 13th day of August 1993 is
hereby terminated.
Signed this 6th day of June, 1994
By Brian C. Rode
(Signature)
Brian C. Rode, President
(Type or Print Name and Title)
__________________________________________
(Limited partnerships only -- indicate Name of General
Partner if a corporation or other entity)
MICHIGAN DEPARTMENT OF COMMERCE -- CORPORATION AND SECURITIES BUREAU
Date Received Jun 24 1994
(FOR BUREAU USE ONLY)
FILED
JUN 24 1994
2 of 3
Administrator
MICHIGAN DEPARTMENT OF COMMERCE
Corporation of Securities Bureau
EFFECTIVE DATE:
Name
Jonathan R. Moothart, Esq.
Address
620-A Woodmere
City State Zip Code
Traverse City MI 49684
Document will be returned to the name and address you enter above
CERTIFICATE OF AMENDMENT TO THE ARTICLES OF INCORPORATION
For use by Domestic Profit Corporations
(Please read information and instructions on the last page)
Pursuant to the provisions of Act 284, Public Acts of 1972 (profit
corporations), or Act 162, Public Acts of 1982 (non-profit corporations), the
undersigned corporation executes the following Certificate:
1. The present name of the corporation is: Multiple Consumer Recycler, Inc.
2. The identification number assigned by the Bureau is: 453-923
3. The location of its registered office is:
620-A Woodmere Traverse City, Michigan 49684
(Street Address) (City) (Zip Code)
4. Article I of the Articles of Incorporation is hereby amended to read as
follows:
Article I
The name of the corporation is: Multi Container Recycler, Inc.
5. COMPLETE SECTION (a) IF THE AMENDMENT WAS ADOPTED BY THE UNANIMOUS
CONSENT OF THE INCORPORATOR(S) BEFORE THE FIRST MEETING OF THE BOARD OF
DIRECTORS OR TRUSTEES; OTHERWISE, COMPLETE SECTION (b) DO NOT COMPLETE
BOTH.
a. [ ] The foregoing amendment to the Articles of Incorporation was duly
adopted on the __________ day of _____________, 19__, in accordance with
the provisions of the Act by the unanimous consent of the
incorporator(s) before the first meeting of the board of directors or
trustees.
Signed this ___________ day of _______________, 19__.
_______________________________ ______________________________
(Signature) (Signature)
_______________________________ ______________________________
(Type or Print Name) (Type or Print Name)
_______________________________ ______________________________
(Signature) (Signature)
_______________________________ ______________________________
(Type or Print Name) (Type or Print Name)
b. [X] The foregoing amendment to the Articles of Incorporation was duly
adopted on the 16th day of June, 1994. The amendment (check one of the
following)
[ ] was duly adopted in accordance with Section 611(2) of the Act by
the vote of the shareholders if a profit corporation, or by the
vote of the shareholders or members of a nonprofit corporation, or
by the vote of the directors if a nonprofit corporation organized
on a nonstock directorship basis. The necessary votes were cast in
favor of the amendment.
[ ] was duly adopted by the written consent of all the directors
pursuant to Section 525 of the Act and the corporation is a
nonprofit corporation organized on a nonstock directorship basis.
[ ] was duly adopted by the written consent of the shareholders or
members having not less than the minimum number of votes required
by statute in accordance with Section 407 (1) and (2) of the Act
it a nonprofit corporation, and Section 407 (1) of the Act of a
profit corporation. Written notice to shareholders or member who
have not consented in writing has been given. (Note: Written
consent by less than all of the shareholders or members is
permitted only if such provision appears in the Articles of
Incorporation.)
[X] was duly adopted by the written consent of all the shareholders or
members entitled to vote in accordance with Section 407 (3) of the
Act if a non-profit corporation, and Section 407 (2) of the Act I
a profit corporation.
Signed this 16th day of June, 1994
By Brian C. Rode
(Only Signature of President, Vice-President,
Chairperson, or Vice-Chairperson)
Brian C. Rode, President
(Type or Print Name) (Type or Print Name)
MICHIGAN DEPARTMENT OF COMMERCE -- CORPORATION AND SECURITIES BUREAU
Date Received Jun 24 1994
(FOR BUREAU USE ONLY)
FILED
JUN 28 1994
3 of 3
Administrator
MICHIGAN DEPARTMENT OF COMMERCE
Corporation of Securities Bureau
EXPIRATION DATE: December 31, 1999
Name
Jonathan R. Moothart, Esq.
Address
620-A Woodmere
City State Zip Code
Traverse City MI 49684
Document will be returned to the name and address you enter above
CERTIFICATE OF ASSUMED NAME
For use by Corporations and Limited Partnerships
(Please read information and instructions on the reverse side)
Pursuant to the provisions of Act 284, Public Acts of 1972 (profit
corporations), or Act 162, Public Acts of 1982 (nonprofit corporations), or
Act 213, Public Acts of 1982 (limited partnerships), the corporation or
limited partnership in item one below executes the following Certificate:
1. The true name of the corporation is: Multi Container Recycler, Inc.
2. The identification number assigned by the Bureau is: 453-923
3. The location of the corporate registered office or the office at which
the limited partnership records are maintained is:
620-A Woodmere Traverse City, Michigan 49684
(Street Address) (City) (Zip Code)
4. The assumed name under which business is to be transacted is: Multiple
Container Recycler, Inc.
Complete item 5 on page 3 if this name is assumed by more than one entity.
Signed this 6 day of June, 1994
By Brian C. Rode
(Signature)
Brian C. Rode, President
(Type or Print Name) (Type or Print Name)
__________________________________________
(LIMITED PARTNERSHIPS ONLY -- INDICATE
NAME OF GENERAL PARTNER IF A CORPORATION OR
OTHER ENTITY)
EXHIBIT 3.18
BY-LAWS
OF
MULTI-CONTAINER RECYCLING, INC.
TABLE OF CONTENTS
Article Section Page
I. Offices
Section 1. Registered Office 1
Section 2. Other Offices 1
II. Meetings of Shareholders
Section 1. Place 1
Section 2. Notice 1
Section 3. Annual Meeting 2
Section 4. Conduct of Meetings 2
Section 5. Special Meetings 3
Section 6. Meeting by Conference
Telephone 4
Section 7. Adjournment 4
Section 8. Record Dates 4
Section 9. Quorum 4
Section 10. Corporate Action Without
Shareholders' Meeting 5
Section 11. Voting Lists 5
Section 12. Voting Rights 6
Section 13. Required Vote 6
Section 14. Proxies 6
Section 15. Election of Directors 6
III. Board of Directors
Section 1. General Powers 6
Section 2. Number 7
Section 3. Term of Office 7
Section 4. Resignation 7
Section 5. Removal 7
Section 6. Vacancies 7
Section 7. Regular Meetings 7
Section 8. Special Meetings 8
Section 9. Attendance Constituting
Waiver of Notice 8
Section 10. Meeting by Conference
Telephone 8
Section 11. Quorum 8
Section 12. Required Vote 8
Section 13. Adjournment 8
Section 14. Consent of Directors
Without Board Meeting 9
Section 15. Chairperson 9
Section 16. Compensation 9
Section 17. Discharge of Duties by
Director 9
Section 18. Directors' Liability for
Corporate Actions 10
Section 19. Directors' Rights Upon
Successful Claim
Against Him 10
Section 20. Presumption of Directors'
concurrence in Absence
of Dissent 12
IV Committees
Section 1. Committees 12
section 2. Powers 12
V Officers
Section 1. Number, Election, and
Compensation 13
Section 2. Term of Office 13
Section 3. Resignation, Removal and
Suspension 13
Section 4. Vacancies 14
Section 5. Duties of Officers 14
Section 6. The President 15
Section 7. The Vice-President(s) 15
Section 8. The Secretary 15
Section 9. The Treasurer 16
VI Contracts
Section 1. Common Directorship,
Officership or Interest 16
Section 2. Compensating Directors
for Services 17
Section 3. Corporate Loan, Guaranty
or Assistance for its
Officers or Employees 17
VII Indemnification
Section 1. Actions, Suits and Proceedings
Other Than Actions by or in
the Right of the Corporation 18
Section 2. Actions and Suits by or in the
Right of the Corporation 18
Section 3. Expenses of Successful Defense 19
Section 4. Employee Benefit Plans 19
Section 5. Proportionate Indemnification 19
Section 6. Determination as to Propriety of
Indemnification in a Specific
Case 20
Section 7. Indemnification of Directors
and Officers with Respect to
Services Performed as an
Employee or Agent of the
Corporation 20
Section 8. Advancement of Expenses 20
Section 9. Limitation Indemnity 21
Section 10. Contract Right 21
Section 11. Non-Exclusivity of Rights 22
Section 12. Continuation of Indemnity 22
Section 13. Indemnification of Employees
and Agents of the Corporation 22
Section 14. Insurance 22
VIII Capital Shares
Section 1. Share Certificates 23
Section 2. Contents of Share
Certificates 23
Section 3. Consideration for
Issuance of Shares 24
Section 4. Fractional Shares and
Alternatives 24
Section 5. Lost or Destroyed
Certificates 25
Section 6. Transfer of Shares 25
Section 7. Rights of Corporation
with Respect to
Registered Owners 25
Section 8. Transfer Agents and
Registrars 26
Section 9. Subscriptions 26
IX Distributions
Section 1. Distributions Authorized 26
Section 2 Limitation on Distributions 26
Section 3. Acquisition of Corporation's
Own Shares 27
Section 4. Indebtedness to Shareholders
Due to Distributions 28
Section 5. Record Date 28
X General Provisions
Section 1. Corporate Books, Records,
Minutes 28
Section 2. Shares of Other Corporations 29
Section 3. Sureties and Bonds 29
Section 4. Corporate Seal 29
Section 5. Accounting Year 29
Section 6. Reimbursement 29
Section 7. Constructive Dividend 30
XI Amendinqor Repealing By-Laws
Section 1. Power to Amend or Repeal 30
Section 2. By Shareholders 30
Section 3. By the Board of Directors 30
XII Execution of Instruments
Section 1. Checks, Etc. 31
Section 2. Evidence of Indebtedness 31
Section 3. Depositories 31
Section 4. Alternative Exception 31
BY-LAWS
OF
MULTI-CONTAINER RECYCLING, INC.
ARTICLE I
Offices
Section 1. Registered Office. The corporation shall have and
continuously maintain, in the State of Michigan, a registered office
located at G-2051 W. Bristol Road, Flint, MI 48507. The corporation may
change the location to any other place in Michigan by resolution of the
board of directors.
Section 2. Other Offices. The corporation may also maintain
offices at such other place, within or without the State of Michigan, as
the board may, from time to time, establish.
ARTICLE II
Meetings of Shareholders
Section 1. Place. All regular and special meetings of the
shareholders shall be held at a place, within or without the State of
Michigan, as specified by the board.
Section 2. Notice. Except as otherwise provided by the Business
Corporation Act of Michigan, as amended, and in effect from time to time,
being 1972 PA 284, (the "Act"), written notice of the time, place and
purpose of a meeting shall be given not less than 10 nor more than 60 days
before the date of the meeting, either personally or by mail, to each
shareholder of record entitled to vote at the meeting. If mailed, such
notice shall be deemed to be given when deposited in the United States
mail, postage prepaid, directed to the shareholder at the address which
appears on the records of the corporation. Attendance of a shareholder at
a meeting of shareholders will result in both of the following:
(a) Waiver of objection to lack of notice or defective
notice of the meeting, unless the shareholder at
the beginning of the meeting objects to holding
the meeting or transacting business at the
meeting; and
(b) Waiver of objection to consideration of a particular
matter at the meeting that is not within the
purpose or purposes described in the meeting
notice, unless the shareholder objects to
considering the matter when it is presented.
Section 3. Annual Meeting. An annual meeting of shareholders for
the election of directors and for such other business as may come before
the meeting shall be held at the following time and date: March 15, 9:00
a.m., notice of which shall be given in the Notice of the Meeting, unless
such action is taken by written consent as provided in section 407 of the
Act. Failure to hold the annual meeting at the designated time or to elect
a sufficient number of directors at the meeting or any adjournment of it
does not affect otherwise valid corporate acts or work a forfeiture or give
cause for dissolution of the corporation, except as provided in section 823
of the Act. If the annual meeting is not held on the date designated for
it, the board shall cause the meeting to be held as soon after that as is
convenient.
Section 4. Conduct of Meetings. The chairman of the board, if
any, shall act as chairman of and preside at all meetings of shareholders.
In the event that there is no chairman of the board then in office or in
the event of his absence or disability, the president shall act as chairman
of such meetings and, in the event of his absence or disability, the
shareholders shall elect some other individual to act as chairman of the
meeting. The secretary of the corporation shall act as secretary of each
meeting of shareholders, but in his absence the chairman shall appoint some
other person to act as secretary of the meeting and to keep a true record
of the proceedings thereof for entry in the minute book of the corporation.
Should any question arise regarding the procedure at any meeting, it shall
be resolved by reference to Robert's Rules of Order, Revised. The order of
business at the annual meeting of shareholders and, as far as practicable,
at all other meetings of shareholders shall be as follows:
(a) Calling of roll, presentation of proxies, and deter-
mination of quorum,
(b) Proof of notice of meeting,
(c) Reading of minutes of preceding meeting and action
thereon,
(d) Reports of officers and committees,
(e) Unfinished business,
(f) New business,
(g) Election of directors, and
(h) Adjournment,
provided that, in the absence of any prior objection, the chairman of the
meeting may vary the order of business at his discretion.
Section 5. Special Meetings. Special meetings of shareholders
may be called by:
(a) The board of directors,
(b) Any officer, or
(c) Any one or more shareholders who is or are the
registered holder or holders of an aggregate of more
than 20% of the outstanding shares of the corporation's
voting stock
by giving notice under the provisions of article II, section 2 of these by-
laws. Notwithstanding the foregoing, if the corporation has no directors
in office because of death, resignation, or otherwise, a special meeting of
shareholders may be called by any officer or shareholder (including any
executor, administrator, personal representative, trustee, guardian, or
other fiduciary entrusted with like responsibility for the person or estate
of a shareholder).
Section 6. Meeting by Conference Telephone. A shareholder may
participate in a meeting of shareholders by a conference telephone or
similar communications equipment by which all participants in the meeting
may communicate with each other if all participants are advised of the
communications equipment and the names of the participants in the
conference are divulged to all participants. Such participation shall
constitute presence in person at the meeting for all purposes.
Section 7. Adjournment. When a meeting is adjourned to another
time or place, it is not necessary to give notice of the adjourned meeting
if the time and place to which the meeting is adjourned are announced at
the meeting at which the adjournment is taken and at the adjourned meeting
only such business is transacted as might have been transacted at the
original meeting. However, if after the adjournment the board fixes a new
record date for the adjourned meeting, a notice of the adjourned meeting
shall be given to each shareholder of record on the new record date
entitled to notice under the provisions of article II, section 2 of these
by-laws.
Section 8. Record Dates. For the purpose of determining the
shareholders entitled to notice of, or to vote at, a meeting of
shareholders or an adjournment meeting, or to express consent or dissent
from a proposal without a meeting, the record date shall be the close of
business on the date two days before the day on which notice is given, or
if no notice is given, two days before the day on which the meeting is
held.
For any purpose other than the above and for the purpose of
determining shareholders entitled to receive payment of a dividend or
allotment of a right, the record date shall be the close of business on the
day on which the resolution of the board relating to that is adopted.
The above dates shall not be more than 60 days, nor less than 10
days, before the date of the meeting, nor more than 60 days before any
other action. When a determination of shareholders of record entitled to
notice of or to vote at a meeting of shareholders has been made as provided
above, the determination applies to any adjournment of the meeting.
Section 9. Quorum. A quorum at a meeting is constituted by
shares entitled to cast a majority of the votes at a meeting. The
withdrawal of any shareholder, attending in person or by proxy, after the
commencement of the meeting shall have no effect on the existence of a
quorum, after a quorum has been established at such meeting. Whether or
not a quorum is present, the meeting may be adjourned by a vote of the
shares present. When the holders of a class or series of shares are
entitled to vote separately on an item of business, this section applies in
determining the presence of a quorum of such class or series for
transaction of the item of business.
Section 10. Corporate Action Without Shareholders' Meeting. Any
action required or permitted to be taken at an annual or special meeting of
shareholders may be taken without a meeting, without prior notice, and
without a vote, if before or after the action a consent in writing, setting
forth the action so taken, is signed by all of the holders of outstanding
stock of the corporation entitled to vote thereon.
Section 11. Voting Lists. The officer or agent having charge of
the stock transfer books for shares of the corporation shall make and
certify a complete list of the shareholders entitled to vote at a
shareholders' meeting or any adjournment of a meeting. The list shall:
(a) be arranged alphabetically within each class and
series, with the address of, and the number of
shares held by, each shareholder;
(b) be produced at the time and place of the meeting;
(c) be subject to inspection by any shareholder during
the whole time of the meeting; and
(d) be prima facie evidence as to who are the shareholders
entitled to examine the list or vote at the meeting.
If the above-stated requirements have not been complied
with, on demand of a shareholder in person or by proxy,
who in good faith challenges the existence of
sufficient votes to carry any action at the meeting,
the meeting shall be adjourned until the requirements
are met. Failure to comply with the above-stated
requirements does not affect the validity of an
action taken at the meeting before the making of such
a demand.
Section 12. Voting Rights. On each matter submitted to a vote,
each issued and outstanding voting share is entitled to one vote. A vote
may be cast either orally, by written ballot, or by a show of hands.
Section 13. Required Vote. When an action, other than the
election of directors, is to be taken by vote of the shareholders, the
holders of shares entitled to vote shall authorize the action by a majority
of the votes cast.
Section 14. Proxies. A shareholder entitled to vote at a meeting
of shareholders or to express consent or dissent without a meeting may
authorize other persons to act for him by proxy. A proxy shall be signed
by the shareholder or his authorized agent or representative. A proxy is
not valid after the expiration of three (3) years from its date unless
otherwise provided in the proxy. A proxy is revocable at the pleasure of
the shareholder executing it, except as otherwise provided in sections 421,
422, and 423 of the Act. The authority of the holder of a proxy to act is
not revoked by the incompetence or death of the shareholder who executed
the proxy, unless, before the authority is exercised, written notice of an
adjudication of the incompetence or death is received by the corporate
officer responsible for maintaining the list of shareholders.
Section 15. Election of Directors. At the first annual meeting
of the shareholders and at each annual meeting after that, the shareholders
shall elect directors. The directors shall be elected by a plurality of
the votes cast at an election. A shareholder entitled to vote at an
election for directors, in person or by proxy, shall have one vote for each
voting share owned, and may distribute such votes among as many candidates
as there are directors to be elected and for whose election he/she has a
right to vote.
ARTICLE III
Board of Directors
Section 1. General Powers. Except as otherwise provided in the
Act or the articles, the business affairs of the corporation shall be
managed by its board. A director need not be a shareholder of the
corporation. Relative to the qualifications for directors, there are none,
other than the above.
Section 2. Number. Subject to applicable law, the number of
directors sitting on the board shall be as from time to time fixed by the
board; initially the corporation shall have three (3) directors.
Section 3. Term of Office. A director shall hold office for the
term elected and until a successor is elected and qualified, or until the
director resigns or is removed. At the first annual meeting of
shareholders, the shareholders shall elect directors. The directors so
elected shall hold office until the succeeding annual meeting, at which
time the shareholders shall again elect directors.
Section 4. Resigination. A director may resign by written notice
to the corporation. The resignation is effective upon its receipt by the
corporation or a subsequent time as set forth in the notice of resignation.
Section 5. Removal. Relative to the removal of directors, a
director or the entire board may be removed, with or without cause, by vote
of the holders of a majority of the shares entitled to vote at an election
of the directors.
Section 6. Vacancies. The right to fill vacancies is reserved
exclusively to the shareholders. A vacancy may be filled by the required
vote specified in article II, section 13 of these by-laws. A directorship
to be filled because of an increase in the number of directors, or to fill
a vacancy, may be filled for a term of office continuing only until the
next election of directors by the shareholders.
Section 7. Regular Meetings. A regular meeting of the board may
be held either within or without the State of Michigan. A regular meeting
may be held without notice. Regular meetings of the board shall be held
whenever the board deems necessary, but not less than annually immediately
following the annual shareholders' meeting.
Section 8. Special Meetings. Special meetings of the board may
be called by the president, chairman of the board, or shall be called by
the secretary on the written request of any director. Such meetings may be
held either within or without the State of Michigan. A special meeting
shall be held only when notice of the time and place of it is either: (1)
mailed to each director and addressed to the address which appears on the
records of the corporation, at least two days before the day on which the
meeting is to be held, or (2) sent to such place by telegraph, telex, or
cable, or (3) communicated by telephone, or (4) delivered personally, not
later than the day before the day on which the meeting is to be held. The
business to be transacted at, and the purpose of a special meeting must be
specified in the notice of waiver or notice of the meeting.
Section 9. Attendance Constituting Waiver of Notice. At both
regular and special meetings, attendance of a director at a meeting
constitutes a waiver of notice of the meeting, unless he or she at the
beginning of the meeting, or upon his or her arrival, objects to the
meeting or the transacting of business at the meeting and does not
thereafter vote for or assent to any action taken at the meeting.
Section 10. Meeting by Conference Telephone. A member of the
board or of a committee designated by the board may participate in a
meeting by means of a conference telephone or similar communications
equipment by means of which all persons participating in the meeting can
communicate with each other. Participation in a meeting conducted in this
fashion constitutes presence in person at the meeting.
Section 11. Quorum. A quorum at a meeting for the transaction of
business is constituted by a majority of the members of the board then in
office, or of the members of a committee of the board.
Section 12. Required Vote. Amendment of the by-laws by the board
requires the vote of not less than two-thirds of the members of the board
then in office. For all other purposes, unless the vote of a larger number
is required by the Act, the vote of the majority of the members present at
a meeting at which a quorum is present constitutes the action of the board
or of the committee. At all meetings of the board, each director present
shall have only one vote.
Section 13. Adjournment. In the absence of a quorum, a majority
of the directors present at the time and place of any meeting may adjourn
such meeting from time to time until a quorum is present.
Section 14. Consent of Directors Without Board Meeting. Action
required or permitted to be taken pursuant to authorization voted at a
meeting of the board or a committee of the board, may be taken without a
meeting if, before or after the action, all members of the board then in
office or of the committee consent to that in writing. The written
consents shall be filed with the minutes of the proceedings of the board or
committee. The consent has the same effect as a vote of the board or
committee for all purposes.
Section 15. Chairperson. At all meetings of the board, the
chairperson of the board, if any and if present, shall preside. If there
is not a chairperson, or if the chairperson is absent, then the president
shall preside. If the president is absent, then a chairperson, chosen by
the directors, shall preside.
Section 16. Compensation. Directors shall not receive, as such,
any salary from the corporation, but the board may authorize the payment to
directors of a fixed fee and expenses for attendance at meetings of the
board or any committee of the board. No such payment shall preclude any
director(s) from serving the corporation in any other capacity and
receiving compensation.
Section 17. Discharge of Duties by Director. A director shall
discharge his or her duties as a director including his or her duties as a
member of a committee of the Board in the following manner:
(a) In good faith;
(b) With the care an ordinarily prudent person in a like
position would exercise under similar
circumstances; and
(c) In a manner he or she reasonably believes to be in
the best interests of the corporation.
In discharging his or her duties, a director is entitled to rely on
information, opinions, reports or statements, including financial data, if
prepared or presented by one or more directors, officers or employees of
the corporation, or of a business organization under joint or common
control with the corporation, whom the director or officer reasonably
believes to be reliable and competent in the matters presented, or if
prepared or presented by legal counsel, public accounts or engineers, or
other persons as to matters the director reasonably believes are within the
person's professional or expert competence, or if prepared or presented by
the committee of the Board of which he or she is not a member if the
Director reasonably believes the committee merits confidence; provided,
however, that a Director is not entitled to rely on such information if he
or she has knowledge concerning the matter in question that makes reliance
otherwise permitted hereby unwarranted.
Section 18. Directors' Liability for Corporate Actions. In
addition to any other liability imposed by the Act or other law upon the
directors of the corporation, directors who vote for or concur in, any of
the following corporate actions are jointly and severally liable to the
corporation for the benefit of its creditors or shareholders, to the extent
of any legally recoverable injury suffered by such persons as a result of
the action, but not to exceed the amount unlawfully paid or distributed:
(a) declaration of a dividend or other distribution of
assets to shareholders contrary to the Act or
contrary to any restriction in the articles or
by-laws;
(b) purchase of shares of the corporation contrary to the
Act or contrary to any restriction in the
articles or by-laws;
(c) distribution of assets to shareholders during or
after dissolution of the corporation without
paying, or adequately providing for, all known
debts, obligations and liabilities of the
corporation;
(d) making of a loan to an officer, director, or employee
of the corporation or of a subsidiary thereof
contrary to the Act. A director is not liable
if he or she has complied with section 541a of
the Act.
Section 19. Director's Rights Upon Successful Claim Against Him.
A director against whom a claim is successfully asserted under section 551
of the Act is entitled to contribution from the other directors who voted
for, or concurred in, the action upon which the claim is asserted. A
director against whom a claim is successfully asserted under section 551 of
the Act is entitled, to the extent of the amounts paid by him to the
corporation as a result of such claims:
(a) Upon payment to the corporation of any amount of an
improper dividend or distribution, to be
subrogated to the rights of the corporation
against shareholders who received the dividend
or distribution in proportion to the amounts
received by them respectively;
(b) Upon payment to the corporation of any amount of the
purchase price of an improper purchase of shares
(i) to have the corporation rescind the purchase
and recover for his benefit, but at his
expense, the amount of the purchase
price from any seller who sold such
shares with knowledge of facts
indicating that such purchase of shares
by the corporation was not authorized
by this Act, or
(ii) to have the corporation assign to such
director such shares and any claim
against the seller;
(c) Upon payment to the corporation of the claim of a
creditor because of a violation of subdivision
(1)(c) of section 551 of the Act, to be
subrogated to the rights of the corporation
against shareholders who received an improper
distribution of assets;
(d) Upon payment to the corporation of the amount of a
loan made improperly to an officer, director or
employee, to be subrogated to the rights of the
corporation against an officer, director or
employee who received the improper loan.
Section 20. Presumption of Director's Concurrence in Absence of
Dissent. A director who is present at a meeting of the board, or a
committee of which he or she is a member, at which an action is taken on a
corporate matter, referred to in section 551 of the Act, is presumed to
have concurred in that action unless a dissent is entered in the minutes or
unless a written dissent to the action is filed with the person acting as
secretary of the meeting before or promptly after the adjournment of it.
The right to dissent does not apply to a director who voted in favor of the
action. A director who is absent from a meeting of the board, or a
committee of which he or she is a member, at which any such action is
taken, is presumed to have concurred in the action unless a written dissent
is filed with the secretary of the corporation within a reasonable time
after he or she had knowledge of the action.
ARTICLE IV
Committees
Section 1. Committees. The board of directors may designate one
or more committees, each committee to consist of one or more of the
directors of the corporation. The board may designate one or more
directors as alternate members who may replace absent or disqualified
members at a meeting of the committee. A committee, and each member, shall
serve at the pleasure of the board. In the absence of disqualification of
a member of a committee, the members present at a meeting and not
disqualified from voting, whether or not they constitute a quorum, may
unanimously appoint another member of the board to act at the meeting in
place of such an absent or disqualified member.
Section 2. Powers. A committee may exercise all powers and
authority of the board in management of the business affairs of the
corporation. However, such a committee does not have the power or
authority to:
(a) amend the articles of incorporation;
(b) adopt an agreement of merger or consolidation;
(c) recommend to shareholders the sale, lease or exchange
of all or substantially all of the corporation's
property and assets;
(d) recommend to shareholders a dissolution of the
corporation or revocation of a dissolution;
(e) amend the by-laws of the corporation;
(f) fill vacancies in the board; or
(g) fix compensation of the directors for serving on the
board or on a committee.
No committee shall have power or authority to declare a distribution or
dividend, or to authorize the issuance of stock.
ARTICLE V
Officers
Section 1. Number, Election, and Compensation. The officers of
the corporation shall consist of a president, secretary and treasurer and
such other officers as may be determined by the board. The board of
directors shall elect or appoint the officers and fix their compensation.
Two or more offices may be held by the same person, but an officer shall
not execute, acknowledge or verify an instrument in more than one capacity
if the instrument is require by law or the articles or by-laws to be
executed, acknowledged, or verified by two or more officers. No officer
need be a shareholder or director.
Section 2. Term of Office. An officer elected or appointed, as
provided in the by-laws, shall hold office for the term elected or
appointed and until a successor is elected or appointed and qualified, or
until that officer resigns, dies or is removed, unless otherwise provided
in an employment contract approved by the board.
Section 3. Resignation, Removal and Suspension. An officer
elected or appointed by the board may be removed by the board with or
without cause. The removal of an officer shall be without prejudice to any
contract rights, if any, of the person so removed. The election or
appointment of an officer, of itself, does not create contract rights. An
officer may resign by written notice to the corporation. The resignation
is effective upon its receipt by the corporation or at a subsequent time
specified in the notice of resignation.
Section 4. Vacancies. Any vacancy occurring in any office of the
corporation shall be filled for the unexpired term in the manner prescribed
in article V, section 1, of these bylaws for the regular election or
appointment to such office.
Section 5. Duties of Officers. An officer, as between that
officer and other officers and the corporation, has such authority and
shall perform such duties in the management of the corporation as may be
provided in these by-laws, or as may be determined by resolution of the
board, not inconsistent with these by-laws. An officer shall discharge his
or her duties as an officer in the following manner:
(a) In good faith;
(b) With the care an ordinarily prudent person in a like
position would exercise under similar
circumstances; and
(c) In a manner which he or she reasonably believes to
be in the best interest of the corporation.
In discharging his or her duties, an officer is entitled to rely on
information, opinions, reports, or statements, including financial
statements and other financial data if prepared or presented by one or more
directors, officers, or employees of the corporation, or of a business
organization under joint control or common control with the corporation,
whom the officer reasonably believes to be reliable and competent in the
manners presented, or if prepared or presented by legal counsel, public
accountants, engineers, or other persons as to matters the officer
reasonably believes are within the person's professional or expert
competence, or if prepared or presented by a committee of the Board of
Directors of which the officer is not a member if the officer reasonably
believes the committee merits confidence; provided, however, that an
officer is not entitled to rely on the information set forth above if he or
she has knowledge concerning the matter in question that makes reliance
otherwise permitted hereby unwarranted.
Section 6. The President. The president shall be the chief
operating officer of the corporation. Subject to the direction and under
the supervision of the board of directors, he shall have general charge of
the business affairs and property of the corporation and control over its
officers, agents and employees. The president shall have authority to hire
and fire employees buy may not make long-term contracts with employees,
which latter authority shall be reserved to the board. He may prescribe
their powers, duties and compensation and delegate authority to them
subject to the ultimate authority of the Board of Directors. The president
shall, in general, perform all duties and have all powers incident to the
office of president and shall perform such other duties and have such other
powers as, from time to time, may be assigned by these by-laws or by the
board.
Section 7. The Vice-President(s). At the request of the
president or in the event of his or her absence, death or disability, the
vice-president(s), if any are designated by the board, shall perform all
the duties of the president. When so acting they shall have all the powers
of, and be subject to all the restrictions upon the president. The vice-
president(s) shall perform such other duties and have such other powers as,
from time to time, may be assigned by these by-laws, the board, or the
president.
Section 8. The Secretary. The secretary shall keep the minutes
of the proceedings of the shareholders, of the board and of any committees
in one or more books to be kept for that purpose. The secretary shall have
custody of the seal of the corporation and shall have authority to cause
such seal to be affixed to, or impressed, or otherwise reproduced upon all
documents, the execution and delivery of which, on behalf of the
corporation, shall have been duly authorized. He shall retain an executed
copy of any shareholders' agreements. He shall give, or cause to be given,
notice to all meetings of the shareholders and the board as required by
these bylaws. The secretary shall, in general, perform all duties and have
all powers incident to the office of secretary and shall perform such other
duties and have such other powers as may, from time to time, be assigned by
these by-laws, the board or the president. The assistant secretary shall
assist the secretary and perform such duties delegated to him by the
secretary.
Section 9. The Treasurer. The treasurer shall have custody of
the corporate funds and securities and shall keep full and accurate
accounts of receipts and disbursements in books belonging to the
corporation. The treasurer shall cause all monies and other valuable
effects to be deposited in the name and to the credit of the corporation in
such depositories as may be designated by the board. The treasurer shall
cause the funds of the corporation to be disbursed when such disbursements
have been duly authorized, taking proper vouchers for such disbursements,
and shall render to the president and the board, whenever requested, an
account of all transactions as treasurer and of the financial condition of
the corporation. The treasurer shall, in general, perform all duties and
have all powers incident to the office of treasurer and shall perform such
other duties and have such other powers as may, from time to time, be
assigned by these by-laws, the board, or the president.
ARTICLE VI
Contracts
Section 1. Common Directorship, Officership or Interest. A
transaction in which a director or officer has an interest shall not,
because of the interest, be enjoined, set aside, or give rise to an award
of damages or other sanctions, in a proceeding by a shareholder or by or in
the right of the corporation, if the person interested in the transaction
establishes any of the following:
(a) The transaction was fair to the corporation at the
time entered into;
(b) The material facts of the transaction and the
director's or officer's interest were disclosed or
known to the board, a committee of the board, or any
independent director or directors of the corporation,
and the board, committee, or independent director or
directors authorized, approved, or ratified the
transaction; or
(c) The material facts of the transaction and the
director's or officer's interest were disclosed or
known to the shareholders entitled to vote and they
authorized, approved, or ratified the transaction.
For purposes of subsection (b) hereof, a transaction is authorized,
approved, or ratified, if it received the affirmative vote of the majority
of the directors on the board or the committee who had no interest in the
transaction, though less than a quorum, or all independent directors (if
any) who had no interest in the transaction. The presence of, or a vote
cast by, a director with an interest in the transaction does not affect the
validity of the action taken under subsection (b) hereof. For purposes of
subsection (c) hereof, a transaction is authorized, approved, or ratified
if it received the majority of votes cast by the holders of shares who did
not have an interest in the transaction. The majority of the shares held
by shareholders who did not have an interest in the transaction constitutes
a quorum for the purpose of taking action under subsection (c) hereof.
Section 2. Compensating Directors for Services. The board, by
affirmative vote of a majority of directors in office and irrespective of
any personal interest of any of them, may establish reasonable compensation
of directors for services to the corporation as directors or officers, but
approval of the shareholders is required.
Section 3. Corporate Loan, Guaranty or Assistance for its
Officers or Employees. The corporation may lend money to, or guarantee an
obligation of, or otherwise assist an officer or employee of the
corporation or its subsidiary, when, in the judgment of the board, the
loan, guaranty, or assistance reasonably may be expected to benefit the
corporation, or is pursuant to a plan authorizing loans, guarantees or
assistance, which plan the board has reasonably determined will benefit the
corporation. The loan, guaranty or assistance may be with or without
interest, and may be secured, or unsecured in such manner as the board
approves, including, without limitation, a pledge of shares of stock of the
corporation. Nothing in this section shall be deemed to deny, limit, or
restrict the powers of guaranty or warranty of the corporation at common
law or under any statute.
ARTICLE VII
Indemnification
Section 1. Actions, Suits and Proceedings Other Than Actions by
or in the Right of the Corporation. The corporation shall indemnify any
person who was or is a party or is threatened to be made a party to any
threatened, pending or completed action, suit or proceeding, whether civil,
criminal, administrative or investigative and whether formal or informal,
other than an action by or in the right of the corporation, by reason of
the fact that the person is or was a director or officer of the
corporation, or is or was serving at the request of the corporation as a
director, officer, partner, trustee, employee or agent of another foreign
or domestic corporation, partnership, joint venture, trust or other
enterprise, whether for profit or not for profit, against expenses
(including attorneys' fees), judgments, penalties, fines and amounts paid
in settlement actually and reasonably incurred by him or her in connection
with such action, suit or proceeding if the person acted in good faith and
in a manner the person reasonably believed to be in or not opposed to the
best interests of the corporation or its shareholders, and with respect to
any criminal action or proceeding, if the person had no reasonable cause to
believe his or her conduct was unlawful. The termination of any action,
suit or proceeding by judgment, order, settlement, conviction, or upon a
plea of nolo contendere or its equivalent, shall not, of itself, create a
presumption that the person did not act in good faith and in a manner which
the person reasonably believed to be in or not opposed to the best
interests of the corporation or its shareholders, and, with respect to any
criminal action or proceeding, has reasonable cause to believe that his or
her conduct was unlawful.
Section 2. Actions and Suits by or in the Right of the
Corporation. The corporation shall indemnify any person who was or is a
party to or is threatened to be made a party to any threatened, pending or
completed action or suit by or in the right of the corporation to procure a
judgment in its favor by reason of the fact that the person is or was a
director or officer of the corporation, or is or was serving at the request
of the corporation as a director, officer, partner, trustee, employee or
agent of another foreign or domestic corporation, partnership, joint
venture, trust or other enterprise, whether for profit or not for profit,
against expenses (including actual and reasonable attorneys' fees) and
amounts paid in settlement incurred by the person in connection with such
action or suit if the person acted in good faith and in a manner which the
person reasonably believed to be in or not opposed to the best interests of
the corporation or its shareholders. However, indemnification shall not be
made for any claim, issue or matter in which the person has been found
liable to the corporation unless and only to the extent that the court in
which the action or suit was brought has determined upon application that,
despite the adjudication of liability but in view of all circumstances of
the case, the person is fairly and reasonably entitled to indemnification
for the expenses which the court considers proper.
Section 3. Expenses of Successful Defense. To the extent that a
person has been successful on the merits or otherwise in defense of any
action, suit or proceeding referred to in section 1 or section 2 of this
article, or in defense of any claim, issue or matter in the action, suit or
proceeding, the person shall be indemnified against expenses (including
actual and reasonable attorneys' fees) incurred by the person in connection
with the action, suit or proceeding and in any action, suit or proceeding
brought to enforce the mandatory indemnification provided by this section.
Section 4. Employee Benefit Plans. For the purposes of sections
1 and 2 of this article the term "other enterprises" shall include employee
benefit plans; the term "fines" shall include any excise taxes assessed on
a person with respect to an employee benefit plan; and the term "serving at
the request of the corporation" shall include any service as a trustee,
director, officer, employee or agent of the corporation which imposes
duties on, or involves services by, the director or officer with respect to
an employee benefit plan, its participants or beneficiaries; and a person
who acted in good faith and in a manner the person reasonably believed to
be in the interest of the participants and beneficiaries of an employee
benefit plan shall be considered to have acted in a manner "not opposed to
the best interests of the corporation or its shareholders" as referred to
in sections 1 and 2 of this article.
Section 5. Proportionate Indemnification. If a person is
entitled to indemnification under section 1 or section 2 of this article
for a portion of expenses (including attorneys' fees), judgments,
penalties, fines, and amounts paid in settlement, but not for the total
amount thereof, the corporation shall indemnify the person for the portion
of the expenses, judgments, penalties, fines, or amounts paid in settlement
for which the person is entitled to be indemnified.
Section 6. Determination as to Propriety of Indemnification in a
Specific Case. Any indemnification pursuant to section 1 or section 2 of
this article, unless ordered by a court, shall be made by the corporation
only as authorized in the specific case upon a determination that
indemnification of the director or officer is proper in the circumstances
because the person has met the applicable standard of conduct set forth in
section 1 or section 2 of this article, whichever is applicable. Such
determination shall be made in any of the following ways:
(a) By a majority vote of a quorum of the board consisting
of directors who were not parties to the action,
suit or proceeding;
(b) If the quorum described in clause (a) above is not
obtainable, then by a majority vote of a committee of
directors who are not parties to the action, suit or
proceeding. The committee shall consist of not less
than two disinterested directors;
(c) By independent legal counsel in a written opinion; or
(d) By the shareholders.
Section 7. Indemnification of Directors and Officers with Respect
to Services Performed as an Employee or Agent of the Corporation. In the
case of a director or officer who is also an employee or agent of the
corporation, the indemnification rights provided for in this article shall
apply to such person in his or her capacity as an employee or agent of the
corporation as well as to such person in his or her capacity as a director
or officer of the corporation.
Section 8. Advancement of Expenses. Expenses incurred in
defending a civil or criminal action, suit or proceeding referred to in
section 1 or section 2 of this article may be paid by the corporation in
advance of the final disposition of the action, suit or proceeding upon
receipt of an undertaking by or on behalf of the person involved to repay
the expenses if it is ultimately determined that the person is not entitled
to be indemnified by the corporation. The undertaking shall be by
unlimited general obligation of the person on whose behalf advances are
made, but need not be secured unless the board of directors determines in
the particular case to require adequate security for the undertaking to
repay, as a condition for the making of advances.
Section 9. Limitation on Indemnity. Notwithstanding any other
provision of this article, the corporation shall have no obligation to
indemnify any person in connection with any proceeding, or part thereof,
initiated by such person without authorization by the board of directors,
except as provided in section 3 of this article.
Section 10. Contract Right. The right to indemnification
provided for in this article shall be a contract right. In the event that
a claim for indemnification is not paid in full by the corporation within
45 days after a written claim has been received by the corporation, the
director or officer who submitted the claim may at any time thereafter
bring a suit or action against the corporation to recover the unpaid amount
of the claim. If successful in whole or in part in any such suit or action
or in a suit or action brought by the corporation to recover advances, the
director or officer involved shall also be entitled to be paid the expense
of prosecuting or defending such action. In any action brought by a
director or officer to enforce a right under this article with respect to
an action, suit or proceeding referred to in section 1 or section 2 of this
article it shall be a defense that, and in any action brought by the
corporation to recover advances the corporation shall be entitled to
recover such advances if, the director or officer in question has not met
the standard of conduct set forth in section 1 or section 2 of this
article, whichever is applicable, except as otherwise provided in section
3. Neither the absence of a determination in accordance with section 6 of
this article that indemnification is proper in the circumstances, nor a
determination in accordance with section 6 of this article that
indemnification is not proper in the circumstances, shall be a defense to
an action brought by a director or officer or create a presumption that the
director or officer has not met the applicable standard of conduct. In any
action brought by a director or officer to enforce a right under this
article or by the corporation to recover advances made under this article,
in which there is an issue as to whether the director or officer has met
the applicable standard of conduct set forth in section 1 or section 2 of
this article, it shall be presumed that the director or officer has met the
applicable standard of conduct unless the corporation meets the burden of
proof that such is not the case.
Section 11. Non-Exclusivity of Rights. The rights to
indemnification provided for under this article are not exclusive of other
rights to which a person seeking indemnification may be entitled under a
contractual arrangement with the corporation. However, the total amount of
expenses advanced or indemnified from all sources combined shall not exceed
the amount of actual expenses incurred by the person seeking
indemnification.
Section 12. Continuation of Indemnity. The rights to
indemnification provided for in this article continue as to a person who
ceases to be a director or officer of the corporation and shall inure to
the benefit of the heirs, executors and administrators of such person.
Section 13. Indemnification of Employees and Agents of the
Corporation. To the extent authorized from time to time by the board of
directors, the corporation may grant rights to indemnification and/or may
advance expenses to any employee or agent of the corporation to the extent
that such rights are granted or such advancement of expenses is authorized
under this article with respect to directors or officers of the
corporation.
Section 14. Insurance. The corporation may purchase and maintain
insurance on behalf of any person who is or was a director, officer,
employee or agent of the corporation, or is or was serving at the request
of the corporation as a director, officer, partner, trustee, employee or
agent of another foreign or domestic corporation, partnership, joint
venture, trust or other enterprise, whether for profit or not for profit,
against any liability asserted against such person and incurred by such
person in any such capacity or arising out of such person's status as such,
whether or not the corporation would have power to indemnify the person
against such liability under this article or the laws of the state of
Michigan.
ARTICLE VIII
Capital Shares
Section 1. Share Certificates. The board may authorize the
issuance of some or all of the shares of the corporation without
certificates, but any such authorization does not affect shares already
represented by certificates until they are surrendered to the corporation.
Absent authorization of shares without certificates by the board, all
shares of the corporation shall be represented by certificates which shall
be signed by the chairman of the board, president, or a vice-president, and
which also may be signed by the treasurer, assistant treasurer, secretary,
or assistant secretary of the corporation. They may be sealed with the
seal of the corporation or a facsimile of that. The signatures of the
officers may be facsimiles if the certificate is countersigned by a
transfer agent or registered by a registrar, other than the corporation
itself or its employee. In case an officer who has signed, or whose
facsimile signature has been placed upon, a certificate ceases to be such
officer before the certificate is issued, it may be issued by the
corporation with the same effect as if he were such officer at the date of
issue. The certificates shall be numbered consecutively.
Section 2. Contents of Share Certificates. A certificate
representing shares shall state the following information upon its face,
and the corporation shall within a reasonable time after issuance send a
written statement of the following information to a shareholder who is
issued shares not represented by a certificate:
(a) that the corporation is formed under the laws of the
State of Michigan;
(b) the name of the person to whom the shares are being
issued; and
(c) the number and class of the shares being issued, and
the designation of the series, if any, of the
shares being issued.
If the corporation is authorized to issue shares of more than one class,
then a certificate representing shares issued by the corporation, or a
written statement sent to a shareholder who is issued shares not
represented by a certificate, shall set forth on its face or back or shall
state, as the case may be, that the corporation will furnish to a
shareholder, upon request and without charge, a full statement of the
designation, relative rights, preferences, and limitations of the shares of
each class authorized to be issued, and if the corporation is authorized to
issue any class of shares in series, the designation, relative rights
preferences, and limitations of each series, so far as the same have been
prescribed, and the authority of the board to designate and prescribe the
relative rights, preferences, and limitations of other series.
Section 3. Consideration for Issuance of Shares. Shares may be
issued for a consideration fixed by the board of directors. Treasury
shares may be disposed of by the corporation for a consideration fixed by
the board. The consideration for the issuance of shares may consist of any
tangible or intangible property or benefit to the corporation, including
without limitation cash, promissory notes, services performed, contracts
for services to be performed, or other securities of the corporation, but a
contract for future services shall not constitute payment for shares unless
so provided in a written subscription agreement. When the consideration
for which the board authorized the issuance of shares has been received,
the shares shall be deemed to have been validly issued and shall be
considered fully paid and non-assessable. The determination of the board
as to the adequacy of consideration received or to be received shall be
conclusive insofar as the nature and amount of consideration for the
issuance of shares relates to whether the shares are validly issued, fully
paid, and non-assessable.
Section 4. Fractional Shares and Alternatives. The corporation
may issue certificates for fractions of a share where necessary to effect
share transfers, share distributions or a reclassification, merger,
consolidation, or reorganization, which shall entitle the holders, in
proportion to their fractional holdings, to exercise voting rights, receive
dividends, and participate in liquidating distributions. As an
alternative, the corporation may pay in cash the fair value of fractions of
a share as of the time when those entitled to receive the fractions are
determined. As an alternative, the corporation may issue scrip in
registered or bearer form over the manual or facsimile signature of an
officer of the corporation or of its agent, exchangeable as therein
provided for full shares, but such scrip shall not entitle the holder to
the right of a shareholder, except as provided in the scrip. The scrip
shall be issued subject to the condition that it becomes void, if not
exchanged for certificates representing full shares, before a specified
date. The scrip may be subject to the condition that the shares for which
the scrip is exchangeable may be sold by the corporation and the proceeds
thereof distributed to the holders of the scrip, or subject to any other
condition which the board may determine. The corporation may provide
reasonable opportunity for persons entitled to fractions of a share or
scrip to sell them or to purchase additional fractions of a share or scrip
needed to acquire a full share.
Section 5. Lost or Destroyed Certificates. The corporation may
issue a new certificate for shares or fractional shares in place of a
certificate previously issued by it, alleged to have been lost or
destroyed. The board may require the owner of the lost or destroyed
certificate, or that person's legal representative, to give the corporation
a bond sufficient to indemnify the corporation against any claim that may
be made against it on account of the alleged lost or destroyed certificate
or the issuance of such a new certificate.
Section 6. Transfer of Shares. Shares of stock of the
corporation shall only be transferred on the books of the corporation by
the holder of record or by the holder's attorney, duly authorized in
writing, with such evidence of the authenticity of such authorization, and
other matters as the corporation may reasonably require, and accompanied by
all necessary stock transfer stamps, where applicable. In that event, it
shall be the duty of the corporation to record the transaction on its
books, and take such other action as may be required in order to give
effect to the transaction.
Section 7. Rights of Corporation with Respect to Registered
Owners. Prior to compliance by a shareholder with all actions necessary in
order for the corporation to record the transfer of shares, the corporation
may treat the registered owner as the person entitled to receive dividends
and distributions, to vote, to receive notifications, and otherwise to
exercise the rights and powers of an owner.
Section 8. Transfer Agents and Registrars. The board of
directors may make such rules and regulations as it may deem expedient
concerning the issuance and transfer of shares of the stock of the
corporation. It may appoint transfer agents or registrars or both, and may
require all certificates of stock to bear the signatures of either, or
both. Nothing in this section shall be construed to prohibit the
corporation from acting as its own transfer agent at any of its offices.
Section 9. Subscriptions. Unless otherwise provided in the
subscription agreement, subscriptions for shares, whether made before or
after organization of the corporation, shall be paid in full at such time
or in such installments and at such times as shall be determined by the
board of directors. Any call made by the board of directors for payment on
subscriptions shall be uniform as to all shares of the same series. In
case of default in the payment or any installment or call when payment is
due, the corporation may proceed to collect the amount due in the same
manner as any debt due to the corporation, and shall have all other rights
and remedies which may be provided to it by law.
ARTICLE IX
Distributions
Section 1. Distributions Authorized. The board may authorize and
the corporation may make distributions to its shareholders, subject to the
limitations contained in section 2 of this article IX, and subject to any
restrictions contained in the articles of incorporation.
Section 2. Limitation on Distributions. No distribution may be
made if, after giving effect to such distribution, the corporation would
not be able to pay its debts as they become due in the usual course of
business, or if the corporation's total assets would be less than the sum
of its total liabilities plus, unless the articles permit otherwise, the
amount that would be needed, if the corporation were to be dissolved at the
time of the distribution to satisfy the preferential rights upon
dissolution of shareholders whose preferential rights are superior to those
receiving the distribution. The board may base its determination that a
distribution is not prohibited under this section 2 either on financial
statements prepared on the basis of accounting practices and principles
that are reasonable in the circumstances or on a fair evaluation or other
method that is reasonable.
The effect of a distribution under this section 2 shall be
measured at the following times:
(a) Except as provided in section 3 of this article IX,
in the case of a distribution by purchase, redemption,
or other acquisition of the corporation's shares, as
of the earlier of the date money or other property
is transferred or debt is incurred by the
corporation, or the date the shareholder ceases to
be a shareholder with respect with the acquired
shares;
(b) In the case of any distribution of indebtedness, as
of the date the indebtedness is authorized if
distribution occurs within one hundred and twenty
(120) days after the date of authorization or the
date the indebtedness is distributed if it occurs
more than one hundred and twenty (120) days after
the date of authorization; or
(c) In all other cases, as of the date the distribution
is authorized if the payment occurs within one
hundred and twenty (120) days after the date of
authorization or the date the payment is made if it
occurs more than one hundred and twenty (120) days
after the date of authorization.
Section 3. Acquisition of Corporation's Own Shares. If the
corporation acquires its shares in exchange for an obligation to make
future payments, and distribution of the obligation would otherwise be
prohibited under section 2 of this article IX at the time it is made, the
corporation may issue the obligation and the following shall apply:
(a) At any time prior to the due date of the obligation,
payments of principal and interest may be made as a
distribution to the extent that a distribution may
then be made under this article;
(b) At any time on or after the due date, obligation to
pay principal and interest is deemed distributed as
treated and indebtedness described in section 4 of
this article IX to the extent that a distribution
may be made under this article IX; and
(c) The obligation shall not be considered a liability
or debt for purposes of determinations under section
1 of this article IX except to the extent that it is
deemed distributed and treated as indebtedness under
this section 3.
Section 4. Indebtedness to Shareholders Due to Distributions.
The corporation's indebtedness to a shareholder incurred by reason of a
distribution made in accordance with this article shall be at parity with
the corporation's indebtedness to its general, unsecured creditors except
to extent subordinated by agreement.
Section 5. Record Date. If the board does not fix the record
date for determining shareholders entitled to a distribution, other than a
distribution involving a purchase, redemption, or acquisition of the
corporation's shares, the record shall be the date on which the board
authorizes the distribution.
ARTICLE X
General Provisions
Section 1. Corporate Books, Records, Minutes. The corporation
shall keep books and records of account and minutes of the proceedings of
its shareholders, board and executive committee, if any. The books,
records and minutes may be kept outside of the State of Michigan. The
corporation shall keep at its registered office, or at the office of its
transfer agent within or without the State of Michigan, records containing
the names and addresses of all shareholders, the number, class and series
of shares held by each and the dates when they respectively became holders
of record. Any of such books, records, or minutes may be in written form
or in any other form capable of being converted into written form within a
reasonable time. The corporation shall convert into written form, without
charge, any such record not in such form, upon written request of a person
entitled to inspect them, unless otherwise requested by such person.
Section 2. Shares of Other Corporations. Shares standing in the
name of another domestic or foreign corporation, whether or not the
corporation is subject to the Act, may be voted by an officer or agent, or
by proxy appointed by an officer or agent.
Section 3. Sureties and Bonds. If the board requires, any
officer, employee or agent of the corporation shall execute to the
corporation a bond in such sum, and with such surety or sureties, as the
board may direct, conditioned upon the faithful performance of that
person's duties to the corporation, including responsibility for negligence
and for the accounting of all property, funds, or securities, of the
corporation which may come into that person's hands.
Section 4. Corporate Seal. The corporation shall have power, in
furtherance of its corporate purposes, to have a corporate seal (which may
be a written seal if the board of directors so directs), and alter the
seal, and use it by causing it or a facsimile to be affixed, impressed or
reproduced in any other manner. The corporate seal shall be in the form of
a circle and shall bear the name of the corporation, and indicate its
formation under the laws of the State of Michigan, and may bear such
additional information as the board of directors so directs.
Section 5. Accounting Year. Subject to applicable law, the
accounting year shall be as from time to time fixed by the board; initially
the corporation shall have an accounting year commencing on February 1, and
ending on January 31.
Section 6. Reimbursement. Any payments made to an officer of the
corporation, whether commission, bonus, interest, rent, or entertainment
expense incurred by him, which shall be disallowed in whole or in part as a
deductible expense by the Internal Revenue Service, shall be reimbursed by
such officer to the corporation to the full extent of such disallowance.
It shall be the duty of the directors, as a board, to enforce payment of
each such amount disallowed. Subject to the approval of the board of
directors, reimbursement may be made by the withholding of proportionate
amounts from his future compensation until the amount owed to the
corporation shall have been recovered.
Section 7. Constructive Dividend. Any payment, distribution, or
other transaction made or entered into by the corporation which shall be
assessed by the United States Internal Revenue Service to be a constructive
dividend to any shareholder or shareholders of the corporation shall, upon
final determination by a court having jurisdiction thereof, not appealed
from by any such shareholder or shareholders, or upon acquiescence in such
assertion by such shareholder or shareholders, be repaid by such
shareholder or shareholders to the corporation. It shall be the duty of
the board of directors to enforce such repayment.
ARTICLE XI
Amending or Repealing By-Laws
Section 1. Power to Amend or Repeal. The power to amend or
repeal the by-laws or adopt new by-laws is available to the shareholders or
the board, except that the power to amend or repeal any by-law made by the
shareholders shall be reserved exclusively to the shareholders.
Section 2. By Shareholders. Any by-law made by the shareholders,
or amendment of the by-laws by the shareholders, shall be approved by the
appropriate number of votes as prescribed in article II, section 13 of
these by-laws.
Section 3. By the Board of Directors. Amendment of the by-laws
by the board requires the vote of not less than two thirds of the members
of the board then in office.
ARTICLE XII
Execution of Instruments
Section 1. Checks, Etc. All checks, drafts, or orders for
payment of money, notes and other obligations, securities and evidences of
indebtedness payable in money, issued in the name of the corporation,
shall, unless otherwise provided by the board of directors or a committee,
be signed, either by the president or the treasurer, or by such other
officers, agents or employees as may be designated by the board of
directors or a committee.
Section 2. Evidence of Indebtedness. Notes given and drafts
accepted by the corporation shall be valid only when signed by the
president, any vice-president, if acting, or treasurer. Bills receivable,
drafts and other evidences of indebtedness to the corporation shall, for
the purpose of discount and collection, be endorsed by the president, any
vice-president, if acting, or such other person or persons as the board of
directors may, from time to time, authorize so to do.
Section 3. Depositories. Funds of the corporation deposited in
banks and other depositories to the credit of the corporation shall be
drawn from such banks and depositories by checks signed by the president,
any vice-president, if acting, or treasurer or such person or persons as
the board of directors shall, from time to time, designate. Funds
deposited in banks or other depositories in special accounts, for payroll
or other purposes, shall be drawn from such depositories by checks signed
by either the president, any vice-president, if acting, or treasurer or
such person or persons as the board of directors shall, from time to time,
designate.
Section 4. Alternative Exception. Whenever the board of
directors or a committee shall provide, by resolution, that any contract or
note shall be executed or draft accepted or any bill receivable, draft or
other evidence of indebtedness be endorsed in any other manner and by any
other officer or agent than as specified in these by-laws, such method of
execution, acceptance or endorsement shall be as equally effective to bind
this corporation as if specified in it.
I HEREBY CERTIFY that the above by-laws were adopted the 13th day
of November, 1990.
-------------------------------
Murray J. Fox,
Secretary/Treasurer
MULTI-CONTAINER RECYCLING, INC.
Consent to Resolutions of Sole Incorporator
in Lieu of Organization Meeting
-----------------------
The undersigned, being the sole incorporator of Multi-Container
Recycling, Inc., acting under the authority of MCL Section 450.1223, does
hereby consent in this writing to the following resolutions of the
corporation:
RESOLVED, that a copy of the Certificate of Incorporation,
together with the original receipt showing payment of the filing fee, be
inserted in the Minute Book, and further
RESOLVED, that the bylaws submitted to the meeting are adopted,
and that a copy be inserted in the Corporate Minute Book, and finally
RESOLVED, that the following are elected as directors of the
corporation, to serve until the first annual meeting of shareholders and
until their successors are elected and qualify:
Simon Sinnreich
Joseph Mastroianni
Murray J. Fox
Dated: November 13, 1990 ____________________________
Thomas E. Dudak,
Sole Incorporator
MULTI-CONTAINER RECYCLING, INC.
STOCK SUBSCRIPTION
To the Board of Multi-Container Recycling, Inc.:
The undersigned hereby subscribes to purchase two thousand (2,000)
shares of the common stock (qualified under IRC Section 1244) of Multi-
Container Recycling, Inc. for a total purchase price of $2,000.00, to be
paid in cash or by transfer to Multi-Container Recycling, Inc. of assets
(other than stock, securities or services) having like value.
Very truly yours,
REI Distributors, Inc.
Dated:___________________ By_________________________
Its___________________
EXHIBIT 3.19
STATE OF CALIFORNIA
SECRETARY OF STATE
[Seal]
I, BILL JONES, Secretary of State of the State of California,
hereby certify:
That the attached transcript of 2 page(s) was prepared by and
in this office from the record on file, of which it purports to be a copy, and
that it is full, true and correct.
IN WITNESS WHEREOF, I execute this
certificate and affix the Great Seal
of the State of California this
February 19, 1998
-------------------------------
/s/Bill Jones
-------------------------------
Secretary of State
THE GREAT SEAL OF
THE STATE OF CALIFORNIA
Filed
Sacramento, Calif.
May 19, 1995
Bill Jones
Secretary of State
- ------------------------------------------------------------------------
STATE OF CALIFORNIA
Secretary of State
STATEMENT BY DOMESTIC STOCK CORPORATION
THIS STATEMENT MUST BE FILED WITH CALIFORNIA SECRETARY OF
STATE (SEC. 1502, CORPORATIONS CODE)
P.O. Box 944230
Sacramento, CA 94244-0230
Phone: (916) 445-2020
- -------------------------------------------------------------------------
A $5 FILING FEE MUST ACCOMPANY THIS STATEMENT.
- -------------------------------------------------------------------------
WHEN COMPLETING FORM, PLEASE USE BLACK TYPEWRITER
RIBBON OR BLACK INK
- -------------------------------------------------------------------------
IMPORTANT -- Please Read Instructions On Back Of Form
- -------------------------------------------------------------------------
1. DO NOT ALTER PREPRINTED NAME, IF ITEM NO. 1 IS BLANK, PLEASE ENTER
CORPORATE NAME
C1470272 COAST RECYCLING NORTH, INC.
* IF THERE HAS BEEN NO CHANGE IN ANY OF THE INFORMATION ON FILE -- PROCEED TO
LINE 16.
- -------------------------------------------------------------------------
THE CALIFORNIA CORPORATION NAMED HEREIN, MAKES THE FOLLOWING STATEMENT
<TABLE>
<S> <C> <C> <C>
2. STREET ADDRESS OF PRINCIPAL EXECUTIVE OFFICE ROOM NO. 2A. CITY AND STATE 2B. ZIP CODE
330 Reservation Rd. G Marina, CA 93933
3. STREET ADDRESS OF PRINCIPAL BUSINESS OFFICE IN CALIFORNIA (IF ANY) ROOM NO. 3A. CITY 3B. ZIP CODE
(Same) CA
4. MAILING ADDRESS ROOM NO. 4A. CITY 4B. ZIP CODE
(Same)
THE NAMES OF THE FOLLOWING OFFICERS ARE:
Must have these three officers (Sec. 312, Corporations Code). An officer may hold more than one office.
</TABLE>
<TABLE>
<S> <C> <C> <C>
5. CHIEF EXECUTIVE OFFICER 5A. STREET ADDRESS (DO NOT USE P.O. BOX) 5B. CITY AND STATE 5C. ZIP CODE
David Katz 100 Franklin Sq. Dr. Suite 105 Somerset, NJ 08875
6. Secretary 6A. STREET ADDRESS (DO NOT USE P.O. BOX) 6B. CITY AND STATE 6C. ZIP CODE
Murray Fox 112 Main St. Webster, MA 01570
7. Chief Financial Officer 7A. STREET ADDRESS (DO NOT USE P.O. BOX) 7B. CITY AND STATE 7C. ZIP CODE
Michael Nafash 100 Franklin Sq. Dr. Suite 105 Somerset, NJ 08875
INCUMBENT DIRECTORS, INCLUDING DIRECTORS WHO ARE ALSO OFFICERS
Officers may also be directors. Must have one or more directors
(Chap. 3, Sec. 301a, Corporations Code).
Statements not listing directors will be rejected.
8. Name 8A. STREET ADDRESS (DO NOT USE P.O. BOX) 8B. CITY AND STATE 8C. ZIP CODE
David Katz 100 Franklin Sq. Dr. Suite 105 Somerset, NJ 08875
9. Name 9A. STREET ADDRESS (DO NOT USE P.O. BOX) 9B. CITY AND STATE 9C. ZIP CODE
10. Name 10A. STREET ADDRESS (DO NOT USE P.O. BOX) 10B. CITY AND STATE 10C. ZIP CODE
11. THE NUMBER OF VACANCIES ON THE BOARD OF DIRECTORS, IF ANY: 0
DESIGNATED AGENT FOR SERVICE OF PROCESS (Only one agent may be named and must
reside in California.)
12. Name
United Corporate Services, Inc. C1021866
13. CALIFORNIA STREET ADDRESS IF AGENT IS AN INDIVIDUAL (DO NOT USE P.O. BOX) DO
NOT INCLUDE ADDRESS IF AGENT IS A CORPORATION.
740 University Avenue, Suite #100 Sacramento, CA 95825
14. DESCRIBE TYPE OF BUSINESS OF THE CORPORATION NAMED IN ITEM 1
Glass Recycler
15. I DECLARE THAT I HAVE EXAMINED THIS STATEMENT AND TO THE BEST OF MY
KNOWLEDGE AND BELIEF, IT IS TRUE, CORRECT AND COMPLETE.
MICHAEL NAFASH /s/ Michael Nafash CFU 5/15/95
- ------------------------------------------------ --------------------- ------------- ---------
TYPE OR PRINT NAME OF SIGNING OFFICER OR AGENT SIGNATURE TITLE DATE
16. I DECLARE THERE HAS BEEN NO CHANGE IN THE INFORMATION CONTAINED IN THE LAST STATEMENT OF THE CORPORATION WHICH
IS ON FILE IN THE SECRETARY OF STATE'S OFFICE. DOES NOT APPLY ON INITIAL FILING.
(READ INSTRUCTIONS BEFORE COMPLETING THIS ITEM)
[_]
(CHECK HERE)
------------------------------------------------ --------------------- ------------- ---------
TYPE OR PRINT NAME OF SIGNING OFFICER OR AGENT SIGNATURE TITLE DATE
</TABLE>
Filed
Sacramento, Calif.
September 29, 1993
March Fong Eu
Secretary of State
- -------------------------------------------------------------------------
STATE OF CALIFORNIA
March Fong Eu
Secretary of State
STATEMENT BY DOMESTIC STOCK CORPORATION
THIS STATEMENT MUST BE FILED WITH CALIFORNIA SECRETARY OF
STATE (SEC. 1502, CORPORATIONS CODE)
P.O. Box 944230
Sacramento, CA 94244-0230
Phone: (916) 445-2020
- -------------------------------------------------------------------------
A $5 FILING FEE MUST ACCOMPANY THIS STATEMENT.
- -------------------------------------------------------------------------
WHEN COMPLETING FORM, PLEASE USE BLACK TYPEWRITER
RIBBON OR BLACK INK
- -------------------------------------------------------------------------
IMPORTANT -- Please Read Instructions On Back Of Form
- -------------------------------------------------------------------------
1. DO NOT ALTER PREPRINTED NAME, IF ITEM NO. 1 IS BLANK, PLEASE ENTER CORPORATE
NAME
C1470272 DUE DATE 10-31-93 23986S
COAST RECYCLING NORTH, INC.
P.O. BOX 870
MARINA, CA 93933
* IF THERE HAS BEEN NO CHANGE IN ANY OF THE INFORMATION ON FILE -- PROCEED TO
LINE 16. DO NOT WRITE IN THIS SPACE
- -------------------------------------------------------------------------
THE CALIFORNIA CORPORATION NAMED HEREIN, MAKES THE FOLLOWING STATEMENT
<TABLE>
<S> <C> <C> <C>
2. STREET ADDRESS OF PRINCIPAL EXECUTIVE OFFICE ROOM NO. 2A. CITY AND STATE 2B. ZIP CODE
3. STREET ADDRESS OF PRINCIPAL BUSINESS OFFICE IN CALIFORNIA ROOM NO. 3A. CITY CA 3B. ZIP CODE
(IF ANY)
4. MAILING ADDRESS ROOM NO. 4A. CITY 4B. ZIP CODE
THE NAMES OF THE FOLLOWING OFFICERS ARE:
Must have these three officers (Sec. 312, Corporations Code). An officer may hold more than one office.
</TABLE>
<TABLE>
<S> <C> <C> <C>
5. CHIEF EXECUTIVE OFFICER 5A. STREET ADDRESS (DO NOT USE P.O. BOX) 5B. CITY AND STATE 5C. ZIP CODE
6. SECRETARY 6A. STREET ADDRESS (DO NOT USE P.O. BOX) 6B. CITY AND STATE 6C. ZIP CODE
7. CHIEF FINANCIAL OFFICER 7A. STREET ADDRESS (DO NOT USE P.O. BOX) 7B. CITY AND STATE 7C. ZIP CODE
INCUMBENT DIRECTORS, INCLUDING DIRECTORS WHO ARE ALSO OFFICERS
Officers may also be directors. Must have one or more directors (Chap. 3, Sec.
301a, Corporations Code).
Statements not listing directors will be rejected.
8. Name 8A. STREET ADDRESS (DO NOT USE P.O. BOX) 8B. CITY AND STATE 8C. ZIP CODE
9. Name 9A. STREET ADDRESS (DO NOT USE P.O. BOX) 9B. CITY AND STATE 9C. ZIP CODE
10. Name 10A. STREET ADDRESS (DO NOT USE P.O. BOX) 10B. CITY AND STATE 10C. ZIP CODE
11. THE NUMBER OF VACANCIES ON THE BOARD OF DIRECTORS, IF ANY: ________________
Designated agent for Service of Process (Only one agent may be named and must reside in California.)
12. Name
13. CALIFORNIA STREET ADDRESS IF AGENT IS AN INDIVIDUAL (DO NOT USE P.O. BOX) DO NOT INCLUDE ADDRESS IF AGENT IS A
CORPORATION
14. DESCRIBE TYPE OF BUSINESS OF THE CORPORATION NAMED IN ITEM 1
15. I DECLARE THAT I HAVE EXAMINED THIS STATEMENT AND TO THE BEST OF MY KNOWLEDGE AND BELIEF, IT IS TRUE, CORRECT AND
COMPLETE
- ------------------------------------------------ --------------------- ------------- ---------
TYPE OR PRINT NAME OF SIGNING OFFICER OR AGENT SIGNATURE TITLE DATE
16. I DECLARE THERE HAS BEEN NO CHANGE IN THE INFORMATION CONTAINED IN THE LAST STATEMENT OF THE CORPORATION WHICH
IS ON FILE IN THE SECRETARY OF STATE'S OFFICE. DOES NOT APPLY ON INITIAL FILING
(READ INSTRUCTIONS BEFORE COMPLETING THIS ITEM)
[X]
(CHECK HERE) Celia McBride /s/ Celia McBride Asst. 9/16/93
------------------------------------------------ --------------------- ------------- ---------
TYPE OR PRINT NAME OF SIGNING OFFICER OR AGENT SIGNATURE TITLE DATE
</TABLE>
STATE OF CALIFORNIA
SECRETARY OF STATE
[Seal]
OFFICE OF THE SECRETARY OF STATE
I, BILL JONES, Secretary of State of the State of California, hereby
certify:
That the attached transcript of 8 page(s) was prepared by and in this
office from the record on file, of which it purports to be a copy, and that it
is full and correct.
IN WITNESS WHEREOF, I execute
this certificate and affix the Great
Seal of the State of California this
FEBRUARY 19, 1998
----------------------------------
/s/Bill Jones
----------------------------------
Secretary of State
THE GREAT SEAL OF
THE STATE OF CALIFORNIA
ARTICLES OF INCORPORATION
OF
COAST RECYCLING NORTH, INC.
I.
The name of the corporation is Coast Recycling North, Inc.
II.
The purpose of the corporation is to engage in any lawful act or
activity for which a corporation may be organized under the General
Corporation Law of California other than the banking business, the trust
company business or the practice of a profession permitted to be incorporated
by the California Corporations code.
III.
The name and address in this state of the corporation's initial agent
for service of process is: Mary Elizabeth Collins, Esq., 1150 Osos Street,
Suite 203, San Luis Obispo, California 93401.
IV.
The corporation is authorized to issue 10,000 shares of common stock of
one class.
V.
The liability of the directors of the corporation for monetary damages
shall be eliminated to the fullest extent permissible under California law.
The corporation is authorized to provide indemnification of agents (as
defined in Section 317 of the California Corporations Code) through bylaw
provisions, agreements with the agents, vote of shareholders or disinterested
directors, or otherwise, in excess of the indemnification otherwise permitted
by Section 317 of the California Corporations Code, subject only to the limits
set forth in Section 204 of the California Corporations Code with respect to
actions for breach of duty to this corporation or its shareholders. The
corporation is further authorized to provide insurance for agents as set forth
in Section 317 of the California Corporations Code, provided that, in cases
where the corporation owns all or a portion of the shares of the company
issuing the insurance policy, the company and/or the policy must meet one of
the two sets of conditions set forth in Section 317, as amended.
Any repeal or modification of the foregoing provisions of this Article V
by the shareholders of the corporation shall not adversely affect any right or
protection of an agent of the corporation existing at the time of such repeal
or modification.
IN WITNESS WHEREOF, the undersigned has executed these Articles of
Incorporation, this 13th day of October 1989.
/s/ Mary Elizabeth Collins
-------------------------------
Mary Elizabeth Collins
COAST RECYCLING AND ENTERPRISES, INC.
340 BUCKLEY ROAD
SAN LUIS OBISPO, CA 93401
October 13, 1989
Coast Recycling North, Inc.
c/o Ellis & Collins
1150 Osos, Ste. 203
San Luis Obispo, CA 93401
Gentlemen:
This letter is permission by the undersigned corporation to utilize the name
"Coast Recycling North, Inc." for your corporate name.
Coast Recycling & Enterprises, Inc.
By: /s/ Brian Touey
--------------------------------
Brian Touey, President
AGREEMENT OF MERGER
OF
PURE TECH SUBSIDIARY CORP.
INTO
COAST RECYCLING NORTH, INC.
The following Agreement is entered into in accordance with Section 1101
of the California General Corporation Law:
FIRST: The name of the surviving corporation, incorporated under the
laws of the State of California, is:
COAST RECYCLING NORTH, INC.
SECOND: The name of the Non-Surviving corporation is PURE TECH
SUBSIDIARY CORP.; it is incorporated under the laws of the State of
California.
THIRD: The terms and conditions of said merger and the mode of carrying
same into effect are as follows:
Each of the 100 issued and outstanding shares of Common
Stock of Pure Tech Subsidiary Corp. shall be converted into
.8634 share of Common Stock of Coast Recycling North, Inc.
Each of the 86.34 outstanding shares of Coast Recycling
North, Inc. outstanding prior to the merger shall be converted
into the right to receive an aggregate of 851.91 shares of
validly issued, fully paid and nonassessable shares of shares
of common stock, $.05 par value per share, of Pure Tech
International, Inc., a Delaware corporation and the parent
corporation of Pure Tech Subsidiary Corp.
FOURTH: The amendments to the Article of Incorporation of the Surviving
California Corporation to be effected by this merger are as follows:
Coast Recycling North, Inc. hereby changes the number of
shares it is authorized to issue by eliminating 9,900 unissued
shares, and to that end amends Article IV to read as follows:
IV.
"The number of shares which the Corporation shall
have authority to issue is 100 shares of Common Stock."
FIFTH: The manner of converting the shares of each Non-Surviving
corporation into shares or other securities of the Surviving corporation is as
follows:
Each of the 100 issued and outstanding shares of Common
Stock of Pure Tech Subsidiary Corp. shall be converted into
.8634 share of Common Stock of Coast Recycling North, Inc.
Each of the 86.34 outstanding shares of Coast Recycling
North, Inc. outstanding prior to the merger shall be converted
into the right to receive an aggregate of 851.91 shares of
validly issued, fully paid and nonassessable shares of shares
of common stock, $.05 par value per share, of Pure Tech
International, Inc., a Delaware corporation and the parent
corporation of Pure Tech Subsidiary Corp.
IN WITNESS WHEREOF, we hereto sign this Agreement this 8th day of
February, 1994.
COAST RECYCLING NORTH, INC.
By: /s/ Winn Schey
---------------------------------
Winn Schey, President
By: /s/ Brian Touey
----------------------------------
Brian Touey, Assistant Secretary
PURE TECH SUBSIDIARY CORP.
By: /s/ Joseph Mastroianni
----------------------------------
Joseph Mastroianni, President
By: /s/ Paul Litwinczuk
----------------------------------
Paul Litwinczuk, Assistant Secretary
CERTIFICATE OF APPROVAL
OF
AGREEMENT OF MERGER
Joseph Mastroianni, President, and Paul Litwinczuk, Assistant Secretary
certify that:
1. They are the President and Assistant Secretary, respectively, of Pure
Tech Subsidiary Corp., a California corporation.
2. The Agreement of Merger in the form attached was duly approved by the
board of directors and shareholders of the corporation.
3. The shareholder approval was by the holders of 100% of the outstanding
shares of the corporation.
4. There is only one class of shares and the number of shares outstanding
is 100.
We further declare under penalty of perjury under the laws of the State of
California that the matters set forth in this certificate are true and correct
of our own knowledge.
Date: February 8, 1994
/s/ Joseph Mastroianni
------------------------------------
Joseph Mastroianni, President
/s/ Paul Litwinczuk
------------------------------------
Paul Litwinczuk, Assistant Secretary
CERTIFICATE OF APPROVAL
OF
APPROVAL OF MERGER
Winn Schey, President, and Brian Touey, Assistant Secretary, certify that:
1. They are the President and Assistant Secretary, respectively, of Coast
Recycling North, Inc., a California corporation.
2. The Agreement of Merger in the form attached was duly approved by the
board of directors and shareholders of the corporation.
3. The shareholder approval was by the holders of 100% of the outstanding
shares of the corporation.
4. There is only one class of shares and the number of shares outstanding
is 86.34.
We further declare under penalty of perjury under the laws of the State of
California that the matters set forth in this certificate are true and correct
of our own knowledge.
Date: February 8, 1994
/s/ Winn Schey
----------------------------------
Winn Schey, President
/s/ Brian Touey
----------------------------------
Brian Touey, Assistant Secretary
[Seal]
OFFICE OF THE
SECRETARY OF STATE
EXHIBIT 3.20
BYLAWS
OF
COAST RECYCLING NORTH, INC.
ARTICLE I
OFFICES
Section 1.01. Principal Executive Office. The principal
executive office of the corporation shall be located at Watsonville,
California. This location may be changed by a resolution adopted by the Board
of Directors of the corporation.
Section 1.02. Other Offices. Subject to the corporation's
compliance with any state, county or municipal requirements, the corporation
may establish other offices at locations within or without California, as
designated by the Board of Directors of the corporation.
ARTICLE II
DIRECTORS
Section 2.01. Definitions. The words "Board" or "Directors"
as used in these Bylaws, with regard to any action requiring the approval of
the Board of Directors, shall mean the Board of Directors of the corporation.
Section 2.02. Responsibility of the Board. Subject to
requirements of law and limitations in the Articles of Incorporation, the
business and affairs of the corporation shall be managed and all corporate
powers shall be exercised by or under the direction of the Board. The Board
may delegate the management of the day-to-day operation of the business of the
corporation, provided that the business and affairs of the corporation shall
be managed and all corporate powers shall be exercised under the ultimate
direction of the Board.
Section 2.03. Number of Directors. The number of directors of
the corporation shall be three (3). After the issuance of shares, a bylaw
changing the number of directors, or changing to a variable board, may be
adopted in a manner consistent with the requirements of law.
Section 2.04. Election and Term of Office. At each annual
meeting of the shareholders, directors shall be elected to hold office until
the next annual meeting. Each director, including a director elected to fill
a vacancy, shall hold office until the expiration of the term for which he or
she is elected and until a successor is elected and qualified, or until death,
resignation or removal.
Section 2.05. Resignation. Any director may resign effective
upon giving written notice to the Chairman of the Board, if any, the
President, the Secretary or the Board, unless the notice specifies a future
date for the effectiveness of the director's resignation. If the resignation
is effective at a future date, a successor may be elected to take office when
the resignation becomes effective.
Section 2.06. Vacancies. Any vacancies on the Board,
including any vacancies caused by the removal of directors, may be filled by
a majority of the directors then in office, whether or not less than a quorum,
or by a sole remaining director.
The shareholders may, at any time and in a manner consistent
with the requirements of law, elect a director to fill any vacancy not filled
by the directors.
Section 2.07. Compensation. The directors shall not be
compensated for their services as directors, but the Board may determine the
amount to be paid to directors as reimbursement for their expenses. The
provisions of this section do not prohibit a director from serving the
corporation in a capacity other than as a director and being compensated for
those services.
Section 2.08. Board Committees. By resolution adopted by a
majority of the authorized number of directors, the Board may designate one
or more committees, each consisting of two or more directors, to serve at the
pleasure of the Board. The Board may designate one or more directors as
alternate members of any committee, who may replace any absent member at any
meeting of the committee. The appointment of members or alternate members of
a committee requires the vote of a majority of the authorized number of
directors.
To the extent authorized by the Board, and subject to the
restrictions and limitations of law, any Board committee shall have all the
authority of the Board.
ARTICLE III
MEETINGS OF DIRECTORS
Section 3.01. Call of Meetings. Meetings of the Board may he
called by the Chairman of the Board, if any, or the President or any Vice
President or the Secretary.
Section 3.02. Place of Meetings. Meetings of the Board may be
held at any place within or without California, as designated in the notice of
the meeting. If not designated in the notice, or if there is no notice,
meetings shall be held at any place designated by resolution of the Board, or
in the absence of a Board resolution, at the principal executive office of the
corporation.
Section 3.03. Time of Regular Meetings. Regular meetings of
the Board shall be held at the times designated in a resolution adopted by the
Board.
Section 3.04. Notice of Meetings. Regular meetings of the
Board may be held without notice if the time and place of the meetings are
fixed in these Bylaws or in a resolution adopted by the Board. Special
meetings of the Board shall be held upon four days' notice by mail or 48
hours' notice delivered personally or by telephone or telegraph. A notice
need not specify the purpose of any regular or special meeting.
Each director shall provide the Secretary with his or her
current address and the notice of any meeting sent to that address shall
constitute a valid notice.
Section 3.05. Waiver of Notice. Notice of a meeting need not
be given to any director who, either before or after the meeting, signs a
waiver of notice, a consent to holding the meeting or an approval of the
meeting's minutes, or who attends the meeting, without protesting, either
before or at the meeting's commencement, a lack of notice to that director.
All waivers, consents and approvals pursuant to this section shall be filed
with the corporate records or made a part of the meeting's minutes.
Section 3.06. Quorum and Board Actions. A majority of the
authorized number of directors shall constitute a quorum of the Board for the
transaction of business. Subject to the provisions of Corporations Code
sections 310 and 317 (e), every act or decision by a majority of the
directors present at a meeting duly held, at which a quorum is present, is the
act of the Board. If directors withdraw from a meeting at which a quorum is
initially present, the remaining directors may continue to transact business,
provided that any action taken must be approved by at least a majority of the
required quorum for such meeting.
Section 3.07. Adjournment. A majority of the directors
present at any meeting, whether or not a quorum is present, may adjourn the
meeting to another time and place. If the meeting is adjourned for more than
24 hours, notice of the time and place of the adjourned meeting shall be given
to any director who was not present at the time of adjournment.
Section 3.08. Conduct of Meetings. The Chairman of the Board
of the corporation, or if there is none, the President, or, in the absence of
the Chairman of the Board or the President, an officer designated by such
officer, or in the absence of any designation, a director chosen by a majority
of the directors present, shall preside over meetings of the Board. The
Secretary of the corporation, or, in the absence of the Secretary, any person
selected by the presiding officer, shall act as Secretary of the Board.
Section 3.09. Telephone Participation. Directors may
participate in Board meetings through the use of a conference telephone or
similar communications equipment, so long as all directors participating in
the meeting can hear one another. Participation in a meeting pursuant to this
section constitutes presence in person at the meeting.
Section 3.10. Action Without Meeting. Any action required
or permitted to be taken by the Board may be taken without a meeting, if all
members of the Board individually or collectively consent in writing to the
action. The written consent or consents shall be filed with the minutes of
Board proceedings, and the action by written consent shall have the same force
and effect as a unanimous vote of the directors.
Section 3.11. Meetings of Board Committees. The foregoing
sections of this Article shall also apply to meetings of Board committees.
ARTICLE IV
OFFICERS
Section 4.01. Number. The corporation shall have a President,
a Secretary and a Chief Financial Officer. The Board may also elect, in its
discretion, other officers, including a Chairman of the Board and one or more
Vice Presidents. Any number of offices may be held by the same person.
Section 4.02. Term of Office. These officers shall be chosen
by the Board and shall serve at the pleasure of the Board, subject to the
rights, if any, of an officer under any employment contract.
Section 4.03. Additional Offices. The Board, or any officer
or committee designated by the Board, may appoint additional officers as may
be necessary to enable the corporation to sign instruments and share
certificates. Any officer appointed pursuant to this section shall have the
authority, duties and term of office designated in these Bylaws or by the
Board.
Section 4.04. Removal and Resignation. Subject to any rights
of any officer under any employment contract, the Board or an officer
designated by the Board may remove an officer, with or without cause.
An officer may resign by giving written notice to the Board of
Directors, the President or the Secretary of the corporation. The resignation
is effective at the time specified in the notice, or if no time is specified
at the time the notice is received. Acceptance of an officer's resignation is
only required if so specified in the notice. Any officer's resignation is
without prejudice to the corporation's rights under any contract to which the
officer is a party.
Section 4.05. Vacancies. The Board shall fill a vacancy in
the office of the President, the Secretary or the Chief Financial Officer as
soon as reasonably possible. If any other office is vacant, the Board may
fill the office or leave it vacant. A succeeding officer shall be chosen at
the pleasure of the Board, subject to any rights of the officer under any
employment contract.
Section 4.06. Chairman of the Board. The Chairman of the
Board, if any, shall preside over all meetings of the Board at which he or she
is present and shall have any other duties or powers designated by the Board
or in these Bylaws.
Section 4.07. President. The President shall be the Chief
Executive Officer of the corporation. Under the control of the Board, the
President shall have general supervision and control of the corporation's
business and officers, including the powers and duties of management that are
commonly associated with that office. Pursuant to this authority, the
President shall have the following powers and duties:
(a) To preside over all meetings of the shareholders and, in the
absence of the Chairman of the Board, or if there is none, over all meetings
of the Board.
(b) To sign the corporation's share certificates in the manner
and with the other officers prescribed by these Bylaws.
(c) To sign deeds, conveyances, promissory notes, deeds of
trust and any other instruments of the corporation on behalf of the
corporation and subject to the Board's authorization.
(d) Any other powers and duties designated by the Board or in
these Bylaws.
Section 4.08. Vice President. Each Vice President shall have
the powers and duties designated by the Board, or in these Bylaws, or assigned
to him or her by the Chief Executive Officer. In the absence of the Chief
Executive officer, the Vice President(s) shall have all the powers and duties
of the Chief Executive Officer.
Section 4.09. Secretary. The Secretary shall have the
following powers and duties:
(a) To have custody of the corporate seal and corporate records.
(b) To notice as required in these Bylaws or by law.
(c) To act as Secretary at all meetings of the shareholders and
the Board and to record all actions taken at those meetings.
(d) To keep all minutes of the proceedings of the shareholders,
Board and Board committees in a minute book at a place designated by the Board
or, if not designated, at the corporation's principal executive office.
(e) To keep a record of the names and addresses of the
corporation's shareholders and the number and class of shares held by each of
them at the corporation's principal executive office.
(f) Any other powers and duties designated by the Board or in
these Bylaws or incident to the office of Secretary.
Section 4.10. Assistant Secretary. The Assistant Secretary
shall have the powers and duties designated by the Board or in these Bylaws or
assigned to him or her by the Secretary. At the request or in the absence of
the Secretary, the Assistant Secretary shall have all the powers and duties of
the Secretary.
Section 4.11. Chief Financial Officer. The Chief Financial
Officer, who may be designated as the Treasurer, shall have the following
powers and duties:
(a) To keep and maintain accurate and sufficient books and
records of account.
(b) To have custody and responsibility for all of the
corporation's funds.
(c) To deposit the corporation's funds, in the name of the
corporation, in any depositories designated by the Board or an authorized
officer.
(d) To disburse the corporation's funds as directed by the
Board or an authorized officer.
(e) To receive, on behalf of the corporation, any amounts due
the corporation.
(f) To provide the directors and the Chief Executive Officer,
upon request, with financial reports and an account of all transactions as
Chief Financial Officer.
(g) Any other duties designated by the Board or in these Bylaws
or incident to the office of Chief Financial Officer.
Section 4.12 Assistant Treasurer. The Assistant Treasurer
shall have the powers and duties designated by the Board, or in these Bylaws,
or assigned to him or her by the Chief Financial Officer. At the request or
in the absence of the Chief Financial Officer, the Assistant Treasurer(s)
shall have all the powers and duties of the Chief Financial Officer.
Section 4.13. Compensation. The Board shall determine the
salaries and compensation of the officers. An officer shall not be denied
compensation on the ground that he or she is a director of the corporation.
ARTICLE V
GENERAL CORPORATE ACTIVITIES
Section 5.01. Execution of Instruments. Unless otherwise
provided in these Bylaws, the Board may authorize any officer or agent of the
corporation to enter into any contract, or to execute and deliver any
instrument, on behalf of the corporation. The Board's authorization may be
general or may be limited to specific instances, but in the absence of that
authorization, no officer, agent or employee shall have any power or authority
to bind the corporation, pledge its credit or subject it to any liability for
any purpose or in any amount.
Section 5.02. Endorsement of Checks and Drafts. The Board may
designate, or may authorize any officer to designate, one or more persons to
sign or countersign, or both, checks, drafts or other orders for the payment
of money by the corporation.
Section 5.03. Voting of Corporation's Shares. Unless
otherwise provided by the Board, the President or the Secretary, or any person
designated by the President or the Secretary, shall represent and vote, on
behalf of the corporation, any shares of any other corporation standing in the
name of this corporation. This authority may be exercised in person or by
proxy duly executed by the authorized representative.
ARTICLE VI
ISSUANCE, CERTIFICATES AND TRANSFER OF SHARES
Section 6.01. Requirements of Share Certificates. Every
shareholder in the corporation shall be entitled to have a share certificate
signed in the name of the corporation by the Chairman of the Board, if any,
the President or a Vice President and by the Chief Financial Officer or an
Assistant Treasurer or the Secretary or any Assistant Secretary, certifying
the number of shares and the class or any series of shares owned by the
shareholder. Any or all of the signatures on the certificate may be
facsimile. All certificates shall be in a form authorized by the Board and in
accordance with the requirements of law.
In the event that any officer, transfer agent or registrar
ceases to act in that capacity after his or her signature has been placed upon
a certificate, but before the certificate is issued, the certificate may be
issued with the same effect as though the person were an officer, transfer
agent or registrar at the date of issue.
Section 6.02. Issuance and Transfer of Certificates. When a
share certificate is presented to the Secretary or any transfer agent of the
corporation with a request to register transfer, and the certificate is duly
endorsed or accompanied by appropriate evidence of succession, assignment or
authority to transfer, the Secretary shall, subject to any requirements of
law, issue a new share certificate to the transferee, cancel the old
certificate and enter that transaction in the corporation's books.
The corporation may issue a new share certificate to replace any
previously issued certificate that is alleged to have been lost, stolen or
destroyed, and may require the certificate's owner, or his or her legal
representative, to give the corporation a bond or security sufficient to
indemnify it against any claim that may be made against the corporation on
account of the alleged loss, theft or destruction or the issuance of the new
certificate.
The Board may adopt any additional rules and regulations, in
accordance with these Bylaws and provisions of law, governing the issuance,
transfer and registration of share certificates. The Board may, in its
discretion, appoint one or more transfer agents or registrars, or both.
Section 6.03. Shareholders of Record. The Board may fix, in
advance, a record date for determining the shareholders entitled to notice of
or to vote at any meeting, or to take any action by written consent, or
entitled to receive any dividend or distribution or allotment of rights, or to
exercise rights in respect of any other lawful action. The record date shall
not be more than 60 nor less than 10 days prior to the date of any meeting and
shall not be more than 60 days prior to the date of any other action.
The determination of shareholders for these purposes shall be
conclusive, notwithstanding the transfer of any shares on the corporation's
books after the record date.
Section 6.04. Prohibition of Fractional Shares. The
corporation shall not issue fractions of a share either originally or on
transfer, but, in connection with any original issuance of shares, the
corporation shall arrange for the disposition or redemption of fractional
interests, by or from those entitled to them, in the manner provided by law.
Section 6.05. Prohibition of Partly Paid Shares. Every
subscriber to shares and every person to whom shares are originally issued
shall pay the full agreed consideration prior to or concurrent with the
issuance of shares. The corporation shall not issue all or any part of its
shares as partly paid or subject to call for the remainder of any
consideration to be paid for the shares.
ARTICLE VII
MEETINGS OF SHAREHOLDERS
Section 7.01. Place of Meetings. Meetings of the
shareholders may be held at any place within or without California, as
designated in the notice of the meeting. If not designated in the notice or
if there is no notice, meetings shall be held at any place designated by the
Board, or, in the absence of the Board's designation, at the principal
executive office of the corporation.
Section 7.02. Annual Meeting. The annual meeting of the
shareholders shall be held each year at the time and on the date designated by
the Board, provided that the designated date shall be no later than 6 months
after the end of the corporation's fiscal year and 15 months after the
corporation's last annual meeting. Directors shall be elected and any other
appropriate business may be transacted at that meeting.
Section 7.03. Special Meetings. Special meetings of the
shareholders may be called by the Board, the Chairman of the Board, if any,
the President or the holders of shares entitled to cast not less than ten
percent (10%) of the votes at the meeting or such additional persons as
designated in the Articles of Incorporation or Bylaws. Upon written request
to the Chairman of the Board, if any, the President, any Vice President or the
Secretary by any person, other than the Board, entitled to call a special
meeting of the shareholders, the officer shall forthwith cause notice to be
given to the shareholders entitled to vote at the meeting that a meeting will
be held, at the time requested by the person or persons calling the meeting.
The time of the meeting shall not be less than 35 nor more than 60 days after
the officer's receipt of the request. If the officer does not give the notice
within 20 days after receipt of the request, the person or persons entitled to
call the meeting may give the notice.
Section 7.04. Notice of Meetings. Written notice of meetings
of the shareholders shall be given to each shareholder entitled to vote at the
meeting. The notice shall be given not less than 10 (or if sent by
third-class mail, 30), nor more than 60 days, prior to the date of the meeting
and shall state the place, date and hour of the meeting. In the case of a
special meeting, the notice shall state the general nature of the business to
be transacted. In the case of an annual meeting, the notice shall state the
matters which the Board intends to present for action by the shareholders. If
any proposal pursuant to Corporations Code sections 310 (interested
directors), 902 (amendment of articles after issuance of shares), 1201
(reorganization), 1900 (voluntary dissolution) or 2007 (distribution not in
accordance with rights of preferred shareholders) is to be considered at the
meeting, the notice shall state the general nature of the proposal. Notice of
any meeting at which directors are to be elected shall include the names of
nominees intended at the time of the notice to be presented by the Board for
election.
Notice of any meeting of the shareholders shall be given
personally, by first-class mail, postage prepaid, or by any other means of
written communication. The notice shall be addressed to the shareholder at
the shareholder's address appearing on the corporation's books or given by the
shareholder to the corporation for the purpose of notice. If no address
appears or has been given, the notice shall be given at the corporation's
principal executive office or by publication, published at least once, in a
newspaper of general circulation in the county in which the corporation's
principal executive office is located.
Section 7.05. Notice of Adjourned Meetings. Unless otherwise
provided by law, notice of an adjourned meeting of the shareholders need only
be given if the time and place of the meeting are not announced at the meeting
at which adjournment is taken, if the adjournment is for more than 45 days, or
if, after adjournment, a new record date is fixed for the adjourned meeting.
If required, notice shall be given to each shareholder of record entitled to
vote at the meeting.
Section 7.06. Waiver of Notice. The transactions of any
meeting of the shareholders, however called and noticed, and wherever held,
shall be as valid as though conducted at a meeting duly held and notified if a
quorum is present, either in person or by proxy, and if, either before or
after the meeting, each of the persons, entitled to vote who are not present
in person or by proxy signs a written waiver of notice, consent to holding the
meeting or approval of the meeting's minutes. All waivers, consents and
approvals shall be filed with the corporation's records or made a part of the
meeting's minutes.
Unless a person objects, at the beginning of a meeting, to the
transaction of business because the meeting is not lawfully called or
convened, the attendance of a person at a meeting shall constitute a waiver of
notice of the meeting and presence at the meeting. However, attendance at a
meeting is not a waiver of any right to object to the consideration of matters
required by law to be included in the notice but which are not included if the
objection is expressly made at the meeting.
Section 7.07. Quorum and Shareholder Actions. A majority of
the shares entitled to vote, represented in person or by proxy, shall
constitute a quorum at a meeting of the shareholders. In the absence of a
quorum, any meeting of the shareholders may be adjourned by the vote of a
majority of the shares present in person or by proxy, but, except as provided
in the following paragraph, no other business shall be transacted.
Except as provided in the following sentence, the affirmative
vote of a majority of the shares represented and voting at a duly held meeting
at which a quorum is present (which shares also constitute at least a majority
of the required quorum) shall be the act of the shareholders, unless the vote
of a greater number or voting by classes is required by law or by the Articles
of Incorporation; provided, however, that the shareholders present at a duly
called or duly held meeting at which a quorum is present may continue to
transact business until adjournment, notwithstanding the withdrawal of enough
shareholders to leave less than a quorum, if any action taken (other than
adjournment) is approved by at least a majority of the shares required to
constitute a quorum.
Section 7.08. Voting of Shares. Except as otherwise provided
in this section or in the Articles of Incorporation, each outstanding share,
regardless of class, is entitled to one vote on each matter submitted to a
vote of the shareholders.
On any matter other than election of directors, any holder of
shares entitled to vote on any matter may vote part of the shares in favor of
the proposal and refrain from voting the remaining shares or vote them against
the proposal, but, if the shareholder fails to specify the number of shares
that the shareholder is voting affirmatively, it will be conclusively presumed
that the shareholder's approving vote is with respect to all shares the
shareholder is entitled to vote.
Elections of directors need not be by ballot. In any election
of directors, the candidates receiving the highest number of affirmative votes
of the shares entitled to be voted for the directors, up to the number of
directors to be elected by those shares, shall be elected; votes against a
director and votes withheld shall have no legal effect.
Every shareholder entitled to vote at any election of directors
may cumulate votes as permitted and in the manner provided by law.
Section 7.09. Proxies. Every person entitled to vote shares
may authorize another person or persons to act by proxy with respect to the
shares. Any proxy shall be signed by the shareholder or the shareholder's
attorney in fact and filed with the Secretary of the corporation. A proxy is
deemed signed if the shareholder's name is placed on the proxy by manual
signature, typewriting, telegraphic transmission or otherwise, by the
shareholder or the shareholder's attorney in fact.
Unless otherwise provided in the proxy, no proxy shall be valid
after the expiration of 11 months from the date of the proxy. Subject to the
foregoing limitation and with the exception of a proxy that states that it is
irrevocable, every proxy continues in full force and effect until revoked by
the person executing the proxy before the vote pursuant to the proxy is taken
or by the written notice of the death or incapacity of the proxy maker,
received by the corporation before the vote is counted. A proxy may be
revoked in any of the following ways: (1) by the delivery of a writing to the
corporation stating that the proxy is revoked; (2) by the presentation to the
meeting of a subsequent proxy executed by the person who executed the initial
proxy; or (3) by the attendance at the meeting and voting in person by the
person executing the proxy.
The Board may, prior to any annual or special meeting of the
shareholders, designate additional rules and regulations governing the
execution, filing and validation of proxies intended to be voted at the
meeting.
Section 7.10. Conduct of Meetings. The Chairman of the Board,
if any, or the President of the corporation, or in the absence of such
officer(s) an officer designated by the Chairman of the Board, if any, or the
President, or in the absence of both of those officers, a person chosen by the
vote of a majority of the shares present, in person or by proxy, and entitled
to vote, shall act as chairman at meetings of the shareholders. The Secretary
of the corporation, or in the absence of the Secretary, any person elected by
the Chairman, shall act as Secretary at those meetings.
Section 7.11. Action Without Meeting. Except as otherwise
provided in this section, any action that may be taken at any annual or
special meeting of the shareholders may be taken without a meeting and without
prior notice if a consent in writing, setting forth the action, is signed by
the holders of outstanding shares having at least the minimum number of votes
that would be necessary to authorize or take the action at a meeting at which
all the shares entitled to vote on the action were present and voted.
Directors may be elected without a meeting only by the
unanimous written consent of all the shares entitled to vote for the election
of directors; provided, however, that, in the case of a Board vacancy that has
not been filled by the directors and was not caused by removal, directors may
be elected by the written consent of a majority of the outstanding shares
entitled to vote for directors.
Unless the consent of all shareholders entitled to vote has
been solicited in writing or unless approval is by unanimous consent, the
following requirements apply to actions taken or approved without a meeting:
(a) Notice of any shareholder approval pursuant to Corporations
Code sections 310 (interested directors), 317 (indemnification of corporate
agents), 1201 (reorganizations) or 2007 (distribution not in accordance with
rights of preferred shares) shall be given at least 10 days prior to the
consummation of the action authorized by the approval.
(b) Notice of any other corporate action approved by
shareholders without a meeting by less than unanimous written consent must be
given promptly.
In each case, notice shall be given to those shareholders
entitled to vote who have not consented in writing.
ARTICLE VIII
CORPORATE RECORDS AND REPORTS
Section 8.01. Minutes, Books and Records. The officers of the
corporation shall keep adequate and correct books and records of account in
written form or in any other form capable of being converted into written
form. The officers shall also keep minutes of the proceedings of its
shareholders, the Board and Board committees in written form. These books,
records and minutes shall be kept at a place designated by the Board, or in
the absence of any designation, at the corporation's principal executive
office.
Section 8.02. Record of Shareholders. The officers of the
corporation shall keep a record of its shareholders, giving the names and
addresses of all shareholders and the number and class of shares held by each,
at the office of its transfer agent or registrar or at the corporation's
principal executive office.
Section 8.03. Annual Report. So long as the corporation has
less than 100 shareholders of record, determined as provided in Corporations
Code section 605, the requirement for an annual report to shareholders
pursuant to Corporations Code section 1501 is expressly waived; provided,
however, that nothing contained in this section shall be construed to prohibit
the Board, in its discretion, from issuing annual and other reports to the
shareholders.
ARTICLE IX
INDEMNIFICATION
Section 9.01. Right to Indemnification. Each person who was
or is a party or is threatened to be made a party to or is involved (as a
party, witness or otherwise) in any threatened, pending or completed action,
suit or proceeding, whether civil, criminal, administrative or investigative
(hereafter, a "Proceeding") by reason of the fact that he or she, or a person
of whom he or she is the legal representative, is or was a director, officer,
employee or agent of the corporation or is or was serving at the request of
the corporation as a director, officer, employee or agent of another foreign
or domestic corporation, partnership, joint venture, trust or other
enterprise, or was a director, officer, employee or agent of a foreign or
domestic corporation that was a predecessor corporation of the corporation or
of another enterprise at the request of such predecessor corporation,
including service with respect to employee benefit plans, whether the basis of
the Proceeding is alleged action in an official capacity as a director,
officer, employee or agent or in any other capacity while serving as a
director, officer, employee or agent (hereafter, an "Agent"), shall be
indemnified and held harmless by the corporation to the fullest extent
authorized by statutory and decisional law, as the same exists or may
hereafter be interpreted or amended (but, in the case of any amendment or
interpretation, only to the extent that such amendment or interpretation
permits the corporation to provide broader indemnification rights than were
permitted prior thereto) against all expenses, liability and loss (including
attorneys' fees, judgments, fines, ERISA excise taxes and penalties, amounts
paid or to be paid in settlement, any interest, assessments or other charges
imposed thereon, and any federal, state, local or foreign taxes imposed on any
Agent as a result of the actual or deemed receipt of any payments under this
Article IX) incurred or suffered by such persons in connection with
investigating, defending, being a witness in, or participating in (including
on appeal), or preparing for any of the foregoing in, any Proceeding
(hereafter, "Expenses"). The right to indemnification conferred in this
Article IX shall be a contract right. It is the corporation's intent that
these bylaws provide indemnification in excess of that expressly permitted by
section 317 of the California General Corporation Law, as authorized by the
corporation's Articles of Incorporation.
Section 9.2. Authority to Advance Expenses. Expenses incurred
by an officer or director (acting in his or her capacity as such) in defending
a Proceeding shall be paid by the corporation in advance of the final
disposition of such Proceeding; provided, however, that if required by the
California General Corporation Law, as amended, such Expenses shall be
advanced only upon delivery to the corporation of an undertaking by or on
behalf of such director of officer to repay such amount if it shall ultimately
be determined that he or she is not entitled to be indemnified by the
corporation as authorized in this Article IX or otherwise. Expenses incurred
by other Agents of the corporation (or by the directors or officers not acting
in their capacity as such, including service with respect to employee benefit
plans) may be advanced upon the receipt of a similar undertaking, if required
by law, and upon such other terms and conditions as the Board deems
appropriate. Any obligation to reimburse the corporation for Expenses
advanced shall be unsecured and no interest shall be charged thereon.
Section 9.3. Provisions Nonexclusive. The rights conferred on
any person by this Article IX shall not be exclusive of any other rights that
such person may have or hereafter acquire under any statute, provision of the
Articles of Incorporation, agreement, vote of stockholders or disinterested
directors, or otherwise, both as to action in an official capacity and as to
action in another capacity while holding such office. To the extent that any
provision of the Articles of Incorporation, agreement or vote of the
stockholders or disinterested directors is inconsistent with these bylaws, the
provision, agreement or vote shall take precedence.
Section 9.4. Authority to Insure. The corporation may
purchase and maintain insurance to protect itself and any Agent against any
Expense asserted against or incurred by such person, whether or not the
corporation would have the power to indemnify the Agent against such Expense
under applicable law or the provisions of this Article IX.
Section 9.5. Survival of Rights. The rights provided by this
Article IX shall continue as to a person who has ceased to be an Agent and
shall inure to the benefit of the heirs, executors and administrators of such
person.
Section 9.6. Settlement of Claims. The corporation shall not
be liable to indemnify any Agent under this Article (i) for any amounts paid
in settlement of any action or claim effected without the corporation's
written consent, which consent shall not be unreasonably withheld; or (ii) for
any judicial award, if the corporation was not given a reasonable and timely
opportunity, at its expense, to participate in the defense of such action.
Section 9.7. Effect of Amendment. Any amendment, repeal or
modification of this Article IX shall not adversely affect any right or
protection of any Agent existing at the time of such amendment, repeal or
modification.
Section 9.8. Subrogation. in the event of payment under this
Article IX, the corporation shall be subrogated to the extent of such payment
to all of the rights of recovery of the Agent, who shall execute all papers
required and shall do everything that may be necessary to secure such rights,
including the execution of such documents necessary to enable the corporation
effectively to bring suit to enforce such rights.
Section 9.9. No Duplication of Payments. The corporation
shall not be liable under this Article IX to make any payment in connection
with any claim made against the Agent to the extent the Agent has otherwise
actually received payment (under any insurance policy, agreement, vote or
otherwise) of the amounts otherwise indemnifiable hereunder.
ARTICLE X
MAINTENANCE, AMENDMENT AND CONSTRUCTION OF BYLAWS
Section 10.01. Maintenance of Bylaws. The officers of the
corporation shall keep an original or copy of these Bylaws, as amended to
date, at the corporation's principal executive office in California, or, if
that office is not in this state, at the corporation's principal business
office in California. If kept at an office in California, the Bylaws, as
amended to date, shall be open to inspection by the shareholders. If the
corporation has neither its principal executive office nor a principal
business office in California, the Secretary shall, upon the written request
of any shareholder, furnish a copy of these Bylaws, as amended to date, to
that shareholder.
Section 10.02. Adoption, Amendment or Repeal by Shareholders.
Subject to compliance with any provisions of law or any limitations contained
in the Articles of Incorporation, bylaws may be adopted, amended or repealed
by the approval of the outstanding shares of the corporation, as that term is
defined in Corporations Code section 152.
Section 10.03. Adoption, Amendment or Repeal By Board.
Subject to compliance with any provisions of law or any limitations contained
in the Articles of Incorporation and subject to the rights of the outstanding
shares of the corporation to adopt, amend or repeal bylaws, bylaws may be
adopted, amended or repealed by the approval of the Board; provided, however,
that after shares are issued, a bylaw changing the authorized number of
directors may only be adopted by the approval of the outstanding shares, as
that term is defined in Corporations Code section 152.
Section 10.04. Construction of Bylaws. Except as otherwise
provided in these Bylaws or required by the context, the definitions provided
in the General Corporation Law shall govern the construction of these Bylaws.
Without limiting the foregoing, the singular and plural number includes the
other, and the word "person" includes a corporation or other entity as well as
a natural person, whenever the context so indicates.
EXHIBIT 3.21
STATE OF NEW JERSEY
DEPARTMENT OF STATE
FILING CERTIFICATION (CERTIFIED COPY)
DISTRIBUTORS RECYCLING, INC.
I, the Secretary of State of the State of New Jersey, do hereby
certify, that the above named business did file and record in this
department the below listed document(s) and that the foregoing is a true
copy of the CERTIFICATE OF INCORPORATION & REINSTATEMENT as the same is
taken from and compared with the original(s) filed in this office on the
date set forth on each instrument and now remaining on file and of record
in my office.
IN TESTIMONY WHEREOF, I have
hereunto set my hand and affixed
my Official Seal at Trenton, this
25th day of February, 1998
/s/ Lonna R. Hooks
LONNA R. HOOKS
Secretary of State
[SEAL]
CERTIFICATE OF INCORPORATION
OF
DISTRIBUTORS RECYCLING, INC.
The undersigned, being over the age of 18 years, in order to form a
corporation pursuant to the provisions of the New Jersey Business
Corporation Act, hereby certifies as follows:
1. The name of the corporation is:
DISTRIBUTORS RECYCLING, INC.
2. The purpose of the corporation is to engage in any activity within
the purposes for which corporations may be organized under the New Jersey
Business Corporation Act, N. J. S. 14A:1-1 et seq.
3. The corporation is authorized to issue 200 shares of capital stock
without par value.
4. The initial registered office of the corporation is 510 Old
Bridge Turnpike, South River, New Jersey 08882. The name of the
corporation's initial registered agent at that office is Simon Sinnreich.
5. One person will constitute the first Board of Directors, the name and
address is as follows:
Simon Sinnreich
510 Old Bridge Turnpike
South River, New Jersey 08882
6. The name and address of the incorporator of the corporation is as
follows:
Simon Sinnreich
510 Old Bridge Turnpike
South River, New Jersey 08882
IN WITNESS WHEREOF, the undersigned has signed this Certificate of
Incorporation this 19th day of July, 1983.
/s/ Simon Sinnreich (L.S.)
------------------------------
SIMON SINNREICH
STATE OF NEW JERSEY :
: ss
COUNTY OF MIDDLESEX :
BE IT REMEMBERED that on this 19th day of July 1983, before me, the
subscriber, personally appeared SIMON SINNREICH, who I am satisfied is the
person named in and who executed the within Instrument, and thereupon he
acknowledged that he signed, sealed and delivered the same as his act and
deed, for the uses and purposes therein expressed.
/s/ John A. Jorgensen
---------------------------------
JOHN A. JORGENSEN
Attorney-at-Law of New Jersey
Prepared by:
/s/ John A. Jorgensen
- ----------------------------------
JOHN A. JORGENSEN
Attorney-at-Law of New Jersey
FILED
JUL 28 1983
JANE BURGIO
Secretary of State
FILED
JAN 15 1992
JOAN HABERLE
Secretary of State
PETITION FOR THE REINSTATEMENT OF FRANCHISE OF A CORPORATION
OF THE STATE OF NEW JERSEY
IN THE MATTER OF:
Corporate Name: DISTRIBUTORS RECYCLING INC.
Corporation Serial Number: 0100-2011-33
Federal Identification No.: 222-466-975/000
Number of Authorized Shares: 200
Present Corporate Address: P.O. Box 5250, Somerset NJ 08875
Registered Agent: Simon Sinnreich
Registered Agent's Address: 100 Franklin Square Dr, Suite 105,
Somerset NJ 08873
To the Honorable JOAN HABERLE Secretary of State of the State of New
Jersey:
1. Prior to Sept. 1, 1988, on which date the corporate charter was
voided, Your Petitioner, Distributors Recycling Inc., was a corporation,
organized under the laws of New Jersey, and in possession of all franchises
granted thereby, being other than a gas, electric light, telephone,
telegraph, water, pipe line, railroad, or street railway company, or a
corporation having the right to use the public streets or to take and
condemn lands in this State.
2. On aforesaid date, the charter and corporate powers of Petitioner
became inoperative and void, by proclamation of the Governor, prior to
1971, or by the Secretary of State of New Jersey in 1971 and all years
subsequent thereto, issued pursuant to N.J.S.A. 54:11-2, for nonpayment of
taxes.
3. Petitioner herewith entreats the Secretary of State of New Jersey
to reinstate it to all its corporate franchises and privileges, pursuant to
N.J.S.A. 54:11-5 and herewith tenders, for payment to the Secretary of
State the sum of $50.00, as a reinstatement fee (U.S. Postal Money Order
or certified check made payable to the order of "New Jersey Secretary of
State").
4. The tax returns required to be filed pursuant to Title 54 of the
Revised Statutes of New Jersey as of this date have been filed and the
taxes reported to be due thereon to the State of New Jersey, Department of
Treasury, Division of Taxation, have been paid.
(A) CORPORATE ACKNOWLEDGMENT REQUIRING TWO OFFICERS'
SIGNATURES
IN WITNESS WHEREOF, Petitioner has caused these presents to be signed
by its President or Vice President and its corporate seal to be hereunto
affixed by its Secretary.
/s/ Distributors Recycling, Inc.
- ------------------------ -------------------------------
Asst. Secretary Petitioning Corporation
STATE OF NEW JERSEY :
: SS.: By /s/ Joseph Mastroianni
COUNTY OF Somerset : -------------------------------
President
On December 11, 1991, before me, the subscriber, personally appeared
Joseph Mastroianni who being by me duly sworn according to law on his oath
saith that he is President of the above-named Petitioner, that the seal
affixed to aforesaid Petition is the corporate seal of the said
corporation; that Joseph Mastroianni is the President of the said
corporation; that this deponent saw the said Joseph Mastroianni sign the
Petition as the act and deed of said corporation, he being thereunto duly
authorized; that this deponent signed his name to the Petition as an
attesting witness, and that the facts stated in said petition are true.
Sworn and subscribed to before /s/
me the day and year aforesaid -------------------------
Asst. Secretary
/s/ Sarina Urban
- -------------------------------
SARINA URBAN
NOTARY PUBLIC OF NEW JERSEY
(B) CORPORATE ACKNOWLEDGMENT REQUIRING ONE OFFICER'S
SIGNATURE
IN WITNESS WHEREOF, Petitioner has caused these presents to be signed by
its President or Vice President and its corporate seal to be hereunto affixed.
STATE OF NEW JERSEY:
: SS.: ----------------------------
COUNTY OF : Petitioning Corporation
On this day of ,
19 , before me, the subscriber, a of the
State of , personally appeared
, the President of the said corporation, who I am
satisfied is the person who has signed the within instrument, and, I having
first made known to him the contents thereof, he did acknowledge that he
signed, sealed with the corporate seal, and delivered the same as such officer
aforesaid and that the within instrument is the voluntary act and deed of such
corporation, made by virtue of the authority of its Board of Directors.
Sworn and subscribed to before
me the day and year aforesaid ---------------------------------
President or Vice President
To The Honorable, , Secretary of State of the State
of New Jersey:
I advise the reinstatement of the aforesaid corporation to its
franchises and privileges.
By /s/ Martin
- ------------------------------ ---------------------------------------
Attorney General Deputy Attorney General
, a corporation organized under the
laws of this State applying, by the foregoing Petition, to have its
corporate franchise and privileges restored and tendering, for payment to
the Secretary of State, the sum of $ , reinstatement fee, and the Attorney
General having advised said reinstatement:
I, , Secretary of State of the State
of New Jersey, in the exercise of the power granted to me in and by
N.J.S.A. 54:11-5, its amendments and supplements, do hereby permit
aforesaid corporation to be reinstated and entitled to all its franchises
and privileges.
IN WITNESS WHEREOF I have hereunto set my hand this 15th day of January,
1992.
/s/ Joan Haberle
----------------------------
Secretary of State
PETITION FOR REINSTATEMENT
Distributors Recycling, Inc.
SEND CERTIFICATE OF REINSTATEMENT TO
Simon Sinnreich
100 Franklin Square Dr., Suite 105
Somerset NJ 08873
C-9101
3-74, R-2
INTRA-DEPARTMENTAL COMMUNICATION [SEAL] NJ DEPARTMENT OF THE TREASURY
TO: The Honorable Joan Haberle Secretary of State
Office of Secretary of State
FROM: Leslie A. Thompson, Director Division of Taxation
BY: Steven H. Breen, Acting Supervisor Reinstatements and
Proclamations
SUBJECT: Petition for Reinstatement DATE: December 13, 1991
In the Matter of:
Petitioning Corporation DISTRIBUTORS RECYCLING INC.
Corporation Serial Number 0100-2011-33
Federal Identification 222-466-975/000
Date of Voidance 9-1-88
Date of Reinstatement
Attached is a Petition for the Reinstatement of Franchise of a
Corporation of the State of New Jersey, together with a check in the amount
of $50.00, the reinstatement fee due the Office of the Secretary of State.
CERTIFICATION:
As of the date of this memorandum, the tax returns required to be filed
with the Division of Taxation by the Petitioner, pursuant to Title 54 and 54A
of the Revised Statutes of New Jersey have been filed and the taxes reported
to be due thereon have been paid.
CERTIFICATION NOT VALID AFTER: March 13, 1992
If the corporation's charter is not reinstated within the ninety (90)
day period, the corporation must then reapply to the Division of Taxation in
order that a new certification be issued.
cc: Andrea Watson
Department of Law and Public Safety
12B0D01062222466975000003011 TU-38
New Jersey is an Equal Opportunity Employer
EXHIBIT 3.22
BY-LAWS
OF
DISTRIBUTORS RECYCLING, INC.
SECTION 1:- ANNUAL MEETING OF SHAREHOLDERS --
The annual meeting of shareholders shall be held at 10:00 A.M. on
of each year, upon not less than ten (10) nor more than sixty (60) days
written notice of the time, place, and purposes of the meeting, at the
Corporation's then registered office in the State of New Jersey, or at such
other time and place as shall be specified in the notice of the meeting, in
order to elect directors of the Corporation and transact such other
business as shall come before the meeting. If that date is a legal
holiday, the meeting shall be held at the same time and place on the next
succeeding business day.
SECTION 2:- SPECIAL MEETINGS OF SHAREHOLDERS --
Special meetings of shareholders may be called, for any purpose or purposes,
by the President or the Board of Directors, or by any member of the Board of
Directors of the Corporation. Special meetings shall be held at the
Corporation's then registered office in the State of , or at such
other place as shall be specified in the notice of the meeting.
SECTION 3:- ACTION WITHOUT SHAREHOLDER MEETING --
Meetings of the shareholders may be dispensed with, and any action requiring
shareholder approval accomplished, by the execution of a written consent in
lieu of such meeting signed by all shareholders who would have been
entitled to vote upon such action if the meeting had been held.
SECTION 4:- BOARD OF DIRECTORS; REGULAR MEETINGS --
The number of directors shall consist of one or more members. Directors
shall be at least eighteen years of age.
A regular meeting of the Board of Directors for the election of officers and
such other business as may come before the meeting, shall be held without
notice immediately following the annual shareholders' meeting at the same
place. The Board may provide for additional regular meetings, which may be
held without notice, except to members not present at the time of the
adoption of the resolution, by resolution adopted at any meeting of the
Board.
SECTION 5:- SPECIAL MEETINGS OF THE BOARD --
Special meetings of the Board for any purpose or purposes may be called at any
time by the President or by one Director. Such meetings shall be held upon two
days notice, given personally or by telephone or telegraph, or by four days
notice, given by depositing notice in the United States mails, postage
prepaid. Such notice shall specify the time and place of the meeting.
SECTION 6:- ACTION WITHOUT MEETING --
The Board may act without a meeting if, prior or subsequent to such action,
each member of the Board shall consent, in writing, to such action. Such
written consent, or consents, shall be filed with the Minutes of the
Corporation.
SECTION 7:- QUORUM OF BOARD OF DIRECTORS --
A majority of the entire Board shall constitute a quorum for the
transaction of business.
SECTION 8:- VACANCIES IN BOARD OF DIRECTORS --
Any vacancy in the Board, not including a vacancy caused by an increase in
the number of Directors, may only be filled by the affirmative vote of a
majority of the remaining Directors, even though less than a quorum of the
Board. Any Directorship to be filled by reason of an increase in the
number of Directors shall be filled by election at an annual meeting, or a
special meeting of the stockholders called for that purpose. This by-law
may be amended or repealed only by the affirmative vote of a majority of
votes cast at a meeting of the shareholders.
SECTION 9:- WAIVERS OF NOTICE --
Any notice required by these by-laws, the Certificate of Incorporation, or by
the Corporation Act, may be waived by a writing, signed by the person or
persons entitled to such notice, either before or after the time stated
therein. Any director or shareholder attending a meeting without
protesting, prior to its conclusion, a lack of notice shall be deemed to
have waived notice of such meeting.
SECTION 10:- OFFICERS --
At its regular meeting, following the annual meeting of shareholders, the
Board shall elect a President, a Treasurer, a Secretary, and such other
officers as it shall deem necessary. One person may hold two or more
offices, but the same person shall not be both President and Secretary.
SECTION 11:- DUTIES AND AUTHORITY OF PRESIDENT --
The President shall be chief executive officer of the Corporation. He
shall have general charge and supervision over, and responsibility for the
business and affairs of the Corporation. Unless otherwise directed by the
Board, all other officers shall be subject to the authority and supervision
of the President. The President may enter into and execute in the name of
the Corporation contracts or other instruments not in the regular course of
business which are authorized, either generally or specifically, by the
Board. He shall have the general powers and duties of management usually
vested in the office of President of a corporation.
SECTION 12:- DUTIES AND AUTHORITY OF TREASURER --
The Treasurer shall have the custody of the funds and securities of the
Corporation and shall keep or cause to be kept regular books of account for
the Corporation. The Treasurer shall perform such other duties and possess
such other powers as are incident to his office, or as, shall be assigned
to him by the President or the Board.
SECTION 13:- DUTIES AND AUTHORITY OF SECRETARY --
The Secretary shall cause notices of all meetings to be served, as
prescribed in these by-laws, and shall keep, or cause to be kept, the
minutes of all meetings of the shareholders, and the Board. The Secretary
shall have charge of the seal of the Corporation. He shall perform such
other duties and possess such other powers as are incident to his office,
or as are assigned to him by the President or the Board.
SECTION 14:- AMENDMENTS TO BY-LAWS --
Unless otherwise specified in the Certificate of Incorporation, or
elsewhere in these by-laws, any or all of these by-laws may be altered,
amended or repealed by the shareholders or the Board. Any by-law adopted,
amended or repealed by the shareholders may be amended or repealed by the
Board, unless the resolution of the shareholders adopting such by-laws
expressly reserves the right to amend or repeal it to the shareholders.
SECTION 15:- FISCAL YEAR --
The first and each subsequent fiscal year of the Corporation shall be as
determined by the Board of Directors of the Corporation, which determination
shall be made subject to all applicable laws and regulations, and which
determination may be changed by said Directors, subject to all applicable laws
and regulations.
SECTION 16:- LOANS TO OFFICERS OR EMPLOYEES --
A Corporation may lend money to, or guarantee any obligation of, or otherwise
assist, any officer or other employee of the Corporation or of any subsidiary,
whenever, in the judgment of the Directors, such loan, guarantee or assistance
may reasonably be expected to benefit the Corporation, and may lend money to,
guarantee any obligation of, or otherwise assist, any officer or other
employee who is also a Director of the Corporation. Any such loan,
guarantee or assistance shall only be permitted if authorized by a majority
of the entire Board. The loan, guarantee, or other assistance may be made
with or without interest, and may be unsecured, or secured, in such manner
as the Board shall approve, including, without limitation, a pledge of
shares of the Corporation, and may be made upon such other terms and
conditions as the Board may determine.
SECTION 17:- FORCE AND EFFECT OF BY-LAWS --
These by-laws are subject to the provisions of the New Jersey Business
Corporation Act and the Corporation's Certificate of Incorporation, as it
may be amended from time to time. If any provision in these by-laws is
inconsistent with a provision in that Act, or the Certificate of
Incorporation, the provisions of that Act, or the Certificate of
Incorporation, shall govern to the extent of such inconsistency.
EXHIBIT 3.23
STATE OF NEW JERSEY
DEPARTMENT OF STATE
FILING CERTIFICATION (CERTIFIED COPY)
REI DISTRIBUTORS INC.
I, the Secretary of State of the State of New Jersey, do hereby certify,
that the above named business did file and record in this department the
below listed document(s) and that the foregoing is a true copy of the
CERTIFICATE OF INCORPORATION & MERGER as the same is taken from and
compared with the original(s) filed in this office on the date set forth on
each instrument and now remaining on file and of record in my office.
IN TESTIMONY WHEREOF, I have
hereunto set my hand and affixed my
Official Seal at Trenton, this
25th day of February, 1998
/s/ Lonna R Hooks
LONNA R HOOKS
Secretary of State
CERTIFICATE OF INCORPORATION
OF
REI DISTRIBUTORS INC.
* * * * * *
To: The Secretary of State
State of New Jersey
THE UNDERSIGNED, of the age of eighteen years or over, for the purpose
of forming a corporation pursuant to the provisions of Title 14A,
Corporations, General, of the New Jersey Statutes, do hereby execute the
following Certificate of Incorporation:
FIRST: The name of the corporation is
REI DISTRIBUTORS INC.
SECOND: The purpose or purposes for which the corporation is organized
are:
To engage in any activity within the lawful business purposes for which
corporations may be organized under the New Jersey Business Corporation Act.
To manufacture, purchase or otherwise acquire, invest in, own, mortgage,
pledge, sell, assign and transfer or otherwise dispose of, trade, deal in and
deal with goods, wares and merchandise and personal property of every class and
description.
To acquire, and pay for in cash, stock or bonds of this corporation or
otherwise, the good will, rights, assets and property, and to undertake or
assume the whole or any part of the obligations or liabilities of any person,
firm, association or corporation.
To acquire, hold, use, sell, assign, lease, grant licenses in respect of,
mortgage or otherwise dispose of letters patent of the United States or any
foreign country, patent rights, licenses and privileges, inventions,
improvements and processes, copyrights, trade-marks and trade names, relating
to or useful in connection with any business of this corporation.
To acquire by purchase, subscription or otherwise, and to receive, hold,
own, guarantee, sell, assign, exchange, transfer, mortgage, pledge or otherwise
dispose of or deal in and with any of the shares of the capital stock, or any
voting trust certificates in respect of the shares of capital stock, scrip,
warrants, rights, bonds, debentures, notes, trust receipts, and other
securities, obligations, choses in action and evidences of indebtedness or
interest issued or created by any corporations, joint stock companies,
syndicates, associations, firms, trusts or persons, public or private, or by
the government of the United States of America, or by any foreign government,
or by any state, territory, province, municipality or other political
subdivision or by any governmental agency, and as owner thereof to possess and
exercise all the rights, powers and privileges of ownership, including the
right to execute consents and vote thereon, and to do any and all acts and
things necessary or advisable for the preservation, protection, improvement
and enhancement in value thereof.
To borrow or raise moneys for any of the purposes of the corporation and,
from time to time without limit as to amount, to draw, make, accept, endorse,
execute and issue promissory notes, drafts, bills of exchange, warrants, bonds,
debentures and other negotiable or non-negotiable instruments and evidences of
indebtedness, and to secure the payment of any thereof and of the interest
thereon by mortgage upon or pledge, conveyance or assignment in trust of the
whole or any part of the property of the corporation, whether at the time
owned or thereafter acquired, and to sell, pledge or otherwise dispose of such
bonds or other obligations of the corporation for its corporate purposes.
To purchase, receive, take by grant, gift, devise, bequest or otherwise,
lease, or otherwise acquire, own, hold, improve, employ, use and otherwise deal
in and with real or personal property, or any interest therein, wherever
situated, and to sell, convey, lease, exchange, transfer or otherwise dispose
of, or mortgage or pledge, all or any of the corporation's property and
assets, or any interest therein, wherever situated.
In general, to carry on any other business in connection with the
foregoing, and to have and exercise all the powers conferred by Title 14A,
Corporations, General, Revised Statutes of New Jersey, and to do any or all of
the things hereinbefore set forth to the same extent as natural persons might
or could do, and in any part of the world.
The foregoing clauses shall be construed both as objects and powers and,
except where otherwise expressed, such objects and powers shall be in nowise
limited or restricted by reference to or inference from the terms of any other
clause in this certificate of incorporation, but the objects and powers so
specified shall be regarded as independent objects and powers, and it is
hereby expressly provided that the foregoing enumeration of specific powers
shall not be held to limit or restrict in any manner the powers of the
corporation.
THIRD: The aggregate number of shares which the corporation shall have
authority to issue is two thousand five hundred (2,500) without par value.
FOURTH: The address of the corporation's initial registered office is 1
Bedford Court, East Brunswick, New Jersey 08816, and the name of the
corporation's initial registered agent at such address in Simon Sinnreich.
FIFTH: The number of directors constituting the initial board of
directors shall be three (3); and the names and addresses of the directors are
as follows:
NAMES ADDRESSES
Simon Sinnreich 1 Bedford Court
East Brunswick, N.J. 08816
Barry William Becker 81 Shrewsbury Drive
Livingston, N.J. 07039
Murray Fox Pompeo Road
Wilsonville, Connecticut 06255
SIXTH: The names and addresses of the incorporators are as follows:
NAMES ADDRESSES
Stephen Frayne 1633 Broadway
New York, New York 10019
John L. Vaughan 1633 Broadway
New York, New York 10019
Kit Raseaman 1633 Broadway
New York, New York 10019
SEVENTH: The duration of the corporation shall be perpetual.
IN WITNESS WHEREOF, we, the incorporators of the above named
corporation, have hereunto signed this Certificate of Incorporation on the 9
day of November, 1981.
/s/ Stephen Frayne
/s/ John L. Vaughan
/s/ Kit Raseman
Filed
Nov 17, 1981
Donald Lan
Secretary of State
0100154418
REI DISTRIBUTORS INC.
* * * * * * * * * * * * * * * * *
CERTIFICATE
OF
INCORPORATION
* * * * * * * * * * * * * * * * * * * *
Organized under the laws of the
STATE OF NEW JERSEY
* * * * * * * * * * * * * * * * * * * *
CT CORPORATION SYSTEM
28 W. STATE STREET
TRENTON, N.J. 08608
FILED
Sep 17 1991
JOAN HABERLE
Secretary of State
0719704
ARTICLES OF MERGER
OF
REI DISTRIBUTORS, INC.
AND
PTI ACQUISITION CORP.
Under Section 14A:10-4 of the New Jersey
Business Corporation Act
Pursuant to the provisions of Section 14A:10-4 of the New Jersey
Business Corporation Act, the undersigned hereby certify:
FIRST: That the following Plan of Merger has been duly approved by the
Board of Directors of each of the constituent corporations:
(a) The name of each of the constituent corporation is REI Distributors,
Inc. (REI) and PTI Acquisition Corp. (PTA) and the name of the surviving
corporation is REI Distributors, Inc.
(b) The terms and conditions of the proposed merger and the manner and
basis of converting the shares of each constituent corporation are as follows:
The shareholders of REI, the surviving corporation, will
receive 2,288.09 shares of common stock of Pure Tech
International, Inc. (PTI) and 11,440.44 shares of Convertible
Class A Preferred Stock of PTI for each share of common stock
of REI.
Pure Tech International, Inc. is the parent
corporation of PTI Acquisition Corp.
SECOND: As to each corporation, the number of shares entitled to
vote, and the number and designation of the shares of any class or series
entitled to vote as a class or series, are:
<TABLE>
<S> <C> <C> <C>
Designation Number of Shares
of Class or Outstanding
Total Number Series Entitled of Such Class
Name of of Shares to Vote as a Class or Series
Corporation Entitled to Vote or Series (if any) (if any)
- --------------- ---------------- ------------------ -----------------
PTA 100 Common Stock 10
REI 2,500 Common Stock 1,136.32
</TABLE>
As to each corporation, the number of shares voted for and against
the Plan, respectively, and the number of shares of any class, or series,
entitled to vote as a class or series voted for and against the Plan are:
<TABLE>
<S> <C> <C> <C>
Class
Name of Total Shares Total Shares of
Corporation Voted for Voted Against Series
- ----------- ------------ -------------- -------
PTA 10 0 N/A
REI 1,136.32 0 N/A
</TABLE>
THIRD: The applicable provisions of the laws of under which was
organized have been complied with in respect to the merger.
IN WITNESS WHEREOF, each of the corporations, parties hereto, has caused
this Certificate to be executed on its behalf by its President.
Dated: September 17, 1991
REI DISTRIBUTORS, INC.
By /s/ Simon Sinnreich
Simon Sinnreich, President
PTI ACQUISITION CORP.
By /s/ David C. Katz
David Katz, Sole Director
Chairman of the Board
STATE OF NEW JERSEY )
) ss:
COUNTY OF SOMERSET )
I, Aleena B. Maher a Notary Public, do hereby certify that on the 17
day of September, 1991, Simon Sinnreich personally appeared before me,
being first duly sworn by me, acknowledged that he signed the foregoing
document in the capacity therein set forth and declared that the statements
therein contained are true.
IN WITNESS WHEREOF, I have hereunto set my hand and seal the day and
year before written.
/s/ Aleena B. Maher
Notary Public
ALEENA B. MAHER
Notary Public, State of New York
No. 31-4932617
Qualified in New York County
Commission Expires October 24, 1992
STATE OF NEW JERSEY )
) ss:
COUNTY OF SOMERSET )
I, Aleena B. Maher a Notary Public, do hereby certify that on the 17
day of September, 1991, David C. Katz personally appeared before me, being
first duly sworn by me, acknowledged that he signed the foregoing document
in the capacity therein set forth and declared that the statements therein
contained are true.
IN WITNESS WHEREOF, I have hereunto set my hand and seal the day and
year before written.
/s/ Aleena B. Maher
Notary Public
ALEENA B. MAHER
Notary Public, State of New York
No. 31-4932617
Qualified in New York County
Commission Expires October 24, 1992
EXHIBIT 3.24
REI DISTRIBUTORS INC.
* * * * *
B Y-L A W S
* * * * *
ARTICLE I
OFFICES
Section 1. The registered office shall be located in East
Brunswick, New Jersey.
Section 2. The corporation may also have offices at such other
places both within and without the State of New Jersey as the board of
directors may from time to time determine or the business of the corporation
may require.
ARTICLE II
ANNUAL MEETINGS OF SHAREHOLDERS
Section 1. All meetings of shareholders for the election of
directors shall be held in the City of Hillside, State of New Jersey, at such
place as may be fixed from time to time by the board of directors.
Section 2. Annual meetings of shareholders, commencing with
the year 1982, shall be held on the 3rd day of November, if not a legal
holiday, and if a legal holiday, then on the next secular day following, at 10
A. M. , or at such other date and time as shall be fixed from time to time by
the board of directors and stated in the notice of meeting, at which the
shareholders shall elect by a plurality vote a board of directors, and
transact such other business as may properly be brought before the meeting.
Section 3. Written notice of the annual meeting stating the
time, place, and purpose and purposes of the meeting shall be delivered not
less than ten nor more than sixty days before the date of the meeting, either
personally or by mail, to each shareholder of record entitled to vote at such
meeting.
ARTICLE III
SPECIAL MEETINGS OF SHAREHOLDERS
Section 1. Special meetings of shareholders for any purpose
other than the election of directors may be held at such time and place within
or without the State of New Jersey as shall be stated in the notice of the
meeting or in a duly executed waiver of notice thereof.
Section 2. Special meetings of the shareholders, for any
purpose or purposes, unless otherwise prescribed by statute or by the
certificate of incorporation, may be called by the president, the board of
directors, or the holders of not less than fifty one percent of all the shares
entitled to vote at the meeting. Special meetings of the shareholders may be
called also by the chairman of the board of directors.
Section 3. Written notice of a special meeting stating the
time, place, and purpose or purposes of the meeting for which the meeting is
called, shall be delivered not less than ten nor more than sixty days before
the date of the meeting, either personally or by mail, by or at the direction
of the president, the secretary, or the officer or persons calling the
meeting, to each shareholder of record entitled to vote at such meeting.
Section 4. Business transacted at any special meeting shall be
confined to the purpose or purposes stated in the notice thereof.
ARTICLE IV
QUORUM AND VOTING OF STOCK
Section 1. The holders of a majority of the shares of stock
issued and outstanding and entitled to vote, represented in person or by
proxy, shall constitute a quorum at all meetings of the shareholders for the
transaction of business except as otherwise provided by statute or by the
certificate of incorporation. If however, such quorum shall not be present or
represented at any meeting of the shareholders, the shareholders present in
person or represented by proxy shall have power to adjourn the meeting from
time to time, without notice other than announcement at the meeting,
until a quorum shall be present or represented. At such adjourned meeting
at which a quorum shall be present or represented any business may be
transacted which might have been transacted at the meeting as originally
notified.
Section 2. If a quorum is present, the affirmative vote of a
majority of the shares of stock represented at the meeting shall be the act of
the shareholders unless the vote of a greater number of shares of stock is
required by law or the certificate of incorporation.
Section 3. Each outstanding share of stock, having voting
power, shall be entitled to one vote on each matter submitted to a vote at a
meeting of shareholders, unless otherwise provided in the certificate of
incorporation. A shareholder may vote either in person or by proxy executed in
writing by the shareholder or by his agent.
In all elections for directors every shareholder, entitled to
vote, shall have the right to vote, in person or by proxy, the number of
shares of stock owned by him, for as many persons as there are directors to be
elected and for whose election he has a right to vote, or, if the certificate
of incorporation so provides, to cumulate the vote of said shares, and give
one candidate as many votes as the number of directors multiplied by the
aggregate number of his votes shall equal, or to distribute the votes on the
same principle among as many candidates as he may see fit.
Section 4. Subject to statutory provisions, any action
required to be taken at a meeting of the shareholders may be taken without a
meeting if a consent in writing, setting forth the action so taken, shall be
signed by all of the shareholders entitled to vote with respect to the subject
matter thereof.
Except as provided in the certificate of incorporation and
subject to the statutory provisions and upon compliance therewith any action
required to be taken at a meeting of shareholders, other than the annual
election of directors, may be taken without a meeting upon the written consent
of shareholders who would have been entitled to cast the minimum number of
votes which would be necessary to authorize such action at a meeting at which
all shareholders entitled to vote thereon were present and voting.
ARTICLE V
DIRECTORS
Section 1. The number of directors which shall constitute the
whole board of directors, other than the first board of directors, shall be
three. Directors need not be residents of the State of New Jersey nor
shareholders of the corporation. The directors, other than the first board of
directors, shall be elected at the annual meeting of the shareholders, and
each director elected shall serve until the next succeeding annual meeting and
until his successor shall have been elected and qualified. The first board of
directors shall hold office until the first annual meeting of shareholders.
Section 2. Unless otherwise provided in the certificate of
incorporation, any vacancy occurring in the board of directors may be filled
by the affirmative vote of a majority of the remaining directors though less
than a quorum of the board of directors. A director elected to fill a vacancy
shall be elected for the unexpired portion of the term of his predecessor in
office.
Any directorship to be filled by reason of an increase in the
number of directors shall be filled by election at an annual meeting or at a
special meeting of shareholders called for that purpose. A director elected
to fill a newly created directorship shall serve until the next succeeding
annual meeting of shareholders and until his successor shall have been elected
and qualified.
Section 3. The business affairs of the corporation shall be
managed by its board of directors which may exercise all such powers of the
corporation and do all such lawful acts and things as are not by statute or by
the certificate of incorporation or by these by-laws directed or required
to be exercised or done by the shareholders.
Section 4. The directors may keep the books and records of the
corporation, except such as are required by law to be kept within the state,
outside of the State of New Jersey, at such place or places as they may from
time to time determine.
Section 5. The board of directors, by the affirmative vote of
a majority of the directors then in office, and irrespective of any personal
interest of any of its members, shall have authority to establish reasonable
compensation of all directors for services to the corporation as directors,
officers or otherwise.
ARTICLE VI
MEETINGS OF THE BOARD OF DIRECTORS
Section 1. Meetings of the board of directors, regular or
special, may be held either within or without the State of New Jersey.
Section 2. The first meeting of each newly elected board of
directors shall be held at such time and place as shall be fixed by the vote
of the shareholders at the annual meeting and no notice of such meeting shall
be necessary to the newly elected directors in order legally to constitute the
meeting, provided a quorum shall be present, or it may convene at such place
and time as shall be fixed by the consent in writing of all the directors.
Section 3. Regular meetings of the board of directors may be
held upon such notice, or without notice, and at such time and at such place
as shall from time to time be determined by the board.
Section 4. Special meetings of the board of directors may be
called by the president on ten days' notice to each director, either
personally or by mail or by telegram; special meetings shall be called by the
president or secretary in like manner and on like notice on the written
request of two directors. Notice need not be given to any director who signs
a waiver of notice, whether before or after the meeting.
Section 5. Attendance of a director at any meeting shall
constitute a waiver of notice of such meeting, except where a director attends
for the express purpose of objecting to the transaction of any business
because the meeting is not lawfully called or convened. Neither the business
to be transacted at, nor the purpose of, any regular or special meeting of the
board of directors need be specified in the notice or waiver of notice of such
meeting.
Section 6. A majority of the directors shall constitute a
quorum for the transaction of business unless a greater or lesser number is
required by statute or by the certificate of incorporation. The act of a
majority of the directors present at any meeting at which a quorum is present
shall be the act of the board of directors, unless the act of a greater or
lesser number is required by statute or by the certificate of incorporation.
If a quorum shall not be present at any meeting of directors, the directors
present thereat may adjourn the meeting from time to time, without notice
other than announcement at the meeting, until a quorum shall be present.
Section 7. Unless otherwise provided by the certificate of
incorporation, any action required to be taken at a meeting of the board, or
any committee thereof, shall be deemed the action of the board of directors or
of a committee thereof, if all directors or committee members, as the case may
be, execute either before or after the action is taken, a written consent
thereto, and the consent is filed with the records of the corporation.
ARTICLE VII
EXECUTIVE COMMITTEE
Section 1. The board of directors, by resolution adopted by
a majority of the number of directors fixed by the by-laws or otherwise,
may designate one or more directors to constitute an executive committee,
which committee, to the extent provided in such resolution, shall have and
exercise all of the authority of the board of directors in the management
of the corporation, except as otherwise required by law. Vacancies in the
membership of the committee shall be filled by the board of directors at a
regular or special meeting of the board of directors. The executive
committee shall keep regular minutes of its proceedings and report the same
to the board when required.
ARTICLE VIII
NOTICES
Section 1. Whenever, under the provisions of the statutes or
of the certificate of incorporation or of these by-laws, notice is required to
be given to any director or shareholder, it shall not be construed to mean
personal notice, but such notice may be given in writing, by mail, addressed
to such director or shareholder, at his address as it appears on the records
of the corporation, with postage thereon prepaid, and such notice shall be
deemed to be given at the time when the same shall be deposited in the United
States mail. Notice to directors may also be given by telegram.
Section 2. Whenever any notice whatever is required to be
given under the provisions of the statutes or under the provisions of the
certificate of incorporation or these by-laws, a waiver thereof in writing
signed by the person or persons entitled to such notice, whether before or
after the time stated therein, shall be deemed equivalent to the giving of
such notice.
ARTICLE IX
OFFICERS
Section 1. The officers of the corporation shall be chosen by
the board of directors and shall be a president, a vice-president, a secretary
and a treasurer. The board of directors may also choose additional
vice-presidents, and one or more assistant secretaries and assistant
treasurers.
Section 2. The board of directors at its first meeting after
each annual meeting of shareholders shall choose a president, one or more
vice-presidents, a secretary and a treasurer, none of whom need be a member of
the board.
Section 3. The board of directors may appoint such other
officers and agents as it shall deem necessary who shall hold their offices
for such terms and shall exercise such powers and perform such duties as
shall be determined from time to time by the board of directors.
Section 4. The salaries of all officers and agents of the
corporation shall be fixed by the board of directors.
Section 5. The officers of the corporation shall hold office
until their successors are chosen and qualify. Any officer elected or
appointed by the board of directors may be removed at any time by the
affirmative vote of a majority of the board of directors. Any vacancy
occurring in any office of the corporation shall be filled by the board of
directors.
THE PRESIDENT
Section 6. The president shall be the chief executive officer
of the corporation, shall preside at all meetings of the shareholders and the
board of directors, shall have general and active management of the business
of the corporation and shall see that all orders and resolutions of the board
of directors are carried into effect.
Section 7. He shall execute bonds, mortgages and other
contracts requiring a seal, under the seal of the corporation, except where
required or permitted by law to be otherwise signed and executed and except
where the signing and execution thereof shall be expressly delegated by the
board of directors to some other officer or agent of the corporation.
THE VICE-PRESIDENTS
Section 8. The vice-president, or if there shall be more than
one, the vice-presidents in the order determined by the board of directors,
shall, in the absence or disability of the president, perform the duties
and exercise the powers of the president and shall perform such other
duties and have such other powers as the board of directors may from time
to time prescribe.
THE SECRETARY AND ASSISTANT SECRETARIES
Section 9. The secretary shall attend all meetings of the
board of directors and all meetings of the shareholders and record all the
proceedings of the meetings of the corporation and of the board of
directors in a book to be kept for that purpose and shall perform like
duties for the standing committees when required. He shall give, or cause
to be given, notice of all meetings of the shareholders and special
meetings of the board of directors, and shall perform such other duties as
may be prescribed by the board of directors or president, under whose
supervision he shall be. He shall have custody of the corporate seal of
the corporation and he, or an assistant secretary, shall have authority to
affix the same to any instrument requiring it and when so affixed, it may
be attested by his signature or by the signature of such assistant
secretary. The board of directors may give general authority to any other
officer to affix the seal of the corporation and to attest the affixing by
his signature.
Section 10. The assistant secretary, or if there be more than
one, the assistant secretaries in the order determined by the board of
directors, shall, in the absence or disability of the secretary, perform the
duties and exercise the powers of the secretary and shall perform such other
duties and have such other powers as the board of directors may from time to
time prescribe.
THE TREASURER AND ASSISTANT TREASURERS
Section 11. The treasurer shall have the custody of the
corporate funds and securities and shall keep full and accurate accounts of
receipts and disbursements in books belonging to the corporation and shall
deposit all moneys and other valuable effects in the name and to the credit of
the corporation in such depositories as may be designated by the board of
directors.
Section 12. He shall disburse the funds of the corporation as
may be ordered by the board of directors, taking proper vouchers for such
disbursements, and shall render to the president and the board of directors,
at its regular meetings, or when the board of directors so requires, an
account of all his transactions as treasurer and of the financial condition of
the corporation.
Section 13. If required by the board of directors, he shall
give the corporation a bond in such sum and with such surety or sureties as
shall be satisfactory to the board of directors for the faithful performance
of the duties of his office and for the restoration to the corporation, in
case of his death, resignation, retirement or removal from office, of all
books, papers, vouchers, money and other property of whatever kind in his
possession or under his control belonging to the corporation.
Section 14. The assistant treasurer, or, if there shall be
more than one, the assistant treasurers in the order determined by the board
of directors, shall, in the absence or disability of the treasurer, perform
the duties and exercise the powers of the treasurer and shall perform such
other duties and have such other powers as the board of directors may from
time to time prescribe.
ARTICLE X
CERTIFICATES FOR SHARES
Section 1. The shares of the corporation shall be represented
by certificates signed by, the chairman or vice-chairman of the board, or the
president or a vice-president and by the treasurer or an assistant treasurer,
or the secretary or an assistant secretary of the corporation, and may be
sealed with the seal of the corporation or a facsimile thereof.
When the corporation is authorized to issue shares of more than
one class there shall be set forth upon the face or back of the certificate,
or the certificate shall have a statement that the corporation will furnish to
any shareholder upon request and without charge, a full statement of the
designations, preferences, limitations and relative rights of the shares of
each class authorized to be issued and, if the corporation is authorized to
issue any preferred or special class in series, the variations in the relative
rights and preferences between the shares of each such series so far as the
same have been fixed and determined and the authority of the board of
directors to fix and determine the relative rights and preferences of
subsequent series.
Section 2. The signatures of the officers of the corporation
upon a certificate may be facsimiles if the certificate is countersigned by a
transfer agent, or registered by a registrar, other than the corporation
itself or an employee of the corporation. In case any officer who has signed
or whose facsimile signature has been placed upon such certificate shall have
ceased to be such officer before such certificate is issued, it may be issued
by the corporation with the same effect as if he were such officer at the date
of its issue.
LOST CERTIFICATES
Section 3. The board of directors may direct a new certificate
to be issued in place of any certificate theretofore issued by the corporation
alleged to have been lost or destroyed. When authorizing such issue of a new
certificate, the board of directors, in its discretion and as a condition
precedent to the issuance thereof, may prescribe such terms and conditions as
it deems expedient, and may require such indemnities as it deems adequate, to
protect the corporation from any claim that may be made against it with
respect to any such certificate alleged to have been lost or destroyed.
TRANSFERS OF SHARES
Section 4. Upon surrender to the corporation or the transfer
agent of the corporation of a certificate representing shares duly endorsed or
accompanied by proper evidence of succession, assignment or authority to
transfer, a new certificate shall be issued to the person entitled thereto,
and the old certificate cancelled and the transaction recorded upon the books
of the corporation.
CLOSING OF TRANSFER BOOKS
Section 5. For the purpose of determining shareholders
entitled to notice of or to vote at any meeting of shareholders or any
adjournment thereof or entitled to receive payment of any dividend or
allotment of any right, or entitled to give a written consent to any action
without a meeting, or in order to make a determination of shareholders for any
other proper purpose, the board of directors may provide that the stock
transfer books shall be closed for a stated period but not to exceed, in any
case, sixty days. If the stock transfer books shall be closed for the purpose
of determining shareholders entitled to notice of or to vote at a meeting of
shareholders, such books shall be closed for at least ten days immediately
preceding such meeting. If the stock transfer book shall be closed for the
purpose of determining shareholders entitled to give a written consent to
any action without a meeting, such books may not be closed for more than
sixty days before the date fixed for tabulation of consents or if no date
has been fixed for tabulation, the books may not be closed for more than
sixty days before the last day on which consents received may be counted.
In lieu of closing the stock transfer books, the board of directors may fix
in advance a date as the record date for any such determination of
shareholders, such date in any case to be not more than sixty days and, in
case of a meeting of shareholders, not less than ten days prior to the date
on which the particular action, requiring such determination of
shareholders, is to be taken and, in case of determining shareholders
entitled to give a written consent the record date may not be more than
sixty days before the date fixed for tabulation of the consents or if no
date has been fixed for the tabulation, more than sixty days before the
last day on which consents may be counted. If the stock transfer books are
not closed and no record date is fixed, the record date for a shareholders'
meeting shall be the close of business on the day next preceding the day on
which notice is given, or, if no notice is given, the day next preceding
the day on which the meeting is held; and the record date for determining
shareholders for any other purpose shall be at the close of business on the
day on which the resolution of the board relating thereto is adopted. When
a determination of shareholders of record for a shareholders' meeting has
been made as provided in this section, such determination shall apply to
any adjournment thereof unless the board fixes a new record date for the
adjourned meeting.
REGISTERED SHAREHOLDERS
Section 6. The corporation shall be entitled to recognize the
exclusive right of a person registered on its books as the owner of shares to
receive dividends, and to vote as such owner, and to hold liable for calls and
assessments a person registered on its books as the owner of shares, and shall
not be bound to recognize any equitable or other claim to or interest in such
share or shares on the part of any other person, whether or not it shall have
express or other notice thereof, except as otherwise provided by the laws of
New Jersey.
LIST OF SHAREHOLDERS
Section 7. The officer or agent having charge of the transfer
books for shares shall make, and certify a complete list of the shareholders
entitled to vote at a shareholders' meeting, or adjournment thereof, arranged
in alphabetical order within each class, series, or group of shareholders
maintained by the corporation for convenience of reference, with the address
of, and the number of shares held by each shareholder, which list shall be
produced and kept open at the time and place of the meeting and shall be
subject to the inspection of any shareholder during the whole time of the
meeting. Such list shall be prima facie evidence as to who are the
shareholders entitled to examine such list or to vote at any meeting of the
shareholders.
ARTICLE XI
GENERAL PROVISIONS
DIVIDENDS
Section 1. Subject to the provisions of the certificate of
incorporation relating thereto, if any, dividends may be declared by the board
of directors at any regular or special meeting, pursuant to law. Dividends
may be paid in cash, in its bonds, in its own shares or other property
including the shares or bonds of other corporations subject to any provisions
of law and of the certificate of incorporation.
Section 2. Before payment of any dividend, there may be set
aside out of any funds of the corporation available for dividends such sum or
sums as the directors from time to time, in their absolute discretion, think
proper as a reserve fund to meet contingencies, or for equalizing dividends,
or for repairing or maintaining any property of the corporation, or for such
other purpose as the directors shall think conducive to the interest of the
corporation, and the directors may modify or abolish any such reserve in the
manner in which it was created.
CHECKS
Section 3. All checks or demands for money and notes of the
corporation shall be signed by such officer or officers or such other person
or persons as the board of directors may from time to time designate.
FISCAL YEAR
Section 4. The fiscal year of the corporation shall be fixed
by resolution of the board of directors.
SEAL
Section 5. The corporate seal shall have inscribed thereon the
name of the corporation, the year of its organization and the words "Corporate
Seal, New Jersey". The seal may be used by causing it or a facsimile thereof
to be impressed or affixed or in any manner reproduced.
ARTICLE XII
AMENDMENTS
Section 1. These by-laws may be altered, amended, or repealed
or new by-laws may be adopted by the affirmative vote of a majority of the
board of directors at any regular or special meeting of the board, subject to
any provision in the certificate of incorporation reserving to the
shareholders the power to adopt, amend, or repeal by-laws, but by-laws made by
the board may be altered or repealed and new by-laws made by the shareholders.
The shareholders may prescribe that any by-law made by them shall not be
altered or repealed by the board.
EXHIBIT 3.25
(Department of Corporations Use Only) Department of Corporations File No.,
Fee Paid $25 if any
Receipt No. 202029C-23 (Insert File Number(s) of Previous
Filings Before the Department, if any)
FEE: $25.00 $35.00 $50.00 $150.00 $300.00
(Circle the appropriate amount of fee.
See Corp. Code Section 25608(c))
($25.00 circled)
COMMISSIONER OF CORPORATIONS
STATE OF CALIFORNIA
FEB 2 1994
NOTICE OF TRANSACTION PURSUANT TO CORPORATIONS CODE
SECTION 25102(f)
A. Check one: Transaction under (X) Section 25102(f) (X) Rule 260.103.
1. Name of Issuer: Pure Tech Recycling of California
2. Address of Issuer:
100 Franklin Square Drive, Ste. 105, Somerset, NJ 08875-5250
Street City State ZIP
Mailing Address:
100 Franklin Square Drive, Ste. 105, Somerset, NJ 08875-5250
Street City State ZIP
3. Area Code and Telephone Number: (908) 302-1000
4. Issuer's state (or other jurisdiction) of incorporation or organization:
California
5. Title of class or classes of securities sold in transaction:
Common Stock
6. The value of the securities sold or proposed to be sold in the
transaction, determined in accordance with Corp. Code Sec. 25608(g) in
connection with the fee required upon filing this notice, is (fee based on
amount shown in line (iii) under "Total Offering"):
California Total Offering
(a) (i) in money $100 $100
(ii) in consideration other than money $ 0 $ 0
(iii) total of (i) and (ii) $100 $100
(b) ( ) Change in rights, preferences, privileges or restrictions
of or on outstanding securities. ($25.00 fee.) (See Rule
260.103.)
7. Type of filing under Securities Act of 1933, if applicable: N/A
8. Date of Notice: December 17, 1993 Pure Tech Recycling of California
Issuer
( ) Check if issuer already has a
consent to service of process /s/ Joseph Mastroianni
on file with the Commissioner. Authorized Signature on behalf of issuer
Joseph Mastroianni, President
Print name and title of signatory
Name, Address and Phone number of contact person:
Sheldon H. Wolfe, Esq., Pettit & Martin
101 California Street, 35th Floor
San Francisco, California 94111
Instruction: Each issuer (other than a California corporation) filing a
notice under Section 25102(f) must file a consent to service of process
(Form 260.165), unless it already has a consent to service on file with the
Commissioner.
260.102.14(c) (10/84)
STATE OF CALIFORNIA
MARCH FONG EU P.O. Box 944230
SECRETARY OF STATE Sacramento, CA
STATEMENT BY DOMESTIC STOCK 94244-0230
CORPORATION Phone: (916) 445-2020
(THIS STATEMENT MUST BE FILED
WITH CALIFORNIA SECRETARY OF
STATE (SEC. 1502, CORPORATIONS
CODE)
A $5 FILING FEE MUST ACCOMPANY THIS STATEMENT.
WHEN COMPLETING FORM, PLEASE USE BLACK
TYPEWRITER RIBBON OR BLACK INK
IMPORTANT-Please read Instruction On Back Of Form
1. DUE DATE JANUARY 22, 1994
PURE TECH RECYCLING OF CALIFORNIA
DO NOT ALTER PREPRINTED NAME. IF ITEM NO. 1 IS BLANK, DO NOT WRITE
PLEASE ENTER CORPORATE NAME IN THIS SPACE
THE CALIFORNIA CORPORATION NAMED HEREIN, MAKES THE FOLLOWING STATEMENT.
2.STREET ADDRESS ROOM NO. 2A. CITY AND 2B. ZIP CODE
OF PRINCIPAL 105 STATE 08875-5250
EXECUTIVE OFFICE Somerset, NJ
100 Franklin Square
Drive
3. STREET ADDRESS ROOM NO. 3A. CITY 3B. ZIP CODE
OF PRINCIPAL CA
BUSINESS OFFICE IN
CALIFORNIA (IF ANY)
4. MAILING ADDRESS ROOM NO. 4A. CITY AND 4B. ZIP CODE
100 Franklin Square 105 STATE 08875-5250
Drive Somerset, N.J.
THE NAMES OF THE FOLLOWING OFFICERS ARE:
5. CHIEF EXECUTIVE 5A. STREET 5B. CITY AND 5C. ZIP CODE
OFFICER ADDRESS (SEE STATE 08875-5250
Joseph Mastroianni REVERSE SIDE) Somerset, N.J.
100 Franklin Square
Drive, Ste. 105
6. SECRETARY 6A. STREET 6B. CITY AND 6C. ZIP CODE
Murray Fox ADDRESS (SEE STATE 08875-5250
REVERSE SIDE) Somerset, N.J.
100 Franklin Square
Drive, Ste. 105
7. CHIEF 7A. STREET 7B. CITY AND 7C. ZIP CODE
FINANCIAL ADDRESS (SEE STATE 08875-5250
OFFICER REVERSE SIDE) Somerset, N.J.
Murray Fox 100 Franklin Square
Drive, Ste. 105
INCUMBENT DIRECTORS, INCLUDING DIRECTORS WHO ARE ALSO OFFICERS
(Attach supplemental list if necessary)
8. NAME 8A. STREET 8B. CITY AND 8C. ZIP CODE
Simon Sinnreich ADDRESS (SEE STATE 08875-5250
REVERSE SIDE) Somerset, N.J.
100 Franklin Square
Drive, Ste. 105
9. NAME 9A. STREET 9B. CITY AND 9C. ZIP CODE
David Katz ADDRESS (SEE STATE 08875-5250
REVERSE SIDE) Somerset, N.J.
100 Franklin Square
Drive, Ste. 105
10. NAME 10A. STREET 10B. CITY AND 10C. ZIP CODE
Joseph Mastroianni ADDRESS (SEE STATE 08875-5250
REVERSE SIDE) Somerset, N.J.
100 Franklin Square
Drive, Ste. 105
11. THE NUMBER OF VACANCIES ON THE BOARD OF DIRECTORS, IF ANY: 0
DESIGNATED AGENT FOR SERVICE OR PROCESS (Only one agent may be named)
12. NAME
CT Corporation
13. CALIFORNIA STREET ADDRESS IF AGENT IS AN INDIVIDUAL (DO NOT
USE P.O. BOX) DO NOT INCLUDE ADDRESS IF AGENT IS A CORPORATION.
14. DESCRIBE TYPE OF BUSINESS OF THE CORPORATION NAMED IN ITEM 1.
Recycling of beverage containers
15. I DECLARE THAT I HAVE EXAMINED THIS STATEMENT AND TO THE BEST
OF MY KNOWLEDGE AND BELIEF, IT IS TRUE, CORRECT AND COMPLETE.
Joseph Mastroianni /s/ J. Mastroianni President January , 1994
TYPE OR PRINT NAME OF
SIGNING OFFICER OR AGENT SIGNATURE TITLE DATE
16. I DECLARE THERE HAS BEEN NO CHANGE IN THE INFORMATION
CONTAINED IN THE LAST STATEMENT OF THE CORPORATION WHICH IS ON
FILE IN THE SECRETARY OF STATE'S OFFICE. DOES NOT APPLY ON INITIAL
FILING. (READ INSTRUCTIONS BEFORE
COMPLETING THIS ITEM)
[ ]
(CHECK HERE) TYPE OR PRINT NAME SIGNATURE TITLE DATE
OF SIGNING OFFICER
OR AGENT
* * * * *
S T A T E M E N T
OF
SOLE INCORPORATOR
OF
PURE TECH RECYCLING OF CALIFORNIA
* * * * *
The articles of incorporation of this corporation having been filed
in the office of the Secretary of State, the undersigned, being the sole
incorporator named in said articles, does hereby state that the following
actions were taken on this day for the purpose of organizing this
corporation:
1. The following persons were elected as directors to hold office
until the first annual meeting of stockholders or until their respective
successors are elected and qualified:
Simon Sinnreich
David Katz
Joseph Mastroianni
2. The board of directors was authorized, in its discretion, to
issue the shares of the capital stock of this corporation to the full
amount or number of shares authorized by the articles of incorporation, in
such amounts and for such considerations as from time to time shall be
determined by the board of directors and as may be permitted by law.
Dated: October 22, 1993
/s/ Brendan Dowd
------------------------
Brendan Dowd
STATE OF CALIFORNIA
OFFICE OF THE SECRETARY OF STATE
CORPORATION DIVISION
I, MARCH FONG EU, Secretary of State of the State of California, hereby
certify:
That the annexed transcript has been compared with the corporate record
on file in this office, of which it purports to be a copy, and that same is
full, true and correct.
IN WITNESS WHEREOF, I execute this
certificate and affix the Great Seal of
the State of California this
OCT 27 1993
/s/ March Fong Eu
[SEAL] ------------------------
Secretary of State
ARTICLE OF INCORPORATION
OF
PURE TECH RECYCLING OF CALIFORNIA
ARTICLE I
The name of this corporation shall be: Pure Tech Recycling of
California.
ARTICLE II
The purpose of this corporation is to engage in any lawful act or
activity for which a corporation may be organized under the General
Corporation Law of California other than the banking business, the trust
company business or the practice of a profession permitted to be incorporated
by the California Corporations Code.
ARTICLE III
The name of this corporation's initial agent for service of process is:
CT Corporation System
ARTICLE IV
This corporation is authorized to issue only one class of shares,
and the total number of shares which this corporation is authorized to
issue is 10,000 shares.
ARTICLE V
Section 1. The liability of the directors of the corporation for
monetary damages shall be eliminated to the fullest extent permissible under
California law.
Section 2. The corporation is authorized to provide indemnification of
agents (as defined in Section 317 of the California Corporations Code) through
bylaw provisions, agreements with the agents, vote of shareholders or
disinterested directors, or otherwise, in excess of the indemnification
otherwise permitted by Section 317 of the California Corporations Code,
subject only to the limits set forth in Section 204 of the California
Corporations Code with respect to actions for breach of duty to the corporation
or its shareholders. The corporation is further authorized to provide
insurance for agents as set forth in Section 317 of the California
Corporations Code, provided that, in cases where the corporation owns all or a
portion of the shares of the company issuing the insurance policy, the company
and/or the policy must meet one of the two sets of conditions set forth in
Section 317 of the California Corporations Code.
Section 3. Any appeal or modification of the foregoing provisions of
this Article V by the shareholders of this corporation shall not adversely
affect any right or protection of an agent of this corporation existing at the
time of such repeal or modification.
Dated: October 21, 1993
/s/ Brendan Dowd
------------------------------
Brendan Dowd, Incorporator
UNANIMOUS WRITTEN CONSENT OF DIRECTORS
IN LIEU OF AN ORGANIZATIONAL MEETING
OF
PURE TECH RECYCLING OF CALIFORNIA
The undersigned, constituting all of the directors of Pure Tech
Recycling of California, a California corporation (the "Corporation"), and
acting pursuant to the authority vested in them by Section 307(b) of the
California Corporations Code, do hereby consent to and adopt the following
resolutions, effective on December 17, 1993.
AGENT FOR SERVICE OF PROCESS
RESOLVED, that CT Corporation System is approved as the agent of the
Corporation for the purpose of service of process under section 1502 of the
California General Corporation Law.
BYLAWS
RESOLVED, that the Bylaws, in the form attached hereto and incorporated
herein by reference, are adopted as the Bylaws of the Corporation.
RESOLVED FURTHER, that the Secretary, when elected, is authorized and
directed to execute a Certificate of Adoption of Bylaws and to insert the
Bylaws as certified in the Corporation's Minute Book and to see that a copy of
the Bylaws, similarly certified, is kept at the Corporation's principal
executive office.
ELECTION OF OFFICERS
RESOLVED, that the following persons are elected to the offices
designated after their respective names, to take their respective offices
immediately upon such election:
Name Office
---- ------
Joseph Mastroianni President
Murray Fox Secretary and Treasurer
Paul Litwinczuk Assistant Secretary
CORPORATE SEAL
RESOLVED, that a corporate seal in a form to be determined by the
Secretary is adopted as the seal of the Corporation.
RESOLVED FURTHER, that the Secretary is directed to affix an impression
of the corporate seal in the space immediately following this resolution:
PRINCIPAL EXECUTIVE OFFICE
RESOLVED, that the principal executive office of the Corporation shall
be located at 100 Franklin Square Drive, Ste. 105, Somerset, N.J. 08875-5250.
EXPENSES OF INCORPORATION
RESOLVED, that the Treasurer is authorized and directed to pay the
expenses of the incorporation and organization of the Corporation and to
reimburse the persons advancing funds to the Corporation for this purpose.
SHARE CERTIFICATES
RESOLVED, that the form of share certificate for the Corporation in
the form attached hereto as Exhibit A and incorporated herein by reference
is adopted for use by the Corporation.
STATEMENT BY DOMESTIC STOCK CORPORATION
RESOLVED, that the President or the Secretary is authorized and
directed to prepare and to file or cause to be prepared and filed with the
California Secretary of State the necessary statement in compliance with
Section 1502 of the California General Corporation Law.
RESOLVED FURTHER, that in the event of any change in the agent for
service of process as stated in the aforementioned form, the President or
the Secretary shall execute a new form and send it to the Secretary of
State, and, in addition, those officers are directed to file a new form
annually in accordance with Section 1502 of the California Corporations
Code.
BANKING ACCOUNT
RESOLVED, that the Corporation establish in its name one or more
bank accounts, that the President and the Secretary are authorized to
execute the Bank's standard form of corporate resolution and to establish
such accounts upon such terms and conditions as may be agreed upon with the
Bank.
RESOLVED FURTHER, that the standard form of corporate resolution
required by the Bank for opening a corporate account, in accordance with
the above resolution, is adopted as the resolution of the Board of
Directors, and the Secretary is directed to insert an executed copy of the
Bank's standard form of corporate resolution into the Corporation's Minute
Book following these resolutions.
RESOLVED FURTHER, that the Bank is hereby authorized to honor and
pay any and all checks and drafts signed as provided in the corporate
resolution establishing such accounts, including those drawn or endorsed to
the individual order of any officer or other person authorized to sign the
same.
EMPLOYER IDENTIFICATION AND WITHHOLDING
RESOLVED, that the officers of the Corporation are, and each
individually is, authorized and directed to take all actions deemed necessary
or advisable to secure federal and state employer identification numbers and
to comply with all laws regulating payroll reporting, withholding and taxes.
ISSUANCE OF SHARES
WHEREAS, the Corporation is authorized to issue an aggregate of ten
thousand (10,000) common shares.
WHEREAS, it is proposed that the Corporation sell and issue a total of
one hundred (100) common shares to Pure Tech International, Inc. for the
consideration of One Hundred Dollars ($100.00).
NOW, THEREFORE, BE IT RESOLVED, that the Corporation sell and issue to
Pure Tech International, Inc. for the consideration of One Hundred Dollars
($100.00).
RESOLVED FURTHER, that all of the shares to be issued by the
Corporation in accordance with the foregoing resolution shall be issued in
compliance with the provisions of Section 25102(f) of the California
Corporations Code and with the provisions of such exemption or exemptions from
the registration requirements of the Securities Act of 1933, as amended (the
"1933 Act"), as may be determined to be available therefor.
RESOLVED FURTHER, that the officers of the Corporation are, and each
individually is, authorized to cause to be prepared, and to execute on behalf
of the Corporation (individually and without the requirement of the signature
of any other officer of the Corporation) and cause to be filed with the
appropriate governmental authorities, any and all notices and other documents
that may be required to be filed under the California Corporations Code (or
the regulations thereunder) or the 1933 Act (or the regulations thereunder),
including, without limitation, a "Notice of Sale of Securities Pursuant to
Regulation D, Section 4(6), and/or Uniform Limited Offering Exemption."
SECTION 1244 PLAN
RESOLVED, that it is the intention of the Corporation to offer, sell
and issue its common shares in a manner that qualified shareholders receive
the benefits of Section 1244 of the Internal Revenue Code of 1986.
RESOLVED FURTHER, that the Corporation is a small business corporation
as defined in Section 1244(c)(3) of the Internal Revenue Code of 1986.
RESOLVED FURTHER, that all common shares the Corporation offers, sells
and issues, which qualify as Section 1244 stock as defined in Section
1244(c)(1) of the Internal Revenue Code of 1986 shall be treated as Section
1244 stock.
AUTHORITY
RESOLVED, that the officers of the Corporation are, and each
individually is, authorized to do and perform any and all such acts, including
execution of any and all documents and certificates, as they shall deem
necessary or advisable, to carry out the purposes of the foregoing resolutions.
IN WITNESS WHEREOF, the undersigned, constituting all of the directors
of the Corporation, have executed this consent as of the date set forth above.
/s/ Simon Sinnreich
-----------------------
Simon Sinnreich
/s/ David Katz
-----------------------
David Katz
/s/ Joseph Mastroianni
-----------------------
Joseph Mastroianni
EXHIBIT 3.26
BYLAWS OF
PURE TECH RECYCLING OF CALIFORNIA
TABLE OF CONTENTS
Page
ARTICLE I - OFFICES
Sec. 1.01 Principal Offices..................................... 1
Sec. 1.02 Other Offices......................................... 1
ARTICLE II - SHAREHOLDERS
Sec. 2.01 Annual Meeting........................................ 1
Sec. 2.02 Special Meetings...................................... 2
Sec. 2.03 Place of Meetings..................................... 3
Sec. 2.04 Notice................................................ 3
Sec. 2.05 Manner of Giving Notice; Affidavit of Notice.......... 4
Sec. 2.06 Quorum................................................ 5
Sec. 2.07 Adjourned Meeting; Notice............................. 5
Sec. 2.08 Voting................................................ 6
Sec. 2.09 Waiver of Notice or Consent by Absent Shareholders.... 8
Sec. 2.10 Shareholder Action by Written Consent
Without a Meeting..................................... 9
Sec. 2.11 Record Date for Shareholder Notice, Voting
and Giving Consents...................................10
Sec. 2.12 Proxies...............................................11
Sec. 2.13 Inspectors of Election................................12
Sec. 2.14 Conduct of Meetings...................................13
ARTICLE III - BOARD OF DIRECTORS
Sec. 3.01 Powers................................................14
Sec. 3.02 Number, Tenure and Qualifications.....................14
Sec. 3.03 Regular Meetings......................................15
Sec. 3.04 Special Meetings......................................16
Sec. 3.05 Place of Meetings.....................................16
Sec. 3.06 Participation by Telephone............................17
Sec. 3.07 Quorum................................................17
Sec. 3.08 Action at Meeting.....................................17
Sec. 3.09 Waiver of Notice......................................18
Sec. 3.10 Action Without Meeting................................18
Sec. 3.11 Removal...............................................19
Sec. 3.12 Resignations..........................................19
Sec. 3.13 Vacancies.............................................20
Sec. 3.14 Compensation..........................................20
Sec. 3.15 Committees............................................21
Sec. 3.16 Meetings and Action of Committees.....................21
ARTICLE IV - OFFICERS
Sec. 4.01 Number and Term.......................................22
Sec. 4.02 Inability to Act......................................23
Sec. 4.03 Removal and Resignation...............................23
Sec. 4.04 Vacancies.............................................23
Sec. 4.05 Chairman..............................................23
Sec. 4.06 President.............................................24
Sec. 4.07 Vice Presidents.......................................25
Sec. 4.08 Secretary.............................................25
Sec. 4.09 Chief Financial Officer...............................26
Sec. 4.10 Salaries..............................................26
ARTICLE V - EXECUTION OF CORPORATE INSTRUMENTS,
RATIFICATION OF CONTRACTS, AND VOTING OF
SHARES OWNED BY THE CORPORATION
Sec. 5.01 Execution of Corporate Instruments....................27
Sec. 5.02 Ratification by Shareholders..........................28
Sec. 5.03 Voting of Shares Owned by the Corporation.............28
ARTICLE VI - SHARE CERTIFICATES
Sec. 6.01 Form of Certificates..................................29
Sec. 6.02 Transfer of Shares....................................29
Sec. 6.03 Lost Certificates.....................................29
ARTICLE VII - MISCELLANEOUS
Sec. 7.01 Record Date for Purposes Other Than
Notice and Voting.....................................30
Sec. 7.02 Corporate Seal........................................30
Sec. 7.03 Fiscal Year...........................................30
Sec. 7.04 Annual Statement of General Information...............30
Sec. 7.05 Records and Inspection Rights.........................31
Sec. 7.06 Construction and Definitions..........................32
ARTICLE VIII - INDEMNIFICATION..............................................32
ARTICLE IX - AMENDMENTS
Sec. 9.01 Amendment by Shareholders.............................34
Sec. 9.02 Amendment by Directors................................34
BYLAWS
OF
Pure Tech Recycling of California
ARTICLE I - OFFICES
Section 1.01 Principal Offices. The Board of Directors (the "Board")
shall fix the location of the principal executive office of the Corporation at
any place within or without the State of California. If the principal executive
office is located outside the State of California, and the Corporation has one
or more business offices in the State of California, the Board shall fix and
designate a principal business office in the State of California.
Section 1.02 Other Offices. The Board may at any time establish branch
or subordinate offices at any place or places where the Corporation is qualified
to do business.
ARTICLE II - SHAREHOLDERS
Section 2.01 Annual Meeting. The annual meeting of the shareholders for
the election of directors to succeed those whose terms expire and for the
transaction of any other business as may properly come before the meeting shall
be held on the first Tuesday of October in each year at 10:00 a.m. However, if
this day falls on a legal holiday, then the meeting shall be held on the next
succeeding business day. If an annual meeting of the shareholders is not held as
herein prescribed, the election of directors may be held at any meeting
thereafter called pursuant to these Bylaws.
Section 2.02 Special Meetings. Special meetings of the shareholders may
be called at any time by the Board, the Chairman of the Board (the "Chairman"),
the President, or one or more shareholders holding shares in the aggregate
entitled to cast not less than ten percent (10%) of the votes at the meeting.
If a special meeting is called by any person or persons other than the
Board, the request shall be in writing, specifying the general nature of the
business proposed to be transacted, and shall be delivered personally or sent by
registered mail or by telegraphic or other facsimile transmission to the
Chairman, the President, any Vice President or the Secretary. The request shall
also specify the time of the meeting which shall not be less than thirty-five
(35) nor more than sixty (60) days after receipt of the request. The officer
receiving the request shall forthwith cause notice to be given to the
shareholders entitled to vote, in accordance with the provisions of Sections
2.04 and 2.05, that a meeting will be held at the time specified. If the notice
is not given within twenty (20) days after receipt of the request, the person or
persons requesting the meeting may give the notice. Nothing contained in this
paragraph shall be construed as limiting, fixing or affecting the time when a
meeting of shareholders called by action of the Board may be held.
Section 2.03 Place of Meetings. All meetings of the shareholders shall
be at any place within or without the State of California which may be
designated by the Board. In the absence of any such designation, shareholders'
meetings shall be held at the principal executive office of the corporation.
Section 2.04 Notice. All notices of meetings of shareholders shall be
sent or otherwise given in accordance with Section 2.05 not less than ten (10)
nor more than sixty (60) days before the date of the meeting. The notice shall
specify the place, date and hour of the meeting and (i) in the case of a special
meeting, the general nature of the business to be transacted, or (ii) in the
case of the annual meeting, those matters which the Board, at the time of giving
the notice, intends to present for action by the shareholders. The notice of any
meeting at which directors are to be elected shall include the name of any
nominee or nominees whom, at the time of the notice, management intends to
present for election.
If action is proposed to be taken at any meeting for approval of the
following actions: (i) a contract or transaction in which a director has a
direct or indirect financial interest under section 310 of the California
General Corporation Law, (ii) an amendment of the Articles of Incorporation
under section 902 of that Law, (iii) a reorganization of the Corporation under
section 1201 of that Law, (iv) a voluntary dissolution of the Corporation under
section 1900 of that Law, or (v) a distribution in dissolution other than in
accordance with the rights of outstanding preferred shares under section 2007 of
that Law, the notice shall also state the general nature of that proposal.
Section 2.05 Manner of Giving Notice; Affidavit of Notice. Notice of
any shareholders' meeting shall be given either personally or by first-class
mail or telegraphic or other written communication, charges prepaid, addressed
to the shareholder at the address of that shareholder appearing on the books of
the Corporation or given by the shareholder to the Corporation for the purpose
of notice. If no such address appears on the Corporation's books or has been so
given, notice shall be deemed to have been given if sent to that shareholder by
first-class mail or telegraphic or other written communication to the
Corporation's principal executive office, or if published at least once in a
newspaper of general circulation in the county where that office is located.
Notice shall be deemed to have been given at the time when delivered personally,
deposited in the mail, delivered to a common carrier for transmission to the
recipient, actually transmitted by electronic means to the recipient by the
person giving the notice, or sent by other means of written communication.
If any notice addressed to a shareholder at the address of that
shareholder appearing on the books of the Corporation is returned to the
Corporation by the United States Postal Service marked to indicate that the
United States Postal Service is unable to deliver the notice to the shareholder
at that address, all future notices or reports shall be deemed to have been duly
given without further mailing if these shall be available to the shareholder on
written demand of the shareholder at the principal executive office of the
Corporation for a period of one (1) year from the date of the giving of the
notice.
An affidavit of the mailing or other means of giving any notice of any
shareholders' meeting may be executed by the Secretary, any Assistant Secretary,
or any transfer agent of the Corporation giving the notice, and filed and
maintained in the minute book of the Corporation.
Section 2.06 Quorum. The presence in person or by proxy of the holders
of a majority of the shares entitled to vote at any meeting of shareholders
constitutes a quorum for the transaction of business. The shareholders present
at a duly called or held meeting at which a quorum is present may continue to do
business until adjournment, notwithstanding the departure from the meeting of
enough shareholders to leave less than a quorum, if any action taken (other than
adjournment) is approved by at least a majority of the shares required to
constitute a quorum.
Section 2.07 Adjourned Meeting; Notice. Any shareholders' meeting,
annual or special, whether or not a quorum is present, may be adjourned from
time to time by the vote of the majority of the shares represented at that
meeting, either in person or by proxy, but in the absence of a quorum, no other
business may be transacted at that meeting, except as provided in Section 2.06.
When any meeting of shareholders, either annual or special, is
adjourned to another time or place, notice need not be given of the adjourned
meeting if the time and place are announced at the meeting at which the
adjournment is taken, unless a new record date for the adjourned meeting is
fixed, or unless the adjournment is for more than forty-five (45) days from the
date set for the original meeting, in which case the Board shall set a new
record date. Notice of any such adjourned meeting, if required, shall be given
to each shareholder of record entitled to vote at the adjourned meeting in
accordance with the provisions of Sections 2.04 and 2.05. At any adjourned
meeting the Corporation may transact any business that might have been
transacted at the original meeting.
Section 2.08 Voting. The shareholders entitled to vote at any meeting
of shareholders shall be determined in accordance with the provisions of Section
2.11, subject to the provisions of sections 702 to 704, inclusive, of the
California General Corporation Law (relating to voting shares held by a
fiduciary, in the name of a corporation, or in joint ownership). The
shareholders' vote may be by voice vote or by ballot; provided, however, that
any election for directors must be by ballot if demanded by any shareholder
before the voting has begun. On any matter other than the election of directors,
any shareholder may vote part of the shares in favor of the proposal and refrain
from voting the remaining shares or vote them against the proposal, but if the
shareholder fails to specify the number of shares which the shareholder is
voting affirmatively, it will be conclusively presumed that the shareholder's
approving vote is with respect to all shares that the shareholder is entitled to
vote. If a quorum is present (or if a quorum had been present earlier at the
meeting but some shareholders had withdrawn), the affirmative vote of a majority
of the shares represented and voting, provided such shares voting affirmatively
also constitute a majority of the number of shares required for a quorum, shall
be the act of the shareholders, unless the vote of a greater number or voting by
classes is required by California General Corporation Law or by the Articles of
Incorporation.
At a shareholders' meeting at which directors are to be elected, no
shareholder shall be entitled to cumulate votes (i.e., cast for any candidate a
number of votes greater than the number of votes which such shareholder normally
is entitled to cast), unless the candidates' names have been placed in
nomination before commencement of the voting and a shareholder has given notice
before commencement of the voting of the shareholder's intention to cumulate
votes. If any shareholder has given such a notice, then every shareholder
entitled to vote may cumulate votes for candidates in nomination and give one
(1) candidate a number of votes equal to the number of directors to be elected
multiplied by the number of votes to which that shareholder's shares are
normally entitled, or distribute the shareholder's votes on the same principle
among any or all of the candidates, as the shareholder thinks fit. The
candidates receiving the highest number of votes, up to and including the number
of directors to be elected, shall be elected.
Section 2.09 Waiver of Notice or Consent by Absent Shareholders. The
transactions of any meeting of shareholders, either annual or special, however
called and noticed, and wherever held, shall be as valid as though had at a
meeting duly held after regular call and notice, if a quorum is present either
in person or by proxy, and if, either before or after the meeting, each person
entitled to vote, who was not present in person or by proxy, signs a written
waiver of notice or a consent to a holding of the meeting, or an approval of the
minutes. The waiver of notice or consent need not specify either the business to
be transacted or the purpose of any annual or special meeting of shareholders,
except that if action is taken or proposed to be taken for approval of any of
those matters specified in the second paragraph of Section 2.04, the waiver of
notice or consent shall state the general nature of the proposal. All such
waivers, consents, or approvals shall be filed with the corporate records or
made a part of the minutes of the meeting.
Attendance by a person at a meeting shall also constitute a waiver of
notice of that meeting, except when the person objects, at the beginning of the
meeting, to the transaction of any business because the meeting is not lawfully
called or convened, and except that attendance at a meeting is not a waiver of
any right to object to the consideration of matters required by law to be
included in the notice of the meeting, but not so included, if that objection is
expressly made at the meeting.
Section 2.10 Shareholder Action by Written Consent Without a Meeting.
Any action which may be taken at any annual or special meeting of shareholders
may be taken without a meeting and without prior notice, if a consent in
writing, setting forth the action so taken, is signed by the holders of
outstanding shares having not less than the minimum number of votes that would
be necessary to authorize or take that action at a meeting at which all shares
entitled to vote on that action were present and voted.
Directors may be elected by written consent without a meeting only if
the written consents of all outstanding shares entitled to vote are obtained,
except that a vacancy in the Board (other than a vacancy created by removal of a
director) not filled by the Board may be filled by the written consent of the
holders of a majority of the outstanding shares entitled to vote.
All such consents shall be filed with the Secretary and shall be
maintained in the corporate records. Any shareholder giving a written consent,
or the shareholder's proxy holder, or a transferee of the shares or a personal
representative of the shareholder or their respective proxy holders, may revoke
the consent by a writing received by the Secretary before written consents of
the number of shares required to authorize the proposed action have been filed
with the Secretary.
If the consents of all shareholders entitled to vote have not been
solicited in writing, and if the unanimous written consent of all such
shareholders shall not have been received, the Secretary shall give prompt
notice of the corporate action approved by the shareholders without a meeting.
This notice shall be given in the manner specified in Section 2.05. In the case
of approval of (i) contracts or transactions in which a director has a direct or
indirect financial interest under section 310 of the California General
Corporation Law, (ii) indemnification of agents of the Corporation, under
section 317 of that Law, (iii) a reorganization of the Corporation under section
1201 of that Law, or (iv) a distribution in dissolution other than in accordance
with the rights of outstanding preferred shares, under section 2007 of that Law,
notice of such approval shall be given at least ten (10) days before the
consummation of any action authorized by that approval.
Section 2.11 Record Date for Shareholder Notice, Voting and Giving
Consents. For purposes of determining the shareholders entitled to notice of any
meeting or to vote or entitled to give consent to corporate action without a
meeting, the Board may fix, in advance, a record date, which shall not be more
than sixty (60) days or less than ten (10) days before the date of any such
meeting or more than sixty (60) days before any such action without a meeting,
and in this event only shareholders of record at the close of business on the
date so fixed are entitled to notice and to vote or to give consents, as the
case may be, notwithstanding any transfer of any shares on the books of the
Corporation after the record date, except as otherwise provided in the
California General Corporation Law.
If the Board does not so fix a record date:
(a) The record date for determining shareholders entitled to notice of
or to vote at a meeting of shareholders shall be at the close of business on the
business day next preceding the day on which notice is given or, if notice is
waived, at the close of business on the business day next preceding the day on
which the meeting is held.
(b) The record date for determining shareholders entitled to give
consent to corporate action in writing without a meeting, (i) when no prior
action by the Board has been taken, shall be the day on which the first written
consent is given, or (ii) when prior action of the Board has been taken, shall
be at the close of business on the day on which the Board adopts the resolution
relating to that action, or the sixtieth (60th) day before the date of such
other action, whichever is later.
Section 2.12 Proxies. Every person entitled to vote for directors or on
any other matter shall have the right to do so either in person or by one or
more agents authorized by a written proxy signed by the person and filed with
the Secretary. A proxy shall be deemed signed if the shareholder's name is
placed on the proxy (whether by manual signature, typewriting, telegraphic
transmission, or otherwise) by the shareholder or the shareholder's
attorney-in-fact. A validly executed proxy that does not state that it is
irrevocable shall continue in full force and effect unless (i) revoked by the
person executing it, before the vote pursuant to that proxy, by a writing
delivered to the Corporation stating that the proxy is revoked, or by attendance
at the meeting and voting in person by the person executing the proxy or by a
subsequent proxy executed by the same person and presented at the meeting; or
(ii) written notice of the death or incapacity of the maker of that proxy is
received by the Corporation before the vote pursuant to that proxy is counted;
provided, however, that no proxy shall be valid after the expiration of eleven
(11) months from the date of the proxy, unless otherwise provided in the proxy.
The revocability of a proxy that states on its face that it is irrevocable shall
be governed by the provisions of sections 705(e) and 705(f) of the California
General Corporation Law.
Section 2.13 Inspectors of Election. Before any meeting of
shareholders, the Board may appoint any persons other than nominees for office
to act as inspectors of election at the meeting or its adjournment. If no
inspectors of election are so appointed, the chairman of the meeting may, and on
the request of any shareholder or a shareholder's proxy shall, appoint
inspectors of election at the meeting. The number of inspectors shall be either
one (1) or three (3). If inspectors are appointed at a meeting on the request of
one (1) or more shareholders or proxies, the holders of a majority of shares or
their proxies present at the meeting shall determine whether one (1) or three
(3) inspectors are to be appointed. If any person appointed as inspector fails
to appear or fails or refuses to act, the chairman of the meeting may, and upon
the request of any shareholder or a shareholder's proxy shall, appoint a person
to fill that vacancy.
These inspectors shall:
(a) Determine the number of shares outstanding and the voting power of
each, the shares represented at the meeting, the existence of a quorum, and the
authenticity, validity, and effect of proxies;
(b) Receive votes, ballots, or consents;
(c) Hear and determine all challenges and questions in any way arising
in connection with the right to vote;
(d) Count and tabulate all votes or consents;
(e) Determine when the polls shall close;
(f) Determine the result; and
(g) Do any other act that may be proper to conduct the election or vote
with fairness to all shareholders.
Section 2.14 Conduct of Meetings. Subject to any limitations in the
Articles of Incorporation or these Bylaws and to any provision of the California
General Corporation Law, all annual and special meetings of shareholders shall
be conducted in accordance with such rules and procedures as the Board may
determine and, as to matters not governed by such rules and procedures, as the
chairman of such meeting shall determine, including, without limitation,
establishment of rules and procedures for the maintenance of order, safety,
limitations on the time allotted to questions or comments on the affairs of the
Corporation, restrictions on entry to such meeting after the time prescribed for
the commencement thereof, and the opening and closing of the voting polls.
ARTICLE III - BOARD OF DIRECTORS
Section 3.01 Powers. Subject to any limitations in the Articles of
Incorporation or these Bylaws and to any provision of the California General
Corporation Law requiring shareholder authorization or approval for a particular
action, the business and affairs of the Corporation shall be managed and all
corporate powers shall be exercised by or under the direction of the Board. The
Board may delegate the management of the day-to-day operation of the business of
the Corporation to a management company or other person provided that the
business and affairs of the Corporation shall be managed and all corporate
powers shall be exercised under the ultimate direction of the Board.
Section 3.02 Number, Tenure and Qualifications. The authorized number
of directors of the Board shall be three (3) until changed by an amendment to
the Articles of Incorporation or by an amendment to these Bylaws duly adopted by
the vote or written consent of holders of a majority of the outstanding shares
entitled to vote; provided, however, that an amendment reducing the number of
directors to a number less than five (5) cannot be adopted if the votes cast
against its adoption at a meeting, or the shares not consenting in the case of
action by written consent, are equal to more than sixteen and two-thirds percent
(16-2/3%) of the outstanding shares entitled to vote.
Directors shall be elected at each annual meeting of shareholders to
hold office until the next annual meeting. Each director, including a director
elected to fill a vacancy, shall hold office until the expiration of the term
for which elected and until a successor has been elected and qualified. If any
such annual meeting is not held, or the directors are not elected thereat, the
directors may be elected at any special meeting of shareholders held for that
purpose. Directors need not be shareholders.
Section 3.03 Regular Meetings
A regular annual meeting of the Board shall be held immediately after,
and at the same place as, the annual meeting of shareholders for the purpose of
electing officers and transacting any other business. The Board may provide for
other regular meetings from time to time by resolution. In the absence of such
resolution, other regular meetings of the Board shall be held quarterly on the
second Tuesday of March, June, September and December at 10:00 a.m. However, if
this day falls on a legal holiday, then the meeting shall be held on the next
succeeding business day. Such annual and other regular meetings may be held
without call or notice.
Section 3.04 Special Meetings. Special meetings of the Board for any
purpose or purposes may be called at any time by the Chairman, the President,
any Vice President, the Secretary, or any two (2) directors.
Notice of the time and place of special meetings shall be delivered
personally or by telephone to each director or sent by first-class mail or
telegram, charges prepaid, addressed to each director at that director's address
as it is shown on the records of the Corporation. In case the notice is mailed,
it shall be deposited in the United States mail at least four (4) days before
the time of meeting. In case the notice is delivered personally, or by telephone
or telegram, it shall be delivered personally or by telephone or to the
telegraph company at least forty-eight (48) hours before the time of the
meeting. Any oral notice given personally or by telephone may be communicated
either to the director or to a person at the office of the director whom the
person giving the notice has reason to believe will promptly communicate it to
the director. The notice need not specify the purpose of the meeting, nor need
it specify the place if the meeting is to be held at the principal executive
office of the Corporation.
Section 3.05 Place of Meetings. Meetings of the Board may be held at
any place within or without the State of California that has been designated in
the notice. If a place has not been stated in the notice or there is no notice,
meetings shall be held at the principal executive office of the Corporation
unless another place has been designated by a resolution duly adopted by the
Board.
Section 3.06 Participation by Telephone. Members of the Board may
participate in a meeting through the use of a conference telephone or similar
communications equipment, so long as all members participating in such meeting
can hear one another. Participation in a meeting pursuant to this Section 3.06
constitutes presence in person at such meeting.
Section 3.07 Quorum. A majority of the authorized number of directors
shall constitute a quorum for the transaction of business. In the absence of a
quorum a majority of the directors present may adjourn any meeting to another
time and place. If a meeting is adjourned for more than twenty-four (24) hours,
notice of any adjournment to another time or place shall be given, in the manner
specified in Section 3.04, prior to the time of the adjourned meeting to the
directors who were not present at the time of adjournment.
Section 3.08 Action at Meeting. Every act or decision done or made by a
majority of the directors present at a meeting duly held at which a quorum is
present is the act of the Board, subject to the provisions of section 310 of the
California General Corporation Law (as to approval of contracts or transactions
in which a director has a direct or indirect material financial interest),
section 311 of that Law (as to appointment of committees), and section 317(e) of
that Law (as to indemnification of directors). A meeting at which a quorum is
initially present may continue to transact business notwithstanding the
withdrawal of directors, if any action taken is approved by at least a majority
of the required quorum for that meeting.
Section 3.09 Waiver of Notice. The transactions of any meeting of the
Board, however called and noticed or wherever held, shall be as valid as though
at a meeting duly held after regular call and notice if a quorum is present and
if, either before or after the meeting, each of the directors not present signs
a written waiver of notice, a consent to holding the meeting, or an approval of
the minutes thereof. All such waivers, consents and approvals shall be filed
with the corporate records or made a part of the minutes of the meeting. Notice
of any meeting of the Board need not be given to any director who attends the
meeting without protesting prior thereto or at its commencement the lack of
notice to such director.
Section 3.10 Action Without Meeting Any action required or permitted to
be taken by the Board may be taken without a meeting, if all members of the
Board individually or collectively consent in writing to such action. Such
written consent or consents shall be filed with the minutes of the proceedings
of the Board. Such action by written consent shall have the same force and
effect as a unanimous vote of such directors.
Section 3.11 Removal. The Board may declare vacant the office of a
director who has been declared of unsound mind by an order of court or who has
been convicted of a felony.
The entire Board or any individual director may be removed from office
without cause by a vote of shareholders holding a majority of the outstanding
shares entitled to vote at an election of the director or directors concerned;
provided, however, that unless the entire Board is removed, no individual
director may be removed when the votes cast against removal, or not consenting
in writing to such removal, would be sufficient to elect such director if voted
cumulatively at an election at which the same total number of votes cast were
cast (or, if such action is taken by written consent, all shares entitled to
vote were voted) and the entire number of directors authorized at the time of
the director's most recent election were then being elected.
If the office of a director is so declared vacant or if the Board or
any one or more directors be so removed, new directors may be elected at the
same meeting.
Section 3.12 Resignations. Any director may resign effective upon
giving written notice to the Chairman, the President, the Secretary, or the
Board, unless the notice specifies a later time for the effectiveness of such
resignation. If the resignation is effective at a future time, a successor may
be elected to take office when the resignation becomes effective.
Section 3.13 Vacancies. Except for a vacancy created by the removal of
a director, all vacancies on the Board, whether caused by resignation, death, or
otherwise, may be filled by a majority of the remaining directors, though less
than a quorum, or by a sole remaining director, and each director so elected
shall hold office until the expiration of the term for which elected until a
successor is elected and qualified. Vacancies created by the removal of a
director may be filled only by approval of a majority of the shareholders
entitled to vote at an election of directors. The shareholders may elect a
director at any time to fill any vacancy not filled by the directors. Any such
election by written consent requires the consent of a majority of the
outstanding shares entitled to vote, except that filling a vacancy created by
removal of a director shall require the written consent of the holders of all
outstanding shares entitled to vote.
Section 3.14 Compensation. Directors and members of committees may
receive such compensation, if any, for their services, and such reimbursement of
expenses, as may be fixed or determined by resolution of the Board. This Section
3.14 shall not be construed to preclude any director from serving the
Corporation in any other capacity as an officer, agent, employee, or otherwise,
and receiving compensation for those services.
Section 3.15 Committees. The Board may, by resolution adopted by a
majority of the authorized number of directors, designate one or more
committees, each consisting of two (2) or more directors, to serve at the
pleasure of the Board. The Board may designate one or more directors as
alternate members of any committee, who may replace any absent member at any
meeting of the committee. The appointment of members or alternate members of a
committee requires the vote of a majority of the authorized number of directors.
Any such committee, to the extent provided in the resolution of the Board, shall
have all the authority of the Board in the management of the business and
affairs of the Corporation, except with respect to (a) the approval of any
action requiring shareholders' approval or approval of the outstanding shares,
(b) the filling of vacancies on the Board or any committee, (c) the fixing of
compensation of directors for serving on the Board or a committee, (d) the
adoption, amendment or repeal of Bylaws, (e) the amendment or repeal of any
resolution of the Board which by its express terms is not so amendable or
repealable, (f) a distribution to shareholders, except at a rate or in a
periodic amount or within a price range determined by the Board, and (g) the
appointment of other committees of the Board or the members thereof.
Section 3.16 Meetings and Action of Committees. Meetings and action of
committees shall be governed by, and held and taken in accordance with, the
provisions of Article III of these Bylaws dealing with meetings of directors,
with such changes in the context of those Bylaws as are necessary to substitute
the committee and its members for the Board and its members, except that the
time of regular meetings of committees may be determined either by resolution of
the Board or by resolution of the committee; special meetings of committees may
also be called by resolution of the Board; and notice of special meetings of
committees shall also be given to all alternate members, who shall have the
right to attend all meetings of the committee. The Board may adopt rules for the
government of any committee not inconsistent with the provisions of these
Bylaws.
ARTICLE IV - OFFICERS
Section 4.01 Number and Term. The officers of the Corporation shall be
a Chairman or a President, or both, one or more Vice Presidents, a Secretary and
a Chief Financial Officer, all of whom shall be chosen by the Board. In
addition, the Board may appoint such other officers as may be deemed expedient
for the proper conduct of the business of the Corporation, each of whom shall
have such authority and perform such duties as the Board may from time to time
determine. The officers to be appointed by the Board shall be chosen annually at
the regular meeting of the Board held after the annual meeting of shareholders
and shall serve at the pleasure of the Board, subject to the rights, if any, of
an officer under any contract of employment. If officers are not chosen at such
meeting of the Board, they shall be chosen as soon thereafter as shall be
convenient. Each officer shall hold office until such officer's successor shall
have been duly chosen or until such officer's removal or resignation.
Section 4.02 Inability to Act. In the case of absence or inability to
act of any officer of the Corporation and of any person herein authorized to act
in the officer's place, the Board may from time to time delegate the powers or
duties of such officer to any other officer, or any director or other person
whom it may select.
Section 4.03 Removal and Resignation. Subject to the rights, if any, of
an officer under any contract of employment, any officer chosen by the Board may
be removed at any time, with or without cause, by the Board or, except in the
case of an officer chosen by the Board, by any officer upon whom such power of
removal may be conferred by the Board.
Any officer chosen by the Board may resign at any time by giving a
written notice of resignation to the Corporation. Unless a different time is
specified therein, such resignation shall be effective upon its receipt by the
Chairman, the President, the Secretary, or the Board.
Section 4.04 Vacancies. A vacancy in any office because of any cause
may be filled by the Board for the unexpired portion of the term.
Section 4.05 Chairman. The Chairman, if such office is filled by the
Board, shall, if present, preside at all meetings of shareholders and the Board
and shall perform all such other duties as are incident to such office or are
assigned by the Board. If the Chairman is designated as the chief executive
officer or if there is no President or Vice President performing the duties of
the President pursuant to Section 4.07, the Chairman shall in addition be the
chief executive officer of the Corporation and shall have the powers and duties
prescribed in Section 4.06.
Section 4.06 President. The President shall be the general manager and,
unless the Chairman has been designated by the Board as the chief executive
officer, chief executive officer of the Corporation and, in the absence of the
Chairman (if a Chairman has been appointed) or during any period in which the
office of Chairman is for any reason vacant, shall preside at all meetings of
shareholders and if a member, at all meetings of the Board. If the President is
the chief executive officer, the President shall, subject to the control of the
Board, have general supervision of the affairs of the Corporation, shall sign or
countersign or authorize another officer to sign all certificates, contracts,
and other instruments of the Corporation as authorized by the Board, shall make
reports to the Board and shareholders, and shall perform all such other duties
as are incident to such office or are properly required by the Board. If the
President is not the chief executive officer, the President shall have such
powers and discharge such duties as may be assigned from time to time by the
Chairman or by the Board.
Section 4.07 Vice Presidents. In the absence of the President, or in
the event of the President's death, disability, or refusal to act, the Vice
President or, in the event there be more than one Vice President, the Vice
Presidents in the order designated at the time of their selection, or in the
absence of any such designation, then in the order of their selection, shall
perform the duties of the President, and when so acting, shall have all the
powers and be subject to all restrictions upon the President. Each Vice
President shall have such powers and discharge such duties as may be assigned
from time to time by the chief executive officer or by the Board.
Section 4.08 Secretary. The Secretary shall see that notices for all
meetings are given in accordance with the provisions of these Bylaws and as
required by the California General Corporation Law, shall keep minutes of all
meetings, shall have charge of the seal and the corporate books, and shall make
such reports and perform such other duties as are incident to such office, or
are properly required by the President or by the Board.
The Assistant Secretary or the Assistant Secretaries who may be
appointed by the Board, in the order of their seniority, shall, in the absence
or disability of the Secretary, or in the event of the Secretary's refusal to
act, perform the duties and exercise the powers and discharge such duties as may
be assigned from time to time by the chief executive officer or by the Board.
Section 4.09 Chief Financial Officer. The Chief Financial officer shall
have custody of all moneys and securities of the Corporation and shall keep
regular books of account. Such officer shall disburse the funds of the
Corporation in payment of the just demands against the Corporation, or as may be
ordered by the Board, taking proper vouchers for such disbursements, and shall
render to the Board from time to time as may be required of such officer an
account of all transactions as Chief Financial Officer and of the financial
condition of the Corporation. Such officer shall perform all duties incident to
such office or which are properly required by the chief executive officer or by
the Board.
The Assistant or Assistants to the Chief Financial Officer who may be
appointed by the Board, in the order of their seniority, shall, in the absence
or disability of the Chief Financial Officer, or in the event of the Chief
Financial Officer's refusal to act, perform the duties and exercise the powers
of the Chief Financial Officer, and shall have such powers and discharge such
duties as may be assigned from time to time by the President or by the Board.
Section 4.10 Salaries. The salaries of the officers may be fixed from
time to time by the Board and no officer shall be prevented from receiving such
salary by reason of the fact that such officer is also a director of the
Corporation.
ARTICLE V - EXECUTION OF CORPORATE INSTRUMENTS,
RATIFICATION OF CONTRACTS, AND
VOTING OF SHARES OWNED BY THE CORPORATION
Section 5.01 Execution of Corporate Instruments. The Board may, in its
discretion, determine the method and designate the signatory officer or
officers, or other person or persons to execute any corporate instrument or
document, or to sign the corporate name without limitation, except where
otherwise provided by law, and such execution or signature shall be binding upon
the Corporation unless otherwise specifically determined by the Board:
(a) formal contracts of the Corporation, promissory notes, deeds of
trust, mortgages, and other evidences of indebtedness of the Corporation, and
other corporate instruments or documents requiring the corporate seal (except
for share certificates issued by the Corporation), and share certificates owned
by the Corporation, shall be executed, signed, or endorsed by the President, or
jointly endorsed by any Vice President and the Secretary, Assistant Secretary,
Chief Financial Officer or Assistant Financial Officer;
(b) checks drawn on banks or other depositories on funds to the credit
of the Corporation, or in special accounts of the Corporation, shall be signed
in such manner (which may be a facsimile signature) and by such person or
persons as shall be authorized by the Board;
(c) dividend warrants, drafts, insurance policies, and all other
instruments and documents requiring the corporate signature, but not requiring
the corporate seal, shall be executed or signed in the manner directed by the
Board; and
(d) share certificates issued by the Corporation shall be signed (which
may be a facsimile signature) jointly by (i) the President or a Vice President
and (ii) the Secretary or an Assistant Secretary.
Section 5.02 Ratification by Shareholders. The Board may, in its
discretion, submit any contract or act for approval or ratification by the
shareholders at any annual meeting of shareholders or at any special meeting of
shareholders called for that purpose. Any contract or act which shall be
approved or ratified by the holders of a majority of the voting power of the
Corporation represented at such meeting shall be as valid and binding upon the
Corporation as though approved or ratified by each and every shareholder of the
Corporation, unless a greater vote is required by law for such purpose.
Section 5.03 Voting of Shares Owned by the Corporation. All shares of
other corporations owned or held by the Corporation for itself or for other
parties in any capacity shall be voted, and all proxies with respect thereto
shall be executed, by the person authorized to do so by resolution of the Board
or, in the absence of such authorization, by the President, any of the Vice
Presidents, the Secretary or any Assistant Secretary.
ARTICLE VI - SHARE CERTIFICATES
Section 6.01 Form of Certificates. Share certificates of the
Corporation shall be in such form and design as the Board shall determine. Each
certificate shall state the certificate number, the date of issuance, the
number, designation, class, and the name of the record holder of the shares
represented thereby, the name of the Corporation, and if the shares of the
Corporation are classified or if any class of shares has two (2) or more series,
the legends required by section 417 of the California General Corporation Law.
Section 6.02 Transfer of Shares. Shares may be transferred in any
manner permitted or provided by law. Before any transfer of shares is entered
upon the books of the Corporation or recognized by the designated transfer agent
and/or registrar of the Corporation, or any new certificate is issued therefor,
the old certificate, properly endorsed, shall be surrendered and cancelled,
except when a certificate has been lost or destroyed.
Section 6.03 Lost Certificates. The Board may order a new share
certificate to be issued in the place of any certificate alleged to have been
lost or destroyed, but in every such case the owner of the lost certificate may
be required to give the Corporation a bond, with surety, in such form and amount
as the Board may determine, as indemnity against any loss or claim that the
Corporation may incur by reason of the issuance of a new certificate.
ARTICLE VII - MISCELLANEOUS
Section 7.01 Record Date for Purposes Other Than Notice and Voting. For
purposes of determining the shareholders entitled to receive payment of any
dividend or other distribution or allotment of any rights or entitled to
exercise any rights in respect to any other lawful action (other than action by
shareholders by written consent without a meeting), the Board may fix, in
advance, a record date which shall not be more than sixty (60) nor less than ten
(10) days before any such action. Shareholders on the record date are entitled
to receive the dividend, distribution, or allotment of rights or to exercise the
rights, as the case may be, notwithstanding any transfer of any shares on the
books of the Corporation after the record date, except as otherwise provided by
agreement or by applicable law.
If the Board does not so fix a record date, the record date for
determining shareholders for any such purpose shall be at the close of business
on the day on which the Board adopts the applicable resolution or the sixtieth
(60th) day before the date of that action, whichever is later.
Section 7.02 Corporate Seal. The Corporation may have a corporate seal
in such form as shall be prescribed and adopted by the Board.
Section 7.03 Fiscal Year. The fiscal year of the Corporation shall end
on the last day of June.
Section 7.04 Annual Statement of General Information. The Corporation
shall, each year, during the calendar month in which its original Articles of
Incorporation were filed or during the preceding five (5) calendar months, file
with the Secretary of State of the State of California, on the prescribed form,
a statement setting forth the authorized number of directors, the names and
complete business or residence addresses of all incumbent directors, the names
and complete business or residence addresses of the Chief Executive Officer, the
Secretary, and the Chief Financial officer, the street address of its principal
executive office or principal business office in the State of California, and
the general type of business constituting the principal business activity of the
Corporation, together with a designation of the agent of the Corporation for the
purpose of service of process, all in compliance with section 1502 of the
California General Corporation Law.
Notwithstanding the preceding paragraph, if there has been no change in
the information contained in the Corporation's last annual statement on file
with the Secretary of State of the State of California, the Corporation may, in
lieu of filing the annual statement described in the preceding paragraph, advise
the Secretary of State, on the appropriate form, that no changes in the required
information have occurred during the applicable period.
Section 7.05 Records and Inspection Rights. The Corporation shall keep
at its principal executive office, or at the office of its transfer agent or
registrar, if either be appointed and as determined by resolution of the Board,
a record of its shareholders, giving the names and addresses of all shareholders
and the number and class of shares held by each shareholder. The Corporation
shall keep at its principal executive office, or if its principal executive
office is not in the State of California, at its principal business office in
this state, the original or a copy of these Bylaws, as amended to date. If the
principal executive office of the Corporation is not in the State of California
and the Corporation has no principal business office in this state, the
Secretary shall, upon the written request of any shareholder, furnish to that
shareholder a copy of the Bylaws, as amended to date. All accounting books,
records, and minutes of the Corporation shall be open to inspection by the
directors or shareholders at all reasonable times during office hours to the
extent permitted by the California General Corporation Law.
Section 7.06 Construction and Definitions. Unless the context otherwise
requires, the general provisions, rules of construction, and definitions in the
California General Corporation Law as in effect from time to time shall govern
the construction of these Bylaws and references to particular sections of the
California General Corporation Law shall include any successor provisions.
ARTICLE VIII - INDEMNIFICATION
The Corporation shall have power to indemnify each of its agents to the
fullest extent permissible by the California General Corporation Law. Without
limiting the generality of the foregoing sentence, the Corporation:
(a) is authorized to provide indemnification of agents in excess of
that expressly permitted by section 317 of the California General Corporation
Law for those agents of the Corporation for breach of duty to the Corporation
and its shareholders, provided, however, that the Corporation is not authorized
to provide indemnification of any agent for any acts or omissions or
transactions from which a director may not be relieved of liability as set forth
in the exception to section 204(a)(10) of the California General Corporation Law
or as to circumstances in which indemnity is expressly prohibited by section 317
of the California General Corporation Law; and
(b) shall have power to purchase and maintain insurance on behalf of
any agent of the Corporation against any liability asserted against or incurred
by the agent in such capacity or arising out of the agent's status as such,
whether or not the Corporation would have the power to indemnify the agent
against such liability under the provisions of section 317 of the California
General Corporation Law, and shall have power to advance the expenses reasonably
expected to be incurred by such agent in defending any such proceeding upon
receipt of the undertaking required by subdivision (f) of such section.
The term "agent" used in this Article shall have the same meaning as such term
in section 317 of the California General Corporation Law.
ARTICLE IX - AMENDMENTS
Section 9.01 Amendment by Shareholders. New bylaws may be adopted or
these Bylaws may be amended or repealed by the vote or written consent of
holders of a majority of the outstanding shares entitled to vote, except as
otherwise provided by law, these Bylaws, or the Articles of Incorporation.
Section 9.02 Amendment by Directors. Subject to the rights of the
shareholders as provided in Section 8.01, any bylaw, other than a bylaw or an
amendment of a bylaw changing the authorized number of directors, may be
adopted, amended, or repealed by the Board.
CERTIFICATE OF
ADOPTION OF
BYLAWS
---------------
I, the undersigned, certify that:
1. I am the presently elected and Assist. Secretary of Pure Tech
Recycling of California, a California corporation; and
2. The foregoing Bylaws, consisting of thirty-four (34) pages are the
Bylaws of the Corporation as adopted pursuant to the Unanimous Written Consent
of Directors in Lieu of an Organizational Meeting, effective as of December 17,
1993.
IN WITNESS WHEREOF, I have executed this certificate on January 21,
1994.
/s/PAUL LITWINCZUK
----------------------------------------
PAUL LITWINCZUK, ASSISTANT SECRETARY
EXHIBIT 3.27
STATE OF NEW JERSEY
DEPARTMENT OF STATE
LONG FORM STANDING WITH CHARTER DOCUMENTS
ALUMET SMELTING CORPORATION
IN TESTIMONY WHEREOF, I have
hereunto set my hand and
affixed my Official Seal
at Trenton, this
23rd day of February, 1998
/s/ Lonna R Hooks
LONNA R HOOKS
Secretary of State
Note: Long form standings with charter documents may reflect two dates for
filed amendments. The system processing date, which is the date of entry
into the State's data base, is always shown immediately to the right of the
amendment description. If shown alone, the system processing date also
constitutes the filing date for the amendment. If an amendment was
reviewed and stamped filed prior to the system processing date, a second
date called the back-stamp date is shown at the far right margin. In cases
where the two dates are shown, the date at the far right margin date is the
actual filing date for the amendment.
CERTIFICATE OF INCORPORATION
OF
ALUMET SMELTING CORPORATION
* * * * * * * * * * * * * * * * * * * * * * * *
Signed by the undersigned for the purpose of forming a corporation
under the New Jersey Business Corporation Act.
FIRST: The name of the corporation is:
"ALUMET SMELTING CORPORATION"
SECOND: The purposes for which this corporation is organized are to
engage in any activity within the purposes for which corporations may be
organized under the New Jersey Business Corporation Act.
THIRD: The address of the corporation's initial registered office and
the name of the corporation's initial registered agent at such address are
Stephen E. Lampf, Esq., 80 Main Street, West Orange, New Jersey 07052.
FOURTH: The aggregate number of shares which this corporation shall
have authority to issue is Two Thousand Five Hundred (2,500) shares without
nominal or par value.
FIFTH: The number of directors constituting the first Board of Directors
is two (2) and the names and addresses of the persons who are to serve as such
directors are:
Bella Dub Barney Shlomy
67-51 180th Street P.O. Box 218
Flushing, New York Whitehead Avenue
South River, New Jersey
SIXTH: The name and address of the incorporator is Stephen E. Lampf,
Esq., 80 Main Street, West Orange, New Jersey 07052.
IN WITNESS WHEREOF, this Certificate of Incorporation has been signed
this 11th day of April, 1980.
/s/ Stephen E. Lampe, Esq.
STEPHEN E. LAMPF, ESQ.
Sole Incorporator
CERTIFICATE OF INCORPORATION Filed and Recorded
APR 28 1980
Donald Lan
ALUMET SMELTING CORPORATION Secretary of State
0100112154
DATED: April 11, 1980
Lampf, Pleva, Lipkind, Prupis & Petigrow
A Professional Corporation
Counsellors at Law
80 Main Street
West Orange, New Jersey 07052
CERTIFICATE OF MERGER
Pursuant to Section 14A:10-4 of the New Jersey Business Corporation Act,
the undersigned corporations execute the following Certificate of Merger:
FIRST: A Plan of Merger (a copy of which is annexed hereto) was
approved by the shareholders and directors of each of the undersigned
corporations in the manner prescribed by Chapter 10 of the New Jersey Business
Corporation Act.
SECOND: As to each of the corporations, the number of shares
outstanding are as follows:
<TABLE>
<S> <C> <C>
NUMBER OF
NAME OF SHARES
CORPORATION OUTSTANDING DESIGNATION
ALUMET CORP. 1000 Common-Voting
ALUMET SMELTING
CORPORATION 300 Common-Voting
</TABLE>
THIRD: As to each corporation, the total number of shares voted for and
against the Plan of Merger are as follows:
<TABLE>
<S> <C> <C>
TOTAL VOTED TOTAL VOTED
NAME OF CORPORATION FOR AGAINST
ALUMET CORP. 1000 None
ALUMET SMELTING
CORPORATION 300 None
</TABLE>
FOURTH: Pursuant to Section 14A:10-4(2) of the New Jersey Business
Corporation Act, the merger is to become effective at the close of business on
September 30, 1980.
IN WITNESS WHEREOF, each corporation has been caused these presents to
be signed by its duly authorized corporate officers and its corporate seal to
be hereunto affixed, as of the 30th day of September, 1980.
ALUMET CORP.
ATTEST:
BY: /s/ Bella Dub
/s/ Barney Shlomy BELLA DUB, PRESIDENT
BARNEY SHLOMY, SECRETARY
ALUMET SMELTING
CORPORATION
ATTEST:
BY: /s/ Bella Dub
/s/ Barney Shlomy BELLA DUB, PRESIDENT
BARNEY SHLOMY, SECRETARY
PLAN OF MERGER
Pursuant to the provisions of Chapter 10 of Title 14A of the New Jersey
Business Corporation Act, the following named corporations hereby establish a
Plan of Merger.
FIRST: The name of the corporations proposing to merge are:
ALUMET SMELTING CORPORATION
ALUMET CORP.
SECOND: The name of the corporation into which the aforesaid
corporations propose to merge is ALUMET SMELTING CORPORATION.
THIRD: The terms and conditions of the proposed merger are as follows:
(a) Upon the effective date of merger, the separate corporate existence
of ALUMET CORP., shall cease and ALUMET SMELTING CORPORATION the surviving
corporation shall become the owner, without other transfer, of all the rights
and property of the merging corporation, and the surviving corporation shall
become subject to all the debts and liabilities of the merging corporation in
the same manner as if the surviving corporation had itself incurred them.
(b) The Certificate of Incorporation of ALUMET SMELTING CORPORATION
shall remain and continue to be the Certificate of Incorporation of the
surviving corporation following the effective date of the merger until the
same shall be altered or amended according to the provisions thereof.
FOURTH: The method of converting the shares of the merging corporation
into shares of the surviving corporation shall be as follows:
(a) Each share of common stock of ALUMET CORP. shall be exchanged
for .33 shares of ALUMET SMELTING CORPORATION, which shares of the surviving
corporation shall thereupon be issued and outstanding.
(b) After the effective date of the merger holders of certificates for
shares of common stock in ALUMET CORP. shall surrender them to the surviving
corporation, or its duly appointed agent, in such a manner as the surviving
corporation shall legally require. On receipt of said share certificates, the
surviving corporation shall issue in exchange therefor a certificate of shares
of common stock in the surviving corporation representing the number of shares
of such stock to which the holder shall be entitled as hereinabove set forth.
FIFTH: Neither the merging corporation nor the surviving corporation
shall, prior to the effective date of the merger, engage in any activity or
transaction other than in the ordinary course of business, except as
contemplated by this Plan of Merger.
SIXTH: This Plan of Merger shall be submitted to the shareholders of the
constituent corporations for their approval in the manner provided by the
applicable laws of the State of New Jersey, at a meeting to be held on or
before , 1980 or at such other time as the Boards
of Directors of the constituent corporations shall agree.
SEVENTH: The directors of any constituent corporation may, in their
discretion, abandon this merger, subject to the rights of third parties under
the contracts relating thereto, without further action or approval by the
shareholders of the corporation, at any time before the merger has been
completed.
ALUMET SMELTING CORPORATION
BY: /s/ Bella Dub
------------------------------
BELLA DUB, PRESIDENT
ALUMET CORP.
BY: /s/ Bella Dub
------------------------------
BELLA DUB, PRESIDENT
CERTIFICATE OF MERGER Filed and Recorded
Oct 22 1980
Donald Lan
Secretary of State
ALUMET SMELTING CORPORATION
DATED: September 30, 1980
Lampf, Pleva, Lipkind, Prupis & Petigrow
A Professional Corporation
Counsellors at Law
80 Main Street
West Orange, New Jersey 07052
STATE OF NEW JERSEY
DEPARTMENT OF STATE
FILING CERTIFICATION (CERTIFIED COPY)
ALUMET SMELTING CORPORATION
I, the Secretary of State of the State of New Jersey, do
hereby certify, that the above named business did file
and record in this department the below listed document(s)
and the foregoing is a true copy of the
Certificate of Incorporation and Merger as the same is
taken from and compared with the original(s) filed in
this office on the date set forth on each instrument and
now remaining on file and of record in my office.
IN TESTIMONY WHEREOF, I have
hereunto set my hand and
affixed my Official Seal
at Trenton, this
6th day of March, 1998
/s/ Lonna R Hooks
LONNA R HOOKS
Secretary of State
EXHIBIT 3.28
BY-LAWS OF
ALUMET SMELTING CORPORATION
Adopted April 11, 1980
ARTICLE I
OFFICES
1. Registered Office and Agent - The registered office of the
Corporation in the State of New Jersey is at 80 Main Street, West Orange, New
Jersey. The registered agent of the Corporation at such office is Stephen E.
Lampf.
2. Principal Place of Business - The principal place of
business of the Corporation is 104 East Peddie Street, Newark, New Jersey.
3. Other Places of Business - Branch or subordinate places of
business or offices may be established at any time by the Board at any place or
places where the Corporation is qualified to do business.
ARTICLE II
SHAREHOLDERS
1. Annual Meeting - The annual meeting of shareholders shall be
held upon not less than ten nor more than sixty days written notice of the
time, place, and purposes of the meeting at 11:00 o'clock a.m. on the 14th day
of the month of February of each year at a place to be elected, or at such
other time and place as shall be specified in the notice of meeting, in order
to elect directors and transact such other business as shall come before the
meeting.
If that date is a legal holiday, the meeting shall be held at
the same hour on the next succeeding business day.
2. Special Meetings - A special meeting of shareholders may be
called for any purpose by the president or the Board. A special meeting shall
be held upon not less than ten nor more than sixty days written notice of the
time, place, and purposes of the meeting.
3. Action Without Meeting - The shareholders may act without a
meeting if, prior or subsequent to such action, each shareholder who would
have been entitled to vote upon such action shall consent in writing to
such action. Such written consent or consents shall be filed in the minute
book.
4. Quorum - The presence at a meeting in person or by proxy of
the holders of shares entitled to cast a majority of the votes shall
constitute a quorum.
ARTICLE III
BOARD OF DIRECTORS
1. Number and Term of Office - The Board shall consist of one
member. Each director shall be elected by the shareholders at each annual
meeting and shall hold office until the next annual meeting of shareholders
and until that director's successor shall have been elected and qualified.
2. Regular Meetings - A regular meeting of the Board shall be
held without notice immediately following and at the same place as the annual
shareholders' meeting for the purposes of electing officers and conducting such
ocher business as may come before the meeting. The Board, by resolution, may
provide for additional regular meetings which may be held without notice,
except to members not present at the time of the adoption of the resolution.
3. Special Meetings - A special meeting of the Board may be
called at any time by the president or by the director for any purpose. Such
meeting shall be held upon ten (10) days notice if given orally, (either by
telephone or in person), or by telegraph, or by 15 days notice if given by
depositing the notice in the United States mails, postage prepaid. Such notice
shall specify the time and place of the meeting.
4. Action Without Meeting - The Board may act without a meeting
if, prior or subsequent to such action, each member of the Board shall consent
in writing to such action. Such written consent or consents shall be filed in
the minute book.
5. Quorum - A majority of the entire Board shall constitute a
quorum for the transaction of business.
6. Vacancies in Board of Directors - Any vacancy in the Board
excluding a vacancy caused by an increase in the number of directors, may be
filled by the affirmative vote of a majority of the remaining directors, even
though less than a quorum of the Board, or by a sole remaining director.
ARTICLE IV
WAIVERS OF NOTICE
Any notice required by these by-laws, by the certificate of
incorporation, or by the New Jersey Business Corporation Act may be waived in
writing by any person entitled to notice. The waiver or waivers may be
executed either before or after the event with respect to which notice is
waived. Each director or shareholder attending a meeting without protesting,
prior to its conclusion, the lack of proper notice shall be deemed
conclusively to have waived notice of the meeting.
ARTICLE V
OFFICERS
14A.6-15(1) 1. Election. - At its regular meeting following the
annual meeting of shareholders, the Board shall elect a
president, a treasurer, a secretary, and it may elect
such other officers, including one or more vice
presidents, as it shall deem necessary.
14A6-15(2) One person may hold two or more offices.
14A6-15(4) 2. Duties and Authority of President. - The president
shall be chief executive officer of the Corporation.
Subject only to the authority of the Board, he shall have
general charge and supervision over, and responsibility
for, the business and affairs of the Corporation. Unless
otherwise directed by the Board, all other officers shall
be subject to the authority and supervision of the
president. The president may enter into and execute in
the name of the Corporation contracts or other
instruments in the regular course of business or
contracts or other instruments not in the regular course
of business which is authorized, either generally or
specifically, by the Board. He shall have the general
powers and duties of management usually vested in the
office of president of a corporation.
14A.6-15(4) 3. Duties and Authority of Vice President. - The vice
president shall perform such duties and have such
authority as from time to time may be delegated to him by
the president or by the Board. In the absence of the
president or in the event of his death, inability, or
refusal to act, the vice president shall perform the
duties and be vested with the authority of the president.
14A:6-15(4) 4. Duties and Authority of Treasurer. - The treasurer
shall have the custody of the funds and securities of the
Corporation and shall keep or cause to be kept regular
books of account for the Corporation. The treasurer
shall perform such other duties and possess such other
powers as are incident to that office or as shall be
assigned by the president or the Board.
14A.6-15(4) 5. Duties and Authority of Secretary. - The secretary
shall cause notices of all meetings to be served as
prescribed in these by-laws and shall keep or cause to be
kept the minutes of all meetings of the shareholders and
the Board. The secretary shall have charge of the seal of
the Corporation. The secretary shall perform such other
duties and possess such other powers as are incident to that
office or as are assigned by the president or the fund.
ARTICLE VI
AMENDMENTS TO AND EFFECT OF BY-LAWS;
FISCAL YEAR
1. Force and Effect of By-Laws - These by-laws are subject to
the provisions of the New Jersey Business Corporation Act and the Corporation's
certificate of incorporation, as it may be amended from time to time. If any
provision in these by-laws is inconsistent with a provision in that Act or the
certificate of incorporation, the provision of that Act or the certificate of
incorporation shall govern.
2. Amendments to By-laws - These by-laws may be altered, amended
or repealed by the shareholders or the Board. Any by-law adopted, amended or
repealed by the shareholders may be amended or repealed by the Board, unless
the resolution of the shareholders adopting such by-law expressly reserves to
the shareholders the right to amend or repeal it.
3. Fiscal Year - The fiscal year of the Corporation shall
begin on the first day of January of each year.
EXHIBIT 3.29
CERTIFICATE OF INCORPORATION
OF
CONNECTICUT CONTAINER RECOVERY CORPORATION
The undersigned, as incorporator under the Stock Corporation
Act of the State of Connecticut, certifies as follows:
FIRST. The name of the corporation is CONNECTICUT CONTAINER
RECOVERY CORPORATION.
SECOND. The purpose of the corporation is to engage in any
lawful act or activity for which corporations may be formed under the Stock
Corporation Act of the State of Connecticut.
THIRD. The designation of each class of shares, authorized
number of shares of each such class and the par value of each share thereof,
are as follows:
The corporation shall have (1) class of stock designated as Common
Stock and consisting of Five Thousand (5,000) authorized shares.
Each share of Common Stock to have a par value of $100.
FOURTH. The minimum amount of stated capital with which the
corporation shall commence business is One Thousand Dollars ($1,000.00).
FIFTH. The duration of this corporation is perpetual.
SIXTH. The following provisions are for the regulation of the
business of the corporation and for the purpose of defining and regulating the
powers of the corporation and its officers, directors and stockholders:
The Board of Directors is hereby authorized and empowered to issue from
time to time all or any part of the shares of its unissued authorized capital
stock, as then constituted, for such consideration (not less than the par
value thereof), in money or other property as the Board of Directors may deem
advisable; and all shares of the capital stock of this corporation so when
issued shall be deemed fully paid and nonassessable, and the holders of such
shares shall not be liable thereunder to this corporation or its creditors.
Dated at Hartford, Connecticut, this 5th day of October 1979.
I hereby declare under the penalties of false statement, that
the statements contained in the foregoing certificate are true.
-------------------------
WILLIAM E. KELLY
Incorporator
APPOINTMENT OF STATUTORY AGENT FOR SERVICE [Illegible]
DOMESTIC CORPORATION [Illegible]
61-6 rev 6-66 [Illegible]
TO: The Secretary of the State of Connecticut
Name of Corporation:
CONNECTICUT CONTAINER RECOVERY CORPORATION
APPOINTMENT
<TABLE>
<S> <C>
The above corporation appoints as its statutory agent for service, one of the following:
Name of Natural Person Who is Resident of Connecticut: Business Address
Richard A. Gitlin 100 Constitution Plaza, Hartford, CT 06106
Residence Address
31 Mountain Farms Road, W. Hartford, CT 06117
Name of Connecticut Corporation Address of Principal Office in Connecticut
[Illegible]
Name of Corporation not Organized Under the Laws of Address of Principal Office in Connecticut
Conn. [Illegible]
</TABLE>
*[Illegible]
AUTHORIZATION
<TABLE>
<S> <C> <C>
Original Name of Incorporator (Print or type) SIGNED (Incorporator) October 5, 1979
Appointment William E. Kelly
Name of Incorporator (Print or type) SIGNED (Incorporator)
[Illegible]
Subsequent Appointment Name of President, Vice President SIGNED (Incorporator)
(Print or type)
</TABLE>
ACCEPTANCE
<TABLE>
<S> <C> <C>
Accepted Name of statutory Agent for Service SIGNATURE
(Print or type)
Richard A. Gitlin
</TABLE>
APPOINTMENT OF STATUTORY AGENT FOR SERVICE
DOMESTIC CORPORATION
61-6 rev 6-93
Secretary of the State [Illegible]
30 Trinity Street
Hartford, CT 06106
Complete All Blanks
<TABLE>
<S> <C>
Enter Name of Corporation here:
Connecticut Container Recovery Corporation
The above corporation appoints as its statutory agent for service, one of the following:
Name of Natural Person Who is Resident of Business Address
Connecticut 14 Eastern Park Road, East Hartford, CT 06108
William F. Leonard Residence Address
96 Candlewood Lane, Southington, CT 06489
Name of Connecticut Corporation Address of Principal Office in Conn.
(If none, enter address of appointee's statutory agent
for service)
Name of Corporation Address of Principal Office in Conn.
(Not organized under the Laws of Conn.*) (If none, enter "Secretary of the State of Conn.")
</TABLE>
<TABLE>
<S> <C> <C> <C>
*Which has procured a Certificate of Authority to transact business or conduct affairs in this state.
AUTHORIZATION
Original Appointment Name of Incorporator (Print or Type) Signed (Incorporator) Date
(Must be signed by a Name of Incorporator (Print or Type) Signed (Incorporator)
majority of Name of Incorporator (Print or Type) Signed (Incorporator)
Incorporators)
</TABLE>
<TABLE>
<S> <C> <C> <C>
Subsequent Approval Name of President, Date
William F. Leonard September 20, 1994
Signed (President or Vice President
Secretary/Assistant Secretary)
Acceptance: Name of Statutory Agent for Service (Print or Type) Signed (Statutory Agent for Service)
William F. Leonard
For Official Use Only Rec CC: William F. Leonard
14 Eastern Park Road
Please provide filer's name and complete address for mailing East Hartford, CT 06108
receipt.
</TABLE>
CERTIFICATE
AMENDING OF RESTATING CERTIFICATE
OF INCORPORATION
61-38 BY ACTION OF
<TABLE>
<S> <C> <C> <C>
[ ] Incorporators [ ] Board of Directors [ ] Board of Directors [ ] Board of Directors
and Shareholders and Members
(Stock Corporation) (Nonstock Corporation)
</TABLE>
STATE OF CONNECTICUT
SECRETARY OF THE STATE
<TABLE>
<S> <C>
1. Name of Corporation Date
Connecticut Container Recovery Corporation May 19,1998
</TABLE>
<TABLE>
<S> <C> <C> <C>
2. The Certificate of incorporation is [ ] A. Amended Only [ ] B. Amended and [ ] C. Restated only by the
Restated following resolutions
</TABLE>
RESOLVED, that the Certificate of Incorporation of the Corporation be
amended by restating the "THIRD" paragraph thereof to decrease the par value
of the Corporation's Common Stock from $100 per share of $.01 per share as
follows:
THIRD. The designation of each class of shares, authorized
number of shares of each such class and the par value of each share
thereof, are as follows:
The corporation shall have one (1) class of stock
designated as Common Stock and consisting of Five Thousand
(5,000) authorized shares. Each share of common stock to have
a par value of $.01.
3. (Omit if 2A checked)
(a) The above resolution merely restates and does not change the
provisions of the original Certificate of Incorporation as supplemented and
amended to date, except as follows: (Indicate amendments made, if any, if
none, so indicate)
(b) Other than as indicated in Par. 3(a), there is no discrepancy
between the provisions of the original Certificate of Incorporation as
supplemented to date, and the provisions of this Certificate Restating the
Certificate of Incorporation.
<TABLE>
<S> <C> <C>
[ ] 4. The above resolution was adopted by vote of at least two-thirds of the incorporation before the organization meeting of the
corporation, and approved in writing by all subscribers (if any) for shares of the corporation, (or if nonstock
corporation, by all applicants for membership entitled to vote, if any)
We (at least two-thirds of the incorporators) hereby
declare, under the penalties of false statement that the
statements made in the foregoing certificate are true.
SIGNED SIGNED SIGNED
APPROVED
(All subscribers, or, if nonstock corporation, all applicants for membership entitled to vote, if none, so indicate)
SIGNED SIGNED SIGNED
</TABLE>
(Over)
<TABLE>
<S> <C> <C> <C> <C>
[ ] 4. (Omit if 2C is checked) The above resolution was adopted by the board of directors acting alone,
[ ] there being no shareholders or subscribers. [ ] the board of directors being so authorized pursuant to
Section 33-341, Conn. G.S. as amended
[ ] the corporation being a nonstock corporation and having no members and no applicants for membership entitled to
vote on such resolution.
5. The number of affirmative votes required to adopt such 6. The number of directors' votes in favor of the resolution
resolution is: was:
We hereby declare, under the penalties of false statement that the statements made in the foregoing certificates are true.
Name of President or Vice President (Print or Type) Name of Secretary or Assistant Secretary (Print or type)
SIGNED (President or Vice President) SIGNED (Secretary or Assistant Secretary)
[ ] 4. The above resolution was adopted by the board of directors and by shareholders.
5. Vote of shareholders;
(a) (Use of no shares are required to be voted as a class)
Number of shares entitled to vote Total Voting Power Vote Required for Adoption Vote Favoring Adoption
900 900 2/3 vote 900
(b) (If the shares of any class are entitled to vote as a class, indicate the designation and number of outstanding shares
of each such class, the voting power thereof, and the vote of each such class for the amendment resolution.)
We hereby declare, under the penalties of false statement that the statements made in the foregoing certificate are true.
Name of President or Vice President (Print or Type) Name of Secretary or Assistant Secretary (Print or Type)
William Leonard, President Roger Loeb, Secretary
[ ] 4. The above resolution was adopted by the board of directors and by members.
5. Vote of members:
(a) (Use of no members are required to be vote as a class)
Number of members voting Total Voting Power Vote Required for Adoption Vote Favoring Adoption
(b) (If the members of any class are entitled to vote as a class, indicate the designation and number of members of each such
class, the voting power thereof, and the vote of each such class for the amendment resolution.)
SIGNED (President or Vice President) SIGNED (Secretary or Assistant Secretary)
(Filing Fee) (Certification Fee) (Total Fees)
$30 [Illegible] $59.00
(SIGNED (for Secretary of the State))
(Certified copy sent on (Date) Initials)
(To)
(Card) (List) (Proof)
</TABLE>
CERTIFICATE AMENDING OR RESTATING CERTIFICATE OF INCORP0RATION
61-38 Rev. 9/90
Stock Corporation
STATE OF CONNECTICUT
SECRETARY OF THE STATE
30 TRINITY STREET
HARTFORD, CT 06106
1. Name of Corporation (Please enter name within lines)
Connecticut Container Recovery Corporation
2. The Certificate of Incorporation is: (Check One)
[ ] A. Amended only pursuant to Conn. Gen. Stat. Section 33-360
[ ] B. Amended only, to cancel authorized shares (state number of
shares to be canceled, the class, the series, if any, and the par
value, P.A. 90-107.)
[ ] C. Restated only, pursuant to Conn. Gen. Stat. Section 33-362(a).
[ ] D. Amended and restarted, pursuant to Conn. Gen. Stat. Section
33-362(c).
[ ] E. Restated and superseded pursuant to Conn. Gen. Stat. Section
33-362(d).
Set forth here the resolution of amendment and/or restatement. Use an
8 1/2 X 11 attached sheet if more space is needed. Conn. Gen. State.
Section 1-9.
"FIRST. The name of the corporation is CONCONRE CORP."
(If 2A or 2B is checked, go to 5 & 6 to complete this certificate. If 2C or
2D is checked, complete 3A or 3B. If 2E is checked, complete 4.)
3. (Check one)
[ ] A. This certificate purports merely to restate but not to change
provisions of the original Certificates of Incorporation as
supplemented and amended to date, and the provisions of this
Restated Certificate of Incorporation. (If 3A is checked, go to
5 & 6 to complete this certificate.)
[ ] B. This Restated Certificate of Incorporation shall give effect to
the amendment(s) and purports to restate all those provisions
now in effect not being amended by such new amendment(s) (If 3B
is checked, check 4, if true, and go to 5 & 6 to complete this
Certificate.)
4. (Check, if true)
[ ] This restated Certificate of Incorporations was adopted by the
greatest vote which would have been required to amend any provision
of the Certificate of Incorporation as in effect before such vote
and supersedes such Certificate of Incorporation.
5. The manner of adopting the resolution was as follows:
[ ] A. By the board of directors and shareholders, [Illegible] Vote of
Shareholders: (Check (i) or (ii), and check (iii) if
applicable.)
(i) [ ] No shares are required to be voted as a class: the shareholders
vote was as follows:
Vote Required for Adoption majority
-------------
Vote Favoring Adoption unanimous
-------------
(ii) [ ] There are shares of more than one class entitled to vote as
a class. The designation of each class required for
adoption of the resolution and the vote of each class in
favor of adoption were as follows: (Use an 8 1/2 X 11
attached sheet if more space is needed. Con.. Gen. Stat.
Section 1-9)
(iii)[ ] Check here if the corporation has 100 or more recordholders,
as defined in Conn. Gen. Stat. Section 33-311a(a).
[ ] B. By the board of directors acting above, pursuant to Conn. Gen.
State. Section 33 -3[Illegible] (b)(2) or 33-362(a).
The number of affirmative votes required to adopt such
resolution is:
-----------------------------------
The number of directors' votes in favor of the
resolution was:
-----------------------------------
We hereby declare, under the penalties of false statement, that the statements
made in the foregoing certificate are true:
<TABLE>
<S> <C> <C> <C>
(Print or Type) Signature (Print or Type) Signature
Name of Pres./V. Pres. Name of Sec/Assn't Sec.
</TABLE>
[ ] C. The corporation does not have any shareholders. The resolution
was adopted by vote or at least two-thirds of the incorporators
before the organization meeting of the corporation and approved
in writing by all subscribers for shares of the corporation. If
there are no subscribers, state NONE below.
We (at least two-thirds of the incorporators) hereby declare, under the
penalties of false statement, that the statements made in the foregoing
certificate are true.
<TABLE>
<S> <C> <C>
Signed Subscriber Signed Subscriber Signed Subscriber
</TABLE>
<TABLE>
<S> <C> <C>
Signed Incorporator Signed Incorporator Signed Incorporator
</TABLE>
(Use an 8 1/2 X 11 attached sheet if more space is needed Conn.
Gen. State Section 1 - 9.
6. Dated at this day of 19
---------------------- ------------- ------- ---
Rec. CC. GS: (Type or Print)
Data Reporting Corp.
330 Roberts Street,
Suite 203
East Hartford, CT
06108-3654
ATTN:
<TABLE>
<S> <C> <C>
ALL BLANKS MUST BE BIENNIAL REPORT DO NOT FOLD, BEND, TEAR,
COMPLETED STATE OF CONNECTICUT STAPLE OR PERFORATE THIS CARD
Secretary of the State
30 Trinity St. Hartford, CT 06106
REVERSE SIDE MUST BE COMPLETED PLEASE TYPE OR PRINT LEGIBLY IN INK - BLOCK LETTERS
Report must be filed by the last day of: CONNECTICUT CONTAINER RECOVERY
Oct 1993 150 COLONIAL RD
MANCHESTER CT 06040
DEFAULT
NOTICE
PRINCIPLE OFFICE ADDRESS IN CON. IS THIS A CHANGE SINCE LAST REPORT YES NO
(Must [Illegible] or indicate NONE) [ ] [ ]
ADDRESS OF EXECUTIVE OFFICES (Foreign Corporation only) IS THIS A CHANGE SINCE LAST REPORT YES NO
[ ] [ ]
PRINCIPAL OFFICE ADDRESS WHERE INCORPORATED (NONE) IS THIS A CHANGE SINCE LAST REPORT YES NO
[ ] [ ]
</TABLE>
<TABLE>
<S> <C> <C> <C>
If more space is necessary attach an 8-(1)/(2) x 11 sheet of paper Check DO NOT FOLD, BEND, PLEASE TYPE
here [ ] TEAR, STAPLE OR OR PRINT LEGIBLY IN
PERFORATE THIS CARD INK
TITLE COMPLETE COMPLETE BUSINESS COMPLETE
NAME ADDRESS RESIDENCE ADDRESS
President William F. [Illegible] [Illegible]
Leonard
Secretary Murray Fox [Illegible] [Illegible]
List Directors below COMPLETE BUSINESS COMPLETE
COMPLETE NAME ADDRESS RESIDENCE ADDRESS
Simon [Illegible] [Illegible] [Illegible]
[Illegible]
I DECLARE UNDER PENALTIES OF FALSE [Illegible] [Illegible]
ENDORSEMENT THAT THE STATEMENTS
MADE IN THIS REPORT ARE TRUE AND
COMPLETE AS OF THE DATE OF REPORT x
</TABLE>
EXHIBIT 3.30
BYLAWS
OF
CONNECTICUT CONTAINER RECOVERY CORPORATION
ARTICLE I
Offices
The principal office of CONNECTICUT CONTAINER RECOVERY
CORPORATION shall be at such place in the State of Connecticut as the Board
of Directors shall from time to time designate. The Corporation may have such
other offices within or without the State of Connecticut as the Board of'
Directors may from time to time determine.
ARTICLE II
Meetings of Shareholders
1. Place of Meetings. All meetings of holders of voting common
stock of the Corporation (herein referred to as "shareholders") shall be held
the principal office or place of business of the Corporation, or at such place
within or without the State of Connecticut as from time to time may be
designated by the bylaws or by resolution of the Board of Directors.
2. Annual Meetings. The annual meetings of shareholders shall
be held on such day other than a legal holiday in the month of April in each
year at such time and place as may be designated by the Board of Directors,
for the election of Directors and for the transaction of such other business
as may properly come before such meeting. If the annual meeting of the
shareholders is riot held as herein prescribed, the election of directors may
be held at any meeting thereafter called pursuant to these bylaws or otherwise
lawfully held.
3. Special Meetings. Special meetings of the shareholders may
be called at any time by the President or by resolution of the Board of
Directors and shall be called by the President upon the request of any two (2)
directors or upon the written request of one (1) or more shareholders holding
in the aggregate at least one-tenth (1/10) of the total number of shares
entitled to vote at such meeting.
4. Notice of Annual or Special Meeting. A notice setting forth
the day, hour and place of each annual or special meeting of shareholders
shall be mailed, postage prepaid, to each shareholder of record, at his last
known post office address as the same appears on the stock records of the
corporation or said notice shall be left with each such shareholder at his
residence or usual place of business, not less than seven (7) nor more than
fifty (50) days before such annual or special meeting. In the case of a
special meeting the notice shall also state the general purpose thereof.
5. Waiver of Notice. Notice of any shareholders' meeting may be
waived in writing by any shareholder either before or after the time stated
therein and, if any person present at a stockholders' meeting does not
protest, prior to or at the commencement of the meeting, the lack of proper
notice, such person shall be deemed to have waived notice of such meeting.
6. Shareholders' Consent. Any resolution in writing approved
and signed by all the shareholders or their proxies or attorneys shall have
the same force and effect as if it were a vote passed by all the shareholders
at a meeting duly called and held for that purpose. In addition, actions taken
at any meeting of shareholders however called and with whatever notice, if
any, shall be as valid as if taken at a meeting duly called and held on
notice, if:
(1) All shareholders entitled to vote were
present in person or by proxy and no objection to holding the
meeting was made by any share holder; or
(2) A quorum was present, either in person or by
proxy, and no objection to holding the meeting was made by any
shareholder entitled to vote so present, and if, either before
or after the meeting, each of the persons entitled to vote, not
present in person or by proxy, signs a written waiver of notice,
or a consent to the holding of the meeting, or an approval of
the action taken as shown by the minutes thereof. All such
resolutions, waivers, consents and approvals shall be recorded
in the minute book of the Corporation by the Secretary.
7. Quorum. The holders of a majority of the issued and
outstanding stock entitled to vote, either in person or by proxy, shall
constitute a quorum for the transaction of business at any meeting of the
shareholders. The shareholders present at a validly called and convened
meeting, at which a quorum was present may continue to transact business
notwithstanding the withdrawal of enough shares to leave less than a quorum.
8. Adjournment of Shareholders' Meeting. If a quorum is not
present at any meeting of the shareholders, the holders of a majority of the
voting power of the shares entitled to vote present, in person or by proxy,
may adjourn the meeting to such future time as shall be agreed upon by them,
and notice of such adjournment shall be given to the shareholders not present
or represented at the meeting.
9. Proxies. At all meetings of the shareholders, any
shareholder entitled to vote may vote either in person or by proxy. All
proxies shall be in writing, signed and dated and shall be filed with the
Secretary before or at the time of the meeting. No proxy shall be valid for
more than eleven (11) months after its execution unless otherwise provided
therein and in no event shall a proxy be valid for more than ten (10) years
after its execution.
10. Number of Votes, of Each Shareholder. Each outstanding,
share of common stock of the Corporation shall be entitled to one vote on each
matter submitted to a vote at a meeting of shareholders unless, and except to
the extent that, voting rights of shares of any class are increased, limited
or denied by the Certificate of Incorporation.
11. Voting. In voting on any question on which a vote by
ballot is required by law or is demanded by any shareholder, the voting shall
be by ballot; on all other questions it may be viva voce. Except as otherwise
provided herein, or by statute or this corporation's Certificate of
Incorporation, the affirmative vote, at a meeting of shareholders duly held
and at which a quorum is present, of a majority of the voting power of the
shares represented at such meeting which are entitled to vote on the subject
matter shall be the act of the shareholders.
12. Record Date. For the purpose of determining shareholders
entitled to notice of or to vote at any meeting of shareholders or any
adjournment thereof, or entitled to receive payment of any dividend or for any
other proper purpose, the Board of Directors shall set a record date which
shall not be a date earlier than the date on which such action is taken by the
Board of Directors, nor more than seventy (70) nor less than ten (10) days
before the particular event requiring such determination of shareholders is to
occur.
ARTICLE III
Directors
1. Number, Election and Term of Office. The property, business
and affairs of the Corporation shall be managed by or under the direction of
a Board of Directors comprising not less than three (3) nor more than ten (10)
directorships in number, except that if the Corporation shall at any time have
less than three (3) shareholders, the number of directorships may be decreased
to a number not less than the number of shareholders. The actual number of
directorships shall be fixed from time to time by resolution of the
shareholders or the directors, or in the absence thereof, shall be the number
of directors elected at the preceding annual meeting of shareholders. The
initial Board of Directors shall consist of three (3) members. Directors shall
be elected by the shareholders at the annual meeting, and it shall not be a
qualification of office that the directors be shareholders or residents of the
State of Connecticut. Each Director shall hold office for the term for which
he is elected and until his successor has been elected and qualified, except
that a Director shall cease to be in office upon his death, resignation,
lawful removal or court order decreeing that he is no longer a Director in
office.
2. Vacancies. Any vacancy in the Board of Directors by reason
of death, resignation, increase in the number of directorships or other cause,
shall be filled for the unexpired portion of the term by the concurring vote
of the shareholders entitled to vote at a shareholders' meeting called for the
purpose of filling such vacancy.
3. Powers of Directors. The Board of Directors shall have the
general management and control of the property, business and affairs of the
Corporation and may exercise all the powers that may be exercised or performed
by the Corporation, under the Connecticut General Statutes, as amended, its
Certificate of Incorporation and these bylaws.
4. Place of Meeting. The Board of Directors may hold its
meetings at such place or places within or without the State of Connecticut as
it may from time to time determine.
5. Regular Meetings. A meeting of the Board of Directors for
the election of officers and the transaction of any other business that may
come before such meeting shall be held without other notice immediately
following each annual meeting of the shareholders or as soon thereafter as is
convenient at the place designated therefor.
6. Other Meetings. Other meetings of the Board of Directors
may be held whenever the President or a member of the Board deems it
advisable, notice thereof to be given or m ailed to each Director at least
three (3) days prior to such meeting.
7. Waiver of Notice. Notice of any meeting of the Board of
Directors may be waived in writing by all the Directors and, if any Director
present at a meeting of the Board of Directors does not protest prior to or at
the commencement of the meeting the lack of proper notice, he shall be deemed
to have waived notice of such meeting.
8. Directors' Consent. Any resolution in writing concerning
action to be taken by the Corporation, which resolution is approved and signed
by all of the Directors, severally or collectively, whose number shall
constitute at least a majority of the directorships, shall have the same force
and effect as if such action were authorized at a meeting of the Board of
Directors duly called and held for that purpose, and such resolution, together
with the Directors' written approval thereof, shall be recorded by the
Secretary in the minute book of the Corporation.
9. Quorum. The holders of a majority of the directorships shall
constitute a quorum for the transaction of business at all meetings of the
Board of Directors.
10. Required Vote. The act of a majority of the total
directorships shall be the act of the ]Board of Directors; provided however,
that with respect to action authorizing the termination of any Beverage
Container Agreement between this Corporation and any of its shareholders, the
borrowing of money or the issuance of additional stock, a unanimous vote of the
directorships shall be necessary.
11. Compensation of Directors. The Board of Directors shall
have authority to fix fees of Directors, including reasonable allowance for
expenses actually incurred in connection with their duties.
ARTICLE IV
Officers
1. In General. The officers of the Corporation shall be a
President, a Treasurer, an Assistant Treasurer and a Secretary, and such other
officers as the Board of Directors may, from time to time, appoint. Any two or
more offices may be held by the same person except that the offices of
President and Secretary may not be simultaneously held by the same person. The
duties of officers of the Corporation shall be such as are prescribed by these
bylaws and as may be prescribed by the Board of Directors.
2. President. The President shall be the chief executive
officer of the Corporation and shall have general control and management of
the business affairs, subject to the direction of the Board of Directors, and
shall perform all duties incident to the office of President. He may appoint
such clerks and other employees and agents of the Corporation as he may from
time to time deem advisable.
3. Secretary. The Secretary shall keep a book of minutes of all
meetings of shareholders and the Board of Directors and shall issue all notices
required by law or by these bylaws, and he shall discharge all other duties
required of a corporate secretary by law or imposed from time to time by the
Board of Directors or by the President or as are incident to the office of
Secretary. He shall have the custody of the seal of the Corporation and all
books, records and papers of the Corporation, except such as shall be in the
charge of the Treasurer or of some other person authorized to have custody
and possession thereof by a resolution of the Board of Directors.
4. Treasurer. The Treasurer shall have charge and custody of
and be responsible for all funds and securities of the Corporation, keep full
and accurate accounts of receipts and disbursements and other customary
financial records of the Corporation, deposit all moneys and valuable effects
in the name and to the credit of the Corporation in depositories designated by
the Board of Directors and, in general, perform such other duties as may from
time, to time be assigned to him by the Board of Directors or by the President
or as are incident to the office of Treasurer.
5. Assistant Treasurer. The Assistant Treasurer shall perform
such duties as may from time to time be assigned to him by the Board of
Directors or delegated to him by the Treasurer. In case of death, disability
or absence of the Treasurer, the Assistant Treasurer shall fulfill all the
duties and be vested with all the powers and responsibilities of the Treasurer.
6. Term of Office. Each of such officers shall serve for the
term of one year and until his successor is duly appointed and qualified, but
any officer may be removed by the Board of Directors at any time with or
without cause. Vacancies among the officers by reason of death, resignation or
other causes shall be filled by the Board of Directors.
7. Compensation. The compensation of all officers shall be
fixed by the Board of Directors, and may be changed from time to time by a
majority vote of the Board.
ARTICLE V
Issue and Transfer of Stock
1. Certificates. Certificates of stock shall be in form
authorized or adopted by the Board of Directors and shall be consecutively
numbered. Each certificate shall set forth upon its face as at the time of
issue: the name of the Corporation, a statement that the Corporation is
organized under the laws of the State of Connecticut, the name of the person
to whom issued or that the same is issued to bearer, the number, class and
designation of series, if any, of shares represented thereby and the par value
of each such share; and each certificate shall be signed by the President and
by the Secretary and shall be sealed with the seal of the Corporation;
provided that the certificate shall also contain such other recitals as may
from time to time be required by law.
2. Transfer. The stock of the Corporation shall be transferred
only upon the books of the Corporation either by the shareholder in person or
by power of attorney executed by him for that purpose upon the surrender for
cancellation of the old stock certificate. Prior to due presentment for
registration of transfer of a certificate, and subject to the provisions of
Article II paragraph 12 of these bylaws, the Corporation shall treat the
registered owner of such certificate as the person exclusively entitled to
vote, receive notifications and distributions, and otherwise to exercise all
the rights and powers of the shares represented by such certificate.
ARTICLE VI
Designated Proxy
The President, or such other person as the Board of Directors
may designate, shall be the authorized proxy of this Corporation for the
purpose of voting shares of the capital stock of any other corporation
standing in the name of this Corporation.
ARTICLE VII
Seal
The seal of the Corporation shall have inscribed thereon the
name of the Corporation, the word "Seal" and the word "Connecticut."
ARTICLE VIII
Fiscal Year
The fiscal year of the Corporation shall commence on the first
day of each calendar year and end on the last day of such year.
ARTICLE IX
Indemnification
The Corporation shall indemnify and hold harmless each person
who is or was a Director, officer, employee or agent of it and certain other
parties pursuant to, and to the maximum extent permitted by the laws of the
State of Connecticut, now or hereafter enacted.
ARTICLE X
Amendments
The bylaws of the Corporation may be altered, amended or
repealed at any validly called and convened meeting of the Board of Directors
by the affirmative vote of two thirds (2/3) of the total number of
directorships or at any validly called and convened meeting of the
shareholders by the affirmative vote of the holders of two thirds (2/3) of the
voting power of all shares entitled to vote thereon, and the notice of such
shareholders' meeting shall state that such alteration, amendment or repeal
will be proposed.
I hereby certify that the foregoing bylaws were adopted by me as
incorporator of the Corporation on the 9th day of October, 1979.
ATTEST
/s/ William E. Kelly
----------------------------------
Incorporator
EXHIBIT 4.1
===============================================================================
INDENTURE
Dated as of March 1, 1998
Among
TEKNI-PLEX, INC.,
the GUARANTORS (defined herein)
and
MARINE MIDLAND BANK, Trustee
---------------
$275,000,000
9 1/4% Senior Subordinated Notes due 2008
===============================================================================
CROSS-REFERENCE TABLE
Indenture
Trust Indenture Act Section Section
- --------------------------- -------
ss.310(a)(1)................................................ 7.10
(a)(2)................................................ 7.10
(a)(3)................................................ N.A.
(a)(4)................................................ N.A.
(a)(5)................................................ N.A.
(b)................................................... 7.08; 7.10; 13.02
(c)................................................... N.A.
ss.311(a)................................................... 7.11
(b)................................................... 7.11
(c)................................................... N.A.
ss.312(a)................................................... 2.05
(b)................................................... 13.03
(c)................................................... 13.03
ss.313(a)................................................... 7.06
(b)(1)................................................ N.A.
(b)(2)................................................ 7.06
(c)................................................... 7.06; 13.02
(d)................................................... 7.06
ss.314(a)................................................... 4.11; 4.12; 13.02
(b)................................................... N.A.
(c)(1)................................................ 13.04
(c)(2)................................................ 13.04
(c)(3)................................................ N.A.
(d)................................................... N.A.
(e)................................................... 13.05
(f)................................................... N.A.
ss.315(a)................................................... 7.01(b)
(b)................................................... 7.05; 13.02
(c)................................................... 7.01(a)
(d)................................................... 7.01(c)
(e)................................................... 6.11
ss.316(a)(last sentence).................................... 2.09
(a)(1)(A)............................................. 6.05
(a)(1)(B)............................................. 6.04
(a)(2)................................................ N.A.
(b)................................................... 6.07
(c)................................................... 10.04
ss.317(a)(1)................................................ 6.08
(a)(2)................................................ 6.09
(b)................................................... 2.04
ss.318(a)................................................... 13.01
- ---------------
N.A. means Not Applicable.
NOTE: This Cross-Reference Table shall not, for any purpose, be deemed to be a
part of this Indenture.
TABLE OF CONTENTS
Page
----
ARTICLE ONE
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.01. Definitions......................................................1
SECTION 1.02. Other Definitions...............................................22
SECTION 1.03. Incorporation by Reference of Trust Indenture Act...............22
ARTICLE TWO
THE SECURITIES
SECTION 2.01. Form and Dating.................................................24
SECTION 2.02. Execution and Authentication....................................26
SECTION 2.03. Registrar and Paying Agent......................................27
SECTION 2.04. Paying Agent To Hold Money in Trust.............................27
SECTION 2.05. Securityholder Lists............................................28
SECTION 2.06. Transfer and Exchange...........................................28
SECTION 2.07. Replacement Securities..........................................38
SECTION 2.08. Outstanding Securities..........................................38
SECTION 2.09. Treasury Securities.............................................39
SECTION 2.10. Temporary Securities............................................39
SECTION 2.11. Cancellation....................................................39
SECTION 2.12. Defaulted Interest..............................................40
SECTION 2.13. CUSIP or CINS Number............................................40
SECTION 2.14. Payments of Interest............................................40
ARTICLE THREE
REDEMPTION
SECTION 3.01. Notices to Trustee..............................................41
SECTION 3.02. Selection of Securities To Be Redeemed..........................42
SECTION 3.03. Notice of Redemption............................................42
SECTION 3.04. Effect of Notice of Redemption..................................43
SECTION 3.05. Deposit of Redemption Price.....................................43
SECTION 3.06. Securities Redeemed in Part.....................................43
ARTICLE FOUR
COVENANTS
SECTION 4.01. Payment of Securities...........................................44
SECTION 4.02. Maintenance of Office or Agency.................................44
SECTION 4.03. Limitation on Transactions with Affiliates
and Related Persons...........................................45
SECTION 4.04. Limitation on Indebtedness......................................45
SECTION 4.05. Limitation on Certain Asset Dispositions........................48
SECTION 4.06. Limitation on Restricted Payments...............................50
SECTION 4.07. Corporate Existence.............................................53
SECTION 4.08. Payment of Taxes and Other Claims...............................54
SECTION 4.09. Notice of Defaults..............................................54
SECTION 4.10. Maintenance of Properties.......................................54
SECTION 4.11. Compliance Certificate..........................................55
SECTION 4.12. Provision of Financial Information..............................55
SECTION 4.13. Waiver of Stay, Extension or Usury Laws.........................56
SECTION 4.14. Change of Control...............................................56
SECTION 4.15. Limitation on Senior Subordinated Indebtedness..................58
SECTION 4.16. Limitations Concerning Distributions and Transfers
by Restricted Subsidiaries....................................58
SECTION 4.17. Limitation on Issuance and Sale of Capital Stock of
Restricted Subsidiaries........................................59
SECTION 4.18. Limitation on Liens.............................................60
SECTION 4.19. Future Guarantors...............................................62
SECTION 4.20. Termination of Certain Covenants................................62
ARTICLE FIVE
MERGERS; SUCCESSOR CORPORATION
SECTION 5.01. Restriction on Mergers, Consolidations and
Certain Sales of Assets........................................62
SECTION 5.02. Successor Corporation Substituted...............................63
ARTICLE SIX
DEFAULT AND REMEDIES
SECTION 6.01. Events of Default...............................................64
SECTION 6.02. Acceleration....................................................66
SECTION 6.03. Other Remedies..................................................67
SECTION 6.04. Waiver of Past Default..........................................67
SECTION 6.05. Control by Majority.............................................68
SECTION 6.06. Limitation on Suits.............................................68
SECTION 6.07. Rights of Holders To Receive Payment............................69
SECTION 6.08. Collection Suit by Trustee......................................69
SECTION 6.09. Trustee May File Proofs of Claim................................70
SECTION 6.10. Priorities......................................................70
SECTION 6.11. Undertaking for Costs...........................................71
ARTICLE SEVEN
TRUSTEE
SECTION 7.01. Duties of Trustee...............................................71
SECTION 7.02. Rights of Trustee...............................................72
SECTION 7.03. Individual Rights of Trustee....................................74
SECTION 7.04. Trustee's Disclaimer............................................74
SECTION 7.05. Notice of Defaults..............................................74
SECTION 7.06. Reports by Trustee to Holders...................................74
SECTION 7.07. Compensation and Indemnity......................................75
SECTION 7.08. Replacement of Trustee..........................................76
SECTION 7.09. Successor Trustee by Merger, etc................................77
SECTION 7.10. Eligibility; Disqualification...................................77
SECTION 7.11. Preferential Collection of Claims Against Company...............78
ARTICLE EIGHT
SUBORDINATION OF SECURITIES
SECTION 8.01. Securities Subordinated to Senior Debt..........................78
SECTION 8.02. No Payment on Securities in Certain Circumstances...............78
SECTION 8.03. Payment Over of Proceeds upon Dissolution, etc..................80
SECTION 8.04. Subrogation.....................................................81
SECTION 8.05. Obligations of Company Unconditional............................82
SECTION 8.06. Notice to Trustee...............................................83
SECTION 8.07. Reliance on Judicial Order or Certificate
of Liquidating Agent...........................................84
SECTION 8.08. Trustee's Relation to Senior Debt...............................84
SECTION 8.09. Subordination Rights Not Impaired by Acts or
Omissions of the Company or Holders of Senior Debt.............85
SECTION 8.10. Securityholders Authorize Trustee To Effectuate
Subordination of Securities....................................85
SECTION 8.11. This Article Not To Prevent Events of Default...................85
SECTION 8.12. Trustee's Compensation Not Prejudiced...........................85
SECTION 8.13. No Waiver of Subordination Provisions...........................86
SECTION 8.14. Subordination Provisions Not Applicable to Money
Held in Trust for Securityholders; Payments May
Be Paid Prior to Dissolution...................................86
SECTION 8.15. Acceleration of Securities......................................87
ARTICLE NINE
DISCHARGE OF INDENTURE
SECTION 9.01. Termination of Company's Obligations............................87
SECTION 9.02. Conditions Precedent to Termination.............................88
SECTION 9.03. Survival of Certain Obligations of the Company..................88
SECTION 9.04. Trustee's Obligations upon Termination..........................89
ARTICLE TEN
AMENDMENTS, SUPPLEMENTS AND WAIVERS
SECTION 10.01. Without Consent of Holders.....................................90
SECTION 10.02. With Consent of Holders........................................91
SECTION 10.03. Compliance with Trust Indenture Act............................93
SECTION 10.04. Revocation and Effect of Consents..............................93
SECTION 10.05. Notation on or Exchange of Securities..........................94
SECTION 10.06. Trustee To Sign Amendments, etc................................94
ARTICLE ELEVEN
GUARANTEE
SECTION 11.01. Unconditional Guarantee........................................94
SECTION 11.02. Severability...................................................95
SECTION 11.03. Release of a Guarantor.........................................95
SECTION 11.04. Limitation of Guarantor's Liability............................96
SECTION 11.05. Contribution...................................................97
SECTION 11.06. Execution of Guarantee.........................................97
SECTION 11.07. Subordination of Subrogation and Other Rights..................97
ARTICLE TWELVE
SUBORDINATION OF GUARANTEE
SECTION 12.01. Guarantee Obligations Subordinated to
Senior Debt of Guarantor.....................................98
SECTION 12.02. No Payment on Guarantees in Certain Circumstances..............98
SECTION 12.03. Payment Over of Proceeds upon Dissolution, etc................100
SECTION 12.04. Subrogation...................................................101
SECTION 12.05. Obligations of Guarantors Unconditional.......................102
SECTION 12.06. Notice to Trustee.............................................103
SECTION 12.07. Reliance on Judicial Order or Certificate of
Liquidating Agent...........................................104
SECTION 12.08. Trustee's Relation to Senior Debt of Guarantors...............104
SECTION 12.09. Subordination Rights Not Impaired by Acts or
Omissions of the Guarantors or Holders of
Senior Debt of Guarantors...................................105
SECTION 12.10. Securityholders Authorize Trustee To Effectuate
Subordination of Guarantee..................................105
SECTION 12.11. This Article Not To Prevent Events of Default.................105
SECTION 12.12. Trustee's Compensation Not Prejudiced.........................105
SECTION 12.13. No Waiver of Guarantee Subordination Provisions...............106
SECTION 12.14. Payments May Be Paid Prior to Dissolution.....................106
ARTICLE THIRTEEN
MISCELLANEOUS
SECTION 13.01. Trust Indenture Act Controls..................................106
SECTION 13.02. Notices.......................................................107
SECTION 13.03. Communications by Holders with Other Holders..................108
SECTION 13.04. Certificate and Opinion as to Conditions Precedent............108
SECTION 13.05. Statements Required in Certificate or Opinion.................109
SECTION 13.06. Rules by Trustee, Paying Agent, Registrar.....................109
SECTION 13.07. Governing Law.................................................110
SECTION 13.08. No Recourse Against Others....................................110
SECTION 13.09. Successors....................................................110
SECTION 13.10. Count`erpart Originals........................................110
SECTION 13.11. Severability..................................................110
SECTION 13.12. No Adverse Interpretation of Other Agreements.................110
SECTION 13.13. Legal Holidays................................................111
SIGNATURES...................................................................112
EXHIBIT A - Form of Security.................................................A-1
EXHIBIT B - Form of Certificate of Transfer..................................B-1
EXHIBIT C - Form of Certificate of Exchange..................................C-1
INDENTURE dated as of March 1, 1998, among TEKNI-PLEX, INC., a Delaware
corporation (the "Company"), the Guarantors listed on the signature page hereto,
and MARINE MIDLAND BANK, a banking corporation and trust company organized under
the laws of the State of New York, as trustee (the "Trustee").
Each party hereto agrees as follows for the benefit of the other
parties and for the equal and ratable benefit of the Holders of the Company's 9
1/4% Senior Subordinated Notes due 2008:
ARTICLE ONE
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.01. Definitions.
"Acquired Indebtedness" means, with respect to any Person, Indebtedness
of such Person (i) existing at the time such Person becomes a Restricted
Subsidiary or (ii) assumed in connection with the acquisition of assets from
another Person, including Indebtedness Incurred in connection with, or in
contemplation of, such Person becoming a Restricted Subsidiary or such
acquisition, as the case may be.
"Additional Interest" shall have the meaning set forth in the
Registration Rights Agreement.
"Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with any specified Person. For purposes of this definition, "control"
when used with respect to any Person means the power to direct the management
and policies of such Person, directly or indirectly, whether through the
ownership of voting securities, by contract or otherwise; and the terms
"controlling" and "controlled" have meanings correlative to the foregoing.
"Agent" means any Registrar, Paying Agent or co-Registrar. See Section
2.03.
"Applicable Procedures" means with respect to any transfer or exchange
of interests in a Global Security, the rules and procedures of DTC, Euroclear or
Cedel that apply to such transfer or exchange.
"Asset Disposition" means any sale, transfer or other disposition
(including, without limitation, by merger, consolidation or sale-and-leaseback
transaction) of (i) shares of Capital Stock of a Restricted Subsidiary of the
Company (other than directors' qualifying shares) or (ii) property or assets of
the Company or any Restricted Subsidiary of the Company other than in the
ordinary course of business; provided, however, that an Asset Disposition shall
not include (a) any sale, transfer or other disposition of shares of Capital
Stock, property or assets by a Restricted Subsidiary of the Company to the
Company or to any Wholly Owned Subsidiary of the Company, (b) any sale, transfer
or other disposition of defaulted receivables for collection or any sale,
transfer or other disposition of property or assets in the ordinary course of
business, (c) any isolated sale, transfer or other disposition that does not
involve aggregate consideration in excess of $2.0 million individually, (d) the
grant in the ordinary course of business of any non-exclusive license of
patents, trademarks, registrations therefor and other similar intellectual
property, (e) any Lien (or foreclosure thereon) securing Indebtedness to the
extent that such Lien is granted in compliance with Section 4.18, (f) any
Restricted Payment permitted by Section 4.06, (g) any disposition of assets or
property in the ordinary course of business to the extent such property or
assets are obsolete, worn-out or no longer useful in the Company's or any of its
Restricted Subsidiaries' business, (h) the sale, lease, conveyance or
disposition or other transfer of all or substantially all of the assets of the
Company as permitted under Section 5.01; provided, that the assets not so sold,
leased, conveyed, disposed of or otherwise transferred shall be deemed an Asset
Disposition, or (i) any disposition that constitutes a Change of Control.
"Average Life" means, as of the date of determination, with respect to
any Indebtedness for borrowed money or Preferred Stock, the quotient obtained by
dividing (i) the sum of the products of the number of years from the date of
determination to the dates of each successive scheduled principal or liquidation
value payments of such Indebtedness or Preferred Stock, respectively, and the
amount of such principal or liquidation value payments, by (ii) the sum of all
such principal or liquidation value payments.
"Board of Directors" means the Board of Directors of the Company or any
Guarantor, as the case may be, or any authorized committee of that Board.
"Board Resolution" means, with respect to any Person, a duly adopted
resolution of the Board of Directors of such Person and, if applicable,
certified and delivered to the Trustee.
"Business Day" means each Monday, Tuesday, Wednesday, Thursday and
Friday that is not a day on which banking institutions in the City of New York
are authorized or obligated by law, resolution or executive order to close.
"Capital Lease Obligations" of any Person means the obligations to pay
rent or other amounts under a lease of (or other Indebtedness arrangements
conveying the right to use) real or personal property of such Person which are
required to be classified and accounted for as a capital lease or liability on
the face of a balance sheet of such Person in accordance with GAAP. The amount
of such obligations shall be the capitalized amount thereof in accordance with
GAAP and the stated maturity thereof shall be the date of the last payment of
rent or any other amount due under such lease prior to the first date upon which
such lease may be terminated by the lessee without payment of a penalty.
"Capital Stock" of any Person means any and all shares, interests,
participations or other equivalents (however designated) of corporate stock of
such Person.
"Cedel" means Cedel Bank, societe anonyme.
"Common Stock" of any Person means Capital Stock of such Person that
does not rank prior, as to the payment of dividends or as to the distribution of
assets upon any voluntary or involuntary liquidation, dissolution or winding up
of such Person, to shares of Capital Stock of any other class of such Person.
"Company" means the Person named as the "Company" in the first
paragraph of this Indenture until a successor shall have become such pursuant to
the applicable provisions of this Indenture, and thereafter "Company" shall mean
such successor.
"Company Request" or "Company Order" means a written request or order
signed in the name of the Company by its Chairman of the Board, its Vice
Chairman of the Board, its President or a Vice President, and by its Treasurer,
an Assistant Treasurer, its Secretary or an Assistant Secretary, and delivered
to the Trustee.
"Consolidated Cash Flow Available for Fixed Charges" of any Person
means for any period the Consolidated Net Income of such Person for such period
increased (to the extent Consolidated Net Income for such period has been
reduced thereby) by the sum of (without duplication) (i) Consolidated Interest
Expense of such Person for such period, plus (ii) Consolidated Income Tax
Expense of such Person for such period, plus (iii) the consolidated depreciation
and amortization expense included in the income statement of such Person
prepared in accordance with GAAP for such period, plus (iv) any other non-cash
charges to the extent deducted from or reflected in Consolidated Net Income
except for any non-cash charges that represent accruals of, or reserves for,
cash disbursements to be made in any future accounting period.
"Consolidated Cash Flow Ratio" of any Person means for any period the
ratio of (i) Consolidated Cash Flow Available for Fixed Charges of such Person
for such period to (ii) the sum of (A) Consolidated Interest Expense of such
Person for such period, plus (B) the annual interest expense with respect to any
Indebtedness proposed to be Incurred by such Person or its Restricted
Subsidiaries, minus (C) Consolidated Interest Expense of such Person to the
extent included in clause (ii)(A) with respect to any Indebtedness that will no
longer be outstanding as a result of the Incurrence of the Indebtedness proposed
to be Incurred, plus (D) the annual interest expense with respect to any other
Indebtedness Incurred by such Person or its Restricted Subsidiaries since the
end of such period to the extent not included in clause (ii)(A), minus (E)
Consolidated Interest Expense of such Person to the extent included in clause
(ii)(A) with respect to any Indebtedness that no longer is outstanding as a
result of the Incurrence of the Indebtedness referred to in clause (ii)(D);
provided, however, that in making such computation, the Consolidated Interest
Expense of such Person attributable to interest on any Indebtedness bearing a
floating interest rate shall be computed on a pro forma basis as if the rate in
effect on the date of computation (after giving effect to any hedge in respect
of such Indebtedness that will, by its terms, remain in effect until the earlier
of the maturity of such Indebtedness or the date one year after the date of such
determination) had been the applicable rate for the entire period; provided,
further, however, that, in the event such Person or any of its Restricted
Subsidiaries has made any Asset Dispositions or acquisitions of assets not in
the ordinary course of business (including acquisitions of other Persons by
merger, consolidation or purchase of Capital Stock) during or after such period
and on or prior to the date of measurement, such computation shall be made on a
pro forma basis as if the Asset Dispositions or acquisitions had taken place on
the first day of such period. Calculations of pro forma amounts in accordance
with this definition shall be done in accordance with Article 11 of Regulation
S-X under the Securities Act or any successor provision and may include
reasonably ascertainable cost savings.
"Consolidated Income Tax Expense" of any Person means for any period
the consolidated provision for income taxes of such Person and its Restricted
Subsidiaries for such period calculated on a consolidated basis in accordance
with GAAP.
"Consolidated Interest Expense" for any Person means for any period,
without duplication, (a) the consolidated interest expense included in a
consolidated income statement (without deduction of interest or finance charge
income) of such Person and its Restricted Subsidiaries for such period
calculated on a consolidated basis in accordance with GAAP and (b) dividend
requirements of such Person and its Restricted Subsidiaries with respect to
Disqualified Stock and with respect to all other Preferred Stock of Restricted
Subsidiaries of such Person (in each case whether in cash or otherwise (except
dividends payable solely in shares of Capital Stock of such Person or such
Restricted Subsidiary)) paid, accrued or accumulated during such period times a
fraction the numerator of which is one and the denominator of which is one minus
the then effective consolidated Federal, state and local tax rate of such
Person, expressed as a decimal.
"Consolidated Net Income" of any Person means for any period the
consolidated net income (or loss) of such Person and its Restricted Subsidiaries
for such period determined on a consolidated basis in accordance with GAAP;
provided, however, that there shall be excluded therefrom (a) the net income (or
loss) of any Person acquired by such Person or a Restricted Subsidiary of such
Person in a pooling-of-interests transaction for any period prior to the date of
such transaction, (b) the net income (but not net loss) of any Restricted
Subsidiary of such Person which is subject to restrictions which prevent or
limit the payment of dividends or the making of distributions to such Person to
the extent of such restrictions (regardless of any waiver thereof), (c) non-cash
gains and losses due solely to fluctuations in currency values, (d) the net
income of any Person that is not a Restricted Subsidiary of such Person, except
to the extent of the amount of dividends or other distributions representing
such Person's proportionate share of such other Person's net income for such
period actually paid in cash to such Person by such other Person during such
period, (e) gains but not losses on Asset Dispositions by such Person or its
Restricted Subsidiaries, (f) all extraordinary gains and losses determined in
accordance with GAAP and (g) in the case of a successor to the referent Person
by consolidation or merger or as a transferee of the referent Person's assets,
any earnings (or losses) of the successor corporation prior to such
consolidation, merger or transfer of assets.
"Consolidated Net Worth" of any Person means the consolidated
stockholders' equity of such Person, determined on a consolidated basis in
accordance with GAAP, less (without duplication) amounts attributable to
Disqualified Capital Stock of such Person.
"Continuing Director" means a director who either was a member of the
Board of Directors of the Company on the Issue Date or who became a director of
the Company subsequent to the Issue Date and whose election, or nomination for
election by the Company's stockholders, was duly approved by a majority of the
Continuing Directors then on the Board of Directors of the Company, either by a
specific vote or by approval of the proxy statement issued by the Company on
behalf of the entire Board of Directors of the Company in which such individual
is named as nominee for director.
"Corporate Trust Office of the Trustee" shall be at the address of the
Trustee specified in Section 13.02 or such other address as the Trustee may give
notice to the Company.
"Credit Agreement" means the Credit Agreement, dated as of March 3,
1998, among the Company as borrower thereunder, the guarantors party thereto,
the lenders party thereto, the letter of credit issuing banks referred to
therein, and Morgan Guaranty Trust Company of New York, as agent on behalf of
itself and the others named therein, and any deferrals, renewals, extensions,
replacements, refinancings or refundings thereof, or amendments, modifications
or supplements thereto or replacements thereof (including, without limitation,
any amendment increasing the amount borrowed thereunder) and any agreement
providing therefor whether by or with the same or any other lender, creditors,
or group of creditors and including related notes, guarantee agreements,
security agreements and other instruments and agreements executed in connection
therewith.
"Default" means any event that is, or after notice or lapse of time or
both would become, an Event of Default.
"Designated Senior Debt" means (i) so long as the Credit Agreement is
in effect, the Senior Debt incurred thereunder and (ii) thereafter, any other
Senior Debt which has at the time of initial issuance an aggregate outstanding
principal amount in excess of $25.0 million which has been so designated as
Designated Senior Debt by the Board of Directors of the Company at the time of
initial issuance in a resolution certified pursuant to an Officers' Certificate
and delivered to the Trustee.
"Disqualified Stock" of any Person means any Capital Stock of such
Person which, by its terms (or by the terms of any security into which it is
convertible or for which it is exchangeable), or upon the happening of any
event, matures or is mandatorily redeemable, pursuant to a sinking fund
obligation or otherwise, or is redeemable at the option of the holder thereof,
in whole or in part, on or prior to the final maturity of the Securities (other
than pursuant to change of control provisions similar to those applicable to the
Securities, provided that such provisions expressly provide that no payment can
be made on such Capital Stock until any Offer to Purchase the Securities
required pursuant to Section 4.14 shall have been consummated and paid in full).
"Domestic Restricted Subsidiary" means any Restricted Subsidiary of the
Company organized and existing under the laws of the United States, any state
thereof or the District of Columbia.
"DTC" means The Depository Trust Company or its successors.
"11 1/4% Notes" means the Company's 11 1/4% Senior Subordinated Notes
due 2007 issued pursuant to the 11 1/4% Notes Indenture.
"11 1/4% Notes Indenture" means the indenture dated as of April 1,
1997, among the Company, the subsidiaries of the Company from time to time party
thereto as guarantors thereunder and Marine Midland Bank, as trustee, as
supplemented from time to time.
"Euroclear" means Morgan Guaranty Trust Company of New York (Brussels
Office) as operator of the Euroclear system.
"Exchange Act" means the Securities Exchange Act of 1934, as amended,
and the rules and regulations promulgated by the Commission thereunder.
"Exchange Registration Statement" shall have the meaning set forth in
the Registration Rights Agreement.
"Expiration Date" has the meaning set forth in the definition of "Offer
to Purchase".
"GAAP" means generally accepted accounting principles, consistently
applied, as in effect on the Issue Date in the United States of America, as 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 is approved by a significant segment of the
accounting profession in the United States.
"Global Security" means the global security, without coupons,
representing all or a portion of the Securities deposited with DTC substantially
in the form of Exhibit A attached hereto.
"guarantee" by any Person means any obligation, contingent or
otherwise, of such Person guaranteeing any Indebtedness of any other Person (the
"primary obligor") in any manner, whether directly or indirectly, and including,
without limitation, any obligation of such Person (i) to purchase or pay (or
advance or supply funds for the purchase or payment of) such Indebtedness or to
purchase (or to advance or supply funds for the purchase of) any security for
the payment of such Indebtedness, (ii) to purchase property, securities or
services for the purpose of assuring the holder of such Indebtedness of the
payment of such Indebtedness, or (iii) to maintain working capital, equity
capital or other financial statement condition or liquidity of the primary
obligor so as to enable the primary obligor to pay such Indebtedness (and
"guaranteed," "guaranteeing" and "guarantor" shall have meanings correlative to
the foregoing); provided, however, that the guarantee by any Person shall not
include endorsements by such Person for collection or deposit, in either case,
in the ordinary course of business.
"Guarantee" means the guarantee of the Securities by each Guarantor
under this Indenture.
"Guarantor" means (i) each Domestic Restricted Subsidiary on the Issue
Date with assets or stockholder's equity in excess of $25,000 and (ii) each
Domestic Restricted Subsidiary, if any, of the Company formed or acquired after
the Issue Date which pursuant to the terms of this Indenture executes a
supplement to this Indenture as a Guarantor.
"Holder" or "Securityholder" means the Person in whose name a Security
is registered on the books of the Registrar or any co-Registrar.
"Incur" means, with respect to any Indebtedness or other obligation of
any Person, to create, issue, incur (including by conversion, exchange or
otherwise), assume, guarantee or otherwise become liable in respect of such
Indebtedness or other obligation or the recording, as required pursuant to GAAP
or otherwise, of any such Indebtedness or other obligation on the balance sheet
of such Person (and "Incurrence," "Incurred" and "Incurring" shall have meanings
correlative to the foregoing). Indebtedness of any Person or any of its
Restricted Subsidiaries existing at the time such Person becomes a Restricted
Subsidiary of the Company (or is merged into or consolidates with the Company or
any of its Restricted Subsidiaries), whether or not such Indebtedness was
incurred in connection with, or in contemplation of, such Person becoming a
Restricted Subsidiary of the Company (or being merged into or consolidated with
the Company or any of its Restricted Subsidiaries), shall be deemed Incurred at
the time any such Person becomes a Restricted Subsidiary of the Company or
merges into or consolidates with the Company or any of its Restricted
Subsidiaries.
"Indebtedness" means (without duplication), with respect to any Person,
whether recourse is to all or a portion of the assets of such Person and whether
or not contingent, (i) every obligation of such Person for money borrowed, (ii)
every obligation of such Person evidenced by bonds, debentures, notes or other
similar instruments, including obligations incurred in connection with the
acquisition of property, assets or businesses, (iii) every reimbursement
obligation of such Person with respect to letters of credit, bankers'
acceptances or similar facilities issued for the account of such Person
outstanding for more than 15 days, (iv) every obligation of such Person issued
or assumed as the deferred purchase price of property or services outstanding
for more than 15 days (but excluding trade accounts payable or accrued
liabilities arising in the ordinary course of business which are not overdue or
which are being contested in good faith), (v) every Capital Lease Obligation of
such Person, (vi) every net obligation under interest rate swap or similar
agreements or foreign currency hedge, exchange or similar agreements of such
Person and (vii) every obligation of the type referred to in clauses (i) through
(vi) of another Person and all dividends of another Person the payment of which,
in either case, such Person has guaranteed or is responsible or liable for,
directly or indirectly, as obligor, guarantor or otherwise. Indebtedness shall
include the liquidation preference and any mandatory redemption payment
obligations in respect of any Disqualified Stock of the Company owned by any
Person other than the Company or a Restricted Subsidiary of the Company, and any
Preferred Stock of a Restricted Subsidiary of the Company. Indebtedness shall
never be calculated taking into account any cash and cash equivalents held by
such Person. Indebtedness shall not include obligations arising from agreements
of the Company or a Restricted Subsidiary of the Company to provide for
indemnification, adjustment of purchase price, earn-out, or other similar
obligations, in each case, incurred or assumed in connection with the
disposition of any business or assets of a Restricted Subsidiary of the Company.
"Indenture" means this Indenture as amended or supplemented from time
to time.
"Initial Global Securities" means the Regulation S Global Security and
the 144A Global Security, each of which contains a Securities Act Legend.
"Initial Securities" means the Securities containing a Securities Act
Legend.
"Interest Payment Date" means the stated maturity of an installment of
interest on the Securities.
"Institutional Accredited Investor" means an institution that is an
"accredited investor" as that term is defined in Rule 501(a)(1), (2), (3) or (7)
of Regulation D promulgated under the Securities Act.
"Investment" by any Person means any direct or indirect loan, advance,
guarantee or other extension of credit (excluding credit balances in bank
accounts or similar accounts with other financial institutions) or capital
contribution to (by means of transfers of cash or other property to others or
payments for property or services for the account or use of others, or
otherwise), or purchase or acquisition of Capital Stock, bonds, notes,
debentures or other securities or evidence of Indebtedness issued by any other
Person.
"Investment Grade Rated" means, with respect to the Securities, both a
rating of the Securities by S&P of BBB- or higher and a rating of the Securities
by Moody's of Baa3 or higher.
"Issue Date" means March 3, 1998.
"Lien" means, with respect to any property or assets, any mortgage or
deed of trust, pledge, hypothecation, assignment, security interest, lien,
charge, easement (other than any easement not materially impairing usefulness or
marketability), encumbrance, preference, priority or other security agreement
with respect to such property or assets (including, without limitation, any
conditional sale or other title retention agreement having substantially the
same economic effect as any of the foregoing).
"Material Subsidiary" means, at any date of determination, any
Subsidiary that, together with its Subsidiaries, (i) for the most recent fiscal
year of the Company accounted for more than 5% of the consolidated revenues of
the Company or (ii) as of the end of such fiscal year, was the owner of more
than 5% of the consolidated assets of the Company, all as set forth on the most
recently available consolidated financial statements of the Company for such
fiscal year prepared in conformity with GAAP.
"Maturity Date" means the date, which is set forth on the face of the
Securities, on which the Securities will mature.
"Moody's" means Moody's Investors Service, Inc. or any successor to its
debt rating business.
"Net Available Proceeds" from any Asset Disposition by any Person means
cash or readily marketable cash equivalents received (including by way of sale
or discounting of a note, installment receivable or other receivable, but
excluding any other consideration received in the form of assumption by the
acquiror of Indebtedness or other obligations relating to such properties or
assets or received in any other non-cash form) therefrom by such Person,
including any cash received by way of deferred payment or upon the monetization
or other disposition of any non-cash consideration (including notes or other
securities) received in connection with such Asset Disposition, net of (i) all
legal, title and recording tax expenses, commissions and other fees and expenses
incurred and all federal, state, foreign and local taxes required to be accrued
as a liability as a consequence of such Asset Disposition, (ii) all payments
made by such Person or its Restricted Subsidiaries on any Indebtedness which is
secured by such assets in accordance with the terms of any Lien upon or with
respect to such assets or which must by the terms of such Lien, or in order to
obtain a necessary consent to such Asset Disposition or by applicable law, be
repaid out of the proceeds from such Asset Disposition, (iii) all payments made
with respect to liabilities associated with the assets which are the subject of
the Asset Disposition, including, without limitation, trade payables and other
accrued liabilities, (iv) appropriate amounts to be provided by such Person or
any Restricted Subsidiary thereof, as the case may be, as a reserve in
accordance with GAAP against any liabilities associated with such assets and
retained by such Person or any Restricted Subsidiary thereof, as the case may
be, after such Asset Disposition, including, without limitation, liabilities
under any indemnification obligations and severance and other employee
termination costs associated with such Asset Disposition, until such time as
such amounts are no longer reserved or such reserve is no longer necessary (at
which time any remaining amounts will become Net Available Proceeds to be
allocated in accordance with the provisions of clause (iii) of Section 4.05),
and (v) all distributions and other payments made to minority interest holders
in Restricted Subsidiaries of such Person or joint ventures as a result of such
Asset Disposition.
"Net Investment" means the excess of (i) the aggregate amount of all
Investments in Unrestricted Subsidiaries or joint ventures made by the Company
or any Restricted Subsidiary on or after the Issue Date (in the case of an
Investment made other than in cash, the amount shall be the fair market value of
such Investment as determined in good faith by the Board of Directors of the
Company or such Restricted Subsidiary) over (ii) the aggregate amount returned
in cash on or with respect to such Investments whether through interest
payments, principal payments, dividends or other distributions or payments;
provided, however, that such payments or distributions shall not be (and have
not been) included in subclause (b) of clause (3) of the first paragraph of
Section 4.06; provided, further, that with respect to all Investments made in
any Unrestricted Subsidiary or joint venture the amounts referred to in clause
(ii) above with respect to such Investments shall not exceed the aggregate
amount of all such Investments made in such Unrestricted Subsidiary or joint
venture.
"Offer" has the meaning set forth in the definition of "Offer to
Purchase".
"Offer to Purchase" means a written offer (the "Offer") sent by the
Company by first class mail, postage prepaid, to each Holder at his address
appearing in the register for the Securities on the date of the Offer offering
to purchase up to the principal amount of Securities specified in such Offer at
the purchase price specified in such Offer (as determined pursuant to this
Indenture). Unless otherwise required by applicable law, the Offer shall specify
an expiration date (the "Expiration Date") of the Offer to Purchase which shall
be not less than 30 days nor more than 60 days after the date of such Offer and
a settlement date (the "Purchase Date") for purchase of Securities within five
Business Days after the Expiration Date. The Company shall notify the Trustee at
least 15 Business Days (or such shorter period as is acceptable to the Trustee)
prior to the mailing of the Offer of the Company's obligation to make an Offer
to Purchase, and the Offer shall be mailed by the Company or, at the Company's
request, by the Trustee in the name and at the expense of the Company. The Offer
shall contain all the information required by applicable law to be included
therein. The Offer shall contain all instructions and materials necessary to
enable such Holders to tender Securities pursuant to the Offer to Purchase. The
Offer shall also state:
(1) the Section of this Indenture pursuant to which the Offer
to Purchase is being made;
(2) the Expiration Date and the Purchase Date;
(3) the aggregate principal amount of the outstanding
Securities offered to be purchased by the Company pursuant to the Offer
to Purchase (including, if less than 100%, the manner by which such
amount has been determined pursuant to the Section of this Indenture
requiring the Offer to Purchase) (the "Purchase Amount");
(4) the purchase price to be paid by the Company for each
$1,000 aggregate principal amount of Securities accepted for payment
(as specified pursuant to this Indenture) (the "Purchase Price");
(5) that the Holder may tender all or any portion of the
Securities registered in the name of such Holder and that any portion
of a Security tendered must be tendered in an integral multiple of
$1,000 principal amount;
(6) the place or places where Securities are to be surrendered
for tender pursuant to the Offer to Purchase;
(7) that interest on any Security not tendered or tendered but
not purchased by the Company pursuant to the Offer to Purchase will
continue to accrue;
(8) that on the Purchase Date the Purchase Price will become
due and payable upon each Security being accepted for payment pursuant
to the Offer to Purchase and that interest thereon shall cease to
accrue on and after the Purchase Date;
(9) that each Holder electing to tender all or any portion of
a Security pursuant to the Offer to Purchase will be required to
surrender such Security at the place or places specified in the Offer
prior to the close of business on the Expiration Date (such Security
being, if the Company or the Trustee so requires, duly endorsed by, or
accompanied by a written instrument of transfer in form satisfactory to
the Company and the Trustee duly executed by, the Holder thereof or his
attorney duly authorized in writing);
(10) that Holders will be entitled to withdraw all or any
portion of Securities tendered if the Company (or its Paying Agent)
receives, not later than the close of business on the fifth Business
Day next preceding the Expiration Date, a telegram, telex, facsimile
transmission or letter setting forth the name of the Holder, the
principal amount of the Security the Holder tendered, the certificate
number of the Security the Holder tendered and a statement that such
Holder is withdrawing all or a portion of his tender;
(11) that (a) if Securities in an aggregate principal amount
less than or equal to the Purchase Amount are duly tendered and not
withdrawn pursuant to the Offer to Purchase, the Company shall purchase
all such Securities and (b) if Securities in an aggregate principal
amount in excess of the Purchase Amount are tendered and not withdrawn
pursuant to the Offer to Purchase, the Company shall purchase
Securities having an aggregate principal amount equal to the Purchase
Amount on a pro rata basis (with such adjustments as may be deemed
appropriate so that only Securities in denominations of $1,000 or
integral multiples thereof shall be purchased); and
(12) that in the case of any Holder whose Security is
purchased only in part, the Company shall execute and the Trustee shall
authenticate and deliver to the Holder of such Security without service
charge, a new Security or Securities, of any authorized denomination as
requested by such Holder, in an aggregate principal amount equal to and
in exchange for the unpurchased portion of the Security so tendered.
An Offer to Purchase shall be governed by and effected in accordance
with the provisions above pertaining to any Offer.
"Officer" means the Chairman, Chief Executive Officer, the President,
any Vice President, the Chief Financial Officer, the Treasurer, the Secretary,
or the Controller of the Company.
"Officers' Certificate" means a certificate signed by two Officers (one
of whom shall be the Chief Executive Officer, the Chief Operating Officer, or
the Chief Financial Officer of the Company) or by an Officer and the Treasurer,
the Secretary, an Assistant Treasurer or Assistant Secretary of the Company
complying with Sections 13.04 and 13.05.
"Opinion of Counsel" means a written opinion reasonably satisfactory in
form and substance to the Trustee from legal counsel who is reasonably
acceptable to the Trustee. The counsel may be an employee of or counsel to the
Company or the Trustee.
"Participant" means, with respect to DTC, Euroclear or Cedel, a Person
who has an account with DTC, Euroclear or Cedel, respectively (and, with respect
to DTC, shall include Euroclear and Cedel).
"Permitted Holder" means any of any member of the Board of Directors of
the Company as of the Issue Date, Tekni-Plex Partners L.P., MST/TP Partners,
L.P., MST Management, L.P., MST Partners L.P., any Affiliate of or partner in
any of the foregoing (including any Person receiving common stock of the Company
upon a distribution by any of the foregoing partnerships, whether a partner or
designated by a partner for purposes of estate or similar personal planning), or
any group if the majority of the shares of Common Stock of the Company owned by
such group are beneficially owned by any or all of the foregoing and their
Related Persons and Affiliates.
"Permitted Investments" means (i) Investments in marketable, direct
obligations issued or guaranteed by the United States of America, or any
governmental entity or agency or political subdivision thereof (provided that
the full faith and credit of the United States of America is pledged in support
thereof), maturing within one year of the date of purchase; (ii) Investments in
commercial paper issued by corporations or financial institutions maturing
within 180 days from the date of the original issue thereof, and rated "P-1" or
better by Moody's Investors Service or "A-1" or better by Standard & Poor's
Corporation or an equivalent rating or better by any other nationally recognized
securities rating agency; (iii) Investments in certificates of deposit issued or
acceptances accepted by or guaranteed by any bank or trust company organized
under the laws of the United States of America, any state thereof, the District
of Columbia, Canada or any province thereof, in each case having a combined
capital, surplus and undivided profits totaling more than $500 million, maturing
within one year of the date of purchase; (iv) Investments representing Capital
Stock or obligations issued or otherwise transferred to the Company or any of
its Restricted Subsidiaries in the course of the good faith settlement of claims
against any other Person or by reason of a composition or readjustment of debt
or a reorganization of any debtor of the Company or any of its Restricted
Subsidiaries; (v) deposits, including interest-bearing deposits, maintained in
the ordinary course of business in banks; (vi) any Investment in any Person;
provided, however, that (x) after giving effect to any such Investment such
Person shall become a Restricted Subsidiary of the Company or (y) such Person is
merged with or into, or substantially all of such Person's assets are
transferred to, the Company or a Restricted Subsidiary of the Company; (vii)
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; (viii) 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 receivables; (ix) any interest
swap or hedging obligation with an unaffiliated Person otherwise permitted by
this Indenture; (x) Investments received as consideration for an Asset
Disposition in compliance with Section 4.05; (xi) Investments in Restricted
Subsidiaries or by virtue of which a Person became a Restricted Subsidiary
(including under circumstances in which equity interests in a Restricted
Subsidiary are acquired from third parties subsequent to such Person becoming a
Restricted Subsidiary pursuant to the terms of any merger or acquisition or
similar agreement in existence at the time such Person becomes a Restricted
Subsidiary); and (xii) loans and advances to employees of the Company or any of
its Restricted Subsidiaries in the ordinary course of business.
"Person" means any individual, corporation, limited or general
partnership, limited liability company, joint venture, association, joint stock
company, trust, unincorporated organization or government or any agency or
political subdivision thereof.
"Preferred Stock," as applied to the Capital Stock of any Person, means
Capital Stock of such Person of any class or classes (however designated) that
ranks prior, as to the payment of dividends or as to the distribution of assets
upon any voluntary or involuntary liquidation, dissolution or winding up of such
Person, to shares of Capital Stock of any other class of such Person.
"principal" of a debt security means the principal of the security
plus, when appropriate, the premium, if any, on the security.
"Private Exchange Securities" shall have the meaning set forth in the
Registration Rights Agreement.
"PS&T" means Plastic Specialties and Technologies, Inc.
"PS&T Notes" means the 11 1/4% Senior Secured Notes due 2003 of PS&T.
"PS&T Tender Offer" means the tender offer and consent solicitation
relating to the PS&T Notes commenced February 2, 1998.
"Purchase Amount" has the meaning set forth in the definition of "Offer
to Purchase".
"Purchase Date" has the meaning set forth in the definition of "Offer
to Purchase".
"Purchase Price" has the meaning set forth in the definition of "Offer
to Purchase".
"PureTec" means PureTec Corporation.
"QIB" means a "qualified institutional buyer" as defined in Rule 144A.
"redemption date," when used with respect to any Security to be
redeemed, means the date fixed for such redemption pursuant to this Indenture.
"redemption price," when used with respect to any Security to be
redeemed, means the price fixed for such redemption pursuant to this Indenture
as set forth in the form of Security annexed as Exhibit A.
"Registration Rights Agreement" means the Registration Rights Agreement
dated as of March 3, 1998 among the Company, the Guarantors party thereto and
J.P. Morgan Securities Inc.
"Regulation S" means Regulation S promulgated under the Securities Act
(including any successor regulation thereto) as it may be amended from time to
time.
"Related Person" of any Person means any other Person directly or
indirectly owning (a) 5% or more of the outstanding Common Stock of such Person
(or, in the case of a Person that is not a corporation, 5% or more of the equity
interest in such Person) or (b) 5% or more of the combined voting power of the
Voting Stock of such Person.
"Restricted Physical Security" means a Physical Security containing a
Securities Act Legend.
"Restricted Subsidiary" means any Subsidiary of the Company other than
an Unrestricted Subsidiary.
"Rule 144" shall have the meaning set forth in the Registration Rights
Agreement.
"Rule 144A" shall have the meaning set forth in the Registration Rights
Agreement.
"S&P" means Standard & Poor's Ratings Group or any successor to its
debt rating business.
"Securities" means the 9 1/4% Senior Subordinated Notes due 2008 issued
pursuant to the terms of this Indenture, as amended or supplemented from time to
time.
"Securities Act" means the Securities Act of 1933, as amended, and the
rules and regulations promulgated by the Commission thereunder.
"Securityholder" has the meaning set forth in the definition of
"Holder" above.
"Senior Debt" means, with respect to any Person at any date, (i) in the
case of the Company or the Guarantors, all Indebtedness and other obligations
under the Credit Agreement, including, without limitation, principal, premium,
if any, and interest on such Indebtedness and all other amounts due on or in
connection with such Indebtedness including all charges, fees and expenses, (ii)
all other Indebtedness of such Person for money borrowed, including principal,
premium, if any, and interest on such Indebtedness, unless the instrument under
which such Indebtedness for money borrowed is created, incurred, assumed or
guaranteed expressly provides that such Indebtedness for money borrowed is not
senior or superior in right of payment to the Securities, and all renewals,
extensions, modifications, amendments, refinancing or replacements thereof and
all other Indebtedness of such Person of the types referred to in clauses (iii),
(iv) (not including obligations issued or assumed as the deferred purchase price
of services) and (vi) of the definition of Indebtedness and (iii) all interest
on any Indebtedness referred to in clauses (i) and (ii) accruing during, or
which would accrue but for, the pendency of any bankruptcy or insolvency
proceeding, whether or not allowed thereunder.
Notwithstanding the foregoing, Senior Debt shall not include (a)
Indebtedness which is pursuant to its terms or any agreement relating thereto or
by operation of law subordinated or junior in right of payment or otherwise to
any other Indebtedness of such Person; provided, however, that no Indebtedness
shall be deemed to be subordinate or junior in right of payment or otherwise to
any other Indebtedness of a Person solely by reason of such other Indebtedness
being secured and such Indebtedness not being secured, (b) the Securities, (c)
any Indebtedness of such Person to any of its Subsidiaries, (d) Indebtedness
Incurred in violation of Section 4.04; provided, however, that Indebtedness
under the Credit Agreement shall be deemed not to have been Incurred in
violation of such provisions for purposes of this clause (d) if the holder(s) of
such Indebtedness or their agent or representative shall have received a
representation from the Company to the effect that the Incurrence of such
Indebtedness does not violate such provision, and (e) any Indebtedness which,
when incurred and without respect to any election under Section 1111(b) of the
Bankruptcy Code, is without recourse to the Company.
"Shelf Registration Statement" shall have the meaning set forth in the
Registration Rights Agreement.
"Stated Maturity," when used with respect to any Security or any
installment of interest thereon, means the date specified in such Security as
the fixed date on which the principal of such Security or such installment of
interest is due and payable.
"Subordinated Indebtedness" means any Indebtedness (whether outstanding
on the date hereof or hereafter incurred) which is by its terms expressly
subordinate or junior in right of payment to the Securities.
"Subsidiary" of any Person means (i) a corporation more than 50% of the
outstanding Voting Stock of which is owned, directly or indirectly, by such
Person or by one or more other Subsidiaries of such Person or by such Person and
one or more other Subsidiaries thereof or (ii) any other Person (other than a
corporation) in which such Person, or one or more other Subsidiaries of such
Person or such Person and one or more other Subsidiaries thereof, directly or
indirectly, have at least a majority ownership and voting power relating to the
policies, management and affairs thereof.
"Term Loan Facilities" means the term loans outstanding on the Issue
Date under the Credit Agreement less any scheduled or other payments made
thereon.
"TIA" means the Trust Indenture Act of 1939 (15 U.S. Code ss.ss.
77aaa-77bbbb) as in effect on the date of this Indenture, except as provided in
Section 10.03.
"Trustee" means the party named as such in this Indenture until a
successor replaces it in accordance with the provisions of this Indenture and
thereafter means such successor.
"Trust Officer" means any officer within the corporate trust department
(or any successor group of the Trustee) including any vice president, assistant
vice president, assistant secretary or any other officer or assistant officer of
the Trustee customarily performing functions similar to those performed by the
persons who at that time shall be such officers, and also means, with respect to
a particular corporate trust matter, any other officer to whom such trust matter
is referred because of his knowledge of and familiarity with the particular
subject.
"Unrestricted Global Securities" means one or more Global Securities
that do not and are not required to bear the Securities Act Legend.
"Unrestricted Physical Securities" means one or more Physical
Securities that do not and are not required to bear the Securities Act Legend.
"Unrestricted Securities" means the Securities that do not and are not
required to bear the Securities Act Legend.
"Unrestricted Subsidiary" means (i) any Subsidiary of the Company
formed or acquired after the Issue Date that at the time of determination is
designated an Unrestricted Subsidiary by the Board of Directors in the manner
provided below and (ii) any Subsidiary of an Unrestricted Subsidiary. Any such
designation by the Board of Directors will be evidenced to the Trustee by
promptly filing with the Trustee a copy of the Board Resolution giving effect to
such designation and an Officers' Certificate certifying that such designation
complied with the foregoing provisions. The Board of Directors of the Company
may not designate any Subsidiary of the Company to be an Unrestricted Subsidiary
if, after such designation, (a) the Company or any other Restricted Subsidiary
(i) provides credit support for, or a guarantee of, any Indebtedness of such
Subsidiary (including any undertaking, agreement or instrument evidencing such
Indebtedness) or (ii) is directly or indirectly liable for any Indebtedness of
such Subsidiary, (b) a default with respect to any Indebtedness of such
Subsidiary (including any right which the holders thereof may have to take
enforcement action against such Subsidiary) would permit (upon notice, lapse of
time or both) any holder of any other Indebtedness of the Company or any
Restricted Subsidiary to declare a default on such other Indebtedness or cause
the payment thereof to be accelerated or payable prior to its final scheduled
maturity or (c) such Subsidiary owns any Capital Stock of, or owns or holds any
Lien on any property of, any Restricted Subsidiary which is not a Subsidiary of
the Subsidiary to be so designated.
"Voting Stock" of any Person means the Capital Stock of such Person
which ordinarily has voting power for the election of directors (or persons
performing similar functions) of such Person, whether at all times or only so
long as no senior class of securities has such voting power by reason of any
contingency.
"Wholly Owned Subsidiary" of any 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) shall at the time be owned by
such Person or by one or more Wholly Owned Subsidiaries of such Person or by
such Person and one or more Wholly Owned Subsidiaries of such Person.
SECTION 1.02. Other Definitions.
Term Defined in Section
---- ------------------
"Bankruptcy Law" 6.01
"Change of Control" 4.14
"Custodian" 6.01
"Event of Default" 6.01
"Funding Guarantor" 11.05
"Guarantor Blockage Period" 12.02(a)
"Guarantor Payment Blockage Notice" 12.02(a)
"Guarantor Securities Payment" 12.02
"144A Global Security" 2.01(a)
"Paying Agent" 2.03
"Payment Blockage Notice" 8.02(a)
"Payment Blockage Period" 8.02(a)
"Physical Security" 2.01(b)
"Registrar" 2.03
"Regulation S Global Security" 2.01(a)
"Required Filing Date" 4.12
"Securities Act Legend" 2.06(f)
"Securities Payment" 8.02
"United States Government Obligation" 9.01
SECTION 1.03. Incorporation by Reference of Trust Indenture Act.
Whenever this Indenture refers to a provision of the TIA, the provision
is incorporated by reference in and made a part of this Indenture. The following
TIA terms used in this Indenture have the following meanings:
"Commission" means the Securities and Exchange Commission.
"indenture securities" means the Securities.
"indenture security holder" means a Holder or Securityholder.
"indenture to be qualified" means this Indenture.
"indenture trustee" or "institutional trustee" means the Trustee.
"obligor" on the indenture securities means the Company or any other
obligor on the Securities.
All other TIA terms used in this Indenture that are defined by the TIA,
defined by TIA reference to another statute or defined by Commission rule and
not otherwise defined herein have the meanings assigned to them therein.
SECTION 1.04. Rules of Construction.
Unless the context otherwise requires:
(1) a term has the meaning assigned to it;
(2) an accounting term not otherwise defined has the meaning
assigned to it in accordance with generally accepted accounting
principles in effect from time to time, and any other reference in this
Indenture to "generally accepted accounting principles" refers to GAAP;
(3) "or" is not exclusive;
(4) words in the singular include the plural, and words in the
plural include the singular;
(5) provisions apply to successive events and transactions;
(6) "herein," "hereof" and other words of similar import refer
to this Indenture as a whole and not to any particular Article, Section
or other subdivision; and
(7) whenever in this Indenture there is mentioned, in any
context, principal, interest or any other amount payable under or with
respect to any Security, such mention shall be deemed to include
mention of the payment of Additional Interest to the extent that, in
such context, Additional Interest is, was or would be payable in
respect hereof.
ARTICLE TWO
THE SECURITIES
SECTION 2.01. Form and Dating.
(a) Global Securities. Securities offered and sold to QIBs in reliance
on Rule 144A shall be issued initially substantially in the form of Exhibit A
hereto in the name of Cede & Co. as nominee of DTC, duly executed by the Company
and authenticated by the Trustee as hereinafter provided. Such Security shall be
referred to herein as the "144A Global Security." Securities offered and sold in
reliance on Regulation S shall be issued initially substantially in the form of
Exhibit A hereto in the name of Cede & Co. as nominee of DTC, duly executed by
the Company and authenticated by the Trustee as hereinafter provided. Such
Security shall be referred to herein as the "Regulation S Global Security."
Unrestricted Global Securities shall be issued initially in accordance with
Sections 2.06(b)(iv), 2.06(c)(ii) and 2.06(e) in the name of Cede & Co. as
nominee of DTC, duly executed by the Company and authenticated by the Trustee as
hereinafter provided. The aggregate principal amount of each of the Global
Security may from time to time be increased or decreased by adjustments made on
the records of the Trustee as hereinafter provided.
Each Global Security shall represent such of the outstanding Securities
as shall be specified therein and each shall provide that it shall represent the
aggregate principal amount of outstanding Securities from time to time endorsed
thereon and that the aggregate principal amount of outstanding Securities
represented thereby may from time to time be reduced or increased, as
appropriate, to reflect exchanges, redemptions and transfers of interests
therein in accordance with the terms of this Indenture. Any endorsement of a
Global Security to reflect the amount of any increase or decrease in the
principal amount of outstanding Securities represented thereby shall be made by
the Trustee in accordance with instructions given by the Holder thereof as
required by Section 2.06 hereof.
Upon the issuance of the Global Security to DTC, DTC shall credit, on
its internal book-entry registration and transfer system, its Participants'
accounts with the respective interests owned by such Participants. Interests in
the Global Securities shall be limited to Participants, including Euroclear and
Cedel, and indirect Participants.
The Participants shall not have any rights either under this Indenture
or under any Global Security with respect to such Global Security held on their
behalf by DTC, and DTC may be treated by the Company, the Trustee and any agent
of the Company or the Trustee as the absolute owner of such Global Security for
the purpose of receiving payment of or on account of the principal of and,
subject to the provisions of this Indenture, interest and Additional Interest,
if any, on the Global Securities and for all other purposes. Notwithstanding the
foregoing, nothing herein shall prevent the Company, the Trustee or any agent of
the Company or the Trustee from giving effect to any written certification,
proxy or other authorization furnished by DTC or impair, as between DTC and its
Participants, the operation of customary practices of DTC governing the exercise
of the rights of an owner of a beneficial interest in any Global Security.
The provisions of the "Operating Procedures of the Euroclear System"
and "Terms and Conditions Governing Use of Euroclear" and the "General Terms and
Conditions of Cedel Bank" and "Customer Handbook" of Cedel shall be applicable
to interests in the Regulation S Global Security that are held by the
Participants through Euroclear or Cedel.
(b) Physical Securities. Securities offered and sold to Institutional
Accredited Investors who are not also QIBs shall be issued substantially in the
form of Exhibit A hereto, in certificated form and issued in the names of the
purchasers thereof (or their nominees), duly executed by the Company and
authenticated by the Trustee as hereinafter provided. Such Securities, together
with any Securities subsequently issued, whether pursuant to the terms of
Section 2.06 hereof or otherwise, that are not Global Securities, shall be
referred to herein as the "Physical Securities."
(c) Securities. The provisions of the form of Securities contained in
Exhibit A hereto are incorporated herein by reference. The Securities and the
Trustee's Certificates of Authentication shall be substantially in the form of
Exhibit A hereto. The Securities may have notations, legends or endorsements
required by law, stock exchange rule, usage or agreement to which the Company is
subject. The Company shall approve the form of the Securities and any notation,
legend or endorsement (including notations relating to the Guarantee) on them.
If required, the Securities may bear the appropriate legend regarding original
issue discount for federal income tax purposes. Each Security shall be dated the
date of its authentication. The terms and provisions contained in the Securities
shall constitute, and are hereby expressly made, a part of this Indenture.
SECTION 2.02. Execution and Authentication.
Two Officers of the Company shall sign the Securities for the Company
by manual or facsimile signature.
If an Officer whose signature is on a Security no longer holds that
office at the time the Trustee authenticates the Security, the Security shall be
valid nevertheless.
A Security shall not be valid until an authorized officer of the
Trustee manually signs the certificate of authentication on the Security. The
signature shall be conclusive evidence that the Security has been authenticated
under this Indenture.
The Trustee shall authenticate (i) Initial Securities for original
issue on the Issue Date in the aggregate principal amount of $200,000,000, (ii)
Private Exchange Securities from time to time only in exchange for a like
principal amount of Initial Securities, (iii) Unrestricted Securities from time
to time in exchange for a like principal amount of Initial Securities, or (iv)
one or more series of Securities (which may be in the form of Initial
Securities) in an aggregate principal amount of not more than the excess of
$275,000,000 over the sum of the aggregate principal amount of (A) Initial
Securities then outstanding, (B) Private Exchange Securities then outstanding
and (C) Unrestricted Securities issued in accordance with clause (iii), in each
case upon a Company Order (an "Authentication Order"). The Authentication Order
shall be based upon a Board Resolution of the Company to similar effect filed
with the Trustee and shall specify the amount of such Securities to be
authenticated and the date on which the original issue of such Securities is to
be authenticated. The Authentication Order shall also provide instructions
concerning registration, amounts for each Holder and delivery. The aggregate
principal amount of Securities outstanding at any time may not exceed
$275,000,000 except as provided in Section 2.07. The Securities shall be issued
only in registered form, without coupons and only in denominations of $1,000 and
any integral multiple thereof All Securities issued under this Indenture shall
vote and consent together on all matters as one class and no series of
Securities will have the right to vote or consent as a separate class on any
matter.
SECTION 2.03. Registrar and Paying Agent.
The Company shall maintain an office or agency where Securities may be
presented for registration of transfer or for exchange ("Registrar") and an
office or agency where Securities may be presented for payment ("Paying Agent").
The Company may have one or more co-Registrars and one or more additional paying
agents. The term "Paying Agent" includes any additional paying agent.
The Company shall enter into an appropriate agency agreement with any
Agent not a party to this Indenture. The agreement shall implement the
provisions of this Indenture that relate to such Agent and shall, if required,
incorporate the provisions of the TIA. The Company shall notify the Trustee of
the name and address of any such Agent. If the Company fails to maintain a
Registrar or Paying Agent, the Trustee shall act as such and shall be entitled
to appropriate compensation in accordance with the provisions of Section 7.07.
The Company initially appoints the Trustee as Registrar and Paying
Agent. The Company shall give written notice to the Trustee in the event that
the Company decides to act as Registrar. None of the Company, its Subsidiaries
or any of their Affiliates may act as Paying Agent.
SECTION 2.04. Paying Agent To Hold Money in Trust.
The Company shall require each Paying Agent to agree in writing (if
other than the Trustee, who hereby agrees) to hold in trust for the benefit of
Securityholders or the Trustee all money held by the Paying Agent for the
payment of principal of or interest on the Securities (whether such money has
been paid to it by the Company or any other obligor on the Securities), and the
Company and the Paying Agent shall each notify the Trustee of any default by the
Company (or any other obligor on the Securities) in making any such payment. The
Company at any time may require a Paying Agent to pay all money held by it to
the Trustee and account for any funds disbursed and the Trustee may at any time
during the continuance of any payment default, upon written request to a Paying
Agent, require such Paying Agent to pay all money held by it to the Trustee and
to account for any funds disbursed. Upon making such payment the Paying Agent
shall have no further liability for the money delivered to the Trustee.
SECTION 2.05. Securityholder Lists.
The Trustee shall preserve in as current a form as is reasonably
practicable the most recent list available to it of the names and addresses of
Securityholders. If the Trustee is not the Registrar, the Company shall furnish
to the Trustee at least five Business Days before each Interest Payment Date and
at such other times as the Trustee may request in writing a list in such form
and as of such date as the Trustee may reasonably require of the names and
addresses of Securityholders.
SECTION 2.06. Transfer and Exchange.
(a) Transfer and Exchange of Global Securities. Transfer of the Global
Securities shall be by delivery. Global Securities will be exchanged by the
Company for Physical Securities only (i) if DTC notifies the Company that it is
unwilling or unable to continue to act as depositary with respect to the Global
Securities or ceases to be a clearing agency registered under the Exchange Act
and, in either case, a successor depositary registered as a clearing agency
under the Exchange Act is not appointed by the Company within 120 days, (ii) at
any time if the Company in its sole discretion determines that the Global
Securities (in whole but not in part) should be exchanged for Physical
Securities or (iii) if the beneficial owner of an interest in the Global
Securities requests such Physical Securities, following an Event of Default
under this Indenture, in a writing delivered through DTC to the Trustee.
Upon the occurrence of any of the events specified in the previous
paragraph, Physical Securities shall be issued in such names as DTC shall
instruct the Trustee and the Trustee shall cause the aggregate principal amount
of the applicable Global Security to be reduced accordingly and direct DTC to
make a corresponding reduction in its book-entry system. The Company shall
execute and the Trustee shall authenticate and deliver to the Person designated
in such instructions a Physical Security in the appropriate principal amount.
The Trustee shall deliver such Physical Securities to the Persons in whose names
such Securities are so registered. Physical Securities issued in exchange for an
Initial Global Security pursuant to this Section 2.06(a) shall bear the
Securities Act Legend and shall be subject to all restrictions on transfer
contained therein. Global Securities may also be exchanged or replaced, in whole
or in part, as provided in Sections 2.07 and 2.10. Every Security authenticated
and delivered in exchange for, or in lieu of, a Global Security or any portion
thereof, pursuant to Section 2.07 or 2.10, shall be authenticated and delivered
in the form of, and shall be, a Global Security. A Global Security may not be
exchanged for another Security other than as provided in this Section 2.06(a).
(b) Transfer and Exchange of Interests in Global Securities. The
transfer and exchange of interests in Global Securities shall be effected
through DTC, in accordance with this Indenture and the procedures of DTC
therefor. Interests in Initial Global Securities shall be subject to
restrictions on transfer comparable to those set forth herein to the extent
required by the Securities Act. The Trustee shall have no obligation to
ascertain DTC's compliance with any such restrictions on transfer. Transfers of
interests in Global Securities shall also require compliance with subparagraph
(i) below, as well as one or more of the other following subparagraphs as
applicable:
(i) All Transfers and Exchanges of Interests in Global
Securities. In connection with all transfers and exchanges of interests
in Global Securities (other than transfers of interests in a Global
Security to Persons who take delivery thereof in the form of an
interest in the same Global Security), the transferor of such interest
must deliver to the Registrar (1) instructions given in accordance with
the Applicable Procedures from a Participant or an indirect Participant
directing DTC to credit or cause to be credited an interest in the
specified Global Security in an amount equal to the interest to be
transferred or exchanged, (2) a written order given in accordance with
the Applicable Procedures containing information regarding the
Participant account to be credited with such increase and (3)
instructions given by the Holder of the Global Security to effect the
transfer referred to in (1) and (2) above.
(ii) Transfer of Interests in the Same Initial Global
Security. Interests in any Initial Global Security may be transferred
to Persons who take delivery thereof in the form of an interest in the
same Initial Global Security in accordance with the transfer
restrictions set forth in Section 2.06(f) hereof.
(iii) Transfer of Interests to Another Initial Global
Security. Interests in any Initial Global Security may be transferred
to Persons who take delivery thereof in the form of an interest in
another Initial Global Security if the Registrar receives the
following:
(A) if the transferee will take delivery in the form
of an interest in the 144A Global Security, then the
transferor must deliver a certificate in the form of Exhibit B
hereto, including the certifications in item 1 thereof; or
(B) if the transferee will take delivery in the form
of an interest in the Regulation S Global Security, then the
transferor must deliver a certificate in the form of Exhibit B
hereto, including the certifications in item 2 thereof.
(iv) Transfer and Exchange of Interests in Initial Global
Security for Interests in an Unrestricted Global Security. Interests in
any Initial Global Security may be exchanged by the holder thereof for
an interest in the Unrestricted Global Security or transferred to a
Person who takes delivery thereof in the form of an interest in the
Unrestricted Global Security if:
(A) such exchange or transfer is effected pursuant to
the Exchange Registration Statement in accordance with the
Registration Rights Agreement;
(B) any such transfer is effected pursuant to the
Shelf Registration Statement in accordance with the
Registration Rights Agreement; or
(C) the Registrar receives the following:
(1) if the beneficial holder of such an
interest in an Initial Global Security proposes to
exchange it for an interest in the Unrestricted
Global Security, a certificate from such beneficial
holder in the form of Exhibit C hereto, including the
certifications in item 1(a) thereof;
(2) if the beneficial holder of such an
interest in an Initial Global Security proposes to
transfer it to a Person who shall take delivery
thereof in the form of an interest in an Unrestricted
Global Security, a certificate in the form of Exhibit
B hereto, including the certification in item 4
thereof; and
(3) in each such case set forth in this
paragraph (C), an Opinion of Counsel in form
reasonably acceptable to the Company, to the effect
that such exchange or transfer is in compliance with
the Securities Act and, that the restrictions on
transfer contained herein and in Section 2.06(f)
hereof are not required in order to maintain
compliance with the Securities Act.
If any such transfer is effected pursuant to paragraph (B) above at a
time when an Unrestricted Global Security has not yet been issued, the
Company shall issue and, upon receipt of an Authentication Order in
accordance with Section 2.02, the Trustee shall authenticate one or
more Unrestricted Global Securities in an aggregate principal amount
equal to the principal amount of interests in the Initial Global
Security transferred pursuant to paragraph (B) above.
(v) Notation by the Trustee of Transfer of Interests Among
Global Securities. Upon satisfaction of the requirements for transfer
of interests in Global Securities pursuant to clauses (iii) or (iv)
above, the Trustee shall reduce or cause to be reduced the aggregate
principal amount of the relevant Global Security from which the
interests are being transferred, and increase or cause to be increased
the aggregate principal amount of the Global Security to which the
interests are being transferred, in each case, by the principal amount
so transferred and shall direct DTC to make corresponding adjustments
in its book-entry system. No transfer of interests of a Global Security
shall be effected until, and any transferee pursuant thereto shall
succeed to the rights of a holder of such interests only when, the
Registrar has made appropriate adjustments to the applicable Global
Security in accordance with this paragraph.
(c) Transfer or Exchange of Physical Securities for Interests in a
Global Security.
(i) If any Holder of Physical Securities required to contain
the Securities Act Legend proposes to exchange such Securities for an
interest in a Global Security or to transfer such Physical Securities
to a Person who takes delivery thereof in the form of an interest in a
Global Security, then, upon receipt by the Registrar of the following
documentation (all of which may be submitted by facsimile):
(A) if the Holder of such Physical Registered
Securities proposes to exchange such Securities for an
interest in an Initial Global Security, a certificate from
such Holder in the form of Exhibit C hereto, including the
certifications in item 2 thereof;
(B) if such Physical Securities are being transferred
to a QIB in accordance with Rule 144A under the Securities
Act, a certificate to the effect set forth in Exhibit B
hereto, including the certifications in item 1 thereof; or
(C) if such Physical Securities are being transferred
to a Non-U.S. Person (as defined in Regulation S) in an
offshore transaction in accordance with Rule 904 under the
Securities Act, a certificate to the effect set forth in
Exhibit B hereto, including the certifications in item 2
thereof,
the Trustee shall cancel the Physical Securities, increase or cause to
be increased the aggregate principal amount of, in the case of clause
(B) above, the 144A Global Security or, in the case of clause (C)
above, the Regulation S Global Security, and direct DTC to make a
corresponding increase in its book-entry system.
(ii) A Holder of Physical Securities required to contain the
Securities Act Legend may exchange such Securities for an interest in
the Unrestricted Global Security or transfer such Restricted Physical
Securities to a Person who takes delivery thereof in the form of an
interest in the Unrestricted Global Security only:
(A) if such exchange or transfer is effected pursuant
to the Exchange Registration Statement in accordance with the
Registration Rights Agreement;
(B) any such transfer is effected pursuant to the
Shelf Registration Statement in accordance with the
Registration Rights Agreement;
(C) upon receipt by the Registrar of the following
documentation (all of which may be submitted by facsimile):
(1) if the Holder of such Physical
Securities proposes to exchange such Securities for
an interest in the Unrestricted Global Security, a
certificate from such Holder in the form of Exhibit C
hereto, including the certifications in item 1(b)
thereof;
(2) the Holder of such Registered
Securities proposes to transfer such Securities to a
Person who shall take delivery thereof in the form of
an interest in the Unrestricted Global Security, a
certificate in the form of Exhibit B hereto,
including the certifications in item 4 thereof; and
(3) in each such case set forth in this
paragraph (C), an Opinion of Counsel in form
reasonably acceptable to the Company, to the effect
that such exchange or transfer is in compliance with
the Securities Act and that the restrictions on
transfer contained herein and in Section 2.06(f)
hereof are not required in order to maintain
compliance with the Securities Act.
If any such transfer is effected pursuant to paragraph (B)
above at a time when an Unrestricted Global Security has not
yet been issued, the Company shall issue and, upon receipt of
an Authentication Order in accordance with Section 2.02, the
Trustee shall authenticate one or more Unrestricted Global
Securities in an aggregate principal amount equal to the
principal amount of Physical Securities transferred pursuant
to paragraph (B) above.
(d) Transfer and Exchange of Physical Securities.
(i) Transfer of a Physical Security to Another Physical
Security. Following the occurrence of one or more of the events
specified in Section 2.06(a), a Physical Security may be transferred to
Persons who take delivery thereof in the form of another Physical
Security if the Registrar receives the following:
(A) if the transfer is being effected pursuant to and
in accordance with Rule 144A, then the transferor must deliver
a certificate in the form of Exhibit B hereto, including the
certifications in item 3(a) thereof; or
(B) if the transfer is being effected pursuant to and
in accordance with Regulation S, then the transferor must
deliver a certificate in the form of Exhibit B hereto,
including the certifications in item 3(b) thereof.
(ii) Transfer and Exchange of Restricted Physical Security
for Physical Security Which Does Not Bear the Securities Act Legend.
Following the occurrence of one or more of the events specified in
Section 2.06(a), a Restricted Physical Security may be exchanged by the
Holder thereof for a Physical Security or transferred to a Person who
takes delivery thereof in the form of a Physical Security which does
not bear the Securities Act Legend if:
(A) such exchange or transfer is effected pursuant to
the Exchange Registration Statement in accordance with the
Registration Rights Agreement;
(B) any such transfer is effected pursuant to the
Shelf Registration Statement in accordance with the
Registration Rights Agreement; or
(C) the Registrar receives a certificate from such
Holder in the form of Exhibit C hereto, including the
certifications in item 1(c) thereof and an Opinion of Counsel
in form reasonably acceptable to the Company, to the effect
that such exchange or transfer is in compliance with the
Securities Act and, that the restrictions on transfer
contained herein and in Section 2.06(f) hereof are not
required in order to maintain compliance with the Securities
Act.
(iii) Exchange of Physical Securities. When Physical
Securities are presented by a Holder to the Registrar with a request to
register the exchange of such Physical Securities for an equal
principal amount of Physical Securities of other authorized
denominations, the Registrar shall make the exchange as requested only
if the Physical Securities are endorsed or accompanied by a written
instrument of transfer in form satisfactory to the Registrar duly
executed by such Holder or by his attorney duly authorized in writing
and shall be issued only in the name of such Holder or its nominee. The
Physical Securities issued in exchange for Physical Securities shall
bear the Securities Act Legend and shall be subject to all restrictions
on transfer contained herein in each case to the same extent as the
Physical Securities so exchanged.
(iv) Return of Physical Securities. In the event of a
transfer pursuant to clauses (i) or (ii) above and the Holder thereof
has delivered certificates representing an aggregate principal amount
of Securities in excess of that to be transferred, the Company shall
execute and the Trustee shall authenticate and deliver to the Holder of
such Security without service charge, a new Physical Security or
Securities of any authorized denomination requested by the Holder, in
an aggregate principal amount equal to the portion of the Security not
so transferred.
(e) Exchange Offer. Upon the occurrence of the Exchange Offer (as
defined in the Registration Rights Agreement) in accordance with the
Registration Rights Agreement, the Company shall issue and, upon receipt of an
Authentication Order in accordance with Section 2.02, the Trustee shall
authenticate one or more Unrestricted Global Securities in an aggregate
principal amount equal to the principal amount of the interests in the Initial
Global Securities and Restricted Physical Securities tendered for acceptance by
persons participating therein. Concurrently with the issuance of such
Securities, the Trustee shall cause the aggregate principal amount of the
applicable Initial Global Securities to be reduced accordingly and direct DTC to
make a corresponding reduction in its book-entry system. The Trustee shall
cancel any Restricted Physical Certificates in accordance with Section 2.11
hereof.
In the case that one or more of the events specified in Section 2.06(a)
have occurred, upon the occurrence of such Exchange Offer, the Company shall
issue and, upon receipt of an Authentication Order in accordance with Section
2.02, the Trustee shall authenticate Unrestricted Physical Securities in an
aggregate principal amount equal to the principal amount of the Restricted
Physical Securities tendered for acceptance by persons participating therein.
(f) Legends. Each Initial Global Security and each Restricted Physical
Security shall bear the legend (the "Securities Act Legend") in substantially
the following form:
"THE SECURITY EVIDENCED HEREBY (OR ITS PREDECESSOR) WAS ORIGINALLY
ISSUED IN A TRANSACTION EXEMPT FROM REGISTRATION UNDER SECTION 5 OF THE
UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES
ACT"), AND THE SECURITY EVIDENCED HEREBY MAY NOT BE OFFERED, SOLD OR
OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN
APPLICABLE EXEMPTION THEREFROM. EACH PURCHASER OF THE SECURITY
EVIDENCED HEREBY IS HEREBY NOTIFIED THAT THE SELLER MAY BE RELYING ON
THE EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE SECURITIES ACT
PROVIDED BY RULE 144A THEREUNDER. THE HOLDER OF THE SECURITY EVIDENCED
HEREBY AGREES FOR THE BENEFIT OF THE COMPANY THAT (A) SUCH SECURITY MAY
BE RESOLD, PLEDGED OR OTHERWISE TRANSFERRED, ONLY (1)(a) TO A PERSON
WHOM THE SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER
(AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) IN A TRANSACTION
MEETING THE REQUIREMENTS OF RULE 144A, (b) IN A TRANSACTION MEETING THE
REQUIREMENTS OF RULE 144 UNDER THE SECURITIES ACT OR (c) OUTSIDE THE
UNITED STATES TO A FOREIGN PERSON IN A TRANSACTION MEETING THE
REQUIREMENTS OF RULE 904 UNDER THE SECURITIES ACT, (2) TO THE COMPANY
OR (3) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT AND, IN EACH
CASE, IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF
THE UNITED STATES OR ANY OTHER APPLICABLE JURISDICTION AND (B) THE
HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY
PURCHASER FROM IT OF THE SECURITY EVIDENCED HEREBY OF THE RESALE
RESTRICTIONS SET FORTH IN (A) ABOVE."
(g) Global Security Legend. Each Global Security shall bear a legend in
substantially the following form:
"UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR SECURITIES IN
DEFINITIVE FORM, THIS SECURITY MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE
BY THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO A
NOMINEE OF DTC, OR BY ANY NOMINEE OF DTC, OR BY DTC TO A SUCCESSOR
DEPOSITORY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITORY. UNLESS THIS
CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF DTC TO THE
COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT,
AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR
SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC
(AND ANY PAYMENT HEREON IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY
AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER,
PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON
IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN
INTEREST HEREIN.
TRANSFERS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS IN
WHOLE, BUT NOT IN PART, TO NOMINEES OF CEDE & CO. OR TO A SUCCESSOR
THEREOF OR SUCH SUCCESSOR'S NOMINEE AND TRANSFERS OF PORTIONS OF THIS
GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH
THE RESTRICTIONS SET FORTH IN SECTION 2.06 OF THE INDENTURE."
(h) Cancellation and/or Adjustment of Global Securities. At such time
as all interests in the Global Securities have been exchanged for Physical
Securities, all Global Securities shall be returned to or retained and cancelled
by the Trustee in accordance with Section 2.11 hereof. At any time prior to such
cancellation, if any interest in a Global Security is exchanged for an interest
in another Global Security or for Physical Securities, the principal amount of
Securities represented by such Global Security shall be reduced accordingly and
an endorsement shall be made on such Global Security, by the Trustee to reflect
such reduction.
(i) General Provisions Relating to All Transfers and Exchanges.
(i) To permit registrations of transfers and exchanges, the
Company shall execute and the Trustee shall authenticate Global
Securities and Physical Securities upon a written order signed by an
Officer of the Company or at the Registrar's request.
(ii) No service charge shall be made to a Holder for any
registration of transfer or exchange, but the Company may require
payment of a sum sufficient to cover any stamp or transfer tax or
similar governmental charge payable in connection therewith (other than
any such stamp or transfer taxes or similar governmental charge payable
upon exchange or transfer pursuant to Sections 2.10, 3.06, 4.05, 4.14
and 10.05 hereof).
(iii) All Global Securities and Physical Securities issued
upon any registration of transfer or exchange of Global Securities or
Physical Securities shall be the valid obligations of the Company,
evidencing the same debt, and entitled to the same benefits under this
Indenture, as the Global Securities or Physical Securities surrendered
upon such registration of transfer or exchange.
(iv) The Company shall not be required (A) to issue, to
register the transfer of or to exchange Securities during a period
beginning at the opening of business 15 days before the day of any
selection of Securities for redemption under Section 3.02 hereof and
ending at the close of business on the day of selection, (B) to
register the transfer of or to exchange any Security so selected for
redemption in whole or in part, except the unredeemed portion of any
Security being redeemed in part or (C) to register the transfer of or
to exchange a Security between a record date and the next succeeding
Interest Payment Date.
(v) Prior to due presentment for the registration of a
transfer of any Security, the Trustee, any Agent and the Company may
deem and treat the Person in whose name any Security is registered as
the absolute owner of such Security for the purpose of receiving
payment of principal of and interest on such Securities and for all
other purposes, and none of the Trustee, any Agent or the Company shall
be affected by notice to the contrary.
SECTION 2.07. Replacement Securities.
If a mutilated Security is surrendered to the Trustee or if the Holder
of a Security claims that the Security has been lost, destroyed or wrongfully
taken, the Company shall issue and the Trustee shall authenticate a replacement
Security if the Trustee's requirements are met. An indemnity bond in an amount
sufficient in the judgment of the Company and the Trustee to protect the
Company, the Trustee or any Agent from any loss which any of them may suffer if
a Security is replaced may be required by the Trustee or the Company. The
Company and the Trustee each may charge such Holder for its expenses in
replacing such Security.
Every replacement Security is an additional obligation of the Company.
SECTION 2.08. Outstanding Securities.
Securities outstanding at any time are all Securities that have been
authenticated by the Trustee except for those cancelled by it, those delivered
to it for cancellation and those described in this Section as not outstanding. A
Security does not cease to be outstanding because the Company or one of its
Affiliates holds the Security.
If a Security is replaced pursuant to Section 2.07, it ceases to be
outstanding unless the Trustee receives proof satisfactory to it that the
replaced Security is held by a bona fide purchaser.
If the Paying Agent holds on a redemption date or Maturity Date money
sufficient to pay the principal of, and interest on Securities payable on that
date, then on and after that date such Securities cease to be outstanding and
interest on them ceases to accrue.
SECTION 2.09. Treasury Securities.
In determining whether the Holders of the required principal amount of
Securities have concurred in any direction, waiver or consent, Securities owned
by the Company, any Subsidiary or any of their respective Affiliates shall be
disregarded, except that for the purposes of determining whether the Trustee
shall be protected in relying on any such direction, waiver or consent, only
Securities that the Trustee actually knows are so owned shall be so disregarded.
The Trustee may require an Officers' Certificate listing securities
owned by the Company, any Subsidiary or any of their respective Affiliates.
SECTION 2.10. Temporary Securities.
Until definitive Securities are ready for delivery, the Company may
prepare and the Trustee shall authenticate temporary Securities. Temporary
Securities shall be substantially in the form of definitive Securities but may
have variations that the Company considers appropriate for temporary Securities.
Without unreasonable delay, the Company shall prepare and the Trustee shall
authenticate definitive Securities in exchange for temporary Securities. Until
such exchange, temporary Securities shall be entitled to the same rights,
benefits and privileges as definitive Securities.
SECTION 2.11. Cancellation.
The Company at any time may deliver Securities to the Trustee for
cancellation. The Registrar and the Paying Agent shall forward to the Trustee
any Securities surrendered to them for transfer, exchange or payment. The
Trustee and no one else shall cancel all Securities surrendered for transfer,
exchange, payment or cancellation. The Company may not issue new Securities to
replace, or reissue or resell, Securities which the Company has redeemed or paid
or have been delivered to the Trustee for cancellation. The Trustee (subject to
the record-retention requirements of the Exchange Act) shall destroy cancelled
Securities and deliver a certificate of destruction thereof to the Company.
SECTION 2.12. Defaulted Interest.
If the Company defaults in a payment of interest on the Securities, it
shall pay the defaulted interest, plus any interest payable on the defaulted
interest pursuant to Section 4.01 hereof, to the persons who are Securityholders
on a subsequent special record date, and such term, as used in this Section 2.12
with respect to the payment of any defaulted interest, shall mean the fifteenth
day next preceding the date fixed by the Company for the payment of defaulted
interest, whether or not such day is a Business Day. At least 15 days before
such special record date, the Company shall mail to each Securityholder and to
the Trustee a notice that states such special record date, the payment date and
the amount of defaulted interest to be paid.
SECTION 2.13. CUSIP or CINS Number.
The Company in issuing the Securities may use a "CUSIP" or "CINS"
number, and if so, such CUSIP or CINS number shall be included in notices of
redemption or exchange as a convenience to Holders; provided that any such
notice may state that no representation is made as to the correctness or
accuracy of the CUSIP or CINS number printed in the notice or on the Securities,
and that reliance may be placed only on the other identification numbers printed
on the Securities. The Company will promptly notify the Trustee of any change in
the CUSIP or CINS number.
In the event that the Company shall issue and the Trustee shall
authenticate any Securities issued under this Indenture subsequent to the Issue
Date pursuant to the fourth paragraph of Section 2.02, the Company shall use its
best efforts to obtain the same "CUSIP" number for such Securities as is printed
on the Securities outstanding at such time; provided, however, that if any
series of Securities issued under this Indenture subsequent to the Issue Date is
determined, pursuant to an Opinion of Counsel of the Company in a form
reasonably satisfactory to the Trustee to be a different class of security than
the Securities outstanding at such time for federal income tax purposes, the
Company may obtain a "CUSIP" number for such Securities that is different than
the "CUSIP" number printed on the Securities then outstanding.
SECTION 2.14. Payments of Interest.
(a) The Holder of a Physical Security at the close of business on the
regular record date with respect to any Interest Payment Date shall be entitled
to receive the interest and Additional Interest, if any, payable on such
Interest Payment Date notwithstanding any transfer or exchange of such Physical
Security subsequent to the regular record date and prior to such Interest
Payment Date, except if and to the extent the Company shall default in the
payment of the interest or Additional Interest due on such Interest Payment
Date, in which case such defaulted interest and Additional Interest, if any,
shall be paid in accordance with Section 2.12; provided that, in the event of an
exchange of a Physical Security for a beneficial interest in any Global Security
subsequent to a regular record date or any special record date and prior to or
on the related Interest Payment Date or other payment date under Section 2.12,
any payment of the interest and Additional Interest payable on such payment date
with respect to any such Physical Security shall be made to the Person in whose
name such Physical Security was registered on such record date. Payments of
interest on the Global Securities will be made to the Holder of the Global
Security on each Interest Payment Date; provided that, in the event of an
exchange of all or a portion of a Global Security for Physical Security
subsequent to the regular record date or any special record date and prior to or
on the related Interest Payment Date or other payment date under Section 2.12
any payment of interest or Additional Interest payable on such Interest Payment
Date or other payment date with respect to the Physical Security shall be made
to the Holder of the Global Security.
(b) The Trustee shall pay interest and Additional Interest, if any, to
DTC, with respect to any Global Security held by DTC, on the applicable Interest
Payment Date in accordance with instructions received from DTC at least five
Business Days before the applicable Interest Payment Date.
ARTICLE THREE
REDEMPTION
SECTION 3.01. Notices to Trustee.
If the Company wants to redeem Securities pursuant to paragraph 5 of
the Securities at the applicable redemption price set forth thereon, it shall
notify the Trustee in writing of the redemption date and the principal amount of
Securities to be redeemed.
The Company shall give the notice provided for in this Section 3.01 at
least 45 days before the redemption date (unless a shorter notice shall be
agreed to by the Trustee in writing) but not more than 60 days before the
redemption date, together with an Officers' Certificate stating that such
redemption will comply with the conditions contained herein.
SECTION 3.02. Selection of Securities To Be Redeemed.
If less than all of the Securities are to be redeemed pursuant to
paragraph 5 thereof, the Trustee shall select the Securities to be redeemed pro
rata or by lot or in such other manner as the Trustee shall deem appropriate and
fair. The Trustee shall make the selection from the Securities then outstanding,
subject to redemption and not previously called for redemption. The Trustee may
select for redemption portions (equal to $1,000 or any integral multiple
thereof) of the principal of Securities that have denominations larger than
$1,000. Provisions of this Indenture that apply to Securities called for
redemption also apply to portions of Securities called for redemption.
SECTION 3.03. Notice of Redemption.
At least 30 days but not more than 60 days before a redemption date,
the Company shall mail a notice of redemption by first class mail to each Holder
whose Securities are to be redeemed.
The notice shall identify the Securities to be redeemed and shall
state:
(1) the redemption date;
(2) the redemption price;
(3) the CUSIP number;
(4) the name and address of the Paying Agent to which the
Securities are to be surrendered for redemption;
(5) that Securities called for redemption must be
surrendered to the Paying Agent to collect the redemption price;
(6) that, unless the Company defaults in making the
redemption payment, interest on Securities called for redemption ceases
to accrue on and after the redemption date and the only remaining right
of the Holders is to receive payment of the redemption price upon
surrender to the Paying Agent; and
(7) if any Security is being redeemed in part, the portion
of the principal amount of such Security to be redeemed and that, after
the redemption date, upon surrender of such Security, a new Security or
Securities in principal amount equal to the unredeemed portion thereof
will be issued.
At the Company's request, the Trustee shall give the notice of
redemption on behalf of the Company, in the Company's name and at the Company's
expense.
SECTION 3.04. Effect of Notice of Redemption.
Once a notice of redemption is mailed, Securities called for redemption
become due and payable on the redemption date and at the redemption price. Upon
surrender to the Paying Agent, such Securities shall be paid at the redemption
price, plus accrued interest thereon to the redemption date, but interest
installments whose maturity is on or prior to such redemption date shall be
payable to the Holders at the close of business on the relevant record dates
referred to in the Securities. The Trustee shall not be required to (i) issue,
authenticate, register the transfer of or exchange any Security during a period
beginning 15 days before the date a notice of redemption is mailed and ending at
the close of business on the date the redemption notice is mailed, or (ii)
register the transfer or exchange of any Security so selected for redemption in
whole or in part, except the unredeemed portion of any Security being redeemed
in part.
SECTION 3.05. Deposit of Redemption Price.
At least one Business Day before the redemption date, the Company shall
deposit with the Paying Agent money sufficient to pay the redemption price of
and accrued interest on all Securities to be redeemed on that date other than
Securities or portions thereof called for redemption on that date which have
been delivered by the Company to the Trustee for cancellation.
SECTION 3.06. Securities Redeemed in Part.
Upon surrender of a Security that is redeemed in part, the Trustee
shall authenticate for the Holder a new Security equal in principal amount to
the unredeemed portion of the Security surrendered.
ARTICLE FOUR
COVENANTS
SECTION 4.01. Payment of Securities.
The Company shall pay the principal of and interest on the Securities
in the manner provided in the Securities. An installment of principal or
interest shall be considered paid on the date due if the Trustee or Paying Agent
holds on that date money designated for and sufficient to pay the installment in
full and is not prohibited from paying such money to the Holders of the
Securities pursuant to the terms of this Indenture.
The Company shall pay interest on overdue principal (including, to the
extent permitted by applicable law, post-petition interest in a proceeding under
any Bankruptcy Law) at the same rate per annum borne by the Securities. The
Company shall pay interest on overdue installments of interest at the same rate
per annum borne by the Securities, to the extent lawful.
SECTION 4.02. Maintenance of Office or Agency.
The Company shall maintain in the Borough of Manhattan, The City of New
York, an office or agency where Securities may be surrendered for registration
of transfer or exchange or for presentation for payment and where notices and
demands to or upon the Company in respect of the Securities and this Indenture
may be served. The Company shall give prompt written notice to the Trustee of
the location, and any change in the location, of such office or agency. If at
any time the Company shall fail to maintain any such required office or agency
or shall fail to furnish the Trustee with the address thereof, such
presentations, surrenders, notices and demands may be made or served at the
address of the Trustee set forth in Section 13.02.
The Company may also from time to time designate one or more other
offices or agencies where the Securities may be presented or surrendered for any
or all such purposes and may from time to time rescind such designations;
provided that no such designation or rescission shall in any manner relieve the
Company of its obligation to maintain an office or agency in the Borough of
Manhattan, The City of New York, for such purposes. The Company shall give
prompt written notice to the Trustee of any such designation or rescission and
of any change in the location of any such other office or agency.
SECTION 4.03. Limitation on Transactions with
Affiliates and Related Persons.
The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, enter into directly or indirectly any transaction with any of
their respective Affiliates or Related Persons (other than the Company or a
Restricted Subsidiary of the Company), including, without limitation, the
purchase, sale, lease or exchange of property, the rendering of any service, or
the making of any guarantee, loan, advance or Investment, either directly or
indirectly, involving aggregate consideration in excess of $2.0 million unless a
majority of the disinterested directors of the Board of Directors of the Company
determines, in its good faith judgment evidenced by a resolution of such Board
of Directors filed with the Trustee, that the terms of such transaction are at
least as favorable as the terms that could be obtained by the Company or such
Restricted Subsidiary, as the case may be, in a comparable transaction made on
an arm's-length basis between unaffiliated parties; provided, however, that if
the aggregate consideration is in excess of $15.0 million the Company shall also
obtain, prior to the consummation of the transaction, the favorable opinion as
to the fairness of the transaction to the Company or such Restricted Subsidiary,
from a financial point of view from an independent financial advisor. The
provisions of this covenant shall not apply to (i) transactions permitted by
Section 4.06 and (ii) reasonable fees and compensation paid to, and indemnity
provided on behalf of, officers, directors and employees of the Company and its
Restricted Subsidiaries as determined in good faith by the Board of Directors or
authorized executive officers, as the case may be, of the Company.
SECTION 4.04. Limitation on Indebtedness.
The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, directly or indirectly, Incur any Indebtedness (including
Acquired Indebtedness), except: (i) Indebtedness of the Company or any of its
Restricted Subsidiaries, if immediately after giving effect to the Incurrence of
such Indebtedness and the receipt and application of the net proceeds thereof,
the Consolidated Cash Flow Ratio of the Company for a year consisting of the
four full fiscal quarters for which quarterly or annual financial statements are
available next preceding the Incurrence of such Indebtedness (calculated on a
pro forma basis in accordance with Article 11 of Regulation S-X under the
Securities Act or any successor provision as if such Indebtedness had been
Incurred on the first day of such year) would be greater than 2.0 to 1.0; (ii)
Indebtedness of the Company and its Restricted Subsidiaries Incurred under the
Credit Agreement in an amount not to exceed $120.0 million in aggregate
principal amount less the amount of any such Indebtedness that is permanently
repaid or, without duplication, the amount by which commitments thereunder are
permanently reduced, in either case, from the proceeds of Asset Dispositions (it
being understood that the amount incurred under the Credit Agreement may be
increased as a result of the operation of clause (xv) below); (iii) Indebtedness
owed by the Company to any direct or indirect Wholly Owned Subsidiary of the
Company or Indebtedness owed by a direct or indirect Restricted Subsidiary of
the Company to the Company or a direct or indirect Wholly Owned Subsidiary of
the Company; provided, however, upon either (I) the transfer or other
disposition by such direct or indirect Wholly Owned Subsidiary or the Company of
any Indebtedness so permitted under this clause (iii) to a Person other than the
Company or another direct or indirect Wholly Owned Subsidiary of the Company or
(II) the issuance (other than directors' qualifying shares), sale, transfer or
other disposition of shares of Capital Stock or other ownership interests
(including by consolidation or merger) of such direct or indirect Wholly Owned
Subsidiary to a Person other than the Company or another such Wholly Owned
Subsidiary of the Company, the provisions of this clause (iii) shall no longer
be applicable to such Indebtedness and such Indebtedness shall be deemed to have
been Incurred at the time of any such issuance, sale, transfer or other
disposition, as the case may be; (iv) Indebtedness of the Company or any
Restricted Subsidiary under any interest rate or foreign currency hedge or
exchange or other similar agreement to the extent entered into to hedge any
other Indebtedness permitted under this Indenture (including the Securities);
(v) Indebtedness Incurred to defer, renew, extend, replace, refinance or refund,
whether under any amendment, supplement or otherwise (collectively for purposes
of this clause (v), to "refund") any Indebtedness outstanding on the Issue Date
(including Indebtedness under clause (xiv) below and Indebtedness under the Term
Loan Facilities), any Indebtedness Incurred under the prior clause (i) above or
the Securities and the Guarantees of the Securities; provided, however, that (I)
such Indebtedness does not exceed the principal amount (or accrual amount, if
less) of Indebtedness so refunded plus the amount of any premium required to be
paid in connection with such refunding pursuant to the terms of the Indebtedness
refunded or the amount of any premium reasonably determined by the issuer of
such Indebtedness as necessary to accomplish such refunding by means of a tender
offer, exchange offer, or privately negotiated repurchase, plus the expenses of
such issuer reasonably incurred in connection therewith and (II)(A) in the case
of any refunding of Indebtedness that is pari passu with the Securities, such
refunding Indebtedness is made pari passu with or subordinate in right of
payment to the Securities, and, in the case of any refunding of Indebtedness
that is subordinate in right of payment to the Securities, such refunding
Indebtedness is subordinate in right of payment to the Securities on terms no
less favorable to the Holders of the Securities than those contained in the
Indebtedness being refunded, (B) in either case, the refunding Indebtedness by
its terms, or by the terms of any agreement or instrument pursuant to which such
Indebtedness is issued, does not have an Average Life that is less than the
remaining Average Life of the Indebtedness being refunded and does not permit
redemption or other retirement (including pursuant to any required offer to
purchase to be made by the Company or a Restricted Subsidiary of the Company) of
such Indebtedness at the option of the holder thereof prior to the final stated
maturity of the Indebtedness being refunded, other than a redemption or other
retirement at the option of the holder of such Indebtedness (including pursuant
to a required offer to purchase made by the Company or a Restricted Subsidiary
of the Company) which is conditioned upon a change of control of the Company
pursuant to provisions substantially similar to those contained in Section 4.14
and (C) any Indebtedness Incurred to refund any Indebtedness is Incurred by the
obligor on the Indebtedness being refunded or by the Company; provided, further,
that clause (II) of the immediately preceding proviso shall not apply to any
Indebtedness incurred to refinance term loans under the Credit Agreement
outstanding on the Issue Date or to subsequent refinancings of any such
refinancing Indebtedness; (vi) commodity agreements of the Company or any of its
Restricted Subsidiaries to the extent entered into to protect the Company and
its Restricted Subsidiaries from fluctuations in the prices of raw materials
used in their businesses; (vii) Indebtedness of the Company under the Exchange
Securities (as defined in the Registration Rights Agreement) and Indebtedness of
the Guarantors under the Guarantees incurred in accordance with this Indenture;
(viii) Indebtedness outstanding on the Issue Date; (ix) guarantees by the
Company or its Restricted Subsidiaries of Indebtedness otherwise permitted to be
incurred hereunder; (x) Indebtedness the net proceeds of which are applied to
defease the Securities in their entirety; (xi) Indebtedness of the Company or
any of its Subsidiaries that is an endorsement of bank drafts and similar
negotiable instruments for collection or deposit in the ordinary course of
business; (xii) Indebtedness incurred by the Company or any of its Restricted
Subsidiaries constituting reimbursement obligations with respect to letters of
credit issued in the ordinary course of business, including, without limitation,
letters of credit in respect of workers' compensation claims or self-insurance,
or other Indebtedness with respect to reimbursement type obligations regarding
workers' compensation claims or self-insurance and obligations in respect of
performance and surety bonds and completion guarantees provided by the Company
or any Restricted Subsidiary of the Company in the ordinary course of business
not in excess of $5.0 million; (xiii) guarantees by the Guarantors of the 11
1/4% Notes pursuant to the 11 1/4% Notes Indenture; (xiv) Indebtedness of
PureTec and its subsidiaries outstanding on the Issue Date, including
Indebtedness under any PS&T Notes which are not tendered pursuant to and remain
outstanding following the PS&T Tender Offer; and (xv) Indebtedness of the
Company or its Restricted Subsidiaries not otherwise permitted to be Incurred
pursuant to clauses (i) through (xiv) above which, together with any other
outstanding Indebtedness Incurred pursuant to this clause (xv), has an aggregate
principal amount not in excess of $40.0 million at any time outstanding, which
Indebtedness may be Incurred under the Credit Agreement or otherwise.
SECTION 4.05. Limitation on Certain Asset Dispositions.
The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, directly or indirectly, make one or more Asset Dispositions
unless: (i) the Company or such Restricted Subsidiary, as the case may be,
receives consideration for such Asset Disposition at least equal to the fair
market value of the assets sold or disposed of as determined by the Board of
Directors of the Company in good faith and evidenced by a resolution of such
Board of Directors filed with the Trustee; (ii) not less than 75% of the
consideration for the disposition consists of (a) cash or readily marketable
cash equivalents or the assumption of Indebtedness (other than non-recourse
Indebtedness or any Subordinated Indebtedness) of the Company or such Restricted
Subsidiary or other obligations relating to such assets (and release of the
Company or such Restricted Subsidiary from all liability on the Indebtedness or
other obligations assumed) or (b) assets which constitute or are part of
businesses which are related to the business of the Company or its Restricted
Subsidiaries as of the Issue Date or which assets consist of the issued and
outstanding Capital Stock of a person (which becomes a Restricted Subsidiary as
a result of the transaction) the assets of which are principally comprised of
such assets; and (iii) all Net Available Proceeds, less any amounts invested
within 360 days of such Asset Disposition in assets related to the business of
the Company or its Restricted Subsidiaries (including in Capital Stock of
another Person (other than any Person that is a Restricted Subsidiary of the
Company immediately prior to such investment); provided, however, that
immediately after giving effect to any such investment in Capital Stock (and not
prior thereto) such Person shall be a Restricted Subsidiary of the Company), are
applied, on or prior to the 360th day (or 390th day in the case of clause (y)
below) after such Asset Disposition, unless and to the extent that the Company
shall determine to make an Offer to Purchase, (x) to the permanent reduction and
prepayment of any Senior Debt of the Company or any of its Subsidiaries then
outstanding (including a permanent reduction of commitments in respect thereof)
or (y) to the repurchase of the Company's 11 1/4% Notes pursuant to the 11 1/4%
Notes Indenture. Any Net Available Proceeds from any Asset Disposition which is
subject to the immediately preceding sentence that are not applied as provided
in the immediately preceding sentence shall be used promptly after the
expiration of the 390th day after such Asset Disposition, or promptly after the
Company shall have earlier determined to not apply any Net Available Proceeds
therefrom as provided in clause (iii) of the immediately preceding sentence, to
make an Offer to Purchase outstanding Securities at a purchase price in cash
equal to 100% of their principal amount plus accrued interest to the Purchase
Date. Notwithstanding the foregoing, the Company may defer making any Offer to
Purchase outstanding Securities until there are aggregate unutilized Net
Available Proceeds from Asset Dispositions otherwise subject to the two
immediately preceding sentences equal to or in excess of $15.0 million (at which
time, the entire unutilized Net Available Proceeds from Asset Dispositions
otherwise subject to the two immediately preceding sentences, and not just the
amount in excess of $15.0 million, shall be applied as required pursuant to this
paragraph). Any remaining Net Available Proceeds following the completion of the
required Offer to Purchase may be used by the Company for any other purpose
(subject to the other provisions of this Indenture) and the amount of Net
Available Proceeds then required to be otherwise applied in accordance with this
Section 4.05 shall be reset to zero, subject to any subsequent Asset
Disposition. These provisions will not apply to a transaction consummated in
compliance with the provisions of Section 5.01.
In the event that the Company makes an Offer to Purchase the
Securities, the Company shall comply with any applicable securities laws and
regulations, including any applicable requirements of Section 14(e) of, and Rule
14e-1 under, the Exchange Act.
SECTION 4.06. Limitation on Restricted Payments.
The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, directly or indirectly, (i) declare or pay any dividend, or
make any distribution of any kind or character (whether in cash, property or
securities), on or in respect of any class of the Capital Stock of the Company
or any of its Restricted Subsidiaries excluding any (x) dividends or
distributions payable solely in shares of Capital Stock of the Company (other
than Disqualified Stock) or in options, warrants or other rights to acquire
Capital Stock of the Company (other than Disqualified Stock), or (y) in the case
of any Restricted Subsidiary of the Company, dividends or distributions payable
to the Company or a Restricted Subsidiary of the Company or to the extent
payable on a pro rata basis to all holders of Capital Stock of such Restricted
Subsidiary, (ii) purchase, redeem, or otherwise acquire or retire for value
shares of Capital Stock of the Company or any of its Restricted Subsidiaries,
any options, warrants or rights to purchase or acquire shares of Capital Stock
of the Company or any of its Restricted Subsidiaries or any securities
convertible or exchangeable into shares of Capital Stock of the Company or any
of its Restricted Subsidiaries, excluding any such shares of Capital Stock,
options, warrants, rights or securities which are owned by the Company or a
Restricted Subsidiary of the Company, (iii) make any Investment in (other than a
Permitted Investment), or make any payment on a guarantee of any obligation of,
any Person, other than the Company or a direct or indirect Wholly Owned
Subsidiary of the Company, or (iv) redeem, defease, repurchase, retire or
otherwise acquire or retire for value, prior to any scheduled maturity,
repayment or sinking fund payment, Subordinated Indebtedness (each of the
transactions described in clauses (i) through (iv) (other than any exception to
any such clause) being a "Restricted Payment"), if at the time thereof: (1) a
Default or an Event of Default shall have occurred and be continuing, or (2)
upon giving effect to such Restricted Payment, the Company could not Incur at
least $1.00 of additional Indebtedness pursuant to clause (i) of Section 4.04,
or (3) upon giving effect to such Restricted Payment, the aggregate of all
Restricted Payments made on or after April 4, 1997 exceeds the sum of: (a) 50%
of cumulative Consolidated Net Income of the Company (or, in the case cumulative
Consolidated Net Income of the Company shall be negative, less 100% of such
deficit) since April 4, 1997, plus (b) 100% of the aggregate net proceeds
received after April 4, 1997, including the fair market value of property other
than cash (determined in good faith by the Board of Directors of the Company as
evidenced by a resolution of such Board of Directors filed with the Trustee)
from the issuance of, or equity contribution with respect to, Capital Stock
(other than Disqualified Stock) of the Company and warrants, rights or options
on Capital Stock (other than Disqualified Stock) of the Company (other than in
respect of any such issuance to a Restricted Subsidiary of the Company) and the
principal amount of Indebtedness of the Company or any of its Restricted
Subsidiaries that has been converted into or exchanged for Capital Stock of the
Company which Indebtedness was Incurred after April 4, 1997; plus (c)
$7,325,000; plus (d) 100% of the aggregate after-tax net cash proceeds, of the
sale or other disposition of any Investment constituting a Restricted Payment
made after April 4, 1997; provided that any gain on the sale or disposition to
the extent included in this clause (d) shall not be included in determining
Consolidated Net Income for purposes of clause (a) above; provided, further,
that amounts included in this clause (d) shall not exceed the Net Investment by
the Company in the asset so sold or disposed.
The foregoing provision shall not be violated by (i) any dividend on
any class of Capital Stock of the Company or any of its Restricted Subsidiaries
paid within 60 days after the declaration thereof if, on the date when the
dividend was declared, the Company or such Restricted Subsidiary, as the case
may be, could have paid such dividend in accordance with the provisions of this
Indenture, (ii) the renewal, extension, refunding or refinancing of any
Indebtedness otherwise permitted pursuant to clause (v) of Section 4.04, (iii)
the exchange or conversion of any Indebtedness of the Company or any of its
Restricted Subsidiaries for or into Capital Stock of the Company (other than
Disqualified Stock), (iv) so long as no Default or Event of Default has occurred
and is continuing, any Investment made with the proceeds of a substantially
concurrent sale (other than in respect of any issuance to a Restricted
Subsidiary of the Company) for cash of Capital Stock of the Company (other than
Disqualified Stock); provided, however, that the proceeds of such sale of
Capital Stock, to the extent used in any such Investment, shall not be (and have
not been) included in subclause (b) of clause (3) of the preceding paragraph,
(v) the redemption, repurchase, retirement or other acquisition of any Capital
Stock of the Company in exchange for or out of the net cash proceeds of a
substantially concurrent sale (other than to a Restricted Subsidiary of the
Company) of Capital Stock of the Company (other than Disqualified Stock);
provided, however, that the proceeds of such sale of Capital Stock, to the
extent used for such redemption, repurchase, retirement or other acquisition or
retirement, shall not be (and have not been) included in subclause (b) of clause
(3) of the preceding paragraph, (vi) payments made to purchase, redeem or
otherwise acquire or retire for value shares of Capital Stock of the Company or
any of its Restricted Subsidiaries at no more than fair market value (determined
in good faith by the Board of Directors of the Company as evidenced by a
resolution of such Board of Directors filed with the Trustee) from present and
former employees and directors of the Company or any such Restricted Subsidiary
and present and former limited partners of Tekni-Plex Partners, L.P. (in each
case other than F. Patrick Smith, J. Andrew McWethy, Barry A. Solomon and
Stephen A. Tuttle) in an amount not in excess of up to $4.0 million for each
fiscal year and $10.0 million in the aggregate commencing with the fiscal year
ended June 27, 1997, (vii) all payments, not exceeding $600,000 in the
aggregate, for each fiscal year, required to be made to Tekni-Plex Partners,
L.P. MST/TP Partners, L.P., MST Management, L.P., MST Partners L.P. or their
respective Affiliates or partners under the terms of existing agreements and
notes, (viii) so long as no Default or Event of Default has occurred and is
continuing, the redemption, repurchase or retirement of Subordinated
Indebtedness of the Company in exchange for, by conversion into, or out of the
net proceeds of, a substantially concurrent sale or incurrence of Subordinated
Indebtedness (other than any Indebtedness owed to a Subsidiary) of the Company
that is contractually subordinated in right of payment to the Securities to at
least the same extent, and which has an Average Life at least as long, in each
case, as the subordinated Indebtedness being redeemed, repurchased or retired,
(ix) so long as no Default or Event of Default has occurred and is continuing,
Investments not otherwise permitted pursuant to the clauses above up to $20.0
million in the aggregate from and after April 4, 1997, (x) so long as no Default
or Event of Default has occurred and is continuing, Restricted Payments not
otherwise permitted pursuant to the clauses above up to $5.0 million in the
aggregate from and after April 4, 1997, (xi) any Permitted Investment and (xii)
so long as no Default or Event of Default has occurred and is continuing,
Investments in any Person the primary business of which is located outside the
United States and is related, ancillary or complementary to the business of the
Company or its Restricted Subsidiaries, provided that the aggregate amount of
Investments pursuant to this clause does not exceed $15 million. Each Restricted
Payment described in clauses (i) (to the extent not already taken into account
for purposes of computing the aggregate amount of all Restricted Payments
pursuant to clause (3) above), (iv), (vi), (vii), (ix), (x) and (xii) of the
previous sentence shall be taken into account for purposes of computing the
aggregate amount of all Restricted Payments pursuant to clause (3) of the
preceding paragraph.
For purposes of this Section 4.06, (i) an "Investment" shall be deemed
to have been made at the time any Restricted Subsidiary is designated as an
Unrestricted Subsidiary in an amount (proportionate to the Company's equity
interest in such Subsidiary) equal to the net worth of such Restricted
Subsidiary at the time that such Restricted Subsidiary is designated as an
Unrestricted Subsidiary; (ii) at any date the aggregate of all Restricted
Payments made as Investments since April 4, 1997 shall exclude and be reduced by
an amount (proportionate to the Company's equity interest in such Subsidiary)
equal to the net worth of an Unrestricted Subsidiary at the time that such
Unrestricted Subsidiary is designated a Restricted Subsidiary, not to exceed, in
the case of any such redesignation of an Unrestricted Subsidiary as a Restricted
Subsidiary, the amount of Investments previously made by the Company and the
Restricted Subsidiaries in such Unrestricted Subsidiary (in each case (i) and
(ii) "net worth" to be calculated based upon the fair market value of the assets
of such Subsidiary as of any such date of designation); and (iii) any property
transferred to or from an Unrestricted Subsidiary shall be valued at its fair
market value at the time of such transfer.
SECTION 4.07. Corporate Existence.
Subject to Article Five, the Company shall do or shall cause to be done
all things necessary to preserve and keep in full force and effect its corporate
existence and the corporate, partnership or other existence of each of its
Restricted Subsidiaries in accordance with the respective organizational
documents of each such Restricted Subsidiary and the rights (charter and
statutory) and material franchises of the Company and its Restricted
Subsidiaries; provided, however, that the Company shall not be required to
preserve any such right or franchise, or the corporate existence of any
Restricted Subsidiary, if the Board of Directors of the Company shall determine
that the preservation thereof is no longer desirable in the conduct of the
business of the Company and its Restricted Subsidiaries, taken as a whole, and
that the loss thereof is not, and will not be, adverse in any material respect
to the Holders; provided, further, however, that a determination of the Board of
Directors of the Company shall not be required in the event of a merger of one
or more wholly-owned Subsidiaries of the Company with or into another
wholly-owned Subsidiary of the Company or another Person, if the surviving
Person is a wholly-owned Subsidiary of the Company organized under the laws of
the United States or a State thereof or of the District of Columbia.
SECTION 4.08. Payment of Taxes and Other Claims.
The Company shall pay or discharge or cause to be paid or discharged,
before the same shall become delinquent, (1) all material taxes, assessments and
governmental charges levied or imposed upon the Company or any Subsidiary of the
Company or upon the income, profits or property of the Company or any Subsidiary
of the Company and (2) all lawful claims for labor, materials and supplies
which, in each case, if unpaid, might by law become a material liability, or
Lien upon the property, of the Company or any Subsidiary of the Company;
provided, however, that the Company shall not be required to pay or discharge or
cause to be paid or discharged any such tax, assessment, charge or claim whose
amount, applicability or validity is being contested in good faith by
appropriate proceedings and for which appropriate provision has been made.
SECTION 4.09. Notice of Defaults.
(1) In the event that any Indebtedness of the Company or any of its
Restricted Subsidiaries is declared due and payable before its maturity because
of the occurrence of any default (or any event which, with notice or lapse of
time, or both, would constitute such a default) under such Indebtedness, the
Company shall promptly give written notice to the Trustee of such declaration,
the status of such default or event and what action the Company is taking or
proposes to take with respect thereto.
(2) Upon becoming aware of any Default or Event of Default, the Company
shall promptly deliver an Officers' Certificate to the Trustee specifying the
Default or Event of Default.
SECTION 4.10. Maintenance of Properties.
The Company shall cause all material properties owned by or leased to
it or any of its Restricted Subsidiaries and used or useful in the conduct of
its business or the business of any of its Restricted Subsidiaries to be
maintained and kept in normal condition, repair and working order and supplied
with all necessary equipment and shall cause to be made all necessary repairs,
renewals, replacements, betterments and improvements thereof, all as in the
judgment of the Company may be necessary, so that the business carried on in
connection therewith may be properly and advantageously conducted at all times;
provided, however, that nothing in this Section 4.10 shall prevent the Company
or any of its Restricted Subsidiaries from discontinuing the use, operation or
maintenance of any of such properties, or disposing of any of them, if such
discontinuance or disposal is, in the judgment of the Board of Directors or of
the board of directors of the Restricted Subsidiary concerned, or of an officer
(or other agent employed by the Company or of any of its Restricted
Subsidiaries) of the Company or such Restricted Subsidiary having managerial
responsibility for any such property, desirable in the conduct of the business
of the Company or any of its Restricted Subsidiaries, and if such discontinuance
or disposal is not adverse in any material respect to the Holders.
SECTION 4.11. Compliance Certificate.
The Company shall deliver to the Trustee within 100 days after the
close of each fiscal year a certificate signed by the principal executive
officer, principal financial officer or principal accounting officer stating
that a review of the activities of the Company has been made under the
supervision of the signing officers with a view to determining whether a Default
or Event of Default has occurred and whether or not the signers know of any
Default or Event of Default by the Company that occurred during such fiscal
year. If they do know of such a Default or Event of Default, the certificate
shall describe all such Defaults or Events of Default, their status and the
action the Company is taking or proposes to take with respect thereto. The first
certificate to be delivered by the Company pursuant to this Section 4.11 shall
be for the fiscal year ending on or about June 30, 1998.
SECTION 4.12. Provision of Financial Information.
Whether or not the Company is subject to Section 13(a) or 15(d) of the
Exchange Act, or any successor provision thereto, the Company shall file with
the Commission the annual reports, quarterly reports and other documents which
the Company would have been required to file with the Commission pursuant to
such Section 13(a) or 15(d), or any successor provision thereto if the Company
were so required, such documents to be filed with the Commission on or prior to
the respective dates (the "Required Filing Dates") by which the Company would
have been required so to file such documents if the Company were so required.
The Company shall also in any event (a) within 15 days of each Required Filing
Date (i) transmit by mail to all Holders of Securities, as their names and
addresses appear in the Security Register, without cost to such Holders, and
(ii) file with the Trustee, copies of the annual reports, quarterly reports and
other documents which the Company is required to file with the Commission
pursuant to the preceding sentence, and (b) if, notwithstanding the preceding
sentence, filing such documents by the Company with the Commission is not
permitted under the Exchange Act, promptly upon written request supply copies of
such documents to any prospective holder of Securities.
SECTION 4.13. Waiver of Stay, Extension or Usury Laws.
The Company covenants (to the extent that it may lawfully do so) that
it shall not at any time insist upon, plead, or in any manner whatsoever claim
or take the benefit or advantage of, any stay or extension law or any usury law
or other law, which would prohibit or forgive the Company from paying all or any
portion of the principal of and/or interest on the Securities as contemplated
herein, wherever enacted, now or at any time hereafter in force, or which may
affect the covenants or the performance of this Indenture; and (to the extent
that it may lawfully do so) the Company hereby expressly waives all benefit or
advantage of any such law, and covenants that it shall not hinder, delay or
impede the execution of any power herein granted to the Trustee, but shall
suffer and permit the execution of every such power as though no such law had
been enacted.
SECTION 4.14. Change of Control.
Within 30 days following the date of the consummation of a transaction
resulting in a Change of Control, the Company shall commence an Offer to
Purchase all outstanding Securities at a purchase price in cash equal to 101% of
their principal amount plus accrued interest to the Purchase Date. Such Offer to
Purchase will be consummated not earlier than 30 days and not later than 60 days
after the commencement thereof. Each Holder shall be entitled to tender all or
any portion of the Securities owned by such Holder pursuant to the Offer to
Purchase, subject to the requirement that any portion of a Security tendered
must be an integral multiple of $1,000 principal amount. A "Change of Control"
will be deemed to have occurred in the event that (whether or not otherwise
permitted by this Indenture) after the Issue Date (a) any Person or any 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 Parties who are Permitted Holders, shall "beneficially
own" (as defined in Rule 13d-3 under the Exchange Act, or any successor
provision thereto), directly or indirectly, at least (i) 50% of the voting power
of the outstanding Voting Stock of the Company or (ii) 40% of the voting power
of the outstanding Voting Stock of the Company and in the case of clause (ii)
the Permitted Holders own less than such Person or Group (in doing the "own less
than" comparison in this clause (ii), 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); (b) any sale, lease or other transfer (in one
transaction or a series of related transactions) is made by the Company or any
of its Restricted Subsidiaries of all or substantially all of the consolidated
assets of the Company and its Restricted Subsidiaries to any Person; (c) the
Company consolidates with or merges with or into another Person or any Person
consolidates with, or merges with or into, the Company, in any such event
pursuant to a transaction in which immediately after the consummation thereof
Persons owning a majority of the Voting Stock of the Company immediately prior
to such consummation shall cease to own a majority of the Voting Stock of the
Company or the surviving entity if other than the Company; (d) Continuing
Directors cease to constitute at least a majority of the Board of Directors of
the Company; or (e) the stockholders of the Company approve any plan or proposal
for the liquidation or dissolution of the Company. In no event would the sale of
common stock of the Company to an underwriter or a group of underwriters in
privity of contract with the Company (or anybody in privity of contract 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 the outstanding Voting Stock
of the Company by a Person or any Group unless such common stock is not held in
an investment account in which case the investment account would be treated
without giving effect to the foregoing part of this sentence.
Prior to the mailing of a notice to each Holder regarding the Offer to
Purchase, but in any event within 30 days following the date on which a Change
of Control occurs, the Company will be obligated under the Credit Agreement as
in effect on the Issue Date to (i) repay in full all Indebtedness under the
Credit Agreement (and terminate all such commitments) or offer to repay in full
all such Indebtedness (and terminate all such commitments) and to repay the
Indebtedness owed to (and terminate the commitments of) each lender which has
accepted such offer or (ii) obtain the requisite consents under the Credit
Agreement to permit the repurchase of the Securities. The Company will first
comply with its obligations described in the preceding sentence before it offers
to repurchase Securities pursuant to this Section 4.14, provided that nothing in
this paragraph shall eliminate the obligation of the Company to consummate an
Offer to Purchase the Securities within 90 days of the consummation of a
transaction resulting in a Change of Control.
In the event that the Company makes an Offer to Purchase the
Securities, the Company shall comply with any applicable securities laws and
regulations, including any applicable requirements of Section 14(e) of, and Rule
14e-1 under, the Exchange Act.
SECTION 4.15. Limitation on Senior Subordinated Indebtedness.
The Company shall not (i) directly or indirectly Incur any Indebtedness
that by its terms would expressly rank senior in right of payment to the
Securities and expressly rank subordinate in right of payment to any Senior Debt
and (ii) permit a Guarantor to, and no Guarantor shall, directly or indirectly
Incur any Indebtedness that by its terms would expressly rank senior in right of
payment to the Guarantee of such Guarantor and expressly rank subordinate in
right of payment to any Senior Debt of such Guarantor.
SECTION 4.16. Limitations Concerning Distributions and Transfers by Restricted
Subsidiaries.
The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, directly or indirectly, create or otherwise cause or suffer to
exist any consensual encumbrance or restriction on the ability of any Restricted
Subsidiary of the Company to (i) pay, directly or indirectly, dividends or make
any other distributions in respect of its Capital Stock or pay any Indebtedness
or other obligation owed to the Company or any Restricted Subsidiary of the
Company, (ii) make loans or advances to the Company or any Restricted Subsidiary
of the Company or (iii) transfer any of its property or assets to the Company or
any Restricted Subsidiary of the Company, except for such encumbrances or
restrictions existing under or by reason of (a) any agreement in effect on the
Issue Date as any such agreement is in effect on such date, (b) the Credit
Agreement, (c) any agreement relating to any Indebtedness Incurred by such
Restricted Subsidiary prior to the date on which such Restricted Subsidiary was
acquired by the Company and outstanding on such date and not Incurred in
anticipation or contemplation of becoming a Restricted Subsidiary and provided
such encumbrance or restriction shall not apply to any assets of the Company or
its Restricted Subsidiaries other than such Restricted Subsidiary, (d) customary
provisions contained in an agreement which has been entered into for the sale or
disposition of all or substantially all of the Capital Stock or assets of a
Restricted Subsidiary; provided, however, that such encumbrance or restriction
is applicable only to such Restricted Subsidiary or assets, (e) an agreement
effecting a renewal, exchange, refunding, amendment or extension of Indebtedness
Incurred pursuant to an agreement referred to in clause (a) or (c) above;
provided, however, that the provisions contained in such renewal, exchange,
refunding, amendment or extension agreement relating to such encumbrance or
restriction are no more restrictive in any material respect than the provisions
contained in the agreement that is the subject thereof in the reasonable
judgment of the Board of Directors of the Company as evidenced by a resolution
of such Board of Directors filed with the Trustee, (f) this Indenture, (g)
applicable law, (h) customary provisions restricting subletting or assignment of
any lease governing any leasehold interest of any Restricted Subsidiary of the
Company, (i) restrictions contained in Indebtedness permitted to be incurred
subsequent to the Issue Date pursuant to Section 4.04; provided that any such
restrictions are ordinary and customary with respect to the type of Indebtedness
incurred, (j) purchase money obligations for property acquired in the ordinary
course of business that impose restrictions of the type referred to in clause
(iii) of this Section 4.16 or (k) restrictions of the type referred to in clause
(iii) of this Section 4.16 contained in security agreements securing
Indebtedness of a Restricted Subsidiary of the Company to the extent that such
Liens were otherwise incurred in accordance with Section 4.18 and restrict the
transfer of property subject to such agreements.
SECTION 4.17. Limitation on Issuance and Sale of Capital Stock of Restricted
Subsidiaries.
The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, (a) transfer, convey, sell or otherwise dispose of any shares
of Capital Stock of any Restricted Subsidiary of the Company (other than to the
Company or a Wholly Owned Subsidiary of the Company), except that the Company
and any such Restricted Subsidiary may, in any single transaction, sell all, but
not less than all, of the issued and outstanding Capital Stock of any such
Restricted Subsidiary to any Person, subject to complying with Section 4.05 and
(b) issue shares of Capital Stock of a Restricted Subsidiary of the Company
(other than directors' qualifying shares), or securities convertible into, or
warrants, rights or options to subscribe for or purchase shares of, Capital
Stock of a Restricted Subsidiary of the Company to any Person other than to the
Company or a Wholly Owned Subsidiary of the Company and other than to the
holders of the Capital Stock of such Restricted Subsidiary made pro rata to the
relative amounts of such Capital Stock held by such holders.
SECTION 4.18. Limitation on Liens.
The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, incur any Lien on or with respect to any property or assets of
the Company or such Restricted Subsidiary owned on the Issue Date or thereafter
acquired or on the income or profits thereof to secure Indebtedness, without
making, or causing any such Restricted Subsidiary to make, effective provision
for securing the Securities and all other amounts due under this Indenture (and,
if the Company shall so determine, any other Indebtedness of the Company or such
Restricted Subsidiary, including Subordinated Indebtedness; provided, however,
that Liens securing the Securities and any Indebtedness pari passu with the
Securities are senior to such Liens securing such Subordinated Indebtedness)
equally and ratably with such Indebtedness or, in the event such Indebtedness is
subordinate in right of payment to the Securities or the Guarantee, prior to
such Indebtedness, as to such property or assets for so long as such
Indebtedness shall be so secured.
The foregoing restrictions shall not apply to (i) Liens existing on the
Issue Date securing Indebtedness existing on the Issue Date; (ii) Liens securing
Senior Debt (including Liens securing Indebtedness outstanding under the Credit
Agreement) and any guarantees thereof to the extent that the Indebtedness
secured thereby is permitted to be incurred under Section 4.04; provided,
however, that Indebtedness under the Credit Agreement shall be deemed not to
have been Incurred in violation of such provisions for purposes of this clause
(ii) if the holder(s) of such Indebtedness or their agent or representative
shall have received a representation from the Company to the effect that the
Incurrence of such Indebtedness does not violate such provision; (iii) Liens
securing only the Securities and the Guarantees; (iv) Liens in favor of the
Company or a Guarantor; (v) Liens to secure Indebtedness Incurred for the
purpose of financing all or any part of the purchase price or the cost of
construction or improvement of the property (or any other capital expenditure
financing) subject to such Liens; provided, however, that (a) the aggregate
principal amount of any Indebtedness secured by such a Lien does not exceed 100%
of such purchase price or cost, (b) such Lien does not extend to or cover any
other property other than such item of property and any improvements on such
item, (c) the Indebtedness secured by such Lien is Incurred by the Company
within 180 days of the acquisition, construction or improvement of such property
and (d) the Incurrence of such Indebtedness is permitted by Section 4.04; (vi)
Liens on property existing immediately prior to the time of acquisition thereof
(and not created in anticipation or contemplation of the financing of such
acquisition); (vii) Liens on property of a Person existing at the time such
Person is acquired or merged with or into or consolidated with the Company or
any such Restricted Subsidiary (and not created in anticipation or contemplation
thereof); (viii) Liens to secure Indebtedness Incurred to extend, renew,
refinance or refund (or successive extensions, renewals, refinancings or
refundings), in whole or in part, any Indebtedness secured by Liens referred to
in clauses (i)-(vii), (ix)-(xii) and (xiv) of this paragraph so long as such
Liens do not extend to any other property and the principal amount of
Indebtedness so secured is not increased except for the amount of any premium
required to be paid in connection with such renewal, refinancing or refunding
pursuant to the terms of the Indebtedness renewed, refinanced or refunded or the
amount of any premium reasonably determined by the Company as necessary to
accomplish such renewal, refinancing or refunding by means of a tender offer,
exchange offer or privately negotiated repurchase, plus the expenses of the
issuer of such Indebtedness reasonably incurred in connection with such renewal,
refinancing or refunding; (ix) Liens in favor of the Trustee as provided for in
this Indenture on money or property held or collected by the Trustee in its
capacity as Trustee; (x) Liens securing a tax, assessment or other governmental
charge or levy or the claim of a materialman, mechanic, carrier, warehouseman or
landlord for labor, materials, supplies or rentals incurred in the ordinary
course or business; (xi) Liens consisting of a deposit or pledge made in the
ordinary course of business in connection with, or to secure payment of,
obligations under worker's compensation, unemployment insurance or similar
legislation; (xii) Liens arising pursuant to an order of attachment, distraint
or similar legal process arising in connection with legal proceedings; (xiii)
Liens incurred in the ordinary course of business securing assets not having a
fair market value in excess of $500,000; and (xiv) Liens in favor of the trustee
under the 11 1/4% Notes Indenture as provided for in the 11 1/4% Notes Indenture
on money or property held or collected by such trustee in its capacity as
trustee under the 11 1/4% Notes Indenture.
SECTION 4.19. Future Guarantors.
The Company shall not create or acquire, nor permit any of its Domestic
Restricted Subsidiaries to create or acquire, any Domestic Restricted Subsidiary
after the Issue Date unless, at the time such Domestic Restricted Subsidiary has
either assets or stockholder's equity in excess of $25,000, such Domestic
Restricted Subsidiary (a) executes and delivers to the Trustee a supplemental
indenture in form reasonably satisfactory to the Trustee pursuant to which such
Domestic Restricted Subsidiary shall unconditionally guarantee all of the
Company's obligations under the Securities and this Indenture on the terms set
forth in Articles Eleven and Twelve and (b) delivers to the Trustee an Opinion
of Counsel that such supplemental indenture has been duly authorized, executed
and delivered by such Domestic Restricted Subsidiary and constitutes a legal,
valid, binding and enforceable obligation of such Domestic Restricted Subsidiary
(subject to customary exceptions).
SECTION 4.20. Termination of Certain Covenants.
The Company's obligation to comply with the provisions of Section 4.03,
Section 4.04, Section 4.05, Section 4.06, Section 4.16 and Section 4.17 will
terminate if the Notes are rated Investment Grade upon the delivery to the
Trustee of an Officers' Certificate and an Opinion of Counsel pursuant to
Sections 13.04 and 13.05 to that effect.
ARTICLE FIVE
MERGERS; SUCCESSOR CORPORATION
SECTION 5.01. Restriction on Mergers, Consolidations and Certain Sales of
Assets.
The Company shall not consolidate or merge with or into any Person, or
sell, assign, lease, convey or otherwise dispose of (or cause or permit any
Restricted Subsidiary of the Company to consolidate or merge with or into any
Person or sell, assign, lease, convey or otherwise dispose of) all or
substantially all of the Company's assets (determined on a consolidated basis
for the Company and its Restricted Subsidiaries), whether as an entirety or
substantially an entirety in one transaction or a series of related
transactions, including by way of liquidation or dissolution, to any Person
unless, in each such case: (i) the entity formed by or surviving any such
consolidation or merger (if other than the Company or such Restricted
Subsidiary, as the case may be), or to which such sale, assignment, lease,
conveyance or other disposition shall have been made (the "Surviving Entity"),
is a corporation organized and existing under the laws of the United States, any
state thereof or the District of Columbia; (ii) if there is a Surviving Entity,
the Surviving Entity assumes by supplemental indenture all of the obligations of
the Company (or in the case a Restricted Subsidiary is the Surviving Entity, the
obligations of such Restricted Subsidiary) on the Securities and under this
Indenture; (iii) immediately after giving effect to such transaction and the use
of any net proceeds therefrom on a pro forma basis, the Company or the Surviving
Entity, as the case may be, (A) shall have a Consolidated Net Worth equal to or
greater than the Consolidated Net Worth of the Company immediately prior to such
transaction and (B) could Incur at least $1.00 of Indebtedness pursuant to
clause (i) of Section 4.04; (iv) immediately before and after giving effect to
such transaction and treating any Indebtedness which becomes an obligation of
the Company or any of its such Restricted Subsidiaries as a result of such
transaction as having been incurred by the Company or such Restricted
Subsidiary, as the case may be, at the time of the transaction, no Default or
Event of Default shall have occurred and be continuing; and (v) if, as a result
of any such transaction, property or assets of the Company or a Restricted
Subsidiary would become subject to a Lien not excepted from Section 4.18, the
Company, Restricted Subsidiary or the Surviving Entity, as the case may be,
shall have secured the Securities as required by Section 4.18. The provisions of
this paragraph shall not apply to any merger of a Restricted Subsidiary of the
Company with or into the Company or a Wholly Owned Subsidiary of the Company or
any transaction pursuant to which a Guarantor, is to be released in accordance
with the terms of the Guarantee and this Indenture in connection with any
transaction complying with Section 4.05.
SECTION 5.02. Successor Corporation Substituted.
Upon any consolidation of the Company or any Restricted Subsidiary of
the Company with, or merger of the Company or any such Restricted Subsidiary
into, any other Person or any sale, assignment, lease, conveyance or other
disposition of all or substantially all of the Company's consolidated assets (as
an entirety or substantially as an entirety in one transaction or a series of
related transactions, including by way of liquidation or dissolution) in
accordance with Section 5.01, upon the execution of a supplemental indenture by
the Surviving Person in form and substance satisfactory to the Trustee (as
evidenced by the Trustee's execution thereof), the Surviving Person shall
succeed to, and be substituted for, and may exercise every right and power of
and shall assume all obligations of, the Company or such Restricted Subsidiary,
as the case may be, under this Indenture and the Securities or the Guarantees,
as the case may be, with the same effect as if such Surviving Person had been
named as the Company or such Restricted Subsidiary, as the case may be, herein,
and thereafter, except in the case of a lease of all or substantially all of the
Company's consolidated assets, the predecessor Person shall be relieved of all
obligations and covenants under this Indenture and the Securities or the
Guarantees, as the case may be.
In connection with any consolidation, merger or transfer of assets
contemplated by Section 5.01, the Company shall deliver, or cause to be
delivered, to the Trustee, in form and substance reasonably satisfactory to the
Trustee, an Officers' Certificate and an Opinion of Counsel, each stating that
such consolidation, merger or transfer and the supplemental indenture in respect
thereof, if any, comply with Section 5.01 and that all conditions precedent
herein provided for relating to such transactions have been complied with.
ARTICLE SIX
DEFAULT AND REMEDIES
SECTION 6.01. Events of Default.
An "Event of Default" occurs if:
(1) the Company fails to pay principal of (or premium, if any,
on) any Security when due (whether or not prohibited by Article Eight
or Eleven);
(2) the Company fails to pay any interest on any Security when
due, and the default continues for 30 days (whether or not prohibited
by Article Eight or Eleven);
(3) the Company defaults in the payment of principal of and
interest on Securities required to be purchased pursuant to an Offer to
Purchase as described under Section 4.05 or 4.14 hereof when due and
payable (whether or not prohibited by Article Eight or Eleven);
(4) the Company fails to perform or comply with any of the
provisions of Section 5.01;
(5) the Company fails to perform any other covenant or
agreement of the Company under this Indenture or the Securities and the
default continues for 60 days after written notice to the Company by
the Trustee or holders of at least 25% in aggregate principal amount of
outstanding Securities;
(6) the Company defaults under the terms of one or more
instruments evidencing or securing Indebtedness of the Company or any
of its Restricted Subsidiaries having an outstanding principal amount
of $15.0 million or more individually or in the aggregate that has
resulted in the acceleration of the payment of such Indebtedness or the
Company or any of its Restricted Subsidiaries fails to pay principal
when due at the stated maturity of any such Indebtedness;
(7) there shall have been rendered any final judgment or
judgments (not subject to appeal) against the Company or any of its
Restricted Subsidiaries in an amount of $5.0 million or more which
remain undischarged or unstayed for a period of 60 days after the date
on which the right to appeal has expired;
(8) the Company or any of its Material Subsidiaries pursuant
to or within the meaning of any Bankruptcy Law:
(A) commences a voluntary case or proceeding,
(B) consents to the entry of an order for relief
against it in an involuntary case or proceeding,
(C) consents to the appointment of a Custodian of it
or for all or substantially all of its property, or
(D) makes a general assignment for the benefit of its
creditors;
(9) a court of competent jurisdiction enters an order or
decree under any Bankruptcy Law that:
(A) is for relief against the Company or any Material
Subsidiary in an involuntary case or proceeding,
(B) appoints a Custodian of the Company or any
Material Subsidiary or for all or substantially all of its
property, or
(C) orders the liquidation of the Company or any
Material Subsidiary,
and in each case the order or decree remains unstayed and in effect for
60 days; provided, however, that if the entry of such order or decree
is appealed and dismissed on appeal then the Event of Default hereunder
by reason of the entry of such order or decree shall be deemed to have
been cured; or
(10) any Guarantee ceases to be in full force and effect or is
declared null and void and unenforceable or found to be invalid or any
Guarantor denies its liability under its Guarantee (other than by
reason of a release of such Guarantor from its Guarantee in accordance
with the terms of this Indenture and the Guarantee).
The term "Bankruptcy Law" means Title 11, U.S. Code or any similar
Federal, state or foreign law for the relief of debtors. The term "Custodian"
means any receiver, trustee, assignee, liquidator, sequestrator or similar
official under any Bankruptcy Law.
SECTION 6.02. Acceleration.
If an Event of Default with respect to the Securities (other than an
Event of Default with respect to the Company described in clause (8) or (9) of
Section 6.01) shall occur and be continuing, either the Trustee or the Holders
of at least 25% in aggregate principal amount of the outstanding Securities may
accelerate the maturity of all Securities; provided, however, that after such
acceleration, but before a judgment or decree based on acceleration, the Holders
of a majority in aggregate principal amount of outstanding Securities may, under
certain circumstances, rescind and annul such acceleration if all Events of
Default, other than the non-payment of accelerated principal, have been cured or
waived as provided in this Indenture; and provided, further, 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 in clauses (8) or (9)
above), the Securities shall not become due and payable until the earlier to
occur of (x) five business days following delivery of a written notice of such
acceleration of the Securities to the agent under the Credit Agreement, if such
an Event of Default has not been cured prior to such fifth business day and (y)
the acceleration of any Indebtedness under the Credit Agreement. If an Event of
Default specified in clause (8) or (9) of Section 6.01 with respect to the
Company occurs, the outstanding Securities will ipso facto become immediately
due and payable without any declaration or other act on the part of the Trustee
or any Holder.
After a declaration of acceleration, but before a judgment or decree of
the money due in respect of the Securities has been obtained, the Holders of not
less than a majority in aggregate principal amount of the Securities then
outstanding by written notice to the Trustee may rescind an acceleration and its
consequences if all existing Events of Default (other than the nonpayment of
principal of and interest on the Securities which has become due solely by
virtue of such acceleration) have been cured or waived and if the rescission
would not conflict with any judgment or decree. No such rescission shall affect
any subsequent Default or impair any right consequent thereto.
SECTION 6.03. Other Remedies.
If an Event of Default occurs and is continuing, the Trustee may pursue
any available remedy by proceeding at law or in equity to collect the payment of
principal of or interest on the Securities or to enforce the performance of any
provision of the Securities or this Indenture.
The Trustee may maintain a proceeding even if it does not possess any
of the Securities or does not produce any of them in the proceeding. A delay or
omission by the Trustee or any Securityholder in exercising any right or remedy
maturing upon an Event of Default shall not impair the right or remedy or
constitute a waiver of or acquiescence in the Event of Default. No remedy is
exclusive of any other remedy. All available remedies are cumulative to the
extent permitted by law.
SECTION 6.04. Waiver of Past Default.
Subject to Sections 2.09, 6.07 and 10.02, prior to the declaration of
acceleration of the Securities, the Holders of not less than a majority in
aggregate principal amount of the outstanding Securities by written notice to
the Trustee may waive an existing Default or Event of Default and its
consequences, except a Default in the payment of principal of or interest on any
Security as specified in clauses (1) and (2) of Section 6.01 or a Default in
respect of any term or provision of this Indenture that may not be amended or
modified without the consent of each Holder affected as provided in Section
10.02. The Company shall deliver to the Trustee an Officers' Certificate stating
that the requisite percentage of Holders have consented to such waiver and
attaching copies of such consents. In case of any such waiver, the Company, the
Trustee and the Holders shall be restored to their former positions and rights
hereunder and under the Securities, respectively. This paragraph of this Section
6.04 shall be in lieu of Section 316(a)(1)(B) of the TIA and such Section
316(a)(1)(B) of the TIA is hereby expressly excluded from this Indenture and the
Securities, as permitted by the TIA.
Upon any such waiver, such Default shall cease to exist and be deemed
to have been cured and not to have occurred, and any Event of Default arising
therefrom shall be deemed to have been cured and not to have occurred for every
purpose of this Indenture and the Securities, but no such waiver shall extend to
any subsequent or other Default or Event of Default or impair any right
consequent thereon.
SECTION 6.05. Control by Majority.
Subject to Section 2.09, the Holders of a majority in principal
amount of the outstanding Securities may direct the time, method and place
of conducting any proceeding for any remedy available to the Trustee or
exercising any trust or power conferred on it. However, the Trustee may
refuse to follow any direction that conflicts with law or this Indenture,
that the Trustee determines may be unduly prejudicial to the rights of
another Securityholder, or that may involve the Trustee in personal
liability; provided, however, that the Trustee may take any other action
deemed proper by the Trustee which is not inconsistent with such direction.
In the event the Trustee takes any action or follows any direction pursuant
to this Indenture, the Trustee shall be entitled to indemnification
satisfactory to it in its sole discretion against any loss or expense
caused by taking such action or following such direction. This Section
6.05 shall be in lieu of Section 316(a)(1)(A) of the TIA, and such Section
316(a)(1)(A) of the TIA is hereby expressly excluded from this Indenture
and the Securities, as permitted by the TIA.
SECTION 6.06. Limitation on Suits.
A Securityholder may not pursue any remedy with respect to this
Indenture or the Securities unless:
(1) the Holder gives to the Trustee written notice of a
continuing Event of Default;
(2) the Holders of at least 25% in aggregate principal
amount of the outstanding Securities make a written request to the
Trustee to pursue a remedy;
(3) such Holder or Holders offer and, if requested, provide
to the Trustee indemnity satisfactory to the Trustee against any loss,
liability or expense;
(4) the Trustee does not comply with the request within 60
days after receipt of the request and the offer and, if requested, the
provision of indemnity; and
(5) during such 60-day period the Holders of a majority in
principal amount of the outstanding Securities (excluding Affiliates of
the Company) do not give the Trustee a direction which, in the opinion
of the Trustee, is inconsistent with the request.
A Securityholder may not use this Indenture to prejudice the
rights of another Securityholder or to obtain a preference or priority over such
other Securityholder.
SECTION 6.07. Rights of Holders To Receive Payment.
Notwithstanding any other provision of this Indenture, the right of any
Holder to receive payment of principal of and interest on the Security, on or
after the respective due dates expressed in the Security, or to bring suit for
the enforcement of any such payment on or after such respective dates, shall not
be impaired or affected without the consent of the Holder.
SECTION 6.08. Collection Suit by Trustee.
If an Event of Default in payment of interest or principal specified in
Section 6.01(1) or (2) occurs and is continuing, the Trustee may recover
judgment in its own name and as trustee of an express trust against the Company
or any other obligor on the Securities for the whole amount of principal and
accrued interest remaining unpaid, together with interest overdue on principal
and to the extent that payment of such interest is lawful, interest on overdue
installments of interest, in each case at the rate per annum borne by the
Securities and such further amount as shall be sufficient to cover the costs and
expenses of collection, including the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel.
SECTION 6.09. Trustee May File Proofs of Claim.
The Trustee may file such proofs of claim and other papers or documents
as may be necessary or advisable in order to have the claims of the Trustee
(including any claim for the reasonable compensation, expenses, disbursements
and advances of the Trustee, its agents and counsel) and the Securityholders
allowed in any judicial proceedings relative to the Company (or any other
obligor upon the Securities), its creditors or its property and shall be
entitled and empowered to collect and receive any monies or other property
payable or deliverable on any such claims and to distribute the same, and any
Custodian in any such judicial proceedings is hereby authorized by each
Securityholder to make such payments to the Trustee and, in the event that the
Trustee shall consent to the making of such payments directly to the
Securityholders, to pay to the Trustee any amount due to it for the reasonable
compensation, expenses, disbursements and advances of the Trustee, its agent and
counsel, and any other amounts due the Trustee under Section 7.07. Nothing
herein contained shall be deemed to authorize the Trustee to authorize or
consent to or accept or adopt on behalf of any Securityholder any plan of
reorganization, arrangement, adjustment or composition affecting the Securities
or the rights of any Holder thereof, or to authorize the Trustee to vote in
respect of the claim of any Securityholder in any such proceeding.
SECTION 6.10. Priorities.
If the Trustee collects any money or property pursuant to this Article
Six, it shall pay out the money or property in the following order:
First: to the Trustee for amounts due under Section 7.07;
Second: to Holders for amounts due and unpaid on the
Securities for principal and interest, ratably, without preference or
priority of any kind, according to the amounts due and payable on the
Securities for principal and interest, respectively; and
Third: to the Company.
The Trustee, upon prior written notice to the Company, may fix a record
date and payment date for any payment to Securityholders pursuant to this
Section 6.10.
SECTION 6.11. Undertaking for Costs.
In any suit for the enforcement of any right or remedy under this
Indenture or in any suit against the Trustee for any action taken or omitted by
it as Trustee, a court in its discretion may require the filing by any party
litigant in the suit of an undertaking to pay the costs of the suit, and the
court in its discretion may assess reasonable costs, including reasonable
attorneys' fees, against any party litigant in the suit, having due regard to
the merits and good faith of the claims or defenses made by the party litigant.
This Section 6.11 shall not apply to a suit by the Trustee, a suit by a Holder
or group of Holders of more than 10% in aggregate principal amount of the
outstanding Securities, or to any suit instituted by any Holder for the
enforcement or the payment of the principal or interest on any Securities on or
after the respective due dates expressed in the Security.
ARTICLE SEVEN
TRUSTEE
SECTION 7.01. Duties of Trustee.
(a) If an Event of Default has occurred and is continuing, the Trustee
shall exercise such of the rights and powers vested in it by this Indenture and
use the same degree of care and skill in their exercise as a prudent person
would exercise or use under the circumstances in the conduct of such person's
own affairs.
(b) Except during the continuance of an Event of Default:
(1) The Trustee shall not be liable except for the performance
of such duties as are specifically set forth herein; and
(2) In the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon certificates or
opinions conforming to the requirements of this Indenture; however, the
Trustee shall examine the certificates and opinions to determine
whether or not they conform to the requirements of this Indenture (but
need not confirm or investigate the accuracy of mathematical
calculations or other facts stated therein).
(c) The Trustee shall not be relieved from liability for its own
negligent action, its own negligent failure to act, or its own willful
misconduct, except that:
(1) This paragraph does not limit the effect of paragraph (b)
of this Section 7.01;
(2) The Trustee shall not be liable for any error of judgment
made in good faith by a Trust Officer, unless it is proved that the
Trustee was negligent in ascertaining the pertinent facts; and
(3) The Trustee shall not be liable with respect to any action
it takes or omits to take in good faith in accordance with a direction
received by it pursuant to Section 6.05.
(d) No provision of this Indenture shall require the Trustee to expend
or risk its own funds or otherwise incur any financial liability in the
performance of any of its duties hereunder or to take or omit to take any action
under this Indenture or take any action at the request or direction of Holders
if it shall have reasonable grounds for believing that repayment of such funds
is not assured to it or it does not receive an indemnity satisfactory to it in
its sole discretion against such risk, liability, loss, fee or expense which
might be incurred by it in compliance with such request or direction.
(e) Every provision of this Indenture that in any way relates to the
Trustee is subject to paragraphs (a), (b), (c) and (d) of this Section 7.01.
(f) The Trustee shall not be liable for interest on any money or assets
received by it except as the Trustee may agree with the Company. Money or assets
held in trust by the Trustee need not be segregated from other funds or assets
except to the extent required by law.
SECTION 7.02. Rights of Trustee.
Subject to Section 7.01:
(a) The Trustee may request and conclusively rely on any
document believed by it to be genuine and to have been signed or
presented by the proper person. The Trustee need not investigate any
fact or matter stated in the document.
(b) Before the Trustee acts or refrains from acting, it may
consult with counsel and may require an Officers' Certificate and an
Opinion of Counsel, which shall conform to the provisions of Section
13.05. The Trustee shall not be liable for any action it takes or omits
to take in good faith in reliance on such certificate or opinion.
(c) The Trustee may act through attorneys and agents of its
selection and shall not be responsible for the misconduct or negligence
of any agent or attorney (other than an agent who is an employee of the
Trustee) appointed with due care.
(d) The Trustee shall not be liable for any action it takes or
omits to take in good faith which it reasonably believes to be
authorized or within its rights or powers.
(e) The Trustee shall be under no obligation to exercise any
of the rights or powers vested in it by this Indenture at the request
or direction of any of the Securityholders pursuant to this Indenture,
unless such Securityholders shall have offered to the Trustee
reasonable security or indemnity against the costs, expenses and
liabilities which might be incurred by it in compliance with such
request or direction.
(f) The Trustee may consult with counsel of its selection, and
the advice or opinion of such counsel as to matters of law shall be
full and complete authorization and protection from liability in
respect of any action taken, omitted or suffered by it hereunder in
good faith and in accordance with the advice or opinion of such
counsel.
(g) The Trustee shall not be deemed to have knowledge of any
Default or Event of Default except (i) any Event of Default occurring
pursuant to clause (1) or (2) of Section 6.01 hereof or (ii) any
Default or Event of Default of which the Trustee shall have received
notification or obtained actual knowledge.
SECTION 7.03. Individual Rights of Trustee.
The Trustee in its individual or any other capacity may become the
owner or pledgee of Securities and may otherwise deal with the Company or its
Affiliates with the same rights it would have if it were not Trustee. Any Agent
may do the same with like rights. However, the Trustee is subject to Sections
7.10 and 7.11.
SECTION 7.04. Trustee's Disclaimer.
The Trustee shall not be responsible for and makes no representation as
to the validity or adequacy of this Indenture or the Securities, it shall not be
accountable for the Company's use of the proceeds from the Securities, and it
shall not be responsible for any statement of the Company in this Indenture or
any document issued in connection with the sale of Securities or any statement
in the Securities other than the Trustee's certificate of authentication.
SECTION 7.05. Notice of Defaults.
If a Default or an Event of Default occurs and is continuing and the
Trustee knows of such Defaults or Events of Default, the Trustee shall mail to
each Securityholder notice of the Default or Event of Default within 30 days
after the occurrence thereof; provided however, that, except in the case of an
Event of Default or a Default in payment with respect to the Securities or a
Default or Event of Default complying with Section 5.01, the Trustee shall be
protected in withholding such notice if and so long as the Board of Directors or
responsible officers of the Trustee in good faith determine that the withholding
of such notice is in the interest of the Holders.
SECTION 7.06. Reports by Trustee to Holders.
If required by TIA Section 313(a), within 60 days after each June 30
beginning with the June 30 following the date of this Indenture, the Trustee
shall mail to each Securityholder a report dated as of such June 30 that
complies with TIA Section 313(a). The Trustee also shall comply with TIA Section
313(b), (c) and (d).
A copy of each such report at the time of its mailing to
Securityholders shall be filed with the Commission and each stock exchange, if
any, on which the Securities are listed.
The Company shall promptly notify the Trustee in writing if the
Securities become listed on any securities exchange or of any delisting thereof.
SECTION 7.07. Compensation and Indemnity.
The Company shall pay to the Trustee from time to time such
compensation as the Company and the Trustee shall from time to time agree in
writing for its services. The Trustee's compensation shall not be limited by any
law on compensation of a trustee of an express trust. The Company shall
reimburse the Trustee upon request for all reasonable disbursements, expenses
and advances (including fees, disbursements and expenses of its agents and
counsel) incurred or made by it in addition to the compensation for its services
except any such disbursements, expenses and advances as may be attributable to
the Trustee's negligence or bad faith. Such expenses shall include the
reasonable compensation, disbursements and expenses of the Trustee's agents,
accountants, experts and counsel and any taxes or other expenses incurred by a
trust created pursuant to Section 9.01 hereof.
The Company shall indemnify the Trustee and its agents for, and hold
them harmless against any and all loss, damage, claims, liability or expense,
including taxes (other than franchise taxes imposed on the Trustee and taxes
based upon, measured by or determined by the income of the Trustee), arising out
of or in connection with the acceptance or administration of the trust or trusts
hereunder, including the costs and expenses of enforcing this Indenture against
the Company (including Section 7.07) and of defending itself against any claim
(whether asserted by any Securityholder or the Company) or liability in
connection with the exercise or performance of any of their powers or duties
hereunder, except to the extent that such loss, damage, claim, liability or
expense is due to their own negligence or bad faith. The Trustee shall notify
the Company promptly of any claim asserted against the Trustee for which it may
seek indemnity. However, the failure by the Trustee to so notify the Company
shall not relieve the Company of its obligations hereunder. The Company shall
defend the claim and the Trustee shall cooperate in the defense (and may employ
its own counsel) at the Company's expense; provided, however, that the Company's
reimbursement obligation with respect to counsel employed by the Trustee will be
limited to the reasonable fees and expenses of a single counsel. The Company
need not pay for any settlement made without its written consent, which consent
shall not be unreasonably withheld. The Company need not reimburse any expense
or indemnify against any loss or liability incurred by the Trustee as a result
of the violation of this Indenture by the Trustee.
To secure the Company's payment obligations in this Section 7.07, the
Trustee shall have a Lien prior to the Securities against all money or property
held or collected by the Trustee, in its capacity as Trustee, except money or
property held in trust to pay principal of or interest on particular Securities.
When the Trustee incurs expenses or renders services after an Event of
Default specified in Section 6.01(8) or (9) occurs, the expenses (including the
reasonable fees and expenses of its agents and counsel) and the compensation for
the services shall be preferred over the status of the Holders in a proceeding
under any Bankruptcy Law and are intended to constitute expenses of
administration under any Bankruptcy Law. The Company's obligations under this
Section 7.07 and any claim arising hereunder shall survive the resignation or
removal of any Trustee, the discharge of the Company's obligations pursuant to
Article Nine and any rejection or termination under any Bankruptcy Law.
SECTION 7.08. Replacement of Trustee.
The Trustee may resign at any time by so notifying the Company in
writing. The Holders of a majority in principal amount of the outstanding
Securities may remove the Trustee by so notifying the Trustee and the Company in
writing and may appoint a successor Trustee with the Company's consent. The
Company may remove the Trustee if:
(1) the Trustee fails to comply with Section 7.10;
(2) the Trustee is adjudged a bankrupt or an insolvent under
any Bankruptcy Law;
(3) a custodian or other public officer takes charge of the
Trustee or its property; or
(4) the Trustee becomes incapable of acting.
If the Trustee resigns or is removed or if a vacancy exists in the
office of Trustee for any reason (the Trustee in such event being referred to
herein as the retiring Trustee), the Company shall promptly appoint a successor
Trustee. Within one year after the successor Trustee takes office, the Holders
of a majority in principal amount of the Securities may appoint a successor
Trustee to replace the successor Trustee appointed by the Company.
A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Company. As promptly as
practicable after that, the retiring Trustee shall transfer, after payment of
all sums then owing to the Trustee pursuant to Section 7.07, all property held
by it as Trustee to the successor Trustee, subject to the Lien provided in
Section 7.07, the resignation or removal of the retiring Trustee shall become
effective, and the successor Trustee shall have the rights, powers and duties of
the Trustee under this Indenture. A successor Trustee shall mail notice of its
succession to each Securityholder.
If a successor Trustee does not take office within 60 days after the
retiring Trustee resigns or is removed, the retiring Trustee, the Company or the
Holders of at least 10% in principal amount of the outstanding Securities may
petition any court of competent jurisdiction for the appointment of a successor
Trustee.
If the Trustee fails to comply with Section 7.10, any Securityholder
may petition any court of competent jurisdiction for the removal of the Trustee
and the appointment of a successor Trustee.
Notwithstanding replacement of the Trustee pursuant to this Section
7.08, the Company's obligations under Section 7.07, to the extent incurred,
shall continue for the benefit of the retiring Trustee.
SECTION 7.09. Successor Trustee by Merger, etc.
If the Trustee consolidates with, merges or converts into, or transfers
all or substantially all of its corporate trust business to, another corporation
or banking corporation, the resulting, surviving or transferee corporation or
banking corporation without any further act shall be the successor Trustee.
SECTION 7.10. Eligibility; Disqualification.
This Indenture shall always have a Trustee which shall be eligible to
act as Trustee under TIA Sections 310(a)(1) and 310(a)(5). The Trustee (or in
the case of a corporation included in a bank holding company, the related bank
holding company) shall have a combined capital and surplus of at least
$50,000,000 as set forth in its most recent published annual report of
condition. If the Trustee has or shall acquire any "conflicting interest" within
the meaning of TIA Section 310(b), the Trustee and the Company shall comply with
the provisions of TIA Section 310(b); provided, however, that there shall be
excluded from the operation of TIA Section 310(b)(1) any indenture or indentures
under which other securities, or certificates of interest or participation in
other securities, of the Company are outstanding, if the requirements for such
exclusion set forth in TIA Section 310(b)(1) are met. If at any time the Trustee
shall cease to be eligible in accordance with the provisions of this Section,
the Trustee shall resign immediately in the manner and with the effect
hereinbefore specified in this Article Seven.
SECTION 7.11. Preferential Collection of Claims Against Company.
The Trustee shall comply with TIA Section 311(a), excluding any
creditor relationship listed in TIA Section 311(b). A Trustee who has resigned
or been removed shall be subject to TIA Section 311(a) to the extent indicated
therein.
ARTICLE EIGHT
SUBORDINATION OF SECURITIES
SECTION 8.01. Securities Subordinated to Senior Debt.
The Company covenants and agrees, and the Trustee and each Holder by
acceptance of the Securities likewise covenants and agrees, that all Securities
shall be issued subject to the provisions of this Article; and each person
holding any Security, whether upon original issue or upon transfer, assignment
or exchange thereof, accepts and agrees that all payments of the principal of
(and premium, if any) and interest on the Securities by the Company and any
claims arising out of or with respect to this Indenture shall, to the extent and
in the manner set forth in this Article, be subordinated and junior in right of
payment to the prior payment in full of all Senior Debt of the Company.
SECTION 8.02. No Payment on Securities in Certain Circumstances.
(a) No payment by or on behalf of the Company of the principal of,
premium, if any, or interest on the Securities, or any payment to acquire any of
the Securities for cash, property or securities, or any distribution with
respect to the Securities of any kind or character, whether in cash, property or
securities, by set-off or otherwise (all such payments and distributions
referred to individually and collectively as a "Securities Payment"), whether
pursuant to the terms of the Securities or upon acceleration or otherwise, will
be made if, at the time of such payment, there exists a default in the payment
of all or any portion of the obligations on any Designated Senior Debt, whether
at maturity, on account of mandatory redemption or prepayment, acceleration or
otherwise, and such default shall not have been cured or waived or the benefits
of this sentence waived by or on behalf of the holders of such Designated Senior
Debt. In addition, during the continuance of any non-payment default or
non-payment event of default with respect to any Designated Senior Debt pursuant
to which the maturity thereof may be accelerated, and upon receipt by the
Trustee of notice (a "Payment Blockage Notice") from a holder or holders of such
Designated Senior Debt or the trustee or agent acting on behalf of such
Designated Senior Debt, then, unless and until such default or event of default
has been cured or waived or has ceased to exist or such Designated Senior Debt
has been discharged or repaid in full in cash or cash equivalents or otherwise
in a form satisfactory to the holders of such Designated Senior Debt, no
Securities Payment will be made by or on behalf of the Company, except from
those funds held in trust for purposes of defeasance for the benefit of the
Holders of any Securities to such Holders, during a period (a "Payment Blockage
Period") commencing on the date of receipt of such Payment Blockage Notice by
the Trustee and ending 179 days thereafter. Notwithstanding anything herein to
the contrary, (x) in no event will a Payment Blockage Period extend beyond 179
days from the date of the Payment Blockage Notice in respect thereof was given
and (y) there must be 180 days in any 365 day period during which no Payment
Blockage Period is in effect. Not more than one Payment Blockage Period may be
commenced with respect to the Securities during any period of 365 consecutive
days. No default or event of default that existed or was continuing on the date
of commencement of any Payment Blockage Period with respect to the Designated
Senior Debt initiating such Payment Blockage Period may be, or be made, the
basis for the commencement of any other Payment Blockage Period by the holder or
holders of such Designated Senior Debt or the trustee or agent acting on behalf
of such Designated Senior Debt, whether or not within a period of 365
consecutive days, unless such default or event of default has been cured or
waived for a period of not less than 90 consecutive days (it being acknowledged
that any subsequent action or any breach of any financial covenants for a period
commencing after the date of commencement of such Payment Blockage Period that,
in either case, would give rise to an event of default pursuant to any provision
under which an event of default previously existed or was continuing, shall
constitute a new event of default for this purpose).
(b) In the event that, notwithstanding the foregoing, any payment shall
be received by the Trustee or any Holder when such payment is prohibited by
Section 8.02(a), such payment shall be held for the benefit of, and shall be
paid over or delivered to, the holders of Designated Senior Debt or their
respective representatives, or to the trustee or trustees under any indenture
pursuant to which any of such Designated Senior Debt may have been issued, as
their respective interests may appear, but only to the extent that, upon notice
from the Trustee to the holders of Designated Senior Debt that such prohibited
payment has been made, the holders of the Designated Senior Debt (or their
representative or representatives or a trustee) notify the Trustee in writing of
the amounts then due and owing on the Designated Senior Debt, if any, and only
the amounts specified in such notice to the Trustee shall be paid to the holders
of Designated Senior Debt.
SECTION 8.03. Payment Over of Proceeds upon Dissolution, etc.
(a) Upon any payment or distribution of assets or securities of the
Company of any kind or character, whether in cash, property or securities, upon
any dissolution or winding up or total or partial liquidation or reorganization
of the Company, whether voluntary or involuntary or in bankruptcy, insolvency,
receivership or other proceedings, all amounts due or to become due with respect
to Senior Debt of the Company (including any interest accruing on or after, or
which would accrue but for, an event of bankruptcy, regardless of whether such
interest is an allowed claim enforceable against the debtor under the Bankruptcy
Code) shall first be paid in full, or payment provided for, in either case in
cash or cash equivalents or otherwise in a form satisfactory to the holders of
Senior Debt, before the Holders of the Securities or the Trustee on behalf of
such Holders shall be entitled to receive any Securities Payment. Before any
payment may be made by, or on behalf of, the Company of the principal of,
premium, if any, or interest on the Securities upon any such dissolution or
winding up or liquidation or reorganization, any payment or distribution of
assets or securities of the Company of any kind or character, whether in cash,
property or securities, to which the Holders of the Securities or the Trustee on
their behalf would be entitled, but for the subordination provisions of this
Indenture, shall be made by the Company or by any receiver, trustee in
bankruptcy, liquidating trustee, agent or other person making such payment or
distribution, directly to the holders of Senior Debt of the Company (pro rata to
such holders on the basis of the respective amounts of Senior Debt held by such
holders) or their representatives or to the trustee or trustees under any
indenture pursuant to which any such Senior Debt may have been issued as their
respective interests may appear, to the extent necessary to pay all such Senior
Debt in full in cash or cash equivalents or otherwise in a form satisfactory to
the holders of such Senior Debt after giving effect to any concurrent payment,
distribution or provision therefor to or for the holders of such Senior Debt.
(b) In the event that, notwithstanding the foregoing provision
prohibiting such payment or distribution, any payment or distribution of assets
or securities of the Company of any kind or character, whether in cash, property
or securities, shall be received by the Trustee or any Holder of Securities at a
time when such payment or distribution is prohibited by Section 8.03(a) and
before all obligations in respect of Senior Debt are paid in full, or payment
provided for, such payment or distribution shall be received and held for the
benefit of, and shall be paid over or delivered to, the holders of Senior Debt
or their respective representatives, or to the trustee or trustees under any
indenture pursuant to which any of such Senior Debt may have been issued, as
their respective interests may appear, for application to the payment of Senior
Debt remaining unpaid until all such Senior Debt has been paid in full after
giving effect to any concurrent payment, distribution or provision therefor to
or for the holders of such Senior Debt.
The consolidation of the Company with, or the merger of the Company
with or into, another corporation or the liquidation or dissolution of the
Company following the conveyance or transfer of its property as an entirety, or
substantially as an entirety, to another corporation upon the terms and
conditions provided in Article Five shall not be deemed a dissolution,
winding-up, liquidation or reorganization for the purposes of this Section if
such other corporation shall, as a part of such consolidation, merger,
conveyance or transfer, comply with the conditions stated in Article Five.
SECTION 8.04. Subrogation.
Upon the payment in full of all Senior Debt of the Company, or
provision for payment, the Holders of the Securities shall be subrogated to the
extent of the payments or distributions made to the holders of such Senior Debt
pursuant to the provisions of this Article to the rights of the holders of such
Senior Debt to receive payments or distributions of cash, property or securities
of the Company made on such Senior Debt until the principal of and interest on
the Securities shall be paid in full; and, for the purposes of such subrogation,
no payments or distributions to the holders of the Senior Debt of any cash,
property or securities to which the Holders of the Securities or the Trustee on
their behalf would be entitled except for the provisions of this Article, and no
payment over pursuant to the provisions of this Article to the holders of Senior
Debt by Holders of the Securities or the Trustee on their behalf shall, as
between the Company, its creditors other than holders of Senior Debt, and the
Holders of the Securities, be deemed to be a payment by the Company to or on
account of the Senior Debt. It is understood that the provisions of this Article
are and are intended solely for the purpose of defining the relative rights of
the Holders of the Securities, on the one hand, and the holders of the Senior
Debt, on the other hand.
If any payment or distribution to which the Holders of the Securities
would otherwise have been entitled but for the provisions of this Article shall
have been applied, pursuant to the provisions of this Article, to the payment of
all amounts payable under Senior Debt, then and in such case, the Holders of the
Securities shall be entitled to receive from the holders of such Senior Debt any
payments or distributions received by such holders of Senior Debt in excess of
the amount required to make payment in full, or provision for payment, of such
Senior Debt.
SECTION 8.05. Obligations of Company Unconditional.
Nothing contained in this Article or elsewhere in this Indenture or in
the Securities is intended to or shall impair, as among the Company and the
Holders of the Securities, the obligation of the Company, which is absolute and
unconditional, to pay to the Holders of the Securities the principal of and
interest on the Securities as and when the same shall become due and payable in
accordance with their terms, or is intended to or shall affect the relative
rights of the Holders of the Securities and creditors of the Company other than
the holders of the Senior Debt, nor shall anything herein or therein prevent the
Holder of any Security or the Trustee on their behalf from exercising all
remedies otherwise permitted by applicable law upon default under this
Indenture, subject to the rights, if any, under this Article of the holders of
the Senior Debt in respect of cash, property or securities of the Company
received upon the exercise of any such remedy.
Without limiting the generality of the foregoing, nothing contained in
this Article shall restrict the right of the Trustee or the Holders of
Securities to take any action to declare the Securities to be due and payable
prior to their stated maturity pursuant to Section 6.01 or to pursue any rights
or remedies hereunder; provided, however, that all Senior Debt then due and
payable shall first be paid in full before the Holders of the Securities or the
Trustee are entitled to receive any direct or indirect payment from the Company
of principal of or interest on the Securities.
SECTION 8.06. Notice to Trustee.
The Company shall give prompt written notice to the Trustee of any fact
known to the Company which would prohibit the making of any payment to or by the
Trustee in respect of the Securities pursuant to the provisions of this Article.
The Trustee shall not be charged with knowledge of the existence of any default
or event of default with respect to any Senior Debt or of any other facts which
would prohibit the making of any payment to or by the Trustee unless and until
the Trustee shall have received notice in writing at its Corporate Trust Office
to that effect signed by an Officer of the Company, or by a holder of Senior
Debt or trustee or agent therefor; and prior to the receipt of any such written
notice, the Trustee shall, subject to Article Seven, be entitled to assume that
no such facts exist; provided that if the Trustee shall not have received the
notice provided for in this Section 8.06 at least two Business Days prior to the
date upon which by the terms of this Indenture any moneys shall become payable
for any purpose (including, without limitation, the payment of the principal of
or interest on any Security), then, regardless of anything herein to the
contrary, the Trustee shall have full power and authority to receive any moneys
from the Company and to apply the same to the purpose for which they were
received, and shall not be affected by any notice to the contrary which may be
received by it on or after such prior date. Nothing contained in this Section
8.06 shall limit the right of the holders of Senior Debt to recover payments as
contemplated by Section 8.02 or 8.03. The Trustee shall be entitled to rely on
the delivery to it of a written notice by a Person representing himself or
itself to be a holder of any Senior Debt (or a trustee on behalf of, or other
representative of, such holder) to establish that such notice has been given by
a holder of such Senior Debt or a trustee or representative on behalf of any
such holder.
In the event that the Trustee determines in good faith that any
evidence is required with respect to the right of any Person as a holder of
Senior Debt to participate in any payment or distribution pursuant to this
Article, the Trustee may request such Person to furnish evidence to the
reasonable satisfaction of the Trustee as to the amount of Senior Debt held by
such Person, the extent to which such Person is entitled to participate in such
payment or distribution and any other facts pertinent to the rights of such
Person under this Article, and if such evidence is not furnished, the Trustee
may defer any payment to such Person pending judicial determination as to the
right of such Person to receive such payment.
SECTION 8.07. Reliance on Judicial Order or Certificate of Liquidating Agent.
Upon any payment or distribution of assets or securities referred to in
this Article, the Trustee and the Holders of the Securities shall be entitled to
rely upon any order or decree made by any court of competent jurisdiction in
which bankruptcy, dissolution, winding-up, liquidation or reorganization
proceedings are pending, or upon a certificate of the receiver, trustee in
bankruptcy, liquidating trustee, agent or other person making such payment or
distribution, delivered to the Trustee or to the Holders of the Securities for
the purpose of ascertaining the persons entitled to participate in such
distribution, the holders of the Senior Debt and other indebtedness of the
Company, the amount thereof or payable thereon, the amount or amounts paid or
distributed thereon and all other facts pertinent thereto or to this Article.
SECTION 8.08. Trustee's Relation to Senior Debt.
The Trustee and any Paying Agent shall be entitled to all the rights
set forth in this Article with respect to any Senior Debt which may at any time
be held by it in its individual or any other capacity to the same extent as any
other holder of Senior Debt, and nothing in this Indenture shall deprive the
Trustee or any Paying Agent of any of its rights as such holder.
With respect to the holders of Senior Debt, the Trustee undertakes to
perform or to observe only such of its covenants and obligations as are
specifically set forth in this Article, and no implied covenants or obligations
with respect to the holders of Senior Debt shall be read into this Indenture
against the Trustee. The Trustee shall not be deemed to owe any fiduciary duty
to the holders of Senior Debt.
SECTION 8.09. Subordination Rights Not Impaired by Acts or Omissions of the
Company or Holders of Senior Debt.
No right of any present or future holders of any Senior Debt to enforce
subordination as provided herein shall at any time in any way be prejudiced or
impaired by any act or failure to act on the part of the Company or by any act
or failure to act, in good faith, by any such holder, or by any noncompliance by
the Company with the terms of this Indenture, regardless of any knowledge
thereof which any such holder may have or otherwise be charged with. The
provisions of this Article are intended to be for the benefit of, and shall be
enforceable directly by, the holders of Senior Debt.
SECTION 8.10. Securityholders Authorize Trustee To Effectuate Subordination of
Securities.
Each Holder of Securities by his acceptance of such Securities
authorizes and expressly directs the Trustee on his behalf to take such action
as may be necessary or appropriate to effectuate the subordination provided in
this Article, and appoints the Trustee his attorney-in-fact for such purposes,
including, in the event of any dissolution, winding up, liquidation or
reorganization of the Company (whether in bankruptcy, insolvency, receivership,
reorganization or similar proceedings or upon a general assignment for the
benefit of creditors or otherwise) tending towards liquidation of the business
and assets of the Company, the filing of a claim for the unpaid balance of its
or his Securities in the form required in those proceedings.
SECTION 8.11. This Article Not To Prevent Events of Default.
The failure to make a payment on account of principal of or interest on
the Securities by reason of any provision of this Article shall not be construed
as preventing the occurrence of an Event of Default specified in clause (1), (2)
or (3) of Section 6.01.
SECTION 8.12. Trustee's Compensation Not Prejudiced.
Nothing in this Article shall apply to amounts due to the Trustee
pursuant to Section 7.07.
SECTION 8.13. No Waiver of Subordination Provisions.
Without in any way limiting the generality of Section 8.09, the holders
of Senior Debt may, at any time and from time to time, without the consent of or
notice to the Trustee or the Holders of the Securities, without incurring
responsibility to the Holders of the Securities and without impairing or
releasing the subordination provided in this Article or the obligations
hereunder of the Holders of the Securities to the holders of Senior Debt, do any
one or more of the following: (a) change the manner, place or terms of payment
or extend the time of payment of, or renew or alter, Senior Debt or any
instrument evidencing the same or any agreement under which Senior Debt is
outstanding or secured; (b) sell, exchange, release or otherwise deal with any
property pledged, mortgaged or otherwise securing Senior Debt; (c) release any
Person liable in any manner for the collection of Senior Debt; and (d) exercise
or refrain from exercising any rights against the Company and any other Person.
SECTION 8.14. Subordination Provisions Not Applicable to Money Held in Trust for
Securityholders; Payments May Be Paid Prior to Dissolution.
All money and United States Government Obligations deposited in trust
with the Trustee pursuant to and in accordance with Article Nine shall be for
the sole benefit of the Holders and shall not be subject to this Article Eight.
Nothing contained in this Article or elsewhere in this Indenture shall
prevent (i) the Company, except under the conditions described in Section 8.02,
from making payments of principal of and interest on the Securities, or from
depositing with the Trustee any moneys for such payments or from effecting a
termination of the Company's and the Guarantors' obligations under the
Securities and this Indenture as provided in Article Nine, or (ii) the
application by the Trustee of any moneys deposited with it for the purpose of
making such payments of principal of and interest on the Securities, to the
Holders entitled thereto unless at least two Business Days prior to the date
upon which such payment becomes due and payable, the Trustee shall have received
the written notice provided for in Section 8.02(b) or in Section 8.06. The
Company shall give prompt written notice to the Trustee of any dissolution,
winding-up, liquidation or reorganization of the Company.
SECTION 8.15. Acceleration of Securities.
If payment of the Securities is accelerated because of an Event of
Default, the Company shall promptly notify holders of the Senior Debt of the
acceleration.
ARTICLE NINE
DISCHARGE OF INDENTURE
SECTION 9.01. Termination of Company's Obligations.
(a) Discharge. Subject to the provisions of Article Eight, the Company
may terminate its substantive obligations and the substantive obligations of the
Guarantors, in respect of the Securities and the Guarantees by delivering all
outstanding Securities to the Trustee for cancellation and paying all sums
payable by the Company on account of principal of, premium, if any, and interest
on all the Securities or otherwise.
(b) Defeasance. Subject to the provisions of Sections 9.02 and 9.03
below, the Company may:
(i) Covenant Defeasance. terminate its obligations under
Section 4.03 through 4.19 and Article Five (a "Covenant Defeasance") by
(A) satisfying the conditions specified in Section 9.02 and (B)
delivering to the Trustee an Opinion of Counsel confirming that the
Holders will not recognize income, gain or loss for federal income tax
purposes as a result of the 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 no Covenant Defeasance had
been effected; or
(ii) Legal Defeasance. terminate all of its substantive
obligations under the Indenture (other than those set forth in Section
9.03(a) (a "Legal Defeasance") by (A) satisfying the conditions
specified in Section 9.02 and (B) delivering to the Trustee an Opinion
of Counsel confirming that (I) the Company has received from, or there
has been published by, the Internal Revenue Service a ruling or (II)
since the date of this Indenture there has been a change in the
applicable federal income tax law, in either case to the effect that
the Holders will not recognize income, gain or loss for federal income
tax purposes as a result of 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 no Legal Defeasance had been
effected.
SECTION 9.02. Conditions Precedent to Termination.
In order to effect either a Covenant Defeasance or Legal Defeasance,
the following conditions must be satisfied:
(i) the Company shall have deposited with the Trustee, under
the terms of an irrevocable trust agreement, money or direct
non-callable obligations of the United States of America for the
payment of which its full faith and credit is pledged ("United States
Government Obligations") sufficient (without reinvestment) to pay all
remaining indebtedness on the Securities (a "Defeasance Deposit");
(ii) no Default shall have occurred and be continuing or
could arise as a result of the Defeasance Deposit (or with respect to a
Default or Event of Default specified in clause (8) or (9) of Section
6.01, any time on or prior to the 91st calendar day after the date of
the Defeasance Deposit (it being understood that this condition shall
not be deemed satisfied until after such 91st day)) and no default
under any Senior Debt would result therefrom;
(iii) the Defeasance Deposit shall not be prohibited at the
time it is made by the provisions of Article Eight of this Indenture or
any covenants in the instruments governing Senior Debt and the Company
shall have delivered to the Trustee and any Paying Agent an Officers'
Certificate to that effect; and
(iv) the Company shall have delivered to the Trustee an
Officers' Certificate and an Opinion of Counsel, each stating that (A)
the Defeasance Deposit will not result in any of the Company, the
Trustee or the trust created by such deposit being deemed to be an
"investment company" under the Investment Company Act of 1940, as
amended, and (B) all conditions precedent relating to either the Legal
Defeasance or the Covenant Defeasance, as the case may be, have been
complied with.
SECTION 9.03. Survival of Certain Obligations of
the Company.
(a) Survival of Obligations. In effecting either a Covenant Defeasance
or a Legal Defeasance, the Company's obligations contained in Sections 2.03,
2.05, 2.06, 2.07, 4.02, 7.07, 7.08, this Section 9.03 and Section 9.04(c), and
in addition, in effecting a Covenant Defeasance, the Company's obligations
contained in Section 4.01, shall survive until the Securities are no longer
outstanding. Thereafter the Company's obligations in Section 7.07, this Section
9.03 and Section 9.04(c) shall survive.
(b) Taxes. The Company shall pay any taxes or other expenses incurred
by any trust created pursuant to this Article Nine.
(c) Reinstatement. If the Trustee is unable to apply the Defeasance
Deposit in accordance with Section 9.02 by reason of any legal proceeding or by
reason of any order or judgment of any court or governmental authority
enjoining, restraining or otherwise prohibiting such application, the Company's
obligations under this Indenture and the Securities shall be revived and
reinstated as though no deposit had occurred pursuant to Section 9.02 until such
time as the Trustee is permitted to apply the Defeasance Deposit in accordance
with Section 9.02; provided that if the Company has made any payment of interest
on or principal of any Securities because of the reinstatement of its
obligations, the Company shall be subrogated to the rights of the Holders of
such Securities to receive such payment from the Defeasance Deposit held by the
Trustee.
SECTION 9.04. Trustee's Obligations upon Termination.
(a) Acknowledgment. The Trustee upon a Company Request shall
acknowledge in writing the discharge of the Company's and the Guarantor's (if
any) obligations under the Securities, the Guarantee and this Indenture other
than those obligations specified in Section 9.03.
(b) Application of Trust Money. The Trustee shall hold the Defeasance
Deposit pursuant to Section 9.02, and shall apply the Defeasance Deposit in
accordance with this Article Nine solely to the payment of the principal of,
premium, if any, and interest on the Securities.
(c) Repayment to the Company. Subject to Sections 7.07 and 9.03, the
Trustee shall promptly pay to the Company upon request any excess money held by
it at any time. The Trustee shall pay to the Company upon written request any
money held by it for the payment of principal or interest that remains unclaimed
for two years; provided, however, that the Trustee before being required to make
any payment may at the expense of the Company cause to be published once in a
newspaper of general circulation in the City of New York or to be mailed to each
Holder entitled to such money notice that such money remains unclaimed and that,
after a date specified therein, which shall be at least 30 days from the date of
such publication or mailing, any unclaimed balance of such money then remaining
will be repaid to the Company. After payment to the Company, Holders entitled to
such money must look to the Company for payment as general creditors unless an
applicable law designates another person and all liability of the Trustee with
respect to such money shall thereupon cease.
ARTICLE TEN
AMENDMENTS, SUPPLEMENTS AND WAIVERS
SECTION 10.01. Without Consent of Holders.
The Company and the Guarantors and the Trustee may amend or supplement
this Indenture or the Securities without notice to or consent of any
Securityholder:
(i) to cure any ambiguity, defect or inconsistency;
provided, however, that such amendment or supplement does not adversely
affect the rights of any Holder in any material respect;
(ii) to effect the assumption by a successor Person of all
obligations of the Company under the Securities and this Indenture in
connection with any transaction complying with Article Five of this
Indenture;
(iii) to provide for uncertificated Securities in addition to
or in place of certificated Securities;
(iv) to comply with any requirements of the Commission in
order to effect or maintain the qualification of this Indenture under
the TIA;
(v) to make any change that would provide any additional
benefit or rights to the Holders;
(vi) to make any other change that does not adversely affect
the rights of any Holder under this Indenture;
(vii) to evidence the succession of another Person to any
Guarantor and the assumption by any such successor of the covenants of
such Guarantor herein and in the Guarantee;
(viii) to add to the covenants of the Company or the Guarantors
for the benefit of the Holders, or to surrender any right or power
herein conferred upon the Company or any Guarantor;
(ix) to secure the Securities pursuant to the requirements of
Section 4.18 or otherwise; or
(x) to reflect the release of a Guarantor from its
obligations with respect to its Guarantee in accordance with the
provisions of Section 11.03 and to add a Guarantor pursuant to the
requirements of Section 11.07;
provided, however, that the Company has delivered to the Trustee an Opinion of
Counsel and an Officers' Certificate each stating that such amendment or
supplement complies with the provisions of this Section 10.01.
SECTION 10.02. With Consent of Holders.
The Company, the Guarantors, if any, and the Trustee may amend or
supplement this Indenture or the Securities with the written consent of the
Holders of at least a majority in aggregate principal amount of the outstanding
Securities. However, without the consent of each Holder affected, an amendment,
supplement or waiver may not:
(1) change the Stated Maturity of the principal of or any
installment of interest on any Security or alter the optional
redemption or repurchase provisions of any Security or this Indenture
in a manner adverse to the Holders of the Securities;
(2) reduce the principal amount of (or the premium) of any
Security;
(3) reduce the rate of or extend the time for payment of
interest on any Security;
(4) change the place or currency of payment of principal of
(or premium) or interest on any Security;
(5) modify any provisions of this Indenture relating to the
waiver of past defaults (other than to add sections of this Indenture
subject thereto) or the right of the Holders to institute suit for the
enforcement of any payment on or with respect to any Security or the
Guarantee, or the modification and amendment of this Indenture and the
Securities (other than to add sections of this Indenture or the
Securities which may not be amended, supplemented or waived without the
consent of each Holder affected);
(6) reduce the percentage of the principal amount of
outstanding Securities necessary for amendment to or waiver of
compliance with any provision of this Indenture or the Securities or
for waiver of any Default;
(7) waive a default in the payment of principal of, interest
on, or redemption payment with respect to, any Security (except a
recision of acceleration of the Securities by the Holders as provided
in this Indenture and a waiver of the payment default that resulted
from such acceleration);
(8) modify the ranking or priority of the Securities or the
Guarantee, or modify the definition of Senior Debt or Designated Senior
Debt or amend or modify the subordination provisions of this Indenture
in any manner adverse to the Holders;
(9) release the Guarantors from any of their respective
obligations under the Guarantee or this Indenture otherwise than in
accordance with this Indenture; or
(10) modify the provisions relating to any Offer to Purchase
required under Section 4.05 or Section 4.14 in a manner materially
adverse to the Holders of Securities with respect to any Asset
Disposition that has been consummated or Change of Control that has
occurred.
The Holders of a majority in aggregate principal amount of the
outstanding Securities, on behalf of all Holders of Securities, may waive
compliance by the Company with certain restrictive provisions of this Indenture.
Subject to certain rights of the Trustee, as provided in this Indenture, the
Holders of a majority in aggregate principal amount of the outstanding
Securities, on behalf of all Holders of Securities, may waive any past default
under this Indenture, except a default in the payment of principal, premium or
interest or a default arising from failure to purchase any Security tendered
pursuant to an Offer to Purchase, or a default in respect of a provision that
under this Indenture cannot be modified or amended without the consent of the
Holder of each outstanding Security affected.
SECTION 10.03. Compliance with Trust Indenture Act.
Every amendment to or supplement of this Indenture or the Securities
shall comply with the TIA as then in effect.
SECTION 10.04. Revocation and Effect of Consents.
Until an amendment or waiver becomes effective, a consent to it by a
Holder is a continuing consent by the Holder and every subsequent Holder of that
Security or portion of that Security that evidences the same debt as the
consenting Holder's Security, even if notation of the consent is not made on any
Security. Subject to the following paragraph, any such Holder or subsequent
Holder may revoke the consent as to such Holder's Security or portion of such
Security by notice to the Trustee or the Company received before the date on
which the Trustee receives an Officers' Certificate certifying that the Holders
of the requisite principal amount of Securities have consented (and not
theretofore revoked such consent) to the amendment, supplement or waiver.
The Company may, but shall not be obligated to, fix a record date for
the purpose of determining the Holders entitled to consent to any amendment,
supplement or waiver. If a record date is fixed, then, notwithstanding the last
sentence of the immediately preceding paragraph, those persons who were Holders
at such record date (or their duly designated proxies), and only those persons,
shall be entitled to consent to such amendment, supplement or waiver or to
revoke any consent previously given, whether or not such persons continue to be
Holders after such record date. No such consent shall be valid or effective for
more than 90 days after such record date.
After an amendment, supplement or waiver becomes effective, it shall
bind every Securityholder, unless it makes a change described in any of clauses
(1) through (10) of Section 10.02. In that case the amendment, supplement or
waiver shall bind each Holder of a Security who has consented to it and every
subsequent Holder of a Security or portion of a Security that evidences the same
debt as the consenting Holder's Security.
SECTION 10.05. Notation on or Exchange of Securities.
If an amendment, supplement or waiver changes the terms of a Security,
the Trustee may require the Holder of the Security to deliver it to the Trustee.
The Trustee may place an appropriate notation on the Security about the changed
terms and return it to the Holder. Alternatively, if the Company or the Trustee
so determines, the Company in exchange for the Security shall issue and the
Trustee shall authenticate a new Security that reflects the changed terms.
Failure to make the appropriate notation or issue a new Security shall not
affect the validity and effect of such amendment, supplement or waiver.
SECTION 10.06. Trustee To Sign Amendments, etc.
The Trustee shall be entitled to receive, and shall be fully protected
in relying upon, an Opinion of Counsel and an Officers' Certificate each stating
that the execution of any amendment, supplement or waiver authorized pursuant to
this Article Ten is authorized or permitted by this Indenture and that such
amendment, supplement or waiver constitutes the legal, valid and binding
obligation of the Company and the Guarantors, enforceable in accordance with its
terms (subject to customary exceptions). The Trustee may, but shall not be
obligated to, execute any such amendment, supplement or waiver which affects the
Trustee's own rights, duties or immunities under this Indenture or otherwise. In
signing any amendment, supplement or waiver, the Trustee shall be entitled to
receive an indemnity reasonably satisfactory to it.
ARTICLE ELEVEN
GUARANTEE
SECTION 11.01. Unconditional Guarantee.
Each Guarantor who becomes a party to this Indenture hereby
unconditionally, jointly and severally, guarantees to each Holder of a Security
authenticated and delivered by the Trustee and to the Trustee and its successors
and assigns that: the principal of and interest on the Securities will be
promptly paid in full when due, subject to any applicable grace period, whether
at maturity, by acceleration or otherwise, and interest on the overdue principal
and interest on any overdue interest on the Securities and all other obligations
of the Company to the Holders or the Trustee hereunder or under the Securities
will be promptly paid in full or performed, all in accordance with the terms
hereof and thereof; subject, however, to the limitations set forth in Section
11.04. Each such Guarantor hereby agrees that its obligations hereunder shall be
unconditional, irrespective of the validity, regularity or enforceability of the
Securities or this Indenture, the absence of any action to enforce the same, any
waiver or consent by any Holder of the Securities with respect to any provisions
hereof or thereof, the recovery of any judgment against the Company, any action
to enforce the same or any other circumstance which might otherwise constitute a
legal or equitable discharge or defense of a guarantor. Each such Guarantor
hereby waives diligence, presentment, demand of payment, filing of claims with a
court in the event of insolvency or bankruptcy of the Company, any right to
require a proceeding first against the Company, protest, notice and all demands
whatsoever and covenants that the Guarantee will not be discharged except by
complete performance of the obligations contained in the Securities, this
Indenture, and this Guarantee. If any Holder or the Trustee is required by any
court or otherwise to return to the Company, any Guarantor, or any custodian,
trustee, liquidator or other similar official acting in relation to the Company
or any Guarantor, any amount paid by the Company or any Guarantor to the Trustee
or such Holder, this Guarantee, to the extent theretofore discharged, shall be
reinstated in full force and effect. Each Guarantor further agrees that, as
between each Guarantor, on the one hand, and the Holders and the Trustee, on the
other hand, (x) the maturity of the obligations guaranteed hereby may be
accelerated as provided in Article Six for the purpose of this Guarantee,
notwithstanding any stay, injunction or other prohibition preventing such
acceleration in respect of the obligations guaranteed hereby, and (y) in the
event of any acceleration of such obligations as provided in Article Six, such
obligations (whether or not due and payable) shall forth become due and payable
by each Guarantor for the purpose of this Guarantee.
SECTION 11.02. Severability.
In case any provision of this Guarantee shall be invalid, illegal or
unenforceable, the validity, legality and enforceability of the remaining
provisions shall not in any way be affected or impaired thereby.
SECTION 11.03. Release of a Guarantor.
If the Securities are defeased in accordance with Section 9.01(b)(ii),
or if all or substantially all of the assets of any Guarantor or all of the
Capital Stock of any Guarantor is sold (including by issuance or otherwise) by
the Company or any of its Restricted Subsidiaries in a transaction constituting
an Asset Disposition and if (x) the Net Available Proceeds from such Asset
Disposition are used in accordance with Section 4.05 or (y) the Company delivers
to the Trustee an Officers' Certificate covenanting that the Net Available
Proceeds from such Asset Disposition shall be used in accordance with Section
4.05 and within the time limits specified by such Section 4.05, then such
Guarantor (in the event of a sale or other disposition of all of the Capital
Stock of such Guarantor) or the corporation acquiring such assets (in the event
of a sale or other disposition of all or substantially all of the assets of such
Guarantor), shall be deemed released from all obligations under this Article
Eleven without any further action required on the part of the Trustee or any
Holder. The Trustee shall, at the sole cost and expense of the Company and upon
receipt at the reasonable request of the Trustee of an Opinion of Counsel that
the provisions of this Section 11.03 have been complied with, deliver an
appropriate instrument evidencing such release upon receipt of a request by the
Company accompanied by an Officers' Certificate certifying as to the compliance
with this Section. Any Guarantor not so released remains liable for the full
amount of principal of and interest on the Securities and the other obligations
of the Company hereunder as provided in this Article Eleven.
SECTION 11.04. Limitation of Guarantor's Liability.
Each Guarantor, and by its acceptance hereof each Holder and the
Trustee, hereby confirms that it is the intention of all such parties that the
guarantee by such Guarantor pursuant to its Guarantee not constitute a
fraudulent transfer or conveyance for purposes of title 11 of the United States
Code, as amended, the Uniform Fraudulent Conveyance Act, the Uniform Fraudulent
Transfer Act or any similar U.S. Federal or state or other applicable law. To
effectuate the foregoing intention, the Holders and such Guarantor hereby
irrevocably agree that the obligations of such Guarantor under the Guarantee
shall be limited to the maximum amount as will, after giving effect to all other
contingent and fixed liabilities of such Guarantor and after giving effect to
any collections from or payments made by or on behalf of any other Guarantor in
respect of the obligations of such other Guarantor under its Guarantee or
pursuant to Section 11.05, result in the obligations of such Guarantor under the
Guarantee not constituting such fraudulent transfer or conveyance.
SECTION 11.05. Contribution.
In order to provide for just and equitable contribution among the
Guarantors, the Guarantors agree, inter se, that in the event any payment or
distribution is made by any Guarantor (a "Funding Guarantor") under the
Guarantee, such Funding Guarantor shall be entitled to a contribution from all
other Guarantors in a pro rata amount, based on the net assets of each Guarantor
(including the Funding Guarantor), determined in accordance with GAAP, subject
to Section 11.04, for all payments, damages and expenses incurred by that
Funding Guarantor in discharging the Company's obligations with respect to the
Securities or any other Guarantor's obligations with respect to the Guarantee.
SECTION 11.06. Execution of Guarantee.
To further evidence their Guarantee to the Holders, any Guarantor
required to Guarantee the Securities pursuant to the terms of Section 4.19 shall
execute the Guarantee in substantially the form set forth in Exhibit A hereto to
be endorsed on each Security ordered to be authenticated and delivered by the
Trustee. Each such Guarantor hereby agrees that its Guarantee set forth in
Section 11.01 shall remain in full force and effect notwithstanding any failure
to endorse on each Security a notation of such Guarantee. Each such Guarantee
shall be signed on behalf of each Guarantor by its Chairman of the Board, its
Chief Executive Officer, its President or one of its Vice Presidents prior to
the authentication of the Security on which it is endorsed, and the delivery of
such Security by the Trustee, after the authentication thereof hereunder, shall
constitute due delivery of such Guarantee on behalf of such Guarantor. Such
signature upon the Guarantee may be manual or facsimile signature of such
officer and may be imprinted or otherwise reproduced on the Guarantee, and in
case such officer who shall have signed the Guarantee shall cease to be such
officer before the Security on which such Guarantee is endorsed shall have been
authenticated and delivered by the Trustee or disposed of by the Company, such
Security nevertheless may be authenticated and delivered or disposed of as
though the Person who signed the Guarantee had not ceased to be such officer of
the Guarantor.
SECTION 11.07. Subordination of Subrogation and Other Rights.
Each Guarantor hereby agrees that any claim against the Company that
arises from the payment, performance or enforcement of such Guarantor's
obligations under its Guarantee or this Indenture, including, without
limitation, any right of subrogation, shall be subject and subordinate to, and
no payment with respect to any such claim of such Guarantor shall be made
before, the payment in full in cash of all outstanding Securities in accordance
with the provisions provided therefor in this Indenture.
ARTICLE TWELVE
SUBORDINATION OF GUARANTEE
SECTION 12.01. Guarantee Obligations Subordinated
to Senior Debt of Guarantor.
Each Guarantor covenants and agrees, and the Trustee and each Holder of
the Securities by his acceptance thereof likewise covenant and agree, that the
Guarantees shall be issued subject to the provisions of this Article; and each
person holding any Security, whether upon original issue or upon transfer,
assignment or exchange thereof, accepts and agrees that all payments of the
principal of and interest on the Securities pursuant to the Guarantee made by or
on behalf of any Guarantor shall, to the extent and in the manner set forth in
this Article, be subordinated and junior in right of payment to the prior
payment in full of all amounts payable under Senior Debt of such Guarantor.
SECTION 12.02. No Payment on Guarantees in Certain Circumstances.
(a) No payment by or on behalf of any Guarantor of principal of,
premium, if any, or interest on the Securities, or any payment to acquire any of
the Securities for cash, property or securities, or any distribution with
respect to the Securities of any kind or character, whether in cash, property or
securities, by set-off or otherwise (all such payments and distributions
referred to individually and collectively as a "Guarantor Securities Payment"),
whether pursuant to the terms of such Guarantor's Guarantee, upon acceleration
or otherwise, will be made if, at the time of such payment, there exists a
default in the payment of all or any portion of the obligations on any
Designated Senior Debt of such Guarantor whether at maturity, on account of
mandatory redemption or prepayment, acceleration or otherwise, and such default
shall not have been cured or waived or the benefits of this sentence waived by
or on behalf of the holders of such Designated Senior Debt. In addition, during
the continuance of any non-payment default or event of default with respect to
any Designated Senior Debt pursuant to which the maturity thereof may be
accelerated, and upon receipt by the Trustee of written notice (the "Guarantor
Payment Blockage Notice") from a holder or holders of such Designated Senior
Debt or the trustee or agent acting on behalf of such Designated Senior Debt,
then, unless and until such default or event of default has been cured or waived
or has ceased to exist or such Designated Senior Debt has been discharged or
repaid in full, in cash or cash equivalents or otherwise in a form satisfactory
to the holders of such Senior Debt, no Guarantor Securities Payment will be made
by or on behalf of such Guarantor, except from those funds held in trust for
purposes of defeasance for the benefit of the Holders of any Securities to such
Holders, during a period (a "Guarantor Blockage Period") commencing on the date
of receipt of such notice by the Trustee and ending 179 days thereafter.
Notwithstanding anything herein or in the Securities to the contrary,
(x) in no event shall a Guarantor Blockage Period extend beyond 179 days from
the date the Guarantor Payment Blockage Notice was given and (y) there must be
180 days in any 365 day period during which no Guarantor Payment Blockage Period
is in effect. Not more than one Guarantor Blockage Period may be commenced with
respect to any Guarantor during any period of 365 consecutive days. No default
or event of default that existed or was continuing on the date of commencement
of any other Guarantor Blockage Period with respect to the Designated Senior
Debt initiating such Guarantor Payment Blockage Period may be, or be made, the
basis for the commencement of any other Guarantor Blockage Period by the holder
or holders of such Designated Senior Debt or the trustee or agent acting on
behalf of such Designated Senior Debt, whether or not within a period of 365
consecutive days, unless such default or event of default has been cured or
waived for a period of not less than 90 consecutive days (it being acknowledged
that any subsequent action or any breach of any financial covenants for a period
commencing after the date of commencement of such Guarantor Payment Blockage
Period that, in either case, would give rise to an event of default pursuant to
any provision under which an event of default previously existed or was
continuing, shall constitute a new event of default for this purpose).
(b) In the event that, notwithstanding the foregoing, any payment shall
be received by the Trustee or any Holder when such payment is prohibited by
Section 12.02(a), such payment shall be held for the benefit of, and shall be
paid over or delivered to, the holders of such Designated Senior Debt or their
respective representatives, or to the trustee or trustees under any indenture
pursuant to which any of such Designated Senior Debt may have been issued, as
their respective interests may appear, but only to the extent that, upon notice
from the Trustee to the holders of such Designated Senior Debt that such
prohibited payment has been made, the holders of such Designated Senior Debt (or
their representative or representatives or a trustee) notify the Trustee in
writing of the amounts then due and owing on such Designated Senior Debt, if
any, and only the amounts specified in such notice to the Trustee shall be paid
to the holders of such Designated Senior Debt.
SECTION 12.03. Payment Over of Proceeds upon Dissolution, etc.
(a) Upon any payment or distribution of assets or securities of any
Guarantor of any kind or character, whether in cash, property or securities,
upon any dissolution or winding-up or total or partial liquidation or
reorganization of such Guarantor, whether voluntary or involuntary or in
bankruptcy, insolvency, receivership or other proceedings, all amounts due or to
become due with respect to all Senior Debt of such Guarantor (including any
interest accruing on or after, or which would accrue but for, an event of
bankruptcy, regardless of whether such interest is an allowed claim enforceable
against the debtor under the Bankruptcy Code) shall first be paid in full, or
payment provided for, in either case in cash or cash equivalents or otherwise in
a form satisfactory to the holders of Senior Debt, before the Holders of the
Securities or the Trustee on behalf of such Holders shall be entitled to receive
any Guarantor Securities Payment. Before any payment may be made by, or on
behalf of, any Guarantor of the principal of or interest on the Securities upon
any such dissolution or winding-up or liquidation or reorganization, any payment
or distribution of assets or securities of such Guarantor of any kind or
character, whether in cash, property or securities, to which the Holders of the
Securities or the Trustee on their behalf would be entitled, but for the
subordination provisions of this Indenture, shall be made by such Guarantor or
by any receiver, trustee in bankruptcy, liquidating trustee, agent or other
Person making such payment or distribution, directly to the holders of the
Senior Debt of such Guarantor (pro rata to such holders on the basis of the
respective amounts of Senior Debt held by such holders) or their representatives
or to the trustee or trustees under any indenture pursuant to which any of such
Senior Debt may have been issued, as their respective interests may appear, to
the extent necessary to pay all such Senior Debt in full in cash or cash
equivalents or otherwise in a form satisfactory to the holders of such Senior
Debt after giving effect to any concurrent payment, distribution or provision
therefor to or for the holders of such Senior Debt.
(b) In the event that, notwithstanding the foregoing provision
prohibiting such payment or distribution, any payment or distribution of assets
or securities of any kind or character, whether in cash, property or securities,
shall be received by the Trustee or any Holder of Securities at a time when such
payment or distribution is prohibited by Section 12.03(a) and before all
obligations in respect of the Senior Debt of such Guarantor are paid in full, or
payment provided for, such payment or distribution shall be received and held
for the benefit of, and shall be paid over or delivered to, the holders of such
Senior Debt or their respective representatives, or to the trustee or trustees
under any indenture pursuant to which any of such Senior Debt may have been
issued, as their respective interests may appear, for application to the payment
of such Senior Debt remaining unpaid until all such Senior Debt has been paid in
full after giving effect to any concurrent payment, distribution or provision
therefor to or for the holders of such Senior Debt.
(c) The consolidation of any Guarantor with, or the merger of any
Guarantor with or into, another corporation or the liquidation or dissolution of
any Guarantor following the conveyance or transfer of its property as an
entirety, or substantially as an entirety, to another corporation upon the terms
and conditions provided in Article Five or Section 11.03 shall not be deemed a
dissolution, winding-up, liquidation or reorganization for the purposes of this
Section if such other corporation shall, as a part of such consolidation,
merger, conveyance or transfer, comply with the conditions stated in Article
Five or such Guarantor or successor entity shall be released from the Guarantee
pursuant to the terms of Section 11.03.
SECTION 12.04. Subrogation.
Upon the payment in full of all Senior Debt of a Guarantor, or
provision for payment, the Holders of the Securities shall be subrogated to the
rights of the holders of such Senior Debt to receive payments or distributions
of cash, property or securities of such Guarantor made on such Senior Debt until
the principal of and interest on the Securities shall be paid in full; and, for
the purposes of such subrogation, no payments or distributions to the holders of
such Senior Debt of any cash, property or securities to which the Holders of the
Securities or the Trustee on their behalf would be entitled except for the
provisions of this Article, and no payment over pursuant to the provisions of
this Article to the holders of such Senior Debt by Holders of the Securities or
the Trustee on their behalf shall, as between such Guarantor, its creditors
other than holders of such Senior Debt, and the Holders of the Securities, be
deemed to be a payment by such Guarantor to or on account of such Senior Debt.
It is understood that the provisions of this Article are and are intended solely
for the purpose of defining the relative rights of the Holders of the
Securities, on the one hand, and the holders of Senior Debt of the Guarantors,
on the other hand.
If any payment or distribution to which the Holders of the Securities
would otherwise have been entitled but for the provisions of this Article shall
have been applied, pursuant to the provisions of this Article, to the payment of
all amounts payable under Senior Debt, then and in such case, the Holders of the
Securities shall be entitled to receive from the holders of such Senior Debt any
payments or distributions received by such holders of Senior Debt in excess of
the amount required to make payment in full, or provision for payment, of such
Senior Debt.
SECTION 12.05. Obligations of Guarantors Unconditional.
Nothing contained in this Article or elsewhere in this Indenture or in
the Securities or the Guarantee is intended to or shall impair, as among the
Guarantors and the Holders of the Securities, the obligation of each Guarantor,
which is absolute and unconditional, to pay to the Holders of the Securities the
principal of and interest on the Securities as and when the same shall become
due and payable in accordance with the terms of the Guarantee, or is intended to
or shall affect the relative rights of the Holders of the Securities and
creditors of any Guarantor other than the holders of Senior Debt, nor shall
anything herein or therein prevent the Holder of any Security or the Trustee on
their behalf from exercising all remedies otherwise permitted by applicable law
upon default under this Indenture, subject to the rights, if any, under this
Article of the holders of Senior Debt in respect of cash, property or securities
of any Guarantor received upon the exercise of any such remedy.
Without limiting the generality of the foregoing, nothing contained in
this Article shall restrict the right of the Trustee or the Holders of
Securities to take any action to declare the Securities to be due and payable
prior to their stated maturity pursuant to Section 6.01 or to pursue any rights
or remedies hereunder; provided, however, that all Senior Debt of any Guarantor
then due and payable shall first be paid in full before the Holders of the
Securities or the Trustee are entitled to receive any direct or indirect payment
from such Guarantor of principal of or interest on the Securities pursuant to
such Guarantor's Guarantee.
SECTION 12.06. Notice to Trustee.
The Company shall give prompt written notice to the Trustee of any fact
known to the Company or such Guarantor which would prohibit the making of any
payment to or by the Trustee in respect of the Securities pursuant to the
provisions of this Article. The Trustee shall not be charged with knowledge of
the existence of any default or event of default with respect to any Senior Debt
or of any other facts which would prohibit the making of any payment to or by
the Trustee unless and until the Trustee shall have received notice in writing
at its Corporate Trust Office to that effect signed by an Officer of the
Company, or by a holder of Senior Debt or trustee or agent therefor; and prior
to the receipt of any such written notice, the Trustee shall, subject to Article
Seven, be entitled to assume that no such facts exist; provided that if the
Trustee shall not have received the notice provided for in this Section at least
two Business Days prior to the date upon which by the terms of this Indenture
any moneys shall become payable for any purpose (including, without limitation,
the payment of the principal of or interest on any Security), then, regardless
of anything herein to the contrary, the Trustee shall have full power and
authority to receive any moneys from any Guarantor and to apply the same to the
purpose for which they were received, and shall not be affected by any notice to
the contrary which may be received by it on or after such prior date. Nothing
contained in this Section 12.06 shall limit the right of the holders of Senior
Debt of a Guarantor to recover payments as contemplated by Section 12.02 or
12.03. The Trustee shall be entitled to rely on the delivery to it of a written
notice by a Person representing himself or itself to be a holder of any Senior
Debt of a Guarantor (or a trustee on behalf of, or other representative of, such
holder) to establish that such notice has been given by a holder of such Senior
Debt or a trustee or representative on behalf of any such holder.
In the event that the Trustee determines in good faith that any
evidence is required with respect to the right of any Person as a holder of
Senior Debt of a Guarantor to participate in any payment or distribution
pursuant to this Article, the Trustee may request such Person to furnish
evidence to the reasonable satisfaction of the Trustee as to the amount of such
Senior Debt held by such Person, the extent to which such Person is entitled to
participate in such payment or distribution and any other facts pertinent to the
rights of such Person under this Article, and if such evidence is not furnished,
the Trustee may defer any payment to such Person pending judicial determination
as to the right of such Person to receive such payment.
SECTION 12.07. Reliance on Judicial Order or Certificate of Liquidating Agent.
Upon any payment or distribution of assets or securities of a Guarantor
referred to in this Article, the Trustee and the Holders of the Securities shall
be entitled to rely upon any order or decree made by any court of competent
jurisdiction in which bankruptcy, dissolution, winding-up, liquidation or
reorganization proceedings are pending, or upon a certificate of the receiver,
trustee in bankruptcy, liquidating trustee, agent or other person making such
payment or distribution, delivered to the Trustee or to the Holders of the
Securities for the purpose of ascertaining the persons entitled to participate
in such distribution, the holders of Senior Debt of such Guarantor and other
indebtedness of such Guarantor, the amount thereof or payable thereon, the
amount or amounts paid or distributed thereon and all other facts pertinent
thereto or to this Article.
SECTION 12.08. Trustee's Relation to Senior Debt of Guarantors.
The Trustee and any Paying Agent shall be entitled to all the rights
set forth in this Article with respect to any Senior Debt of Guarantors which
may at any time be held by it in its individual or any other capacity to the
same extent as any other holder of such Senior Debt, and nothing in this
Indenture shall deprive the Trustee or any Paying Agent of any of its rights as
such holder.
With respect to the holders of a Guarantor's Senior Debt, the Trustee
undertakes to perform or to observe only such of its covenants and obligations
as are specifically set forth in this Article, and no implied covenants or
obligations with respect to the holders of such Senior Debt shall be read into
this Indenture against the Trustee. The Trustee shall not be deemed to owe any
fiduciary duty to the holders of Senior Debt of Guarantors.
SECTION 12.09. Subordination Rights Not Impaired by Acts or Omissions of the
Guarantors or Holders of Senior Debt of Guarantors.
No right of any present or future holders of any Senior Debt of
Guarantors to enforce subordination as provided herein shall at any time in any
way be prejudiced or impaired by any act or failure to act on the part of any
Guarantor or by any act or failure to act, in good faith, by any such holder, or
by any noncompliance by any Guarantor with the terms of this Indenture,
regardless of any knowledge thereof which any such holder may have or otherwise
be charged with. The provisions of this Article are intended to be for the
benefit of, and shall be enforceable directly by, the holders of Senior Debt of
Guarantors.
SECTION 12.10. Securityholders Authorize Trustee To Effectuate Subordination of
Guarantee.
Each Holder of Securities by his acceptance of such Securities
authorizes and expressly directs the Trustee on his behalf to take such action
as may be necessary or appropriate to effectuate the subordination provided in
this Article, and appoints the Trustee his attorney-in-fact for such purposes,
including, in the event of any dissolution, winding up, liquidation or
reorganization of any Guarantor (whether in bankruptcy, insolvency,
receivership, reorganization or similar proceedings or upon a general assignment
for the benefit of creditors or otherwise) tending towards liquidation of the
business and assets of such Guarantor, the filing of a claim for the unpaid
balance of its or his Securities in the form required in those proceedings.
SECTION 12.11. This Article Not To Prevent Events of Default.
The failure to make a payment on account of principal of or interest on
the Securities by reason of any provision of this Article shall not be construed
as preventing the occurrence of an Event of Default specified in clauses (1) or
(2) of Section 6.01.
SECTION 12.12. Trustee's Compensation Not Prejudiced.
Nothing in this Article shall apply to amounts due to the Trustee
pursuant to Section 7.07.
SECTION 12.13. No Waiver of Guarantee Subordination Provisions.
Without in any way limiting the generality of Section 12.09, the
holders of Senior Debt of Guarantors may, at any time and from time to time,
without the consent of or notice to the Trustee or the Holders of the
Securities, without incurring responsibility to the Holders of the Securities
and without impairing or releasing the subordination provided in this Article or
the obligations hereunder of the Holders of the Securities to the holders of
Senior Debt of Guarantors, do any one or more of the following: (a) change the
manner, place or terms of payment or extend the time of payment of, or renew or
alter, Senior Debt of Guarantors or any instrument evidencing the same or any
agreement under which such Senior Debt is outstanding or secured; (b) sell,
exchange, release or otherwise deal with any property pledged, mortgaged or
otherwise securing such Senior Debt; (c) release any Person liable in any manner
for the collection of such Senior Debt; and (d) exercise or refrain from
exercising any rights against any Guarantor and any other Person.
SECTION 12.14. Payments May Be Paid Prior to Dissolution.
Nothing contained in this Article or elsewhere in this Indenture shall
prevent (i) a Guarantor, except under the conditions described in Section 12.02,
from making payments of principal of and interest on the Securities, or from
depositing with the Trustee any moneys for such payments, or (ii) the
application by the Trustee of any moneys deposited with it for the purpose of
making such payments of principal of and interest on the Securities, to the
Holders entitled thereto unless at least two Business Days prior to the date
upon which such payment becomes due and payable, the Trustee shall have received
the written notice provided for in Section 12.02(b) or in Section 12.06. A
Guarantor shall give prompt written notice to the Trustee of any dissolution,
winding-up, liquidation or reorganization of such Guarantor.
ARTICLE THIRTEEN
MISCELLANEOUS
SECTION 13.01. Trust Indenture Act Controls.
This Indenture is subject to the provisions of the TIA that are
required to be a part of this Indenture, and shall, to the extent applicable, be
governed by such provisions. If any provision of this Indenture modifies any TIA
provision that may be so modified, such TIA provision shall be deemed to apply
to this Indenture as so modified. If any provision of this Indenture excludes
any TIA provision that may be so excluded, such TIA provision shall be excluded
from this Indenture.
The provisions of TIA Sections 310 through 317 that impose duties on
any Person (including the provisions automatically deemed included unless
expressly excluded by this Indenture) are a part of and govern this Indenture,
whether or not physically contained herein.
SECTION 13.02. Notices.
Any notice or communication shall be sufficiently given if in writing
and delivered in person, by facsimile and confirmed by overnight courier, or
mailed by first-class mail addressed as follows:
if to the Company or a Guarantor:
Tekni-Plex, Inc.
201 Industrial Parkway
Somerville, New Jersey 08876
Attention: Dr. F. Patrick Smith
Facsimile: (908) 722-4967
Telephone: (908) 722-4800
with a copy to:
Davis Polk & Wardwell
450 Lexington Avenue
New York, New York 10017
Attention: Winthrop Conrad
Facsimile: (212) 450-4800
Telephone: (212) 450-4000
if to the Trustee:
Marine Midland Bank
140 Broadway
New York, New York 10005
Attention: Corporate Trust Services-Tekni-Plex
Facsimile: (212) 658-6425
Telephone: (212) 658-6433
The Company or the Trustee by notice to the other may designate
additional or different addresses for subsequent notices or communications.
Any notice or communication mailed, first class, postage prepaid, to a
Securityholder, including any notice delivered in connection with TIA Section
310(b), TIA Section 313(c), TIA Section 314(a) and TIA Section 315(b), shall be
mailed to him at his address as set forth on the registration books of the
Registrar and shall be sufficiently given to him if so mailed within the time
prescribed. To the extent required by the TIA, any notice or communication shall
also be mailed to any Person described in TIA Section 313(c).
Failure to mail a notice or communication to a Securityholder or any
defect in it shall not affect its sufficiency with respect to other
Securityholders. Except for a notice to the Trustee, which is deemed given only
when received, if a notice or communication is mailed in the manner provided
above, it is duly given, whether or not the addressee receives it.
SECTION 13.03. Communications by Holders with Other Holders.
Securityholders may communicate pursuant to TIA Section 312(b) with
other Securityholders with respect to their rights under this Indenture or the
Securities. The Company, the Trustee, the Registrar and any other person shall
have the protection of TIA Section 312(c).
SECTION 13.04. Certificate and Opinion as to Conditions Precedent.
Upon any request or application by the Company to the Trustee to take
or refrain from taking any action under this Indenture, the Company shall
furnish to the Trustee at the request of the Trustee:
(1) an Officers' Certificate in form and substance
satisfactory to the Trustee stating that, in the opinion of the
signers, all conditions precedent, if any, provided for in this
Indenture relating to the proposed action have been complied with;
(2) an Opinion of Counsel in form and substance satisfactory
to the Trustee stating that, in the opinion of such counsel, all such
conditions precedent have been complied with; and
(3) where applicable, a certificate or opinion by an
independent certified public accountant satisfactory to the Trustee
that complies with TIA Section 314(c).
SECTION 13.05. Statements Required in Certificate or Opinion.
Each certificate or opinion with respect to compliance with a condition
or covenant provided for in this Indenture shall include:
(1) a statement that the person making such certificate or
opinion has read such covenant or condition;
(2) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions
contained in such certificate or opinion are based;
(3) a statement that, in the opinion of such person, he has
made such examination or investigation as is necessary to enable him to
express an informed opinion as to whether or not such covenant or
condition has been complied with; and
(4) a statement as to whether or not, in the opinion of such
person, such condition or covenant has been complied with; provided,
however, that with respect to matters of fact an Opinion of Counsel may
rely on an Officers' Certificate or certificates of public officials.
SECTION 13.06. Rules by Trustee, Paying Agent, Registrar.
The Trustee may make reasonable rules for action by or at a meeting of
Securityholders. The Paying Agent or Registrar may make reasonable rules for its
functions.
SECTION 13.07. Governing Law.
Pursuant to Section 5-1401 of the General Obligations Law of the State
of New York this Indenture, the Securities and the Guarantee shall be governed
by and construed in accordance with the laws of the State of New York, without
giving effect to any other conflicts of law provisions.
SECTION 13.08. No Recourse Against Others.
A director, officer, employee or stockholder, as such, of the Company
or any Guarantor shall not have any liability for any obligations of the Company
or any Guarantor under the Securities, the Guarantee or this Indenture or for
any claim based on, in respect of or by reason of such obligations or their
creation. Each Securityholder by accepting a Security waives and releases all
such liability.
SECTION 13.09. Successors.
All agreements of the Company in this Indenture and the Securities
shall bind its successor. Subject to Section 11.03, all agreements of each
Guarantor in this Indenture and Securities shall bind its successor. All
agreements of the Trustee in this Indenture shall bind its successor.
SECTION 13.10. Counterpart Originals.
The parties may sign any number of copies of this Indenture. Each
signed copy shall be an original, but all of them together represent the same
agreement.
SECTION 13.11. Severability.
In case any provision in this Indenture, in the Securities or in the
Guarantee shall be invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions shall not in any way be affected or
impaired thereby, and a Holder shall have no claim therefor against any party
hereto.
SECTION 13.12. No Adverse Interpretation of Other Agreements.
This Indenture may not be used to interpret another indenture, loan or
debt agreement of the Company or a Subsidiary. Any such indenture, loan or debt
agreement may not be used to interpret this Indenture.
SECTION 13.13. Legal Holidays.
If a payment date is a Legal Holiday at a place of payment, payment may
be made at that place on the next succeeding day that is not a Legal Holiday,
and no interest shall accrue for the intervening period.
[Signature Page Follows]
<PAGE>
SIGNATURES
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be
duly executed as of the date first written above.
TEKNI-PLEX, INC.
By:_____________________________
Name:
Title:
PURETEC CORPORATION
PTI PLASTICS, INC.
OZITE CORPORATION
PLASTIC SPECIALTIES AND
TECHNOLOGIES, INC.
PLASTIC SPECIALTIES AND
TECHNOLOGIES INVESTMENTS, INC.
BURLINGTON RESINS, INC.
PURE TECH APR, INC.
MULTI CONTAINER RECYCLER, INC.
COAST RECYCLING NORTH, INC.
DISTRIBUTORS RECYCLING, INC.
REI DISTRIBUTORS, INC.
PURE TECH RECYCLING OF CALIFORNIA
ALUMET SMELTING CORP.
CONCONRE CORP.,
collectively, the Guarantors
By:_____________________________
Name:
Title:
MARINE MIDLAND BANK,
as Trustee
By:_____________________________
Name:
Title:
EXHIBIT A
TEKNI-PLEX, INC.
No. $[ ]
9 1/4% SENIOR SUBORDINATED NOTE DUE 2008
Tekni-Plex, Inc. promises to pay to [ ] or registered assigns the
principal sum of [ ] Dollars on the Maturity Date of March 1, 2008. Interest
Payment Dates: March 1 and September 1, beginning September 1, 1998.
Record Dates: February 15 and August 15
IN WITNESS WHEREOF, TEKNI-PLEX, INC. has caused this instrument to be
executed in its corporate name by manual or a facsimile signature of its
________________ and its ___________________.
TEKNI-PLEX, INC.
By:___________________________
Name:
Title:
Dated: By:____________________________
Name:
Title:
Certificate of Authentication:
This is one of the 9 1/4% Senior Subordinated Notes due 2008 referred
to in the within-mentioned Indenture.
MARINE MIDLAND BANK, as Trustee
By _____________________________ Date:
Authorized Signatory
(REVERSE OF SECURITY)
TEKNI-PLEX, INC.
9 1/4% Senior Subordinated Note due 2008
1. Interest.
Tekni-Plex, Inc., a Delaware corporation (the "Company"),
promises to pay interest at the rate of 9 1/4% per annum on the principal amount
of this Security semiannually commencing on September 1, 1998, until the
principal hereof is paid or made available for payment. Interest on the
Securities will accrue from and including the most recent date to which interest
has been paid or, if no interest has been paid, from and including March 3,
1998, through but excluding the date on which interest is paid. If an Interest
Payment Date falls on a day that is not a Business Day, the interest payment to
be made on such Interest Payment Date will be made on the next succeeding
Business Day with the same force and effect as if made on such Interest Payment
Date, and no additional interest will accrue as a result of such delayed
payment. Interest will be computed on the basis of a 360-day year of twelve
30-day months.
2. Method of Payment.
The interest payable on the Securities, and punctually paid or
duly provided for, on any Interest Payment Date will, as provided in the
Indenture (as defined below), be paid to the person in whose name this Security
is registered at the close of business on the regular record date, which shall
be the February 15 or August 15 (whether or not a Business Day) next preceding
such Interest Payment Date. Any such interest not so punctually paid or duly
provided for, and any interest payable on such defaulted interest (to the extent
lawful), will forthwith cease to be payable to the Holder on such regular record
date and shall be paid to the person in whose name this Security is registered
at the close of business on a special record date for the payment of such
defaulted interest to be fixed by the Company, notice of which shall be given to
Holders not less than 15 days prior to such special record date. Payment of the
principal of and interest on this Security will be made at the agency of the
Company maintained for that purpose in New York, New York and at any other
office or agency maintained by the Company for such purpose, in such coin or
currency of the United States of America as at the time of payment is legal
tender for payment of public and private debts; provided, however, that at the
option of the Company payment of interest may be made by check mailed to the
address of the person entitled thereto as such address shall appear in the
Security register.
3. Paying Agent and Registrar.
Initially, Marine Midland Bank (the "Trustee") will act as
Paying Agent and Registrar. The Company may change any Paying Agent, Registrar
or co-Registrar without notice to the Holders of Securities. The Company or any
of its Subsidiaries may act as Registrar or co-Registrar but may not act as
Paying Agent.
4. Indenture.
This Security is one of a duly authorized issue of Securities
of the Company, designated as its 9 1/4% Senior Subordinated Notes due 2008 (the
"Securities"), limited in aggregate principal amount to $275,000,000 (except for
Securities issued in substitution for destroyed, lost or stolen Securities)
issuable under an indenture dated as of March 1, 1998 (the "Indenture"), among
the Company, the Guarantors and the Trustee. The terms of the Securities include
those stated in the Indenture and those made part of the Indenture by the Trust
Indenture Act of 1939 (the "Act") (15 U.S. Code Sections 77aaa-77bbbb) as in
effect on the date of the Indenture. The Securities are subject to all such
terms, and Holders of Securities are referred to the Indenture and the Act for a
statement of them. Each Securityholder, by accepting a Security, agrees to be
bound to all of the terms and provisions of the Indenture, as the same may be
amended from time to time. Payment on each Security is guaranteed, jointly and
severally, by the Guarantors pursuant to Article Eleven of the Indenture.
Capitalized terms contained in this Security to the extent not
defined herein shall have the meanings assigned to them in the Indenture.
5. Optional Redemption.
The Securities will be subject to redemption, at the option of
the Company, in whole or in part, at any time on or after March 1, 2003 and
prior to maturity, upon not less than 30 nor more than 60 days' notice mailed to
each holder of Securities to be redeemed at his address appearing in the
register for the Securities, in amounts of $1,000 or an integral multiple of
$1,000, at the following redemption prices (expressed as percentages of
principal amount) plus accrued interest to but excluding the date fixed for
redemption (subject to the right of holders of record on the relevant Record
Date to receive interest due on an interest payment date that is on or prior to
the date fixed for redemption), if redeemed during the 12-month period beginning
March 1 of the years indicated:
Year Percentage
2003........................................ 104.625%
2004........................................ 103.083
2005........................................ 101.542
2006 and thereafter......................... 100.000%
In addition, prior to March 1, 2001, the Company may redeem up
to 35% of the principal amount of the Securities with the net cash proceeds
received by the Company from one or more public offerings of Capital Stock
(other than Disqualified Stock) of the Company, at a redemption price (expressed
as a percentage of the principal amount) of 109.25% of the principal amount
thereof, plus accrued and unpaid interest to the date fixed for redemption;
provided, however, that at least 65% of the aggregate principal amount of the
Securities originally issued on the Issue Date remains outstanding immediately
after any such redemption (excluding any Securities owned by the Company or any
of its Affiliates). Notice of redemption pursuant to this paragraph must be
mailed to holders of Securities not later than 60 days following the
consummation of such public offering.
Selection of Securities for any partial redemption shall be
made by the Trustee, in accordance with the rules of any national securities
exchange on which the Securities may be listed or, if the Securities are not so
listed, pro rata or by lot or in such other manner as the Trustee shall deem
appropriate and fair. Securities in denominations larger than $1,000 may be
redeemed in part but only in integral multiples of $1,000. Notice of redemption
will be mailed before the date fixed for redemption to each holder of Securities
to be redeemed at his or her registered address. On and after the date fixed for
redemption, interest will cease to accrue on Securities or portions thereof
called for redemption.
The Securities will not have the benefit of any sinking fund.
6. Purchase upon Occurrence of a Change of Control.
Within 30 days of the occurrence of a Change of Control, the
Company will offer to purchase the Securities, in whole and not in part, at a
purchase price equal to 101% of the principal amount thereof plus any accrued
and unpaid interest thereon.
7. Notice of Redemption.
Notice of redemption will be mailed by first class mail at
least 30 days but not more than 60 days before the redemption date to each
Holder of Securities to be redeemed at his registered address. Securities in
denominations larger than $1,000 may be redeemed in part. On and after the
redemption date, interest ceases to accrue on those Securities or portion of
them called for redemption.
8. Denominations; Transfer; Exchange.
The Securities are in registered form without coupons in
denominations of $1,000 and integral multiples of $1,000. A Holder may transfer
or exchange Securities in accordance with the Indenture. The Registrar may
require a Holder, among other things, to furnish appropriate endorsements and
transfer documents and to pay any taxes and fees required by law or permitted by
the Indenture. The Registrar need not transfer or exchange any Securities
selected for redemption.
9. Persons Deemed Owners.
The registered Holder of a Security may be treated as the
owner of it for all purposes.
10. Unclaimed Funds.
If funds for the payment of principal or interest remain
unclaimed for two years, the Trustee or Paying Agent will repay the funds to the
Company at its request. After such repayment Holders of Securities entitled to
such funds must look to the Company for payment unless an applicable abandoned
property law designates another person.
11. Discharge Prior to Redemption or Maturity.
The Indenture will be discharged and cancelled except for
certain Sections thereof, subject to the terms of the Indenture, upon the
payment of all the Securities or upon the irrevocable deposit with the Trustee
of funds or United States Government Obligations sufficient for such payment or
redemption.
12. Amendment; Supplement; Waiver.
Subject to certain exceptions, the Indenture or the Securities
may be amended or supplemented with the consent of the Holders of at least a
majority in principal amount of the outstanding Securities, and any past default
or compliance with any provision may be waived with the consent of the Holders
of a majority in principal amount of the outstanding Securities. Without notice
to or the consent of any Holder, the Company, the Guarantors and the Trustee may
amend or supplement the Indenture or the Securities to cure any ambiguity,
defect or inconsistency, or to make any change that does not adversely affect
the rights of any Holder of Securities.
13. Restrictive Covenants.
The Indenture restricts, among other things, the ability of
the Company or any of its Restricted Subsidiaries to permit any Liens to be
imposed on their assets, to make certain Restricted Payments and Investments,
limits the Indebtedness which the Company and its Restricted Subsidiaries may
incur and limits the terms on which the Company may engage in Asset
Dispositions. The Company is also obligated under certain circumstances to make
an offer to purchase Securities with the net cash proceeds of certain Asset
Dispositions. The Company must report annually to the Trustee on compliance with
the covenants in the Indenture. The obligation of the Company to comply with
certain covenants will terminate if the Securities are rated Investment Grade.
14. Successor Corporation.
Pursuant to the Indenture, the ability of the Company to
consolidate with, merge with or into or transfer its assets to another person is
conditioned upon certain requirements, including certain financial requirements
applicable to the surviving Person.
15. Defaults and Remedies.
If an Event of Default shall occur and be continuing, the
principal of all of the outstanding Securities, plus all accrued and unpaid
interest, if any, to the date the Securities become due and payable, may be
declared due and payable in the manner and with the effect provided in the
Indenture.
16. Trustee Dealings with Company.
The Trustee in its individual or any other capacity, may
become the owner or pledgee of Securities and make loans to, accept deposits
from, and perform services for the Company or its Affiliates, and may otherwise
deal with the Company or its Affiliates, as if it were not Trustee.
17. No Recourse Against Others.
A director, officer, employee or stockholder, as such, of the
Company or any Guarantor shall not have any liability for any obligations of the
Company or any Guarantor under the Securities, the Guarantee or the Indenture or
for any claim based on, in respect of or by reason of such obligations or their
creation. Each Holder of a Security by accepting a Security waives and releases
all such liability. The waiver and release are part of the consideration for the
issue of the Securities.
18. Authentication.
This Security shall not be valid until the Trustee signs the
certificate of authentication on the other side of this Security.
19. Abbreviations.
Customary abbreviations may be used in the name of
Securityholder or an assignee, such as TEN COM (= tenants in common), TEN ENT (=
tenants by the entireties), JT TEN (= joint tenants with right of survivorship
and not as tenants in common), CUST (= Custodian), and U/G/M/A (= Uniform Gifts
to Minors Act).
20. CUSIP or CINS Numbers.
Pursuant to a recommendation promulgated by the Committee on
Uniform Security Identification Procedures, the Company has caused CUSIP or CINS
numbers to be printed on the Securities and has directed the Trustee to use
CUSIP or CINS numbers in notices of redemption as a convenience to
Securityholders. No representation is made as to the accuracy of such numbers
either as printed on the Securities or as contained in any notice of redemption
and reliance may be placed only on the other identification numbers placed
thereon.
21. Governing Law.
The laws of the State of New York shall govern the Indenture,
this Security and the Guarantee without regard to principles of conflicts of
law.
The Company will furnish to any Holder of record of Securities
upon written request and without charge a copy of the Indenture.
[FORM OF NOTATION ON SECURITY RELATING TO GUARANTEE]
SENIOR SUBORDINATED GUARANTEE
The Guarantors (as defined in the Indenture referred to in the
Security upon which this notation is endorsed) hereby, jointly and severally,
unconditionally guarantee (such guarantee by each Guarantor being referred to
herein as the "Guarantee") the due and punctual payment of the principal of,
premium, if any, and interest on the Securities, whether at maturity, by
acceleration or otherwise, the due and punctual payment of interest on the
overdue principal, premium and interest, if any, on the Securities, and the due
and punctual performance of all other obligations of the Company to the Holders
or the Trustee, all in accordance with the terms set forth in Article Eleven of
the Indenture.
The obligations of each Guarantor to the Holders of Securities
and to the Trustee pursuant to the Guarantee and the Indenture are expressly set
forth, to the extent and in the manner provided, in Article Twelve of the
Indenture, and reference is hereby made to such Indenture for the precise terms
of the Guarantee therein made.
The Guarantee shall not be valid or obligatory for any purpose
until the certificate of authentication on the Securities upon which the
Guarantee is noted shall have been executed by the Trustee under the Indenture
by the manual signature of one of its authorized officers.
This Guarantee shall be governed by and construed in
accordance with the laws of the State of New York without regard to principles
of conflicts of law.
This Guarantee is subject to release upon the terms set forth
in the Indenture.
PURETEC CORPORATION
PTI PLASTICS, INC.
OZITE CORPORATION
PLASTIC SPECIALTIES AND
TECHNOLOGIES
PLASTIC SPECIALTIES AND
TECHNOLOGIES INVESTMENTS, INC.
BURLINGTON RESINS, INC.
PURE TECH APR, INC.
MULTI CONTAINER RECYCLER, INC.
COAST RECYCLING NORTH, INC.
DISTRIBUTORS RECYCLING, INC.
REI DISTRIBUTORS, INC.
PURE TECH RECYCLING OF CALIFORNIA
ALUMET SMELTING CORP.
CONCONRE CORP.,
collectively, the Guarantors
By:_____________________________
Name:
Title:
ASSIGNMENT FORM
If you the Holder want to assign this Security, fill in the
form below and have your signature guaranteed:
I or we assign and transfer this Security to:
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(Print or type name, address and zip code and
social security or tax ID number of assignee)
and irrevocably appoint________________________________________________________,
agent to transfer this Security on the books of the Company. The agent may
substitute another to act for him.
Dated:________________________ Signed:_________________________________________
(Sign exactly as name
appears on the other
side of this Security)
Signature Guarantee:____________________________________________________________
OPTION OF HOLDER TO ELECT PURCHASE
If you the Holder want to elect to have this Security purchased by the Company,
check the box: [ ]
If you want to elect to have only part of this Security purchased by the
Company, state the amount: $____________________
Dated:___________________________ Signed:_______________________________
(Sign exactly as name appears
on the other side of this Security)
Signature Guarantee:____________________________________________________________
EXHIBIT B
FORM OF CERTIFICATE OF TRANSFER
Tekni-Plex, Inc.
201 Industrial Parkway
Somerville, New Jersey 08876
Attention:
Marine Midland Bank
140 Broadway
New York, New York 10005
Attention: Corporate Trust Services-
Tekni-Plex
Re: 9 1/4% Senior Subordinated Notes due 2008
Reference is hereby made to the Indenture, dated as of March
1, 1998 (the "Indenture"), among Tekni-Plex, Inc. (the "Company"), the
Guarantors party thereto and Marine Midland Bank, as trustee. Capitalized terms
used but not defined herein shall have the meanings given to them in the
Indenture.
________________ (the "Transferor") owns and proposes to
transfer the Security[s] specified in Annex A hereto in the principal amount of
$___ in such Security[s] (the "Transfer") to ________ (the "Transferee"), as
further specified in Annex A hereto. In the event that Transferor holds Physical
Securities, this Certificate is accompanied by one or more certificates
aggregating at least the principal amount of Securities proposed to be
Transferred. In connection with the Transfer, the Transferor hereby certifies
that:
1. [ ] Check if Transferee will take an Interest in the 144A Global Security.
The Transfer is being effected pursuant to and in accordance with Rule 144A
under the United States Securities Act of 1933, as amended (the "Securities
Act"), and, accordingly, the Transferor hereby further certifies that the
Securities are being transferred to a Person that the Transferor reasonably
believes is purchasing the Securities for its own account, or for one or more
accounts with respect to which such Person exercises sole investment discretion,
and such Person and each such account is a "qualified institutional buyer"
within the meaning of Rule 144A in a transaction meeting the requirements of
Rule 144A and such Transfer is in compliance with any applicable blue sky
securities laws of any state of the United States. Upon consummation of the
proposed Transfer in accordance with the terms of the Indenture, the transferred
Security will be subject to the restrictions on transfer enumerated in the
Securities Act Legend and in the Indenture and the Securities Act.
2. [ ] Check if Transferee will take an Interest in the Regulation S Global
Security pursuant to Regulation S. The Transfer is being effected pursuant to
and in accordance with Rule 904 under the Securities Act and, accordingly, the
Transferor hereby further certifies that (i) the Transfer is not being made to a
person in the United States and (x) at the time the buy order was originated,
the Transferee was outside the United States or such Transferor and any Person
acting on its behalf reasonably believed and believes that the Transferee was
outside the United States or (y) the transaction was executed in, on or through
the facilities of a designated offshore securities market and neither such
Transferor nor any Person acting on its behalf knows that the transaction was
prearranged with a buyer in the United States, (ii) no directed selling efforts
have been made in contravention of the requirements of Rule 904(b) of Regulation
S under the Securities Act and (iii) the transaction is not part of a plan or
scheme to evade the registration requirements of the Securities Act. Upon
consummation of the proposed transfer in accordance with the terms of the
Indenture, the Security will be subject to the restrictions on Transfer
enumerated in the Securities Act Legend printed on the Regulation S Global
Security and in the Indenture and the Securities Act.
3. [ ] Check and complete if Transferee will take delivery of a Restricted
Physical Security pursuant to Rule 144A or Regulation S. One or more of the
events specified in Section 2.06(a) of the Indenture have occurred and the
Transfer is being effected in compliance with the transfer restrictions
applicable to Securities bearing the Securities Act Legend and pursuant to and
in accordance with the Securities Act, and accordingly the Transferor hereby
further certifies that (check one):
(a) [ ] such Transfer is being effected pursuant to and in accordance
with Rule 144A under the Securities Act and the Transferor certifies to the
effect set forth in paragraph 1 above; or
(b) [ ] such Transfer is being effected pursuant to and in accordance
with Rule 904 under the Securities Act and the Transferor certifies to the
effect set forth in paragraph 2 above.
4. [ ] Check if Transferee will take an Interest in the Unrestricted Global
Security. The Transfer is being effected pursuant to and in accordance with Rule
144 under the Securities Act and in compliance with the transfer restrictions
contained in the Indenture, and the restrictions on transfer contained in the
Indenture and the Securities Act Legend are not required in order to maintain
compliance with the Securities Act. Upon consummation of the proposed Transfer
in accordance with the terms of the Indenture, the transfer Securities will no
longer be subject to the restrictions on transfer enumerated in the Securities
Act Legend and in the Indenture and the Securities Act.
5. [ ] Check if Transferee will take an Interest in the Physical Global
Security that does not bear the Securities Act Legend. One or more of the events
specified in Section 2.06(a) of the Indenture have occurred and the Transfer is
being effected pursuant to and in accordance with Rule 144 under the Securities
Act and in compliance with the transfer restrictions contained in the Indenture,
and the restrictions on transfer contained in the Indenture and the Securities
Act Legend are not required in order to maintain compliance with the Securities
Act. Upon consummation of the proposed Transfer in accordance with the terms of
the Indenture, the transferred Securities will no longer be subject to the
restrictions on transfer enumerated in the Securities Act Legend and in the
Indenture and the Securities Act.
This certificate and the statements contained herein are made
for your benefit and the benefit of the Company.
_____________________________
[Insert Name of Transferor]
By:__________________________
Name:
Title:
Dated:_________________
FORM OF ANNEX A TO CERTIFICATE
OF TRANSFER
1. The Transferor owns and proposes to transfer the following:
[CHECK ONE OF (a) OR (b)]
(a) [ ] Interests in the
(i) [ ] 144A Global Security (CUSIP _____), or
(ii) [ ] Regulation S Global Security (CINS _____).
(b) [ ] Physical Security.
2. That the Transferee will hold:
[CHECK ONE]
(a) [ ] Interests in the:
(i) [ ] 144A Global Security (CUSIP _____), or
(ii) [ ] Regulation S Global Security (CINS _____), or
(iii) [ ] Unrestricted Global Security (CUSIP _____); or
(b) [ ] Physical Securities that bear the Securities Act
Legend;
(c) [ ] Physical Securities that do not bear the
Securities Act Legend;
in accordance with the terms of the Indenture.
EXHIBIT C
FORM OF CERTIFICATE OF EXCHANGE
Tekni-Plex, Inc.
201 Industrial Parkway
Somerville, New Jersey 08876
Attention:
Marine Midland Bank
140 Broadway
New York, New York 10005
Attention: Corporate Trust Services-
Tekni-Plex
Re: 9 1/4% Senior Subordinated Notes due 2008
(CUSIP _______________)
Reference is hereby made to the Indenture, dated as of March
1, 1998 (the "Indenture"), among Tekni-Plex, Inc. (the "Company"), the
Guarantors party thereto and Marine Midland Bank, as trustee. Capitalized terms
used but not defined herein shall have the meanings given to them in the
Indenture.
__________ (the "Holder") owns and proposes to exchange the
Security[s] specified herein, in the principal amount of $___ in such
Security[s] (the "Exchange"). In the event Holder holds Physical Securities,
this Certificate is accompanied by one or more certificates aggregating at least
the principal amount of Securities proposed to be Exchanged. In connection with
the Exchange, the Holder hereby certifies that:
1. Exchange of Restricted Physical Securities or Interests in the Initial
Global Security for Physical Securities that do not bear the Securities Act
Legend or Unrestricted Global Securities
(a) [ ] Check if Exchange is from Initial Global Securities to the
Unrestricted Global Security. In connection with the Exchange of the Holder's
Initial Global Security to the Unrestricted Global Security in an equal
principal amount, the Holder hereby certifies (i) the Unrestricted Global
Securities are being acquired for the Holder's own account without transfer,
(ii) such Exchange has been effected in compliance with the transfer
restrictions applicable to the Initial Global Securities and pursuant to and in
accordance with the Securities Act of 1933, as amended (the "Securities Act")
and (iii) the restrictions on transfer contained in the Indenture and the
Securities Act Legend are not required in order to maintain compliance with the
Securities Act.
(b) [ ] Check if Exchange is from Restricted Physical Securities to an
Interest in the Unrestricted Global Security. In connection with the Holder's
Exchange of Restricted Physical Securities for Interest in the Unrestricted
Global Security, (i) the Interest in the Unrestricted Global Security are being
acquired for the Holder's own account without transfer, (ii) such Exchange has
been effected in compliance with the transfer restrictions applicable to
Restricted Physical Securities and pursuant to and in accordance with the
Securities Act and (iii) the restrictions on transfer contained in the Indenture
and the Securities Act Legend are not required in order to maintain compliance
with the Securities Act.
(c) [ ] Check if Exchange is from Restricted Physical Securities to
Physical Securities that do not bear the Securities Act Legend. In connection
with the Holder's Exchange of a Restricted Physical Security for Physical
Securities that do not bear the Securities Act Legend, the Holder hereby
certifies (i) the Physical Securities that do not bear the Securities Act Legend
are being acquired for the Holder's own account without transfer, (ii) such
Exchange has been effected in compliance with the transfer restrictions
applicable to Restricted Physical Securities and pursuant to and in accordance
with the Securities Act, (iii) the restrictions on transfer contained in the
Indenture and the Securities Act Legend are not required in order to maintain
compliance with the Securities Act and (iv) one or more of the events specified
in Section 2.06(a) of the Indenture have occurred.
2. [ ] Check if Exchange is from Restricted Physical Securities to Interests in
an Initial Global Security. In connection with the Exchange of the Holder's
Restricted Physical Security for interests in the Initial Global Security in the
[CHECK ONE] [ ] 144A Global Security, [ ] Regulation S Global Security, with an
equal principal amount, (i) the interests in the Initial Global Security are
being acquired for the Holder's own account without transfer and (ii) such
Exchange has been effected in compliance with the transfer restrictions
applicable to the Restricted Physical Security and pursuant to and in accordance
with the Securities Act. Upon consummation of the proposed Exchange in
accordance with the terms of the Indenture, the Initial Global Security issued
will be subject to the restrictions on transfer enumerated in the Securities Act
Legend printed on the Initial Global Securities and in the Indenture and the
Securities Act.
This certificate and the statements contained herein are made
for your benefit and the benefit of the Company.
___________________________________
[Insert Name of Holder]
By:________________________________
Name:
Title:
Dated:_________________
EXHIBIT 4.3
TEKNI-PLEX, INC.
$200,000,000
9 1/4% Senior Subordinated Notes due 2008
Purchase Agreement
February 25, 1998
J.P. Morgan Securities Inc.
60 Wall Street
New York, New York 10260-0060
Ladies and Gentlemen:
Tekni-Plex, Inc., a corporation formed under the laws of Delaware (the
"Company"), proposes to issue and sell (the "Offering") to J.P. Morgan
Securities Inc. (the "Initial Purchaser") $200,000,000 principal amount of its 9
1/4% Senior Subordinated Notes due 2008 (the "Notes"). The Notes will be issued
pursuant to the provisions of an Indenture to be dated as of March 1, 1998 (the
"Indenture") among the Company, the Guarantors (as defined) and Marine Midland
Bank, as trustee (the "Trustee"). The Notes will be guaranteed (the "Guarantee"
and, collectively with the Notes, the "Securities") on a senior subordinated
basis by each of the entities listed on the signature pages hereto which will
become subsidiaries of the Company upon the consummation of the Merger referred
to below (the "Guarantors").
The sale of the Securities to the Initial Purchaser will be made
without registration of the Securities under the Securities Act of 1933, as
amended (the "Act" or the "Securities Act"), in reliance upon the exemption
therefrom provided by Section 4(2) of the Act. Holders of the Securities will
have the benefits of a Registration Rights Agreement to be dated as of March 3,
1998 among the Company, the Guarantors and the Initial Purchaser, substantially
in the form attached hereto as Exhibit A (the "Registration Rights Agreement")
pursuant to which the Issuers will agree to file with the Securities and
Exchange Commission (the "Commission") (i) a registration statement under the
Securities Act (the "Exchange Registration Statement") registering an issue of
senior subordinated notes of the Company (the "Exchange Notes") which are
identical in all material respects to the Securities (except that the Exchange
Notes will not contain terms with respect to transfer restrictions or liquidated
damages) and (ii) under certain limited circumstances, a shelf registration
statement with respect to the resale of the Securities pursuant to Rule 415
under the Securities Act (the "Shelf Registration Statement"). This Agreement,
the Indenture, the Notes, the Exchange Notes and the Registration Rights
Agreement are collectively referred to herein as the "Offering Agreements."
The Securities are being sold in connection with (i) the merger of P.T.
Holding, Inc., a Delaware corporation ("P.T. Holding") and PureTec Corporation,
a Delaware corporation ("PureTec"), with PureTec continuing as the surviving
corporation (the "Merger"), all pursuant to an Agreement and Plan of Merger
(together with all related documents and agreements, the "Merger Agreement")
dated as of November 11, 1997 among the Company, P.T. Holding, PureTec and
Plastic Specialties & Technologies, Inc. ("PS&T", and together with each of
PureTec's other direct and indirect subsidiaries, the "PureTec Subsidiaries"),
(ii) the execution of a Credit Agreement (together with all related documents
and agreements, the "Credit Agreement") providing for a $50 million term loan
facility (the "A Term Loan Facility"), a $65 million term loan facility (the "B
Term Loan Facility" and together with the A Term Loan Facility, the "Term Loan
Facilities") and a $90 million revolving credit facility (the "Revolving Credit
Facility" and together with the Term Loan Facilities, the "Bank Financing") and
(iii) a consent solicitation and tender offer (the "Debt Tender Offer") by PS&T
for all of its outstanding 11.25% senior secured notes due 2003 (the "PS&T
Notes") pursuant to an offer to purchase and consent solicitation statement (the
"Offer to Purchase"). Pursuant to the Merger Agreement, simultaneously with the
Merger, PureTec will repay and, except as set forth in the Offering Memorandum
referred to below, will cause each of its subsidiaries to repay substantially
all of its and their outstanding debt (the "Debt Retirement"). PS&T has also
agreed to eliminate its 4% minority shareholders' interest concurrently with or
prior to the Merger (the "PS&T Minority Buyout" and together with the Debt
Retirement, the "Related Transactions"). Pursuant to the Debt Tender Offer, PS&T
will amend the indenture and related security agreements governing the PS&T
Notes to delete or amend such provisions as Tekni-Plex requires (the
"Supplemental Indenture"). The Merger, the Bank Financing, the Debt Tender Offer
and the Related Transactions are collectively referred to herein as the
"Transactions". The Merger Agreement, the Credit Agreement, the Offer to
Purchase and the Supplemental Indenture, in each case, together with all related
documents and agreements, are referred to herein as the "Transaction Documents."
PureTec and the PureTec Subsidiaries are collectively referred to as the
"PureTec Companies". The date of the filing of a merger certificate (the "Merger
Certificate") in connection with the Merger shall be referred to as the
"Effectiveness Date".
The Company and the Guarantors hereby agree, jointly and severally,
with the Initial Purchaser as follows:
1. The Company agrees to issue and sell the Notes and the Guarantors
agree to issue the Guarantees to the Initial Purchaser as hereinafter provided,
and the Initial Purchaser, upon the basis of the representations and warranties
herein contained, but subject to the conditions hereinafter stated, agrees to
purchase from the Company all of the Securities at a price (the "Purchase
Price") equal to 97.25% of their principal amount. No additional consideration
shall be paid by the Initial Purchaser for the Guarantee.
2. The Company and the Guarantors understand that the Initial Purchaser
intends (x) to offer privately the Securities as soon after this Agreement has
become effective as in the judgment of the Initial Purchaser is advisable and
(y) initially to offer the Securities upon the terms set forth in the Offering
Memorandum (as defined below).
The Company and the Guarantors confirm that they have authorized the
Initial Purchaser, subject to the restrictions set forth below, to distribute
copies of the Offering Memorandum in connection with the offering of the
Securities. The Initial Purchaser hereby makes to the Company and the Guarantors
the following representations and agreements:
(i) it is a qualified institutional buyer within the meaning of
Rule 144A under the Act; and
(ii) (A) it will not solicit offers for, or offer to sell, the
Securities by any form of general solicitation or general advertising
(as those terms are used in Regulation D under the Act) or in any
manner involving a public offering within the meaning of Section 4(2)
of the Act, (B) it will solicit offers for the Securities only from,
and will offer, sell or deliver the Securities only to, (1) persons
whom it reasonably believes to be "qualified institutional buyers"
within the meaning of Rule 144A under the Act to whom notice has been
given that such offer, sale or delivery is being made in reliance on
Rule 144A in transactions under Rule 144A or (2) upon the terms and
conditions set forth in Annex I to this Agreement, and (C) it is not
purchasing with a view to or for offer or sale in connection with any
distribution that would be in violation of federal or state law.
3. Payment for the Securities shall be made by wire transfer in
immediately available funds, to the account specified by the Company to the
Initial Purchaser no later than noon on the Business Day (as defined below)
prior to the Closing Date (as defined below), on March 3, 1998, or at such other
time on the same or such other date, not later than the fifth Business Day
thereafter, as the Initial Purchaser and the Company may agree upon in writing.
The time and date of such payment are referred to herein as the "Closing Date".
As used herein, the term "Business Day" means any day other than a day on which
banks are permitted or required to be closed in New York City.
Payment for the Securities shall be made against delivery to the
nominee of The Depository Trust Company for the account of the Initial Purchaser
of one or more global notes representing the Securities (collectively, the
"Global Notes"), with any transfer taxes payable in connection with the transfer
to the Initial Purchaser of the Securities duly paid by the Company. The Global
Notes will be made available for inspection by the Initial Purchaser at the
office of J.P. Morgan Securities Inc. at the address set forth above, or at such
other location as the Company and the Initial Purchaser agree, not later than
1:00 P.M., New York City time, on the Business Day prior to the Closing Date.
4. Each of the Company and each Guarantor represents and warrants to
the Initial Purchaser that:
(a) a preliminary offering memorandum, dated February 10, 1998
(the "Preliminary Offering Memorandum") and an offering memorandum,
dated February 25, 1998 (the "Offering Memorandum") have been prepared
in connection with the offering of the Securities. Any reference to the
Preliminary Offering Memorandum or the Offering Memorandum shall be
deemed to refer to and include any Rule 144A(d)(4) Information (as
defined in Section 5(m)) furnished by the Company prior to the
completion of the distribution of the Securities. The Preliminary
Offering Memorandum or the Offering Memorandum and any amendments or
supplements thereto did not and will not, as of their respective dates,
contain an untrue statement of a material fact or omit to state a
material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading;
provided that this representation and warranty does not apply to
statements or omissions made in reliance upon and in conformity with
information furnished in writing by the Initial Purchaser relating to
the Initial Purchaser to the Company expressly for use in the
Preliminary Offering Memorandum, the Offering Memorandum or any
amendment or supplement thereto;
(b) the financial statements, and the related notes thereto,
included in the Offering Memorandum present fairly the consolidated
financial position of each of the Company and its consolidated
subsidiaries and of PureTec and its consolidated subsidiaries, as of
the dates indicated and the results of their operations and the changes
in their consolidated cash flows for the periods specified; said
financial statements have been prepared in conformity with generally
accepted accounting principles and practices applied on a consistent
basis; and the pro forma financial information, and the related notes
thereto, included in the Offering Memorandum are based upon good faith
estimates and assumptions believed by the Company to be reasonable;
(c) since the respective dates as of which information is
given in the Offering Memorandum, except as otherwise stated therein,
there has not been any material change in the capital stock or
long-term debt of the Company or its subsidiaries, or any material
adverse change, or any development involving a prospective material
adverse change, in or affecting the business, condition (financial or
other), results of operations or prospects of PureTec and its
subsidiaries or the Company and its subsidiaries and PureTec and its
subsidiaries, taken as a whole (a "Material Adverse Change" or
"Prospective Material Adverse Change", respectively), otherwise than as
set forth or contemplated in the Offering Memorandum; and except as set
forth or contemplated in the Offering Memorandum, neither the Company,
the Existing Subsidiaries, nor, to the best of the Company's knowledge,
any of the PureTec Companies has entered into any transaction or
agreement (whether or not in the ordinary course of business) material
to PureTec and its subsidiaries or to the Company and its subsidiaries
and PureTec and its subsidiaries, taken as a whole;
(d) the Company has been duly incorporated and is validly
existing as a corporation under the laws of its jurisdiction of
incorporation, with power and authority (corporate and other) to own
its properties and conduct its business as described in the Offering
Memorandum, and has been duly qualified as a foreign corporation for
the transaction of business and is in good standing under the laws of
each other jurisdiction in which it owns or leases properties, or
conducts any business, so as to require such qualification, other than
where the failure to be so qualified or in good standing would not have
a material adverse effect on the business, condition (financial or
other), results of operations or prospects of PureTec and its
subsidiaries and the Company and its subsidiaries, taken as a whole or,
if applicable, PureTec and its subsidiaries (a "Material Adverse
Effect");
(e) the Company has no subsidiaries other than P.T. Holding,
PurePlast, Inc., a Canadian corporation and PurePlast Acquisition
Corp., a Canadian corporation (together, the "Existing Subsidiaries")
and Dolco Packaging Ltd., a Canadian corporation which is currently
being dissolved; each of the Existing Subsidiaries has been duly
incorporated and is validly existing as a corporation under the laws of
its jurisdiction of incorporation, with power and authority (corporate
and other) to own its properties and conduct its business as described
in the Offering Memorandum, and has been duly qualified as a foreign
corporation for the transaction of business and is in good standing
under the laws of each jurisdiction in which its owns or leases
properties or conducts any business, so as to require such
qualification, other than where the failure to be so qualified or in
good standing would not have a Material Adverse Effect; and all the
outstanding shares of capital stock of the Existing Subsidiaries has
been duly authorized and validly issued, are fully-paid and
non-assessable under the corporate laws of the jurisdiction of
incorporation, and (except as described in the Offering Memorandum)
owned by the Company free and clear of all liens, encumbrances,
security interests and claims;
(f) this Agreement has been duly authorized, executed and
delivered by each of the Company and P.T. Holding and, as of the
Effectiveness Date, will have been duly authorized, executed and
delivered by the Guarantors;
(g) the Registration Rights Agreement has been duly authorized
by each of the Company and, as of the Effectiveness Date, will have
been duly authorized by the Guarantors, and when executed and delivered
by them and (assuming the due authorization, execution and delivery by
the other party thereto) will constitute a valid agreement of each of
the parties thereto and, subject to (i) the effect of applicable
bankruptcy, insolvency, reorganization, moratorium, fraudulent
conveyance and other laws affecting creditors' rights generally, (ii)
general principles of equity and (iii) principles of public policy
limiting the rights to enforce indemnification provisions (clauses (i),
(ii) and (ii) being referred to herein as the "Creditors' Rights
Limitations"), will be binding and will be enforceable in accordance
with its terms; and will conform, in all material respects, to the
description thereof in the Offering Memorandum;
(h) the Notes and the Exchange Notes have been duly authorized
by the Company, and when issued and delivered pursuant to this
Agreement (and the Registration Rights Agreement in the case of the
Exchange Notes), will have been duly executed, issued and delivered
and, when the Notes and the Exchange Notes are authenticated by the
Trustee in accordance with the terms of the Indenture (assuming the due
authorization, execution and delivery by the Trustee) and are delivered
to and paid for by the Initial Purchaser in accordance with the terms
of this Agreement (and the Registration Rights Agreement in the case of
the Exchange Notes), will constitute valid obligations of the Company
entitled to the benefits provided by the Indenture and, subject to the
Creditors' Rights Limitations, will be binding and will be enforceable
in accordance with their terms; the Indenture has been duly authorized
by the Company and, when executed and delivered by each of the Company
and the Guarantors (assuming the due authorization, execution and
delivery by the Trustee), the Indenture will constitute a valid
instrument of the Company and, subject to the Creditors' Rights
Limitations, will be binding and will be enforceable in accordance with
its terms; and the Securities and the Indenture will conform, in all
material respects, to the descriptions thereof in the Offering
Memorandum;
(i) the Guarantee as of the Effectiveness Date will have been
duly authorized by the Guarantors, and when the Notes or Exchange
Notes, as the case may be, are issued and delivered pursuant to this
Agreement (and the Registration Rights Agreement in the case of the
Exchange Notes), will have been duly executed and delivered and, when
the Notes or Exchange Notes, as the case may be, are authenticated by
the Trustee in accordance with the terms of the Indenture (assuming the
due authorization, execution and delivery by the Trustee) and are
delivered to and paid for by the Initial Purchaser in accordance with
the terms of this Agreement (and the Registration Rights Agreement in
the case of the Exchange Notes), will constitute a valid obligation of
the Guarantors and, subject to the Creditors' Rights Limitations, will
be binding and will be enforceable in accordance with its terms; the
Indenture as of the Effectiveness Date, will have been duly authorized
by the Guarantors and, when executed and delivered by each of the
Guarantors and the Company (assuming the due authorization, execution
and delivery by the Trustee), the Indenture will constitute a valid
instrument of each such Guarantor and, subject to the Creditors' Rights
Limitations, will be binding and will be enforceable in accordance with
its terms;
(j) each of the Company and P.T. Holding has the corporate
power and authority to execute and deliver the Merger Agreement and
Credit Agreement (to the extent each is a party thereto) and to perform
its obligations, thereunder; all action to be taken by the Company,
P.T. Holding or the PureTec Companies for the due and proper
authorization, execution and delivery of each of the Transaction
Documents to which it is a party and the consummation of the
transactions contemplated thereby have been duly and validly taken or,
with respect to the PureTec Companies, will have been taken as of the
Effectiveness Date; and when executed and delivered by each of the
parties thereto, each of the Transaction Documents will constitute a
valid instrument or agreement of each of the Company and the
Guarantors, as the case may be, and subject to the Creditors' Rights
Limitations, will be binding and enforceable in accordance with its
terms; and the Transaction Documents conform, in all material respects,
to the descriptions thereof in the Offering Memorandum;
(k) none of the transactions contemplated by this Agreement
(including, without limitation, the use of the proceeds from the sale
of the Securities) will violate or result in a violation of Section 7
of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), or any regulation promulgated thereunder, including, without
limitation, Regulations G, T, U, and X of the Board of Governors of the
Federal Reserve System;
(l) neither the Company nor any Existing Subsidiary is, or
with the giving of notice or lapse of time or both would be, in
violation of or in default under its Certificate of Incorporation or
By-Laws (or similar organizational documents) or any indenture,
mortgage, deed of trust, loan agreement or other agreement or
instrument to which it is a party or by which it or any of its
properties is bound, except for violations and defaults which
individually and in the aggregate would not have a Material Adverse
Effect or are not material to the holders of the Securities as such;
the issue and sale of the Securities and the performance by each of the
Company and the Guarantors of all of the provisions of their
obligations under the Securities, the Indenture, the Registration
Rights Agreement and this Agreement and the consummation of the
transactions herein and therein contemplated will not conflict with or
result in a breach of any of the terms or provisions of, or constitute
a default under, any indenture, mortgage, deed of trust, loan agreement
or other agreement or instrument to which the Company or any Guarantor
is a party or by which the Company or any Guarantor is bound or to
which any of the property or assets of the Company or any Guarantor is
subject, except such as would not have a Material Adverse Effect, nor
will any such action result in any violation of the provisions of the
Certificate of Incorporation or By-Laws of the Company or any Guarantor
or (assuming the accuracy of the representations by, and compliance
with the agreements of, the Initial Purchaser set forth in paragraph 2
of this Agreement) any applicable law or statute or any order, rule or
regulation of any court or governmental agency or body having
jurisdiction over the Company, any Guarantor or any of their respective
properties; and no consent, approval, authorization, order, license,
registration or qualification of or with any such court or governmental
agency or body is required for the issue and sale of the Securities or
the consummation by the Company or any Guarantor of the transactions
contemplated by this Agreement or the Indenture, except such consents,
approvals, authorizations, registrations or qualifications as may be
required under any state securities or Blue Sky Laws in connection with
the purchase and distribution of the Securities by the Initial
Purchaser and except as such as would not have a Material Adverse
Effect;
(m) other than as set forth or contemplated in the Offering
Memorandum, there are no legal or governmental investigations, actions,
suits or proceedings pending or, to the knowledge of the Company,
threatened against or affecting the Company or any Existing Subsidiary
or any of their respective properties or to which the Company or any
Existing Subsidiary is or may be a party or to which any property of
the Company or any Existing Subsidiary is or may be the subject which
could individually or in the aggregate have, or reasonably be expected
to have, a Material Adverse Effect and, to the best of the Company's
knowledge, no such proceedings are threatened or contemplated by
governmental authorities or threatened by others;
(n) neither the Company nor any affiliate (as defined in Rule
501(b) of Regulation D under the Act ("Regulation D")) of the Company
has directly, or through any agent, sold, offered for sale, solicited
offers to buy or otherwise negotiated in respect of, any security (as
defined in the Act) which is or will be integrated with the sale of the
Securities in a manner that would require the registration under the
Act of the offering contemplated by the Offering Memorandum;
(o) neither the Company, the Guarantors nor any person (other
than the Initial Purchaser, as to which the Company makes no
representation) acting on their behalf has offered or sold the
Securities by means of any general solicitation or general advertising
within the meaning of Rule 502(c) under the Act or, with respect to
Securities sold outside the United States to non-U.S. persons (as
defined in Rule 902 under the Act), by means of any directed selling
efforts within the meaning of Rule 902 under the Act and the Company,
the Guarantors and any of their affiliates and any person (other than
the Initial Purchaser) acting on their behalf has complied with and
will implement the "offering restriction" within the meaning of such
Rule 902;
(p) the Company is not, and will not be after giving effect to
the offering and sale of the Securities to be sold and the application
of the proceeds from such sale (as described in the Offering Memorandum
under the caption "Use of Proceeds"), an "investment company" as such
term is defined in the Investment Company Act of 1940, as amended;
(q) assuming that the representations of the Initial Purchaser
set forth in paragraph 2 of this Agreement are true, correct and
complete and assuming compliance by the Initial Purchaser with its
agreements in paragraph 2 of this Agreement, it is not necessary in
connection with the offer, sale and delivery of the Securities in the
manner contemplated by this Agreement to register the Securities under
the Act or to qualify an indenture under the Trust Indenture Act of
1939, as amended (the "TIA");
(r) the Securities satisfy the requirements set forth in Rule
144A(d)(3) under the Act;
(s) BDO Seidman, LLP, who has certified certain financial
statements of the Company and its subsidiaries and Deloitte & Touche
LLP, who has certified certain financial statements of PureTec
Corporation and its subsidiaries and PS&T and its subsidiaries, are
independent public accountants as required by the Act;
(t) the Company and the Existing Subsidiaries have good and
marketable title in fee simple to all material items of real property
and good and marketable title to all material personal property owned
by them, in each case free and clear of all liens, encumbrances and
defects except such as are otherwise described or referred to in the
Offering Memorandum or such as do not interfere with the use made or
proposed to be made of such property by the Company and the Existing
Subsidiaries; and any real property and buildings held under lease by
the Company or the Existing Subsidiaries are held by them under valid,
existing and enforceable leases (subject to the Creditors' Rights
Limitations) with such exceptions as are not material and do not
interfere with the use made or proposed to be made of such property and
buildings by the Company or the Existing Subsidiaries. The Company and
the Existing Subsidiaries own or possess, or have no reason to believe
they cannot acquire on reasonable terms, adequate licenses or other
rights to use all patents, trademarks, service marks, trade names,
copyrights and know-how necessary to conduct the businesses now or
proposed to be operated by them as described in the Offering
Memorandum, except where the failure to own, possess or have the
ability to acquire any such licenses or other rights could not,
individually or in the aggregate, be reasonably expected to have a
Material Adverse Effect, and neither the Company nor any Existing
Subsidiary has received any written or, to the best knowledge of the
Company, oral notice of infringement of or conflict with asserted
rights of others with respect to any patents, trademarks, service
marks, trade names, copyrights or know-how which, if such assertion of
infringement or conflict were sustained, would have a Material Adverse
Effect;
(u) the Company and the Existing Subsidiaries have filed all
federal, state, local and foreign tax returns which have been required
to be filed and have paid all taxes shown thereon and all assessments
received by them or any of them to the extent that such taxes have
become due and are not being contested in good faith, and, except as
disclosed in the Offering Memorandum, the Company has no knowledge of
any material tax deficiency which has been or might reasonably be
expected to be asserted or threatened against the Company;
(v) each of the Company and each Existing Subsidiary owns,
possesses or has obtained all material licenses, permits, certificates,
consents, orders, approvals and other authorizations from, and has made
all declarations and filings with, all federal, state, local and other
governmental authorities (including foreign regulatory agencies), all
self-regulatory organizations and all courts and other tribunals,
domestic or foreign, necessary to own or lease, as the case may be, and
to operate its properties and to carry on its business as conducted as
of the date hereof, except to the extent that the failure to so obtain
or file, individually or in the aggregate, could not reasonably be
expected to have a Material Adverse Effect, and neither the Company nor
any Existing Subsidiary has received any actual notice, or is not
aware, of any proceeding relating to revocation or modification of any
such license, permit, certificate, consent, order, approval or other
authorization, except as described in the Offering Memorandum; and each
of the Company and each Existing Subsidiary is in compliance with all
laws and regulations relating to the conduct of its business as of the
date hereof;
(w) there are no existing or, to the best knowledge of the
Company, threatened labor disputes with the employees of the Company
and the Existing Subsidiaries which are likely to have a Material
Adverse Effect;
(x) each of the Company and each Existing Subsidiary (i) is in
compliance with any and all applicable federal, state and local laws
and regulations relating to the protection of human health and safety,
the environment or hazardous or toxic substances or wastes, pollutants
or contaminants ("Environmental Laws"), (ii) has received all permits,
licenses or other approvals required of it under applicable
Environmental Laws to conduct its business and (iii) is in compliance
or is in the process of complying with all terms and conditions of any
such permit, license or approval, except where such noncompliance with
Environmental Laws, failure to receive required permits, licenses or
other approvals or failure to comply with the terms and conditions of
such permits, licenses or approvals would not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect;
associated costs and liabilities (including, without limitation, any
capital or operating expenditures required for clean-up, closure of
properties or compliance with Environmental Laws or any permit, license
or approval, any related constraints on operating activities and any
potential liabilities to third parties) would not, individually or in
the aggregate, reasonably be expected to have a Material Adverse
Effect; and
(y) each employee benefit plan, within the meaning of Section
3(3) of the Employee Retirement Income Security Act of 1974, as amended
("ERISA"), that is maintained, administered or contributed to by the
Company or any affiliates of the Company for employees or former
employees of the Company and its affiliates has been maintained, in all
material respects, in compliance with its terms and the requirements of
any applicable statutes, orders, rules and regulations, including but
not limited to ERISA and the Internal Revenue Code of 1986, as amended
(the "Code"); no prohibited transaction, within the meaning of Section
406 of ERISA or Section 4975 of the Code has occurred with respect to
any such plan excluding transactions effected pursuant to a statutory
or administrative exemption and excluding transactions which would not
have a Material Adverse Effect; and for each such plan which is subject
to the funding rules of Section 412 of the Code or Section 302 of ERISA
no "accumulated funding deficiency" as defined in Section 412 of the
Code has been incurred, whether or not waived, and the fair market
value of the assets of each such plan which is subject to Title IV of
ERISA (excluding for these purposes accrued but unpaid contributions)
exceeded the present value of all benefits accrued under such plan as
determined using reasonable actuarial assumptions.
(z) to the best knowledge of the Company, each of the
representations and warranties made by PureTec in the Merger Agreement
are true and correct in all material respects and except to the extent
previously disclosed to the Initial Purchaser and counsel for the
Initial Purchaser in environmental audit reports.
5. Each of the Company and each Guarantor covenants and agrees with the
Initial Purchaser as follows:
(a) before distributing any amendment or supplement to the
Offering Memorandum, to furnish to the Initial Purchaser a copy of the
proposed amendment or supplement for review and not to distribute any
such proposed amendment or supplement to which the Initial Purchaser
reasonably objects;
(b) if, at any time prior to the completion of the initial
placement of the Securities, any event shall occur as a result of which
it is necessary to amend or supplement the Offering Memorandum in order
that the Offering Memorandum does not contain an untrue statement of a
material fact or omit to state a material fact necessary in order to
make the statements therein, in the light of the circumstances when the
Offering Memorandum is delivered to a purchaser, not misleading, or if
it is necessary to amend or supplement the Offering Memorandum to
comply with law, forthwith to prepare and furnish, at the expense of
the Company, to the Initial Purchaser and to the dealers (whose names
and addresses the Initial Purchaser will furnish to the Company) to
which Securities may have been sold by the Initial Purchaser on behalf
of the Initial Purchaser and to any other dealers upon request, such
amendments or supplements to the Offering Memorandum as may be
necessary so that the Offering Memorandum as so amended or supplemented
will not contain an untrue statement of a material fact or omit to
state a material fact necessary in order to make the statements
therein, in the light of the circumstances when the Offering Memorandum
is delivered to a purchaser, not misleading or so that the Offering
Memorandum will comply with law;
(c) to cooperate with you and your counsel in connection with
the registration or qualification of the Securities for offering and
sale by the Initial Purchaser and by dealers under the securities or
Blue Sky laws of such jurisdictions as you may designate and will file
such consents to service of process or other documents necessary or
appropriate in order to effect such registration or qualification;
provided that in no event shall the Company or the Guarantors be
obligated to qualify to do business in any jurisdiction where it is not
now so qualified or to take any action that would subject it to
taxation or service of process in suits, other than those arising out
of the Offering or sale of the Securities, in any jurisdiction where it
is not now so subject;
(d) so long as the Securities are outstanding, to furnish to
the Initial Purchaser copies of all reports or other communications
(financial or other) furnished to holders of Securities, and copies of
any reports and financial statements furnished to or filed with the
Commission or any national securities exchange;
(e) during the period beginning on the date hereof and
continuing to and including the Business Day following the Closing
Date, not to offer, sell, contract to sell, or otherwise dispose of any
debt securities of or guaranteed by the Company or the Guarantors which
are substantially similar to the Securities;
(f) to use the net proceeds received by the Company from the
sale of the Securities pursuant to this Agreement in the manner
specified in the Offering Memorandum under the caption "Use of
Proceeds";
(g) if requested by you, to use its best efforts to cause such
Securities to be eligible for the PORTAL trading system of the National
Association of Securities Dealer, Inc.;
(h) to furnish to the holders of the Securities as soon as
practicable after the end of each fiscal year an annual report
(including a balance sheet and statements of income, stockholders'
equity and cash flows of the Company and its consolidated subsidiaries
certified by independent public accountants) and, as soon as
practicable after the end of each of the first three quarters of each
fiscal year (beginning with the fiscal quarter ending after the date of
the Offering Memorandum), consolidated summary financial information of
the Company and its subsidiaries of such quarter in reasonable detail;
(i) during the period of two years after the Closing Date, not
to, and to use its best efforts not to permit any of its "affiliates"
(as defined in Rule 144 under the Act) to, resell any of the Securities
which constitute "restricted securities" under Rule 144 that have been
reacquired by any of them;
(j) whether or not the transactions contemplated by this
Agreement are consummated or this Agreement is terminated and in
addition to any obligations they may have under any other agreements
with you and/or your affiliates, to pay or cause to be paid all costs
and expenses incident to the performance of their obligations
hereunder, including without limiting the generality of the foregoing,
all costs and expenses (i) incident to the preparation, issuance,
execution, authentication and delivery of the Securities, including any
expenses of the Trustee, (ii) incident to the preparation, printing and
distribution of the Offering Memorandum and any preliminary offering
memorandum (including in each case all exhibits, amendments and
supplements thereto), (iii) incurred in connection with the
registration or qualification and determination of eligibility for
investment of the Securities under the laws of such jurisdictions as
the Initial Purchaser may designate (including fees of counsel for the
Initial Purchaser and their disbursements), (iv) in connection with the
application for eligibility for trading of the Securities in the PORTAL
trading system, (v) in connection with the printing (including word
processing and duplication costs) and delivery of this Agreement, the
Indenture, the Registration Rights Agreement, the Preliminary and
Supplemental Blue Sky Memoranda and any Legal Investment Survey and the
furnishing to the Initial Purchaser and dealers of copies of the
Offering Memorandum, including mailing and shipping, as herein
provided, (vi) payable to rating agencies in connection with the rating
of the Securities, and (vii) incurred by the Company in connection with
a "road show" presentation to potential investors;
(k) to take all reasonable action that is appropriate or
necessary to assure that its offerings of other securities will not be
integrated for purposes of the Act with the offerings contemplated
hereby;
(l) not to solicit any offer to buy or offer to sell
Securities by means of any form of general solicitation or general
advertising within the meaning of Rule 502(c) of Regulation D under the
Act;
(m) while the Securities remain outstanding and are
"restricted securities" within the meaning of Rule 144(a)(3) under the
Act, during any period in which it is not subject to Section 13 or
15(d) under the Exchange Act, to make available to the Initial
Purchaser and any holder of Securities in connection with any sale
thereof and any prospective purchaser of Securities, in each case upon
request, the information specified in, and meeting the requirements of,
Rule 144A(d)(4) ("Rule 144A(d)(4) Information") under the Act (or any
successor thereto); and
(n) not to take any action prohibited by Regulation M under
the Exchange Act (or any successor provision), in connection with the
distribution of the Securities contemplated hereby.
6. The obligations of the Initial Purchaser hereunder to purchase the
Securities on the Closing Date are subject to the performance, in all material
respects, by each of the Company and the Guarantors of their obligations
hereunder and to the following additional conditions:
(a) the representations and warranties of each of the Company
and the Guarantors contained herein are true and correct on and as of
the Closing Date as if made on and as of the Closing Date and each of
the Company and the Guarantors shall have complied, in all material
respects, with all agreements and all conditions on its part to be
performed or satisfied hereunder at or prior to the Closing Date;
(b) subsequent to the execution and delivery of this Agreement
and prior to the Closing Date, there shall not have occurred any
downgrading, nor shall any notice have been given of (i) any
downgrading, (ii) any intended or potential downgrading or (iii) any
review or possible change that does not indicate an improvement, in the
rating accorded any securities of or guaranteed by the Company by any
"nationally recognized statistical rating organization", as such term
is defined for purposes of Rule 436(g)(2) under the Act;
(c) since the respective dates as of which information is
given in the Offering Memorandum, except as otherwise stated therein,
there shall not have been any material change in the capital stock or
long-term debt of any of the Company or the Guarantors or any Material
Adverse Change, or any development involving a Prospective Material
Adverse Change, otherwise than as set forth or contemplated in the
Offering Memorandum, the effect of which in the judgment of the Initial
Purchaser makes it impracticable or inadvisable to proceed with the
offering or the delivery of the Securities on the Closing Date on the
terms and in the manner contemplated in the Offering Memorandum; and
neither the PureTec Companies, the Company nor the Existing
Subsidiaries has sustained since the date of the latest audited
financial statements included in the Offering Memorandum any loss or
interference with its respective business from fire, flood, hurricane,
accident or other calamity, whether or not covered by insurance, or
from any labor dispute or legal or governmental proceeding, which loss
or interference, in the judgment of the Initial Purchaser, has had or
has a Material Adverse Effect, otherwise than as set forth or
contemplated in the Offering Memorandum;
(d) the Initial Purchaser shall have received on and as of the
Closing Date a certificate of the Company signed for the Company by an
executive officer of the Company, with specific knowledge about the
Company's and Guarantors' financial matters, satisfactory to the
Initial Purchaser to the effect set forth in subsections (a) and (b) of
this Section and to the further effect that there has not occurred any
Material Adverse Change, or any development involving a Prospective
Material Adverse Change, from those set forth or contemplated in the
Offering Memorandum;
(e) Davis Polk & Wardwell, Counsel for the Company, shall have
furnished to the Initial Purchaser their written opinion, dated the
Closing Date in form and substance satisfactory to the Initial
Purchaser, to the effect that:
(i) the Company has been duly organized and is validly
existing as a corporation in good standing under the laws of
Delaware with the corporate power and authority to own its
properties and conduct its business as described in the
Offering Memorandum;
(ii) each Guarantor listed on Schedule A is a corporation
validly existing under the laws of its jurisdiction of
incorporation with power and authority to enter into this
Agreement, the Registration Rights Agreement, the Indenture
and the Guarantee;
(iii) to such counsel's knowledge, other than as set forth or
contemplated in the Offering Memorandum, there are no legal or
governmental investigations, actions, suits or proceedings (i)
pending or threatened against or affecting the Company or the
Guarantors or any of their respective properties or to which
the Company or any Guarantor is or may be a party or to which
any property of the Company or any Guarantor is or may be the
subject which, if determined adversely to the Company or such
Guarantor, could individually or in the aggregate have, or
reasonably be expected to have, a Material Adverse Effect or
(ii) which seek to restrain, enjoin, prevent the consummation
of or otherwise challenge the issuance or sale of the
Securities in the manner contemplated by the Offering
Memorandum or the consummation of the Offering or the
Transactions; to such counsel's knowledge, no such proceedings
are threatened or contemplated by governmental authorities or
threatened by others;
(iv) this Agreement has been duly authorized, executed and
delivered by each of the Company and each Guarantor listed on
Schedule A; the Registration Rights Agreement has been duly
authorized, executed and delivered by each of the Company and
each Guarantor listed on Schedule A and is a valid agreement
of each of the Company and each such Guarantor and, subject to
the Creditors' Rights Limitations, is binding and is
enforceable in accordance with its terms;
(v) the Guarantee has been duly authorized, executed and
delivered by each Guarantor listed on Schedule A and, and upon
delivery to and payment for the Notes by the Initial Purchaser
in accordance with the terms of this Agreement, will
constitute a valid obligation of each such Guarantor and,
subject to the Creditors' Rights Limitations, is binding and
is enforceable against each such Guarantor in accordance with
its terms;
(vi) the Notes have been duly authorized, executed and
delivered by the Company and, when duly authenticated in
accordance with the terms of the Indenture and delivered to
and paid for by the Initial Purchaser in accordance with the
terms of this Agreement, will constitute valid obligations of
the Company entitled to the benefits provided by the Indenture
and, subject to the Creditors' Rights Limitations, are binding
and are enforceable against the Company in accordance with
their terms;
(vii) the Indenture has been duly authorized, executed and
delivered by the Company and each Guarantor listed on Schedule
A and (assuming the due authorization, execution and delivery
by the Trustee) constitutes a valid agreement of the Company
and each such Guarantor and, subject to the Creditors' Rights
Limitations, is binding and is enforceable against the Company
and each such Guarantor, respectively, in accordance with its
terms;
(viii) the Merger Agreement and the Credit Agreement have
been duly authorized, executed and delivered by the Company
and the Existing Subsidiaries (to the extent such person is a
party thereto), and is a valid agreement of each of the
Company and such Existing Subsidiary, as the case may be, and,
subject to the Creditors' Rights Limitations, the Merger
Agreement and the Credit Agreement are binding and are
enforceable in accordance with its terms. The Merger has
become effective in accordance with the law of the State of
Delaware;
(ix) other than the subject matter of subparagraphs (x) and
(xiv), the issue and sale of the Securities and the
performance by the Company and the Guarantors of their
obligations under the Securities, the execution and delivery
of this Agreement, the Indenture and the Registration Rights
Agreement and the consummation by the Company and the
Guarantors of the transactions contemplated hereby and thereby
will not conflict with or constitute or result in a breach or
a default under or violation of any of (i) the terms or
provisions of any indenture, mortgage, deed of trust, loan
agreement or other material agreement or instrument known to
such counsel to which the Company or such Guarantor is a party
or by which they or any of their properties is known by such
counsel to be bound except as such as would not have a
Material Adverse Effect, (ii) the Certificate of Incorporation
or By-Laws of the Company or such Guarantor, or (iii) any
applicable federal or New York statute or, to the best of such
counsel's knowledge, any federal or New York order, rule or
regulation of any federal or New York governmental agency or
body having jurisdiction over the Company, the Guarantors or
any of their respective properties or any judgment, decree or
order of any court to which the Company or such Guarantor is a
named party;
(x) other than the subject matter of paragraph (xi), to their
knowledge, no consent, approval, authorization, order,
license, registration or qualification of or with any court or
governmental agency or body is required for the issue and sale
of the Securities or the consummation of the other
transactions contemplated by this Agreement or the Indenture,
except as may be required under state securities or Blue Sky
laws in connection with the purchase and distribution of the
Securities or the Exchange Notes or the federal securities
laws with respect to the Exchange Notes;
(xi) no registration under the Act of the Securities is
required in connection with the sale of the Securities to the
Initial Purchaser as contemplated by this Agreement and the
Offering Memorandum or in connection with the initial resale
of the Securities by the Initial Purchaser in accordance with
Section 2 (including Annex I) of this Agreement, and prior to
the commencement of the Exchange Offer or the effectiveness of
the Shelf Registration Statement, the Indenture is not
required to be qualified under the TIA, in each case assuming
(i) that the purchasers who buy the Securities in the initial
resales are qualified institutional buyers (as defined in Rule
144A under the Act) or non-U.S. Persons (as defined in Rule
902 under the Act) and (ii) the accuracy of the Initial
Purchaser's representations and those of the Company and the
Guarantor contained in this Agreement regarding the absence of
a general solicitation in connection with the sale of the
Securities to the Initial Purchaser and the initial resales
thereof (it being understood that such counsel need express no
opinion as to any subsequent resale of any Notes);
(xii) the Securities satisfy the requirements set forth in
Rule 144A(d)(3) under the Act;
(xiii) the statements in the Offering Memorandum under
"Business -- Legal Proceedings and Environmental Matters -
Tekni-Plex," "Description of Notes," and "Certain United
States Federal Income Tax Considerations," insofar as such
statements constitute a description of the legal matters,
documents or proceedings referred to therein, fairly present
the information called for with respect to such legal matters,
documents or proceedings;
(xiv) on the basis stated below, no facts have come to the
attention of such counsel that lead such counsel to believe,
except for the financial statements, related financial
statement schedules, and other financial and statistical
information contained in the Offering Memorandum as to which
such counsel expresses no belief, that the Offering
Memorandum, as of its date of issuance and, as amended or
supplemented, if applicable, as of the Closing Date, contained
an untrue statement of a material fact or omitted to state a
material fact necessary in order to make the statements
therein, in the light of the circumstances under which they
were made, not misleading; and
(xv) the Company is not and, after giving effect to the
offering and sale of the Securities to be sold and the
application of the proceeds from such sale (as described in
the Offering Memorandum under the caption "Use of Proceeds")
will not be, an "investment company" as defined in the
Investment Company Act of 1940, as amended.
In rendering such opinions, such counsel may rely (A) as to
matters involving the application of laws other than the federal laws
of the United States, the corporate law of the State of Delaware and
the laws of the State of New York, to the extent such counsel deems
proper and to the extent specified in such opinion, if at all, upon an
opinion or opinions (reasonably satisfactory to the Initial Purchaser's
counsel) of other counsel, reasonably acceptable to the Initial
Purchaser's counsel, familiar with the applicable laws; and (B) as to
matters of fact, to the extent such counsel deems proper, on the
representations and warranties made by the Company and the Guarantors
herein, and certificates and statements of public officials and
officers and other representatives of the Company and the Guarantors
(and such counsel has not independently verified or investigated, nor
does such counsel assume any responsibility for, the factual accuracy
or completeness of such representations and warranties or certificates
or of such factual statements). The opinion of such counsel for the
Company shall state that the opinion of any such other counsel upon
which they relied is in form satisfactory to such counsel and, in such
counsel's opinion, the Initial Purchaser and they are justified in
relying thereon. With respect to the matters to be covered in
subparagraph (xiv) above counsel may state that their opinion and
belief is based upon their participation in the preparation of the
Offering Memorandum and any amendment or supplement thereto, and that
since such counsel has not conducted any independent investigation with
regard to the information set forth in the Offering Memorandum and any
amendment or supplement thereto, such counsel is not passing upon and
does not assume any responsibility for the accuracy, completeness or
fairness of the statements contained therein except with respect to the
opinions set forth in subparagraph (xiii) above.
The opinion of Davis Polk & Wardwell described above shall be
rendered to the Initial Purchaser at the request of the Company and
shall so state therein.
(f) on the date of the issuance of the Offering Memorandum and
also on the Closing Date, BDO Seidman, LLP and Deloitte & Touche LLP
shall have furnished to the Initial Purchaser letters, dated the
respective dates of delivery thereof, in form and substance
satisfactory to you, containing statements and information of the type
customarily included in accountants "comfort letters" to underwriters
with respect to the financial statements and certain financial
information contained in the Offering Memorandum;
(g) the Company and the Guarantors shall have executed and
delivered the Registration Rights Agreement substantially in the form
attached hereto as Annex II;
(h) the Supplemental Indenture shall have been executed, the
Debt Tender Offer shall have been consummated, the PS&T Notes tendered
in the Debt Tender Offer shall have been accepted for payment and the
Related Transactions shall have occurred; the Company shall have
previously executed the Credit Agreement (as defined in the Offering
Memorandum) in form and substance reasonably satisfactory to the
Initial Purchaser and shall have funds available thereunder as
contemplated by the Offering Memorandum;
(i) all material conditions in the Merger Agreement required
to be performed on or prior to the Closing Date shall have been
satisfied and not waived or modified, all covenants in the Merger
Agreement shall have been satisfied in all material respects, all
representations and warranties contained in the Merger Agreement shall
be true and correct in all material respects, the Merger shall have
been consummated and the Merger Certificate shall have been filed with
the Secretary of State of the State of Delaware;
(j) an indenture supplement relating to the Company's existing
11 1/4% Senior Subordinated Notes due 2007 (the "11 1/4% Notes") shall
have been executed and delivered by the Guarantors as guarantors under
the 11 1/4% Notes in accordance with the terms thereof;
(k) the Initial Purchaser shall have received on and as of the
Closing Date an opinion of Cahill Gordon & Reindel, counsel to the
Initial Purchaser, with respect to the validity of the Indenture and
the Securities, and such other related matters as the Initial Purchaser
may reasonably request, and such counsel shall have received such
papers and information as they may reasonably request to enable them to
pass upon such matters; and
(l) on or prior to the Closing Date, the Company shall have
furnished to the Initial Purchaser such further certificates and
documents as the Initial Purchaser shall reasonably request.
7. Each of the Company and each Guarantor, jointly and severally,
agrees to indemnify and hold harmless the Initial Purchaser, each affiliate of
the Initial Purchaser which assists the Initial Purchaser in the distribution of
the Securities, its officers and directors, and each person, if any, who
controls the Initial Purchaser within the meaning of either Section 15 of the
Act or Section 20 of the Exchange Act, from and against any and all losses,
claims, damages and liabilities (including without limitation the legal fees and
other expenses reasonably incurred in connection with any suit, action or
proceeding or any claim asserted) caused by any untrue statement or alleged
untrue statement of a material fact contained in the Offering Memorandum (and
any amendment or supplement thereto if the Company shall have furnished any
amendments or supplements thereto) or any Preliminary Offering Memorandum, or
caused by any omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein, in
the light of the circumstances under which they were made, not misleading,
except insofar as such losses, claims, damages or liabilities are caused by any
untrue statement or omission or alleged untrue statement or omission (i) made in
reliance upon and in conformity with information relating to the Initial
Purchaser furnished to the Company in writing by the Initial Purchaser expressly
for use therein or (ii) contained in the Preliminary Offering Memorandum if the
Initial Purchaser failed to send or deliver a copy of the Offering Memorandum to
the person asserting such losses, claims, damages or liabilities on or prior to
the delivery of written confirmation of sale of the Securities to such person
and such Offering Memorandum would have corrected such untrue statement or
omission and it shall have been determined that such losses, claims, damages or
liabilities would not have arisen had the Offering Memorandum been delivered or
sent.
The Initial Purchaser agrees to indemnify and hold harmless each of the
Company, the Guarantors, their respective directors and officers and each person
who controls the Company within the meaning of Section 15 of the Act and Section
20 of the Exchange Act, to the same extent as the foregoing indemnity from the
Company to the Initial Purchaser, but only with reference to information
relating to the Initial Purchaser furnished to the Company in writing by the
Initial Purchaser expressly for use in the Offering Memorandum, any amendment or
supplement thereto, or any preliminary offering memorandum.
If any suit, action, proceeding (including any governmental or
regulatory investigation), claim or demand shall be brought or asserted against
any person in respect of which indemnity may be sought pursuant to either of the
two preceding paragraphs, such person (the "Indemnified Person") shall promptly
notify the person against whom such indemnity may be sought (the "Indemnifying
Person") in writing, and the Indemnifying Person, upon request of the
Indemnified Person, shall retain counsel reasonably satisfactory to the
Indemnified Person to represent the Indemnified Person and any others the
Indemnifying Person may designate in such proceeding and shall pay the fees and
expenses of such counsel related to such proceeding. In any such proceeding, any
Indemnified Person shall have the right to retain its own counsel, but the fees
and expenses of such counsel shall be at the expense of such Indemnified Person
unless (i) the Indemnifying Person and the Indemnified Person shall have
mutually agreed in writing to the contrary, (ii) the Indemnifying Person has
failed within a reasonable time to retain counsel reasonably satisfactory to the
Indemnified Person or (iii) the named parties in any such proceeding (including
any impleaded parties) include both the Indemnifying Person and the Indemnified
Person and representation of both parties by the same counsel would be
inappropriate due to actual or potential differing interests between them. It is
understood that the Indemnifying Person shall not, in connection with any
proceeding or related proceeding in the same jurisdiction, be liable for the
fees and expenses of more than one separate firm (in addition to any local
counsel) for all Indemnified Persons, and that all such fees and expenses shall
be reimbursed as they are incurred. Any such separate firm for the Initial
Purchaser, each affiliate of the Initial Purchaser which assists the Initial
Purchaser in the distribution of the Securities, its officers and directors and
such control persons of Initial Purchaser shall be designated in writing by J.P.
Morgan Securities Inc. and any such separate firm for the Company, the
Guarantors, their directors, their officers and such control persons of the
Company shall be designated in writing by the Company. The Indemnifying Person
shall not be liable for any settlement of any proceeding effected without its
written consent, but if settled with such consent or if there be a final
judgment for the plaintiff, the Indemnifying Person agrees to indemnify any
Indemnified Person from and against any loss or liability by reason of such
settlement or judgment. Notwithstanding the foregoing sentence, if at any time
an Indemnified Person shall have requested in writing to the chief legal officer
or, if no chief legal officer exists, to the chief executive officer of the
Indemnifying Person to reimburse the Indemnified Person for fees and expenses of
counsel as contemplated by the third sentence of this paragraph, the
Indemnifying Person agrees that it shall be liable for any settlement of any
proceeding or claim effected without its written consent if (i) such settlement
is entered into more than 60 days after receipt by such Indemnifying Person of
the aforesaid request, (ii) a second such written request shall have been sent
to and received by the chief legal officer or, if no chief legal officer exists,
by the chief executive officer of the Indemnifying Person at least 30 days after
the first such request but at least 15 days prior to the date of such
settlement, and (iii) with respect to such request, such Indemnifying Person
shall not have reimbursed such Indemnified Person for all reasonable fees and
expenses of such counsel prior to the date of such settlement. No Indemnifying
Person shall, without the prior written consent of the Indemnified Person,
effect any settlement of any pending or threatened proceeding in respect of
which any Indemnified Person is or could have been a party and indemnity could
have been sought hereunder by such Indemnified Person, unless such settlement
includes an unconditional release of such Indemnified Person from all liability
on claims that are the subject matter of such proceeding.
If the indemnification provided for in the first and second paragraphs
of this Section 7 is unavailable to an Indemnified Person in respect of any
losses, claims, damages or liabilities referred to therein, then each
Indemnifying Person under such paragraph, in lieu of indemnifying such
Indemnified Person thereunder, shall contribute to the amount paid or payable by
such Indemnified Person as a result of such losses, claims, damages or
liabilities (i) in such proportion as is appropriate to reflect the relative
benefits received by the Company and the Guarantors on the one hand and the
Initial Purchaser on the other hand from the offering of the Securities or (ii)
if the allocation provided by clause (i) above is not permitted by applicable
law, in such proportion as is appropriate to reflect not only the relative
benefits referred to in clause (i) above but also the relative fault of the
Company and the Guarantors on the one hand and the Initial Purchaser on the
other in connection with the statements or omissions that resulted in such
losses, claims, damages or liabilities, as well as any other relevant equitable
considerations. The relative benefits received by the Company and the Guarantors
on the one hand and the Initial Purchaser on the other shall be deemed to be in
the same respective proportions as the net proceeds from the offering (before
deducting expenses) received by the Company and the total discounts and
commissions received by the Initial Purchaser, in each case as set forth in the
table on the cover of the Offering Memorandum, bear to the aggregate offering
price of the Securities. The relative fault of the Company and the Guarantors on
the one hand and the Initial Purchaser on the other shall be determined by
reference to, among other things, whether the untrue or alleged untrue statement
of a material fact or the omission or alleged omission to state a material fact
relates to information supplied by the Company or the Guarantors or by the
Initial Purchaser and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission.
The Company, the Guarantors and the Initial Purchaser agree that it
would not be just and equitable if contribution pursuant to this Section 7 were
determined by pro rata allocation or by any other method of allocation that does
not take account of the equitable considerations referred to in the immediately
preceding paragraph. The amount paid or payable by an Indemnified Person as a
result of the losses, claims, damages and liabilities referred to in the
immediately preceding paragraph shall be deemed to include, subject to the
limitations set forth above, any legal or other expenses incurred by such
Indemnified Person in connection with investigating or defending any such action
or claim. Notwithstanding the provisions of this Section 7, in no event shall
the Initial Purchaser be required to contribute any amount in excess of the
amount by which the total price at which the Securities purchased by it were
offered exceeds the amount of any damages that the Initial Purchaser has
otherwise been required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Act) shall be
entitled to contribution from any person who was not guilty of such fraudulent
misrepresentation.
The remedies provided for in this Section 7 are not exclusive and shall
not limit any rights or remedies which may otherwise be available to any
indemnified party at law or in equity.
The indemnity and contribution agreements contained in this Section 7
and the representations and warranties made as of the date hereof and as of
Closing Date of the Company, the Guarantors and the Initial Purchaser set forth
in this Agreement shall remain operative and in full force and effect regardless
of (i) any termination of this Agreement, (ii) any investigation made by or on
behalf of the Initial Purchaser or any person controlling the Initial Purchaser
or by or on behalf of the Company, the Guarantors, such Company's officers or
directors or any other person controlling the Company and (iii) acceptance of
and payment for any of the Securities.
8. Notwithstanding anything herein contained, this Agreement may be
terminated in the absolute discretion of the Initial Purchaser, by notice given
to the Company, if after the execution and delivery of this Agreement and prior
to the Closing Date (i) trading generally shall have been suspended or
materially limited on or by, as the case may be, any of the New York Stock
Exchange, the American Stock Exchange or the National Association of Securities
Dealers, Inc., the Chicago Board Options Exchange, the Chicago Mercantile
Exchange or the Chicago Board of Trade (ii) trading of any securities of or
guaranteed by the Company shall have been suspended on any exchange or in any
over-the-counter market, (iii) a general moratorium on commercial banking
activities in New York shall have been declared by either Federal or New York
State authorities, or (iv) there shall have occurred any outbreak or escalation
of hostilities or any change in financial markets or any calamity or crisis
that, in the judgment of the Initial Purchaser, is material and adverse and
which, in the judgment of the Initial Purchaser, makes it impracticable to
market the Securities on the terms and in the manner contemplated in the
Offering Memorandum.
9. This Agreement shall become effective upon the execution and
delivery hereof by the parties hereto.
10. If this Agreement shall be terminated by the Initial Purchaser,
because of any failure or refusal on the part of any of the Company to comply
with the terms or to fulfill any of the conditions of this Agreement, or if for
any reason any of the Company shall be unable to perform its obligations under
this Agreement or any condition of the Initial Purchaser's obligations cannot be
fulfilled other than solely by reason of a default by the Initial Purchaser in
payment for the Securities on the Closing Date, the Company agrees to reimburse
the Initial Purchaser for all out-of-pocket expenses (including the fees and
expenses of its counsel) reasonably incurred by the Initial Purchaser in
connection with this Agreement or the offering contemplated hereunder.
11. This Agreement shall inure to the benefit of and be binding upon
the Company, the Initial Purchaser, any controlling persons referred to herein
and their respective successors and assigns. Nothing expressed or mentioned in
this Agreement is intended or shall be construed to give any other person, firm
or corporation any legal or equitable right, remedy or claim under or in respect
of this Agreement or any provision herein contained. No purchaser of Securities
from the Initial Purchaser shall be deemed to be a successor by reason merely of
such purchase.
12. All notices and other communications hereunder shall be in writing
and shall be deemed to have been duly given if mailed or transmitted by any
standard form of telecommunication. Notices to the Initial Purchaser shall be
given to them at the following address: J.P. Morgan Securities Inc., 60 Wall
Street, New York, New York 10260; Attention: Syndicate Department. Notices to
the Company shall be given to them at the following address: Tekni-Plex, Inc.,
201 Industrial Parkway, Somerville, New Jersey 08876; Attention: Dr. F. Patrick
Smith; with a copy to Davis Polk & Wardwell, 450 Lexington Avenue, New York, NY
10017; Attention: Winthrop Conrad, Esq.
13. This Agreement may be signed in counterparts, each of which shall
be an original and all of which together shall constitute one and the same
instrument.
14. Pursuant to Section 5-1401 of the General Obligations Laws of the
State of New York, this Agreement shall be governed by and construed in
accordance with the laws of the State of New York, without giving effect to any
other conflicts of laws provisions.
15. Contemporaniously with the consummation of the merger, the Company
shall cause each of the PureTec Companies to become a party hereto as a
Guarantor by executing and delivering to the Initial Purchaser a counterpart
hereof.
If the foregoing is in accordance with your understanding, please sign
and return four counterparts hereof.
Very truly yours,
TEKNI-PLEX, INC.
By:
------------------------
Name:
Title:
Accepted: February 25, 1998
J.P. MORGAN SECURITIES INC.
By:
-----------------------------
Name:
Title:
Each of the undersigned by its execution hereof agrees to become a
party to this Agreement as a Guarantor as this 3rd day of March, 1997:
PURETEC CORPORATION
PTI PLASTICS, INC.
OZITE CORPORATION
PLASTIC SPECIALTIES AND
TECHNOLOGIES, INC.
PLASTIC SPECIALTIES AND
TECHNOLOGIES INVESTMENTS, INC.
BURLINGTON RESINS, INC.
PURE TECH APR, INC.
MULTI CONTAINER RECYCLER, INC.
COAST RECYCLING NORTH, INC.
DISTRIBUTORS RECYCLING, INC.
REI DISTRIBUTORS, INC.
PURE TECH RECYCLING OF CALIFORNIA
ALUMET SMELTING CORP.
CONCONRE CORP.,
collectively, the Guarantors
By:_____________________________
Name:
Title:
ANNEX I
(A) In addition to offers pursuant to clauses (B)(1) and (B)(2) of
paragraph 2(ii) of the Agreement, the Initial Purchaser intends to offer and
sell the Securities in accordance with Regulation S under the Act. Accordingly,
the Initial Purchaser agrees that neither it, its affiliates nor any persons
acting on its or their behalf has engaged or will engage in any directed selling
efforts within the meaning of Rule 902 under the Act with respect to the
Securities and it and they have complied and will comply with the offering
restrictions requirement of Regulation S. The Initial Purchaser agrees that, at
or prior to confirmation of sale of Securities (other than a sale pursuant to
and in accordance with paragraph 2(ii) of the Agreement to purchasers described
in clauses (B)(1) and (B)(2) thereof), it will have sent to each distributor,
dealer or person receiving a selling concession, fee or other remuneration that
purchases Securities from it during the restricted period a confirmation or
notice to substantially the following effect:
"The Securities covered hereby have not been registered under
the United States Securities Act of 1933, as amended (the "Act"), and
may not be offered, sold or delivered within the United States or to,
or for the account or benefit of, U.S. persons (i) as part of their
distribution at any time or (ii) otherwise until 40 days after the
later of the commencement of the offering and the closing date, except
in either case in accordance with Regulation S (or Rule 144A if
available) under the Act. Terms used above have the meaning given to
them by Regulation S."
Terms used in this paragraph have the meanings given to them by Regulation S.
The Initial Purchaser agrees that it has not entered and will not enter
into any contractual arrangement with respect to the distribution or delivery of
the Securities in accordance with this paragraph (A), except with its affiliates
or with the prior written consent of the Company.
(B) The Initial Purchaser represents and agrees that (i) it has not
offered or sold, and prior to the date six months after the Closing Date will
not offer or sell any Securities to persons in the United Kingdom except to
persons whose ordinary activities involve them in acquiring, holding, managing
or disposing of investments (as principal or agent) for the purposes of their
businesses or otherwise in circumstances which have not resulted and will not
result in an offer to the public in the United Kingdom within the meaning of the
Public Offers of Securities Regulations 1995, (ii) it has complied, and will
comply, with all applicable provisions of the Financial Services Act 1986 with
respect to anything done by it in relation to the Securities in, from or
otherwise involving the United Kingdom, and (iii) it has only issued or passed
on, and will only issue or pass on, in the United Kingdom, any document received
by it in connection with the issuance of the Securities to a person who is of a
kind described in Article 11(3) of the Financial Services Act 1986 (Investment
Advertisements) (Exemptions) Order 1996 or is a person to whom such document may
otherwise lawfully be issued or passed on.
(C) The Initial Purchaser agrees that it will not directly or
indirectly offer, sell or deliver any of the Securities or distribute any
offering memorandum, prospectus or other document or information in any
jurisdiction outside the United States except under circumstances that will
result in compliance with the applicable laws thereof, and that it will take at
its own expense whatever action is required to permit its purchase and resale of
the Securities in such jurisdictions. The Initial Purchaser understands that no
action has been taken by the Company to permit a public offering in any
jurisdiction outside the United States where action would be required for such
purposes. The Initial Purchaser agrees not to cause any advertisement of the
Securities to be published in any newspaper or periodical or posted in any
public place and not to issue any circular relating to the Securities in any
jurisdiction outside of the United States. Without prejudice to the generality
of the foregoing, the Initial Purchaser is not authorized to give any
information or to make any representation in connection with the offering or
sale of the Securities other than those contained in the Offering Memorandum.
ANNEX II
[Form of Registration Rights Agreement]
SCHEDULE A
PureTec Corporation (Delaware)
PTI Plastics, Inc. (Delaware)
Ozite Corporation (Delaware)
Plastics, Specialties and Technologies, Inc. (Delaware)
Plastics, Specialties and Technologies Investments, Inc. (Delaware)
Burlington Resins, Inc. (Delaware)
EXHIBIT 4.4
REGISTRATION RIGHTS AGREEMENT
Dated as of March 3, 1998
among
TEKNI-PLEX, INC.,
THE GUARANTORS NAMED HEREIN
and
J.P. MORGAN SECURITIES INC.
REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement (the "Agreement") is dated
as of March 3, 1998, by and among TEKNI-PLEX, INC., a corporation formed under
the laws of the State of Delaware (the "Company"), each of the Subsidiaries of
the Company listed on the signature pages hereto as a Guarantor (collectively,
the "Guarantors" and together with the Company, the "Issuers"), and J.P. MORGAN
SECURITIES INC. (the "Initial Purchaser").
This Agreement is entered into in connection with the Purchase
Agreement, dated as of February 25, 1998, among the Company, certain existing
subsidiaries of the Company, the Guarantors and the Initial Purchaser (the
"Purchase Agreement") relating to the sale by the Company to the Initial
Purchaser of $200,000,000 aggregate principal amount of its 9 1/4% Senior
Subordinated Notes due 2008 (the "Notes") and the issuance by the Guarantors to
the Initial Purchaser of a guarantees (the "Guarantees" and together with the
Notes, the "Securities"). In order to induce the Initial Purchaser to enter into
the Purchase Agreement, the Issuers have agreed to provide the registration
rights set forth in this Agreement for the benefit of the Initial Purchaser and
its direct and indirect transferees. The execution and delivery of this
Agreement is a condition to the Initial Purchaser's obligation to purchase the
Securities under the Purchase Agreement.
The parties hereby agree as follows:
1. Definitions
As used in this Agreement, the following terms shall have the
following meanings:
Additional Interest: See Section 4.
Advice: See Section 5.
Applicable Period: See Section 2(b).
Closing Date: The Closing Date as defined in the Purchase
Agreement.
Company: See the introductory paragraph to this Agreement.
Consummation Date: The 225th day after the Closing.
DTC: See Section 5(a).
Effectiveness Date: The 180th day after the Closing Date.
Effectiveness Period: See Section 3(a).
Event Date: See Section 4(b).
Exchange Act: The Securities Exchange Act of 1934, as
amended, and the rules and regulations of the SEC promulgated thereunder.
Exchange Offer: See Section 2(a).
Exchange Registration Statement: See Section 2(a).
Exchange Securities: See Section 2(a).
Filing Date: The 90th day after the Closing Date.
Guarantor: See the introductory paragraph to this Agreement.
Holder: Any record holder of Registrable Securities.
Indemnified Person: See Section 7.
Indemnifying Person: See Section 7.
Indenture: The Indenture, dated as of March 1, 1998, among the
Company, the Guarantor and Marine Midland Bank, as trustee, pursuant to which
the Notes are being issued, as amended or supplemented from time to time in
accordance with the terms thereof.
Initial Purchaser: See the introductory paragraph to this
Agreement.
Initial Shelf Registration: See Section 3(a).
Inspectors: See Section 5(p).
Issue Date: The original issue date of the Notes.
Issuers: See the introductory paragraph to this Agreement.
NASD: See Section 5(t).
Notes: See the preamble to this Agreement.
Participant: See Section 7.
Participating Broker-Dealer: See Section 2(b).
Person: An individual, corporation, limited or general
partnership, joint venture, association, joint stock company, trust,
unincorporated organization or government or any agency or political subdivision
thereof.
Private Exchange: See Section 2(b).
Private Exchange Securities: See Section 2(b).
Prospectus: The prospectus included in any Registration
Statement (including, without limitation, a prospectus that includes any
information previously omitted from a prospectus filed as part of an effective
registration statement in reliance upon Rule 430A promulgated under the
Securities Act), as amended or supplemented by any prospectus supplement, with
respect to the terms of the offering of any portion of the Registrable
Securities covered by such Registration Statement, and all other amendments and
supplements to the Prospectus, including post-effective amendments, and all
material incorporated by reference or deemed to be incorporated by reference in
such Prospectus.
Records: See Section 5(p).
Registrable Securities: The Securities, upon original issuance
thereof and at all times subsequent thereto, each Exchange Security as to which
Section 2(c)(1)(i) hereof is applicable upon original issuance and at all times
subsequent thereto and, if issued, the Private Exchange Securities, until, in
the case of any such Securities, Exchange Securities or Private Exchange
Securities, as the case may be, (i) a Registration Statement (other than, with
respect to any Exchange Security as to which Section 2(c)(1)(i) hereof is
applicable, the Exchange Registration Statement) covering such Securities,
Exchange Securities or Private Exchange Securities has been declared effective
by the SEC and such Securities, Exchange Securities or Private Exchange
Securities, as the case may be, have been disposed of in accordance with such
effective Registration Statement, (ii) such Securities, Exchange Securities or
Private Exchange Securities, as the case may be, are sold in compliance with
Rule 144, or (iii) such Securities, Exchange Securities or Private Exchange
Securities, as the case may be, cease to be outstanding.
Registration Statement: Any registration statement of the
Company and the Guarantor, including, but not limited to, the Exchange
Registration Statement, that covers any of the Registrable Securities pursuant
to the provisions of this Agreement, including the Prospectus, amendments and
supplements to such registration statement, including post-effective amendments,
all exhibits, and all material incorporated by reference or deemed to be
incorporated by reference in such registration statement.
Rule 144: Rule 144 promulgated under the Securities Act, as
such Rule may be amended from time to time, or any similar rule (other than Rule
144A) or regulation hereafter adopted by the SEC providing for offers and sales
of securities made in compliance therewith resulting in offers and sales by
subsequent holders that are not affiliates of an issuer of such securities being
free of the registration and prospectus delivery requirements of the Securities
Act.
Rule 144A: Rule 144A promulgated under the Securities Act, as
such Rule may be amended from time to time, or any similar rule (other than Rule
144) or regulation hereafter adopted by the SEC.
Rule 415: Rule 415 promulgated under the Securities Act, as
such Rule may be amended from time to time, or any similar rule or regulation
hereafter adopted by the SEC.
SEC: The Securities and Exchange Commission.
Securities Act: The Securities Act of 1933, as amended, and
the rules and regulations of the SEC promulgated thereunder.
Shelf Notice: See Section 2(c).
Shelf Registration: See Section 3(b).
Subsequent Shelf Registration: See Section 3(b).
TIA: The Trust Indenture Act of 1939, as amended.
Trustee: The trustee as defined in the Indenture and, if
existent, the trustee under any indenture governing the Exchange Securities and
Private Exchange Securities (if any).
Underwritten registration or underwritten offering: A
registration in connection with which securities are sold to an underwriter for
reoffering to the public pursuant to an effective Registration Statement.
2. Exchange Offer
(a) The Issuers agree to file with the SEC as soon as
practicable after the Closing Date, but in no event later than the
Filing Date, an offer to exchange (the "Exchange Offer") any and all of
the Registrable Securities for a like aggregate principal amount of
debt securities of the Company which are identical in all material
respects to the Notes and guaranteed by the Guarantor with terms
identical in all material respects to the Guarantee (the "Exchange
Securities") (and which are entitled to the benefits of a trust
indenture which is identical in all material respects to the Indenture
(other than such changes as are necessary to comply with any
requirements of the SEC to effect or maintain the qualification of such
trust indenture under the TIA) and which has been qualified under the
TIA), except that the Exchange Securities shall have been registered
pursuant to an effective Registration Statement under the Securities
Act and shall contain no restrictive legend thereon. The Issuers agree
to use their reasonable best efforts to keep the Exchange Offer open
for at least 20 business days (or longer if required by applicable law)
after the date notice of the Exchange Offer is mailed to Holders and to
consummate the Exchange Offer on or prior to the Consummation Date. The
Exchange Offer will be registered under the Securities Act on the
appropriate form (the "Exchange Registration Statement") and will
comply with all applicable tender offer rules and regulations under the
Exchange Act. If after such Exchange Registration Statement is
initially declared effective by the SEC, the Exchange Offer or the
issuance of the Exchange Securities thereunder is interfered with by
any stop order, injunction or other order or requirement of the SEC or
any other governmental agency or court such Exchange Registration
Statement shall be deemed not to have become effective for purposes of
this Agreement. Each Holder who participates in the Exchange Offer will
be deemed to represent that any Exchange Securities received by it will
be acquired in the ordinary course of its business, that at the time of
the consummation of the Exchange Offer such Holder will have no
arrangement with any person to participate in the distribution of the
Exchange Securities in violation of the provisions of the Securities
Act, and that such Holder is not an affiliate of the Company within the
meaning of Rule 501(b) of Regulation D under the Securities Act and
such Holder has full power and authority to exchange the Registrable
Securities in exchange for the Exchange Securities. Upon consummation
of the Exchange Offer in accordance with this Section 2, the provisions
of this Agreement shall continue to apply, mutatis, mutandis, solely
with respect to Registrable Securities that are Private Exchange
Securities and Exchange Securities held by Participating
Broker-Dealers, and the Issuers shall have no further obligation to
register Registrable Securities (other than Private Exchange Securities
and other than Exchange Securities as to which clause (c)(1)(i) hereof
applies) pursuant to Section 3 of this Agreement. No securities other
than the Exchange Securities shall be included in the Exchange
Registration Statement.
(b) The Issuers shall include within the Prospectus contained
in the Exchange Registration Statement one or more section(s)
reasonably acceptable to the Initial Purchaser, which shall contain a
summary statement of the positions taken or policies made by the Staff
of the SEC (which are available to the Issuers) with respect to the
potential "underwriter" status of any broker-dealer that is the
beneficial owner (as defined in Rule 13d-3 under the Exchange Act) of
Exchange Securities received by such broker-dealer in the Exchange
Offer (a "Participating Broker-Dealer"), whether such positions or
policies have been publicly disseminated by the Staff of the SEC or
such positions or policies, in the reasonable judgment of the Initial
Purchaser, represent the prevailing views of the Staff of the SEC. Such
section(s) shall also allow the use of the prospectus by all persons
subject to the prospectus delivery requirements of the Securities Act,
including all Participating Broker-Dealers, and include a statement
describing the means by which Participating Broker-Dealers may resell
the Exchange Securities.
The Issuers shall use their reasonable best efforts
to keep the Exchange Registration Statement effective and to amend and
supplement the Prospectus contained therein in order to permit such
Prospectus to be lawfully delivered by all persons subject to the
prospectus delivery requirements of the Securities Act for such period
of time as such persons must comply with such requirements in order to
resell the Exchange Securities, provided that such period shall not
exceed 180 days (or such longer period if extended pursuant to the last
paragraph of Section 5) (the "Applicable Period").
If, prior to consummation of the Exchange Offer, the
Initial Purchaser holds any Notes acquired by it and having the status
of an unsold allotment in the initial distribution, the Company upon
the request of the Initial Purchaser shall, simultaneously with the
delivery of the Exchange Securities in the Exchange Offer, issue and
deliver to the Initial Purchaser, in exchange (the "Private Exchange")
for the Securities held by the Initial Purchaser, a like principal
amount of debt securities of the Company that are identical in all
material respects to the Exchange Securities (the "Private Exchange
Securities") (and which are issued pursuant to the same indenture as
the Exchange Securities) except for the placement of a restrictive
legend on such Private Exchange Securities. If possible, the Private
Exchange Securities shall bear the same CUSIP number as the Exchange
Securities. Interest on the Exchange Securities and Private Exchange
Securities will accrue from the last interest payment date on which
interest was paid on the Notes surrendered in exchange therefor or, if
no interest has been paid on the Notes, from the Issue Date.
Any indenture under which the Exchange Securities or
the Private Exchange Securities will be issued shall provide that the
holders of any of the Exchange Securities and the Private Exchange
Securities will vote and consent together on all matters (to which such
holders are entitled to vote or consent) as one class and that none of
the holders of the Exchange Securities and the Private Exchange
Securities will have the right to vote or consent as a separate class
on any matter (to which such holders are entitled to vote or consent).
(c) If (1) prior to the consummation of the Exchange Offer,
the Company reasonably determines in good faith or Holders of at least
a majority in aggregate principal amount of the Registrable Securities
notify the Company that they have reasonably determined in good faith
that (i) in the opinion of counsel, the Exchange Securities would not,
upon receipt, be tradeable by such Holders who are not affiliates of
the Company without restriction under the Securities Act and without
restrictions under applicable blue sky or state securities laws or (ii)
in the opinion of counsel, the SEC is unlikely to permit the
consummation of the Exchange Offer and/or (2) subsequent to the
consummation of the Private Exchange, holders of at least a majority in
aggregate principal amount of the Private Exchange Securities so
request with respect to the Private Exchange Securities and/or (3) the
Exchange Offer is commenced and not consummated prior to the 45th day
following the Consummation Date for any reason, then the Company shall
promptly deliver to the Holders and the Trustee notice thereof (the
"Shelf Notice") and shall thereafter file an Initial Shelf Registration
as set forth in Section 3 (which only in the circumstances contemplated
by clause (2) of this sentence will relate solely to the Private
Exchange Securities) pursuant to Section 3. The parties hereto agree
that, following the delivery of a Shelf Notice to the Holders of
Registrable Securities (only in the circumstances contemplated by
clauses (1) and/or (3) of the preceding sentence), the Issuers shall
not have any further obligation to conduct the Exchange Offer or the
Private Exchange under this Section 2.
3. Shelf Registration
If a Shelf Notice is delivered as contemplated by Section
2(c), then:
(a) (Initial Shelf Registration. The Issuers shall as promptly
as reasonably practicable prepare and file with the SEC a Registration
Statement for an offering to be made on a continuous basis pursuant to
Rule 415 covering all of the Registrable Securities (the "Initial Shelf
Registration"). If the Issuers shall have not yet filed an Exchange
Offer, the Issuers shall use their reasonable best efforts to file with
the SEC the Initial Shelf Registration on or prior to the Filing Date.
Otherwise, the Issuers shall use their reasonable best efforts to file
with the SEC the Initial Shelf Registration within 45 days of the
delivery of the Shelf Notice. The Initial Shelf Registration shall be
on Form S-1 or another appropriate form permitting registration of such
Registrable Securities for resale by such holders in the manner or
manners designated by them (including, without limitation, one or more
underwritten offerings). The Issuers shall not permit any securities
other than the Registrable Securities to be included in the Initial
Shelf Registration or any Subsequent Shelf Registration. The Issuers
shall use their reasonable best efforts to cause the Initial Shelf
Registration to be declared effective under the Securities Act on or
prior to the 90th day after the filing thereof with the Commission and
to keep the Initial Shelf Registration continuously effective under the
Securities Act until the date on which the Securities are no longer
"restricted securities" (within the meaning of Rule 144 under the Act)
(subject to extension pursuant to the last paragraph of Section 5
hereof) (the "Effectiveness Period"), or such shorter period ending
when (i) all Registrable Securities covered by the Initial Shelf
Registration have been sold in the manner set forth and as contemplated
in the Initial Shelf Registration, (ii) the second anniversary of the
Closing Date or (iii) a Subsequent Shelf Registration covering all of
the Registrable Securities has been declared effective under the
Securities Act.
(b) Subsequent Shelf Registrations. If the Initial Shelf
Registration or any Subsequent Shelf Registration ceases to be
effective for any reason at any time during the Effectiveness Period
(other than because of the sale of all of the securities registered
thereunder), the Issuers shall use their reasonable best efforts to
obtain the prompt withdrawal of any order suspending the effectiveness
thereof, and in any event shall within 45 days of such cessation of
effectiveness amend the Shelf Registration in a manner reasonably
expected to obtain the withdrawal of the order suspending the
effectiveness thereof, or file an additional "shelf" Registration
Statement pursuant to Rule 415 covering all of the Registrable
Securities (a "Subsequent Shelf Registration"). If a Subsequent Shelf
Registration is filed, the Issuers shall use their reasonable best
efforts to cause the Subsequent Shelf Registration to be declared
effective as soon as practicable after such filing and to keep such
Registration Statement continuously effective for a period equal to the
number of days in the Effectiveness Period less the aggregate number of
days during which the Initial Shelf Registration or any Subsequent
Shelf Registration was previously continuously effective. As used
herein the term "Shelf Registration" means the Initial Shelf
Registration and any Subsequent Shelf Registration.
(c) Supplements and Amendments. The Issuers shall promptly
supplement and amend the Shelf Registration if required by the rules,
regulations or instructions applicable to the registration form used
for such Shelf Registration, if required by the Securities Act, or if
reasonably requested by the Holders of a majority in aggregate
principal amount of the Registrable Securities covered by such
Registration Statement or by any underwriter of such Registrable
Securities.
4. Additional Interest
(a) The Issuers and the Initial Purchasers agree that the
Holders of Registrable Securities will suffer damages if the Issuers
fail to fulfill their obligations under Section 2 or Section 3 hereof
and that it would not be feasible to ascertain the extent of such
damages with precision. Accordingly, the Issuers, jointly and
severally, agree to pay, as liquidated damages, additional interest on
the Registrable Securities ("Additional Interest") under the
circumstances and to the extent set forth below (each of which shall be
given independent effect and shall not be duplicative except as
otherwise provided below):
(i) if neither the Exchange Registration Statement nor the Initial
Shelf Registration has been filed on or prior to the Filing Date,
Additional Interest shall accrue on the Registrable Securities over and
above the stated interest at a rate of .25% per annum for the first 90
days immediately following the Filing Date, such Additional Interest
rate increasing by an additional .25% per annum at the beginning of
each subsequent 90-day period;
(ii) if neither the Exchange Registration Statement nor the Initial
Shelf Registration is declared effective by the SEC on or prior to the
Effectiveness Date, Additional Interest shall be accrued on the
Registrable Securities included or which should have been included in
such Registration Statement over and above the stated interest at a
rate of .25% per annum for the first 90 days immediately following the
day after the Effectiveness Date, such Additional Interest rate
increasing by an additional .25% per annum at the beginning of each
subsequent 90-day period; and
(iii) if (A) the Company has not exchanged Exchange Securities for all
Securities validly tendered in accordance with the terms of the
Exchange Offer on or prior to the Consummation Date or (B) the Exchange
Registration Statement ceases to be effective at any time prior to the
time that the Exchange Offer is consummated or (C) if applicable, the
Shelf Registration has been declared effective and such Shelf
Registration ceases to be effective at any time during the
Effectiveness Period, then Additional Interest shall be accrued on the
Registrable Securities (over and above any interest otherwise payable
on the Registrable Securities) at a rate of .25% per annum for the
first 90 days commencing on the (x) 226th day after the Issue Date, in
the case of (A) above, or (y) the day the Exchange Registration
Statement ceases to be effective in the case of (B) above, or (z) the
day such Shelf Registration ceases to be effective in the case of (C)
above, such Additional Interest rate increasing by an additional .25%
per annum at the beginning of each such subsequent 90-day period;
provided, however, that the Additional Interest rate on the Registrable
Securities may not exceed at any one time in the aggregate 1.0% per annum; and
provided, further, that (1) upon the filing of the Exchange Registration
Statement or a Shelf Registration as required hereunder (in the case of clause
(i) of this Section 4(a)), (2) upon the effectiveness of the Exchange
Registration Statement or the Shelf Registration as required hereunder (in the
case of clause (ii) of this Section 4(a)), or (3) upon the exchange of Exchange
Securities for all Notes tendered (in the case of clause (iii)(A) of this
Section 4(a)), or upon the effectiveness of the Exchange Registration Statement
which had ceased to remain effective (in the case of (iii)(B) of this Section
4(a)), or upon the effectiveness of the Shelf Registration which had ceased to
remain effective (in the case of (iii)(C) of this Section 4(a)), Additional
Interest on the Registrable Securities as a result of such clause (or the
relevant subclause thereof), as the case may be, shall cease to accrue. It is
understood and agreed that, notwithstanding any provision to the contrary, so
long as any Registrable Security is then covered by an effective Shelf
Registration Statement, no Additional Interest shall accrue on such Registrable
Security.
(b) The Company shall notify the Trustee within one business
day after each and every date on which an event occurs in respect of
which Additional Interest is required to be paid (an "Event Date"). The
Issuers shall pay the Additional Interest due on the Registrable
Securities by depositing with the Trustee, in trust, for the benefit of
the Holders thereof, on or before the applicable semi-annual interest
payment date, immediately available funds in sums sufficient to pay the
Additional Interest then due to Holders of Registrable Securities. The
Additional Interest amount due shall be payable on each interest
payment date to the record Holder of Registrable Securities entitled to
receive the interest payment to be made on such date as set forth in
the Indenture. The amount of Additional Interest will be determined by
multiplying the applicable Additional Interest rate by the principal
amount of the affected Registrable Securities of such Holders,
multiplied by a fraction, the numerator of which is the number of days
such Additional Interest rate was applicable during such period
(determined on the basis of a 360-day year comprised of twelve 30-day
months and, in the case of a partial month, the actual number of days
elapsed including the first day but excluding the last day of such
period), and, the denominator of which is 360. Each obligation to pay
Additional Interest shall be deemed to accrue immediately following the
occurrence of the applicable Event Date. The parties hereto agree that
the Additional Interest provided for in this Section 4 constitutes a
reasonable estimate of the damages that may be incurred by Holders of
Registrable Securities by reason of the failure of a Shelf Registration
or Exchange Offer to be filed or declared effective, or a Shelf
Registration to remain effective, as the case may be, in accordance
with this Section 4.
5. Registration Procedures
In connection with the registration of any Registrable
Securities pursuant to Sections 2 or 3 hereof, the Issuers shall effect such
registrations to permit the sale of such Registrable Securities in accordance
with the intended method or methods of disposition thereof, and pursuant thereto
the Issuers shall:
(a) Use their reasonable best efforts to prepare and file with
the SEC, as soon as practicable after the date hereof but in any event
prior to the Filing Date in the case of the Exchange Registration
Statement and the 45th day following the Consummation Date in the case
of the Shelf Registration Statement, a Registration Statement or
Registration Statements as prescribed by Section 2 or 3, and to use
their reasonable best efforts to cause each such Registration Statement
to become effective and remain effective as provided herein, provided
that, if (1) such filing is pursuant to Section 3, or (2) a Prospectus
contained in an Exchange Registration Statement filed pursuant to
Section 2 is required to be delivered under the Securities Act by any
Participating Broker-Dealer who seeks to sell Exchange Securities
during the Applicable Period, before filing any Registration Statement
or Prospectus or any amendments or supplements thereto, the Issuers
shall upon written request furnish to and afford the Holders of the
Registrable Securities (which in the case of Registrable Securities in
the form of global certificates shall be The Depository Trust Company
("DTC")) and each such Participating Broker-Dealer, as the case may be,
covered by such Registration Statement, their counsel and the managing
underwriters, if any, a reasonable opportunity to review copies of all
such documents (including copies of any documents to be incorporated by
reference therein and all exhibits thereto) proposed to be filed.
(b) Prepare and file with the SEC such amendments and
post-effective amendments to each Shelf Registration or Exchange
Registration Statement, as the case may be, as may be necessary to keep
such Registration Statement continuously effective for the
Effectiveness Period or the Applicable Period, as the case may be;
cause the related Prospectus to be supplemented by any required
Prospectus supplement, and as so supplemented to be filed pursuant to
Rule 424 (or any similar provisions then in force) under the Securities
Act; and comply with the provisions of the Securities Act, the Exchange
Act and the rules and regulations of the SEC promulgated thereunder
applicable to it with respect to the disposition of all securities
covered by such Registration Statement as so amended or in such
Prospectus as so supplemented and with respect to the subsequent resale
of any securities being sold by a Participating Broker-Dealer covered
by any such Prospectus; the Issuers shall not be deemed to have used
their reasonable best efforts to keep a Registration Statement
effective during the Applicable Period if either of them voluntarily
takes any action that would result in selling Holders of the
Registrable Securities covered thereby or Participating Broker-Dealers
seeking to sell Exchange Securities not being able to sell such
Registrable Securities or such Exchange Securities during that period
unless such action is required by applicable law or unless the Issuers
comply with this Agreement, including without limitation, the
provisions of paragraph 5(k) hereof and the last paragraph of this
Section 5.
(c) If (1) a Shelf Registration is filed pursuant to Section 3,
or (2) a Prospectus contained in an Exchange Registration Statement
filed pursuant to Section 2 is required to be delivered under the
Securities Act by any Participating Broker-Dealer who seeks to sell
Exchange Securities during the Applicable Period, notify the selling
Holders of Registrable Securities, or each such Participating
Broker-Dealer, as the case may be, their counsel and the managing
underwriters, if any, who have provided the Issuers with their names
and addresses promptly (but in any event within two business days), and
confirm such notice in writing, (i) when a Prospectus or any Prospectus
supplement or post-effective amendment has been filed, and, with
respect to a Registration Statement or any post-effective amendment,
when the same has become effective under the Securities Act (including
in such notice a written statement that any Holder may, upon request,
obtain, without charge, one conformed copy of such Registration
Statement or post-effective amendment including financial statements
and schedules, documents incorporated or deemed to be incorporated by
reference and exhibits), (ii) of the issuance by the SEC of any stop
order suspending the effectiveness of a Registration Statement or of
any order preventing or suspending the use of any preliminary
prospectus or the initiation of any proceedings for that purpose, (iii)
of the receipt by the Company of any notification with respect to the
suspension of the qualification or exemption from qualification of a
Registration Statement or any of the Registrable Securities or the
Exchange Securities to be sold by any Participating Broker-Dealer for
offer or sale in any jurisdiction, or the initiation or threatening of
any proceeding for such purpose, (iv) of the happening of any event or
any information becoming known that makes any statement made in such
Registration Statement or related Prospectus or any document
incorporated or deemed to be incorporated therein by reference untrue
in any material respect or that requires the making of any changes in
such Registration Statement, Prospectus or documents so that, in the
case of the Registration Statement, it will not contain any untrue
statement of a material fact or omit to state any material fact
required to be stated therein or necessary to make the statements
therein not misleading, and that in the case of the Prospectus, it will
not contain any untrue statement of a material fact or omit to state
any material fact required to be stated therein or necessary to make
the statements therein, in the light of the circumstances under which
they were made, not misleading, and (v) of the Company's reasonable
determination that a post-effective amendment to a Registration
Statement would be appropriate.
(d) If (1) a Shelf Registration is filed pursuant to Section 3,
or (2) a Prospectus contained in an Exchange Registration Statement
filed pursuant to Section 2 is required to be delivered under the
Securities Act by any Participating Broker-Dealer who seeks to sell
Exchange Securities during the Applicable Period, use their reasonable
best efforts to prevent the issuance of any order suspending the
effectiveness of a Registration Statement or of any order preventing or
suspending the use of a Prospectus or suspending the qualification (or
exemption from qualification) of any of the Registrable Securities or
the Exchange Securities to be sold by any Participating Broker-Dealer,
for sale in any jurisdiction, and, if any such order is issued, to use
their reasonable best efforts to obtain the withdrawal of any such
order at the earliest possible moment.
(e) If a Shelf Registration is filed pursuant to Section 3 and
if requested by the managing underwriters, if any, or the Holders of a
majority in aggregate principal amount of the Registrable Securities
being sold in connection with an underwritten offering, (i) promptly
incorporate in a prospectus supplement or post-effective amendment such
information as the managing underwriters, if any, or such Holders or
counsel reasonably request to be included therein, or (ii) make all
required filings of such prospectus supplement or such post-effective
amendment as soon as practicable after the Company has received
notification of the matters to be incorporated in such prospectus
supplement or post-effective amendment provided that the Company shall
not be required to take any action pursuant to this Section 5(e) that
would, in the opinion of counsel for the Company, violate applicable
law.
(f) If (1) a Shelf Registration is filed pursuant to Section
3, or (2) a Prospectus contained in an Exchange Registration Statement
filed pursuant to Section 2 is required to be delivered under the
Securities Act by any Participating Broker-Dealer who seeks to sell
Exchange Securities during the Applicable Period, furnish to each
selling Holder of Registrable Securities and to each such Participating
Broker-Dealer who so requests and to counsel and each managing
underwriter, if any, without charge, one conformed copy of the
Registration Statement or Statements and each post-effective amendment
thereto, including financial statements and schedules, and if
requested, all documents incorporated or deemed to be incorporated
therein by reference and all exhibits.
(g) If (1) a Shelf Registration is filed pursuant to Section
3, or (2) a Prospectus contained in an Exchange Registration Statement
filed pursuant to Section 2 is required to be delivered under the
Securities Act by any Participating Broker-Dealer who seeks to sell
Exchange Securities during the Applicable Period, deliver to each
selling Holder of Registrable Securities, or each such Participating
Broker-Dealer, as the case may be, their counsel, and the underwriters,
if any, without charge, as many copies of the Prospectus or
Prospectuses (including each form of preliminary prospectus) and each
amendment or supplement thereto and any documents incorporated by
reference therein as such Persons may reasonably request; and, subject
to the last paragraph of this Section 5, the Issuers hereby consent to
the use of such Prospectus and each amendment or supplement thereto by
each of the selling holders of Registrable Securities or each such
Participating Broker-Dealer, as the case may be, and the underwriters
or agents, if any, and dealers (if any), in connection with the
offering and sale of the Registrable Securities covered by or the sale
by Participating Broker-Dealers of the Exchange Securities pursuant to
such Prospectus and any amendment or supplement thereto.
(h) Prior to any public offering of Registrable Securities or
any delivery of a Prospectus contained in the Exchange Registration
Statement by any Participating Broker-Dealer who seeks to sell Exchange
Securities during the Applicable Period, to use their reasonable best
efforts to register or qualify, and to cooperate with the selling
Holders of Registrable Securities or each such Participating
Broker-Dealer, as the case may be, the underwriters, if any, and their
respective counsel in connection with the registration or qualification
(or exemption from such registration or qualification) of such
Registrable Securities for offer and sale under the securities or Blue
Sky laws of such jurisdictions within the United States as any selling
Holder, Participating Broker-Dealer, or the managing underwriters
reasonably request in writing, provided that where Exchange Securities
held by Participating Broker-Dealers or Registrable Securities are
offered other than through an underwritten offering, the Issuers agree,
if requested, to cause their counsel to perform Blue Sky investigations
and file registrations and qualifications required to be filed pursuant
to this Section 5(h); keep each such registration or qualification (or
exemption therefrom) effective during the period such Registration
Statement is required to be kept effective and do any and all other
reasonable acts or things necessary or advisable to enable the
disposition in such jurisdictions of the Exchange Securities held by
Participating Broker-Dealers or the Registrable Securities covered by
the applicable Registration Statement, provided that neither of the
Issuers shall be required to (A) qualify generally to do business in
any jurisdiction where it is not then so qualified, (B) take any action
that would subject it to general service of process in any such
jurisdiction where it is not then so subject or (C) subject itself to
taxation in excess of a nominal dollar amount in any such jurisdiction.
(i) If a Shelf Registration is filed pursuant to Section 3,
reasonably cooperate with the selling Holders of Registrable Securities
and the managing underwriters, if any, to facilitate the timely
preparation and delivery of certificates representing Registrable
Securities to be sold, which certificates shall not bear any
restrictive legends and shall be in a form eligible for deposit with
DTC; and enable such Registrable Securities to be registered in such
names as the managing underwriter or underwriters, if any, or Holders
may request at least two business days prior to any sale of Registrable
Securities.
(j) Use their reasonable best efforts to cause the Registrable
Securities covered by the Registration Statement to be registered with
or approved by such other United States governmental agencies or
authorities of the United States as may be necessary to enable the
seller or sellers thereof or the underwriters, if any, to consummate
the disposition of such Registrable Securities, except as may be
required solely as a consequence of the nature of such selling
Holder's business, in which case the Issuers will cooperate in all
reasonable respects with the filing of such Registration Statement and
the granting of such approvals.
(k) If (1) a Shelf Registration is filed pursuant to Section
3, or (2) a Prospectus contained in an Exchange Registration Statement
filed pursuant to Section 2 is required to be delivered under the
Securities Act by any Participating Broker-Dealer who seeks to sell
Exchange Securities during the Applicable Period, upon the occurrence
of any event contemplated by paragraph 5(c)(iv) or 5(c)(v) above, as
promptly as practicable prepare and (subject to Section 5(a) above)
file with the SEC, solely at the expense of the Issuers, a supplement
or post-effective amendment to the Registration Statement or a
supplement to the related Prospectus or any document incorporated or
deemed to be incorporated therein by reference, or file any other
required document so that, as thereafter delivered to the purchasers
of the Registrable Securities being sold thereunder or to the
purchasers of the Exchange Securities to whom such Prospectus will be
delivered by a Participating Broker-Dealer, any such Prospectus will
not contain an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which they
were made, not misleading.
(l) Use their reasonable best efforts to cause the Registrable
Securities covered by a Registration Statement or the Exchange
Securities, as the case may be, to be rated, or, if previously rated,
updated, with the appropriate rating agencies, if so requested by the
Holders of a majority in aggregate principal amount of Registrable
Securities covered by such Registration Statement or the Exchange
Securities, as the case may be, or the managing underwriters, if any.
(m) Prior to the effective date of the first Registration
Statement relating to the Registrable Securities, (i) provide the
Trustee with printed certificates for the Registrable Securities in a
form eligible for deposit with DTC and (ii) provide a CUSIP number for
the Registrable Securities.
(n) Use their best efforts to cause all Registrable Securities
covered by such Registration Statement or the Exchange Securities, as
the case may be, to be (i) listed on each securities exchange, if any,
on which similar securities issued by the Company are then listed, or
(ii) authorized to be quoted on the National Association of Securities
Dealers Automated Quotation System ("NASDAQ") or the National Market
System of NASDAQ if similar securities of the Company are so
authorized.
(o) In connection with an underwritten offering of Registrable
Securities pursuant to a Shelf Registration, enter into an
underwriting agreement as is customary in underwritten offerings and
take all such other actions as are reasonably requested by the
managing underwriters in order to expedite or facilitate the
registration or the disposition of such Registrable Securities, and in
such connection, (i) make such representations and warranties to the
underwriters, with respect to the business of the Company and its
subsidiaries, if any, and the Registration Statement, Prospectus and
documents, if any, incorporated or deemed to be incorporated by
reference therein, in each case, as are customarily made by issuers to
underwriters in underwritten offerings, and confirm the same if and
when reasonably requested; (ii) obtain an opinion of counsel to the
Issuers and updates thereof in form and substance reasonably
satisfactory to the managing underwriters (if any), addressed to the
underwriters covering the matters customarily covered in opinions
requested in underwritten offerings and such other matters as may be
reasonably requested by underwriters; (iii) obtain "cold comfort"
letters and updates thereof in form and substance reasonably
satisfactory to the managing underwriters from the independent
certified public accountants of the Company (and, if necessary, any
other independent certified public accountants of any subsidiary of
the Company or of any business acquired by the Company for which
financial statements and financial data are, or are required to be,
included in the Registration Statement), addressed to each of the
underwriters, such letters to be in customary form and covering
matters of the type customarily covered in "cold comfort" letters in
connection with underwritten offerings and such other matters as may
be reasonably requested by underwriters; and (iv) if an underwriting
agreement is entered into, the same shall contain indemnification
provisions and procedures no less favorable than those set forth in
Section 7 hereof (or such other provisions and procedures acceptable
to Holders of a majority in aggregate principal amount of Registrable
Securities covered by such Registration Statement and the managing
underwriters or agents) with respect to all parties to be indemnified
pursuant to said Section provided that the Company shall not be
required to enter into any underwritten offering more than once with
respect to all Registrable Securities and provided further that the
Company may delay entering into an underwritten offering until the
consummation of any underwritten offering the Company shall have
undertaken.
(p) If (1) a Shelf Registration is filed pursuant to Section
3, or (2) a Prospectus contained in an Exchange Registration Statement
filed pursuant to Section 2 is required to be delivered under the
Securities Act by any Participating Broker-Dealer who seeks to sell
Exchange Securities during the Applicable Period, make available for
inspection by any selling Holder of such Registrable Securities being
sold, or each such Participating Broker-Dealer, as the case may be, any
underwriter participating in any such disposition of Registrable
Securities, if any, and any attorney, accountant or other agent
retained by any such selling holder or each such Participating
Broker-Dealer, as the case may be, or underwriter (collectively, the
"Inspectors"), at the offices where normally kept, during reasonable
business hours, all financial and other records, pertinent corporate
documents and properties of the Company and its subsidiaries, if any
(collectively, the "Records"), as shall be reasonably necessary to
enable them to exercise any applicable due diligence responsibilities,
and cause the officers, directors and employees of the Company and its
subsidiaries, if any to supply all information in each case reasonably
requested by any such Inspector in connection with such Registration
Statement; provided that such Inspectors shall first agree in writing
with the Company that any information reasonably designated by the
Company in good faith in writing as confidential at the time of
delivery of such information shall be kept confidential by such
Inspector (and such Inspector shall enter into reasonable
confidentiality agreements, and observe other customary confidentiality
procedures, as the Company may reasonably request), except to the
extent that (i) the disclosure of such Records is necessary to avoid or
correct a misstatement or omission in such Registration Statement, (ii)
the release of such Records is ordered pursuant to a subpoena or other
order from a court of competent jurisdiction or (iii) the information
in such Records has been made generally available to the public. Each
selling Holder of such Registrable Securities and each such
Participating Broker-Dealer will be required to agree that information
obtained by it as a result of such inspections shall be deemed
confidential and shall not be used by it as the basis for any market
transactions in the securities of the Company unless and until such is
made generally available to the public. Each selling Holder of such
Registrable Securities and each such Participating Broker-Dealer will
be required to further agree that it will, upon learning that
disclosure of such Records is sought in a court of competent
jurisdiction, give notice to the Company and allow the Company at its
expense to undertake appropriate action to prevent disclosure of the
Records deemed confidential.
(q) Provide an indenture trustee for the Registrable
Securities or the Exchange Securities, as the case may be, and cause
the Indenture or the trust indenture provided for in Section 2(a), as
the case may be, to be qualified under the TIA not later than the
effective date of the Exchange Offer or the first Registration
Statement relating to the Registrable Securities; and in connection
therewith, cooperate with the trustee under any such indenture and the
holders of the Registrable Securities, to effect such changes to such
indenture as may be required for such indenture to be so qualified in
accordance with the terms of the TIA; and execute, and use their
reasonable best efforts to cause such trustee to execute, all documents
as may be required to effect such changes, and all other forms and
documents required to be filed with the SEC to enable such indenture to
be so qualified in a timely manner.
(r) Comply in all material respects with all applicable rules
and regulations of the SEC and make generally available to their
securityholders earning statements satisfying the provisions of Section
11(a) of the Securities Act and Rule 158 thereunder (or any similar
rule promulgated under the Securities Act) no later than 90 days after
the end of any 12-month period (i) commencing at the end of any fiscal
quarter in which Registrable Securities are sold to underwriters in a
firm commitment or best efforts underwritten offering and (ii) if not
sold to underwriters in such an offering, commencing on the first day
of the first fiscal quarter of the Company after the effective date of
a Shelf Registration Statement, which statements shall cover said
12-month periods.
(s) If an Exchange Offer or a Private Exchange is to be
consummated, upon delivery of the Registrable Securities by Holders to
the Company (or to such other Person as directed by the Company) in
exchange for the Exchange Securities or the Private Exchange
Securities, as the case may be, the Company shall mark, or caused to be
marked, on such Registrable Securities that such Registrable Securities
are being cancelled in exchange for the Exchange Securities or the
Private Exchange Securities, as the case may be; in no event shall such
Registrable Securities be marked as paid or otherwise satisfied.
(t) Reasonably cooperate with each seller of Registrable
Securities covered by any Registration Statement and each underwriter,
if any, participating in the disposition of such Registrable Securities
and their respective counsel in connection with any filings required to
be made with the National Association of Securities Dealers, Inc. (the
"NASD").
(u) Use their reasonable best efforts to take all other steps
necessary to effect the registration of the Registrable Securities
covered by a Registration Statement contemplated hereby.
(v) Upon consummation of an Exchange Offer or a Private
Exchange, obtain an opinion of counsel to the Company and the
Guarantor, in a form customary for underwritten offerings of debt
securities similar to the Notes, addressed to the Trustee solely for
the benefit of the Trustee, and not for the benefit of Holders of
Registrable Securities participating in the Exchange Offer or the
Private Exchange, as the case may be, and which includes an opinion
that (i) each of the Company and the Guarantors has duly authorized,
executed and delivered the Exchange Securities and Private Exchange
Securities and the related indenture and (ii) each of the Exchange
Securities or the Private Exchange Securities, as the case may be, and
related indenture constitute a legal, valid and binding obligation of
each of the Company and the Guarantors, enforceable against each of the
Company and the Guarantors in accordance with its respective terms
(with customary exceptions).
The Issuers may require each seller of Registrable Securities
or Participating Broker-Dealer as to which any registration is being effected to
furnish to the Issuers such information regarding such seller or Participating
Broker-Dealer and the distribution of such Registrable Securities or Exchange
Securities to be sold by such Participating Broker-Dealer, as the case may be,
as the Issuers may, from time to time, reasonably request. The Issuers may
exclude from such registration the Registrable Securities of any seller or
Participating Broker-Dealer who unreasonably fails to furnish such information
within a reasonable time after receiving such request. Each seller as to which
any Shelf Registration is being effected is deemed to agree to furnish promptly
to the Issuers all information required to be disclosed in order to make the
information previously furnished to the Issuers by such seller not materially
misleading.
Each Holder of Registrable Securities and each Participating
Broker-Dealer agrees by acquisition of such Registrable Securities or Exchange
Securities to be sold by such Participating Broker-Dealer, as the case may be,
that, upon receipt of any notice from the Company of the happening of any event
of the kind described in Section 5(c)(ii), 5(c)(iii), 5(c)(iv), or 5(c)(v), such
Holder will forthwith discontinue disposition of such Registrable Securities
covered by such Registration Statement or Prospectus or Exchange Securities to
be sold by such Participating Broker-Dealer, as the case may be, until such
holder's receipt of the copies of the supplemented or amended Prospectus
contemplated by Section 5(k), or until it is advised in writing (the "Advice")
by the Company that the use of the applicable Prospectus may be resumed, and has
received copies of any amendments or supplements thereto. In the event the
Company shall give any such notice, each of the Effectiveness Period and the
Applicable Period shall be extended by the number of days during such periods
from and including the date of the giving of such notice to and including the
date when each seller of Registrable Securities covered by such Registration
Statement or Exchange Securities to be sold by such Participating Broker-Dealer,
as the case may be, shall have received (x) the copies of the supplemented or
amended Prospectus contemplated by Section 5(k) or (y) the Advice.
6. Registration Expenses
(a) All fees and expenses incident to the performance of or
compliance with this Agreement by the Issuers shall be borne by the
Issuers, jointly and severally, whether or not the Exchange Offer or a
Shelf Registration is filed or becomes effective, including, without
limitation, (i) all registration and filing fees (including, without
limitation, (A) fees with respect to filings required to be made with
the NASD in connection with an underwritten offering and (B) fees and
expenses of compliance with state securities or Blue Sky laws
(including, without limitation, reasonable fees and disbursements of
counsel in connection with Blue Sky qualifications of the Registrable
Securities or Exchange Securities and determination of the eligibility
of the Registrable Securities or Exchange Securities for investment
under the laws of such jurisdictions in the United States (x) where the
holders of Registrable Securities are located, in the case of the
Exchange Securities, or (y) as provided in Section 5(h), in the case of
Registrable Securities or Exchange Securities to be sold by a
Participating Broker-Dealer during the Applicable Period)), (ii)
printing expenses (including, without limitation, expenses of printing
certificates for Registrable Securities or Exchange Securities in a
form eligible for deposit with DTC and of printing prospectuses if the
printing of prospectuses is requested by the managing underwriters, if
any, or, in respect of Registrable Securities or Exchange Securities to
be sold by any Participating Broker-Dealer during the Applicable
Period, by the Holders of a majority in aggregate principal amount of
the Registrable Securities included in any Registration Statement or of
such Exchange Securities, as the case may be), (iii) messenger,
telephone and delivery expenses, (iv) fees and disbursements of counsel
for the Issuers and fees and disbursements of special counsel for the
sellers of Registrable Securities (subject to the provisions of Section
6(b)), (v) fees and disbursements of all independent certified public
accountants referred to in Section 5(o)(iii) (including, without
limitation, the expenses of any special audit and "cold comfort"
letters required by or incident to such performance), (vi) rating
agency fees, (vii) Securities Act liability insurance, if the Issuers
desire such insurance, (viii) fees and expenses of all other Persons
retained by either of the Issuers, (ix) internal expenses of the
Issuers (including, without limitation, all salaries and expenses of
officers and employees of the Issuers performing legal or accounting
duties), (x) the expense of any annual audit, (xi) the fees and
expenses incurred in connection with the listing of the securities to
be registered on any securities exchange, if applicable, (xii) the
expenses relating to printing, word processing and distributing all
Registration Statements, underwriting agreements, securities sales
agreements, indentures and any other documents necessary in order to
comply with this Agreement, and (xiii) fees and expenses of the Trustee
(including reasonable fees and expenses of counsel to the Trustee).
(b) In connection with any Shelf Registration hereunder, the
Issuers shall reimburse the Holders of the Registrable Securities being
registered in such registration for the fees and disbursements of not
more than one counsel (in addition to appropriate local counsel) chosen
by the Holders of a majority in aggregate principal amount of the
Registrable Securities to be included in such Registration Statement.
Such Holders shall be responsible for any and all other out-of-pocket
expenses of the Holders of Registrable Securities incurred in
connection with the registration of the Registrable Securities.
7. Indemnification
The Issuers agree, jointly and severally, to indemnify and
hold harmless each Holder of Registrable Securities and each Participating
Broker-Dealer selling Exchange Securities during the Applicable Period, the
officers and directors of each such person, and each person, if any, who
controls any such person within the meaning of either Section 15 of the
Securities Act or Section 20 of the Exchange Act (each, a "Participant"), from
and against any and all losses, claims, damages and liabilities (including,
without limitation, the reasonable legal fees and other expenses actually
incurred in connection with any suit, action or proceeding or any claim
asserted) caused by any untrue statement or alleged untrue statement of a
material fact contained in any Registration Statement (or any amendment thereto)
or Prospectus (as amended or supplemented if the Issuers shall have furnished
any amendments or supplements thereto) or any preliminary prospectus, or caused
by any omission or alleged omission to state therein a material fact required to
be stated therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading, except insofar as such
losses, claims, damages or liabilities are caused by any untrue statement or
omission or alleged untrue statement or omission made in reliance upon and in
conformity with information relating to any Participant furnished to the Company
in writing by such Participant expressly for use therein; provided that the
foregoing indemnity with respect to any preliminary prospectus shall not inure
to the benefit of any Participant (or to the benefit of any person controlling
such Participant) from whom the person asserting any such losses, claims,
damages or liabilities purchased Registrable Securities or Exchange Securities
if such untrue statement or omission or alleged untrue statement or omission
made in such preliminary prospectus is eliminated or remedied in the related
Prospectus (as amended or supplemented if the Issuers shall have furnished any
amendments or supplements thereto) and a copy of the related Prospectus (as so
amended or supplemented) shall not have been furnished to such person at or
prior to the sale of such Registrable Securities or Exchange Securities, as the
case may be, to such person.
Each Participant will be required to agree, severally and not
jointly, to indemnify and hold harmless the Issuers, their directors, their
officers and each person who controls the Issuers within the meaning of Section
15 of the Securities Act or Section 20 of the Exchange Act to the same extent as
the foregoing indemnity from the Issuers to each Participant, but only with
reference to information relating to such Participant furnished to the Company
in writing by such Participant expressly for use in any Registration Statement
or Prospectus, any amendment or supplement thereto, or any preliminary
prospectus. The liability of any Participant under this paragraph shall in no
event exceed the proceeds received by such Participant from sales of Registrable
Securities giving rise to such obligations.
If any suit, action, proceeding (including any governmental or
regulatory investigation), claim or demand shall be brought or asserted against
any person in respect of which indemnity may be sought pursuant to either of the
two preceding paragraphs, such person (the "Indemnified Person") shall promptly
notify the person against whom such indemnity may be sought (the "Indemnifying
Person") in writing, and the Indemnifying Person, upon request of the
Indemnified Person, shall retain counsel reasonably satisfactory to the
Indemnified Person to represent the Indemnified Person and any others the
Indemnifying Person may designate in such proceeding and shall pay the
reasonable fees and expenses actually incurred by such counsel related to such
proceeding, provided that the failure to so notify the Indemnifying Person shall
not relieve it of any obligation or liability which it may have hereunder or
otherwise (unless and only to the extent that such failure directly results in
the loss or compromise of any material rights or defenses). In any such
proceeding, any Indemnified Person shall have the right to retain its own
counsel, but the fees and expenses of such counsel shall be at the expense of
such Indemnified Person unless (i) the Indemnifying Person and the Indemnified
Person shall have mutually agreed in writing to the contrary, (ii) the
Indemnifying Person has failed within a reasonable time to retain counsel
reasonably satisfactory to the Indemnified Person or (iii) the named parties in
any such proceeding (including any impleaded parties) include both the
Indemnifying Person and the Indemnified Person and representation of both
parties by the same counsel would be inappropriate due to actual or potential
differing interests between them. It is understood that the Indemnifying Person
shall not, in connection with any proceeding or related proceeding in the same
jurisdiction, be liable for the fees and expenses of more than one separate firm
(in addition to any local counsel) for all Indemnified Persons, and that all
such fees and expenses shall be reimbursed as they are incurred. Any such
separate firm for the Participants and such control persons of Participants
shall be designated in writing by Participants who sold a majority in interest
of Registrable Securities sold by all such Participants and any such separate
firm for the Issuers, their directors, their officers and such control persons
of the Issuers shall be designated in writing by the Company. The Indemnifying
Person shall not be liable for any settlement of any proceeding effected without
its written consent, but if settled with such consent or if there be a final
non-appealable judgment for the plaintiff, the Indemnifying Person agrees to
indemnify any Indemnified Person from and against any loss or liability by
reason of such settlement or judgment. Notwithstanding the foregoing sentence,
if at any time an Indemnified Person shall have requested in writing the chief
legal officer or, if no chief legal officer exists, to the chief executive
officer of an Indemnifying Person to reimburse the Indemnified Person for
reasonable fees and expenses actually incurred by counsel as contemplated by the
third sentence of this paragraph, the Indemnifying Person agrees that it shall
be liable for any settlement of any proceeding effected without its written
consent if (i) such settlement is entered into more than 60 days after receipt
by such Indemnifying Person of the aforesaid request and (ii) a second such
written request shall have been sent to and received by the chief legal officer
or, if no chief legal officer exists, by the chief executive officer of the
Indemnifying Person at least 30 days after the first such request but at least
15 days prior to the date of such settlement, and (iii) with respect to such
request, such Indemnifying Person shall not have reimbursed the Indemnified
Person for all reasonable fees and expenses of such counsel in accordance with
such request prior to the date of such settlement; provided, however, that the
Indemnifying Person shall not be liable for any settlement effected without its
consent pursuant to this sentence if the Indemnifying Party is contesting, in
good faith, the request for reimbursement. No Indemnifying Person shall, without
the prior written consent of the Indemnified Person, effect any settlement of
any pending or threatened proceeding in respect of which any Indemnified Person
is or could have been a party and indemnity could have been sought hereunder by
such Indemnified Person, unless such settlement includes an unconditional
release of such Indemnified Person from all liability on claims that are the
subject matter of such proceeding.
If the Indemnification provided for in the first and second
paragraphs of this Section 7 is unavailable to an Indemnified Person in respect
of any losses, claims, damages or liabilities referred to therein, then each
Indemnifying Person under such paragraph, in lieu of indemnifying such
Indemnified Person thereunder, shall contribute to the amount paid or payable by
such Indemnified Person as a result of such losses, claims, damages or
liabilities in such proportion as is appropriate to reflect the relative fault
of the Issuers on the one hand and the Participants on the other in connection
with the statements or omissions that resulted in such losses, claims, damages
or liabilities, as well as any other relevant equitable considerations. The
relative fault of the Issuers on the one hand and the Participants on the other
shall be determined by reference to, among other things, whether the untrue or
alleged untrue statement of a material fact or the omission or alleged omission
to state a material fact relates to information supplied by the Issuers or by
the Participants and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission.
The parties shall agree that it would not be just and
equitable if contribution pursuant to this Section 7 were determined by pro rata
allocation (even if the Participants were treated as one entity for such
purpose) or by any other method of allocation that does not take account of the
equitable considerations referred to in the immediately preceding paragraph. The
amount paid or payable by an Indemnified Person as a result of the losses,
claims, damages and liabilities referred to in the immediately preceding
paragraph shall be deemed to include, subject to the limitations set forth
above, any reasonable legal or other expenses actually incurred by such
Indemnified Person in connection with investigating or defending any such action
or claim. Notwithstanding the provisions of this Section 7, in no event shall a
Participant be required to contribute any amount in excess of the amount by
which proceeds received by such Participant from sales of Registrable Securities
exceeds the amount of any damages that such Participant has otherwise been
required to pay by reason of such untrue or alleged untrue statement or omission
or alleged omission. No person guilty of fraudulent misrepresentation (within
the meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation.
The indemnity and contribution agreements contained in this
Section 7 will be in addition to any liability which the Indemnifying Persons
may otherwise have to the Indemnified Persons referred to above.
8. Rule 144 and Rule 144A
Each of the Issuers shall use their reasonable best efforts to
file the reports required to be filed by it under the Securities Act and the
Exchange Act and the rules and regulations adopted by the SEC thereunder in a
timely manner and, if at any time the Issuers are not required to file such
reports, they shall, upon the request of any Holder of Registrable Securities,
make publicly available other information so long as necessary to permit sales
pursuant to Rule 144 and Rule 144A under the Securities Act. The Issuers shall
use their reasonable best efforts to take such further action as any Holder of
Registrable Securities may reasonably request, all to the extent required from
time to time to enable such holder to sell Registrable Securities without
registration under the Securities Act within the limitation of the exemptions
provided by (a) Rule 144 and Rule 144A under the Securities Act, as such Rules
may be amended from time to time, or (b) any similar rule or regulation
hereafter adopted by the SEC. Notwithstanding the foregoing, nothing in this
section 8 shall be deemed to require the Issuers to register any of their
securities pursuant to the Exchange Act.
9. Underwritten Registrations
If any of the Registrable Securities covered by any Shelf
Registration are to be sold in an underwritten offering, the investment banker
or investment bankers and manager or managers that will manage the offering will
be selected by the Holders of a majority in aggregate principal amount of such
Registrable Securities included in such offering and reasonably acceptable to
the Company.
No Holder of Registrable Securities may participate in any
underwritten registation hereunder unless such Holder (a) agrees to sell such
Holder's Registrable Securities on the basis provided in any underwriting
arrangements approved by the Persons entitled hereunder to approve such
arrangements and (b) completes and executes all questionnaires, powers of
attorney, indemnities, underwriting agreements and other documents required
under the terms of such underwriting arrangements.
10. Miscellaneous
(a) Remedies. In the event of a breach by the Issuers of any
of their obligations under this Agreement, each Holder of Registrable
Securities, in addition to being entitled to exercise all rights
provided herein, in the Indenture or, in the case of the Initial
Purchasers, in the Purchase Agreement or granted by law, including
recovery of damages, will be entitled to specific performance of its
rights under this Agreement. The Issuers agree that monetary damages
would not be adequate compensation for any loss incurred by reason of a
breach by them of any of the provisions of this Agreement and hereby
further agree that, in the event of any action for specific performance
in respect of such breach, they shall waive the defense that a remedy
at law would be adequate.
(b) No Inconsistent Agreements. The Issuers have not, as of
the date hereof, entered and shall not, after the date of this
Agreement, enter into any agreement with respect to any of their
securities that is inconsistent with the rights granted to the Holders
of Registrable Securities in this Agreement or otherwise conflicts with
the provisions hereof. The Issuers have not entered and will not enter
into any agreement with respect to any of their securities which will
grant to any Person piggy-back rights with respect to a Registration
Statement.
(c) Adjustments Affecting Registrable Securities. The Issuers
shall not, directly or indirectly, take any action with respect to the
Registrable Securities as a class that would adversely affect the
ability of the Holders of Registrable Securities to include such
Registrable Securities in a registration undertaken pursuant to this
Agreement.
(d) Amendments and Waivers. The provisions of this Agreement,
including the provisions of this sentence, may not be amended, modified
or supplemented, and waivers or consents to departures from the
provisions hereof may not be given, unless the Company has obtained the
written consent of Holders of at least a majority of the then
outstanding aggregate principal amount of Registrable Securities.
Notwithstanding the foregoing, a waiver or consent to depart from the
provisions hereof with respect to a matter that relates exclusively to
the rights of Holders of Registrable Securities whose securities are
being sold pursuant to a Registration Statement and that does not
directly or indirectly affect, impair, limit or compromise the rights
of other Holders of Registrable Securities may be given by Holders of
at least a majority in aggregate principal amount of the Registrable
Securities being sold by such Holders pursuant to such Registration
Statement, provided that the provisions of this sentence may not be
amended, modified or supplemented except in accordance with the
provisions of the immediately preceding sentence.
(e) Notices. All notices and other communications (including
without limitation any notices or other communications to the Trustee)
provided for or permitted hereunder shall be made in writing by
hand-delivery, registered first-class mail, next-day air courier or
telecopier:
(i) if to a Holder of Registrable Securities, at the most
current address given by the Trustee to the Company; and
(ii) if to the Issuers, at Tekni-Plex, Inc., 201 Industrial
Parkway, Somerville, New Jersey 08876, Attention: Dr. F. Patrick Smith;
with a copy to Davis Polk & Wardwell, 450 Lexington Avenue, New York,
New York 10017, Attention: Winthrop Conrad, Esq..
All such notices and communications shall be deemed to have
been duly given: when delivered by hand, if personally delivered; five
business days after being deposited in the mail, postage prepaid, if
mailed; one business day after being timely delivered to a next-day air
courier; and when receipt is acknowledged by the addressee, if
telecopied.
Copies of all such notices, demands or other communications
shall be concurrently delivered by the Person giving the same to the
trustee under the Indenture at the address specified in such Indenture.
(f) Successors and Assigns. This Agreement shall inure to the
benefit of and be binding upon the successors and assigns of each of
the parties, including without limitation and without the need for an
express assignment, subsequent Holders of Registrable Securities;
provided, that, with respect to the indemnity and contribution
agreements in Section 7, each Holder of Registrable Securities
subsequent to the Initial Purchaser shall be bound by the terms thereof
if such Holder elects to include Registrable Securities in a Shelf
Registration; provided, however, that this Agreement shall not inure to
the benefit of or be binding upon a successor or assign of a Holder
unless and to the extent such successor or assign holds Registrable
Securities.
(g) Counterparts. This Agreement may be executed in any number
of counterparts and by the parties hereto in separate counterparts,
each of which when so executed shall be deemed to be an original and
all of which taken together shall constitute one and the same
agreement.
(h) Headings. The headings in this Agreement are for
convenience of reference only and shall not limit or otherwise affect
the meaning hereof.
(i) Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, AS
APPLIED TO CONTRACTS MADE AND PERFORMED WITHIN THE STATE OF NEW YORK,
WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAW. EACH OF THE PARTIES
HERETO AGREES TO SUBMIT TO THE JURISDICTION OF THE COURTS OF THE STATE
OF NEW YORK IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO
THIS AGREEMENT.
(j) Severability. If any term, provision, covenant or
restriction of this Agreement is held by a court of competent
jurisdiction to be invalid, illegal, void or unenforceable, the
remainder of the terms, provisions, covenants and restrictions set
forth herein shall remain in full force and effect and shall in no way
be affected, impaired or invalidated, and the parties hereto shall use
their best efforts to find and employ an alternative means to achieve
the same or substantially the same result as that contemplated by such
term, provision, covenant or restriction. It is hereby stipulated and
declared to be the intention of the parties that they would have
executed the remaining terms, provisions, covenants and restrictions
without including any of such that may be hereafter declared invalid,
illegal, void or unenforceable.
(k) Entire Agreement. This Agreement is intended by the
parties as a final expression of their agreement, and is intended to be
a complete and exclusive statement of the agreement and understanding
of the parties hereto in respect of the subject matter contained
herein.
(l) Securities Held by the Company or Its Affiliates. Whenever
the consent or approval of holders of a specified percentage of
Registrable Securities is required hereunder, Registrable Securities
held by the Company or its affiliates (as such term is defined in Rule
405 under the Securities Act) shall not be counted in determining
whether such consent or approval was given by the Holders of such
required percentage.
(m) Subsidiary Guarantor a Party. Immediately upon the
designation of any subsidiary of the Company as a Guarantor (as defined
in the Indenture), the Company shall cause such Guarantor to guarantee
the obligations of the Company hereunder (including, without
limitation, the obligation to pay Additional Interest, if any, pursuant
to the terms of Section 4 hereof), by executing and delivering to the
Initial Purchaser an appropriate amendment to this Agreement.
IN WITNESS WHEREOF, the parties have executed this Agreement
as of the date first written above.
TEKNI-PLEX, INC.
By:_________________________________
Name:
Title:
PURETEC CORPORATION
PTI PLASTICS, INC.
OZITE CORPORATION
PLASTIC SPECIALTIES AND
TECHNOLOGIES, INC.
PLASTIC SPECIALTIES AND
TECHNOLOGIES INVESTMENTS, INC.
BURLINGTON RESINS, INC.
PURE TECH APR, INC.
MULTI CONTAINER RECYCLER, INC.
COAST RECYCLING NORTH, INC.
DISTRIBUTORS RECYCLING, INC.
REI DISTRIBUTORS, INC.
PURE TECH RECYCLING OF CALIFORNIA
ALUMET SMELTING CORP.
CONCONRE CORP.,
collectively, the Guarantors
By:_________________________________
Name:
Title:
J.P. MORGAN SECURITIES INC.
By:_________________________________
Name:
Title:
EXHIBIT 5.1
DAVIS POLK & WARDWELL
450 Lexington Avenue
New York, N.Y. 10017
212-450-4000
April __, 1998
Tekni-Plex, Inc.
201 Industrial Parkway
Somerville, New Jersey 08876
Ladies and Gentlemen:
We have acted as special counsel to Tekni-Plex, Inc. (the
"Company") in connection with the Company's offer (the "Exchange Offer") to
exchange its Series B 9 1/4% Senior Subordinated Notes due 2008 (the "Exchange
Notes") for any and all of its outstanding 9 1/4% Senior Subordinated Notes
due 2008 (the "Old Notes").
We have examined originals or copies, certified or otherwise
identified to our satisfaction, of such documents, corporate records,
certificates of public officials and other instruments as we have deemed
necessary or advisable for the purpose of rendering this opinion.
Upon the basis of the foregoing and assuming the due execution
and delivery of the Old Notes and the Exchange Notes, we are of the opinion
that the New Notes, when executed, authenticated and delivered in exchange for
the Old Notes in accordance with the Exchange Offer will be valid and binding
obligations of the Company enforceable in accordance with their terms, subject
to applicable bankruptcy, insolvency, reorganization, moratorium and similar
laws affecting creditors' rights generally and equitable principles.
We are members of the Bar of the State of New York and the
foregoing opinion is limited to the laws of the State of New York, the federal
laws of the United States of America and the General Corporation Law of the
State of Delaware.
We hereby consent to the filing of this opinion as an exhibit
to the Registration Statement relating to the Exchange Offer. We also consent
to the reference to us under the caption "Legal Matters" in the Prospectus
contained in such Registration Statement.
This opinion is rendered solely to you in connection with the
above matter. This opinion may not be relied upon by you for any other
purpose or relied upon by or furnished to any other person without our prior
written consent.
Very truly yours,
EXHIBIT 10.1
$205,000,000
CREDIT AGREEMENT,
dated as of
March 3, 1998,
among
Tekni-Plex, Inc.,
The Guarantors Party Hereto,
The Lenders Party Hereto,
The LC Issuing Banks Referred to Herein,
and
Morgan Guaranty Trust Company of New York,
as Agent
-------------------------------
J.P. Morgan Securities Inc.,
as Arranger
TABLE OF CONTENTS
Page
----
ARTICLE I
Definitions..................................................................1
Section 1.01. Definitions...................................................1
Section 1.02. Accounting Terms and Determinations..........................26
ARTICLE II
The Credits.................................................................26
Section 2.01. Commitments to Lend..........................................26
Section 2.02. Minimum Borrowing Amounts, etc.; Pro rata Borrowings.........28
Section 2.03. Method of Borrowing..........................................28
Section 2.04. Maturity of Loans............................................30
Section 2.05. Interest Rates...............................................30
Section 2.06. Method of Electing Interest Rates............................31
Section 2.07. Fees.........................................................32
Section 2.08. Optional Termination or Reduction of Commitments.............33
Section 2.09. Mandatory Reduction of Commitments...........................33
Section 2.10. Mandatory Repayments.........................................34
Section 2.11. Optional Prepayments.........................................39
Section 2.12. General Provisions as to Payments............................39
Section 2.13. Funding Losses...............................................40
Section 2.14. Computation of Interest and Fees.............................40
Section 2.15. Notes........................................................40
Section 2.16. Letters of Credit............................................42
ARTICLE III
Conditions..................................................................47
Section 3.01. Conditions Precedent to Initial Credit Events................47
Section 3.02. Conditions Precedent to All Credit Events....................52
ARTICLE IV
Representations and Warranties..............................................52
Section 4.01. Corporate Existence and Power................................53
Section 4.02. Corporate and Governmental Authorization; No Contravention...53
Section 4.03. Binding Effect...............................................53
Section 4.04. Financial Information........................................53
Section 4.05. Litigation...................................................54
Section 4.06. Compliance with ERISA........................................54
Section 4.07. Environmental Compliance.....................................54
Section 4.08. Taxes........................................................56
Section 4.09. Subsidiaries.................................................56
Section 4.10. No Regulatory Restrictions on Borrowing......................56
Section 4.11. Full Disclosure..............................................56
Section 4.12. Representations in PureTec Acquisition Documents True and
Correct.................................................57
Section 4.13. Representations of Guarantors................................57
Section 4.14. Intellectual Property........................................57
Section 4.15. Solvency.....................................................57
Section 4.16. Labor Relations..............................................58
Section 4.17. Subordinated Notes; etc......................................58
ARTICLE V
Covenants...................................................................58
Section 5.01. Information..................................................58
Section 5.02. Payment of Obligations.......................................60
Section 5.03. Maintenance of Property; Insurance...........................61
Section 5.04. Conduct of Business and Maintenance of Existence.............61
Section 5.05. Compliance with Laws.........................................62
Section 5.06. Inspection of Property, Books and Records....................62
Section 5.07. Mergers and Sales of Assets..................................62
Section 5.08. Use of Proceeds; Compliance with Margin Regulations..........63
Section 5.09. Negative Pledge..............................................63
Section 5.10. Limitation on Debt...........................................64
Section 5.11. Fixed Charge Coverage Ratio..................................65
Section 5.12. Leverage Ratio...............................................66
Section 5.13. Minimum Consolidated EBITDA..................................67
Section 5.14. Restricted Payments..........................................68
Section 5.15. Investments; Restricted Acquisitions.........................69
Section 5.16. Consolidated Capital Expenditures............................72
Section 5.17. Transactions with Affiliates.................................73
Section 5.18. Limitation on Restrictions Affecting Subsidiaries............73
Section 5.19. Limitation on Issuance of Capital Stock......................74
Section 5.20. Limitation on Voluntary Payments and Modifications of
Indebtedness............................................74
Section 5.21. Limitation on Fixed-Price Contracts..........................75
Section 5.22. End of Fiscal Years; Fiscal Quarters.........................75
Section 5.23. Further Assurances...........................................76
Section 5.24. De Minimis Subsidiaries......................................77
ARTICLE VI
Defaults....................................................................77
Section 6.01. Events of Defaults...........................................77
Section 6.02. Notice of Default............................................80
ARTICLE VII
The Agent...................................................................80
Section 7.01. Appointment and Authorization................................80
Section 7.02. Agent and Affiliates.........................................80
Section 7.03. Action by Agent..............................................80
Section 7.04. Consultation with Experts....................................80
Section 7.05. Liability of Agent...........................................80
Section 7.06. Indemnification..............................................81
Section 7.07. Credit Decision..............................................81
Section 7.08. Successor Agent..............................................81
Section 7.09. Agent's Fee..................................................82
ARTICLE VIII
Change in Circumstances.....................................................82
Section 8.01. Basis for Determining Interest Rate Inadequate or Unfair.....82
Section 8.02. Illegality...................................................82
Section 8.03. Increased Cost and Reduced Return............................83
Section 8.04. Taxes........................................................84
Section 8.05. Base Rate Loans Substituted for Affected Euro-Dollar Loans...86
Section 8.06. Replacement of Lender........................................87
ARTICLE IX
Guaranty....................................................................88
Section 9.01. The Guaranty.................................................88
Section 9.02. Guaranty Unconditional.......................................88
Section 9.03. Discharge Only upon Payment in Full; Reinstatement
in Certain Circumstances................................89
Section 9.04. Waiver by Each Guarantor.....................................89
Section 9.05. Subrogation and Contribution.................................89
Section 9.06. Stay of Acceleration.........................................89
Section 9.07. Limit of Liability...........................................89
Section 9.08. Release upon Sale............................................90
Section 9.09. Additional Guarantors........................................90
ARTICLE X
Miscellaneous...............................................................90
Section 10.01. Notices.....................................................90
Section 10.02. No Waivers..................................................90
Section 10.03. Expenses; Indemnification...................................90
Section 10.04. Sharing of Payments.........................................91
Section 10.05. Amendment or Waiver; etc....................................92
Section 10.06. Benefit of Agreement; Assignments; Participation............93
Section 10.07. Governing Law; Submission to Jurisdiction...................95
Section 10.08. Counterparts; Integration; Effectiveness; Amendment
and Restatement.........................................95
Section 10.9. Confidentiality.............................................95
Section 10.10. Waiver of Jury Trial........................................96
Section 10.11. Register....................................................96
Section 10.12. Survival....................................................96
Schedule 1--Commitments
Schedule 2--Debt to Remain Outstanding
Schedule 3--Subsidiaries
Schedule 4--Existing Liens
Schedule 5--Mortgaged Properties
Schedule 6--Insolvent Subsidiaries/Subsidiaries not in Good Standing
Exhibit A-1--Form of Tranche A Term Note
Exhibit A-2--Form of Tranche B Term Note
Exhibit A-3--Form of Revolving Note
Exhibit A-4--Form of Swingline Note
Exhibit B--Opinion of Counsel for the Borrower
Exhibit C--Assignment and Assumption Agreement
Exhibit D--Form of Security Agreement
Exhibit E--Form of Pledge Agreement
Exhibit F--Forms of Mortgage, Deed of Trust and Deed to Secure Debt
Exhibit G--Form of Solvency Certificate
Exhibit H--Form of Bailee Agreement
CREDIT AGREEMENT, dated as of March 3, 1998, among TEKNI-PLEX, INC.,
the GUARANTORS party hereto, the LENDERS party hereto, the LC ISSUING BANKS
referred to herein and MORGAN GUARANTY TRUST COMPANY OF NEW YORK, as Agent.
The parties hereto agree as follows:
ARTICLE I
Definitions
Section 1.01. Definitions. The following terms, as used herein, have
the following meanings:
"Additional Debt Incurrence" means the incurrence of any Debt by the
Borrower or any of its Subsidiaries (other than Debt which is permitted under
(x) Section 5.10(f)(ii), the proceeds of which are used, or to be used within
270 days of the issuance thereof, to make Permitted Acquisitions or (y) any
other Section of Section 5.10) to which the Required Lenders have consented.
"Adjusted London Interbank Offered Rate" applicable to any Interest
Period means a rate per annum equal to the quotient obtained (rounded upward, if
necessary, to the next higher 1/100 of 1%) by dividing (i) the applicable London
Interbank Offered Rate by (ii) 1.00 minus the Euro-Dollar Reserve Percentage.
"Administrative Questionnaire" means, with respect to each Lender, an
administrative questionnaire in the form prepared by the Agent, completed by
such Lender and returned to the Agent (with a copy to the Borrower).
"Affected Euro-Dollar Loan" shall have the meaning set forth in Section
2.10(h).
"Affiliate" means with respect to any Person, any other Person
directly or indirectly controlling, controlled by, or under direct or indirect
common control with, such Person; provided that for purposes of Section 5.17, an
Affiliate of the Borrower shall include any Person that directly or indirectly
owns more than 10% of any class of capital stock of the Borrower. A Person shall
be deemed to control another Person if such Person possesses, directly or
indirectly, the power to direct or cause the direction of the management and
policies of such other Person, whether through the ownership of voting
securities, by contract or otherwise.
"Agent" means MGT in its capacity as agent for the Lenders hereunder,
and its successors in such capacity appointed pursuant to Section 7.08.
"Aggregate LC Exposure" means, at any time, the sum, without
duplication, of (i) the aggregate Stated Amount of all Letters of Credit
outstanding at such time and (ii) the aggregate unpaid amount of all LC
Reimbursement Obligations at such time.
"Agreement" means this Credit Agreement, as modified, supplemented or
amended (including any amendment and restatement) from time to time.
"Applicable Base Rate Margin" means a percentage per annum equal to (i)
in the case of Tranche A Term Loans and Revolving Loans maintained as Base Rate
Loans, 1.25%, less the then applicable Reduction Discount, if any, and (ii) in
the case of Tranche B Term Loans maintained as Base Rate Loans, 1.75%, less the
then applicable Reduction Discount, if any.
"Applicable Commitment Fee Percentage" means 1/2 of 1% per annum less
the then applicable Reduction Discount, if any.
"Applicable Euro-Dollar Margin" means a percentage per annum equal to
(i) in the case of Tranche A Term Loans and Revolving Loans maintained as
Euro-Dollar Loans, 2.25%, less the then applicable Reduction Discount, if any,
and (ii) in the case of Tranche B Term Loans maintained as Euro-Dollar Loans,
2.75%, less the then applicable Reduction Discount, if any.
"Applicable Lending Office" means, with respect to any Lender, (i) in
the case of its Base Rate Loans and its participations in Letters of Credit, its
Domestic Lending Office and (ii) in the case of its Euro-Dollar Loans, its
Euro-Dollar Lending Office.
"Applicable Period" shall mean each period which shall commence on a
date on which the financial statements are delivered pursuant to Section 5.01(a)
or (b) (or, in the case of the fourth Fiscal Quarter, the earlier of (x)
delivery, no later than 45 days after the end of such Fiscal Quarter of either
(A) unaudited versions of the financial statements required by Section 5.01(a)
certified by the chief financial officer of the Borrower or (B) a certificate,
signed by the chief financial officer of the Borrower, setting forth in
reasonable detail the calculation of the Leverage Ratio for such Fiscal Quarter
and the other information required under Section 5.01(c) and (y) delivery of the
financial statements pursuant to Section 5.01(a)), as the case may be, and which
shall end on the earlier of (i) the date of actual delivery of the next
financial statements pursuant to Section 5.01(a) or (b) (or, in the case of the
fourth Fiscal Quarter, the delivery of the financial statements or officer's
certificate set forth in the immediately preceding parenthetical), as the case
may be, and (ii) the latest date on which the next financial statements are
required to be delivered pursuant to Section 5.01(a) or (b), as the case may be;
provided that for purposes of the definition of Reduction Discount, no
Applicable Period shall commence on a date occurring prior to the date of
delivery of financial statements pursuant to Section 5.01(b) in respect of the
fiscal quarter ending the Friday closest to June 30, 1998; provided, further, in
the case the Applicable Period commences on the date set forth in clause (x) of
the first parenthetical to this definition, (i) the Borrower's obligation to
deliver the financial statements pursuant to Section 5.01(a) will not be
affected and (ii) to the extent the financial statements delivered pursuant to
Section 5.01(a) and the corresponding statements delivered pursuant to Section
5.01(d) would result in a Reduction Discount different from that established for
such Fiscal Quarter, the Reduction Discount shall be retroactively adjusted to
correspond to the financial statements delivered pursuant to Section 5.01(a).
"Applicable Repayment Percentage" means (i) in respect of an Asset Sale
or Additional Debt Incurrence, 100%, (ii) in respect of an Equity Issuance, 75%
and (iii) in respect of Excess Cash Flow, 75% (provided, that, if on the last
day of any Excess Cash Flow Period (x) no Default or Event of Default then
exists and (y) the Leverage Ratio is less than 4.00 to 1.00, then the Applicable
Repayment Percentage for the Excess Cash Flow for such Excess Cash Flow Period
shall be reduced to 50%).
"Asset Sale" means any sale, lease or other disposition (including any
such transaction effected by way of merger or consolidation) by the Borrower or
any of its Subsidiaries of any asset, including, without limitation, (x) any
sale-leaseback transaction, whether or not involving a capital lease, and (y)
any capital stock or other securities of another Person (but excluding the sale
by such Person of its own capital stock), whether in a single transaction or a
series of related transactions in which the Net Cash Proceeds therefrom are in
excess of $100,000. Notwithstanding the foregoing, the following will not be
deemed to be Asset Sales: (i) dispositions of inventory, cash, Cash Equivalents
and other cash management investments and (ii) dispositions to the Borrower or a
Domestic Subsidiary of the Borrower.
"Assignment and Assumption Agreement" shall mean an Assignment and
Assumption Agreement substantially in the form of Exhibit C (appropriately
completed).
"Available Domestic JV Basket Amount" shall mean, on any date of
determination, an amount equal to the sum of (i) $15,000,000 minus (ii) the
aggregate amount of Investments made by the Borrower or any of its Domestic
Subsidiaries (other than the respective Domestic Joint Venture), net of Debt
and, without duplication, Capitalized Lease Obligations assigned to, and assumed
by, the respective Domestic Joint Venture in connection therewith), pursuant to
Section 5.15(xiv) after the Initial Borrowing Date, minus (iii) the aggregate
amount of Debt or other obligations (whether absolute, accrued, contingent or
otherwise and whether or not due) of any Domestic Joint Venture for which the
Borrower or any of its Domestic Subsidiaries (other than the respective Domestic
Joint Venture) is liable, minus (iv) all payments made by the Borrower or any of
its Domestic Subsidiaries (other than the respective Domestic Joint Venture) in
respect of Debt or other obligations of the respective Domestic Joint Venture
after the Initial Borrowing Date, plus (v) the amount of any increase to the
Available Domestic JV Basket Amount made after the Initial Borrowing Date in
accordance with the provisions of Section 5.15(xiv). In connection with the
foregoing, it is understood that the acquisition of a Person which has ownership
interests in one or more Domestic Joint Ventures, pursuant to a Permitted
Acquisition effected in accordance with the relevant requirements of this
Agreement shall not be deemed to constitute an Investment pursuant to Section
5.15(xiv) and the Available Domestic JV Basket Amount shall not be reduced as a
result of the payment of consideration owing to effect the Permitted Acquisition
(although the Available Domestic JV Basket Amount would be affected to the
extent preceding clauses (iii) or (iv) apply after the date of such Permitted
Acquisition with respect to the Joint Venture so acquired or to the extent
additional Investments are made in the respective Joint Venture pursuant to
Section 5.15(xiv).
"Available ECF Amount" shall initially mean zero, (x) and shall be
increased on each Excess Cash Payment Date by the amount of Excess Cash Flow
permitted to be retained by the Borrower with respect to the Excess Cash Flow
Period then ended (y) and shall be reduced by (i) Dividends permitted to be paid
pursuant to Section 5.14(z), (ii) Permitted Acquisitions pursuant to Section
5.15(xii) and (iii) Capital Expenditures permitted under Section 5.16(f).
"Bailee Agreement" shall have the meaning provided in Section
3.01(d)(v).
"Bankruptcy Code" means Title 11 of the United States Code entitled
"Bankruptcy", as amended.
"Base Rate" means, for any day, a rate per annum equal to the higher of
(i) the Prime Rate for such day and (ii) the sum of 1/2 of 1% plus the Federal
Funds Rate for such day.
"Base Rate Borrowing" shall mean a Borrowing of Base Rate Loans.
"Base Rate Loan" means each Loan which bears interest at the Base Rate
as provided Section 2.05(a).
"Borrower" means Tekni-Plex, Inc., a Delaware corporation, and its
successors.
"Borrowing" means a borrowing of one Type of Loan pursuant to a single
Tranche by the Borrower from all Lenders having Commitments of the respective
Tranche on a given date (or resulting from conversions on a given date), having
in the case of Euro-Dollar Loans the same Interest Period, provided that Base
Rate Loans incurred pursuant to Article VIII shall be considered part of the
related Borrowing of Euro-Dollar Loans. A Borrowing is a "Base Rate Borrowing"
if such Borrowing is comprised of Loans maintained as Base Rate Loans or a
"Euro-Dollar Borrowing" if such Borrowing is comprised of Loans maintained as
Euro-Dollar Loans.
"Business Day" means (i) for all purposes other than as covered by
clause (ii) below, any day excluding Saturday, Sunday and any day which shall be
in New York City a legal holiday or a day on which banking institutions are
authorized or required by law or other governmental actions to close and (ii)
with respect to all notices and determinations in connection with, and payments
of principal and interest on, Euro-Dollar Loans, any day which is a Business Day
described in clause (i) above and is also a day for trading by and between banks
in U.S. dollar deposits in the interbank Euro-Dollar market.
"Capital Expenditures" means, for any Person for any period, the
additions to property, plant and equipment and other capital expenditures of
such Person for such period, as the same are or would be set forth in a
consolidated statement of cash flows of such Person for such period.
"Capitalized Lease Obligations" of any Person shall mean all rental
obligations which, under generally accepted accounting principles, are or will
be required to be capitalized on the books of such Person, in each case taken at
the amount thereof accounted for as indebtedness in accordance with such
principles.
"Capital Stock" of any Person shall mean any and all shares, interests,
rights to purchase, warrants, options, participation or other equivalents of or
interests in (however designated) equity of such Person, including any preferred
stock, any limited or general partnership interest and any limited liability
company membership interest.
"Carryover Amount" shall have the meaning provided in Section 5.16(b) of
this Agreement.
"Cash Equivalents" shall mean, as to any Person, (i) 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, (ii) 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 by such Person, (iii) repurchase obligations for
underlying securities of the types described in clause (i) above entered into
with any bank meeting the qualifications specified in clause (ii) above, (iv)
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 by such Person, (v) 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 and
(vi) investments in money market funds substantially all of whose assets are
comprised of securities of the types described in clauses (i) through (v) above.
"CERCLA" means the Comprehensive Environmental Response, Compensation and
Liability Act of 1980, as amended from time to time, and regulations promulgated
thereunder.
"Code" shall mean the Internal Revenue Code of 1986, as amended from time
to time, and the regulations promulgated and rulings issued thereunder. Section
references to the Code are to the Code, as in effect at the date of this
Agreement and any subsequent provisions of the Code, amendatory thereof,
supplemental thereto or substituted therefor.
"Collateral" means all of the "Collateral" as defined in each of the
Collateral Documents.
"Collateral Agent" shall mean the Agent acting as the collateral agent or
secured party pursuant to the Collateral Documents.
"Collateral Account" means an account in the name and under the control of
the Agent into which there shall be deposited from time to time amounts required
to be delivered to the Agent pursuant to Section 2.10 or 6.01 of this Agreement.
"Collateral Documents" means the Pledge Agreement, the Security Agreement,
the Mortgages, any additional pledges, security agreements or mortgages
delivered pursuant to the Loan Documents and any instruments of assignment or
other instruments or agreements executed pursuant to the foregoing.
"Commitment" means any of the commitments of any Lender, i.e., whether the
Tranche A Term Loan Commitment, the Tranche B Term Loan Commitment or the
Revolving Loan Commitment.
"Commitment Fee" shall have the meaning set forth in Section 2.07(a).
"Consolidated Capital Expenditures" means, for any period, the amount of
Capital Expenditures made during such period by the Borrower and its
Consolidated Subsidiaries, determined on a consolidated basis.
"Consolidated Cash Interest Expense" shall mean Consolidated Interest
Expense excluding any non-cash interest expense for such period.
"Consolidated Debt" means, at any date, the consolidated Debt of the
Borrower and its Consolidated Subsidiaries as of such date.
"Consolidated EBITDA" means, for any period, Consolidated Net Income for
such period plus, to the extent deducted in determining Consolidated Net Income
for such period, the aggregate amount of (i) Consolidated Interest Expense, (ii)
income tax expense and (iii) depreciation, amortization and other similar
non-cash charges.
"Consolidated Interest Expense" means, for any period, the interest expense
of the Borrower and its Consolidated Subsidiaries, determined on a consolidated
basis, for such period.
"Consolidated Net Income" means, for any period, the net income of the
Borrower and its Consolidated Subsidiaries, determined on a consolidated basis
for such period, adjusted to exclude the effect of any extraordinary or other
non-recurring gain (but not loss).
"Consolidated Net Working Investment" means at any date (i) consolidated
current assets of the Borrower and its Consolidated Subsidiaries (exclusive of
cash and Cash Equivalents) minus (ii) the consolidated current liabilities of
the Borrower and its Consolidated Subsidiaries (exclusive of Debt), all
determined as of such date.
"Consolidated Subsidiary" means, at any date, any Subsidiary or other
entity the accounts of which would be consolidated with those of the Borrower in
its consolidated financial statements if such statements were prepared as of
such date.
"Control Group" means any of any member of the board of directors of the
Borrower as of the date of issuance of the New Senior Subordinated Notes,
Tekni-Plex Partnership, MST/TP Partners, L.P., MST Management, L.P., MST
Partners L.P., any Affiliate of or partner in any of the foregoing (including
any Person receiving common stock of the Borrower upon a distribution by any of
the foregoing partnerships, whether a partner or designated by a partner for
purposes of estate or similar personal planning), or any group if the majority
of the shares of common stock of the Borrower owned by such group are
beneficially owned by any or all of the foregoing and their Related Persons and
Affiliates.
"Credit Event" means the making of any Loan or the issuance of any Letter
of Credit.
"De Minimis Subsidiary" shall mean each Subsidiary of the Borrower existing
on the Initial Borrowing Date to the extent that (i) it holds no capital stock
of any other Subsidiary that is not a De Minimis Subsidiary, (ii) the fair
market value of all assets held by such Subsidiary is less than $250,000 and
(iii) the net income for such Subsidiary for the last 12 months then ended is
less than $250,000.
"Debt" of any Person means, at any date, without duplication, (i) all
obligations of such Person for borrowed money, (ii) all obligations of such
Person evidenced by bonds, debentures, notes or other similar instruments, (iii)
all obligations of such Person to pay the deferred purchase price of property or
services, except trade accounts payable arising in the ordinary course of
business, (iv) all obligations of such Person as lessee which are capitalized in
accordance with GAAP, (v) all non-contingent obligations (and, for purposes of
Sections 5.09 and the definitions of Material Debt and Material Financial
Obligations, all contingent obligations) of such Person to reimburse any bank or
other Person in respect of amounts paid under a letter of credit or similar
instrument, (vi) all Debt secured by a Lien on any asset of such Person, whether
or not such Debt is otherwise an obligation of such Person, (vii) all Guarantees
by such Person of Debt of another Person.
"Debt to be Refinanced" means, collectively, all Debt of the Borrower and
its Subsidiaries (other than (i) the Debt described on Schedule 2 and (ii) Debt
otherwise permitted pursuant to Section 5.10).
"Default" means any condition or event which constitutes an Event of
Default or which with the giving of notice or lapse of time or both would,
unless cured or waived, become an Event of Default.
"Defaulting Lender" means any Lender with respect to which a Lender Default
is in effect.
"Derivatives Obligations" of any Person means all obligations of such
Person in respect of any interest rate swap transaction, basis swap, forward
rate transaction, commodity swap, commodity option, equity or equity index swap,
equity or equity index option, bond option, interest rate option, foreign
exchange transaction, cap transaction, floor transaction, collar transaction,
currency swap transaction, cross-currency rate swap transaction, currency option
or any other similar transaction (including any option with respect to any of
the foregoing transactions) or any combination of the foregoing transactions.
"Dividends" shall have the meaning set forth in Section 5.14.
"Documents" means, collectively, (i) the Loan Documents, (ii) the
Refinancing Documents, (iii) the New Senior Subordinated Note Documents, (iv)
the Existing PST Senior Secured Notes Tender Offer Documents, (v) the PureTec
Acquisition Documents and (vi) the PST Minority Acquisition Documents.
"Dollars" and the sign "$" each means fully transferable lawful money of
the United States.
"Domestic Joint Venture" means any Joint Venture existing under the laws of
the United States or any state thereof.
"Domestic Lending Office" means, as to each Lender, its office located at
its address set forth in its Administrative Questionnaire (or identified in its
Administrative Questionnaire as its Domestic Lending Office) or such other
office as such Lender may hereafter designate as its Domestic Lending Office by
notice to the Borrower and the Agent.
"Domestic Subsidiary" means each Subsidiary of the Borrower that is
organized under the laws of the United States or any state thereof.
"Effective Date" shall have the meaning set forth in Section 10.08.
"Eligible Transferee" shall mean and include a commercial bank, investment
company, financial institution, any fund that invests in bank loans or any other
"accredited investor" (as defined in Regulation D of the Securities Act).
"Environmental Laws" means any and all federal, state, local and foreign
statutes, laws, judicial decisions, regulations, ordinances, rules, judgments,
orders, decrees, plans, injunctions, permits, concessions, grants, franchises,
licenses, agreements and other governmental restrictions relating to the
environment or the effect of the environment on human health or to emissions,
discharges or releases of pollutants, contaminants, Hazardous Substances or
wastes into the environment, including (without limitation) ambient air, surface
water, ground water or land, or otherwise relating to the manufacture,
processing, distribution, use, treatment, storage, disposal, transport or
handling of pollutants, contaminants, Hazardous Substances or wastes or the
clean-up or other remediation thereof.
"Environmental Liabilities" means all liabilities in connection with or
relating to the business, assets presently or previously owned, leased or
operated, activities (including, without limitation, off-site disposal) or
operations of the Borrower and each Subsidiary, whether vested or unvested,
contingent or fixed, actual or potential, known or unknown, which arise under or
relate to matters covered by Environmental Laws.
"Equity Issuance" means the issuance of any Capital Stock by the Borrower
or any of its Subsidiaries (other than equity securities issued to the Borrower
or any of its Subsidiaries by any other Subsidiary of the Borrower).
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended, or any successor statute.
"ERISA Group" means the Borrower, any Subsidiary and all members of a
controlled group of corporations and all trades or businesses (whether or not
incorporated) under common control which, together with the Borrower or any
Subsidiary, are treated as a single employer under Section 414 of the Internal
Revenue Code.
"Euro-Dollar Borrowing" shall mean a Borrowing of Euro-Dollar Loans.
"Euro-Dollar Lending Office" means, as to each Lender, its office, branch
or affiliate located at its address set forth in its Administrative
Questionnaire (or identified in its Administrative Questionnaire as its
Euro-Dollar Lending Office) or such other office, branch or affiliate of such
Lender as it may hereafter designate as its Euro-Dollar Lending Office by notice
to the Borrower and the Agent.
"Euro-Dollar Loan" means each Loan which bears interest at a Euro-Dollar
Rate as provided in Section 2.05(b).
"Euro-Dollar Rate" means a rate of interest determined pursuant to Section
2.05(b) on the basis of a London Interbank Offered Rate.
"Euro-Dollar Reserve Percentage" means, for any day, that percentage
(expressed as a decimal) which is in effect on such day, as prescribed by the
Board of Governors of the Federal Reserve System (or any successor) for
determining the maximum reserve requirement for a member bank of the Federal
Reserve System in New York City with deposits exceeding five billion dollars in
respect of "Eurocurrency liabilities" (or in respect of any other category of
liabilities which includes deposits by reference to which the interest rate on
Euro-Dollar Loans is determined or any category of extensions of credit or other
assets which includes loans by a non-United States office of any Lender to
United States residents).
"Events of Default" shall have the meaning set forth in Section 6.01.
"Evergreen Letter of Credit" means a Letter of Credit that is automatically
extended unless the relevant LC Issuing Bank gives notice to the beneficiary
thereof stating that the expiration date of such Letter of Credit will not be
extended.
"Excess Cash Flow" means, for any period the excess (if any) of: (a) the
sum of (i) Consolidated Net Income for such period plus (ii) to the extent
deducted in determining Consolidated Net Income for such period, depreciation,
amortization and other similar noncash charges plus (iii) any increase (or minus
any decrease) during such period in deferred tax liabilities of the Borrower and
its Consolidated Subsidiaries, taken as a whole, for such fiscal period, plus
(iv) any decrease in Consolidated Net Working Investment between the beginning
and the end of such period; minus (b) the sum of (i) an amount equal to
Consolidated Capital Expenditures (excluding Consolidated Capital Expenditures
made pursuant to Section 5.16(c) and (d)) made during such period that are not
financed with Debt (other than Loans) for such period, (ii) any increase in
Consolidated Net Working Investment between the beginning and the end of such
period, (iii) mandatory prepayments and repayments of long-term Debt of the
Borrower and its Consolidated Subsidiaries (other than repayments of (x) Loans,
provided that repayments of Loans shall be deducted in determining Excess Cash
Flow if such payments were (x) required as a result of a Scheduled Repayment
under Section 2.10(b) or (c) or (y) made as a voluntary prepayment (but in the
case of a voluntary repayment of Revolving Loans, only to the extent accompanied
by a voluntary and permanent reduction to the Total Revolving Loan Commitment)
and (y) Debt (other than the Loans) made with proceeds of other Debt or with
proceeds of Asset Sales or equity issuances) during such period, (iv) to the
extent included in Consolidated Net Income for such period, the amount of any
gain or disposition of an asset if such disposition constitutes an Asset Sale
and (v) cash Dividends paid during such period on Qualified Preferred Stock (to
the extent permitted by Section 5.14).
"Excess Cash Flow Period" means, with respect to the repayment required on
each Excess Cash Payment Date, (i) the period from and including the first day
of the first fiscal quarter commencing after the Initial Borrowing Date to and
including the last Business Day of the Borrower's Fiscal Year ending in June,
1999 and (ii) thereafter, the Fiscal Year ended immediately prior to such Excess
Cash Payment Date.
"Excess Cash Payment Date" means each date occurring 95 days after the last
day of each Fiscal Year ended after the Initial Borrowing Date (commencing with
the Fiscal Year ending on the last Friday closest to June 30, 1999).
"Exchange Act" means the Securities Exchange Act of 1934, as amended from
time to time.
"Existing Credit Agreement" means the Credit Agreement, dated as of May 8,
1997, among the Borrower, the guarantors party thereto, the banks party thereto,
the LC issuing banks party thereto and MGT, as agent, as in effect on the
Initial Borrowing Date.
"Existing PST Patent Security Agreement" means the Patent Security
Agreement dated as of November 8, 1993, by PST in favor of First Fidelity Bank,
N.A., Pennsylvania.
"Existing PST Pledge Agreement" means the Pledge Agreement dated as of
November 8, 1993 by PST in favor of First Fidelity Bank, N.A., Pennsylvania.
"Existing PST Security Agreement" means the Security Agreement dated as of
November 8, 1993 by PST in favor of First Fidelity Bank, N.A., Pennsylvania.
"Existing PST Senior Secured Notes" means PST's 11-1/4% Senior Secured
Notes due 2003.
"Existing PST Senior Secured Notes Collateral Documents" means the (i)
Existing PST Security Agreement, (ii) Existing PST Pledge Agreement, (iii)
Existing PST Patent Security Agreement and (iv) Existing PST Trademark Security
Agreement, each as in effect on the Initial Borrowing Date and as the same may
be amended, modified or supplemented from time to time pursuant to the terms
thereof and hereof.
"Existing PST Senior Secured Notes Collateral Documents Amendment" means
the amendments to the Existing PST Senior Secured Notes Collateral Documents in
form and substance satisfactory to the Agent and entered into by the parties to
the respective Existing PST Senior Secured Notes Collateral Documents in
connection with the Existing PST Senior Secured Notes Tender Offer/Consent
Solicitation.
"Existing PST Senior Secured Notes Indenture" means that certain indenture,
dated as of November 8, 1993, between PST and First Fidelity Bank, N.A.,
Pennsylvania, as trustee, as in effect on the Initial Borrowing Date and as the
same may be amended, modified or supplemented from time to time pursuant to the
terms thereof and hereof.
"Existing PST Senior Secured Notes Indenture Supplement" means the
Supplemental Indenture to the Existing PST Senior Secured Notes Indenture in
form and substance satisfactory to the Agent and entered into by the Borrower
and the trustee for the Existing PST Senior Secured Notes in connection with the
Existing PST Senior Secured Notes Tender Offer/Consent Solicitation.
"Existing PST Senior Secured Notes Tender Offer/Consent Solicitation" shall
have the meaning set forth in Section 3.01(d)(v).
"Existing PST Senior Secured Notes Tender Offer Documents" means the
Existing PST Senior Secured Notes Indenture Supplement, the Existing PST Senior
Secured Notes Collateral Documents Amendment and the Existing PST Senior Secured
Notes Tender Offer/Consent Solicitation, as in effect on the Initial Borrowing
Date and as the same may be amended, modified or supplemented from time to time
pursuant to the terms thereof and hereof.
"Existing PST Senior Secured Notes Tender Offer Repurchases" shall have the
meaning set forth in Section 3.01(d)(v).
"Existing PST Trademark Security Agreement" means the Trademark Security
Agreement dated as of November 8, 1993 by PST in favor of First Fidelity Bank,
N.A., Pennsylvania.
"Existing Senior Subordinated Notes" shall mean the 11-1/4% Senior
Subordinated Notes due 2007 of the Borrower issued pursuant to the Existing
Senior Subordinated Notes Indenture.
"Existing Senior Subordinated Notes Indenture" shall mean the Indenture,
dated as of April 1, 1997, between the Borrower, Dolco Packaging Corp. and
Marine Midland Bank, as trustee, pursuant to which the Existing Senior
Subordinated Notes were issued.
"Federal Funds Rate" means, for any day, the rate per annum (rounded
upward, if necessary, to the nearest 1/100 of 1%) equal to the weighted average
of the rates on overnight Federal funds transactions with members of the Federal
Reserve System arranged by Federal funds brokers on such day, as published by
the Federal Reserve Bank of New York on the Business Day next succeeding such
day, provided that (i) if such day is not a Business Day, the Federal Funds Rate
for such day shall be such rate on such transactions on the next preceding
Business Day as so published on the next succeeding Business Day and (ii) if no
such rate is so published on such next succeeding Business Day, the Federal
Funds Rate for such day shall be the average rate quoted to the Agent on such
day from three Federal funds brokers of recognized standing selected by the
Agent.
"Fiscal Quarter" means a fiscal quarter of the Borrower.
"Fiscal Year" means a fiscal year of the Borrower.
"Fixed Charge Coverage Ratio" means, for any period, the ratio of (i) the
remainder of (A) Consolidated EBITDA for such period minus (B) Consolidated
Capital Expenditures for such period to (ii) Consolidated Cash Interest Expense
for such period.
"Foreign Joint Venture" means any Joint Venture of the Borrower and/or its
Subsidiaries other than a Domestic Joint Venture.
"Foreign Subsidiary" means any Subsidiary of the Borrower and/or its
Subsidiaries other than a Domestic Subsidiary.
"Fronting Fee" shall have the meaning provided in Section 2.07(b).
"GAAP" means generally accepted accounting principles as in effect from
time to time, applied on a basis consistent (except for changes concurred in by
the Borrower's independent public accountants) with the most recent audited
consolidated financial statements of the Borrower and its Consolidated
Subsidiaries delivered to the Lenders.
"Guarantee" by any Person means any obligation, contingent or otherwise, of
such Person directly or indirectly guaranteeing any Debt or other obligation of
any other Person and, without limiting the generality of the foregoing, any
obligation, direct or indirect, contingent or otherwise, of such Person (i) to
purchase or pay (or advance or supply funds for the purchase or payment of) such
Debt or other obligation (whether arising by virtue of partnership arrangements,
by agreement to keep-well, to purchase assets, goods, securities or services, to
take-or-pay, or to maintain financial statement conditions or otherwise), (ii)
to reimburse a bank for amounts drawn under a letter of credit for the purpose
of paying such Debt or (iii) entered into for the purpose of assuring in any
other manner the holder of such Debt or other obligation of the payment thereof
or to protect such holder against loss in respect thereof (in whole or in part);
provided that the term Guarantee shall not include endorsements for collection
or deposit in the ordinary course of business. The term Guarantee used as a verb
has a corresponding meaning. The amount of any Guarantee shall be deemed to be
an amount equal to the stated or determinable amount of such Debt or other
obligation in respect of which such Guarantee is made or, if not stated or
determinable, the maximum reasonably anticipated liability in respect thereof
(assuming such Person is required to perform thereunder) as determined by such
Person in good faith.
"Guaranteed Derivatives Agreement" shall have the meaning provided in the
definition of "Guaranteed Obligations."
"Guaranteed Obligations" shall mean all obligations of the Borrower (i) to
each Lender Party for the full and prompt payment when due (whether at the
stated maturity, by acceleration or otherwise) of the principal and interest on
each Note issued by the Borrower to such Lender Party, and Loans made, under
this Agreement and all LC Reimbursement Obligations with respect to Letters of
Credit, together with all other amounts (including, without limitation,
indemnities, fees and interest thereon) of the Borrower owing to such Lender
Party now existing or hereafter incurred under, arising out of or in connection
with the Credit Agreement or any other Loan Document and (ii) to each Lender
Party and each Affiliate of a Lender Party which enters into an agreement with
respect to Derivatives Obligations with the Borrower which agreement is
designated by the Borrower and such Lender Party as a "Guaranteed Derivatives
Agreement," and the full and prompt payment when due (whether by acceleration or
otherwise) of all obligations of the Borrower owing under any such Guaranteed
Derivatives Agreement whether now in existence or hereafter arising.
"Guarantor" means, subject to Section 9.08, each Subsidiary of the Borrower
that has executed this Agreement as a guarantor.
"Hazardous Substance" means any toxic, radioactive, caustic or otherwise
hazardous substance, including petroleum, its derivatives, by-products and other
hydrocarbons, or any substance having any constituent elements displaying any of
the foregoing characteristics.
"Indemnitee" has the meaning set forth in Section 10.03(b).
"Information Memorandum" means the confidential descriptive memorandum
dated February 25, 1998 furnished to the Lenders in connection with the
transactions contemplated hereby.
"Initial Borrowing Date" shall mean the date occurring on or after the
Effective Date on which the initial Borrowing of Loans occurs hereunder.
"Initial Directors" shall have the meaning set forth in Section 6.01(m).
"Initial Public Offering" shall mean an initial registered public offering
of the common stock of the Borrower.
"Interest Period" means, with respect to each Euro-Dollar Loan, the period
commencing on the date of borrowing specified in the applicable Notice of
Borrowing or on the date specified in an applicable Notice of Interest Rate
Election and ending one, two, three or six months thereafter, as the Borrower
may elect in such notice; provided that:
(a) any Interest Period which would otherwise end on a day which is not a
Business Day shall be extended to the next succeeding Business Day unless such
Business Day falls in another calendar month, in which case such Interest Period
shall end on the next preceding Business Day;
(b) any Interest Period which begins on the last Business Day of a calendar
month (or on a day for which there is no numerically corresponding day in the
calendar month at the end of such Interest Period) shall, subject to clause (c)
below, end on the last Business Day of a calendar month; and
(c) any Interest Period for a Borrowing under a Tranche which would
otherwise end after the respective Maturity Date for such Tranche shall end on
the respective Maturity Date for such Tranche.
"Investment" means any investment in any Person, whether by means of share
purchase, capital contribution, loan, Guarantee, time deposit or otherwise (but
not including any demand deposit).
"Joint Venture" means any Person, other than an individual or a
Wholly-Owned Subsidiary of the Borrower, in which the Borrower or a Subsidiary
of the Borrower holds or acquires an ownership interest (whether by way of
capital stock, partnership or limited liability company interest, or other
evidence of ownership).
"LC Fee" shall have the meaning provided in Section 2.07(b).
"LC Indemnitees" has the meaning set forth in Section 2.16(k).
"LC Issuing Bank" means MGT (and any other RL Lender which, at the
Borrower's request, shall have agreed to issue Letters of Credit hereunder and
confirmed such agreement in a notice to the Agent), each in its capacity as an
LC Issuing Bank under the letter of credit facility described in Section 2.16.
"LC Office" means, with respect to any LC Issuing Bank, the office at which
it books any Letter of Credit issued by it.
"LC Payment Date" has the meaning set forth in Section 2.16(g).
"LC Reimbursement Due Date" has the meaning set forth in Section 2.16(h).
"LC Reimbursement Obligations" means, at any time, all obligations of the
Borrower to reimburse the LC Issuing Banks for amounts paid by the LC Issuing
Banks in respect of drawings under Letters of Credit, including any portion of
any such obligations to which a RL Lender has become subrogated pursuant to
Section 2.16(i).
"Lender" means each Person listed on Schedule 1 hereto, as well as any
Person which becomes a Lender pursuant to Section 8.06 or 10.06(b).
"Lender Default" shall mean (i) the refusal (which has not been retracted)
or the failure of a Lender to make available its portion of any Borrowing
(including any Mandatory Borrowing) or to fund its portion of any unreimbursed
payment under Section 2.16(i) or (ii) a Lender having notified in writing the
Borrower and/or the Agent that such Lender does not intend to comply with its
obligations under Section 2.01 or 2.16.
"Lender Parties" means the Lenders, the LC Issuing Banks and the Agent.
"Letter of Credit" means a letter of credit issued hereunder by an LC
Issuing Bank.
"Leverage Ratio" means, at any time, the ratio of (i) (a) Consolidated Debt
at such time less (b) cash and Cash Equivalents held by the Borrower and its
Consolidated Subsidiaries at such time to (ii) Consolidated EBITDA for the then
most recently ended Test Period. For purposes of determining Consolidated EBITDA
at any time during the first four Fiscal Quarters ending after a Fiscal Quarter
in which a Permitted Acquisition has been made, Consolidated EBITDA shall be
increased for any Fiscal Quarter which began prior to such Permitted Acquisition
by the amount of EBITDA which the Borrower (with the consent of the Agent, such
consent not be unreasonably withheld or delayed) shall determine would have been
attributable to the acquired assets for the Fiscal Quarter most recently ended
on or prior to the date of such Permitted Acquisition; provided that for the
Fiscal Quarter in which the Permitted Acquisition has occurred, such increase
shall be prorated to reflect only the days during such Fiscal Quarter prior to
the consummation of the Permitted Acquisition.
"Lien" means, with respect to any asset, any mortgage, lien, pledge,
charge, security interest or encumbrance of any kind, or any other type of
preferential arrangement that has substantially the same practical effect as a
security interest, in respect of such asset. For purposes hereof, the Borrower
or any Subsidiary shall be deemed to own subject to a Lien any asset which it
has acquired or holds subject to the interest of a vendor or lessor under any
conditional sale agreement, capital lease or other title retention agreement
relating to such asset.
"Loan" means each Tranche A Term Loan, each Tranche B Term Loan, each
Revolving Loan and each Swingline Loan.
"Loan Documents" means this Agreement, the Notes, the Bailee Agreement and
the Collateral Documents.
"London Interbank Offered Rate" applicable to any Interest Period means the
average (rounded upward, if necessary, to the next higher 1/16 of 1%) of the
respective rates per annum at which deposits in dollars are offered to each of
the Reference Lenders in the London interbank market at approximately 11:00 A.M.
(London time) two Business Days before the first day of such Interest Period in
an amount approximately equal to the principal amount of the Euro-Dollar Loan of
such Reference Lender to which such Interest Period is to apply and for a period
of time comparable to such Interest Period.
"Major Casualty Proceeds" means (i) the aggregate insurance proceeds
received by the Borrower or any of its Subsidiaries in connection with one or
more related events under any insurance policy maintained by the Borrower or any
of its Subsidiaries covering losses with respect to tangible real or personal
property or improvements or losses from business interruption or (ii) any award
or other compensation with respect to any condemnation of property (or any
transfer or disposition of property in lieu of condemnation) received by the
Borrower or any of its Subsidiaries, provided that no insurance proceeds, award
or other compensation set forth in preceding clauses (i) and (ii) shall be Major
Casualty Proceeds unless the aggregate amount of such insurance proceeds, award
or other compensation exceeds $2,500,000.
"Majority Lenders" of any Tranche shall mean those Non-Defaulting Lenders
which would constitute the Required Lenders under, and as defined in, this
Agreement if all outstanding Obligations of the other Tranches under this
Agreement were repaid in full and all Commitments with respect thereto were
terminated.
"Mandatory Borrowing" shall have the meaning set forth in Section 2.01(e).
"Margin Regulations" shall mean Regulations G, T, U and X.
"Margin Stock" shall have the meaning set forth in Regulation U.
"Material Adverse Effect" means (i) any material adverse effect upon the
business, property, assets, liabilities, condition (financial or otherwise), or
prospects of the Borrower or of the Borrower and its Subsidiaries, taken as a
whole, or, for purposes of conditions precedent to be satisfied, and
representations and warranties to be made, on the Initial Borrowing Date, Pure
Tec and its Subsidiaries taken as a whole, (ii) a material adverse effect on the
ability of the Borrower or any other Person to consummate the transactions
contemplated hereby to occur on the Initial Borrowing Date; (iii) a material
adverse effect on the ability of the Borrower or any other Obligor to perform
under this Agreement and the Notes and the other Loan Documents; or (iv) a
material adverse effect on the rights and remedies of the Agent and the Lenders
under this Agreement and the Notes and the other Loan Documents.
"Material Debt" means Debt (except Debt outstanding hereunder) of the
Borrower and/or one or more of its Subsidiaries, arising in one or more related
or unrelated transactions, in an aggregate principal or face amount exceeding
$12,500,000.
"Material Financial Obligations" means a principal or face amount of Debt
(other than the Loans and LC Reimbursement Obligations) and/or payment or
collateralization obligations in respect of Derivatives Obligations of the
Borrower and/or one or more of its Subsidiaries, arising in one or more related
or unrelated transactions, exceeding in the aggregate $12,500,000.
"Maturity Date" shall mean, with respect to any Tranche of Loans, the
Tranche A Maturity Date, the Tranche B Maturity Date or the Revolving Loan
Maturity Date, as the case may be.
"Maximum Swingline Amount" means $10,000,000.
"Minimum Borrowing Amount" means (i) for Base Rate Loans (other than
Swingline Loans), $1,000,000, (ii) for Euro-Dollar Loans, $5,000,000 in the case
of the initial Borrowing, and $2,500,000 thereafter and (iii) for Swingline
Loans, $250,000.
"MGT" means Morgan Guaranty Trust Company of New York in its individual
capacity.
"Moody's" means Moody's Investors Service, Inc.
"Mortgage" means each mortgage, deed of trust, deed to secure debt,
amendment to mortgage or amendment to deed of trust, substantially in the
respective form included in Exhibit F hereto between each Obligor party thereto,
as mortgagor or trustor, and the Agent, as mortgagee or beneficiary, entered
into as of the Initial Borrowing Date and relating to the Borrower's and its
Subsidiaries' facilities in the locations listed in Schedule 5 hereto, and any
mortgage, deed of trust, deed to secure debt, amendment to mortgage or amendment
to deed of trust entered into pursuant hereto after the Initial Borrowing Date,
in each case as amended from time to time.
"Multiemployer Plan" means, at any time, an employee pension benefit plan
within the meaning of Section 4001(a)(3) of ERISA to which any member of the
ERISA Group is then making or accruing an obligation to make contributions or
has within the preceding five plan years made contributions, including for these
purposes any Person which ceased to be a member of the ERISA Group during such
five year period.
"Net Cash Proceeds" means, with respect to any Repayment Event, an amount
equal to the gross cash proceeds received by the Borrower or any of its Domestic
Subsidiaries from or in respect of such Repayment Event (including any cash
proceeds, received as income or other proceeds, of any noncash proceeds of any
Asset Sale, as and when received), less (x) any fees, costs and expenses
reasonably incurred by such Person in respect of such Repayment Event and (y) in
the case of an Asset Sale, (I) the amount of any Debt secured by a Lien on any
asset disposed of in such Asset Sale and discharged from the proceeds thereof
and (II) any incremental taxes actually paid or to be payable by such Person (as
estimated by a senior financial or accounting officer of the Borrower, giving
effect to the overall tax position of the Borrower) in respect of such Asset
Sale.
"New Senior Subordinated Note Documents" means the New Senior Subordinated
Notes Indenture and the New Senior Subordinated Notes, as in effect on the
Initial Borrowing Date and as the same may be amended, modified or supplemented
from time to time pursuant to the terms thereof and hereof.
"New Senior Subordinated Notes" means the Borrower's 9 1/4% Senior
Subordinated Notes due 2008, issued in accordance with the terms of the New
Senior Subordinated Notes Indenture.
"New Senior Subordinated Notes Indenture" means that certain indenture,
dated as of March 1, 1998, between the Borrower, as issuer, and Marine Midland
Bank, as trustee, as in effect on the Initial Borrowing Date and as the same may
be amended, modified or supplemented from time to time pursuant to the terms
thereof and hereof.
"Non-Defaulting Lender" means and includes each Lender other than a
Defaulting Lender.
"Note" means each Tranche A Term Note, each Tranche B Term Note, each
Revolving Note, and the Swingline Note.
"Notice of Borrowing" shall have the meaning set forth in Section 2.03.
"Notice of Interest Rate Election" shall have the meaning set forth in
Section 2.06.
"Obligations" shall mean all amounts owing to the Agent or any Lender by
any Obligor pursuant to the terms of this Agreement or any other Loan Document.
"Obligors" means the Borrower and the Guarantors, and "Obligor" means any
of them.
"Payment Office" shall mean the office of the Agent located at 60 Wall
Street, New York, New York 10260 or such other office as the Agent may designate
to the Borrower and the Lenders from time to time.
"PBGC" means the Pension Benefit Guaranty Corporation or any entity
succeeding to any or all of its functions under ERISA.
"Permitted Acquisition" shall have the meaning set forth in Section
5.15(xii).
"Person" means an individual, a corporation, a limited liability company, a
partnership, an association, a trust or any other entity or organization,
including a government or political subdivision or an agency or instrumentality
thereof.
"Plan" means, at any time, an employee pension benefit plan (other than a
Multiemployer Plan) which is covered by Title IV of ERISA or subject to the
minimum funding standards under Section 412 of the Internal Revenue Code and
either (i) is maintained, or contributed to, by any member of the ERISA Group
for employees of any member of the ERISA Group or (ii) has at any time within
the preceding five years been maintained, or contributed to, by any Person which
was at such time a member of the ERISA Group for employees of any Person which
was at such time a member of the ERISA Group.
"Pledge Agreement" means the pledge agreement substantially in the form of
Exhibit E hereto between each Obligor party thereto and the Agent entered into
as of the Closing Date, as amended from time to time.
"Prime Rate" means the rate of interest publicly announced by MGT in New
York City from time to time as its Prime Rate.
"PST" means Plastic, Specialties & Technologies, Inc., a Delaware
corporation.
"PST Minority Acquisition" means the acquisition by PureTec of the
remaining 3% of issued and outstanding capital stock of PST not already owned by
PureTec, in accordance with the terms of the PST Minority Acquisition Documents.
"PST Minority Acquisition Documents" means the Certificate of Ownership and
Merger merging PST Holding, Inc. into PST, as in effect on the Initial Borrowing
Date, and amended and in effect from time to time pursuant to the terms hereof
and thereof.
"PureTec" means PureTec Corporation, a Delaware corporation.
"PureTec Acquisition" means the acquisition by the Borrower of 100% of the
issued and outstanding capital stock of PureTec by way of the merger of P.T.
Holdings, Inc., a Wholly-Owned Subsidiary of the Borrower, with and into
PureTec, with PureTec being the surviving entity of such merger, pursuant to,
and in accordance with, the terms of the PureTec Acquisition Documents.
"PureTec Acquisition Agreement" means the Agreement and Plan of Merger,
dated as of November 11, 1997, among PureTec, PST, the Borrower and P.T.
Holdings, Inc., as in effect on the Initial Borrowing Date, and amended and in
effect from time to time.
"PureTec Acquisition Documents" means the PureTec Acquisition Agreement, as
in effect on the Initial Borrowing Date, and amended and in effect from time to
time pursuant to the terms hereof and thereof.
"Qualified Preferred Stock" of any Person means any preferred stock of such
Person other than preferred stock which, (x) requires any cash payment of
Dividends (other than pursuant to provisions that expressly provide that no such
payment can be made in violation of this Agreement) or (y) by its terms (or by
the terms of any security into which it is convertible or for which it is
exchangeable), or upon the happening of any event, matures or is mandatorily
redeemable, pursuant to a sinking fund obligation or otherwise, or is redeemable
at the option of the holder thereof, in whole or in part, on or prior to the
final maturity of the Obligations (other than pursuant to change of control
provisions similar to those set forth herein, provided that such provisions
expressly provide that no payment can be made on such stock in violation of this
Agreement).
"Quarterly Payment Date" means the last Business Day of each March, June,
September and December occurring after the Initial Borrowing Date.
"Reduction Discount" shall mean initially zero, provided that during any
Applicable Period the Reduction Discount shall be the respective percentage per
annum with respect to (i) Tranche A Term Loans and Revolving Loans, (ii) Tranche
B Term Loans and (iii) Commitment Fees, respectively, as set forth below, but
only if, as of the Test Date with respect to such Applicable Period the Leverage
Ratio for such percentage below is met:
Tranche A Term Loans
and Tranche B Commitment
Leverage Ratio Revolving Loans Term Loans Fees
- -------------- --------------- ---------- ----
Equal to or less than 4.50:1.00
but greater than 4.00:1.00 0.25% 0.00% 0.00%
Equal to or less than 4.00:1.00
but greater than 3.50:1.00 0.50% 0.50% 0.00%
Equal to or less than 3.50:1.00
but greater than 3.00:1.00 0.75% 0.50% 0.125%
Equal to or less than 3.00:1.00
but greater than 2.50:1.00 1.00% 0.50% 0.125%
Equal to or less than 2.50:1.00 1.25% 0.50% 0.25%
"Reference Lenders" means the principal London offices of Fleet Bank,
National Association, LaSalle National Bank and MGT, and "Reference Lender"
means any one of such Reference Lenders; provided that upon the resignation of
any Reference Lender, the Agent and the Borrower shall designate a mutually
satisfactory substitute Reference Lender.
"Reference Period" shall have the meaning set forth in Section 5.15(xii) of
this Agreement.
"Refinancing" means and includes the refinancing and repayment in full of
all amounts outstanding under, and the termination of all commitments and
letters of credit in respect of, the Debt to be Refinanced.
"Refinancing Documents" means all documents, instruments and agreements
entered into in connection with the Refinancing.
"Register" shall have the meaning set forth in Section 10.11.
"Regulated Activity" means any generation, treatment, storage, recycling,
transportation or disposal of any Hazardous Substance.
"Regulation G" shall mean Regulation G of the Board of Governors of the
Federal Reserve System as from time to time in effect and any successor to all
or a portion thereof.
"Regulation T" shall mean Regulation T of the Board of Governors of the
Federal Reserve System as from time to time in effect and any successor to all
or a portion thereof.
"Regulation U" shall mean Regulation U of the Board of Governors of the
Federal Reserve System as from time to time in effect and any successor to all
or a portion thereof.
"Regulation X" shall mean Regulation X of the Board of Governors of the
Federal Reserve System as from time to time in effect and any successor to all
or a portion thereof.
"Related Persons" of any Person means any other Person directly or
indirectly owning (a) 5% or more of the outstanding common stock of such Person
(or, in the case of a Person that is not a corporation, 5% or more of the equity
in such Person) or (b) 5% or more of the combined voting power of the voting
stock of such Person.
"Release" means any discharge, emission or release, including a Release as
defined in CERCLA at 42 U.S.C. Section 9601(22). The term "Released" has a
corresponding meaning.
"Repayment Event" means (i) any Asset Sale, (ii) any Additional Debt
Incurrence or (iii) any Equity Issuance. The description of any transaction as
falling within the above definition does not affect any limitation on such
transaction imposed by Article 5 of this Agreement.
"Replaced Lender" shall have the meaning set forth in Section 8.06.
"Replacement Lender" shall have the meaning set forth in Section 8.06.
"Required Lenders" means Non-Defaulting Lenders the sum of whose
outstanding Term Loans and Revolving Loan Commitments (or, if after the Total
Revolving Loan Commitment has been terminated, outstanding Revolving Loans and
RL Percentages of outstanding Swingline Loans and the Aggregate LC Exposure)
represents an amount greater than 50% of the sum of (i) the total outstanding
Term Loans of Non-Defaulting Lenders and (ii) the Total Revolving Loan
Commitment less the aggregate Revolving Loan Commitments of Defaulting Lenders
(or, if after the Total Revolving Loan Commitment has been terminated, the then
total outstanding Revolving Loans of Non-Defaulting Lenders and the aggregate RL
Percentages of all Non-Defaulting Lenders of the then total outstanding
Swingline Loans and the Aggregate LC Exposure at such time).
"Restricted Acquisition" means any acquisition, whether in a single
transaction or series of related transactions, by the Borrower or any one or
more Subsidiaries, or any combination thereof, of (i) all or a substantial part
of the assets, all or any substantial part of a going business or division, of
any Person, whether through purchase of assets or securities, by merger or
otherwise, (ii) control of securities of an existing corporation or other Person
having ordinary voting power (apart from rights accruing under special
circumstances) to elect a majority of the board of directors of such corporation
or other Person or (iii) control of a greater than 50% ownership interest in any
existing partnership, joint venture or other Person.
"Restricted Payment" means (i) any dividend or other distribution on any of
the Borrower's or any Subsidiary's Capital Stock (except dividends payable
solely in shares of its common stock or Qualified Preferred Stock) or (ii) any
payment on account of the purchase, redemption, retirement or acquisition of any
of the Borrower's or any Subsidiary's Capital Stock (but not including payments
of principal, premium (if any) or interest made pursuant to the terms of
convertible debt securities prior to conversion); provided that payments in an
aggregate amount not to exceed $10,000,000 in respect of the repurchase of the
Borrower's Capital Stock from employees of the Borrower and its Subsidiaries,
former employees, directors, former directors, limited partners (and not general
partners) of Tekni-Plex Partners L.P., and their estates shall not be Restricted
Payments provided, further, that no more than $5,000,000, in the aggregate, may
be used in respect of such repurchases from limited partners of Tekni-Plex
Partners L.P.
"Retained Asset Sale Proceeds" shall have the meaning provided in Section
2.10(d).
"Revolving Credit Period" means the period from and including the
Initial Borrowing Date to but not including the Revolving Loan Maturity Date.
"Revolving Loan" shall have the meaning provided in Section 2.01(c).
"Revolving Loan Commitment" means, for each Lender, the amount set forth
opposite such Lender's name in Schedule 1 directly below the column entitled
"Revolving Loan Commitment," as the same may be (x) reduced from time to time
pursuant to Sections 2.08, 2.09 and/or 6.01 and (y) adjusted from time to time
as a result of assignments to or from such Lender pursuant to Section 8.06 or
Section 10.06(b).
"Revolving Loan Maturity Date" shall mean March 31, 2004.
"Revolving Note" shall have the meaning set forth in Section 2.15(a).
"RL Lender" means, at any time, each Lender with a Revolving Loan
Commitment or outstanding Revolving Loans at such time.
"RL Percentage" means, at any time with respect to any RL Lender, the
percentage obtained by dividing such RL Lender's Revolving Loan Commitment at
such time by the Total Revolving Loan Commitment at such time, provided that if
the RL Percentage of any RL Lender is to be determined after the Total Revolving
Loan Commitment has been terminated, then the RL Percentages of each RL Lender
shall be determined by dividing such RL Lender's Revolving Loan Commitment as in
effect immediately prior to such termination by the Total Revolving Loan
Commitment in effect immediately prior to such termination.
"S&P" means Standard & Poor's Rating Services.
"Scheduled Repayment" means each Tranche A Scheduled Repayment and each
Tranche B Scheduled Repayment.
"SEC" means the Securities and Exchange Commission or any successor
thereto.
"Secured Creditors" shall have the meaning assigned that term in the
respective Collateral Documents.
"Securities Act" shall mean the Securities Act of 1933, as amended, and the
rules and regulations promulgated thereunder.
"Securities Exchange Act" shall mean the Securities Exchange Act of 1934,
as amended, and the rules and regulations promulgated thereunder.
"Security Agreement" means the security agreement substantially in the form
of Exhibit D hereto between each Obligor party thereto and the Agent entered
into as of the Initial Borrowing Date, as amended from time to time.
"Start Date" shall mean the first day of any Applicable Period.
"Stated Amount" of each Letter of Credit means at any time the maximum
amount available to be drawn thereunder (regardless of whether any conditions
for drawing could then be met).
"Subsidiary" means, as to any Person, any corporation or other entity of
which securities or other ownership interests having ordinary voting power to
elect a majority of the board of directors or other persons performing similar
functions (irrespective of whether or not at the time stock of any class or
classes of such corporation shall have or might have voting power by reason of
the happening of any contingency) are at the time directly or indirectly owned
by such Person. Unless otherwise specified, "Subsidiary" means a Subsidiary of
the Borrower.
"Supermajority Lenders" of any Tranche shall mean those Non-Defaulting
Lenders which would constitute the Required Lenders under, and as defined in,
this Agreement if (x) all to the Agent outstanding Obligations of the other
Tranches under this Agreement were repaid in full and all Commitments with
respect thereto were terminated and (y) the percentage "50%" contained therein
were changed to "66-2/3%."
"Swingline Expiry Date" means the date which is five (5) Business Days
prior to the Revolving Loan Maturity Date.
"Swingline Lender" means MGT in its individual capacity.
"Swingline Loan" shall have the meaning provided in Section 2.01(d).
"Swingline Note" shall have the meaning set forth in Section 2.15(a).
"Taxes" shall have the meaning set forth in Section 8.04(a).
"Term Loan" means each Tranche A Term Loan and each Tranche B Term Loan.
"Term Loan Commitments" shall mean and include Tranche A Term Loan
Commitments and Tranche B Term Loan Commitments.
"Test Date" shall mean, with respect to any Applicable Period, the last day
of the most recent Fiscal Quarter or Fiscal Year, as the case may be, ended
immediately prior to the Start Date with respect to such Applicable Period.
"Test Period" means the four consecutive Fiscal Quarters then last ended
(taken as one accounting period); provided that for any determination of
Consolidated EBITDA on or prior to January 4, 1999, Consolidated EBITDA shall be
calculated on a pro forma basis as if the Transaction had occurred at the
beginning of the relevant Test Period (with such pro forma calculation not to
include pro forma cost savings or synergies except $368,000 relating to the
elimination of PureTec expenses for brokers in connection with potential sales
of certain businesses).
"Total Commitment" means the sum of the Total Term Loan Commitment and the
Total Revolving Loan Commitment.
"Total Revolving Loan Commitment" shall mean, at any time, the sum of the
Revolving Loan Commitments of each of the RL Lenders.
"Total Term Loan Commitment" shall mean, at any time, the sum of the
Tranche A Term Loan Commitment and Tranche B Term Loan Commitment.
"Total Tranche A Term Loan Commitment" means the sum of the Tranche A Term
Loan Commitments of each of the Lenders.
"Total Tranche B Term Loan Commitment" means the sum of the Tranche B Term
Loan Commitments of each of the Lenders.
"Total Unutilized Revolving Loan Commitment" shall mean, at any time, an
amount equal to the remainder of (x) the Total Revolving Loan Commitment then in
effect minus (y) the sum of the aggregate principal amount of all Revolving
Loans and Swingline Loans then outstanding plus the Aggregate LC Exposure at
such time.
"Tranche" means the respective facility and commitments utilized in making
Loans hereunder, with these being four separate Tranches, i.e., Tranche A Term
Loans, Tranche B Term Loans, Revolving Loans and Swingline Loans.
"Tranche A Maturity Date" means March 31, 2004.
"Tranche A Scheduled Repayment" shall have the meaning set forth in Section
2.10(b).
"Tranche A Scheduled Repayment Date" shall have the meaning set forth in
Section 2.10(b).
"Tranche A Term Loan" shall have the meaning provided in Section 2.01(a).
"Tranche A Term Loan Commitment" means, for each Lender, the amount set
forth opposite such Lender's name in Schedule 1 directly below the column
entitled "Tranche A Term Loan Commitment", as the same may be (x) reduced from
time to time pursuant to Sections 2.09 and/or 6.01 and (y) adjusted from time to
time as a result of assignments to or from such Lender pursuant to Section 8.06
or 10.06(b).
"Tranche A Term Note" shall have the meaning set forth in Section 2.15(a).
"Tranche B Maturity Date" means March 31, 2006.
"Tranche B Scheduled Repayment" shall have the meaning set forth in Section
2.10(c).
"Tranche B Scheduled Repayment Date" shall have the meaning set forth in
Section 2.10(c).
"Tranche B Term Loan" shall have the meaning provided in Section 2.01(b).
"Tranche B Term Loan Commitment" means, for each Lender, the amount set
forth opposite such Lender's name on Schedule 1 directly below the column
entitled "Tranche B Term Loan Commitment", as the same may be (x) reduced from
time to time pursuant to Sections 2.09 and/or 6.01 and (y) adjusted from time to
time as a result of assignments to or from such Lender pursuant to Section 8.06
or 10.06(b).
"Tranche B Term Note" shall have the meaning set forth in Section 2.15(a).
"Transaction" means, collectively, (i) the issuance by the Borrower of the
New Senior Subordinated Notes, (ii) the consummation of the Refinancing, (iii)
the consummation of the Existing PST Senior Secured Notes Tender Offer/Consent
Solicitation and the making of the Existing PST Senior Secured Notes Tender
Offer Repurchases pursuant thereto and the amendments to the Existing PST Senior
Secured Notes Indenture and Existing PST Senior Secured Notes Collateral
Documents as contemplated therein, (iv) the consummation of the PST Minority
Acquisition, (v) the consummation of the PureTec Acquisition, (vi) the
incurrence of Loans on the Initial Borrowing Date and (vii) the payment of fees
and expenses owing in connection with the foregoing.
"Transaction Date" shall have the meaning set forth in Section 5.15 (xii)
of this Agreement.
"Type" means the type of Loan determined with regard to the interest option
applicable thereto, i.e. whether a Base Rate Loan or a Eurodollar Loan.
"UCC" means the Uniform Commercial Code as in effect from time to time in
the relevant jurisdiction.
"Unfunded Liabilities" means, with respect to any Plan at any time, the
amount (if any) by which (i) the value of all benefit liabilities under such
Plan, determined on a plan termination basis using the assumptions prescribed by
the PBGC for purposes of Section 4044 of ERISA, exceeds (ii) the fair market
value of all Plan assets allocable to such liabilities under Title IV of ERISA
(excluding any accrued but unpaid contributions), all determined as of the then
most recent valuation date for such Plan, but only to the extent that such
excess represents a potential liability of a member of the ERISA Group to the
PBGC or any other Person under Title IV of ERISA.
"Unutilized Revolving Loan Commitment" means, with respect to any Lender,
at any time, such Lender's Revolving Loan Commitment at such time less the sum
of (x) the aggregate principal amount of all Revolving Loans made by such Lender
then outstanding and (y) such Lender's RL Percentage of the Aggregate LC
Exposure at such time.
"United States" means the United States of America.
"Wholly-Owned Subsidiary" shall mean, as to any Person, (i) any corporation
100% of whose Capital Stock (other than director's qualifying shares) is at the
time owned by such Person and/or one or more Wholly-Owned Subsidiaries of such
Person and (ii) any partnership, association, joint venture or other entity in
which such Person and/or one or more Wholly-Owned Subsidiaries of such Person
has a 100% equity interest at such time.
Section 1.02. Accounting Terms and Determinations. The definitions in
Section 1.01 shall apply equally to both the singular and plural forms of the
terms defined. Whenever the context may require, any pronoun shall include the
corresponding masculine, feminine and neuter forms. The words "include",
"includes" and "including" shall be deemed to be followed by the phrase "without
limitation". All references herein to Articles, Sections, Exhibits and Schedules
shall be deemed references to Articles and Sections of, and Exhibits and
Schedules to, this Agreement unless the context shall otherwise require. Except
as otherwise expressly provided herein, (a) any reference in this Agreement to
any Loan Document shall mean such document as amended, restated, supplemented or
otherwise modified from time to time and (b) all terms of an accounting or
financial nature shall be construed in accordance with GAAP, as in effect from
time to time provided that, if the Borrower notifies the Agent that the Borrower
wishes to amend any provision hereof to eliminate the effect of any change in
GAAP (or if the Agent notifies the Borrower that the Required Lenders wish to
amend any provision hereof for such purpose), then such provision shall be
applied on the basis of GAAP in effect immediately before the relevant change in
GAAP became effective, until either such notice is withdrawn or such provision
is amended in a manner satisfactory to the Borrower and the Required Lenders.
ARTICLE II
The Credits
Section 2.01. Commitments to Lend. (a) Subject to and upon the terms and
conditions set forth herein, each Lender with a Tranche A Term Loan Commitment
severally agrees to make, on the Initial Borrowing Date, a term loan or term
loans (each, a "Tranche A Term Loan" and, collectively, the "Tranche A Term
Loans") to the Borrower, which Tranche A Term Loans (i) shall be denominated in
Dollars, (ii) shall, at the option of the Borrower, be incurred and maintained
as, and/or converted into, Base Rate Loans or Euro-Dollar Loans, provided that
all Tranche A Term Loans comprising the same Borrowing of Tranche A Term Loans
shall, unless otherwise specifically provided herein, consist of Tranche A Term
Loans of the same Type and (iii) shall be made by each such Lender in that
initial aggregate principal amount as is equal to the Tranche A Term Loan
Commitment of such Lender on the Initial Borrowing Date. Once repaid, Tranche A
Term Loans incurred hereunder may not be reborrowed.
(b) Subject to and upon the terms and conditions set forth herein, each
Lender with a Tranche B Term Loan Commitment severally agrees to make, on the
Initial Borrowing Date, a term loan or term loans (each, a "Tranche B Term Loan"
and, collectively, the "Tranche B Term Loans") to the Borrower, which Tranche B
Term Loans (i) shall be denominated in Dollars, (ii) shall, at the option of the
Borrower, be incurred and maintained as, and/or converted into, Base Rate Loans
or Euro-Dollar Loans, provided that all Tranche B Term Loans comprising the same
Borrowing of Tranche B Term Loans shall, unless otherwise specifically provided
herein, consist of Tranche B Term Loans of the same Type and (iii) shall be made
by each such Lender in that initial aggregate principal amount as is equal to
the Tranche B Term Loan Commitment of such Lender on the Initial Borrowing Date.
Once repaid, Tranche B Term Loans incurred hereunder may not be reborrowed.
(c) Subject to and upon the terms and conditions set forth herein, each
Lender with a Revolving Loan Commitment severally agrees, at any time and from
time to time during the Revolving Credit Period, to make a revolving loan or
revolving loans (each, a "Revolving Loan" and, collectively, the "Revolving
Loans") to the Borrower, which Revolving Loans (i) shall be denominated in
Dollars, (ii) shall, at the option of the Borrower, be incurred and maintained
as and/or converted into Base Rate Loans or Euro-Dollar Loans, provided, that
all Revolving Loans made as part of the same Borrowing shall, unless otherwise
specifically provided herein, consist of Revolving Loans of the same Type, (iii)
may be repaid and reborrowed in accordance with the provisions hereof and (iv)
shall not exceed for any Lender at any time outstanding that aggregate principal
amount which, when combined with the sum of (I) the aggregate principal amount
of all other then outstanding Revolving Loans made by such Lender and (II) the
product of (A) such Lender's RL Percentage multiplied by (B) the sum of (x) the
Aggregate LC Exposure (exclusive of LC Reimbursement Obligations which are paid
with the proceeds of, and simultaneously with the incurrence of, the respective
incurrence of Revolving Loans) at such time and (y) the aggregate principal
amount of all Swingline Loans (exclusive of Swingline Loans which are repaid
with the proceeds of, and simultaneously with the incurrence of, the respective
incurrence of Revolving Loans) then outstanding, equals the Revolving Loan
Commitment of such Lender at such time.
(d) Subject to and upon the terms and conditions set forth herein, the
Swingline Lender agrees to make at any time and from time to time after the
Initial Borrowing Date and prior to the Swingline Expiry Date, a revolving loan
or revolving loans to the Borrower (each, a "Swingline Loan" and, collectively,
the "Swingline Loans"), which Swingline Loans (i) shall be made and maintained
as Base Rate Loans, (ii) shall be denominated in Dollars, (iii) may be repaid
and reborrowed in accordance with the provisions hereof, (iv) shall not exceed
in aggregate principal amount at any time outstanding, when combined with the
aggregate principal amount of all Revolving Loans then outstanding and the
Aggregate LC Exposure (exclusive of LC Reimbursement Obligations which are
repaid with the proceeds of, and simultaneously with the incurrence of, the
respective incurrence of Swingline Loans) at such time, an amount equal to the
Total Revolving Loan Commitment then in effect and (v) shall not exceed in
aggregate principal amount at any time outstanding the Maximum Swingline Amount.
The Swingline Lender shall not be obligated to make any Swingline Loans at a
time when a Lender Default exists unless the Swingline Lender has entered into
arrangements satisfactory to it and the Borrower to eliminate the Swingline
Lender's risk with respect to the Defaulting Lender's or Lenders' participation
in such Swingline Loans, including by cash collateralizing such Defaulting
Lender's or Lenders' RL Percentage of the outstanding Swingline Loans. The
Swingline Lender will not make a Swingline Loan after it has received written
notice from the Borrower or the Required Lenders stating that a Default exists
until such time as the Swingline Lender shall have received a written notice of
(i) rescission of such notice from the party or parties originally delivering
the same or (ii) a waiver of such Default from the Required Lenders.
(e) On any Business Day, the Swingline Lender may, in its sole discretion,
give notice to the RL Lenders that its outstanding Swingline Loans shall be
funded with a Borrowing of Revolving Loans (provided that each such notice shall
be deemed to have been automatically given upon occurrence of a Default under
Section 6.01(g) or (h) or upon the exercise of any remedies provided in the last
paragraph of Section 6.01), in which case a Borrowing of Revolving Loans
constituting Base Rate Loans (each such Borrowing, a "Mandatory Borrowing")
shall be made on the immediately succeeding Business Day by all RL Lenders pro
rata based on each RL Lender's RL Percentage, and the proceeds thereof shall be
applied directly to repay the Swingline Lender for such outstanding Swingline
Loans. Each such Lender hereby irrevocably agrees to make Base Rate Loans upon
one Business Day's notice pursuant to each Mandatory Borrowing in the amount and
in the manner specified in the preceding sentence and on the date specified in
writing by the Swingline Lender notwithstanding (i) that the amount of the
Mandatory Borrowing may not comply with the Minimum Borrowing Amount otherwise
required hereunder, (ii) whether any conditions specified in Section 3.02 are
then satisfied, (iii) whether a Default or an Event of Default has occurred and
is continuing, (iv) the date of such Mandatory Borrowing and (v) any reduction
in the Total Revolving Loan Commitment after any such Swingline Loans were made.
In the event that an Mandatory Borrowing cannot for any reason be made on the
date otherwise required above (including, without limitation, as a result of the
commencement of a proceeding under the Bankruptcy Code in respect of the
Borrower), each RL Lender (other than the Swingline Lender) hereby agrees that
it shall forthwith purchase from the Swingline Lender (without recourse or
warranty) such assignment of the outstanding Swingline Loans as shall be
necessary to cause the RL Lenders to share in such Swingline Loans ratably based
upon their respective RL Percentages, provided that all interest payable on the
Swingline Loans shall be for the account of the Swingline Lender until the date
the respective assignment is purchased and, to the extent attributable to the
purchased assignment, shall be payable to the RL Lender purchasing same from and
after such date of purchase.
Section 2.02. Minimum Borrowing Amounts, etc.; Pro rata Borrowings. (a) The
aggregate principal amount of each Borrowing of Loans under any Tranche shall
not be less than the respective Minimum Borrowing Amount for such Tranche;
provided that Mandatory Borrowings shall be made in amounts required by Section
2.01(e). More than one Borrowing may occur on the same date, but at no time
shall there be outstanding more than 10 Borrowings of Euro-Dollar Loans.
(b) All Borrowings of Tranche A Term Loans, Tranche B Term Loans and
Revolving Loans under this Agreement shall be incurred from the Lenders pro rata
on the basis of their Tranche A Term Loan Commitments, Tranche B Term Loan
Commitments or Revolving Loan Commitments, as the case may be. It is understood
that no Lender shall be responsible for any default by any other Lender of its
obligation to make Loans hereunder and that each Lender shall be obligated to
make the Loans to be made by it hereunder, regardless of the failure of any
other Lender to make its Loans hereunder.
Section 2.03. Method of Borrowing. (a) Whenever the Borrower desires to
incur Loans hereunder (excluding Borrowings of Swingline Loans and Revolving
Loans incurred pursuant to a Mandatory Borrowing) it shall give the Agent notice
(a "Notice of Borrowing") no later than 11:00 A.M. (New York City time) on (x)
the date of each Base Rate Borrowing and (y) the third Business Day before each
Euro-Dollar Borrowing. Each such Notice of Borrowing shall be given by written
communication (or telephonic communication promptly confirmed in writing) and
shall specify:
(i) the date of such Borrowing (which shall be a Business Day);
(ii) the aggregate principal amount of the Loans to be incurred
pursuant to such Borrowing;
(iii) whether the Loans being incurred pursuant to such Borrowing
shall constitute Tranche A Term Loans, Tranche B Term Loans or
Revolving Loans;
(iv) whether the Loans comprising such Borrowing are to bear
interest initially at the Base Rate or a Euro-Dollar Rate; and
(v) in the case of a Euro-Dollar Borrowing, the duration of the
initial Interest Period applicable thereto, subject to the provisions of
the definition of Interest Period.
(b) Promptly after receiving a Notice of Borrowing, the Agent shall notify
each Lender which is required to make Loans of the Tranche specified in the
respective Notice of Borrowing of the contents thereof and of such Lender's
ratable share of such Borrowing, and such Notice of Borrowing shall not
thereafter be revocable by the Borrower.
(c) (i) Whenever the Borrower desires to incur Swingline Loans hereunder,
it shall give the Swingline Lender not later than 2:00 P.M. (New York City
time) on the day such Swingline Loan is to be made, written notice (or
telephonic notice promptly confirmed in writing) of each Swingline Loan to
be made hereunder. Each such notice shall be irrevocable and shall specify
in each case (x) the date of such Borrowing (which shall be a Business Day)
and (y) the aggregate principal amount of the Swingline Loan to be made
pursuant to such Borrowing.
(ii) Mandatory Borrowings shall be made upon the notice specified in
Section 2.01 (e), with the Borrower irrevocably agreeing, by its incurrence
of any Swingline Loan, to the making of Mandatory Borrowings as set forth
in such Section 2.01(e).
(d) No later than 1:00 P.M. (New York City time) on the date of each
Borrowing (or (x) in the case of Swingline Loans, no later than 2:00 P.M. (New
York City time) on the date specified in Section 2.03 (c)(i) or (y) in the case
of Revolving Loans incurred pursuant to Mandatory Borrowings, no later than
12:00 Noon (New York City time) on the date specified in Section 2.01 (e)), each
Lender with a Commitment of the respective Tranche shall make available its
ratable share of such Borrowing (or, in the case of Swingline Loans, the
Swingline Lender will make available the full amount thereof), in Federal or
other funds immediately available in New York City, to the Agent at its address
specified in or pursuant to Section 10.01. The failure of any Lender to make
available such funds shall not relieve any other Lender of its obligations
hereunder. Unless the Agent determines that any applicable condition specified
in Article 3 has not been satisfied, the Agent will make any funds so received
from the Lenders available to the Borrower in Federal or other funds immediately
available in New York City no later than 2:00 P.M. (or, in the case of Swingline
Loans, 3:00 P.M.) (New York City time) on the date of such Borrowing by credit
to an account of the Borrower at the Agent's aforesaid address or to such other
account of the Borrower in New York City as may have been specified in the
applicable Notice of Borrowing and as shall be reasonably acceptable to the
Agent.
(e) Unless the Agent shall have received notice from a Lender before the
date of any Borrowing that such Lender will not make available to the Agent such
Lender's share of such Borrowing, the Agent may assume that such Lender has made
such share available to the Agent on the date of such Borrowing in accordance
with subsection (d) of this Section, and the Agent may, in reliance upon such
assumption, make available to the Borrower on such date a corresponding amount.
If and to the extent that such Lender shall not have so made such share
available to the Agent, such Lender and the Borrower severally agree to repay to
the Agent forthwith on demand such corresponding amount together with interest
thereon, for each day from the date such amount is made available to the
Borrower until the date such amount is repaid to the Agent, at (i) if such
amount is repaid by the Borrower, a rate per annum equal to the higher of the
Federal Funds Rate and the interest rate applicable thereto pursuant to Section
2.05 and (ii) if such amount is repaid by such Lender, the Federal Funds Rate.
If such Lender shall repay to the Agent such corresponding amount, the Borrower
shall not be required to repay such amount and the amount so repaid by such
Lender shall constitute such Lender's Loan included in such Borrowing for
purposes of this Agreement.
Section 2.04. Maturity of Loans. Each Loan shall mature, and the principal
amount thereof shall be due and payable (together with interest accrued
thereon), on (x) in the case of Swingline Loans, the Swingline Expiry Date and
(y) in the case of Term Loans and Revolving Loans, the respective Maturity Date.
Section 2.05. Interest Rates. (a) Each Base Rate Loan shall bear interest
on the outstanding principal amount thereof, for each day from the date such
Loan is made until the earlier of (i) the maturity thereof (whether by
acceleration or otherwise) and (ii) the conversion of such Base Rate Loan into a
Euro-Dollar Loan pursuant to Section 2.06, at a rate per annum equal to the sum
of (x) the Applicable Base Rate Margin plus (y) the Base Rate for such day. Such
interest shall be payable quarterly in arrears on each Quarterly Payment Date
and, with respect to the principal amount of any Base Rate Loan converted to a
Euro-Dollar Loan, on the date such amount is so converted. Any overdue principal
of or interest on any Base Rate Loan shall bear interest, payable on demand, for
each day until paid at a rate per annum equal to the sum of 2% plus the
Applicable Base Rate Margin for such day plus the Base Rate for such day.
(b) Each Euro-Dollar Loan shall bear interest on the outstanding principal
amount thereof, for each day during each Interest Period applicable thereto
until the earlier of (i) the maturity thereof (whether by acceleration or
otherwise) and (ii) the conversion of such Euro-Dollar Loan into a Base Rate
Loan pursuant to Section 2.06 or Article 8, as applicable, at a rate per annum
equal to the sum of (x) the Applicable Euro-Dollar Margin plus (y) the Adjusted
London Interbank Offered Rate applicable to such Interest Period. Such interest
shall be payable (x) on the date of any conversion into a Base Rate Loan
pursuant to Section 2.06 or Article 8, as applicable (on the amount so
converted) and (y) for each Interest Period, on the last day thereof and, if
such Interest Period is longer than three months, at intervals of three months
after the first day thereof.
(c) Any overdue principal of or interest on any Euro-Dollar Loan shall bear
interest, payable on demand, for each day until paid at a rate per annum equal
to the higher of (i) the sum of 2% plus the Applicable Euro-Dollar Margin plus
the Adjusted London Interbank Offered Rate applicable to such Loan on the day
before such payment was due and (ii) the sum of 2% plus the Applicable Base Rate
Margin plus the Base Rate for such day (or, if the circumstances described in
clause (a) or (b) of Section 8.01 shall exist, at a rate per annum equal to the
sum of 2% plus the Applicable Base Rate Margin plus the Base Rate for such day).
(d) The Agent shall determine each interest rate applicable to the Loans
hereunder. The Agent shall promptly notify the Borrower and the participating
Lenders of each rate of interest so determined, and its determination thereof
shall be conclusive in the absence of manifest error.
(e) Each Reference Lender agrees to use its best efforts to furnish
quotations to the Agent as contemplated by the definition of London Interbank
Offered Rate. If any Reference Lender does not furnish a timely quotation, the
Agent shall determine the relevant interest rate on the basis of the quotation
or quotations furnished by the remaining Reference Lender or Lenders or, if none
of such quotations is available on a timely basis, the provisions of Section
8.01 shall apply.
Section 2.06. Method of Electing Interest Rates. (a) The Loans included in
each Borrowing shall bear interest initially at the type of rate specified by
the Borrower in the applicable Notice of Borrowing. Thereafter, the Borrower may
from time to time elect to change or continue the type of interest rate borne by
each Borrowing (subject to subsection (d) of this Section and the provisions of
Article 8), as follows:
(i) if such Loans are Base Rate Loans, the Borrower may elect to
convert such Loans to Euro-Dollar Loans as of any Business Day, and
(ii) if such Loans are Euro-Dollar Loans, the Borrower may elect to
convert such Loans to Base Rate Loans or elect to continue such Loans as
Euro-Dollar Loans for an additional Interest Period, subject to Section
2.13 if any such conversion is effective on any day other than the last day
of an Interest Period applicable to such Loans.
Each such election shall be made by delivering a notice (a "Notice of
Interest Rate Election") to the Agent no later than 11:00 A.M. (New York
City time) on the third Business Day before the conversion or continuation
selected in such notice is to be effective. A Notice of Interest Rate
Election may, if it so specifies, apply to only a portion of the aggregate
principal amount of the relevant Borrowing; provided that (i) such portion
shall be allocated ratably among the Loans comprising such Borrowing and
(ii) the portion to which such Notice applies, and the remaining portion to
which it does not apply, shall each be at least equal to the Minimum
Borrowing Amount applicable thereto. If no such notice is timely received
before the end of an Interest Period for any Borrowing of Euro-Dollar
Loans, the Borrower shall be deemed to have elected that such Borrowing of
Euro-Dollar be converted to Base Rate Loans at the end of such Interest
Period.
(b) Each Notice of Interest Rate Election shall specify:
(i) the Borrowing (or portion thereof) to which such notice applies;
(ii) the date on which the conversion or continuation selected in such
notice is to be effective, which shall comply with the applicable clause of
subsection (a) above;
(iii)if the Loans comprising such Borrowing are to be converted, the
new type of Loans and, if the Loans resulting from such conversion are to
be Euro-Dollar Loans, the duration of the next succeeding Interest Period
applicable thereto; and
(iv) if such Loans are to be continued as Euro-Dollar Loans for an
additional Interest Period, the duration of such additional Interest
Period.
Each Interest Period specified in a Notice of Interest Rate Election
shall comply with the provisions of the definition of Interest Period.
(c) Promptly after receiving a Notice of Interest Rate Election from the
Borrower pursuant to subsection (a) above, the Agent shall notify each Lender of
the contents thereof and such notice shall not thereafter be revocable by the
Borrower.
(d) The Borrower shall not be entitled to elect to convert any Loans to, or
continue any Loans for an additional Interest Period as, Euro-Dollar Loans if
(i) the aggregate principal amounts of any Borrowing of Euro-Dollar Loans
created or continued as a result of such election would be less than the Minimum
Borrowing Amount applicable thereto or (ii) a Default shall have occurred and be
continuing when the Borrower delivers notice of such election to the Agent.
Section 2.07. Fees. (a) The Borrower shall pay to the Agent, for the
account of each RL Lender that is a Non-Defaulting Lender, a commitment fee (the
"Commitment Fee") computed at the rate for each day equal to the Applicable
Commitment Fee Percentage on the daily Unutilized Revolving Loan Commitment for
such Lender. The Commitment Fee shall accrue from and including the Effective
Date to but excluding the date on which the Total Revolving Loan Commitment
terminates in its entirety.
(b) The Borrower shall pay to the Agent, for the several account of each RL
Lender that is a Non-Defaulting Lender ratably in proportion to their RL
Percentages, a letter of credit fee (the "LC Fee") for each day computed at a
rate per annum equal to the Applicable Margin for Revolving Loans maintained as
Euro-Dollar Loans on the aggregate Stated Amounts under all Letters of Credit
outstanding at the close of business on such day. The Borrower shall pay to each
LC Issuing Bank a fronting fee (the "Fronting Fee") for each day of 0.25% per
annum on the aggregate Stated Amounts under all Letters of Credit issued by such
LC Issuing Bank and outstanding at the close of business on such day, and other
standard and customary processing charges.
(c) Fees accrued for the several accounts of the Lenders under this Section
shall be payable quarterly in arrears on each Quarterly Payment Date and on the
day on which the Total Revolving Loan Commitment terminates in its entirety.
(d) The Borrower shall pay when due to the Agent, for its own account, such
other fees as have been agreed to in writing by the Borrower and the Agent.
Section 2.08. Optional Termination or Reduction of Commitments. (a) The
Borrower may (without premium or penalty), upon at least three Business Days'
notice to the Agent, terminate or partially reduce the Total Unutilized
Revolving Loan Commitments, provided that (i) each such reduction shall apply
proportionately to permanently reduce the Revolving Loan Commitment of each RL
Lender and (ii) any partial reduction to the Total Unutilized Revolving Loan
Commitment pursuant to this Section 2.08 shall be in an amount of at least
$5,000,000 and, if greater, in integral multiples of $1,000,000. Promptly after
receiving a notice pursuant to this Section, the Agent shall notify each Lender
of the contents thereof.
Section 2.09. Mandatory Reduction of Commitments. (a) The Total Commitment
(and the Tranche A Term Loan Commitment, the Tranche B Term Loan Commitment and
the Revolving Loan Commitment of each Lender) shall terminate in its entirety on
March 31, 1998 unless the Initial Borrowing Date shall have occurred on or prior
to such date.
(b) In addition to any other mandatory commitment reductions pursuant to
this Section 2.09, the Total Tranche A Term Loan Commitment (and the Tranche A
Term Loan Commitment of each Bank) shall terminate in its entirety on the
Initial Borrowing Date (after giving effect to the making of the Tranche A Term
Loans on such date).
(c) In addition to any other mandatory commitment reductions pursuant to
this Section 2.09, the Total Tranche B Term Loan Commitment (and the Tranche B
Term Loan Commitment of each Lender) shall terminate in its entirety on the
Initial Borrowing Date (after giving effect to the making of the Tranche B Term
Loans on such date).
(d) In addition to any other mandatory commitment reductions pursuant to
this Section 2.09, in the event that any Existing PST Senior Secured Notes
remain outstanding on the Initial Borrowing Date (after giving effect to the
consummation of the Existing PST Senior Secured Notes Tender Offer/Consent
Solicitation), the Total Term Loan Commitment shall be permanently reduced on
such date by an amount equal to the amount which would have been paid to the
holders of such notes had the same been tendered pursuant to the Existing PST
Senior Secured Notes Tender Offer/Consent Solicitation. Each reduction to the
Total Term Loan Commitment as required by this Section 2.09(d) shall be applied
pro rata to reduce the Total Tranche A Term Loan Commitment and the Total
Tranche B Term Loan Commitment based upon the aggregate amount of Term Loan
Commitments of the respective Tranche. The amount of each reduction to the Total
Tranche A Term Loan Commitment and Total Tranche B Term Loan Commitment as
required by this Section 2.09(d) shall be applied pro rata to reduce the then
remaining Scheduled Repayments of the respective Tranche, based upon the then
remaining amount of each Scheduled Repayment of the respective Tranche, after
giving effect to all prior reductions thereto.
(e) In addition to any other mandatory commitment reductions pursuant to
this Section 2.09, the Total Revolving Loan Commitment (and the Revolving Loan
Commitment of each Lender) shall terminate in its entirety on the Revolving Loan
Maturity Date.
(f) In addition to any other mandatory commitment reductions pursuant to
this Section 2.09, on each date after the Initial Borrowing Date upon which a
mandatory prepayment of Term Loans pursuant to Section 2.10(d) through (f),
inclusive, is required (and exceeds in amount the aggregate principal amount of
Term Loans then outstanding) or would be required if Term Loans were then
outstanding, the Total Revolving Loan Commitment shall be permanently reduced by
the amount, if any, by which the amount required to be applied pursuant to said
Sections (determined as if an unlimited amount of Term Loans were actually
outstanding) exceeds the aggregate principal amount of Term Loans then
outstanding.
(g) Each reduction to the Total Tranche A Term Loan Commitment, the Total
Tranche B Term Loan Commitment and the Total Revolving Loan Commitment pursuant
to this Section 2.09 (or pursuant to Section 2.10) shall be applied
proportionately to reduce the Tranche A Term Loan Commitment, the Tranche B Term
Loan Commitment or the Revolving Loan Commitment, as the case may be, of each
Lender with such a Commitment.
Section 2.10. Mandatory Repayments. (a) On any day on which the sum of (i)
the aggregate outstanding principal amount of the Revolving Loans and Swingline
Loans (after giving effect to all other repayments thereof on such date) and
(ii) the Aggregate LC Exposure exceeds the Total Revolving Loan Commitment as
then in effect, the Borrower shall prepay on such date principal of Swingline
Loans and to the extent no Swingline Loans are or remain outstanding, Revolving
Loans, in an amount equal to such excess. If, after giving effect to the
prepayment of all outstanding Swingline Loans and Revolving Loans, the Aggregate
LC Exposure exceeds the Total Revolving Loan Commitment as then in effect, the
Borrower agrees to pay to the Agent an amount in cash and/or Cash Equivalents
equal to such excess (up to the amount of the Aggregate LC Exposure at such
time) and the Agent shall hold such payment as security for the obligations of
the Borrower hereunder pursuant to a cash collateral agreement to be entered
into in form and substance reasonably satisfactory to the Agent, provided that
if the Revolving Loan Commitments shall have been terminated, all other amounts
payable hereunder shall have been paid in full and no Default shall have
occurred and be continuing, the Agent shall from time to time upon the request
of the Borrower return to the Borrower such portion of such amount as the Agent
in its sole discretion determines is no longer needed to provide cover for
Aggregate LC Exposure and related fees and expenses payable under this
Agreement.
(b) In addition to any other mandatory repayments or commitment reductions
pursuant to this Section 2.10, on each date set forth below, the Borrower shall
be required to repay that principal amount of Tranche A Term Loans, to the
extent then outstanding, as is set forth opposite such date (each such
repayment, as the same may be reduced as provided in Sections 2.09(d), 2.10(g)
and 2.11, a "Tranche A Scheduled Repayment," and each such date, a "Tranche A
Scheduled Repayment Date"):
<PAGE>
Tranche A
Scheduled Repayment Date Amount
- ------------------------ ------
June 30, 1998 $ 625,000
September 30, 1998 $ 625,000
December 31, 1998 $ 625,000
March 31, 1999 $ 625,000
June 30, 1999 $ 625,000
September 30, 1999 $ 625,000
December 31, 1999 $ 625,000
March 31, 2000 $ 625,000
June 30, 2000 $1,250,000
September 30, 2000 $1,250,000
December 31, 2000 $1,250,000
March 31, 2001 $1,250,000
June 30, 2001 $1,250,000
September 30, 2001 $1,250,000
December 31, 2001 $1,250,000
March 31, 2002 $1,250,000
June 30, 2002 $3,750,000
September 30, 2002 $3,750,000
December 31, 2002 $3,750,000
March 31, 2003 $3,750,000
June 30, 2003 $5,000,000
September 30, 2003 $5,000,000
December 31, 2003 $5,000,000
Tranche A Maturity Date $5,000,000
(c) In addition to any other mandatory repayments pursuant to this Section
2.10, on each date set forth below, the Borrower shall be required to repay that
principal amount of Tranche B Term Loans, to the extent then outstanding, as is
set forth opposite such date (each such repayment, as the same may be reduced as
provided in Sections 2.09(d), 2.10(g) and 2.11, a "Tranche B Scheduled
Repayment," and each such date, a "Tranche B Scheduled Repayment Date"):
Tranche B
Scheduled Repayment Date Amount
- ------------------------ ------
June 30, 1998 $ 162,500
September 30, 1998 $ 162,500
December 31, 1998 $ 162,500
March 31, 1999 $ 162,500
June 30, 1999 $ 162,500
September 30, 1999 $ 162,500
December 31, 1999 $ 162,500
March 31, 2000 $ 162,500
June 30, 2000 $ 162,500
September 30, 2000 $ 162,500
December 31, 2000 $ 162,500
March 31, 2001 $ 162,500
June 30, 2001 $ 162,500
September 30, 2001 $ 162,500
December 31, 2001 $ 162,500
March 31, 2002 $ 162,500
June 30, 2002 $ 162,500
September 30, 2002 $ 162,500
December 31, 2002 $ 162,500
March 31, 2003 $ 162,500
June 30, 2003 $ 162,500
September 30, 2003 $ 162,500
December 31, 2003 $ 162,500
March 31, 2004 $ 162,500
June 30, 2004 $7,150,000
September 30, 2004 $7,150,000
December 31, 2004 $7,150,000
March 31, 2005 $7,150,000
June 30, 2005 $8,125,000
September 30, 2005 $8,125,000
December 31, 2005 $8,125,000
Tranche B Maturity Date $8,125,000
(d) In addition to any other mandatory repayments pursuant to this
Section 2.10, on each date on or after the Effective Date upon which the
Borrower or any of its Subsidiaries receives any cash proceeds from any
Repayment Event, an amount equal to the Applicable Repayment Percentage of
the Net Cash Proceeds therefrom shall be applied as a mandatory repayment
of principal of Term Loans in accordance with the requirements of Sections
2.10(g) and (h); provided that with respect to (i) the disposition of
obsolete, unused or unnecessary equipment in the ordinary course of
business and (ii) no more than $10,000,000 in the aggregate for any Fiscal
Year and $25,000,000 in the aggregate during the term of this Agreement, in
each case, of Net Cash Proceeds received in connection with any Asset Sale
(other than pursuant to the immediately preceding clause (i)) (or
$100,000,000 in the case of the disposition of certain non-strategic assets
described to the Lenders prior to the Effective Date), the Net Cash
Proceeds, in each case, therefrom (such Net Cash Proceeds actually received
and not used to make repayments described above, the "Retained Asset Sale
Proceeds") shall not be required to be so applied on such date to the
extent no Default then exists and the Borrower delivers a certificate to
the Agent on or prior to such date stating that such Retained Asset Sale
Proceeds shall be used (or contractually committed to be used) for
reinvestment in other assets owned or to be owned by the Borrower or a
Subsidiary of the Borrower within 270-days following the date of such Asset
Sale (which certificate shall set forth the estimates of the proceeds to be
so expended) or to make Permitted Acquisitions in compliance with this
Agreement; provided further, that if all or any portion of the Retained
Asset Sale Proceeds not required to be so applied as provided in the
preceding proviso are not so used or contractually committed to be so used
within such 270-day period (or, to the extent contractually committed to be
so used, such contact expires or terminates without such portion being so
used), such remaining portion of the Net Cash Proceeds shall be applied on
the last day of such 270-day period or, to the extent contractually
committed to be used on the last day of such 270-day period, on any date
thereafter upon which the respective contract expires or terminates without
such portion being so used) as a mandatory repayment of principal of Term
Loans as provided above in this Section 2.10(d) (without regard to the
first proviso herein; (and provided further that any required payment
under this Section 2.10 with Net Cash Proceeds arising from assets which
are subject to the Existing PS&T Secured Senior Notes Indenture shall be
deferred until the provisions of such PS&T Secured Senior Notes Indenture
have been complied with and, to the extent any portion of such Net Cash
Proceeds shall have been required, pursuant to such provision, to be
applied to the redemption of any Existing PST Senior Secured Notes, such
required payment under this Section 2.10 shall be reduced by such portion.
(e) In addition to any other mandatory repayments pursuant to this
Section 2.10, on each Excess Cash Payment Date, an amount equal to the
Applicable Repayment Percentage of Excess Cash Flow for the most recent
Excess Cash Flow Period ending prior to such Excess Cash Payment Date shall
be applied as a mandatory repayment of principal of Term Loans in
accordance with the requirements of Sections 2.10(g) and (h).
(f) In addition to any other mandatory repayments pursuant to this
Section 2.10, within 10 days following each date after the Effective Date
on which the Borrower or any of its Subsidiaries receives any Major
Casualty Proceeds, an amount equal to 100% of such Major Casualty Proceeds
shall be applied as a mandatory repayment of principal of Term Loans in
accordance with the requirements of Sections 2.10(g) and (h); provided that
so long as no Default then exists, such Major Casualty Proceeds shall not
be required to be so applied on such date to the extent the Borrower has
delivered a certificate to the Agent stating that such Major Casualty
Proceeds shall be expended or committed to be expended to replace or
restore the asset or assets in respect of which such payment or award was
made, or to acquire assets of a type permitted pursuant to Section 5.04,
within 270 days following the date of receipt of such Major Casualty
Proceeds. The Major Casualty Proceeds not required to be applied as a
mandatory repayment of Term Loans as provided in the proviso to the
preceding sentence shall be deposited with the Agent in the Collateral
Account whereby such Major Casualty Proceeds shall be disbursed to the
Borrower from time to time as needed to pay actual costs incurred by it in
connection with the replacement or restoration of the respective assets, or
to acquire assets of a type permitted pursuant to Section 5.04, (subject to
reasonable certification requirements as may be established by the Agent),
provided that at any time that a Default has occurred and is continuing,
the Required Lenders may direct the Agent to apply any or all of such Major
Casualty Proceeds then on deposit in the Collateral Account to the
repayment of Term Loans as provided in this Section 2.10(f) (without
regard to the first proviso herein), provided further, that if all or any
portion of such Major Casualty Proceeds not required to be applied to the
repayment of Term Loans pursuant to the proviso in the preceding sentence
are not used or committed to be used within 270 days following the date on
which the Borrower or such Subsidiary received such Major Casualty
Proceeds, such remaining portion of the Major Casualty Proceeds shall be
applied on the last day of such 270 day period as a mandatory repayment of
principal of Term Loans as provided above in this Section 2.10(f) (without
regard to the proviso in the first sentence herein).
(g) Each amount required to be applied as a mandatory repayment of
Term Loans pursuant to Sections 2.10(d) through (f), inclusive, shall be
applied pro rata to each Tranche of Term Loans based upon the then
remaining principal amounts of the respective Tranches (with each Tranche
of Term Loans to be allocated that percentage of the amount to be applied
as is equal to a fraction (expressed as a percentage) the numerator of
which is the then outstanding principal amount of such Tranche of Term
Loans and the denominator of which is equal to the then outstanding
principal amount of all Term Loans); provided that if the amount of the Net
Cash Proceeds in respect of any Repayment Event is less than $2,500,000,
such repayment shall be made upon receipt of proceeds such that, together
with all other such amounts not previously applied, the amount of such Net
Cash Proceeds is equal to at least $2,500,000. The amount of each
repayment of Tranche A Term Loans and Tranche B Term Loans as required by
this Section 2.10(g) shall be applied to reduce the then remaining
Scheduled Repayments of the respective Tranche pro rata based upon the then
remaining principal amounts of the Scheduled Repayments of the respective
Tranche, after giving effect to all prior reductions thereto.
(h) With respect to each repayment of Loans pursuant to this Section
2.10, the Borrower may designate the Types of Loans of the respective
Tranche which are to be repaid and, in the case of Euro-Dollar Loans, the
specific Borrowing or Borrowings of the respective Tranche pursuant to
which made, provided that: (i) repayments of Euro-Dollar Loans pursuant to
this Section 2.10 may only be made on the last day of an Interest Period
applicable thereto unless all Euro-Dollar Loans of the respective Tranche
with Interest Periods ending on such date of required repayment and all
Base Rate Loans of the respective Tranche have been paid in full; (ii) if
any repayment of Euro-Dollar Loans made pursuant to a single Borrowing
shall reduce the outstanding Euro-Dollar Loans made pursuant to such
Borrowing to an amount less than the Minimum Borrowing Amount applicable
thereto, such Borrowing shall be converted at the end of the then current
Interest Period into a Borrowing of Base Rate Loans; and (iii) each
repayment of any Loans comprising a Borrowing shall be applied pro rata
among such Loans. In the absence of a designation by the Borrower as
described in the preceding sentence, the Agent shall, subject to the above,
make such designation in its sole discretion with a view, but no
obligation, to minimize breakage costs owing under Section 2.13.
Notwithstanding the foregoing provisions of this Section 2.10, if at any
time the mandatory repayment of Term Loans pursuant to Sections 2.10(d)
through (f) above would result, after giving effect to the procedures set
forth above, in the Borrower incurring breakage costs under Section 2.13 as
a result of Euro-Dollar Loans being prepaid other than on the last day of
an Interest Period applicable thereto (the "Affected Euro-Dollar Loans"),
then the Borrower may, in its sole discretion and so long as no Default
then exists, initially deposit a portion (up to 100%) of the amounts that
otherwise would have been paid in respect of the Affected Euro-Dollar Loans
with the Agent (which deposit must be equal in amount to the amount of
Affected Euro-Dollar Loans not immediately prepaid) to be held as security
for the obligations of the Borrower hereunder in the Collateral Account,
with such cash collateral to be directly applied upon the first occurrence
(or occurrences) thereafter of the last day of an Interest Period
applicable to the relevant Term Loans that are Euro-Dollar Loans (or such
earlier date or dates as shall be requested by the Borrower), to repay an
aggregate principal amount of such Term Loans equal to the Affected Euro-
Dollar Loans not initially repaid pursuant to this sentence. Notwithstanding
anything to the contrary contained in the immediately preceding sentence,
all amounts deposited as cash collateral pursuant to the immediately
preceding sentence shall be held for the sole benefit of the Lenders whose
Term Loans would otherwise have been immediately repaid with the amounts
deposited and upon the taking of any action by the Agent or the Lenders
pursuant to the remedial provisions of Section 6.01, any amounts held as
cash collateral pursuant to this Section 2.10(h) shall, subject to the
requirements of applicable law, be immediately applied to such respective
Tranches of Term Loans.
Section 2.11. Optional Prepayments. (a) The Borrower shall have the
right to prepay the Loans made to it, in whole or in part, without premium
or penalty, at any time and from time to time on the following terms and
conditions: (i) the Borrower shall give the Agent written notice (or
telephonic notice promptly confirmed in writing) of its intent to prepay
such Loans, whether such Loans are Term Loans, Revolving Loans or Swingline
Loans, the amount of such prepayment and the Types of Loans to be prepaid
and, in the case of Euro-Dollar Loans, the specific Borrowing or Borrowings
pursuant to which made, which notice shall be given by the Borrower prior
to 11:00 A.M. (New York City time) (x) on the date of such prepayment in
the case of Term Loans or Revolving Loans maintained as Base Rate Loans,
(y) on the date of such prepayment in the case of Swingline Loans and (z)
at least three Business Days prior to the date of such prepayment in the
case of Loans maintained as Euro-Dollar Loans; (ii) each prepayment made
pursuant to this Section 2.11 shall be in an aggregate principal amount of
at least $1,000,000 (or $250,000 in the case of Swingline Loans), provided
that no partial prepayment of Euro-Dollar Loans made pursuant to a
Borrowing shall reduce the aggregate principal amount of Euro-Dollar Loans
outstanding pursuant to such Borrowing to an amount less than the Minimum
Borrowing Amount applicable thereto; (iii) each prepayment of Loans made
pursuant to a Borrowing pursuant to this Section 2.11 shall be applied pro
rata among such Loans; (iv) each prepayment of Term Loans pursuant to this
Section 2.11 shall be applied to each Tranche of Term Loans on a pro rata
basis (based on the then outstanding principal amount of such Tranche of
Term Loans); (v) each prepayment of Tranche A Term Loans pursuant to this
Section 2.11 shall be applied to reduce the then remaining Tranche A
Scheduled Repayments on a pro rata basis (based on the then remaining
principal amount of each Tranche A Schedule Repayment); and (vi) each
prepayment of Tranche B Term Loans pursuant to this Section 2.11 shall be
applied to reduce the then remaining Tranche B Scheduled Repayments on a
pro rata basis (based on the then remaining principal amount of each
Tranche B Scheduled Repayment).
(b) Promptly after receiving a notice of prepayment of Loans (other
than Swingline Loans) pursuant to this Section, the Agent shall notify each
Lender to receive the proceeds thereof of the contents thereof and of such
Lender's ratable share of such prepayment, and such notice shall not
thereafter be revocable by the Borrower.
Section 2.12. General Provisions as to Payments. (a) Except as
otherwise specifically provided herein, the Borrower shall make each
payment of principal of, and interest on, the Loans and LC Reimbursement
Obligations and each payment of fees hereunder (other than fees payable
directly to the LC Issuing Banks) not later than 1:00 P.M. (New York City
time) on the date when due, in Federal or other funds immediately available
in New York City, to the Agent at its address specified in or pursuant to
Section 10.01. Any payments under this Agreement which are made later than
1:00 P.M. (New York City time) shall be deemed to have been made on the
next succeeding Business Day. The Agent will promptly distribute to each
Lender its ratable share of each such payment received by the Agent for the
account of the Lenders. Whenever any payment of principal of, or interest
on, the Loans or LC Reimbursement Obligations or of fees shall be due on a
day which is not a Business Day, the date for payment thereof shall be
extended to the next succeeding Business Day, unless, in the case of
payments in respect of Euro-Dollar Loans, such Business Day falls in
another calendar month, in which case the date for payment thereof shall be
the next preceding Business Day. If the date for any payment of principal
is extended by operation of law or otherwise, interest thereon shall be
payable for such extended time.
(b) Unless the Borrower notifies the Agent before the date on which
any payment is due to the Lenders hereunder that the Borrower will not make
such payment in full, the Agent may assume that the Borrower has made such
payment in full to the Agent on such date, and the Agent may, in reliance
on such assumption, cause to be distributed to each Lender on such due date
an amount equal to the amount then due such Lender. If and to the extent
that the Borrower shall not have so made such payment, each Lender shall
repay to the Agent forthwith on demand such amount distributed to such
Lender together with interest thereon, for each day from the date such
amount is distributed to such Lender until the date such Lender repays such
amount to the Agent, at the Federal Funds Rate.
Section 2.13. Funding Losses. If the Borrower makes any payment of
principal with respect to any Euro-Dollar Loan or any Euro-Dollar Loan is
converted to a different Type of Loan (whether such payment or conversion is
pursuant to Article 2, 6 or 8 or otherwise) on any day other than the last day
of an Interest Period applicable thereto, or the last day of an applicable
period fixed pursuant to Section 2.05(c), or if the Borrower fails to borrow,
prepay, convert or continue any Euro-Dollar Loan after notice has been given
to any Bank in accordance with Section 2.03, 2.06 or 2.11, the Borrower shall
reimburse each Lender within 15 days after demand by such Lender for any
resulting loss or expense incurred by it (or, without duplication, by an
existing or prospective participant in the related Loan), including (without
limitation) any loss incurred in obtaining, liquidating or employing deposits
from third parties, but excluding loss of margin for the period after such
payment or conversion or failure to borrow, prepay, convert or continue;
provided that such Lender shall have delivered to the Borrower a certificate
as to the amount of such loss or expense and its method of calculation, which
certificate shall be conclusive in the absence of manifest error.
Section 2.14. Computation of Interest and Fees. All interest (other than
interest on Base Rate Loans) and fees shall be computed on the basis of a year
of 360 days and paid for the actual number of days elapsed (including the
first day but excluding the last day). All interest on Base Rate Loans
shall be computed on the basis of a year of 365 days and paid for the
actual number of days elapsed (including the first day but excluding the
last day).
Section 2.15. Notes. (a) The Borrower's obligation to pay the
principal of, and interest on, the Loans made to it by each Lender shall be
evidenced (i) if Tranche A Term Loans, by a promissory note duly executed
and delivered by the Borrower substantially in the form of Exhibit A-1 with
blanks appropriately completed in conformity herewith (each, a "Tranche A
Term Note" and, collectively, the "Tranche A Term Notes"), (ii) if Tranche
B Term Loans, by a promissory note duly executed and delivered by the
Borrower substantially in the form of Exhibit A-2 with blanks appropriately
completed in conformity herewith (each, a "Tranche B Term Note" and,
collectively, the "Tranche B Term Notes"), (iii) if Revolving Loans, by a
promissory note duly executed and delivered by the Borrower substantially
in the form of Exhibit A-3, with blanks appropriately completed in
conformity herewith (each, a "Revolving Note" and, collectively, the
"Revolving Notes") and (iv) if Swingline Loans, by a promissory note duly
executed and delivered by the Borrower substantially in the form of Exhibit
A-4 with blanks appropriately completed in conformity herewith (the
"Swingline Note").
(b) The Tranche A Term Note issued to each Lender that has a Tranche
A Term Loan Commitment or outstanding Tranche A Term Loans shall (i) be
executed by the Borrower, (ii) be payable to the order of such Lender and
be dated the Initial Borrowing Date (or, if issued after the Initial
Borrowing Date, the date of issuance thereof), (iii) be in a stated
principal amount equal to the Tranche A Term Loans made by such Lender on
the Initial Borrowing Date (or, if issued after the Initial Borrowing Date,
be in a stated principal amount equal to the outstanding principal amount
of Tranche A Term Loans of such Lender at such time) and be payable in
Dollars in the outstanding principal amount of Tranche A Term Loans
evidenced thereby, (iv) mature on the Tranche A Maturity Date, (v) bear
interest as provided in the appropriate clause of Section 2.05 in respect
of the Base Rate Loans and Euro-Dollar Loans, as the case may be, evidenced
thereby, (vi) be subject to voluntary prepayment as provided in Section
2.11 and mandatory repayment as provided in Section 2.10 and (vii) be
entitled to the benefits of this Agreement and the other Loan Documents.
(c) The Tranche B Term Note issued to each Lender that has a Tranche
B Term Loan Commitment or outstanding Tranche B Term Loans shall (i) be
executed by the Borrower, (ii) be payable to the order of such Lender and
be dated the Initial Borrowing Date (or, if issued after the Initial
Borrowing Date, the date of issuance thereof), (iii) be in a stated
principal amount equal to the Tranche B Term Loans made by such Lender on
the Initial Borrowing Date (or, if issued after the Initial Borrowing Date,
be in a stated principal amount equal to the outstanding principal amount
of Tranche B Term Loans of such Bank at such time) and be payable in
Dollars in the outstanding principal amount of Tranche B Term Loans
evidenced thereby, (iv) mature on the Tranche B Maturity Date, (v) bear
interest as provided in the appropriate clause of Section 2.05 in respect
of the Base Rate Loans and Euro-Dollar Loans, as the case may be, evidenced
thereby, (vi) be subject to voluntary prepayment as provided in Section
2.11 and mandatory repayment as provided in Section 2.10 and (vii) be
entitled to the benefits of this Agreement and the other Loan Documents.
(d) The Revolving Note issued to each Lender that has a Revolving Loan
Commitment or outstanding Revolving Loans shall (i) be executed by the
Borrower, (ii) be payable to the order of such Lender and be dated the
Initial Borrowing Date (or, if issued after the Initial Borrowing Date, the
date of issuance thereof), (iii) be in a stated principal amount equal to
the Revolving Loan Commitment of such Bank (or, if issued after the
termination thereof, be in a stated principal amount equal to the
outstanding Revolving Loans of such Lender at such time) and be payable in
Dollars in the outstanding principal amount of the Revolving Loans
evidenced thereby, (iv) mature on the Revolving Loan Maturity Date, (v)
bear interest as provided in the appropriate clause of Section 2.05 in
respect of the Base Rate Loans and Euro-Dollar Loans, as the case may be,
evidenced thereby, (vi) be subject to voluntary prepayment as provided in
Section 2.11 and mandatory repayment as provided in Section 2.10 and (vii)
be entitled to the benefits of this Agreement and the other Loan Documents.
(e) The Swingline Note issued to the Swingline Lender shall (i) be
executed by the Borrower, (ii) be payable to the order of the Swingline
Lender and be dated the Initial Borrowing Date, (iii) be in a stated
principal amount equal to the Maximum Swingline Amount and be payable in
Dollars in the outstanding principal amount of the Swingline Loans
evidenced thereby, (iv) mature on the Swingline Expiry Date, (v) bear
interest as provided in Section 2.05 in respect of the Base Rate Loans
evidenced thereby, (vi) be subject to voluntary prepayment as provided in
Section 2.11 and mandatory repayment as provided in Section 2.10(a) and
(vii) be entitled to the benefits of this Agreement and the other Loan
Documents.
(f) Each Lender will note on its internal records the amount of each
Loan made by it and each payment in respect thereof and will prior to any
transfer of any of its Notes endorse on the schedule forming a part thereof
the outstanding principal amount of Loans evidenced thereby. Failure to
make any such notation or any error in any such notation or endorsement
shall not affect the Borrower's obligations in respect of such Loans.
Section 2.16. Letters of Credit. (a) Issuance. Each LC Issuing
Bank agrees, on the terms and conditions set forth in this Agreement, to
issue Letters of Credit hereunder at the request of the Borrower from time
to time prior to the date that is 30 days before the Revolving Loan
Maturity Date; provided that, immediately after each such Letter of Credit
is issued and participations therein are sold to the Banks as provided in
this subsection:
(i) the Aggregate LC Exposure shall not exceed $20,000,000; and
(ii) the sum of (i) the Aggregate LC Exposure and (ii) the aggregate
principal amount of all Revolving Loans and Swingline Loans then
outstanding shall not exceed the Total Revolving Loan Commitment as then
in effect.
Whenever an LC Issuing Bank issues a Letter of Credit hereunder, such LC
Issuing Bank shall be deemed, without further action by any party hereto,
to have sold to each other RL Lender, and each such RL Lender shall be
deemed, without further action by any party hereto, to have purchased from
such LC Issuing Bank, without recourse or warranty, a participation in such
Letter of Credit, on the terms specified in this Section, equal to such RL
Lender's RL Percentage thereof.
(b) Notice of Proposed Issuance. With respect to each Letter of Credit, the
Borrower shall give the respective LC Issuing Bank and the Agent at least five
(5) Business Days' prior notice (i) specifying the date such Letter of Credit is
to be issued and (ii) describing the proposed terms of such Letter of Credit and
the nature of the transactions to be supported thereby. Promptly after it
receives such notice, the Agent shall notify each RL Lender of the contents
thereof.
(c) Conditions to Issuance. No LC Issuing Bank shall issue any Letter of
Credit unless:
(i) such Letter of Credit shall be satisfactory in form and substance
to such LC Issuing Bank,
(ii) the Borrower shall have executed and delivered such other
instruments and agreements relating to such Letter of Credit as such LC
Issuing Bank shall have reasonably requested,
(iii) such LC Issuing Bank shall have confirmed with the Agent on the
date of such issuance that the limitations specified in clauses (i) and
(ii) of subsection (a) of this Section will not be exceeded immediately
after such Letter of Credit is issued, and
(iv) such LC Issuing Bank shall not have been notified in writing by
the Borrower, the Required Lenders or the Agent expressly to the effect
that any condition specified in clause (c) or (d) of Section 3.02 is not
satisfied at the time such Letter of Credit is to be issued.
(d) Expiry Dates. No Letter of Credit shall have an expiry date later than
the fifth (5th) Business Day before the Revolving Loan Maturity Date. Subject to
the preceding sentence, each Letter of Credit issued hereunder shall expire on
or before the first anniversary of the date of such issuance; provided that the
expiry date of any Letter of Credit may be extended from time to time (i) at the
Borrower's request for a period not exceeding one year or (ii) in the case of an
Evergreen Letter of Credit, automatically, in each case so long as such
extension is granted (or the last day on which notice can be given to prevent
such extension occurs) no earlier than three (3) months before the then existing
expiry date thereof.
(e) Notice of Proposed Extensions of Expiry Dates. The relevant LC Issuing
Bank shall give the Agent at least three (3) Business Days' notice before such
LC Issuing Bank extends (or allows an automatic extension of) the expiry date of
any Letter of Credit issued by it. Such notice shall identify such Letter of
Credit, the date on which it is to be extended (or the last day on which notice
can be given to prevent such extension) and the date to which it is to be
extended. Promptly after it receives such notice, the Agent shall notify each RL
Lender of the contents thereof. No LC Issuing Bank shall extend (or allow the
extension of) the expiry date of any Letter of Credit if (x) such extension does
not comply with subsection (d) of this Section, (y) such LC Issuing Bank shall
not have confirmed with the Agent on the date of such extension that the
limitations specified in clauses (i) and (ii) of subsection (a) of this Section
will not be exceeded immediately after such Letter of Credit is extended, or (z)
such LC Issuing Bank shall have been notified by the Borrower, the Required
Lenders or the Agent expressly to the effect that any condition specified in
clause (c) or (d) of Section 3.02 is not satisfied at the time of such proposed
extension.
(f) Notice of Actual Issuances and Extensions. Promptly after it issues any
Letter of Credit or extends any Letter of Credit (or allows any Evergreen Letter
of Credit to be extended), the relevant LC Issuing Bank will notify the Agent of
the date, face amount, beneficiary or beneficiaries and expiry date or extended
expiry date of such Letter of Credit. Promptly after it receives such notice,
the Agent shall notify each RL Bank of the contents thereof and the amount of
such RL Lender's participation in such Letter of Credit. Promptly after it
issues any Letter of Credit, the relevant LC Issuing Bank will send a copy of
such Letter of Credit to the Agent.
(g) Drawings. If an LC Issuing Bank receives a demand for payment under any
Letter of Credit issued by it and determines that such demand should be honored,
such LC Issuing Bank shall (i) promptly notify the Borrower and the Agent as to
the amount to be paid by such LC Issuing Bank as a result of such demand and the
date of such payment (an "LC Payment Date") and (ii) make such payment in
accordance with the terms of such Letter of Credit.
(h) Reimbursement by the Borrower. (A) If any amount is drawn under any
Letter of Credit, the Borrower irrevocably and unconditionally agrees to
reimburse the relevant LC Issuing Bank for such amount, together with any and
all reasonable charges and expenses which such LC Issuing Bank may pay or incur
relative to such drawing. Such reimbursement shall be due and payable (the date
on which it is due and payable being an "LC Reimbursement Due Date") by 2:00
P.M. (New York City time) on the relevant LC Payment Date or the date on which
such LC Issuing Bank notifies the Borrower of such drawing, whichever is later;
provided that, if such notice is given after 12:00 Noon (New York City time) on
the later of such dates, such reimbursement shall be due and payable on the next
succeeding Business Day; provided further, that, notwithstanding anything to the
contrary contained above, if, on the relevant LC Payment Date, any Event of
Default shall exist pursuant to Section 6.01(g) or (h) with respect to the
Borrower, such LC Payment Date shall constitute the date upon which such
reimbursement shall be due and payable and notwithstanding anything to the
contrary contained above, if an Event of Default as specified in Section 6.01(g)
or (h) with respect to the Borrower does not exist on the relevant LC Payment
Date but occurs prior to the date which would otherwise constitute the
respective LC Reimbursement Due Date, then the date of the occurrence of such
Default shall instead constitute the respective LC Reimbursement Due Date.
(B) In addition, the Borrower agrees to pay, on the applicable LC
Reimbursement Due Date, interest on each amount drawn under a Letter of Credit,
for each day from and including the LC Payment Date to but excluding such LC
Reimbursement Due Date, at a rate per annum equal to the sum of the Applicable
Base Rate Margin for Revolving Loans plus the Base Rate for such day.
(C) Each payment by the Borrower pursuant to this subsection (h) shall be
made to the relevant LC Issuing Bank in Federal funds or other funds immediately
available to it at its address specified in or pursuant to Section 10.01.
(i) Payments by Lenders. (A) If the Borrower fails to pay any LC
Reimbursement Obligation in full when due, the relevant LC Issuing Bank may
notify the Agent of the unreimbursed amount and request that the RL Lenders
reimburse such LC Issuing Bank for their respective RL Percentages thereof.
Promptly after it receives any such notice, the Agent shall notify each RL
Lender of the unreimbursed amount and such RL Lender's RL Percentage thereof.
Upon receiving such notice from the Agent, each RL Lender shall make available
to such LC Issuing Bank, at its address specified in or pursuant to Section
10.01, an amount equal to such RL Lender's RL Percentage of such unreimbursed
amount, in Federal or other funds immediately available to such LC Issuing Bank,
by 3:00 P.M. (New York time) (i) on the day such RL Lender receives such notice
if it is received at or before 12:00 Noon (New York time) on such day or (ii) on
the next Business Day if such notice is received after 12:00 Noon (New York City
time) on the date of receipt, in each case together with interest on such amount
for each day from and including the relevant LC Payment Date to but excluding
the day such payment is due from such RL Lender at the Federal Funds Rate for
such day. Upon payment in full thereof, such RL Lender shall be subrogated to
the rights of such LC Issuing Bank against the Borrower to the extent of such RL
Lender's RL Percentage of the related LC Reimbursement Obligation (including
interest accrued thereon).
(B) If any RL Lender fails to pay when due any amount to be paid by it
pursuant to clause (A) of this subsection, interest shall accrue on such RL
Lender's obligation to make such payment, for each day from and including the
date such payment became due to but excluding the date such RL Lender makes such
payment, at a rate per annum equal to (x) for each day from the day such payment
is due to the third (3rd) succeeding Business Day, inclusive, the Federal Funds
Rate for such day and (y) for each day thereafter the sum of 2% plus the
Applicable Base Rate Margin for Revolving Loans plus the Base Rate for such day.
(C) If the Borrower shall reimburse any LC Issuing Bank for any drawing
with respect to which any RL Lender shall have made funds available to such LC
Issuing Bank in accordance with clause (A) of this subsection, such LC Issuing
Bank shall promptly upon receipt of such reimbursement distribute to such RL
Lender its RL Percentage thereof, including interest, in Dollars to the extent
received by such LC Issuing Bank.
(j) Exculpatory Provisions. The obligations of the Borrower and the RL
Lenders under this Section shall be absolute and unconditional under any and all
circumstances and irrespective of any setoff, counterclaim or defense to payment
which the Borrower or any RL Lender may have or have had against any LC Issuing
Bank, any RL Lender, any beneficiary of any Letter of Credit, the Agent or any
other Person. The Borrower assumes all risks of the acts or omissions of any
beneficiary of any Letter of Credit with respect to the use of such Letter of
Credit by such beneficiary. None of the LC Issuing Banks, the RL Lenders, the
Agent and their respective officers, directors, employees and agents shall be
responsible for, and the obligations of each RL Lender to make payments to each
LC Issuing Bank and of the Borrower to reimburse each LC Issuing Bank for
drawings pursuant to this Section (other than obligations resulting solely from
the gross negligence or willful misconduct of the relevant LC Issuing Bank)
shall not be excused or affected by, among other things, (i) the use which may
be made of any Letter of Credit or any acts or omissions of any beneficiary or
transferee in connection therewith; (ii) the validity, sufficiency or
genuineness of documents presented under any Letter of Credit or of any
endorsements thereon, even if such documents should in fact prove to be in any
or all respects invalid, insufficient, fraudulent or forged; (iii) payment by
any LC Issuing Bank against presentation of documents to it which do not comply
with the terms of the relevant Letter of Credit; or (iv) any dispute between or
among the Borrower, any beneficiary of any Letter of Credit or any other Person
or any claims or defenses whatsoever of the Borrower or any other Person against
any beneficiary of any Letter of Credit. No LC Issuing Bank shall be liable for
any error, omission, interruption or delay in transmission, dispatch or delivery
of any message or advice, however transmitted, in connection with any Letter of
Credit. Any action taken or omitted by the Agent, any LC Issuing Bank or any RL
Lender in connection with any Letter of Credit and the related drafts and
documents, if done without willful misconduct or gross negligence, shall be
binding on the Borrower and shall not place the Agent, any LC Issuing Bank or
any RL Lender under any liability to the Borrower.
(k) Indemnification by Borrower. The Borrower agrees to indemnify and hold
harmless each RL Lender, each LC Issuing Bank and the Agent (collectively, the
"LC Indemnitees") from and against any and all claims, damages, losses,
liabilities, costs or expenses (including, without limitation, the reasonable
fees and disbursements of counsel) which such LC Indemnitee may reasonably incur
(or which may be claimed against such LC Indemnitee by any Person whatsoever) by
reason of or in connection with any execution and delivery or transfer of or
payment or failure to pay under any Letter of Credit or any actual or proposed
use of any Letter of Credit, including any claims, damages, losses, liabilities,
costs or expenses which any LC Issuing Bank may incur by reason of any RL
Lender's failure to comply with its obligations to such LC Issuing Bank
hereunder in connection with any Letter of Credit (but nothing herein contained
shall affect any rights the Borrower may have against such defaulting RL
Lender); provided that the Borrower shall not be required to indemnify any LC
Issuing Bank for any claims, damages, losses, liabilities, costs or expenses to
the extent, but only to the extent, caused by (i) the willful misconduct or
gross negligence of such LC Issuing Bank in determining whether a request
presented under any Letter of Credit issued by it complied with the terms of
such Letter of Credit or (ii) such LC Issuing Bank's failure to pay under any
Letter of Credit issued by it after the presentation to it of a request strictly
complying with the terms and conditions of such Letter of Credit. Nothing in
this subsection is intended to limit the obligations of the Borrower under any
other provision of this Section.
(l) Indemnification by RL Lenders. The RL Lenders shall, ratably in
proportion to their RL Percentages, indemnify each LC Issuing Bank (to the
extent not reimbursed by the Borrower) against any claims, damages, losses,
liabilities, reasonable costs and reasonable expenses (including, without
limitation, reasonable fees and disbursements of counsel) that any such
indemnitee may suffer or incur in connection with this Section or any action
taken or omitted by such indemnitee under this Section; provided that the RL
Lenders shall not be required to indemnify any LC Issuing Bank for any such
claims, damages, losses, liabilities, costs or expenses to the extent, but only
to the extent, caused by (i) its own gross negligence or willful misconduct,
(ii) its failure to pay under any Letter of Credit issued by it after the
presentation to it of a request strictly complying with the terms and conditions
of such Letter of Credit or (iii) its liabilities under any Letter of Credit
issued by it in contravention of subsection (c)(iii) of this Section or extended
by it in contravention of clause (y) of the last sentence of subsection (e) of
this Section (to the extent that the limitations referred to therein were in
fact exceeded).
(m) Liability for Damages. Nothing in this Section shall preclude the
Borrower or any RL Lender from asserting against any LC Issuing Bank any claim
for direct (but not consequential) damages suffered by the Borrower or such RL
Lender to the extent, but only to the extent, caused by (A) the willful
misconduct or gross negligence of such LC Issuing Bank in determining whether a
request presented under any Letter of Credit issued by it complied with the
terms thereof or (B) such LC Issuing Bank's failure to pay under any such Letter
of Credit after the presentation to it of a request strictly complying with the
terms and conditions thereof.
(n) Dual Capacities. In its capacity as a Lender, each LC Issuing Bank
shall have the same rights and obligations under this Section as any other
Lender.
(o) Information to be Provided to Agent. The LC Issuing Banks shall furnish
to the Agent upon request such information as the Agent shall reasonably request
in order to calculate (i) the Aggregate LC Exposure existing from time to time
and (ii) the amount of any fee payable for the account of the Lenders under
Section 2.07(b).
ARTICLE III
Conditions
Section 3.01. Conditions Precedent to Initial Credit Events. The obligation
of each Lender to make Loans, and the obligation of each LC Issuing Bank to
issue Letters of Credit, on the Initial Borrowing Date, is subject to the
satisfaction of the following conditions:
(a) On or prior to the Initial Borrowing Date, the Effective Date
shall have occurred;
(b) receipt by the Agent, on or prior to the Initial Borrowing Date,
(i) for the account of each of the Lenders the appropriate Tranche A Term
Note, Tranche B Term Note and/or Revolving Note and (ii) of the Swingline
Note for the account of the Swingline Lender, in each case executed by the
Borrower and in the amount, maturity and as otherwise provided herein;
(c) receipt by the Agent of an opinion of Davis Polk & Wardwell,
counsel for the Obligors, substantially in the form of Exhibit B hereto and
covering such additional matters relating to the transactions contemplated
hereby as the Agent may reasonably request;
(d) (i) on the Initial Borrowing Date and contemporaneously with
giving effect to the Loans incurred on the Initial Borrowing Date, the
PureTec Acquisition shall have been consummated in accordance with the
PureTec Acquisition Documents and all applicable laws, and each of the
conditions precedent to the consummation of the PureTec Acquisition shall
have been satisfied and not waived, except with the consent of the Agent;
(ii)(a) on the Initial Borrowing Date and contemporaneously with
giving effect to the Loans incurred on the Initial Borrowing Date, the
total commitments in respect of the Debt to be Refinanced shall have been
terminated, and all loans with respect thereto shall have been repaid in
full, together with interest thereon, all letters of credit issued
thereunder shall have been terminated and all other amounts (including
premiums) owing pursuant to the Debt to be Refinanced shall have been
repaid in full; and
(b) on the Initial Borrowing Date and contemporaneously with giving
effect to the Loans incurred on the Initial Borrowing Date, the creditors
in respect of the Debt to be Refinanced shall have terminated and released
all security interests and Liens on the assets owned by the Obligors; and
the Agent shall have received such releases of security interests in and
Liens on the assets owned by the Obligors as may have been requested by the
Agent, which releases shall be in form and substance reasonably
satisfactory to the Agent; without limiting the foregoing, there shall have
been delivered (i) proper termination statements (Form UCC-3 or the
appropriate equivalent) for filing under the UCC of each jurisdiction where
a financing statement (Form UCC-1 or the appropriate equivalent) was filed
with respect to the Obligors in connection with the security interests
created with respect to the Debt to be Refinanced and the documentation
related thereto, (ii) termination or reassignment of any security interest
in, or Lien on, any patents, trademarks, copyrights, or similar interests
of the Obligors on which filings have been made, (iii) terminations of all
mortgages, leasehold mortgages, deeds of trust and leasehold deeds of trust
created with respect to property of the Obligors, in each case, to secure
the obligations in respect of the Debt to be Refinanced, all of which shall
be in form and substance reasonably satisfactory to the Agent, and (iv) all
collateral owned by the Obligors in the possession of any of the creditors
in respect of the Debt to be Refinanced or any collateral agent or trustee
under any related security document shall have been returned to the
Obligors;
(iii) on or prior to the Initial Borrowing Date, (i) the Borrower
shall have received gross cash proceeds of $200 million from the issuance
of a like principal amount of New Senior Subordinated Notes, (ii) the New
Senior Subordinated Notes shall not be secured by any assets of the
Borrower or any of its Subsidiaries, (iii) the Borrower shall have utilized
the full amount of the net cash proceeds received from the issuance of the
New Senior Subordinated Notes to make payments owing in connection with the
Transaction prior to or contemporaneously with utilizing any proceeds of
the Loans for such purpose and (iv) the issuance of the New Senior
Subordinated Notes shall have been consummated in accordance with the terms
and conditions of the New Senior Subordinated Note Documents and all
applicable laws and each of the conditions precedent to the issuance
thereof shall have been satisfied and not waived, except with the consent
of the Agent, to the satisfaction of the Agent;
(iv) on or prior to the Initial Borrowing Date (i) the PST Minority
Acquisition shall have been consummated in accordance with the PST Minority
Acquisition Documents and all applicable laws, and each of the conditions
precedent to the consummation of the PST Minority Acquisition shall have
been satisfied and not waived, except with the consent of the Agent, to the
satisfaction of the Agent; and (ii) there shall have been delivered to the
Agent true and correct copies of the PST Minority Acquisition Documents and
all of the terms and conditions of such PST Minority Acquisition Documents
shall be in form and substance reasonably satisfactory to the Agent;
(v) on or prior to the Initial Borrowing Date (i) the Borrower and/or
PST shall have consummated a tender offer/consent solicitation with respect
to the outstanding Existing PST Senior Secured Notes (the "Existing PST
Senior Secured Notes Tender Offer/Consent Solicitation"), pursuant to which
the (1) Borrower and/or PST shall offer, subject to the terms and
conditions contained in the Existing PST Senior Secured Notes Tender
Offer/Consent Solicitation, to purchase all of the outstanding Existing PST
Senior Secured Notes at the cash price set forth in the Existing PST Senior
Secured Notes Tender Offer/Consent Solicitation and (2) consents shall be
solicited to a proposed amendment to the Existing PST Senior Secured Notes
Indenture, on terms and conditions satisfactory to the Agent, which
amendment shall provide for the substantial elimination of the financial
and certain operating covenants contained in the Existing PST Senior
Secured Notes Indenture (including, without limitation, limitations on the
incurrence of liens, restricted payments, transactions with affiliates and
indebtedness) and the amendment or elimination of certain other provisions
in the Existing PST Senior Secured Notes Collateral Documents; (ii) all
terms and conditions of the Existing PST Senior Secured Notes Tender
Offer/Consent Solicitation shall be satisfactory to the Agent, and the
period for tendering Existing PST Senior Secured Notes pursuant thereto
shall terminate on or prior to the Initial Borrowing Date; (iii) the
Borrower or PST shall have received sufficient consents to authorize the
execution and delivery of the Existing PST Senior Secured Notes Indenture
Supplement; (iv) PST and the trustee under the Existing PST Senior Secured
Notes Indenture shall have duly executed and delivered the Existing PST
Senior Secured Notes Indenture Supplement (which shall include the Existing
PST Senior Secured Notes Collateral Documents Amendment); (v) the trustee
pursuant to the Existing PST Senior Secured Notes Indenture, as well as any
other agent, sub-agent, collateral agent or custodian which holds any of
the collateral for the Existing PST Senior Secured Notes, shall have
entered into a bailee agreement for the benefit of the Secured Creditors in
substantially the form attached hereto as Exhibit H (the "Bailee
Agreement"); (vi) the Borrower and/or PST shall have repurchased or
committed to repurchase the Existing PST Senior Secured Notes tendered, and
not theretofore withdrawn, pursuant to the Existing PST Senior Secured
Notes Tender Offer/Consent Solicitation (the "Existing PST Senior Secured
Notes Tender Offer Repurchases"); and (vii) the Existing PST Senior Secured
Notes Tender Offer/Consent Solicitation shall have been consummated in
accordance with the Existing PST Senior Secured Notes Tender Offer
Documents and all applicable laws;
(vi) on the Initial Borrowing Date and after giving effect to the
Transaction and the Loans incurred on the Initial Borrowing Date, (A)
neither the Borrower nor any of its Subsidiaries shall have any Debt
outstanding except for (i) Debt created under this Agreement and the other
Loan Documents, (ii) the New Senior Subordinated Notes, (iii) the Existing
Senior Subordinated Notes, (iv) those Existing PST Senior Secured Notes not
purchased pursuant to the Existing PST Senior Secured Notes Tender Offer
Repurchases (which in no event shall have an aggregate principal amount in
excess of $62.499 million) and (v) such other Debt, if any, as shall be
permitted to remain outstanding by the Agent and (B) after giving effect to
the Transaction and the other transactions contemplated hereby there shall
be no default or events of default existing under the Existing Senior
Subordinated Notes and the New Senior Subordinated Notes or arising as a
result of the Transaction and the other transactions contemplated hereby;
and
(vii) on or prior to the Initial Borrowing Date, there shall have been
delivered to the Agent true and correct copies of the Documents and all of
the terms and conditions of the Documents, as well as the structure of the
Transaction, shall be in form and substance reasonably satisfactory to the
Agent;
(e) receipt by the Agent of duly executed counterparts of each of the
Collateral Documents, together with (i) evidence satisfactory to the Agent
of the effectiveness and perfection (to the extent required thereby) of the
Liens contemplated thereby (including the filing of UCC-1's or the
appropriate local equivalent in each jurisdiction as may be necessary to
perfect the security interests created by the Collateral Documents and the
delivery of any promissory notes (duly endorsed in blank) and stock
certificates (accompanied by duly executed and undated stock powers)
comprising the Collateral) or, with respect to the Mortgages, arrangements
satisfactory to the Agent for the prompt recording thereof; (ii) opinions
of local counsel and other counsel to the Obligors and/or the Agent
satisfactory to the Agent, which opinions shall cover such matters incident
to the transactions contemplated herein and in the other Loan Documents as
the Agent may reasonably request and shall be in form and substance
reasonably satisfactory to the Agent; (iii) with respect to each property
subject to a Mortgage (A) policies of title insurance (or irrevocable and
binding commitments, dated and recertified as of the Initial Borrowing
Date, to issue such policies), on forms issued by the American Land Title
Association and otherwise in form and substance reasonably satisfactory to
the Agent and issued by such title insurance company or companies as are
acceptable to the Agent, with all premiums, expenses and fees paid or
caused to be paid by the Borrower, insuring (or committing to insure) the
Liens created under each Mortgage, in such amounts as the Agent shall
request, subject only to Liens permitted under the Loan Documents,
containing such endorsements and affirmative assurances as are satisfactory
to the Agent, and reinsured in amounts and under reinsurance agreements in
form and substance satisfactory to the Agent, and (B) to the extent
required by the Agent, recent "as-built" surveys that comply with the
current Minimum Standard Detail Requirements for ALTA/ACSM Land Title
Surveys and that are otherwise in form and substance satisfactory to the
Agent, provided, with respect to the Shiller Park, Illinois and the
Ridgefield, New Jersey properties recent "as-built" surveys that comply
with the current Minimum Standard Detail Requirements for ALTA/ACSM Land
Title Surveys and that are otherwise in form and substance satisfactory to
the Agent, shall be received by the Agent on or prior to 60 days after the
Effective Date; (iv) such estoppel letters, landlord waiver letters,
non-disturbance letters and similar assurances as may have been requested
by the Agent, which letters shall be in form and substance reasonably
satisfactory to the Agent; and (v) to the extent requested by the Agent,
environmental reports with respect to such properties in form and substance
satisfactory to the Agent;
(f) receipt by the Agent of evidence satisfactory to it of the
insurance coverage required by Section 5.03 and the Collateral Documents;
(g) receipt by the Agent of a certificate substantially in the form of
Exhibit G hereto of the chief operating officer or other senior financial
officer of the Borrower, setting forth the conclusions that, after giving
effect to the Transaction and the incurrence of all the financings
contemplated herein, the Borrower and its Subsidiaries, taken as a whole,
are not insolvent and will not be rendered insolvent by the indebtedness
incurred in connection therewith, and will not be left with unreasonably
small capital with which to engage in their businesses and will not have
incurred debts beyond their ability to pay such debts as they mature;
(h) receipt by the Agent of all documents the Agent may reasonably
request relating to the existence of the Obligors, the corporate authority
for and the validity of the Documents, and any other matters relevant
hereto (including, without limitation, a certificate of incumbency of
officers signing any Loan Documents), all in form and substance
satisfactory to the Agent;
(i) receipt by the Agent of payment in full of all costs, fees,
expenses (including, without limitation, reasonable legal fees and
expenses, title premiums, survey charges and recording taxes and fees) and
other amounts payable for the account of the Lenders or the Agent in the
amounts previously agreed upon to be payable on or before the Initial
Borrowing Date;
(j) there shall not be pending or, to the best of the Borrower's
knowledge, threatened, any action, suit or other proceeding (1) with
respect to which, in the judgment of the Agent, there is a reasonable
possibility of a decision which could reasonably be expected to have a
Material Adverse Effect or (2) which, in the judgment of the Agent, in any
manner draws into question the validity or enforceability of the Loan
Documents;
(k) receipt by the Agent and the Banks of a pro forma consolidated
balance sheet and consolidated statement of operations of the Borrower and
its Consolidated Subsidiaries, which pro forma financial statements shall
be satisfactory to the Agent and demonstrate that the Borrower is in
compliance with the covenants contained in Sections 5.11 to 5.13,
inclusive, after giving effect to all Borrowings and issuances of Letters
of Credit on the Initial Borrowing Date;
(l) nothing shall have occurred (and the Agent shall not have become
aware of any facts or conditions not previously known to it) which the
Agent shall reasonably determine has had, or could reasonably be expected
to have, a Material Adverse Effect;
(m) on or prior to the Initial Borrowing Date, all necessary
governmental (domestic and foreign) and third party approvals and/or
consents in connection with the Transaction and the other transactions
contemplated by the Loan Documents and otherwise referred to herein or
therein shall have been obtained and remain in effect (other than
immaterial approvals and/or consents with respect to the PureTec
Acquisition), and all applicable waiting periods with respect thereto shall
have expired without any action being taken by any competent authority
which restrains, prevents or imposes materially adverse conditions upon,
the consummation of the Transaction or the other transactions contemplated
by the Loan Documents or otherwise referred to herein or therein; and there
shall not exist any judgment, order, injunction or other restraint issued
or filed or a hearing seeking injunctive relief or other restraint pending
or notified prohibiting or imposing materially adverse conditions upon the
Transaction or the other transactions contemplated by the Loan Documents;
and
(n) on or prior to the Initial Borrowing Date, the Borrower shall have
delivered to the Agent a certificate of its chief operating officer and, if
requested by the Agent, such supporting accountants' certificates and/or
computations as the Agent may reasonably request, establishing that the
entire principal amount of New Senior Subordinated Notes may be issued, and
the aggregate principal amount of Term Loans to be incurred on the Initial
Borrowing Date, plus Revolving Loans in an aggregate principal amount equal
to the Total Revolving Loan Commitment, could be incurred on the Initial
Borrowing Date in compliance with, and pursuant to, clauses (i) and (ii) of
Section 4.04 of the Existing Senior Subordinated Notes Indenture.
Section 3.02. Conditions Precedent to All Credit Events. The obligation of
each Lender to make a Loan (including the Loans made on the Initial Borrowing
Date, but excluding Mandatory Borrowings to be made thereafter, which shall be
made as provided in Section 2.01(e)) on the occasion of any Borrowing, and the
obligation of any LC Issuing Bank to issue (or extend or allow an extension of
the expiry date of) any Letter of Credit, are each subject to the satisfaction
of the following conditions:
(a) receipt by the Agent of a Notice of Borrowing as required by
Section 2.03, or receipt by the relevant LC Issuing Bank of a notice of
proposed issuance or extension as required by Section 2.16(b) or 2.16(e),
as the case may be;
(b) immediately after such Credit Event, the sum of (i) the aggregate
principal amount of Revolving Loans and Swingline Loans then outstanding
plus (ii) the Aggregate LC Exposure, will not exceed the Total Revolving
Loan Commitment;
(c) immediately before and after such Credit Event, no Default shall
have occurred and be continuing; and
(d) the representations and warranties of the Obligors contained in
this Agreement and the other Loan Documents shall be true on and as of the
date of such Credit Event as though such representations and warranties had
been made on the date of such Credit Event.
Each Credit Event hereunder shall be deemed to be a representation and warranty
by the Borrower on the date of such Credit Event as to the facts specified in
clauses (b), (c) and (d) of this Section and by each Obligor, with respect to
itself only, as to the fact specified in clause (d) of the Section.
ARTICLE IV
Representations and Warranties
The Borrower represents and warrants, and each Guarantor represents and
warrants, with respect to itself only, as to the matters set forth in Section
4.13, that:
Section 4.01. Corporate Existence and Power. The Borrower is a corporation
duly incorporated, validly existing and in good standing under the laws of the
jurisdiction of its incorporation, and has all corporate powers and all material
governmental licenses, consents, authorizations and approvals required to carry
on its business as now conducted.
Section 4.02. Corporate and Governmental Authorization; No Contravention.
The execution, delivery and performance by the Borrower of the Loan Documents to
which it is a party are within the Borrower's corporate powers, have been duly
authorized by all necessary corporate action, and require no action by or in
respect of, or filing with, any governmental body, agency or official (other
than filings which have been made on or prior to the Initial Borrowing Date).
The execution, delivery and performance by the Borrower of the Loan Documents to
which it is a party do not (i) contravene any provision of applicable law or
regulation or of the Borrower's certificate of incorporation or by-laws, (ii)
contravene, or constitute a default under, any agreement, judgment, injunction,
order, decree or other instrument binding upon the Borrower or any Subsidiary,
the consequences of which contravention or default, singly or in the aggregate,
could reasonably be expected to have a Material Adverse Effect, or (iii) except
as contemplated by the Collateral Documents, result in the creation or
imposition of any Lien on any asset of the Borrower or any Subsidiary.
Section 4.03. Binding Effect. The Borrower has duly executed and delivered
each of the Loan Documents to which it is a party and each of the Loan Documents
(other than the Notes) to which the Borrower is a party constitutes a valid and
binding agreement of the Borrower and each Note constitutes a valid and binding
obligation of the Borrower, in each case enforceable in accordance with its
terms except (i) as may be limited by bankruptcy, insolvency or similar laws
affecting creditors' rights generally, (ii) as rights of acceleration and the
availability of equitable remedies may be limited by equitable principles of
general applicability, and (iii) as limited by principles of reasonableness,
good faith and fair dealing.
Section 4.04. Financial Information. (a) (i) The consolidated balance sheet
of the Borrower and its Consolidated Subsidiaries as of June 27, 1997 and the
related consolidated statements of operations, cash flows and stockholders'
equity for the Fiscal Year then ended, reported on by BDO Seidman, LLP, a copy
of which has been delivered to each of the Lenders, fairly present, in
conformity with GAAP, the consolidated financial position of the Borrower and
its Consolidated Subsidiaries as of such date and their consolidated results of
operations and cash flows for such Fiscal Year.
(ii) The unaudited consolidated balance sheet of the Borrower and its
Consolidated Subsidiaries as of September 26, 1997 and the related unaudited
consolidated statements of operations, cash flows and stockholders' equity for
the three months then ended, a copy of which has been delivered to the Lenders,
fairly present, in conformity with GAAP, the consolidated financial position of
the Borrower and its Consolidated Subsidiaries as of such date and their
consolidated results of operations and cash flows for such three-month period.
(b) (i) The consolidated balance sheet of PureTec and its Consolidated
Subsidiaries as of July 31, 1997 and the related consolidated statements of
operations, cash flows and stockholders' equity for the Fiscal Year then ended,
reported on by Deloitte & Touche LLP, a copy of which has been delivered to each
of the Lenders, fairly present, in conformity with GAAP, the consolidated
financial position of PureTec and its Consolidated Subsidiaries as of such date
and their consolidated results of operations and cash flows for such Fiscal
Year.
(ii) The unaudited consolidated balance sheet of PureTec and its
Consolidated Subsidiaries as of October 31, 1997 and the related unaudited
consolidated statements of operations, cash flows and stockholders' equity for
the three (3) months then ended, a copy of which has been delivered to the
Lenders, fairly present, in conformity with GAAP, the consolidated financial
position of PureTec and its Consolidated Subsidiaries as of such date and their
consolidated results of operations and cash flows for such three (3)-month
period.
(c) Since September 26, 1997 there has occurred no Material Adverse
Effect.
Section 4.05. Litigation. There is no action, suit or proceeding pending
against, or to the best of the Borrower's knowledge threatened against or
affecting, the Borrower or any Subsidiary before any court or arbitrator or any
governmental body, agency or official (i) in which there is a reasonable
possibility of an adverse decision which could have a Material Adverse Effect or
(ii) which in any manner draws into question the validity or enforceability of
the Loan Documents.
Section 4.06. Compliance with ERISA. (a) Each member of ERISA Group has
fulfilled its obligations under the minimum funding standards of ERISA and the
Internal Revenue Code with respect to each Plan and is in compliance in all
material respects with the presently applicable provisions of ERISA and the
Internal Revenue Code with respect to each Plan. No member of the ERISA Group
has (i) sought a waiver of the minimum funding standard under Section 412 of the
Internal Revenue Code in respect of any Plan, (ii) failed to make any
contribution or payment to any Plan or Multiemployer Plan, or made any amendment
to any Plan, which has resulted or could reasonably be expected to result in the
imposition of a Lien or the posting of a bond or other security under ERISA or
the Internal Revenue Code or (iii) incurred any liability under Title IV of
ERISA other than a liability to the PBGC for premiums under Section 4007 of
ERISA.
Section 4.07. Environmental Compliance. (a) Except (x) to the extent
addressed by prior or present remediation activities by the Borrower and its
Subsidiaries or by third parties pursuant to contractual obligations or (y) to
the extent that the Environmental Liabilities of the Borrower and its
Subsidiaries, taken as a whole, that relate to or can reasonably be expected to
result from the matters referred to in clauses (i) through (vii), would not
exceed $10,000,000 for any individual issue arising at or relating to a
particular facility, or $25,000,000 in the aggregate:
(i) no notice, notification, demand, request for information,
citation, summons, complaint or order has been received, no complaint has
been served, no penalty has been assessed and, to the best of the
Borrower's knowledge, no investigation or review is pending or threatened
by any governmental or other entity with respect to any (A) alleged
violation by the Borrower or any Subsidiary of any Environmental Law, (B)
alleged failure by the Borrower or any Subsidiary to have any environmental
permit, certificate, license, approval, registration or authorization
required in connection with the conduct of its business, (C) Regulated
Activity or (D) Release of Hazardous Substances;
(ii) other than Regulated Activity undertaken in compliance with all
applicable Environmental Laws, (A) neither the Borrower nor any Subsidiary
has engaged in any Regulated Activity and (B) no Regulated Activity has
occurred at or on any property now or previously owned, leased or operated
by the Borrower or any Subsidiary during the period of such ownership,
lease or operation by the Borrower or any Subsidiary;
(iii) to the best of the Borrower's knowledge, no polychlorinated
biphenyls, radioactive material, urea formaldehyde, lead, asbestos,
asbestos-containing material or underground storage tank (active or
abandoned) is or has been present at any property now or previously owned,
leased or operated by the Borrower or any Subsidiary during the period of
such ownership, lease or operation by the Borrower or any Subsidiary;
(iv) no Hazardous Substance has been Released (and no written
notification of such Release has been filed) or is present (whether or not
in a reportable or threshold planning quantity) at, on or under any
property now or previously owned, leased or operated by the Borrower or any
Subsidiary during the period of such ownership, lease or operation by the
Borrower or any Subsidiary;
(v) to the best of the Borrower's knowledge, no property now or
previously owned, leased or operated by the Borrower or any Subsidiary or
any property to which the Borrower or any Subsidiary has, directly or
indirectly, transported or arranged for the transportation of any Hazardous
Substances, is listed or, to the best of the Borrower's knowledge, proposed
for listing, on the National Priorities List promulgated pursuant to
CERCLA, on CERCLIS (as defined in CERCLA) or on any similar federal, state
or foreign list of sites requiring investigation or clean-up;
(vi) there are no liens under Environmental Laws on any of the real
property or other assets owned or leased by the Borrower or any Subsidiary,
to the best of the Borrower's knowledge no government actions have been
taken or are in process which could subject any of such properties or
assets to such liens, and neither the Borrower nor any Subsidiary would be
required to place any notice or restriction relating to Hazardous
Substances at any property owned by it in any deed to such property; and
(vii) there has been no environmental investigation, study, audit,
test, review or other analysis conducted of which the Borrower has
knowledge in relation to the current or prior business of the Borrower or
any property or facility now or previously owned, leased or operated by the
Borrower or any Subsidiary, access to which has not been provided to the
Lenders at least five (5) days prior to the date hereof.
(b) For purposes of this Section, the terms "Borrower" and "Subsidiary"
shall include any business or business entity (including a corporation) which is
a predecessor, in whole or in part, of the Borrower or any Subsidiary.
Section 4.08. Taxes. The Borrower and its Subsidiaries have filed all
United States Federal income tax returns and all other material tax returns
which are required to be filed by them and have paid all taxes and assessments
payable by it which have become due pursuant to such returns or pursuant to any
assessment received by the Borrower or any Subsidiary, except any such taxes or
charges which are being diligently contested in good faith by appropriate
proceedings and for which adequate reserves have been provided for on the
financial statements of the Borrower and its Subsidiaries to the extent required
by and in accordance with GAAP.
Section 4.09. Subsidiaries. (a) Each of the Borrower's Subsidiaries is a
corporation or other legal entity duly incorporated or organized, validly
existing and, except as set forth in Schedule 6, in good standing under the laws
of its jurisdiction of organization, and has all corporate or other
organizational powers and all material governmental licenses, authorizations,
consents and approvals required to carry on its business as now conducted.
(b) Schedule 3 lists all of the Subsidiaries of the Borrower as of the
Initial Borrowing Date (after giving effect to the consummation of the
Transaction, and identifies each De Minimis Subsidiary). Each Domestic
Subsidiary of the Borrower is a Guarantor, and each Guarantor is a direct or
indirect Subsidiary of the Borrower.
Section 4.10. No Regulatory Restrictions on Borrowing. The Borrower is not
(i) an "investment company" within the meaning of the Investment Company Act of
1940, as amended, (ii) a "holding company" or a "subsidiary company" of a
holding company within the meaning of the Public Utility Holding Company Act of
1935, as amended, or (iii) otherwise subject to any regulatory scheme which
restricts its ability to incur debt.
Section 4.11. Full Disclosure. (a) All information heretofore furnished by
the Borrower to the Agent or any Lender for purposes of or in connection with
this Agreement or any transaction contemplated hereby is, and all such
information hereafter furnished by the Borrower to the Agent or any Lender will
be, to the best of the Borrower's knowledge, true and accurate in all material
respects on the date as of which such information is stated or certified and not
incomplete by omitting to state any fact necessary to make such information not
misleading in any material respect at such time in light of the circumstances
under which such information was provided. The Borrower has, to the best of the
Borrower's knowledge, disclosed to the Lenders in writing any and all facts
which materially and adversely affect, or may affect (to the extent the Borrower
can now reasonably foresee), the business, operations or financial condition of
the Borrower and its Consolidated Subsidiaries, taken as a whole, or the
Obligors' ability to perform their obligations under the Loan Documents.
(b) The projected financial statements set forth in the Information
Memorandum were based on reasonable assumptions and as of their date represented
the best estimate of future performance of the Borrower and its Subsidiaries.
During the period from the respective dates as of which information is stated in
the Information Memorandum to and including the Initial Borrowing Date, to the
best of the Borrower's knowledge, no event has occurred and no condition has
come into existence which would have caused the projected financial statements
therein to be materially misleading.
Section 4.12. Representations in PureTec Acquisition Documents True and
Correct. Each of the representations and warranties of the Borrower contained in
the PureTec Acquisition Documents was true and correct on the date when made
pursuant to the relevant PureTec Acquisition Documents.
Section 4.13. Representations of Guarantors. Each Guarantor is a
corporation duly incorporated, validly existing and, except as set forth in
Schedule 6, in good standing under the laws of the jurisdiction of its
incorporation, and has all corporate powers and all material governmental
licenses, authorizations, consents and approvals required to carry on its
business as now conducted. The execution, delivery and performance by each
Guarantor of the Loan Documents to which it is a party are within such
Guarantor's corporate powers, have been duly authorized by all necessary
corporate action, and require no action by or in respect of, or filing with, any
governmental body, agency or official (other than filings which have been made
on or prior to the Initial Borrowing Date). The execution, delivery and
performance by the Obligors of the Loan Documents to which they are parties do
not (i) contravene any provision of applicable law or regulation or of the
certificate of incorporation or by-laws of such Guarantor, (ii) contravene, or
constitute a default under, any agreement, judgment, injunction, order, decree
or other instrument binding upon such Guarantor the consequences of which
contravention or default, singly or in the aggregate, could reasonably be
expected to have a Material Adverse Effect, or (iii) except as contemplated by
the Collateral Documents, result in the creation or imposition of any Lien on
any asset of such Guarantor. Each Guarantor has duly executed and delivered each
of the Loan Documents to which it is a party and the Loan Documents to which
each Guarantor is a party constitute valid and binding agreements of such
Guarantor, in each case enforceable against such Guarantor in accordance with
their respective terms except (i) as may be limited by bankruptcy, insolvency or
similar laws affecting creditors' rights generally, (ii) as rights of
acceleration and the availability of equitable remedies may be limited by
equitable principles of general applicability, and (iii) as may be limited by
principles of reasonableness, good faith and fair dealing. Each of the
representations and warranties of each Guarantor contained in the Loan Documents
(other than this Agreement) to which such Guarantor is a party is true and
correct.
Section 4.14. Intellectual Property. The Borrower and each of its
Subsidiaries owns, possesses or holds under valid licenses all patents,
trademarks, service marks, trade names, copyrights, licenses and other
intellectual property rights that are necessary for the operation of their
respective properties and businesses, and neither the Borrower nor any of its
Subsidiaries is in violation of any provision thereof. Neither the Borrower nor
its Subsidiaries has received actual notice of, or knows of any valid basis for,
any claim of infringement of any material license, patent, trademark, trade
name, service mark, copyright, trade secret or any other intellectual property
right of others, and, to the best knowledge of the Borrower, there is no
infringement or claim of infringement by others of any material license, patent,
trademark, trade name, service mark, copyright, trade secret or other
intellectual property right of the Borrower and its Subsidiaries.
Section 4.15. Solvency. Subject to Section 9.07 hereof, except as set forth
in Schedule 6, as of the Initial Borrowing Date after giving effect to the
transactions contemplated hereby to occur on the Initial Borrowing Date, and at
all times thereafter: (i) the aggregate fair market value of the assets of each
of the Borrower and each Guarantor will exceed its liabilities (including
contingent, subordinated, unmatured and unliquidated liabilities), (ii) each of
the Borrower and each Guarantor will have sufficient cash flow to enable it to
pay its debts as they mature and (iii) none of the Borrower nor any Guarantor
will have unreasonably small capital for the business in which it is engaged.
Section 4.16. Labor Relations. Neither the Borrower nor any of its
Subsidiaries is engaged in any unfair labor practice that could reasonably be
expected to have a Material Adverse Effect. There is (i) no unfair labor
practice complaint pending against the Borrower or any of its Subsidiaries or,
to the best knowledge of the Borrower, threatened against any of them, before
the National Labor Relations Board, and no grievance or arbitration proceeding
arising out of or under any collective bargaining agreement is so pending
against the Borrower or any of its Subsidiaries or, to the best knowledge of the
Borrower, threatened against any of them, (ii) no strike, labor dispute,
slowdown or stoppage pending against the Borrower or any of its Subsidiaries or,
to the best knowledge of the Borrower, threatened against the Borrower or any of
its Subsidiaries and (iii) no union representation question existing with
respect to the employees of the Borrower or any of its Subsidiaries, except
(with respect to any matter specified in clause (i), (ii) or (iii) above, either
individually or in the aggregate) such as could not reasonably be expected to
have a Material Adverse Effect.
Section 4.17. Subordinated Notes; etc. All Obligations hereunder and under
the other Loan Documents are within the definitions of "Senior Debt" and
"Designated Senior Debt," as the case may be, included in such provisions of the
Existing Senior Subordinated Note Indenture and the New Senior Subordinated
Notes Indenture. This Agreement constitutes the "Credit Agreement" under, and as
defined in, each of the Existing Senior Subordinated Notes Indenture and the New
Senior Subordinated Notes Indenture.
ARTICLE V
Covenants
The Borrower hereby covenants and agrees that, on and after the Effective
Date and until the Total Commitment and all Letters of Credit have terminated
and the Loans, Notes and LC Reimbursement Obligations, together with interest,
fees and all other Obligations (other than indemnities for which no claim for
payment has been made) incurred hereunder and under the other Loan Documents,
are paid in full:
Section 5.01. Information. The Borrower will deliver to each of the
Lenders:
(a) as soon as available and in any event within 90 days after
the end of each Fiscal Year, a consolidated balance sheet of the
Borrower and its Consolidated Subsidiaries as of the end of such
Fiscal Year and the related consolidated statements of operations,
cash flows and stockholders' equity for such Fiscal Year, setting
forth in each case in comparative form the figures for the previous
Fiscal Year, all audited and reported on in a manner which would be
acceptable to the SEC by BDO Seidman, LLP or other independent public
accountants of nationally recognized standing;
(b) as soon as available and in any event within 45 days after
the end of each of the first three Fiscal Quarters of each Fiscal
Year, a consolidated balance sheet of the Borrower and its
Consolidated Subsidiaries as of the end of such Fiscal Quarter, the
related consolidated statement of operations for such Fiscal Quarter
and the related consolidated statements of cash flows for the portion
of the Fiscal Year ended at the end of such Fiscal Quarter, setting
forth in the case of each such statement of cash flows in comparative
form the figures for the corresponding period in the previous Fiscal
Year, all certified (subject to normal year-end adjustments) as to
fairness of presentation and consistency with GAAP by the Borrower's
chief executive officer or chief accounting officer;
(c) simultaneously with the delivery of each set of financial
statements referred to in clauses (a) and (b) above (or any
certificate establishing the Leverage Ratio as described in the
definition of Applicable Period), a certificate of the Borrower's
chief executive officer or chief accounting officer (i) setting forth
in reasonable detail the calculations required to establish whether
the Borrower was in compliance with the requirements of Sections 2.10
and 5.09 through 5.16, inclusive, on the date of such financial
statements, (ii) stating whether any Default exists on the date of
such certificate and, if any Default then exists, setting forth the
details thereof and the action which the Borrower is taking or
proposes to take with respect thereto and (iii) in respect of the
delivery of the financial statements set forth in clause (a) above,
setting forth the amount of, and calculations required to establish
the amount of, Excess Cash Flow;
(d) simultaneously with the delivery of each set of financial
statements referred to in clause (a) above, a statement of the firm of
independent public accountants which reported on such statements (i)
stating whether anything has come to their attention to cause them to
believe that any Default existed on the date of such statements, and
(ii) confirming the calculations set forth in the officer's
certificate delivered simultaneously therewith pursuant to clause (c)
above;
(e) within five (5) Business Days after any officer of the
Borrower obtains knowledge of any Default, if such Default is then
continuing, a certificate of the Borrower's chief executive officer or
chief accounting officer setting forth the details thereof and the
action which the Borrower is taking or proposes to take with respect
thereto;
(f) as soon as reasonably practicable after any officer of the
Borrower obtains knowledge thereof, notice of any event or condition
(including, without limitation, any litigation, governmental
investigation or other proceeding) which has had or threatens to have
a Material Adverse Effect and the nature of such Material Adverse
Effect;
(g) promptly after the mailing thereof to the Borrower's
shareholders copies of all financial statements, reports and proxy
statements so mailed;
(h) promptly after the filing thereof, copies of all registration
statements (other than the exhibits thereto and any registration
statements on Form S-8 or its equivalent) and reports on Forms 10-K,
10-Q and 8-K (or their equivalents) filed by the Borrower with the
SEC;
(i) promptly, if and when any member of the ERISA Group (i) gives
or is required to give notice to the PBGC of any "reportable event"
(as defined in Section 4043 of ERISA) with respect to any Plan which
might reasonably constitute grounds for a termination of such Plan
under Title IV of ERISA, or knows that the plan administrator of any
Plan has given or is required to give notice of any such reportable
event, a copy of the notice of such reportable event given or required
to be given to the PBGC; (ii) receives notice of complete or partial
withdrawal liability under Title IV of ERISA or notice that any
Multiemployer Plan is in reorganization, is insolvent or has been
terminated, a copy of such notice; (iii) receives notice from the
PBGC under Title IV of ERISA of an intent to terminate, impose
liability (other than for premiums under Section 4007 of ERISA) in
respect of, or appoint a trustee to administer any Plan, a copy of
such notice; (iv) applies for a waiver of the minimum funding
standard under Section 412 of the Internal Revenue Code, a copy of
such application; (v) gives notice of intent to terminate any Plan
under Section 4041 of ERISA, a copy of such notice and other
information filed with the PBGC; (vi) gives notice of withdrawal from
any Plan pursuant to Section 4063 of ERISA, a copy of such notice or
(vii) fails to make any payment or contribution to any Plan or
Multiemployer Plan or makes any amendment to any Plan which has
resulted or could reasonably result in the imposition of a Lien or the
posting of a bond or other security, a certificate of the Borrower's
chief executive officer or chief accounting officer setting forth
details as to such occurrence and the action, if any, which the
Borrower or applicable member of the ERISA Group is required or
proposes to take ( a "Reporting Certificate");
(j) promptly, upon receipt of any complaint, order, citation,
notice or other written communication from any Person with respect to,
or upon the Borrower's obtaining knowledge of, (i) the existence or
alleged existence of a violation of any applicable Environmental Law
or any Environmental Liability in connection with any property now or
previously owned, leased or operated by the Borrower or any of its
Subsidiaries, (ii) any Release of any Hazardous Substance on such
property or any part thereof in a quantity that is reportable under
any applicable Environmental Law, and (iii) any pending or threatened
proceeding for the termination, suspension or non-renewal of any
permit required under any applicable Environmental Law, in each case
(x) which could result in liability or expenses in excess of
$10,000,000 for any individual issue arising at or relating to a
particular facility, or $25,000,000 in the aggregate or (y) which
individually or in the aggregate could have a Material Adverse Effect;
and
(k) from time to time such additional information regarding the
financial position or business of the Borrower and its Subsidiaries
(including, without limitation, any Guarantor) as the Agent, at the
request of any Lender, may reasonably request.
Section 5.02. Payment of Obligations. The Borrower will pay and discharge,
and will cause each Subsidiary to pay and discharge, at or before maturity, all
of their respective material obligations and liabilities (including, without
limitation, tax liabilities and claims of materialmen, warehousemen and the like
which if unpaid might by law give rise to a Lien other than inchoate statutory
liens in respect of obligations not yet due and payable), except where the same
are contested in good faith by appropriate proceedings, and will maintain, and
will cause each Subsidiary to maintain, in accordance with GAAP, any appropriate
reserves for the accrual thereof.
Section 5.03. Maintenance of Property; Insurance. (a) The Borrower will
keep, and will cause each Subsidiary to keep, all material property useful and
necessary in its business in good working order and condition, ordinary wear and
tear excepted.
(b) The Borrower will, and will cause each Subsidiary to, maintain (either
in the Borrower's name or in such Subsidiary's own name) with financially sound
and responsible insurance companies, insurance on all their respective
properties in at least such amounts, against at least such risks and with no
greater risk retention as are usually maintained, insured against or retained,
as the case may be, in the same general area by companies of established repute
engaged in the same or a similar business. The Borrower will furnish to the
Lenders, upon request from the Agent, information presented in reasonable detail
as to the insurance so carried.
Section 5.04. Conduct of Business and Maintenance of Existence. The
Borrower and its Subsidiaries will engage in business activities involving the
manufacture and distribution of packaging materials, plastics products and
materials, other disposable products, and related materials and related
businesses, and will preserve, renew and keep in full force and effect their
respective corporate existences and their respective rights, privileges and
franchises necessary or desirable in the normal conduct of business; provided
that nothing in this Section shall prohibit:
(i) the merger of a Subsidiary into the Borrower if, after giving
effect thereto, no Default shall have occurred and be continuing;
(ii) the merger or consolidation of a Subsidiary with or into a Person
other than the Borrower if the corporation surviving such consolidation or
merger is a Subsidiary and, after giving effect thereto, no Default shall
have occurred and be continuing;
(iii) the merger or consolidation of the Borrower with or into any
other Person if the corporation surviving such consolidation or merger is
the Borrower and, after giving effect thereto, no Default shall have
occurred and be continuing; or
(iv) the termination of the corporate existence of a Subsidiary if the
Borrower in good faith determines that such termination is in the best
interest of the Borrower and is not materially disadvantageous to the
Lenders.
Notwithstanding anything to the contrary contained above, except with respect to
the merger contemplated by the PureTec Acquisition, at any time while any
Existing PST Senior Secured Notes remain outstanding, neither PST nor any of its
Subsidiaries may be merged or consolidated with, or liquidated into, the
Borrower or any of its Subsidiaries (other than PST and its Subsidiaries). The
Borrower will not, and will not permit any of its Subsidiaries to, engage in any
line or lines of business activity other than those engaged in on the Initial
Borrowing Date and any other line or lines of business activity involving the
manufacture and distribution of packaging materials, plastics products and
materials, other disposable products, and related materials and related
businesses.
Section 5.05. Compliance with Laws. The Borrower will comply, and will
cause each Subsidiary to comply, in all material respects with all applicable
laws, ordinances, rules, regulations, orders and requirements of governmental
authorities (including, without limitation, Environmental Laws and ERISA and the
rules and regulations thereunder), except where the necessity or manner of
compliance therewith is contested in good faith by appropriate proceedings.
Section 5.06. Inspection of Property, Books and Records. The Borrower will
keep, and will cause each Subsidiary to keep, proper books of record and account
in which full and correct entries shall be made of all dealings and transactions
in relation to its business and activities; and will permit, and will cause each
Subsidiary to permit, representatives of any Lender at such Lender's expense to
visit and inspect any of their respective properties, to examine and make
abstracts from any of their respective books and records and to discuss their
respective affairs, finances and accounts with their respective officers,
employees and independent public accountants, all at such reasonable times and
as often as may reasonably be requested.
Section 5.07. Mergers and Sales of Assets. (a) The Borrower will not, and
will not permit any Subsidiary to, consolidate or merge with or into any other
Person; provided that (i) mergers expressly permitted pursuant to the provisions
of Section 5.04 shall be permitted pursuant to this Section 5.07 and (ii) any
merger of a Subsidiary shall be permitted to the extent such merger constitutes
an Asset Sale permitted by Subsection (b) below.
(b) No Obligor will sell, lease or otherwise transfer, directly or
indirectly, any Collateral or other assets except for (i) dispositions of
inventory, cash, Cash Equivalents and other cash management investments and
obsolete, unused or unnecessary equipment, in each case in the ordinary course
of business, (ii) dispositions to the Borrower or a Wholly-Owned Subsidiary
thereof (excluding dispositions by the Borrower and its Subsidiaries other than
PureTec and its Subsidiaries to PureTec or any of its Subsidiaries) and (iii)
Asset Sales not otherwise permitted hereunder, provided, that (x) the aggregate
Net Cash Proceeds therefrom shall not exceed $10,000,000 in any Fiscal Year and
$25,000,000 in the aggregate during the term of this Agreement (or $100,000,000
in the case of the disposition of certain non-strategic assets described to the
Lenders prior to the Effective Date), (y) any such Asset Sale is for at least
75% in cash or for assets which constitute or are part of businesses which are
related to the business of the Borrower or its Subsidiaries permitted pursuant
to Section 5.04 or which assets consist of the issued and outstanding Capital
Stock of a person the assets of which are principally comprised of such assets
and at fair market value (as determined in good faith by the board of directors
or any member of senior management of the Person selling such assets) and (z)
the Net Cash Proceeds therefrom are applied to repay Term Loans as provided in
Section 2.10(d) or reinvested or used to make Permitted Acquisitions to the
extent permitted by Section 2.10(d).
Section 5.08. Use of Proceeds; Compliance with Margin Regulations. (a) The
proceeds of Term Loans shall be utilized to finance the Transaction and to pay
fees and expenses incurred in connection therewith.
(b) The proceeds of Revolving Loans and Swingline Loans shall be utilized
for the general corporate and working capital purposes of the Borrower and its
Subsidiaries (including to effect Permitted Acquisitions); provided that the
proceeds of Revolving Loans in an aggregate principal amount not to exceed (i)
$50 million may be utilized for the purposes set forth in clause (a) above and
(ii) up to $5 million may be utilized to purchase outstanding Existing PST
Senior Secured Notes.
(c) Neither the making of any Loan hereunder nor the use of the proceeds
thereof, nor the occurrence of any other Credit Event, will violate or be
inconsistent with the provisions of the Margin Regulations. Neither any proceeds
of the Loans nor any Letter of Credit will be used, directly or indirectly, for
the purpose, whether immediate, incidental or ultimate, of buying or carrying
any Margin Stock.
Section 5.09. Negative Pledge. Neither the Borrower nor any Subsidiary
will create, assume or suffer to exist any Lien on any asset now owned or
hereafter acquired by it, except:
(a) any Lien of the Borrower and its Subsidiaries in existence on
the Effective Date and listed on Schedule 4;
(b) any Lien on any asset securing Debt in an aggregate principal
amount at any time outstanding not to exceed $10,000,000 incurred or
assumed for the purpose of financing all or any part of the cost of
acquiring, constructing or improving such asset, provided that such
Lien attaches to such asset concurrently with or within 180 days after
the acquisition thereof;
(c) any Lien on any asset of any Person existing at the time such
Person is merged or consolidated with or into the Borrower or a
Subsidiary, or at the time such Person becomes a Subsidiary or at the
time such asset is acquired and not created in contemplation of such
event (and so long as the respective such Lien does not extend to, or
attach to any additional asset, as a result of (or after giving effect
to) the respective merger or consolidation) and if securing Debt, such
Debt is permitted under Section 5.10(b)(y);
(d) any Lien arising out of the refinancing, extension, renewal
or refunding of any Debt secured by any Lien permitted by any of the
foregoing clauses of this Section, provided that such Debt is not
secured by any additional assets and the amount of such Debt is not
increased (except for the amount of any premium required to be paid
pursuant to the terms of such Debt, plus expenses reasonably incurred
by the issuer of such Debt, in connection with such refinancing,
extension, renewal or refunding);
(e) Liens arising in the ordinary course of its business which
(i) do not secure Debt or Derivatives Obligations and (ii) do not
secure any single obligation or liability (or class of obligations or
liabilities having a common cause) in an amount exceeding $5,000,000;
(f) Liens created by the Collateral Documents;
(g) Permitted Encumbrances (as defined in the Mortgages) and
those Liens permitted to be contested under Section 2.06 of the
Mortgages;
(h) Liens to secure a Debt owed to the Borrower or a Guarantor;
(i) Liens to secure a Debt of a Foreign Subsidiary permitted
under Section 5.10(g);
(j) so long as any existing PST Senior Secured Notes remain
outstanding, Liens on assets of PST securing the Existing PST Senior
Secured Notes pursuant to the terms, and requirements, of the Existing
PST Senior Secured Notes Indenture and the related documentation, in
each case so long as the Agent, on behalf of the Secured Creditors,
maintains a second priority perfected security interest in all assets
secured by such Liens; and
(k) Liens to secure Debt or other obligations in an aggregate
amount at no time exceeding $500,000.
Section 5.10. Limitation on Debt. The Borrower will not, and will not
permit any of its Subsidiaries to, incur or at any time be liable with respect
to any Debt except:
(a) Debt under this Agreement;
(b) Debt of a Person (x) secured by Liens permitted by Section
5.09(b) or (y) existing at the time such Person is merged or
consolidated with or into the Borrower or a Subsidiary, or at the time
such Person becomes a Subsidiary or at the time such asset is
acquired, so long as the principal amount of Debt under this clause
(y) does not exceed $30,000,000 at any time outstanding and was not
incurred in contemplation of such merger, consolidation or asset
acquisition;
(c) Debt of the Borrower owed to a Guarantor, or Debt of a
Guarantor owed to the Borrower or another Guarantor;
(d) Debt of the Borrower, which may be guaranteed by any
Guarantor on a senior subordinated basis to the extent required by the
terms of the Existing Senior Subordinated Notes Indenture, evidenced
by the Existing Senior Subordinated Notes in an aggregate principal
amount not to exceed $75 million (less the amount of principal
repayments thereof after the Initial Borrowing Date);
(e) Debt of PST evidenced by the Existing PST Senior Secured
Notes, if any, not purchased pursuant to the Existing PST Senior
Secured Notes Tender Offer/Consent Solicitation (which in no event
shall exceed $62.499 million in aggregate principal amount)(less the
amount of principal repayments thereof after the Initial Borrowing
Date);
(f) Debt of the Borrower, which may be guaranteed on a senior
subordinated basis by one or more Guarantors to the extent required by
the terms of the New Senior Subordinated Notes Indenture or any
similar indenture described in clause (ii) below, evidenced by (i) the
New Senior Subordinated Notes in an aggregate principal amount not to
exceed $200 million (less the amount of principal repayments thereof
after the Initial Borrowing Date) and (ii) agreements and documents on
terms and provisions which are substantially identical to or more
favorable to the Lenders (in the reasonable judgment of the Agent) to
those set forth in the New Senior Subordinated Notes Documents in an
amount not to exceed $100 million (less the amount of principal
repayments thereof after the date on incurrence thereof);
(g) Debt of a Foreign Subsidiary in an aggregate amount not to
exceed $25,000,000;
(h) Debt of the Borrower and its Subsidiaries not otherwise
permitted by this Section incurred after the Initial Borrowing Date in
an aggregate principal amount at any time outstanding not to exceed
$15,000,000; provided that the aggregate principal amount of Debt
incurred by all Subsidiaries pursuant to this clause (h) shall not
exceed $7,500,000 at any time outstanding;
(i) the Borrower or any Subsidiary may guaranty Debt and other
obligations of its Domestic Subsidiaries or Foreign Subsidiaries
(which guaranty shall be included as an Investment in such Domestic
Subsidiary or Foreign Subsidiary, as applicable) which are permitted
under the provisions of this Agreement; and
(j) Debt of a Foreign Subsidiary owed to a Foreign Subsidiary;
(k) Debt outstanding as of the Effective Date and listed on
Schedule 2, plus any subsequent extensions, renewals or replacements
thereof; and
(1) Debt incurred under the Loan Agreement dated as of October
31, 1997 among PST, Huntington National Bank and PureTec, as amended
from time to time, in an aggregate principal amount outstanding at no
time to exceed $2,250,000, and any subsequent extensions, renewals or
replacements thereof.
Section 5.11. Fixed Charge Coverage Ratio. For any Test Period ending on
the last day of a Fiscal Quarter ending during one of the periods set forth
below, the Fixed Charge Coverage Ratio will not be less than the ratio set
forth below opposite such period:
Period Ratio
- ------ -----
June 1998 1.00:1
September 1998 0.90:1
December 1998 0.75:1
March 1999 0.70:1
June 1999 0.70:1
September 1999 0.70:1
December 1999 0.75:1
March 2000 0.90:1
June 2000 1.00:1
September 2000 1.10:1
December 2000 1.20:1
March 2001 1.25:1
June 2001 1.30:1
September 2001 1.30:1
December 2001 1.30:1
March 2002 1.30:1
June 2002 1.30:1
September 2002 1.30:1
December 2002 1.30:1
March 2003 1.30:1
June 2003 1.30:1
September 2003 1.30:1
December 2003 1.35:1
March 2004 1.35:1
June 2004 1.40:1
September 2004 1.45:1
December 2004 1.50:1
March 2005 1.50:1
June 2005 1.55:1
September 2005 1.60:1
December 2005 1.65:1
March 2006 1.70:1
Section 5.12. Leverage Ratio. At no time during any period set forth
below shall the Leverage Ratio be greater than the ratio set forth below
opposite such period.
Period Ratio
- --------- ------
June 1998 6.50:1
September 1998 6.50:1
December 1998 6.50:1
March 1999 6.50:1
June 1999 6.50:1
September 1999 6.40:1
December 1999 6.25:1
March 2000 6.15:1
June 2000 6.00:1
September 2000 5.90:1
December 2000 5.75:1
March 2001 5.65:1
June 2001 5.50:1
September 2001 5.45:1
December 2001 5.40:1
March 2002 5.30:1
June 2002 5.25:1
September 2002 5.20:1
December 2002 5.15:1
March 2003 5.05:1
June 2003 5.00:1
September 2003 4.90:1
December 2003 4.75:1
March 2004 4.65:1
June 2004 4.50:1
September 2004 4.45:1
December 2004 4.40:1
March 2005 4.30:1
June 2005 4.25:1
September 2005 4.20:1
December 2005 4.15:1
March 2006 4.10:1
Section 5.13. Minimum Consolidated EBITDA. Consolidated EBITDA for
any Test Period ending on the last day of a Fiscal Quarter set forth below
will not be less than the amount set forth opposite such Fiscal Quarter
below:
Fiscal Quarter Ending Amount
- --------------------- -----------
June 1998 $61,000,000
September 1998 $62,000,000
December 1998 $63,000,000
March 1999 $64,000,000
June 1999 $65,000,000
September 1999 $65,440,000
December 1999 $66,320,000
March 2000 $67,630,000
June 2000 $69,380,000
September 2000 $70,880,000
December 2000 $72,130,000
March 2001 $73,130,000
June 2001 $73,880,000
September 2001 $74,570,000
December 2001 $75,190,000
March 2002 $75,760,000
June 2002 $76,260,000
September 2002 $76,760,000
December 2002 $77,260,000
March 2003 $77,760,000
June 2003 $78,260,000
September 2003 $78,820,000
December 2003 $79,450,000
March 2004 $80,130,000
June 2004 $80,880,000
September 2004 $81,630,000
December 2004 $82,380,000
March 2005 $83,130,000
June 2005 $83,880,000
September 2005 $84,570,000
December 2005 $85,190,000
March 2006 $85,760,000
Section 5.14. Restricted Payments. Neither the Borrower nor any
Subsidiary will declare or make any Restricted Payment, except that any
Subsidiary of the Borrower (x) may pay cash dividends or other
distributions ("Dividends") to the Borrower or any Wholly-Owned Subsidiary
of the Borrower, (y) if the Subsidiary is not a Wholly-Owned Subsidiary,
may pay cash Dividends to its shareholders generally so long as the
Borrower or any such Subsidiary which owns the equity interest or interests
in the Subsidiary paying such Dividends receives at least its proportionate
share thereof (based on its relative holdings of equity interests in the
Subsidiary paying such Dividends and taking into account the relative
preferences, if any, of the various classes of equity interests in such
Subsidiary) and (z) after an Initial Public Offering, the Borrower may pay
Dividends in an amount not to exceed the lesser of (y) $5,000,000 in any
Fiscal Year and (y) the Available ECF Amount. Notwithstanding anything to
the contrary contained above, payments made to effect the PureTec
Acquisition and the PST Minority Acquisition shall be permitted in
accordance with the terms in the relevant Documents.
Section 5.15. Investments; Restricted Acquisitions. Neither the Borrower
nor any Subsidiary will (a) hold, make or acquire any Investment or (b)
consummate or agree to consummate any Restricted Acquisition except:
(i) the Borrower and its Subsidiaries may acquire and hold accounts
receivables owing to any of them, if created or acquired in the ordinary
course of business and payable or dischargeable in accordance with
customary terms;
(ii) the Borrower and its Subsidiaries may acquire and hold cash and
Cash Equivalents;
(iii) the Borrower and its Subsidiaries may enter into agreements
relating to Derivatives Obligations which are determined in good faith by
the Borrower to be non-speculative in nature;
(iv) any Guarantor may make intercompany loans and advances to, and
other Investments in the Borrower or any other Guarantor (and may make
Restricted Acquisitions of any other Guarantor), and the Borrower may
make intercompany loans and advances to, and other Investments in and
Restricted Acquisitions of any Guarantor to the extent not otherwise
prohibited by Section 5.10(c);
(v) any Subsidiary may make Investments and Restricted Acquisitions
to the extent permitted by Section 5.04(ii);
(vi) any Foreign Subsidiary may make any Investment in or Restricted
Acquisition of any other Foreign Subsidiary;
(vii) the Borrower and its Subsidiaries may acquire and own
Investments received in connection with the bankruptcy or reorganization
of suppliers and customers and in settlement of delinquent obligations
of, and other disputes with, customers and suppliers arising in the
ordinary course of business;
(viii) the PureTec Acquisition shall be permitted;
(ix) the PST Minority Acquisition shall be permitted;
(x) Consolidated Capital Expenditures by the Borrower and its
Subsidiaries shall be permitted to the extent not in violation of Section
5.16;
(xi) the Borrower and its Subsidiaries may make Investments in and
Restricted Acquisitions of Foreign Subsidiaries and Foreign Joint
Ventures in an amount not to exceed $30,000,000 minus (i) the
aggregate amount of Investments made by the Borrower or any of its
Domestic Subsidiaries, net of Debt and, without duplication,
Capitalized Lease Obligations assigned to, and assumed by, the
respective Foreign Subsidiary or Foreign Joint Venture in connection
therewith pursuant to this Section 5.15(xi) after the Initial
Borrowing Date, minus (ii) the aggregate amount of Debt or other
obligations (whether absolute, accrued, contingent or otherwise and
whether or not due) of any Foreign Subsidiary or Foreign Joint Venture
for which the Borrower or any of its Domestic Subsidiaries is liable,
minus (iii) all payments made by the Borrower or any of its Domestic
Subsidiaries in respect of Debt or other obligations of the respective
Foreign Subsidiary or Foreign Joint Venture after the Initial
Borrowing Date, plus (iv) to the extent the Borrower or one or more
other Obligors (after the respective Investment has been made)
receives a cash return from the respective Foreign Subsidiary or
Foreign Joint Venture of amounts previously invested pursuant to this
clause (xi) (which cash return may be made by way of repayment of
principal in the case of loans and cash equity returns (whether as a
distribution, dividend or redemption) in the case of equity investments),
then the amount of such return of investment shall apply to increase
the available basket hereunder, provided that the aggregate amount of
increases to the available basket hereunder shall not exceed the
amount of returned investment and, in no event, shall the amount of
the increases made to the available basket hereunder in respect of any
Investment exceed the amount previously invested pursuant to this
clause (xi);.
(xii) additional Investments and Restricted Acquisitions provided that
(a) immediately after any such Investment or Restricted Acquisition is
made or acquired (any such Investment or Restricted Acquisition
permitted by this clause (xii), a "Permitted Acquisition") is
consummated or agreed to, the sum, without duplication, of the
aggregate amount expended by the Borrower and its Domestic
Subsidiaries with respect to Permitted Acquisitions (including the
value of Capital Stock of the Borrower used to make Permitted
Acquisitions) after the date hereof does not in the aggregate exceed
the sum of (x) Available ECF Amount, (y) Retained Asset Sale
Proceeds received in connection with Asset Sales to the extent not
reinvested in other assets pursuant to the first proviso in Section
2.10(d) and (z) an additional amount equal to $100,000,000 for all
periods after the Initial Borrowing Date; and
(b) in the case of a Permitted Acquisition, (A) the Person whose
assets, securities or other equity interests are acquired by the
Borrower or its Subsidiaries is engaged in substantially the same line
of business activity as the Borrower and its Subsidiaries or any other
line or lines of business activity involving the manufacture and
distribution of packaging materials, plastic products and materials,
other disposable products, and related materials and related
businesses; (B) immediately after such Permitted Acquisition is
consummated, the Unutilized Revolving Loan Commitment shall not be
less than $20,000,000; (C) if the Permitted Acquisition is structured
as an acquisition of capital stock or other equity interest of another
Person, the Borrower and/or its Domestic Subsidiaries shall own all of
the capital stock or other equity interests of the Person so acquired;
and (D) the Borrower would be in compliance with Sections 5.11 to
5.13, inclusive, after the Fixed Charge Coverage Ratio, Leverage Ratio
and Consolidated EBITDA are each adjusted with respect to such
Permitted Acquisition on the date of consummation or proposed
consummation thereof (the "Transaction Date") as follows: in
calculating Consolidated EBITDA, Consolidated Interest Expense and
Consolidated Capital Expenditures, (1) the incurrence of any Debt
incurred in connection with such Permitted Acquisition and the
application of the proceeds therefrom shall be assumed to have
occurred on the first day of the period of four consecutive Fiscal
Quarters (or other period) for which such amounts are required to be
determined in accordance with the definitions of Fixed Charge Coverage
Ratio and Leverage Ratio (the "Reference Period"), (2) pro forma
effect shall be given to any Permitted Acquisition (including
adjustments to operating results permitted to be made in accordance
with generally accepted accounting principles and any pro forma cost
savings which the Borrower expects to realize and to the inclusion of
which the Agent and, if such expected pro forma cost savings are in
excess of $2,000,000, the Required Lenders, have consented (such
consents not to be unreasonably withheld or delayed)) which occurs
during the Reference Period or subsequent to the Reference Period and
prior to the Transaction Date as if such Permitted Acquisition had
occurred on the first day of the Reference Period, (3) in the
incurrence of any Debt during the Reference Period or subsequent to
the Reference Period and prior to the Transaction Date and the
application of the proceeds therefrom shall be assumed to have
occurred on the first day of such Reference Period and (4)
Consolidated Interest Expense attributable to any Debt (whether
existing or being incurred) bearing a floating interest rate shall be
computed on a pro forma basis as if the rate in effect on the date of
computation had been the applicable rate for the entire period, unless
such Person or any of its Subsidiaries is a party to an interest rate
swap or cap or similar agreement (which shall remain in effect for the
twelve month period after the Transaction Date) which has the effect
of fixing the interest rate on the date of computation, in which case
such rate (whether higher or lower) shall be used.
At least twenty days prior to the closing date for any Permitted
Acquisition (or, in the case of any Permitted Acquisition that occurs within 20
days after the Initial Borrowing Date, within such time as the Borrower and the
Agent agree), the Borrower shall have delivered to the Lenders (i) a compliance
certificate certifying the Borrower's compliance with the provisions of this
Agreement, including, without limitation, Sections 5.11 to 5.13, inclusive,
after giving effect on a pro forma basis to such Permitted Acquisition and (ii)
a report of the chief executive officer or chief accounting officer of the
Borrower, in a form and providing sufficient detail and justification for the
information provided therein, including assumptions, as shall be found to be
reasonable by the Agent in its good faith discretion after completion of
reasonable due diligence, establishing (x) the basis for such certification and
(y) that after giving effect to such Permitted Acquisition and the financing
therefor, the Borrower shall be in compliance at the end of each Fiscal Year
until the Termination Date with the coven ants contained in Sections 5.11 to
5.13, inclusive.
(xiii) the Borrower and its Subsidiaries may acquire and hold debt
and/or other similar non-cash consideration in connection with Asset
Sales permitted pursuant to Section 5.07(b)(iii);
(xiv) so long as no Default or Event of Default exists or would exist
immediately after giving effect to the respective Investment, the Borrower
and its Domestic Subsidiaries shall be permitted to make Investments in any
Domestic Joint Venture on any date in an amount not to exceed the Available
Domestic JV Basket Amount on such date (after giving effect to all prior
and contemporaneous adjustments thereto, except as a result of such
Investment), it being understood and agreed that to the extent the Borrower
or one or more other Obligors (after the respective Investment has been
made) receives a cash return from the respective Joint Venture of amounts
previously invested pursuant to this clause (xiv) (which cash return may be
made by way of repayment of principal in the case of loans and cash equity
returns (whether as a distribution, dividend or redemption) in the case of
equity investments), then the amount of such return of investment shall
apply to increase the Available Domestic JV Basket Amount, provided that
the aggregate amount of increases to the Available Domestic JV Basket
Amount described above shall not exceed the amount of returned investment
and, in no event, shall the amount of the increases made to the Available
Domestic JV Basket Amount in respect of any Investment exceed the amount
previously invested pursuant to this clause (xiv);
(xv) so long as no Default then exists or would result therefrom, in
addition to the Investments permitted pursuant to preceding clauses (i)
through (xiv), the Borrower and its Subsidiaries may make additional
Investments to or in one or more Persons, so long as all such Investments
(determined without regard to any write-downs or write-offs) do not exceed
in aggregate amount $10,000,000 at any time outstanding; and
(xvi) any Investment of the Borrower or any of its Subsidiaries
existing as of the Effective Date.
Section 5.16. Consolidated Capital Expenditures. The Borrower and its
Subsidiaries shall not make any Capital Expenditures after the Initial
Borrowing Date, except as expressly permitted pursuant to the following
clauses:
(a) The Borrower and its Subsidiaries may make Capital
Expenditures so long as the aggregate amount thereof, in any Fiscal
Year, does not exceed the amount set forth below for such Fiscal Year:
Fiscal Year Amount
- ----------- ----------
1998 --
1999 $40,000,000
2000 $30,000,000
2001 $20,000,000
2002 $20,000,000
2003 $22,000,000
2004 $22,000,000
2005 $20,000,000
2006 $20,000,000
(b) In the event that the maximum amount which is permitted to
be expended in respect of Capital Expenditures during any fiscal
period set forth in Section 5.16(a) (without giving effect to this
clause (b)) is not fully expended during such fiscal period, the
maximum amount which may be expended during any succeeding fiscal
period set forth in Section 5.16(a) shall be increased by such
unutilized amount (the "Carryover Amount"), provided that the
Carryover Amount expended in any such subsequent Fiscal Year shall not
exceed $35,000,000.
(c) The Borrower and its Wholly-Owned Subsidiaries may make
additional Consolidated Capital Expenditures constituting Permitted
Acquisitions effected in accordance with the requirements of Section
5.15(xii).
(d) The Borrower and its Subsidiaries may make additional
Capital Expenditures with Retained Asset Sale Proceeds of Asset Sales
to the extent such proceeds are not required to be applied as a
mandatory repayment of Term Loans pursuant to Section 2.10(d) and such
proceeds are reinvested as required by Section 2.10(d).
(e) The Borrower and its Subsidiaries may make additional
Capital Expenditures with Major Casualty Proceeds to the extent such
proceeds are not required to be applied as a mandatory repayment of
Term Loans pursuant to Section 2.10(f) and such proceeds are
reinvested as required by Section 2.10(f).
(f) The Borrower and its Subsidiaries may make additional Capital
Expenditures in an amount not to exceed the Available ECF Amount.
Section 5.17. Transactions with Affiliates. The Borrower will not, and will
not permit any Subsidiary to, directly or indirectly, pay any funds to or for
the account of, make any investment (whether by acquisition of stock or
indebtedness, by loan, advance, transfer of property, guarantee or other
agreement to pay, purchase or service, directly or indirectly, any Debt, or
otherwise) in, lease, sell, transfer or otherwise dispose of any assets,
tangible or intangible, to, or participate in, or effect, any transaction with,
any Affiliate except on an arms-length basis on terms at least as favorable to
the Borrower or such Subsidiary as could have been obtained from a third party
that was not an Affiliate; provided that the foregoing provisions of this
Section shall not prohibit (i) Restricted Payments to the extent permitted by
Section 5.14, (ii) Loans made and other transactions entered into between the
Borrower and its Subsidiaries, or between such Subsidiaries, to the extent
permitted by Sections 5.10 and 5.15, (iii) transactions among the Borrower and
the Guarantors, (iv) transactions among Foreign Subsidiaries or (v) so long as
no Default has occurred and is continuing, payments by the Borrower, not
exceeding $600,000 in the aggregate in any Fiscal Year, required to be made to
Tekni-Plex Partnership or MST Partners L.P. or their respective affiliates or
partners under the terms of existing agreements and notes.
Section 5.18. Limitation on Restrictions Affecting Subsidiaries. Neither
the Borrower nor any of its Subsidiaries will enter into, or suffer to exist,
any agreement with any Person, other than this Agreement or the other Loan
Documents, which prohibits or limits the ability of any Subsidiary to (a) pay
dividends or make other distributions to, or pay any Debt owed to, the Borrower
or any Subsidiary, (b) make loans or advances to the Borrower or any Subsidiary,
(c) transfer any of its properties or assets to the Borrower or any Subsidiary
or (d) create, incur, assume or suffer to exist any Lien upon any of its
property, assets or revenues, whether now owned or hereafter acquired (other
than, in the case of clause (c) or (d) above, with respect to assets subject to
consensual Liens permitted under Section 5.09); provided that the foregoing
shall not apply to (i) restrictions existing under or by reason of applicable
law, (ii) customary provisions restricting subletting or assignment of any lease
governing a leasehold interest of the Borrower or a Subsidiary of the Borrower,
(iii) customary provisions restricting assignment of any licensing agreement
entered into by the Borrower or any Subsidiary of the Borrower in the ordinary
course of business, (iv) restrictions in effect on the date of this Agreement
contained in the New Senior Subordinated Notes Indenture, the Existing Senior
Subordinated Notes, or any other Debt existing on the Effective Date (and any
replacement or refinancing of the foregoing so long as such restrictions are no
more restrictive than those relating to the Debt being refinanced), (v)
restrictions applicable to an acquired entity or its assets in effect at the
acquisition thereof by the Borrower or a Subsidiary and not incurred (or
modified) in contemplation of such acquisition and (vi) restrictions in any
agreement or instrument evidencing Debt permitted by Section 5.10(g) or 5.10
(h).
Section 5.19. Limitation on Issuance of Capital Stock. (a) The Borrower
shall not issue (i) any preferred stock (other than Qualified Preferred Stock)
or (ii) any redeemable common stock.
(b) No Subsidiary of the Borrower shall issue, or permit any of their
Subsidiaries to issue, any capital stock (including by way of sales of treasury
stock) or any options or warrants to purchase, or securities convertible into,
capital stock, except (i) for transfers and replacements of then outstanding
shares of capital stock, (ii) for stock splits, stock dividends and additional
issuances which do not decrease the percentage ownership of the Borrower or any
of its Subsidiaries in any class of the capital stock of such Subsidiaries and
(iii) to qualify directors to the extent required by applicable law; provided,
the foregoing shall not prohibit Investments and Restricted Acquisitions in
Foreign Joint Ventures and Domestic Joint Ventures permitted pursuant to Section
5.15(xi) and 5.15(xiv), respectively. All capital stock issued in accordance
with this Section 5.19 shall, to the extent required by the Pledge Agreement, be
delivered to the Agent for pledge pursuant to the Pledge Agreement.
Section 5.20. Limitation on Voluntary Payments and Modifications of
Indebtedness. The Borrower will not, and will not permit any of its Subsidiaries
to:
(i) make (or give any notice in respect of) any voluntary or optional
payment or prepayment on or redemption or acquisition for value of
(including, without limitation, by way of depositing with the trustee with
respect thereto or any other Person money or securities before due for the
purpose of paying when due) any New Senior Subordinated Note, any Existing
Senior Subordinated Note or any Existing PST Senior Secured Note, provided
that (x) purchases of Existing PST Senior Secured Notes by the Borrower may
be made pursuant to the Existing PST Senior Secured Notes Tender Offer
Documents or in connection with a disposition of assets requiring such
repurchase under the terms of the Existing PST Senior Secured Note
Indenture, in each case so long as all such notes are immediately canceled
and delivered to the trustee pursuant to the Existing PST Senior Secured
Notes Indenture for cancellation and (y) if the aggregate principal amount
of Existing PST Senior Secured Notes after giving effect to the Existing
PST Senior Secured Notes Tender Offer/Consent Solicitation is less than $5
million, at any time when no Default is in existence (and would not exist
immediately after giving effect to the payments contemplated herein) any
then remaining outstanding Existing PST Senior Secured Notes may be
repurchased, repaid or defeased by the Borrower and/or its Subsidiaries;
(ii) make (or give any notice in respect of) any prepayment or
redemption of New Senior Subordinated Notes, Existing Senior Subordinated
Notes or Existing PST Senior Secured Notes as result of any asset sale,
change of control or similar event (including, without limitation, by way
of depositing with the trustee with respect thereto or any other Person
money or securities before due for the purpose of paying when due any New
Senior Subordinated Note, Existing Senior Subordinated Note or Existing PST
Senior Secured Note; provided that the proviso to preceding clause (i)
shall be equally applicable to this clause (ii); or
(iii) amend or modify, or permit the amendment or modification of, any
provision of any New Senior Subordinated Note Document, the Existing Senior
Subordinated Notes Indenture, the Existing PST Senior Secured Notes
Indenture or any Existing PST Senior Secured Notes Collateral Document,
except (i) if only the respective trustee's consent is required pursuant to
the respective indenture, the consent of the Agent (and not the Required
Lenders) shall be required to permit any of the foregoing, (ii) if consent
of any noteholders is required pursuant to the respective indenture, the
consent of the Required Lenders (not to be unreasonably withheld) shall be
required to permit any of the foregoing and (iii) in the case of the
Existing PST Senior Secured Note Indenture and the Existing PST Senior
Secured Collateral Documents, amendments, restatements and supplements
thereto executed on or before the Initial Borrowing Date as contemplated by
the Documents.
Section 5.21. Limitation on Fixed-Price Contracts. Excluding contracts,
purchase orders and arrangements in respect of which and to the extent the
Borrower or any Subsidiary has entered into non-speculative option, swap or
other hedging arrangements, the Borrower will not, and will not permit any of
its Subsidiaries to, enter into any contract, purchase order or other
arrangement providing for delivery more than twelve months after the effective
date thereof pursuant to which the Borrower or any Subsidiary agrees to
manufacture, produce, supply, sell, distribute or otherwise transfer any
material or product at a fixed price that may not be adjusted to reflect
fluctuations in market conditions and such Person's cost of goods sold if the
aggregate contract price to be paid under all such arrangements during any
fiscal year would exceed 10% of the consolidated net sales of the Borrower and
its Subsidiaries during such year.
Section 5.22. End of Fiscal Years; Fiscal Quarters. The Borrower will, for
financial reporting purposes, cause each of its Fiscal Years to end on the
Friday closest to the last Business Day in June of each year and (ii) each of
its fiscal quarters to end the Friday closest to the last Business Day in each
September, December, March and June; provided that the Borrower may change its
financial reporting periods one time after the Initial Borrowing Date so long as
the Borrower and the Agent agree on new dates (if the Agent deems new test dates
to be appropriate) to test the financial covenants under this Agreement (and
thereafter distribute such revised dates to the Lenders and such covenants shall
be deemed amended to incorporate such revised dates).
Section 5.23. Further Assurances. (a) The Borrower will, and will cause
each of the other Obligors to, at the Borrower's sole cost and expense, do,
execute, acknowledge and deliver all such further acts, deeds, conveyances,
mortgages, assignments, notices of assignment and transfers as the Agent shall
from time to time request, which may be necessary in the reasonable judgment of
the Agent from time to time to assure, perfect, convey, assign and transfer to
the Agent the property and rights conveyed or assigned pursuant to the
Collateral Documents, or which may facilitate the performance of the terms of
the Collateral Documents, or the filing, registering or recording of the
Collateral Documents. Without limiting the foregoing, the Borrower shall use all
reasonable efforts to deliver to the Agent waivers of contractual and statutory
landlord's, landlord's mortgagee's and warehouseman's Liens in form and
substance satisfactory to the Agent under each existing lease, warehouse
agreement or similar agreement to which the Borrower is a party and each
amendment, renewal or extension thereof, and with respect to each new lease to
which the Borrower becomes a party.
(b) All costs and expenses in connection with the grant of any security
interests under the Collateral Documents, including, without limitation,
reasonable legal fees and other reasonable costs and expenses in connection with
the granting, perfecting and maintenance of any security interests under the
Collateral Documents or the preparation, execution, delivery, recordation or
filing of documents and any other acts as the Agent may reasonably request in
connection with the grant of such security interests, shall be paid by the
Borrower promptly upon demand.
(c) The Borrower will not, and will not permit any of its Subsidiaries to,
enter into or become subject to any agreement which would impair their ability
to comply, or which would purport to prohibit them from complying, with the
provisions of this Section.
(d) The Borrower will cause each Domestic Subsidiary acquired, established
or created after the Initial Borrowing Date (i) to become a party to this
Agreement as guarantor by executing a supplement hereto in form and substance
satisfactory to the Agent and (ii) to enter into a Security Agreement and any
other agreements as may be necessary or desirable in order to grant (subject to
and to the extent permitted by restrictions permitted by Section 5.18 hereof,
and subject to Liens permitted by Section 5.09 hereof) perfected first priority
security interests upon all of its assets to secure its obligations hereunder.
In addition, the Borrower will pledge, or cause to be pledged, pursuant to a
Pledge Agreement (or a comparable pledge agreement in form and substance
satisfactory to the Agent), all (or, in the case of a Foreign Subsidiary,
66-2/3%) of the capital stock or other equity interests of such Subsidiary owned
by the Borrower or any Domestic Subsidiary, provided, the capital stock of
Colorite Europe Ltd., an Irish corporation, shall not be pledged unless such
capital stock is owned by an Obligor at any time after six months after the
Effective Date. The Borrower shall cause each such Subsidiary to take such
actions as may be necessary or desirable to effect the foregoing within 30 days
after such Subsidiary is acquired, including, without limitation, causing such
Subsidiary to (x) execute and deliver to the Agent such number of copies as the
Agent may specify of such supplements and Security Agreement and other documents
creating security interests and (y) deliver such certificates, evidences of
corporate action or other documents as the Agent may reasonably request, all in
form and substance satisfactory to the Agent, relating to the satisfaction of
the Borrower's obligations under this Section. Upon compliance by the Borrower
with the provisions of this subsection (d), Schedule 3 shall be deemed to have
been amended to reflect that such Subsidiary is a Guarantor.
Section 5.24. De Minimis Subsidiaries. Notwithstanding anything to the
contrary stated herein, a De Minimis Subsidiary of the Borrower shall not be
required to comply with any of the covenants set forth in this Article V (other
than Section 5.10) or the representations and warranties set forth in Article
IV; provided, however, that the amount of Investments into any De Minimis
Subsidiary shall not exceed $100,000 and the aggregate amount of all Investments
into De Minimis Subsidiaries shall not exceed $1,000,000.
ARTICLE VI
Defaults
Section 6.01. Events of Defaults. If one or more of the following events
("Events of Default") shall have occurred and be continuing:
(a) the Borrower shall fail to pay when due any principal of any
Loan or any LC Reimbursement Obligation, or shall fail to pay within
five days of the date when due any interest, fee or other amount
payable by it hereunder;
(b) the Borrower shall fail to observe or perform any covenant
contained in Article 5, other than those contained in Sections 5.01
through 5.06, or any Obligor shall fail to observe or perform any
covenant contained in Section 4(A) or 4(J) of the Security Agreement
or Section 5(B) of the Pledge Agreement;
(c) any Obligor shall fail to observe or perform any covenant or
agreement (other than those covered by clause (a) or (b) above)
contained in the Loan Documents and such default shall continue
unremedied for a period of at least 15 days after the Agent gives
notice thereof to the Borrower at the request of any Lender;
(d) any representation, warranty, certification or statement made
by any Obligor in any Loan Document or in any certificate, financial
statement or other document delivered pursuant to any Loan Document
shall prove to have been incorrect in any material respect when made
(or deemed made);
(e) the Borrower or any Subsidiary shall fail to make one or more
payments in respect of Material Financial Obligations when due or
within any applicable grace period;
(f) any event or condition shall occur which results in the
acceleration of the maturity of any Material Debt or enables (or, with
the giving of notice or lapse of time or both, would enable) the
holder of such Debt or any Person acting on such holder's behalf to
accelerate the maturity thereof;
(g) the Borrower or any Subsidiary shall commence a voluntary
case or other proceeding seeking liquidation, reorganization or other
relief with respect to itself or its debts under any bankruptcy,
insolvency or other similar law now or hereafter in effect or seeking
the appointment of a trustee, receiver, liquidator, custodian or other
similar official of it or any substantial part of its property, or
shall consent to any such relief or to the appointment of or taking
possession by any such official in an involuntary case or other
proceeding commenced against it, or shall make a general assignment
for the benefit of creditors, or shall fail generally to pay its debts
as they become due, or shall take any corporate action to authorize
any of the foregoing;
(h) an involuntary case or other proceeding shall be commenced
against the Borrower or any Subsidiary seeking liquidation,
reorganization or other relief with respect to it or its debts under
any bankruptcy, insolvency or other similar law now or hereafter in
effect or seeking the appointment of a trustee, receiver, liquidator,
custodian or other similar official of it or any substantial part of
its property, and such involuntary case or other proceeding shall
remain undismissed and unstayed for a period of 60 days; or an order
for relief shall be entered against the Borrower or any Subsidiary
under the federal bankruptcy laws as now or hereafter in effect;
(i) any member of the ERISA Group shall fail to pay when due an
amount or amounts aggregating in excess of $12,500,000 which it shall
have become liable to pay under Title IV of ERISA; or notice of intent
to terminate a Material Plan shall be filed under Title IV of ERISA by
any member of the ERISA Group, any plan administrator or any
combination of the foregoing; or the PBGC shall institute proceedings
under Title IV of ERISA to terminate, to impose liability (other than
for premiums under Section 4007 of ERISA) in respect of, or to cause a
trustee to be appointed to administer, any Material Plan; or a
condition described in Section 4042(a)(1)-(3) or ERISA shall exist by
reason of which the PBGC would be entitled to obtain a decree
adjudicating that any Material Plan must be terminated; or there shall
occur a complete or partial withdrawal from, or a default, within the
meaning of Section 4219(c)(5) of ERISA, with respect to, one or more
Multiemployer Plans which causes one or more members of the ERISA
Group to incur a current payment obligation in excess of $12,500,000
and such payment obligation shall continue unsatisfied and unstayed
for a period of 15 days;
(j) judgments or orders for the payment of money exceeding
$12,500,000 in aggregate amount shall be rendered against the Borrower
or any Subsidiary and such judgments or orders shall continue
unsatisfied and unstayed for a period of 30 days;
(k) any Lien created by any of the Collateral Documents shall at
any time fail to constitute a valid and (to the extent required by the
Collateral Documents) perfected Lien prior to all other Liens except
for Permitted Liens (as defined in the Security Agreement) on any
material part of the Collateral purported to be subject thereto,
securing the obligations purported to be secured thereby, with the
priority required by the Loan Documents, or any Obligor shall so
assert in writing;
(l) the Borrower or any Subsidiary of the Borrower incurs after
the date hereof Environmental Liabilities in excess of $25,000,000 in
the aggregate, which Environmental Liabilities would, under GAAP, be
reflected in the financial statements (or the footnotes thereto) of
the Borrower; or
(m) (1) so long as Tekni-Plex Partners, L.P. has not liquidated
or unwound or otherwise distributed its shares of capital stock of the
Borrower, MST/TP Partners, L.P. ceases to be the sole general partner
of Tekni-Plex Partners, L.P.; (2) at any time prior to an Initial
Public Offering, members of the Control Group shall cease to own,
directly or indirectly, more than fifty percent (50%) of the economic
interest in the Borrower; (3) members of the Control Group shall
cease to control directly or indirectly more than fifty percent (50%)
of the shares of capital stock of the Borrower entitled (excluding
stock that is entitled to vote only upon the occurrence of a
contingency that has not yet occurred) to vote in the election of a
majority of the members of the board of directors of the Borrower;
provided that on or after an Initial Public Offering, such voting
stock interest in the Borrower held by members of the Control Group
may be reduced to not less than a thirty percent (30%) voting stock
interest in the Borrower; (4) any person or group of persons (within
the meaning of Section 13 or 14 of the Exchange Act), excluding from
such group any members of the Control Group, shall have acquired after
the date hereof, beneficial ownership (within the meaning of Rule 13d-
3 promulgated by the SEC under said Act) of the lesser of (x) more
than 40% of the outstanding shares of common stock of the Borrower or
(y) a greater voting stock interest in the Borrower than is held by
members of the Control Group; or (5) during any period of twelve
consecutive calendar months, individuals who were directors of the
Borrower on the first day of such period ("Initial Directors") or who
were nominated for election by all of the Initial Directors (other
than any such Initial Directors who shall have died, become
incapacitated or resigned for family, health or other personal reasons
prior to such nomination), shall cease to constitute a majority of the
Borrower's board of directors; or (6) a "change of control" or similar
event shall occur as provided in the Existing Senior Subordinated
Notes Indenture or the New Senior Subordinated Notes Indenture;
then, and in any such event, and at any time thereafter, if any Event of Default
shall then be continuing, the Agent shall, upon the written request of the
Required Lenders, by written notice to the Borrower, take any or all of the
following actions, without prejudice to the rights of the Agent or any Lender to
enforce its claims against any Obligor, except as otherwise specifically
provided for in this Agreement (provided, that if an Event of Default specified
in Section 6.01(g) or (h) shall occur with respect to the Borrower, the result
which would occur upon the giving of written notice by the Agent as specified in
clauses (i) and (ii) below shall occur automatically without the giving of any
such notice): (i) declare the Total Commitment terminated, whereupon the
Commitment of each Lender shall forthwith terminate immediately and any
Commitment Fees shall forthwith become due and payable without any other notice
of any kind; (ii) declare the principal of and any accrued interest in respect
of all Loans and all Obligations owing hereunder (including LC Reimbursement
Obligations) to be, whereupon the same shall become, forthwith due and payable
without presentment, demand, protest or other notice of any kind, all of which
are hereby waived by the Borrower; (iii) enforce, as Agent, any or all of the
Liens and security interests created pursuant to the Collateral Documents; (iv)
terminate any Letter of Credit which may be terminated in accordance with its
terms; (v) direct the Borrower to pay (and the Borrower hereby agrees upon
receipt of such notice, or upon the occurrence of any Event of Default specified
in Section 6.01(g) or (h) with respect to the Borrower, it will pay) to the
Agent at the Payment Office such additional amounts of cash, to be held as
security for the Borrower's reimbursement obligations in respect of Letters of
Credit then outstanding, as is equal to the Stated Amount of all Letters of
Credit then outstanding; and (vi) apply any cash collateral held in the
Collateral Account pursuant to Section 2.10 in satisfaction of the
Obligations.
Section 6.02. Notice of Default. The Agent shall give notice to the
Borrower under Section 6.01(c) promptly upon being requested to do so by any
Lender and shall thereupon notify all the Lenders thereof.
ARTICLE VII
The Agent
Section 7.01. Appointment and Authorization. Each Lender irrevocably
appoints and authorizes the Agent to enter into and act as its agent in
connection with the Collateral Documents and to take such action as agent on its
behalf and to exercise such powers under the Loan Documents as are delegated to
the Agent by the terms hereof or thereof, together with all such powers as are
reasonably incidental thereto.
Section 7.02. Agent and Affiliates. The Agent shall have the same rights
and powers under the Loan Documents as any other Lender and may exercise or
refrain from exercising the same as though it were not the Agent, and the Agent
and its affiliates may accept deposits from, lend money to and generally engage
in any kind of business with the Borrower or any Subsidiary or affiliate of the
Borrower as if it were not the Agent and the terms "Lender" and "Required
Lenders" shall include the Agent in its individual capacity.
Section 7.03. Action by Agent. The obligations of the Agent hereunder are
only those expressly set forth herein. Without limiting the generality of the
foregoing, the Agent shall not be required to take any action with respect to
any Default, except as expressly provided in Article 6.
Section 7.04. Consultation with Experts. The Agent may consult with legal
counsel (who may be counsel for any obligor), independent public accountants and
other experts selected by it and shall not be liable for any action taken or
omitted to be taken by it in good faith in accordance with the advice of such
counsel, accountants or experts.
Section 7.05. Liability of Agent. Neither the Agent nor any of its
affiliates or any of their respective directors, officers, agents or employees
shall be liable for any action taken or not taken by it in connection herewith
(i) with the consent or at the request of the Required Lenders (or such
different number of Lenders as any provision hereof expressly requires for such
consent or request) or (ii) in the absence of its own gross negligence or
willful misconduct. Neither the Agent nor any of its affiliates nor any of their
respective directors, officers, agents or employees shall be responsible for or
have any duty to ascertain, inquire into or verify (i) any statement, warranty
or representation made in connection with the Loan Documents or any borrowing
hereunder; (ii) the performance or observance of any of the covenants or
agreements of any Obligor; (iii) the satisfaction of any condition specified in
Article 3, except receipt of items required to be delivered to the Agent; or
(iv) the validity, effectiveness or genuineness of the Loan Documents or any
other instrument or writing furnished in connection herewith. The Agent shall
not incur any liability by acting in reliance upon any notice, consent,
certificate, statement or other writing (which may be a bank wire, telex,
facsimile or similar writing) believed by it to be genuine or to be signed by
the proper party or parties. Without limiting the generality of the foregoing,
the use of the term "agent" or "Agent" in this Agreement with reference to the
Agent is not intended to connote any fiduciary or other implied (or express)
obligations arising under agency doctrine of any applicable law. Instead, such
term is used merely as a matter of market custom and is intended to create or
reflect only an administrative relationship between independent contracting
parties.
Section 7.06. Indemnification. The Lenders shall, ratably in accordance
with their respective "percentages" as used in determining Required Lenders
(computed without adjustment for Non-Defaulting Lenders and Defaulting Lenders)
indemnify the Agent, its affiliates and their respective directors, officers,
agents and employees (each an "indemnitee") (to the extent not reimbursed by the
Borrower) against any cost, expense (including counsel fees and disbursements),
claim, demand, action, loss or liability (except such as result from such
indemnitee's gross negligence or willful misconduct) that such indemnitees may
suffer or incur in connection with the Loan Documents or any action taken or
omitted by such indemnitees thereunder. The agreements in this Section 7.06
should survive the termination of this Agreement and the other Loan Documents
and the payment of all Obligations.
Section 7.07. Credit Decision. Each Lender acknowledges that it has,
independently and without reliance on the Agent or any other Lender, and based
on such documents and information as it has deemed appropriate, made its own
credit analysis and decision to enter into this Agreement and to make Loans
hereunder. Each Lender also acknowledges that it will, independently and without
reliance on the Agent or any other Lender, and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
credit decisions in taking or not taking any action under the Loan Documents.
The Agent shall not have any duty or responsibility to provide any Lender with
any credit or other information concerning the business, operations, assets,
property, financial and other condition, prospects or creditworthiness of the
Borrower or any of its Subsidiaries which may come into the possession of the
Agent or any of its officers, directors, employees, agents, attorneys-in-fact or
affiliates.
Section 7.08. Successor Agent. Subject to the appointment of and acceptance
of appointment by a successor Agent as provided below, the Agent may resign at
any time by giving notice thereof to the Lenders and the Borrower. Upon receipt
of such notice, the Required Lenders shall have the right with, so long as no
Default has occurred and is continuing, the consent of the Borrower (not to be
unreasonably withheld or delayed), to appoint a successor Agent. If no successor
Agent shall have been so appointed by the Required Lenders within 30 days after
the retiring Agent gives notice of resignation, then the retiring Agent may, on
behalf of the Lenders, appoint a successor Agent, which shall be a commercial
bank organized or licensed under the laws of the United States or of any State
thereof and having a combined capital and surplus of at least $100,000,000. Upon
the acceptance of its appointment as Agent hereunder by a successor Agent, such
successor Agent shall thereupon succeed to and become vested with all the rights
and duties of the retiring Agent, and the retiring Agent shall be discharged
from its duties and obligations hereunder. After any retiring Agent resigns as
Agent hereunder, the provisions of this Article shall inure to its benefit as to
actions taken or omitted to be taken by it while it was Agent.
Section 7.09. Agent's Fee. The Borrower shall pay to the Agent, for its own
account, fees in the amounts and at the times previously agreed upon by the
Borrower and the Agent.
ARTICLE VIII
Change in Circumstances
Section 8.01. Basis for Determining Interest Rate Inadequate or
Unfair. If on or before the first day of any Interest Period for any Euro-
Dollar Loan:
(a) The Agent is advised by the Reference Lenders that deposits
in dollars (in the applicable amounts) are not being offered to the
Reference Lenders in the London interbank market for such Interest
Period, or
(b) Lenders holding 50% or more of the aggregate principal
amount of the affected Loans advise the Agent that the Adjusted London
Interbank Offered Rate as determined by the Agent will not adequately
and fairly reflect the cost to such Lenders of funding their Euro-
Dollar Loans for such Interest Period,
the Agent shall forthwith give notice thereof to the Borrower and the
Lenders, whereupon until the Agent notifies the Borrower that the
circumstances giving rise to such suspension no longer exist, (i) the
obligations of the Lenders to make Euro-Dollar Loans or to continue or
convert outstanding Loans as or into Euro-Dollar Loans shall be suspended
and (ii) each outstanding Euro-Dollar Loan shall be converted into a Base
Rate Loan on the last day of the then current Interest Period applicable
thereto. Unless the Borrower notifies the Agent at least two (2) Business
Days before the date of any affected Borrowing for which a Notice of
Borrowing has previously been given that it elects not to borrow on such
date, such Borrowing shall instead be made as a Base Rate Borrowing.
Section 8.02. Illegality. If, on or after the date hereof, the adoption of
any applicable law, rule or regulation, or any change in any applicable law,
rule or regulation, or any change in the interpretation or administration
thereof by any governmental authority, central bank or comparable agency charged
with the interpretation or administration thereof, or compliance by any Lender
(or its Euro-Dollar Lending Office) with any request or directive (whether or
not having the force of law) of any such authority, central bank or comparable
agency, shall make it unlawful or impossible for any Lender (or its Euro-Dollar
Lending Office) to make, maintain or fund its Euro-Dollar Loans and such Lender
shall so notify the Agent, the Agent shall forthwith give notice thereof to the
other Lenders and the Borrower, whereupon until such Lender notifies the
Borrower and the Agent that the circumstances giving rise to such suspension no
longer exist, the obligation of such Lender to make Euro-Dollar Loans, or to
convert outstanding Loans into Euro-Dollar Loans or continue outstanding Loans
as Euro-Dollar Loans, shall be suspended. Before giving any notice to the Agent
pursuant to this Section, such Lender shall designate a different Euro-Dollar
Lending Office if such designation will avoid the need for giving such notice
and will not, in the judgment of such Lender, be otherwise disadvantageous to
such Lender. If such notice is given, each Euro-Dollar Loan of such Lender then
outstanding shall be converted to a Base Rate Loan either (a) on the last day of
the then current Interest Period applicable to such Euro-Dollar Loan if such
Bank may lawfully continue to maintain and fund such Loan as a Euro-Dollar Loan
to such day or (b) immediately if such Bank shall determine that it may not
lawfully continue to maintain and fund such Loan as a Euro-Dollar Loan to such
day.
Section 8.03. Increased Cost and Reduced Return. (a) If on or after the
date hereof, the adoption of any applicable law, rule or regulation, or any
change in any applicable law, rule or regulation, or any change in the
interpretation or administration thereof by any governmental authority, central
bank or comparable agency charged with the interpretation or administration
thereof, or compliance by any Lender (or its Applicable Lending Office) or any
LC Issuing Bank with any request or directive (whether or not having the force
of law) of any such authority, central bank or comparable agency, shall impose,
modify or deem applicable any reserve (including, without limitation, any such
requirement imposed by the Board of Governors of the Federal Reserve System, but
excluding with respect to any Euro-Dollar Loan any such requirement included in
an applicable Euro-Dollar Reserve Percentage), special deposit, insurance
assessment or similar requirement against assets of, deposits with or for the
account of, or credit (including letters of credit and participations therein)
extended by, any Lender (or its Applicable Lending Office) or any LC Issuing
Bank or shall impose on any Lender (or its Applicable Lending Office) or any LC
Issuing Bank or the London interbank market any other condition affecting its
Euro-Dollar Loans, its Notes or its obligation to make Euro-Dollar Loans or its
obligations hereunder in respect of Letters of Credit and the result of any of
the foregoing is to increase the cost to such Lender (or its Applicable Lending
Office) or such LC Issuing Bank of making or maintaining any Euro-Dollar Loan or
issuing or participating in any Letter of Credit, or to reduce the amount of any
sum received or receivable by such Lender (or its Applicable Lending Office) or
such LC Issuing Bank under this Agreement or under its Note with respect
thereto, by an amount deemed by such Bank or LC Issuing Bank to be material,
then, within 15 days after demand by such Lender or LC Issuing Bank (with a copy
to the Agent), the Borrower shall pay to such Lender or LC Issuing Bank such
additional amount or amounts as will compensate such Lender or LC Issuing Bank
for such increased cost or reduction.
(b) If any Lender shall have determined that, after the date hereof, the
adoption of any applicable law, rule or regulation regarding capital adequacy,
or any change in any such law, rule or regulation, or any change in the
interpretation or administration thereof by any governmental authority, central
bank or comparable agency charged with the interpretation or administration
thereof, or any request or directive regarding capital adequacy (whether or not
having the force of law) of any such authority, central bank or comparable
agency, has or would have the effect of reducing the rate of return on capital
of such Lender (or its parent) as a consequence of such Lender's obligations
hereunder to a level below that which such Lender (or its parent) could have
achieved but for such adoption, change, request or directive (taking into
consideration its policies with respect to capital adequacy) by an amount deemed
by such Lender to be material, then from time to time, within 15 days after
demand by such Lender (with a copy to the Agent), the Borrower shall pay to such
Lender such additional amount or amounts as will compensate such Lender (or its
parent) for such reduction.
(c) Each Lender and LC Issuing Bank will promptly notify the Borrower and
the Agent of any event of which it has knowledge, occurring after the date
hereof, which will entitle such Lender or LC Issuing Bank to compensation
pursuant to this Section and will designate a different Applicable Lending
Office if such designation will avoid the need for, or reduce the amount of,
such compensation and will not, in the judgment of such Lender or LC Issuing
Bank, be otherwise disadvantageous to it. A certificate of any Lender or LC
Issuing Bank claiming compensation under this section and setting forth the
additional amount or amounts to be paid to it hereunder and the basis therefor
shall be conclusive in the absence of manifest error; provided that no Lender
shall be required to disclose information that it considers in its sole
discretion to be confidential. In determining such amount, such Lender or LC
Issuing Bank may use any reasonable averaging and attribution methods.
Section 8.04. Taxes. (a) For the purposes of this Section, the following
terms have the following meanings:
"Taxes" means any and all present or future taxes, duties,
levies, imposts, deductions, charges or withholdings with respect to
any payment by any Obligor pursuant to this Agreement or under any
Note, and all liabilities with respect thereto, excluding (i) in the
case of each Lender Party, taxes imposed on its net income, and
franchise or similar taxes imposed on it, by a jurisdiction under the
laws of which it is organized or in which its principal executive
office is located or, in which its Applicable Lending Office is
located and (ii) in the case of each Lender, any United States
withholding tax imposed on such payment, but not excluding any portion
of such tax that exceeds the United States withholding tax which would
have been imposed on such a payment to such Bank under the laws and
treaties in effect when such Lender first becomes a party to this
Agreement.
"Other Taxes" means any present or future stamp or documentary
taxes and any other excise or property taxes, or similar charges or
levies, which arise from any payment made pursuant to this Agreement
or under any Note or from the execution, delivery, registration or
enforcement of, or otherwise with respect to, any Loan Document.
(b) Subject to Section 8.04(e), all payments by any Obligor to or for the
account of any Lender Party hereunder or under any Note shall be made without
deduction for any Taxes or Other Taxes; provided that, if any Obligor shall be
required by law to deduct any Taxes or Other Taxes from any such payment, (i)
the sum payable shall be increased as necessary so that after making all
required deductions (including deductions applicable to additional sums payable
under this Section) such Lender Party receives an amount equal to the sum it
would have received had no such deductions been made, (ii) such Obligor shall
make such deductions, (iii) such Obligor shall pay the full amount deducted to
the relevant taxation authority or other authority in accordance with applicable
law and (iv) such Obligor shall promptly furnish to the Agent, at its address
specified in or pursuant to Section 10.01, to the extent available, the original
or a certified copy of a receipt evidencing payment thereof or any other
document reasonably requested by the Agent.
(c) Subject to Section 8.04(e), Obligors agree to indemnify each Lender
Party for the full amount of Taxes and Other Taxes (including, without
limitation, any Taxes or Other Taxes imposed or asserted by any jurisdiction on
amounts payable under this Section) paid by such Lender Party and any liability
(including penalties, interest and expenses) arising therefrom or with respect
thereto. This indemnification shall be paid within 15 days after such Lender
Party makes demand therefor, which demand shall be accompanied by a statement
providing an explanation of the facts and calculations that form the basis for
such demand. Such statement shall be final, conclusive and binding on the
Obligors absent manifest error.
(d)(i) if a Lender is a "bank" within the meaning of Section 881(c)(3)(A)
of the Code, then each such Lender organized under the laws of a jurisdiction
outside the United States, before it signs and delivers this Agreement in the
case of each Lender listed on the signature pages hereof and before it becomes a
Lender in the case of each other Lender, and, from time to time thereafter,
before any Lender designates a new Euro-Dollar Lending Office which is an
Affiliate or if requested in writing by the Borrower (but only so long as such
Lender remains lawfully able to do so), shall provide each of the Borrower and
the Agent with Internal Revenue Service form 1001 or 4224, as appropriate, or
any successor form prescribed by the Internal Revenue Service, certifying that
such Lender is entitled to benefits under an income tax treaty to which the
United States is a party which exempts such Lender from United States
withholding tax or reduces the rate of withholding tax on payments of interest
for the account of such Lender or certifying that the income receivable by it
pursuant to this Agreement is effectively connected with the conduct of a trade
or business in the United States or, (ii) if such Lender is not a "bank" within
the meaning of Section 881(c)(3)(A) of the Code and which intends to claim
exemption from U.S. Federal withholding tax under Section 871(h) or 881(c) of
the Code with respect to payments of "portfolio interest", then each such
Lender, at such times specified in clause (i) above as are appropriate, shall
provide each of the Borrower and the Agent with a Form W-8, or any subsequent
versions thereof or successors thereto (and, if such non-U.S. Lender delivers a
Form W-8, a certificate representing that such non-U.S. Lender is not a bank for
purposes of Section 881(c) of the Code, and is not a 10-percent shareholder
(within the meaning of Section 871(h)(3)(B) of the Code of the Borrower),
properly completed and duly executed by such non-U.S. Lender claiming complete
exemption from, or a reduced rate of, U.S. Federal withholding tax on payments
of interest by the Borrower under this Agreement and the other Loan Documents.
(e) For any period with respect to which a Lender has failed to provide the
Borrower or the Agent with the appropriate form referred to in Section 8.04(d)
(unless such failure is due to a change in treaty, law or regulation occurring
after the date on which such form originally was required to be provided), no
Obligor shall be required to increase any payment to such Lender pursuant to
Section 8.04(b)(i) and such Lender shall not be entitled to indemnification
under Section 8.04(b) or 8.04(c) with respect to Taxes imposed by the United
States; provided that if a Lender that is otherwise exempt from, or subject to a
reduced rate of, withholding tax becomes subject to Taxes because of its failure
to deliver a form required hereunder, the Borrower shall, at such Lender's
expense, take such steps as such Lender shall reasonably request to assist such
Lender to recover such Taxes.
(f) If any Obligor is required to pay additional amounts to or for the
account of any Lender pursuant to this Section as a result of a change in law or
treaty occurring after such Lender first became a party to this Agreement, then
such Lender will, at the Borrower's request and expense, change the jurisdiction
of its Applicable Lending Office if, in the sole judgment of such Lender, such
change (i) will eliminate or reduce any such additional payment which may
thereafter accrue and (ii) is not otherwise disadvantageous to such Lender.
(g) Upon the reasonable request of the Borrower, and at the Borrower's
expense, a Lender Party shall use reasonable efforts to cooperate with the
Borrower with a view to obtain a refund of any Taxes or Other Taxes which were
not correctly or legally imposed and for which the Borrower has indemnified such
Lender Party under this Section 8.04 if obtaining such refund would not, in the
sole judgment of the Lender Party, be disadvantageous to such Lender Party;
provided that nothing in this Section 8.04(g) shall be construed to require any
Lender Party to institute any administrative proceeding (other than the filing
of a claim for any such refund) or judicial proceeding to obtain any such
refund. If a Lender Party shall receive a refund from a taxing authority (as a
result of any error in the imposition of Taxes or Other Taxes by such taxing
authority) of any Taxes or Other Taxes paid by the Borrower pursuant to
subsection 8.04(b) or (c) above, such Lender Party shall promptly pay to the
Borrower the amount so received without interest (other than interest received
from the taxing authority with respect to such refund) and net of out-of-pocket
expenses; provided that such Lender Party shall only be required to pay to the
Borrower such amounts as such Lender Party in its sole discretion, determines
are attributable to Taxes or Other Taxes paid by the Borrower. In the event such
Lender Party or the Agent is required to repay the amount of such refund
(including interest, if any), the Borrower, upon the request of such Lender
Party or the Agent (as the case may be), agrees to promptly return to such
Lender Party or the Agent the amount of such refund and interest, if any (plus
penalties, interest and other charges imposed in connection with the repayment
of such amounts by such Lender Party or the Agent).
(h) Notwithstanding the foregoing, nothing in this Section 8.04 shall be
construed to (i) entitle the Borrower or any other persons to any information
determined by any Lender Party or the Agent, in its sole discretion, to be
confidential or proprietary information of such Lender Party or the Agent, to
any tax or financial information of any Lender Party or the Agent or to inspect
or review any books and records of any Lender Party or the Agent, or (ii)
interfere with the rights of any Lender Party or the Agent to conduct its fiscal
or tax affairs in such manner as it deems fit.
Section 8.05. Base Rate Loans Substituted for Affected Euro-Dollar Loans.
If (i) the obligation of any Lender to make, or to continue or convert
outstanding Loans as or to, Euro-Dollar Loans has been suspended pursuant to
Section 8.02 or (ii) any Lender has demanded compensation under Section 8.03 or
8.04 with respect to its Euro-Dollar Loans, and in any such case the Borrower
shall, by at least five Business Days' prior notice to such Lender, then, unless
and until such Lender notifies the Borrower that the circumstances giving rise
to such suspension or demand for compensation no longer exist, all Loans which
would otherwise be made by such Lender as (or continued as or converted to)
Euro-Dollar Loans shall instead be Base Rate Loans (on which interest and
principal shall be payable contemporaneously with the related Euro-Dollar Loans
of the other Lender). If such Lender notifies the Borrower that the
circumstances giving rise to such suspension or demand for compensation no
longer exist, the principal amount of each such Base Rate Loan shall be
converted into a Euro-Dollar Loan on the first day of the next succeeding
Interest Period applicable to the related Euro-Dollar Loans of the other Lender.
Section 8.06. Replacement of Lender. (x) If any Lender becomes a Defaulting
Lender, (y) upon the occurrence of any event giving rise to the operation of
Section 8.03 or 8.04 with respect to any Lender which results in such Lender
charging to the Borrower increased costs or other compensation in excess of
those being generally charged by the other Lender or any Lender's obligations
are suspended pursuant to Section 8.02 or (z) in the case of a refusal by a
Lender to consent to a proposed change, waiver, discharge or termination with
respect to this Agreement which has been approved by the Required Lenders as
provided in Section 10.05(b), the Borrower shall have the right, if no Default
then exists, to replace such Lender (the "Replaced Lender") with one or more
other Eligible Transferee or Transferees, none of whom shall constitute a
Defaulting Lender at the time of such replacement (collectively, the
"Replacement Lender") reasonably acceptable to the Agent, provided that (i) any
replacement pursuant to this Section 8.06 shall be required to comply with the
requirements of Section 10.06(b) and at the time of any replacement pursuant to
this Section 8.06, the Replacement Lender shall enter into one or more
Assignment and Assumption Agreements pursuant to Section 10.06(b) (and with all
fees payable pursuant to said Section 10.06(b) to be paid by the Replacement
Lender) pursuant to which the Replacement Lender shall acquire all of the
Commitments and outstanding Loans of, and participations in Letters of Credit
by, the Replaced Lender and, in connection therewith, shall pay to (x) the
Replaced Lender in respect thereof an amount equal to the sum of (A) the
principal of, and all accrued interest on, all outstanding Loans of the Replaced
Lender, (B) all LC Reimbursement Obligations that have been funded by (and not
reimbursed to) such Replaced Lender, together with all then unpaid interest with
respect thereto at such time and (C) all accrued, but theretofore unpaid fees
owing to the Replaced Lender pursuant to Section 2.07, (y) the respective LC
Issuing Bank an amount equal to such Replaced Lender's RL Percentage of any LC
Reimbursement Obligation (which at such time remains an LC Reimbursement
Obligation) with respect to a Letter of Credit issued by it to the extent such
amount was not theretofore funded by such Replaced Lender and (z) the Swingline
Lender an amount equal to such Replaced Lender's RL Percentage of any Mandatory
Borrowing to the extent such amount was not theretofore funded by such Replaced
Lender, and (ii) all obligations (including, without limitation, all such
amounts, if any, due and owing under Section 2.13) of the Borrower due and owing
to the Replaced Lender (other than those specifically described in clause (i)
above in respect of which the assignment purchase price has been, or is
concurrently being, paid) shall be paid in full to such Replaced Lender
concurrently with such replacement. Upon the execution of the respective
Assignment and Assumption Agreements, the payment of amounts referred to in
clauses (i) and (ii) above, recordation of the assignment on the Register by the
Agent pursuant to Section 10.11 and, if so requested by the Replacement Lender,
delivery to the Replacement Lender of the appropriate Note or Notes executed by
the Borrower, (x) the Replacement Lender shall become a Lender hereunder and the
Replaced Lender shall cease to constitute a Lender hereunder, except with
respect to indemnification provisions under this Agreement (including, without
limitation, Sections 2.13, 7.06, 8.03, 8.04 and 10.03), which shall survive as
to such Replaced Lender and (y) Schedule I hereto shall be deemed modified to
reflect the changed Commitments (and/or outstanding Term Loans, as the case may
be) resulting from the assignment from the Replaced Lender to the Replacement
Lender.
ARTICLE IX
Guaranty
Section 9.01. The Guaranty. Each Guarantor hereby, jointly and severally,
unconditionally and irrevocably guarantees the full and punctual payment
(whether at stated maturity, upon acceleration or otherwise) of any and all of
the Guaranteed Obligations. Upon failure by the Borrower or any other Guarantor
to pay punctually any such amount, each Guarantor shall forthwith on demand pay
the amount not so paid at the place and in the manner specified in this
Agreement or the other Loan Documents or the respective Guaranteed Derivatives
Agreement. This Guaranty constitutes a guaranty of payment and not of
collection. This Guaranty is a continuing one and shall be deemed ratified and
recertified upon the receipt of any Investment in a Guarantor by the Borrower or
any Subsidiary and all liabilities to which it applies or may apply under the
terms hereof shall be conclusively presumed to have been created in reliance
hereon.
Section 9.02. Guaranty Unconditional. The obligations of each Guarantor
hereunder shall be unconditional and absolute and, without limiting the
generality of the foregoing, shall not be released, discharged or otherwise
affected by:
(i) any extension, renewal, settlement, compromise, waiver or release
in respect of any Guaranteed Obligation, by operation of law or otherwise;
(ii) any modification or amendment of or supplement to any Guaranteed
Obligation;
(iii) to the extent permitted by law, any release, impairment,
non-perfection or invalidity of any direct or indirect security for any
Guaranteed Obligation;
(iv) any change in the corporate existence, structure or ownership of
the Borrower or any other Guarantor, or any insolvency, bankruptcy,
reorganization or other similar proceeding affecting the Borrower, any
other Guarantor or their respective assets or any resulting release or
discharge of any Guaranteed Obligation;
(v) the existence of any claim, set-off or other rights which such
Guarantor may have at any time against the Borrower, any other Guarantor,
the Agent, any LC Issuing Bank, any Lender or any other Person, whether in
connection herewith or any unrelated transactions, provided that nothing
herein shall prevent the assertion of any such claim by separate suit or
compulsory counterclaim;
(vi) any invalidity or unenforceability of all or any part of the
Guaranteed Obligations, or any provision of applicable law or regulation
purporting to prohibit the payment by the Borrower or any other Guarantor
of all or any part of the Guaranteed Obligations; or
(vii) any other act or omission to act or delay of any kind by the
Borrower, any other Guarantor, the Agent, any LC Issuing Bank, any Lender
or any other Person or any other circumstance whatsoever which might, but
for the provisions of this paragraph, constitute a legal or equitable
discharge of the Guarantor's obligations hereunder.
Section 9.03. Discharge Only upon Payment in Full; Reinstatement in Certain
Circumstances. Each Guarantor's obligations hereunder shall remain in full force
and effect until the Total Commitment and all Guaranteed Derivatives Agreements
have been terminated, no Note or Letter of Credit remains outstanding and all
Guaranteed Obligations shall have been paid in full. If at any time any amount
paid in respect of the Guaranteed Obligations is rescinded or must be otherwise
restored or returned upon the insolvency, bankruptcy or reorganization of any
Obligor or otherwise, each Guarantor's obligations hereunder with respect to
such payment shall be reinstated at such time as though such payment had been
due but not made at such time.
Section 9.04. Waiver by Each Guarantor. Each Guarantor irrevocably waives
acceptance hereof, presentment, demand, protest and any notice not provided for
herein, as well as any requirement that at any time any action be taken by any
Person against the Borrower or any other Guarantor or any other Person.
Section 9.05. Subrogation and Contribution. Until all Guaranteed
Obligations shall have been paid in full, each Guarantor agrees not to enforce
or exercise any and all rights to which it may be entitled, by operation of law
or otherwise, upon making any payment hereunder (i) to be subrogated to the
rights of the payee against the Borrower with respect to such payment or against
any direct or indirect security therefor, or otherwise to be reimbursed,
indemnified or exonerated by or for the account of the Borrower in respect
thereof or (ii) to receive any payment, in the nature of contribution or for any
other reason, from any other Guarantor with respect to such payment.
Section 9.06. Stay of Acceleration. If acceleration of the time for payment
of any Guaranteed Obligation is stayed upon insolvency, bankruptcy or
reorganization of the Borrower, all such amounts otherwise subject to
acceleration shall nonetheless be payable by each Guarantor hereunder forthwith
on demand by the Agent made at the request of the Required Lenders or, after all
Obligations have been repaid in full and the Total Commitment has been
terminated, a majority of the holders of all outstanding obligations under
Guaranteed Derivatives Agreements.
Section 9.07. Limit of Liability. It is the desire and intent of each
Guarantor that this Guaranty shall be enforced to the fullest extent permissible
under the laws and public policies applied in each jurisdiction in which
enforcement is sought. If and to the extent that the obligations of each
Guarantor under this Guaranty shall be adjudicated to be invalid or
unenforceable for any reason (including, without limitation, because of any
applicable state or federal law relating to fraudulent conveyances or transfers,
which laws would determine the solvency of each Guarantor by reference to the
full amount of the Guaranteed Obligations at the time of the execution and
delivery of this Guaranty), then the amount of the Guaranteed Obligations shall
be deemed to be reduced and each Guarantor agrees to pay the maximum amount of
the Guaranteed Obligations which would be permissible under applicable law.
Section 9.08. Release upon Sale. Upon any sale by the Borrower or any of
its Subsidiaries of any Guarantor owned by the Borrower and/or any of its
Subsidiaries, in each case pursuant to a transaction permitted by this
Agreement, such Guarantor shall automatically and without further action by any
Lender or the Agent be released from its obligations as a Guarantor hereunder.
Section 9.09. Additional Guarantors. It is understood and agreed that any
Subsidiary of the Borrowers that is required to execute a counterpart of this
Agreement after the date hereof pursuant to Section 5.23(d) shall promptly
become a Guarantor hereunder by executing a counterpart hereof and delivering
the same to the Agent. It is further understood and agreed that any failure by
any Subsidiary to execute a counterpart of this Agreement as otherwise required
pursuant to the terms hereof shall not affect the obligations of the Borrower or
any other Guarantor.
ARTICLE X
Miscellaneous
Section 10.01. Notices. All notices, requests and other communications to
any party under any Loan Document shall be in writing (including bank wire,
facsimile or similar writing) and shall be given to such party: (a) in the case
of the Borrower or the Agent, at its address or facsimile number set forth on
the signature pages hereof, (b) in the case of any Guarantor, in care of the
Borrower, (c) in the case of any Lender, at its address or facsimile number set
forth in its Administrative Questionnaire or (d) in the case of any party, at
such other address or facsimile number as such party may hereafter specify for
the purpose by notice to the Agent and the Borrower. Each such notice, request
or other communication shall be effective (i) if given by facsimile, when
transmitted to the facsimile number referred to in this Section and confirmation
of receipt is received, (ii) if given by mail, 72 hours after such communication
is deposited in the mails with first class postage prepaid, addressed as
aforesaid, or (iii) if given by any other means, when delivered at the address
referred to in this Section; provided that notices to the Agent or any LC
Issuing Bank under Article 2 or Article 8, shall not be effective until
received.
Section 10.02. No Waivers. No failure or delay by any Lender Party in
exercising any right, power or privilege hereunder or under any Note shall
operate as a waiver thereof nor shall any single or partial exercise thereof
preclude any other or further exercise thereof or the exercise of any other
right, power or privilege. The rights and remedies herein provided shall be
cumulative and not exclusive of any rights or remedies provided by law.
Section 10.03. Expenses; Indemnification. (a) The Borrower shall pay (i)
all out-of-pocket expenses of the Agent, including reasonable fees and
disbursements of special counsel for the Agent, in connection with the
preparation and administration of the Loan Documents, any waiver or consent
thereunder or any amendment thereof or any Default or alleged Default thereunder
and (ii) if an Event of Default occurs, all out-of-pocket expenses incurred by
each Lender Party, including (without duplication) the fees and disbursements of
outside counsel and the allocated cost of inside counsel, in connection with
such Event of Default and collection, bankruptcy, insolvency and other
enforcement proceedings resulting therefrom.
(b) The Borrower agrees to indemnify each Lender Party, its respective
affiliates and the respective directors, officers, agents and employees of the
foregoing (each an "Indemnitee") and hold each Indemnitee harmless from and
against any and all liabilities, losses, damages, costs and expenses of any
kind, including, without limitation, the reasonable fees and disbursements of
counsel, which may be incurred by such Indemnitee in connection with any
investigative, administrative or judicial proceeding (whether or not such
Indemnitee shall be designated a party thereto) brought or threatened relating
to or arising out of the Loan Documents or any actual or proposed use of any
Letter of Credit or any proceeds of Loans hereunder; provided that no Indemnitee
shall have the right to be indemnified hereunder to the extent of such
Indemnitee's own gross negligence or willful misconduct as determined by final
judgment of a court of competent jurisdiction.
(c) The Borrower hereby indemnifies each Indemnitee from and against and
agrees to hold each of them harmless from any and all liabilities, losses,
damages, costs and expenses of any kind (including, without limitation,
reasonable expenses of investigation by engineers, environmental consultants and
similar technical personnel and reasonable fees and disbursements of counsel) of
any Indemnitee arising out of, in respect of or in connection with any and all
Environmental Liabilities. Without limiting the generality of the foregoing, the
Borrower hereby waives all rights for contribution or any other rights of
recovery with respect to liabilities, losses, damages, costs and expenses
arising under or related to Environmental Laws that it might have by statute or
otherwise against any Indemnitee.
(d) To the extent that the undertaking to indemnify, pay or hold harmless
any Indemnitee pursuant to this Section 10.03 may be unenforceable because it is
violative of any law or public policy, the Borrower shall make the maximum
contribution to the payment and satisfaction of each of the indemnified
liabilities which is permissible under applicable law.
Section 10.04. Sharing of Payments. Each of the Lenders agrees that, if it
should receive any amount hereunder (whether by voluntary payment, by
realization upon security, by the exercise of the right of setoff or banker's
lien, by counterclaim or cross action, by the enforcement of any right under the
Loan Documents, or otherwise) which is applicable to the payment of the
principal of, or interest on the Loans, LC Reimbursement Obligations or fees, of
a sum which with respect to the related sum or sums received by other Lenders is
a greater proportion than the total of such Obligation then owed and due to such
Lender bears to the total of such Obligation then owed and due to all of the
Lenders immediately prior to such receipt, then such Lender receiving such
excess payment shall purchase for cash without recourse or warranty from the
other Lenders an interest in the Obligations of the respective Obligor to such
Lenders in such amount as shall result in a proportional participation by all of
the Lenders in such amount; provided, that if all or any portion of such excess
amount is thereafter recovered from such Lender, such purchase shall be
rescinded and the purchase price restored to the extent of such recovery, but
without interest.
Section 10.05. Amendment or Waiver; etc. (a) Neither this Agreement nor any
other Loan Document nor any terms hereof or thereof may be changed, waived,
discharged or terminated unless such change, waiver, discharge or termination is
in writing signed by the respective Obligor party thereto and the Required
Lenders, provided that no such change, waiver, discharge or termination shall,
without the consent of each Lender (with Obligations being directly affected in
the case of following clause (i)), (i) extend the final scheduled maturity of
any Loan or Note, or reduce the rate of interest or fees or extend the time of
payment of interest or fees, or reduce the principal amount thereof (except to
the extent repaid in cash) (it being understood that any amendment or
modification to the definitions of "Leverage Ratio" and "Reduction Discount" set
forth in this Agreement or to Section 1.02 may not result in a reduction in any
rate of interest or fees for the purposes of this clause (i) without the consent
of each Lender), (ii) release all or substantially all of the Collateral (except
as expressly provided in the Loan Documents) under all the Collateral Documents,
(iii) amend, modify or waive any provision of this Section 10.05, (iv) reduce
the percentage specified in the definition of Required Lenders (it being
understood that, with the consent of the Required Lenders, additional extensions
of credit pursuant to this Agreement may be included in the determination of the
Required Lenders on substantially the same basis as the extensions of Term Loans
and Revolving Loan Commitments are included on the Effective Date) or (v)
consent to the assignment or transfer by the Borrower of any of its rights and
obligations under this Agreement; provided further, that no such change, waiver,
discharge or termination shall (1) increase the Commitments of any Lender over
the amount thereof then in effect without the consent of such Lender (it being
understood that waivers or modifications of conditions precedent, covenants,
Defaults or Events of Default or of a mandatory reduction in the Total
Commitment shall not constitute an increase of the Commitment of any Lender, and
that an increase in the available portion of any Commitment of any Lender shall
not constitute an increase of the Commitment of such Lender), (2) without the
consent of the Agent, amend, modify or waive any provision of Article 7 or any
other provision as same relates to the rights or obligations of the Agent, (3)
without the consent of the Swingline Lender, amend, modify or waive any
provision relating to the rights or obligations with respect to Swingline Loans
(including, without limitation, the obligations of other RL Lenders to fund
Mandatory Borrowings), (4) without the consent of each LC Issuing Bank, amend,
modify or waive any provision of Section 2.16 or alter its rights or obligations
with respect to Letters of Credit, (5) except in cases where additional
extensions of term loans are being afforded substantially the same treatment
afforded to the Term Loans pursuant to this Agreement as originally in effect,
without the consent of the Majority Lenders of each Tranche which is being
allocated a lesser prepayment, repayment or commitment reduction as a result of
the actions described below (or without the consent of the Majority Lenders of
each Tranche in the case of an amendment to the definition of Majority Lenders),
amend the definition of Majority Lenders or alter the required application of
any prepayments or repayments (or commitment reductions), as between the various
Tranches pursuant to Section 2.10 or 2.11 (excluding Sections 2.10(b) and (c))
(although the Required Lenders may waive, in whole or in part, any such
prepayment, repayment or commitment reduction so long as the application, as
amongst the various Tranches, of any such prepayment, repayment or commitment
reduction which is still required to be made is not altered) or (6) without the
consent of the Supermajority Lenders of the respective Tranche, amend the
definition of Supermajority Lenders or waive or decrease the amount of any
Scheduled Repayment of such affected Tranche.
(b) If, in connection with any proposed change to, waiver, discharge or
termination of any of the provisions of this Agreement as contemplated by
clauses (i) through (v), inclusive, of the first proviso to Section 10.05(a),
the consent of the Required Lenders is obtained but the consent of one or more
of such other Lenders whose consent is required is not obtained, the Borrower
shall have the right, so long as all non-consenting Lenders whose individual
consent is required are treated as described below, to replace each such
non-consenting Lender or Lenders with one or more Replacement Lenders pursuant
to Section 8.06 so long as at the time of such replacement, each such
Replacement Lender consents to the proposed change, waiver, discharge or
termination, provided, that in any event the Borrower shall not have the right
to replace a Lender solely as a result of the exercise of such Lender's rights
(and the withholding of any required consent by such Lender) pursuant to the
second proviso to Section 10.05(a).
Section 10.06. Benefit of Agreement; Assignments; Participation. (a) This
Agreement shall be binding upon and inure to the benefit of and be enforceable
by the respective successors and assigns of the parties hereto; provided,
however, the Borrower, PST or PureTec may not assign or transfer any of its
rights, obligations or interest hereunder without the prior written consent of
the Lenders and, provided further, that, although any Lender may transfer or
grant participations in its rights hereunder, such Lender shall remain a
"Lender" for all purposes hereunder (and may not transfer or assign all or any
portion of its Revolving Loan Commitments and/or outstanding Term Loans
hereunder except as provided in Sections 8.06 and 10.06(b)) and the transferee,
assignee or participant, as the case may be, shall not constitute a "Lender"
hereunder and, provided further, that no Lender shall transfer or grant any
participation under which the participant shall have rights to approve any
amendment to or waiver of this Agreement or any other Loan Document except to
the extent such amendment or waiver would (i) extend the final scheduled
maturity of any Loan or Note in which such participant is participating, or
reduce the rate or extend the time of payment of interest or fees thereon
(except in connection with a waiver of applicability of any post-default
increase in interest rates) or reduce the principal amount thereof, or increase
the amount of the participant's participation over the amount thereof then in
effect (it being understood that a waiver of any Default, or of a mandatory
reduction in the Total Commitment, shall not constitute a change in the terms of
such participation, and that an increase in any Commitment or Loan shall be
permitted without the consent of any participant if the participant's
participation is not increased as a result thereof), (ii) consent to the
assignment or transfer by the Borrower, PST or Puretec of any of its rights and
obligations under this Agreement or (iii) release all or substantially all of
the Collateral under all of the Collateral Documents (except as expressly
provided in the Loan Documents) supporting the Loans hereunder in which such
participant is participating. In the case of any such participation, the
participant shall not have any rights under this Agreement or any of the other
Loan Documents (the participant's rights against such Lender in respect of such
participation to be those set forth in the agreement executed by such Lender in
favor of the participant relating thereto) and all amounts payable by the
Borrower hereunder shall be determined as if such Lender had not sold such
participation.
(b) Notwithstanding the foregoing, any Lender (or any Lender together with
one or more other Lenders) may (x) assign all or a portion of its Commitments
and related outstanding Obligations (or, if the Commitments with respect to the
relevant Tranche have terminated, outstanding Obligations) hereunder to its
parent company and/or any Affiliate of such Lender which is at least 50% owned
by such Lender or its parent company or to one or more Lenders (or in the case
of any Lender that is a fund that invests in bank loans, any other fund that
invests in bank loans and is managed by the same investment advisor of such
Lender or by an Affiliate of such investment advisor) or (y) assign all, or if
less than all, a portion equal to at least $5,000,000 in the aggregate for the
assigning Lender or assigning Lenders, of such Commitments and related
outstanding Obligations (or, if the Commitments with respect to the relevant
Tranche have terminated, outstanding Obligations) hereunder to one or more
Eligible Transferees (treating any fund that invests in bank loans and any other
fund that invests in bank loans and is managed by the same investment advisor of
such fund or by an Affiliate of such investment advisor as a single Eligible
Transferee), each of which assignees shall become a party to this Agreement as a
Lender by execution of an Assignment and Assumption Agreement, provided that,
(i) at such time Schedule I shall be deemed modified to reflect the Commitments
(or outstanding Term Loans, as the case may be) of such new Lender and of the
existing Lenders, (ii) upon the surrender of the relevant Notes by the assigning
Lender (or receipt of a customary indemnity agreement in the case of lost or
misplaced notes), new Notes will be issued, at the Borrower's expense, to such
new Lender and to the assigning Lender upon the request of such new Lender or
assigning Lender, such new Notes to be in conformity with the requirements of
Section 2.15 (with appropriate modifications) to the extent needed to reflect
the revised Commitments (or outstanding Term Loans, as the case may be), (iii)
the consent of the Agent and, so long as no Default then exists, the Borrower
shall be required in connection with any assignment to an Eligible Transferee
pursuant to clause (y) above (each of which consents shall not be unreasonably
withheld or delayed), (iv) the consent of the Swingline Lender and each LC
Issuing Bank shall be required in connection with any assignment of all or any
portion of the Revolving Loan Commitments (such consents not to be unreasonably
withheld or delayed), (v) the Agent shall receive at the time of each such
assignment, from the assigning or assignee Lender, the payment of a
non-refundable assignment fee of $3,500, and (vi) no such transfer or assignment
will be effective until recorded by the Agent on the Register pursuant to
Section 10.11. To the extent of any assignment pursuant to this Section
10.06(b), the assigning Lender shall be relieved of its obligations hereunder
with respect to its assigned Commitments. At the time of each assignment
pursuant to this Section 10.06(b) to a Person which is not already a Lender
hereunder and which is not a person (as such term is defined in Section
7701(a)(30) of the Internal Revenue Code) for Federal income tax purposes, the
respective assignee Lender shall, to the extent legally entitled to do so,
provide to the Borrower the appropriate Internal Revenue Service Forms described
in Section 8.04(d). To the extent that an assignment of all or any portion of a
Lender's Commitments and related outstanding Obligations pursuant to Section
8.06 or this Section 10.06(b) would, at the time of such assignment, result in
increased costs under Article 8 from those being charged by the respective
assigning Lender prior to such assignment, then the Borrower shall not be
obligated to pay such increased costs (although the Borrower, in accordance with
and pursuant to the other provisions of this Agreement, shall be obligated to
pay any other increased costs of the type described above resulting from changes
after the date of the respective assignment).
(c) Nothing in this Agreement shall prevent or prohibit any Lender from
pledging its Loans and Notes hereunder to a Federal Reserve Bank in support of
borrowings made by such Lender from such Federal Reserve Bank and, with the
consent of the Agent, any Lender which is a fund may pledge all or any portion
of its Loans or Notes to its trustee in support of its obligations to its
trustee. No pledge pursuant to this clause (c) shall release the transferor
Lender from any of its obligations hereunder.
Section 10.07. Governing Law; Submission to Jurisdiction. This Agreement
and each Note shall be governed by and construed in accordance with the laws of
the State of New York. Each Obligor hereby submits to the nonexclusive
jurisdiction of the United States District Court for the Southern District of
New York and of any New York State court sitting in New York City for purposes
of all legal proceedings arising out of or relating to this Agreement or the
transactions contemplated hereby. Each Obligor irrevocably waives, to the
fullest extent permitted by law, any objection which it may now or hereafter
have to the laying of the venue of any such proceeding brought in such a court
and any claim that any such proceeding brought in such a court has been brought
in an inconvenient forum.
Section 10.08. Counterparts; Integration; Effectiveness; Amendment and
Restatement. This Agreement may be signed in any number of counterparts, each of
which shall be an original, with the same effect as if the signatures thereto
and hereto were upon the same instrument. This Agreement constitutes the entire
agreement and understanding among the parties hereto and supersedes any and all
prior agreements and understandings, oral or written, relating to the subject
matter hereof. This Agreement shall become effective on the date (the "Effective
Date") when the Agent has received from each of the parties hereto a counterpart
hereof signed by such party or facsimile or other written confirmation
satisfactory to the Agent confirming that such party has signed a counterpart
hereof. If all of the lenders under the Existing Credit Agreement are or become
Lenders under this Agreement on the Effective Date, then the Existing Credit
Agreement shall be amended and restated in its entirety to be this Agreement,
and should be superseded hereby.
Section 10.9. Confidentiality. Each Lender Party agrees to keep any
information delivered or made available by the Borrower pursuant to or in
connection with this Agreement confidential from anyone other than persons
employed or retained by such Lender Party who are engaged in evaluating,
approving, structuring or administering the credit facility contemplated hereby;
provided that nothing herein shall prevent any Lender Party from disclosing such
information (a) to any other Lender Party, (b) to any other Person if reasonably
incidental to the administration of the credit facility contemplated hereby, (c)
upon the order of any court or administrative agency, (d) upon the request or
demand of any regulatory agency or authority, (e) which had been publicly
disclosed other than as a result of a disclosure by any Lender Party prohibited
by this Agreement, (f) in connection with any litigation to which any Lender
Party or its subsidiaries or Parent may be a party, (g) to the extent necessary
in connection with the exercise of any remedy hereunder, (h) to legal counsel
and independent auditors and (i) subject to obtaining a prior written agreement
for the benefit of the Borrower on terms substantially similar to those
contained in this Section, to any actual or proposed participant in the Loan or
Assignee.
Section 10.10. Waiver of Jury Trial. EACH OBLIGOR AND EACH LENDER PARTY
HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL
PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS
CONTEMPLATED HEREBY.
Section 10.11. Register. The Borrower hereby designates the Agent to serve
as the Borrower's agent, solely for the purposes of this Section 10.11, to
maintain a register (the "Register") on which it will record the Commitments
from time to time of each of the Lenders, the Loans made by each of the Lenders
and each repayment in respect of the principal amount of the Loans of each
Lenders. Failure to make any such recordation, or any error in such recordation
shall not affect the Borrower's obligations in respect of such Loans. With
respect to any Lender, the transfer of the Commitments of such Lender and the
rights to the principal of, and interest on, any Loan made pursuant to such
Commitments shall not be effective until such transfer is recorded on the
Register maintained by the Agent with respect to ownership of such Commitments
and Loans and prior to such recordation all amounts owing to the transferor with
respect to such Commitments and Loans shall be recorded by the Agent on the
Register only upon the acceptance by the Agent of a properly executed and
delivered Assignment and Assumption Agreement pursuant to Section 10.06(b).
Coincident with the delivery of such an Assignment and Assumption Agreement to
the Agent for acceptance and registration of assignment or transfer of all or
part of a Loan, or as soon thereafter as practicable, the assigning or
transferor Lender shall surrender the Note evidencing such Loan, and thereupon
one or more new Notes in the same aggregate principal amount shall be issued to
the assigning or transferor Lender and/or the new Lender. The Borrower agrees to
indemnify the Agent from and against any and all losses, claims, damages and
liabilities of whatsoever nature which may be imposed on, asserted against or
incurred by the Agent in performing its duties under this Section 10.11 except
to the extent of the Agent's gross negligence or willful misconduct.
Section 10.12. Survival. All indemnities set forth herein including,
without limitation, in Sections 2.13, 7.06 and 10.03 and in Article 8 shall
survive the execution, delivery and termination of this Agreement and the Notes
and the making and repayment of the Obligations.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their respective authorized officers as of the day and year
first above written.
TEKNI-PLEX, INC., as Borrower
By /s/ Dr. F. Patrick Smith
Title: CEO
Address: 201 Industrial Parkway
Somerville, NJ 08876
Attn: Dr. F. Patrick Smith
Facsimile: (908) 722-4736
PURETEC CORPORATION
By /s/ Dr. F. Patrick Smith
Title: CEO
Address: 201 Industrial Parkway
Somerville, NJ 08876
Attn: Dr. F. Patrick Smith
Facsimile: (908) 722-4736
OZITE CORPORATION
By /s/ Dr. F. Patrick Smith
Title: CEO
Address: 201 Industrial Parkway
Somerville, NJ 08876
Attn: Dr. F. Patrick Smith
Facsimile: (908) 722-4736
PTI PLASTICS, INC.
By /s/ Dr. F. Patrick Smith
Title: CEO
Address: 201 Industrial Parkway
Somerville, NJ 08876
Attn: Dr. F. Patrick Smith
Facsimile: (908) 722-4736
PLASTIC SPECIALTIES AND TECHNOLOGIES, INC.
By /s/ Dr. F. Patrick Smith
Title: CEO
Address: 201 Industrial Parkway
Somerville, NJ 08876
Attn: Dr. F. Patrick Smith
Facsimile: (908) 722-4736
BURLINGTON RESINS, INC.
By /s/ Dr. F. Patrick Smith
Title: CEO
Address: 201 Industrial Parkway
Somerville, NJ 08876
Attn: Dr. F. Patrick Smith
Facsimile: (908) 722-4736
PLASTIC SPECIALTIES AND TECHNOLOGIES
INVESTMENTS, INC.
By /s/ Dr. F. Patrick Smith
Title: CEO
Address: 201 Industrial Parkway
Somerville, NJ 08876
Attn: Dr. F. Patrick Smith
Facsimile: (908) 722-4736
PURETEC APR, INC.
By /s/ Dr. F. Patrick Smith
Title: CEO
Address: 201 Industrial Parkway
Somerville, NJ 08876
Attn: Dr. F. Patrick Smith
Facsimile: (908) 722-4736
MULTI CONTAINER RECYCLER, INC.
By /s/ Dr. F. Patrick Smith
Title: CEO
Address: 201 Industrial Parkway
Somerville, NJ 08876
Attn: Dr. F. Patrick Smith
Facsimile: (908) 722-4736
COAST RECYCLING NORTH, INC.
By /s/ Dr. F. Patrick Smith
Title: CEO
Address: 201 Industrial Parkway
Somerville, NJ 08876
Attn: Dr. F. Patrick Smith
Facsimile: (908) 722-4736
DISTRIBUTORS RECYCLING, INC.
By /s/ Dr. F. Patrick Smith
Title: CEO
Address: 201 Industrial Parkway
Somerville, NJ 08876
Attn: Dr. F. Patrick Smith
Facsimile: (908) 722-4736
REI DISTRIBUTORS, INC
By /s/ Dr. F. Patrick Smith
Title: CEO
Address: 201 Industrial Parkway
Somerville, NJ 08876
Attn: Dr. F. Patrick Smith
Facsimile: (908) 722-4736
PURE TECH RECYCLING OF CALIFORNIA
By /s/ Dr. F. Patrick Smith
Title: CEO
Address: 201 Industrial Parkway
Somerville, NJ 08876
Attn: Dr. F. Patrick Smith
Facsimile: (908) 722-4736
ALUMET SMELTING CORPORATION
By /s/ Dr. F. Patrick Smith
Title: CEO
Address: 201 Industrial Parkway
Somerville, NJ 08876
Attn: Dr. F. Patrick Smith
Facsimile: (908) 722-4736
CONCONRE CORP.
By /s/ Dr. F. Patrick Smith
Title: CEO
Address: 201 Industrial Parkway
Somerville, NJ 08876
Attn: Dr. F. Patrick Smith
Facsimile: (908) 722-4736
MORGAN GUARANTY TRUST
COMPANY OF NEW YORK, as Lender,
Agent and LC Issuing Bank
By /s/ Stephen Hannan
Title: Vice President
Address: 60 Wall Street,
New York, NY 10260
Facsimile: (212) 648-5005
BANKBOSTON, N.A.
By /s/ Gregory R. D. Clark
Title: Managing Director
BANK OF AMERICA, NTSA
By /s/ Steve A. Aronowitz
Title: Managing Director
CREDIT LYONNAIS, NEW YORK BRANCH
By /s/ Vladimir Labun
Title: First Vice President-
Manager
DEEPROCK & COMPANY
By: Eaton Vance Management,
as Investment Advisor
By /s/ Paysen F. Swaffield
Title: Vice President
FLEET BANK, N. A.
By /s/ Bonnie Bernstein
Title: Vice President
GENERAL ELECTRIC CAPITAL CORPORATION
By /s/ Brian E. Miner
Title: Region Risk Analyst
HELLER FINANCIAL, INC.
By /s/ Christopher A. O'Donnell
Title: Vice President
KZH-CRESCENT 2 CORPORATION
By /s/ Virginia Conway
Title: Authorized Agent
LASALLE NATIONAL BANK
By /s/ James C. Tucker
Title: Senior Vice President
OCTAGON CREDIT INVESTORS LOAN
PORTFOLIO
(a unit of The Chase Manhattan Bank)
By /s/ Joyce C. DeLucca
Title: Managing Director
PNC BANK, National Association
By /s/ Sharon Giddes
Title: Vice President
SUMMIT BANK
By /s/ Robert D. Mace
Title: Assistant Vice President
TORONTO DOMINION (TEXAS), INC.
By /s/ Neva Nesbitt
Title: Vice President
VAN KAMPEN AMERICAN CAPITAL PRIME RATE
INCOME TRUST
By /s/ Jeffrey W. Maillet
Title: Senior Vice President &
Director
SCHEDULE 1
COMMITMENTS
<TABLE>
<CAPTION>
Tranche Tranche Revolving
A Term Loan B Term Loan Loan
Lender Commitment Commitment Commitment
- ------ ---------- ---------- ----------
<S> <C> <C> <C>
Morgan Guaranty Trust Company of New York $ 6,250,000.00 $28,500,000.00 $11,250,000.00
Summit Bank 6,250,000.00 1,500,000.00 11,250,000.00
Fleet Bank 6,250,000.00 11,250,000.00
LaSalle National Bank 6,250,000.00 11,250,000.00
Toronto Dominion 10,900,000.00
Heller Financial, Inc. 3,571,428.55 1,500,000.00 6,428,571.45
Bank of America 4,285,714.29 7,714,285.71
BankBoston 4,285,714.29 7,714,285.71
Credit Lyonnais 4,285,714.29 7,714,285.71
GE Capital 4,285,714.29 7,714,285.71
PNC Bank, N.A. 4,285,714.29 7,714,285.71
Octagon Credit Investors 7,200,000.00
KZH Crescent 2 Corp. 7,200,000.00
Van Kampen American 7,200,000.00
Deeprock & Company 1,000,000.00
Total: $50,000,000.00 $65,000,000.00 $90,000,000.00
</TABLE>
FORM OF TRANCHE A TERM NOTE
New York, New York
March 3, 1998
FOR VALUE RECEIVED, TEKNI-PLEX, INC., a Delaware corporation,
and its successors (the "Borrower"), hereby promises to pay to the order of
_______________________ (the "Lender"), in lawful money of the United States of
America in immediately available funds, at the office of Morgan Guaranty Trust
Company of New York (the "Agent") located at 60 Wall Street, New York, NY 10260
on the Tranche A Maturity Date (as defined in the Agreement referred to below)
the principal sum of _______________________________or, if less, the then unpaid
principal amount of all Tranche A Term Loans (as defined in the Agreement) made
by the Lender pursuant to the Agreement.
The Borrower promises also to pay interest on the unpaid
principal amount hereof in like money at said office from the date hereof until
paid at the rates and at the times provided in Section 2.05 of the Agreement.
This Note is one of the Tranche A Term Notes referred to in
the Credit Agreement, dated as of March 3, 1998, among Tekni-Plex, Inc., the
Guarantors party thereto, the Lenders from time to time party thereto, the LC
Issuing Banks (as defined in the Agreement) from time to time party thereto and
Morgan Guaranty Trust Company of New York, as Agent, (as amended, modified or
supplemented from time to time, the "Agreement"), and is entitled to the
benefits thereof and of the other Loan Documents (as defined in the Agreement).
This Note is secured by the Collateral Documents (as defined in the Agreement)
and is entitled to the benefits of the Guaranties (as defined in the Agreement).
As provided in the Agreement, this Note is subject to voluntary prepayment as
per Section 2.11 of the Agreement, and mandatory repayment as per Section 2.10
of the Agreement, prior to the Tranche A Maturity Date, in whole or in part.
In case an Event of Default (as defined in the Agreement)
shall occur and be continuing, the principal of and accrued interest on this
Note may be declared to be due and payable in the manner and with the effect
provided in the Agreement.
The Borrower hereby waives presentment, demand, protest or
notice of any kind in connection with this Note.
THIS NOTE SHALL BE CONSTRUED IN ACCORDANCE WITH AND BE
GOVERNED BY THE LAW OF THE STATE OF NEW YORK, WITHOUT REGARD TO PRINCIPLES OF
CONFLICT OF LAWS.
TEKNI-PLEX, INC.
By________________________________
Name:
Title:
EXHIBIT A-2
FORM OF TRANCHE B TERM NOTE
New York, New York
March 3, 1998
FOR VALUE RECEIVED, TEKNI-PLEX, INC., a Delaware corporation,
and its successors (the "Borrower"), hereby promises to pay to the order of
___________________________________________________________________ (the
"Lender"), in lawful money of the United States of America in immediately
available funds, at the office of Morgan Guaranty Trust Company of New York
(the "Agent") located at 60 Wall Street, New York, NY 10260 on the Tranche
B Maturity Date (as defined in the Agreement referred to below) the
principal sum of _____________________________________________________ or, if
less, the then unpaid principal amount of all Tranche B Term Loans (as
defined in the Agreement) made by the Lender pursuant to the Agreement.
The Borrower promises also to pay interest on the unpaid
principal amount hereof in like money at said office from the date hereof
until paid at the rates and at the times provided in Section 2.05 of the
Agreement.
This Note is one of the Tranche B Term Notes referred to in
the Credit Agreement, dated as of March 3, 1998, among Tekni-Plex, Inc., the
Guarantors party thereto, the Lenders from time to time party thereto, the LC
Issuing Banks (as defined in the Agreement) from time to time party thereto and
Morgan Guaranty Trust Company of New York, as Agent (as amended, modified or
supplemented from time to time, the "Agreement"), and is entitled to the
benefits thereof and of the other Loan Documents (as defined in the Agreement).
This Note is secured by the Collateral Documents (as defined in the Agreement)
and is entitled to the benefits of the Guaranties (as defined in the Agreement).
As provided in the Agreement, this Note is subject to voluntary prepayment as
per Section 2.11 of the Agreement, and mandatory repayment as per Section 2.10
of the Agreement, prior to the Tranche B Maturity Date, in whole or in part.
In case an Event of Default (as defined in the Agreement)
shall occur and be continuing, the principal of and accrued interest on this
Note may be declared to be due and payable in the manner and with the effect
provided in the Agreement.
The Borrower hereby waives presentment, demand, protest or
notice of any kind in connection with this Note.
THIS NOTE SHALL BE CONSTRUED IN ACCORDANCE WITH AND BE
GOVERNED BY THE LAW OF THE STATE OF NEW YORK, WITHOUT REGARD TO PRINCIPLES OF
CONFLICT OF LAWS.
TEKNI-PLEX, INC.
By________________________
Name:
Title:
EXHIBIT A-3
FORM OF REVOLVING NOTE
New York, New York
March 3, 1998
FOR VALUE RECEIVED, TEKNI-PLEX, INC., a Delaware corporation,
and its successors (the "Borrower"), hereby promises to pay to the order of
____________________(the "Lender"), in lawful money of the United States of
America in immediately available funds, at the office of Morgan Guaranty Trust
Company of New York (the "Agent") located at 60 Wall Street, New York, NY 10260
on the Revolving Loan Maturity Date (as defined in the Agreement referred to
below) the principal sum of ________________________________________ or, if
less, the then unpaid principal amount of all Revolving Loans (as defined in the
Agreement) made by the Lender pursuant to the Agreement.
The Borrower promises also to pay interest on the unpaid
principal amount hereof in like money at said office from the date hereof until
paid at the rates and at the times provided in Section 2.05 of the Agreement.
This Note is one of the Revolving Notes referred to in the
Credit Agreement, dated as of March 3, 1998, among Tekni-Plex, Inc., the
Guarantors party thereto, the Lenders from time to time party thereto, the LC
Issuing Banks (as defined in the Agreement) from time to time party thereto and
Morgan Guaranty Trust Company of New York, as Agent (as amended, modified or
supplemented from time to time, the "Agreement"), and is entitled to the
benefits thereof and of the other Loan Documents (as defined in the Agreement).
This Note is secured by the Collateral Documents (as defined in the Agreement)
and is entitled to the benefits of the Guaranties (as defined in the Agreement).
As provided in the Agreement, this Note is subject to voluntary prepayment as
per Section 2.11 of the Agreement, and mandatory repayment as per Section 2.10
of the Agreement, prior to the Revolving Loan Maturity Date, in whole or in
part.
In case an Event of Default (as defined in the Agreement)
shall occur and be continuing, the principal of and accrued interest on this
Note may be declared to be due and payable in the manner and with the effect
provided in the Agreement.
The Borrower hereby waives presentment, demand, protest or
notice of any kind in connection with this Note.
THIS NOTE SHALL BE CONSTRUED IN ACCORDANCE WITH AND BE
GOVERNED BY THE LAW OF THE STATE OF NEW YORK, WITHOUT REGARD TO PRINCIPLES OF
CONFLICT OF LAWS.
TEKNI-PLEX, INC.
By________________________________
Name:
Title:
EXHIBIT A-4
FORM OF SWINGLINE NOTE
New York, New York
March 3, 1998
FOR VALUE RECEIVED, TEKNI-PLEX, INC., a Delaware corporation,
and its successors (the "Borrower"), hereby promises to pay to the order of
_____________________ (the "Swingline Lender"), in lawful money of the United
States of America in immediately available funds, at the office of Morgan
Guaranty Trust Company of New York (the "Agent") located at 60 Wall Street, New
York, NY 10260 on the Swingline Expiry Date (as defined in the Agreement
referred to below) the principal sum of ___________________________________or,
if less, the then unpaid principal amount of all Swingline Loans (as defined in
the Agreement) made by the Lender pursuant to the Agreement.
The Borrower promises also to pay interest on the unpaid
principal amount hereof in like money at said office from the date hereof until
paid at the rates and at the times provided in Section 2.05 of the Agreement.
This Note is one of the Swingline Notes referred to in the
Credit Agreement, dated as of March 3, 1998, among Tekni-Plex, Inc., the
Guarantors party thereto, the Lenders from time to time party thereto, the LC
Issuing Banks (as defined in the Agreement) from time to time party thereto and
Morgan Guaranty Trust Company of New York, as Agent (as amended, modified or
supplemented from time to time, the "Agreement"), and is entitled to the
benefits thereof and of the other Loan Documents (as defined in the Agreement).
This Note is secured by the Collateral Documents (as defined in the Agreement)
and is entitled to the benefits of the Guaranties (as defined in the Agreement).
As provided in the Agreement, this Note is subject to voluntary prepayment as
per Section 2.11 of the Agreement, and mandatory repayment as per Section 2.10
of the Agreement, prior to the Swingline Maturity Date, in whole or in part.
In case an Event of Default (as defined in the Agreement)
shall occur and be continuing, the principal of and accrued interest on this
Note may be declared to be due and payable in the manner and with the effect
provided in the Agreement.
The Borrower hereby waives presentment, demand, protest or
notice of any kind in connection with this Note.
THIS NOTE SHALL BE CONSTRUED IN ACCORDANCE WITH AND BE
GOVERNED BY THE LAW OF THE STATE OF NEW YORK, WITHOUT REGARD TO PRINCIPLES OF
CONFLICT OF LAWS.
TEKNI-PLEX, INC.
By________________________________
Name:
Title:
SECURITY AGREEMENT
AGREEMENT dated as of March 3, 1998 between TEKNI-PLEX,
INC. (with its successors, the "Borrower" and, together with any other
Person which becomes a Grantor pursuant to Section 3(B), the "Grantors" and
each a "Grantor") and MORGAN GUARANTY TRUST COMPANY OF NEW YORK, as
Collateral Agent (with its successor in such capacity, the "Collateral
Agent").
W I T N E S S E T H:
WHEREAS, the Borrower, certain lenders (the "Lenders")
and Morgan Guaranty Trust Company of New York, as Agent for such Lenders,
are parties to a Credit Agreement of even date herewith (as the same may be
amended from time to time, the "Credit Agreement"); and
WHEREAS, in order to induce said Lenders and Morgan
Guaranty Trust Company of New York, as Agent for such Lenders, to enter
into the Credit Agreement, each Grantor has agreed to grant a continuing
security interest in and to the Collateral (as hereafter defined) to secure
the Grantors' obligations under the Credit Agreement and the obligations of
the Borrower under the Notes issued pursuant thereto;
WHEREAS, the Borrowers may from time to time be party to
one or more agreements with respect to Derivatives Obligations (each such
agreement with respect to Derivatives Obligations with a Derivatives
Creditor (as defined below), a "Derivatives Obligations Agreement") with
any Lender or Lenders or an affiliate of Lender (even if any such Lender
ceases to be a Lender under the Credit Agreement for any reason) and in
each case their subsequent assigns (collectively, the "Derivatives
Creditors" and together with the Lenders, the "Secured Creditors");
NOW, THEREFORE, in consideration of the premises and
other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties hereto agree as follows:
SECTION 1. Definitions
Terms defined in the Credit Agreement and not otherwise
defined herein have, as used herein, the respective meanings provided for
therein. The following additional terms, as used herein, have the
following respective meanings:
"Accounts" means all "accounts" (as defined in the UCC)
now owned or hereafter acquired by any Grantor, and shall also
mean and include all accounts receivable, contract rights, book
debts and other obligations or indebtedness owing to any Grantor
arising from the sale, lease or exchange of goods or other
property by it and/or the performance of services by it
(including, without limitation, any such obligation which might be
characterized as an account, contract right or general intangible
under the Uniform Commercial Code in effect in any jurisdiction)
and all of any Grantor's rights in, to and under all purchase
orders for goods, services or other property, and all of any
Grantor's rights to any goods, services or other property
represented by any of the foregoing (including returned or
repossessed goods and an unpaid seller's right of rescission,
replevin, reclamation and rights to stoppage in transit) and all
monies due to or to become due to any Grantor under all contracts
for the sale, lease or exchange of goods or other property and/or
the performance of services by it (whether or not yet earned by
performance on the part of such Grantor), in each case whether now
in existence or hereafter arising or acquired including, without
limitation, the right to receive the proceeds of said purchase
orders and contracts and all collateral security and guarantees of
any kind given by any Person with respect to any of the foregoing.
"Class" shall have the meaning provided in Section 17 of
this Agreement.
"Collateral" has the meaning set forth in Section 3.
"Copyright License" means any agreement now or hereafter
in existence granting to any Grantor, or pursuant to which any
Grantor has granted to any other Person, any right to use, copy,
reproduce, distribute, prepare derivative works based upon,
display or publish any records or other materials on which a
Copyright is in existence or may come into existence.
"Copyrights" means all the following: (i) all copyrights
under the laws of the United States or any other country (whether
or not the underlying works of authorship have been published),
all registrations and recordings thereof, all intellectual
property rights to works of authorship (whether or not published),
and all applications for copyrights under the laws of the United
States or any other country, including, without limitation,
registrations, recordings and applications in the United States
Copyright Office or in any similar office or agency of the United
States, any State thereof or any other country or any political
subdivision thereof, including, without limitation, those
described in Schedule 1 to Exhibit E hereto, (ii) all reissues,
renewals and extensions thereof, (iii) all claims for, and rights
to sue for, past or future infringements of any of the foregoing,
and (iv) all income, royalties, damages and payments now or
hereafter due or payable with respect to any of the foregoing,
including, without limitation, damages and payments for past or
future infringements thereof.
"Copyright Security Agreement" means a Copyright Security
Agreement executed and delivered by a Grantor in favor of the
Collateral Agent, for the benefit of the Lenders, substantially in
the form of Exhibit E hereto, as the same may be amended from time
to time.
"Documents" means all "documents" (as defined in the UCC)
or other receipts covering, evidencing or representing goods, now
owned or hereafter acquired by any Grantor.
"Equipment" means all "equipment" (as defined in the UCC)
now owned or hereafter acquired by any Grantor, including, without
limitation, all motor vehicles, trucks, trailers and Rolling Stock
(including Leased Rolling Stock).
"General Intangibles" means all "general intangibles" (as
defined in the UCC) now owned or hereafter acquired by any
Grantor, including, without limitation, (i) all obligations or
indebtedness owing to any Grantor (other than Accounts) from
whatever source arising, (ii) all Copyrights, Copyright Licenses,
Patents, Patent Licenses, Trademarks, Trademark Licenses, rights
in intellectual property, goodwill, trade names, brand names,
service marks, trade secrets, permits and licenses, (iii) all
rights or claims in respect of refunds for taxes paid, and (iv)
all rights in respect of any pension plan or similar arrangement
maintained for employees of any member of the ERISA Group.
"Instruments" means all "instruments", "chattel paper" or
"letters of credit" (each as defined in the UCC) evidencing,
representing, arising from or existing in respect of, relating to,
securing or otherwise supporting the payment of, any of the
Accounts, including (but not limited to) promissory notes, drafts,
bills of exchange and trade acceptances, now owned or hereafter
acquired by any Grantor.
"Inventory" means all "inventory" (as defined in the
UCC), now owned or hereafter acquired by any Grantor, wherever
located, and shall also mean and include, without limitation, all
raw materials and other materials and supplies, work-in-process
and finished goods and any products made or processed therefrom
and all substances, if any, commingled therewith or added thereto.
"LC Exposure" means, with respect to any Lender at any
time, an amount equal to its ratable share of the Aggregate LC
Exposure.
"Leased Rolling Stock" has the meaning set forth in
Section 3(A).
"Loan Document Obligations" shall have the meaning
provided in the definition of Secured "Obligations" in this
Section 1.
"Patent License" means any agreement now or hereafter in
existence granting to any Grantor, or pursuant to which any
Grantor has granted to any other Person, any right with respect to
any Patent or any invention now or hereafter in existence, whether
patentable or not, whether a patent or application for patent is
in existence on such invention or not, and whether a patent or
application for patent on such invention may come into existence.
"Patents" means all of the following: (i) all letters
patent and design letters patent of the United States or any other
country and all applications for letters patent and design letters
patent of the United States or any other country, including,
without limitation, applications in the United States Patent and
Trademark Office or in any similar office or agency of the United
States, any State thereof or any other country or any political
subdivision thereof, including, without limitation, those
described in Schedule 1 to Exhibit C hereto, (ii) all reissues,
divisions, continuations, continuations-in-part, renewals and
extensions thereof, (iii) all claims for, and rights to sue for,
past or future infringements of any of the foregoing, and (iv) all
income, royalties, damages and payments now or hereafter due or
payable with respect to any of the foregoing, including, without
limitation, damages and payments for past or future infringements
thereof
"Patent Security Agreement" means the Patent Security
Agreement executed and delivered by each Grantor in favor of the
Collateral Agent, for the benefit of the Lenders, substantially in
the form of Exhibit C hereto, as the same may be amended from time
to time.
"Perfection Certificate" means a certificate
substantially in the form of Exhibit A, completed and supplemented
with the schedules and attachments contemplated thereby to the
satisfaction of the Collateral Agent, and duly executed by the
chief executive officer of each Grantor.
"Permitted Liens" means the Security Interests and the
Liens on the Collateral permitted to be created, to be assumed or
to exist pursuant to Section 5.09 of the Credit Agreement.
"Pledgee" shall have the meaning provided in the Pledge
Agreement.
"PST Collateral" means all Collateral subject to the PST
Documents.
"PST Documents" means the Existing PST Senior Secured
Notes Indenture, the Existing PST Senior Notes Indenture
Supplement, the Existing PST Senior Note Collateral Documents and
the Existing PST Senior Secured Notes Collateral Documents
Amendments.
"Proceeds" means all proceeds of, and all other profits,
products, rents or receipts, in whatever form, arising from the
collection, sale, lease, exchange, assignment, licensing or other
disposition of, or other realization upon, Collateral, including,
without limitation, all claims of each Grantor against third
parties for loss of, damage to or destruction of, or for proceeds
payable under, or unearned premiums with respect to, policies of
insurance in respect of, any Collateral, and any condemnation or
requisition payments with respect to any Collateral, in each case
whether now existing or hereafter arising.
"Requisite Creditors" shall have the meaning provided in
Section 17 of this Agreement.
"Rolling Stock" means all railcars, barges and other
water carrier equipment, and all accessions, appurtenances and
parts installed on and additions thereto, and replacements
thereof, now owned or hereafter acquired by the Company.
"Rolling Stock Leases" has the meaning set forth in
Section 3(A).
"Rolling Stock Revenues" means any monies, revenues,
payments or credits now owned or hereafter acquired by any Grantor
which are generated by or attributable to the Rolling Stock or
Leased Rolling Stock, including, without limitation, railcar hire
payments, mileage allowances, per diem mileage payments, empty
mileage allowances, mileage credits and excess mileage credits, in
each case whether now existing or hereafter arising.
"Secured Obligations" means (i) the full and prompt
payment when due (whether at stated maturity, by acceleration or
otherwise) of all obligations (including obligations which, but
for the automatic stay under Section 362(a) of the Bankruptcy
Code, would become due) and liabilities of each Grantor, now
existing or hereafter incurred under any Loan Document to which it
is a party (all such obligations and liabilities under this clause
(i) being herein collectively called the "Loan Document
Obligations"); (ii) the full and prompt payment when due (whether
at the stated maturity, by acceleration or otherwise) of all
obligations (including obligations which, but for the automatic
stay under Section 362(a) of the Bankruptcy Code, would become
due) and liabilities of each Grantor, now existing or hereafter
incurred under, arising out of or in connection with any
Derivatives Obligations Agreement designated by such Grantor and
the related Derivatives Creditor as a "Secured Derivatives
Obligations Agreement", including all obligations, if any, under a
Guaranty in respect of any Derivatives Obligations Agreement (all
such obligations and indebtedness under this clause (ii) being
herein collectively called the "Secured Derivatives Obligations");
(iii) any and all sums advanced by the Collateral Agent in order
to preserve the Collateral or preserve its security interest in
the Collateral in accordance with Section 12; (iv) in the event
of any proceeding for the collection or enforcement of any
indebtedness, obligations, or liabilities of each Grantor referred
to in clauses (i), (ii) and (iii) above after an Event of Default
shall have occurred and be continuing, the reasonable expenses of
re-taking, holding, preparing for sale or lease, selling or
otherwise disposing of or realizing on the Collateral, or of any
exercise by the Collateral Agent of its rights hereunder, together
with reasonable attorneys' fees and court costs; and (v) all
amounts paid by any Indemnitee as to which such Indemnitee has the
right to reimbursement under Section 12 of this Agreement.
"Security Interests" means the security interests in the
Collateral granted hereunder securing the Secured Obligations.
"Trademark License" means any agreement now or hereafter
in existence granting to any Grantor, or pursuant to which any
Grantor has granted to any other Person, any right to use any
Trademark.
"Trademarks" means all of the following: (i) all
trademarks, trade names, corporate names, company names, business
names, fictitious business names, trade styles, service marks,
logos, brand names, trade dress, prints and labels on which any of
the foregoing have appeared or appear, package and other designs,
and any other source or business identifiers, and general
intangibles of like nature, and the rights in any of the foregoing
which arise under applicable law, (ii) the goodwill of the
business symbolized thereby or associated with each of them, (iii)
all registrations and applications in connection therewith,
including, without limitation, registrations and applications in
the United States Patent and Trademark Office or in any similar
office or agency of the United States, any State thereof or any
other country or any political subdivision thereof, including,
without limitation, those described in Schedule 1 to Exhibit D
hereto, (iv) all reissues, extensions and renewals thereof, (v)
all claims for, and rights to sue for, past or future
infringements of any of the foregoing, and (vi) all income,
royalties, damages and payments now or hereafter due or payable
with respect to any of the foregoing, including, without
limitation, damages and payments for past or future infringements
thereof.
"Trademark Security Agreement" means the Trademark
Security Agreement executed and delivered by each Grantor in favor
of the Collateral Agent, for the benefit of the Lenders,
substantially in the form of Exhibit D hereto, as the same may be
amended from time to time.
"UCC" means the Uniform Commercial Code as in effect on
the date hereof in the State of New York; provided that if by
reason of mandatory provisions of law, the perfection or the
effect of perfection or non-perfection of the Security Interest in
any Collateral is governed by the Uniform Commercial Code as in
effect in a jurisdiction other than New York, "UCC" means the
Uniform Commercial Code as in effect in such other jurisdiction
for purposes of the provisions hereof relating to such perfection
or effect of perfection or non-perfection.
SECTION 2. Representations and Warranties
Each Grantor represents and warrants as follows:
(A) The Grantors have good and marketable title to all
of the Collateral, free and clear of any Liens other than
Permitted Liens. Each Grantor has taken all actions necessary
under the UCC to perfect its interest in any Accounts purchased or
otherwise acquired by it, as against its assignors and creditors
of its assignors.
(B) No Grantor has performed any acts which would
prevent the Collateral Agent from enforcing any of the terms of
this Agreement or which would limit the Collateral Agent in any
such enforcement other than pursuant to and in accordance with the
PST Documents. Other than financing statements or other similar
or equivalent documents or instruments with respect to the
Security Interests and Permitted Liens and other than documents or
instruments in respect of which a termination statement or other
termination document has been filed, no financing statement,
mortgage, security agreement or similar or equivalent document or
instrument covering all or any part of the Collateral is on file
or of record in any jurisdiction in which such filing or recording
would be effective to perfect a Lien on such Collateral. No
Collateral, other than the PST Collateral, is in the possession of
any Person (other than the Grantors) asserting any claim thereto
or security interest therein, except that the Collateral Agent or
its designee may have possession of Collateral as contemplated
hereby and warehousemen, carriers or other bailees may from time
to time assert claims to or security interests in Collateral in
their possession.
(C) Not less than five Domestic Business Days prior to
the Initial Borrowing Date under the Credit Agreement, the
Grantors shall deliver a Perfection Certificate to the Collateral
Agent. The information set forth therein shall be correct and
complete.
(D) To the extent that the Collateral is subject to the
UCC, the Security Interests constitute valid security interests
under the UCC securing the Secured Obligations. When UCC
financing statements in the form specified in Exhibit A shall have
been filed in the offices specified in the Perfection Certificate,
and this Agreement and any amendments hereto in appropriate form
have been filed in the office of the Secretary of the Interstate
Commerce Commission, with respect to any Rolling Stock, Leased
Rolling Stock or Rolling Stock Leases, the Security Interests
shall constitute perfected security interests in the Collateral
(except Inventory in transit) to the extent that a security
interest therein may be perfected by filing pursuant to the UCC
and the Interstate Commerce Act, prior to all other Liens and
rights of others therein except for the Permitted Liens. When the
Patent Security Agreement and the Trademark Security Agreement
have been filed with the United States Patent and Trademark
Office, the Security Interests shall constitute perfected security
interests in all right, title and interest of the Grantors in
Patents and Trademarks, prior to all other Liens and rights of
others therein except for Permitted Liens. When a Copyright
Security Agreement has been filed with the United States Copyright
Office, the Security Interests shall constitute perfected security
interests in all right, title and interest of the Grantors in
Copyrights, prior to all other Liens and rights of others therein
except for Permitted Liens.
(E) The Inventory and Equipment are insured in
accordance with the requirements of the Credit Agreement.
(F) The Grantors have produced or will produce all
Inventory produced by them in compliance with the applicable
requirements of the Fair Labor Standards Act, as amended.
SECTION 3. The Security Interests
(A) In order to secure the full and punctual payment of
the Secured Obligations in accordance with the terms thereof, and to secure
the performance of all of the obligations of the Grantors hereunder and
under the Credit Agreement, the Grantors hereby grant to the Collateral
Agent for the ratable benefit of the Lenders a continuing security interest
in and to all of the following property of the Grantors, whether now owned
or existing or hereafter acquired or arising and regardless of where
located (all being collectively referred to as the "Collateral"):
(1) Accounts;
(2) Inventory;
(3) General Intangibles;
(4) Documents;
(5) Instruments;
(6) Equipment;
(7) All books and records (including, without
limitation, customer lists, marketing information, credit files,
price lists, operating records, vendor and supplier price lists,
sales literature, computer programs, printouts and other computer
materials and records) of any Grantor pertaining to any of the
Collateral;
(8) All insurance policies;
(9) All right, title, claims and benefits now owned or
hereafter acquired by any Grantor in and to any railcar leases,
subleases, rental agreements and car hire contracts in which any
Grantor shall at any time have any interest, and any right, title,
claim and benefits of any Grantor now owned or hereafter acquired
in and to any management agreement concerning all such leases and
agreements (collectively, "Rolling Stock Leases"); and all right,
title and interest of any Grantor in the railcars and equipment
provided pursuant to any Rolling Stock Leases ("Leased Rolling
Stock"); in each case, including, without limitation, all rights
of any Grantor to receive and apply any Rolling Stock Revenues
attributable to any Leased Rolling Stock or pursuant to any
Rolling Stock Leases;
(10) All rights now owned or hereafter acquired by any
Grantor to receive and collect any Rolling Stock Revenues; and
(11) All Proceeds of all or any of the Collateral
described in Clauses 1 through 10 hereof.
(B) The Borrower will cause any Domestic Subsidiary
acquired after the Effective Date to take appropriate steps to (i) become a
Grantor hereunder and (ii) immediately grant to the Collateral Agent for
the ratable benefit of the Lenders a first priority security interest
(subject to Permitted Liens and to restrictions permitted by Section 5.18
of the Credit Agreement) upon all of its assets as additional security for
the Secured Obligations.
(C) The Security Interests are granted as security only
and shall not subject the Collateral Agent or any Lender to, or transfer or
in any way affect or modify, any obligation or liability of any Grantor
with respect to any of the Collateral or any transaction in connection
therewith.
SECTION 4. Further Assurances; Covenants
(A) No Grantor will change its name, identity or
corporate structure in any manner unless it shall have given the Collateral
Agent not less than 30 days' prior notice thereof and delivered an opinion
of counsel with respect thereto in accordance with Section 4(L). No
Grantor will change the location of (i) its chief executive office or chief
place of business or (ii) the locations where it keeps or holds any
Collateral or any records relating thereto from the applicable location
described in the Perfection Certificate unless it shall have given the
Collateral Agent not less than 30 days' prior notice thereof and delivered
an opinion of counsel with respect thereto in accordance with Section 4(L).
The Grantors shall not in any event change the location of any Collateral
if such change would cause the Security Interests in such Collateral to
lapse or cease to be perfected, it being understood, however, that the
Grantors shall be able to transfer cash to the extent permitted by the
other provisions of this Agreement and the other Loan Documents.
(B) Each Grantor will, from time to time, at its
expense, execute, deliver, file and record any statement, assignment,
instrument, document, agreement or other paper and take any other action,
(including, without limitation, any filings with the United States Patent
and Trademark Office, any filings with the United States Copyright Office,
any filings with the Interstate Commerce Commission, any filings of
financing or continuation statements under the UCC and any filings in, or
agreements governed by the laws of, foreign jurisdictions) that from time
to time may be necessary, or that the Collateral Agent may reasonably
request, in order to create, preserve, perfect, confirm or validate the
Security Interests or to enable the Collateral Agent and the Lenders to
obtain the full benefits of this Agreement, or to enable the Collateral
Agent to exercise and enforce any of its rights, powers and remedies
hereunder with respect to any of the Collateral. To the extent permitted
by applicable law, each Grantor hereby authorizes the Collateral Agent to
execute and file financing statements or continuation statements without
such Grantor's signature appearing thereon. The Grantors agree that a
carbon, photographic, photostatic or other reproduction of this Agreement
or of a financing statement is sufficient as a financing statement. The
Grantors shall pay the costs of, or incidental to, any recording or filing
of any financing or continuation statements concerning the Collateral.
(C) If any Collateral is at any time in the possession
or control of any warehouseman, bailee or any of a Grantor's agents or
processors, such Grantor, if any Event of Default shall have occurred and
be continuing and if requested to do so by the Collateral Agent acting on
the instructions of the Required Lenders, shall notify such warehouseman,
bailee, agent or processor of the Security Interests created hereby and to
hold all such Collateral for the Collateral Agent's account subject to the
Collateral Agent's instructions, subject to the provisions of the PST
Documents.
(D) Each Grantor shall keep full and accurate books and
records relating to the Collateral, and stamp or otherwise mark such books
and records in such manner as the Required Lenders may reasonably require
in order to reflect the Security Interests.
(E) Each Grantor will immediately deliver and pledge
each Instrument (other than Instruments subject to the PST Documents to the
Collateral Agent, appropriately endorsed to the Collateral Agent, provided
that so long as no Event of Default shall have occurred and be continuing,
each Grantor may retain for collection in the ordinary course any
Instruments received by it in the ordinary course of business, and the
Collateral Agent shall, promptly upon request of a Grantor, make
appropriate arrangements for making any other Instrument pledged by such
Grantor available to it for purposes of presentation, collection or renewal
(any such arrangement to be effected, to the extent deemed appropriate to
the Collateral Agent, against trust receipt or like document).
(F) Each Grantor shall use all reasonable efforts to
cause to be collected from its account debtors, as and when due, any and
all amounts owing under or on account of each Account (including, without
limitation, Accounts which are delinquent, such Accounts to be collected in
accordance with lawful collection procedures) and shall apply forthwith
upon receipt thereof all such amounts as are so collected to the
outstanding balance of such Account. Subject to the rights of the
Collateral Agent and the Lenders hereunder if an Event of Default shall
have occurred and be continuing, each Grantor may allow in the ordinary
course of business as adjustments to amounts owing under its Accounts (i)
an extension or renewal of the time or times of payment, or settlement for
less than the total unpaid balance, which such Grantor finds appropriate in
accordance with sound business judgment and (ii) a refund or credit due as
a result of returned or damaged merchandise, all in accordance with such
Grantor's ordinary course of business consistent with its or the Borrower's
historical collection practices. The costs and expenses (including,
without limitation, attorney's fees) of collection, whether incurred by the
Grantors or the Collateral Agent, shall be borne by the Grantors.
(G) Upon the occurrence and during the continuance of
any Event of Default, upon request of the Required Lenders through the
Collateral Agent, each Grantor will promptly notify (and each Grantor
hereby authorizes the Collateral Agent so to notify) each account debtor in
respect of any Account or Instrument that such Collateral has been assigned
to the Collateral Agent hereunder, and that any payments due or to become
due in respect of such Collateral are to be made directly to the Collateral
Agent or its designee, unless otherwise subject to the PST Documents.
(H) Each Grantor shall, (i) as soon as practicable after
the date hereof, in the case of Equipment now owned in which a security
interest is perfected by a notation on the certificate of title or similar
evidence of the ownership of such goods and (ii) within 10 days of
acquiring any other similar Equipment, in each case, (a) having a value in
excess of $100,000, or (b) having a value in excess of $50,000, if the
aggregate of all such items owned by the Grantors at any time is greater
than $500,000, deliver to the Collateral Agent any and all certificates of
title, applications for title or similar evidence of ownership of such
Equipment and shall cause the Collateral Agent to be named as lienholder on
any such certificate of title or other evidence of ownership, except to the
extent such Equipment is subject to the PST Documents. Each Grantor shall
promptly inform the Collateral Agent of any additions to or deletions from
the Equipment exceeding $250,000 in the aggregate and shall not permit any
such items to become a fixture to real estate except pursuant to the
Mortgages or an accession to other personal property except such other
property that is Collateral.
(I) Each Grantor shall as soon as practicable after the
date hereof, at its own cost and expense, cause to be plainly, distinctly,
permanently and conspicuously placed, fastened or painted upon each side of
each item of Rolling Stock a legend bearing such words as the Collateral
Agent may request indicating the Lien over and security interest in such
Rolling Stock created hereby in letters not less than one inch in height.
The Grantors may permit the Rolling Stock to be operated within the United
States, but shall not permit the Rolling Stock to be operated outside the
boundaries of the continental United States.
(J) Subject to Section 12, without the prior written
consent of the Required Lenders, no Grantor will (a) sell, lease, exchange,
assign or otherwise dispose of, or grant any option with respect to, any
Collateral, except to the extent permitted by Section 5.07 of the Credit
Agreement, subject to the rights of the Collateral Agent and the Banks
hereunder if an Event of Default shall have occurred and be continuing,
whereupon, in the case of such a sale or exchange, the Security Interests
created hereby in such item (but not in any Proceeds arising from such sale
or exchange) shall cease immediately without any further action on the part
of the Collateral Agent; or (b) create, incur or suffer to exist any Lien
with respect to any Collateral, except for Permitted Liens.
(K) Prior to the Initial Borrowing Date under the Credit
Agreement, each Grantor will cause the Collateral Agent to be named as an
insured party on each insurance policy covering risks relating to any of
its Inventory and Equipment. Each Grantor will deliver to the Collateral
Agent, upon request of the Collateral Agent, the insurance policies for
such insurance or certificates of insurance evidencing such coverage. Each
such insurance policy shall include effective waivers by the insurer of all
claims for insurance premiums against the Collateral Agent or any Lender,
provide for coverage to the Collateral Agent regardless of the breach by
relevant Grantor of any warranty or representation made therein, not be
subject to co-insurance, and provide that no cancellation, termination or
material modification thereof shall be effective until at least 30 days
(or, in the case of non-payment of premiums, at least 10 days) after
receipt by the Collateral Agent of notice thereof.
(L) Each Grantor will, promptly upon request, provide to
the Collateral Agent all information and evidence it may reasonably request
concerning the Collateral to enable the Collateral Agent to enforce the
provisions of this Agreement.
(M) Each Grantor shall notify the Collateral Agent
promptly if it knows, or has reason to know, that any application or
registration relating to any Copyright, Patent or Trademark may become
abandoned. In the event that any Grantor receives notice of or becomes
aware that any right to a Copyright, Copyright License, Patent, Patent
License, Trademark or Trademark License has been infringed, misappropriated
or diluted by a third party, such Grantor shall notify the Collateral Agent
promptly after it learns thereof and shall, unless such Grantor shall
reasonably determine that any such action would be of insufficient economic
value, promptly take such other actions as such Grantor shall reasonably
deem appropriate under the circumstances to protect such Copyright,
Copyright License, Patent, Patent License, Trademark or Trademark License.
Within thirty (30) days after having filed an application for the
registration of any Copyright with the United States Copyright Office or
any Patent or Trademark with the United States Patent and Trademark Office,
or with any similar office or agency in any other country or any political
subdivision thereof, upon request of the Collateral Agent, each Grantor
shall execute and deliver any and all agreements, instruments, documents
and papers the Collateral Agent may request to evidence the Security
Interests in such Copyright, Patent or Trademark and the goodwill and
general intangibles of such Grantor relating thereto or represented
thereby. Each Grantor hereby appoints the Collateral Agent its attorney-
in-fact to execute and file all such writings for the foregoing purposes,
all acts of such attorney being hereby ratified and confirmed; such power,
being coupled with an interest, shall be irrevocable until the Secured
Obligations are paid in full. The Collateral Agent shall provide copies to
each Grantor of any writings in which the Collateral Agent has acted as
attorney-in-fact within 30 days after the execution of such writings.
(N) Not more than four months nor less than 10 days
prior to (i) as to all Collateral, each anniversary of the date hereof
during the term of the Credit Agreement, if requested to do so by the
Collateral Agent acting on the instructions of the Required Lenders, and
(ii) as to the Collateral affected by such action, each date on which it
proposes to take any action contemplated by Section 4(A), each Grantor
shall, at its cost and expense, cause to be delivered to the Lenders an
opinion of counsel, satisfactory to the Collateral Agent, substantially in
the form of Exhibit B to the effect that all financing statements and
amendments or supplements thereto, continuation statements and other
documents required to be recorded or filed in order to perfect and protect
the Security Interests, to the extent such Security Interests can be
perfected by recording or filing, for a period, specified in such opinion,
continuing until a date not earlier than six months from the date of such
opinion, against all creditors of and purchasers from such Grantor have
been filed in each filing office necessary for such purpose and that all
filing fees and taxes, if any, payable in connection with such filings have
been paid in full.
(O) Within five (5) Business Days of entering into,
amending, modifying or terminating any Rolling Stock Lease, each Grantor
will deliver a copy of such Rolling Stock Lease, amendment or modification
or notice of such termination to the Collateral Agent.
(P) From time to time upon request by the Collateral
Agent, each Grantor shall, at its cost and expense, cause to be delivered
to the Lenders an opinion of counsel satisfactory to the Collateral Agent
as to such matters relating to the transactions contemplated hereby as the
Required Lenders may reasonably request.
(Q) This Agreement is made with full recourse to such
Grantor and pursuant to and upon all the warranties, representations,
covenants, and agreements on the part of such Grantor contained herein, in
the Derivatives Obligations Agreements and otherwise in writing in
connection herewith or therewith.
SECTION 5. General Authority
Each Grantor hereby irrevocably appoints the Collateral
Agent its true and lawful attorney, with full power of substitution, in the
name of the Grantors, the Collateral Agent, the Lenders or otherwise, for
the sole use and benefit of the Collateral Agent and the Lenders, but at
such Grantor's expense, to the extent permitted by law to exercise and
subject to the PST Documents, at any time and from time to time while an
Event of Default has occurred and is continuing, all or any of the
following powers with respect to all or any of the Collateral:
i) to demand, sue for, collect, receive and give acquittance for any
and all monies due or to become due thereon or by virtue
thereof,
(ii) to settle, compromise, compound, prosecute or defend any action or
proceeding with respect thereto,
(iii) to sell, transfer, assign or otherwise deal in or with the same or
the proceeds or avails thereof, as fully and effectually as if
the Collateral Agent were the absolute owner thereof, and
(iv) to extend the time of payment of any or all thereof and to make any
allowance and other adjustments with reference thereto;
provided that the Collateral Agent shall give each Grantor not less than
thirty (30) days' prior notice of the time and place of any sale or other
intended disposition of any of the Collateral, except any Collateral which
is perishable or threatens to decline speedily in value or is of a type
customarily sold on a recognized market. The Collateral Agent and each
Grantor agree that such notice constitutes "reasonable notification" within
the meaning of Section 9-504(3) of the UCC.
SECTION 6. Remedies upon Event of Default
(A) If any Event of Default has occurred and is
continuing, the Collateral Agent may exercise on behalf of the Lenders all
rights of a secured party under the UCC (whether or not in effect in the
jurisdiction where such rights are exercised), and, in addition, the
Collateral Agent may, without being required to give any notice, except as
herein provided or as may be required by mandatory provisions of law, (i)
apply cash, if any, then held by it as Collateral as specified in Section 8
and (ii) if there shall be no such cash or if such cash shall be
insufficient to pay all the Secured Obligations in full, sell the
Collateral or any part thereof at public or private sale, for cash, upon
credit or for future delivery, and at such price or prices as the
Collateral Agent may deem satisfactory. The Collateral Agent or any Lender
may be the purchaser of any or all of the Collateral so sold at any public
sale (or, if the Collateral is of a type customarily sold in a recognized
market or is of a type which is the subject of widely distributed standard
price quotations, at any private sale). Each Grantor will execute and
deliver such documents and take such other action as the Collateral Agent
deems necessary or advisable in order that any such sale may be made in
compliance with law. Upon any such sale the Collateral Agent shall have
the right to deliver, assign and transfer to the purchaser thereof the
Collateral so sold. Each purchaser at any such sale shall hold the
Collateral so sold to it absolutely and free from any claim or right of
whatsoever kind, including any equity or right of redemption of any Grantor
which may be waived, and each Grantor, to the extent permitted by law,
hereby specifically waives all rights of redemption, stay or appraisal
which it has or may have under any law now existing or hereafter adopted.
The notice (if any) of such sale required by Section 5 shall (1) in the
case of a public sale, state the time and place fixed for such sale, and
(2) in the case of a private sale, state the day after which such sale may
be consummated. Any such public sale shall be held at such time or times
within ordinary business hours and at such place or places as the
Collateral Agent may fix in the notice of such sale. At any such sale the
Collateral may be sold in one lot as an entirety or in separate parcels, as
the Collateral Agent may determine. The Collateral Agent shall not be
obligated to make any such sale pursuant to any such notice. The
Collateral Agent may, without notice or publication, adjourn any public or
private sale or cause the same to be adjourned from time to time by
announcement at the time and place fixed for the sale, and such sale may be
made at any time or place to which the same may be so adjourned. In the
case of any sale of all or any part of the Collateral on credit or for
future delivery, the Collateral so sold may be retained by the Collateral
Agent until the selling price is paid by the purchaser thereof, but the
Collateral Agent shall not incur any liability in the case of the failure
of such purchaser to take up and pay for the Collateral so sold and, in the
case of any such failure, such Collateral may again be sold upon like
notice. The Collateral Agent, instead of exercising the power of sale
herein conferred upon it, may proceed by a suit or suits at law or in
equity to foreclose the Security Interests and sell the Collateral, or any
portion thereof, under a judgment or decree of a court or courts of
competent jurisdiction.
(B) For the purpose of enforcing any and all rights and
remedies under this Agreement, if any Event of Default has occurred and is
continuing, the Collateral Agent may (i) require each Grantor to, and each
Grantor agrees that it will, at its expense and upon the request of the
Collateral Agent, forthwith assemble all or any part of the Collateral as
directed by the Collateral Agent and make it available at a place
designated by the Collateral Agent which is, in its opinion, reasonably
convenient to the Collateral Agent and such Grantor, whether at the
premises of such Grantor or otherwise, (ii) to the extent permitted by
applicable law, enter, with or without process of law and without breach of
the peace, any premise where any of the Collateral is or may be located,
and without charge or liability to it seize and remove such Collateral from
such premises, (iii) have access to and use each Grantors' books and
records relating to the Collateral and (iv) prior to the disposition of the
Collateral, store or transfer it without charge in or by means of any
storage or transportation facility owned or leased by the relevant Grantor,
process, repair or recondition it or otherwise prepare it for disposition
in any manner and to the extent the Collateral Agent deems appropriate and,
in connection with such preparation and disposition, use without charge any
trademark, trade name, brand name, copyright, patent or technical process
used by the Borrower. The Collateral Agent may also render any or all of
the Collateral unusable at any Grantor's premises and may dispose of such
Collateral on such premises without liability for rent or costs.
(C) Without limiting the generality of the foregoing, if
any Event of Default has occurred and is continuing,
(i) subject to any outstanding licenses or sublicenses
to or by any Grantor, the Collateral Agent may license or
sublicense, whether general, special or otherwise, and whether on
an exclusive or non-exclusive basis, any Copyrights, Patents or
Trademarks included in the Collateral throughout the world for
such term or terms, on such conditions and in such manner as the
Collateral Agent shall in its sole discretion determine;
(ii) the Collateral Agent may (without assuming any
obligations or liability thereunder), at any time and from time to
time, in its sole discretion, enforce (and shall have the
exclusive right to enforce) against any licensee or sublicensee
all rights and remedies of each Grantor in, to and under any
Copyright Licenses, Patent Licenses or Trademark Licenses and take
or refrain from taking any action under any thereof, and each
Grantor hereby releases the Collateral Agent and each of the
Lenders from, and agrees to hold the Collateral Agent and each of
the Lenders free and harmless from and against any claims and
expenses arising out of, any lawful action so taken or omitted to
be taken with respect thereto; and
(iii) upon request by the Collateral Agent, each
Grantor will execute and deliver to the Collateral Agent a power
of attorney, in form and substance satisfactory to the Collateral
Agent, for the implementation of any lease, assignment, license,
sublicense, grant of option, sale or other disposition of a
Copyright, Patent or Trademark or any action related thereto. In
the event of any such disposition pursuant to this Section, each
Grantor shall supply its know-how and expertise relating to the
manufacture and sale of the products bearing Trademarks or the
products or services made or rendered in connection with Patents,
and its customer lists and other records relating to such Patents
and Trademarks and to the distribution of said products, to the
Collateral Agent.
(D) Notwithstanding anything to the contrary herein,
the exercise of any remedies and the taking of any other action by
the Collateral Agent pursuant to this Agreement shall be subject
to the provisions of the PST Documents, and in no event shall the
Collateral Agent exercise any such remedies or take any such other
action to the extent such exercise or action would conflict with
such provisions.
SECTION 7. Limitation on Duty of Collateral Agent in
Respect of Collateral
Beyond the exercise of reasonable care in the custody
thereof, the Collateral Agent shall have no duty as to any Collateral in
its possession or control or in the possession or control of any agent or
bailee or any income thereon or as to the preservation of rights against
prior parties or any other rights pertaining thereto. The Collateral Agent
shall be deemed to have exercised reasonable care in the custody of the
Collateral in its possession if the Collateral is accorded treatment
substantially equal to that which it accords its own property, and shall
not be liable or responsible for any loss or damage to any of the
Collateral, or for any diminution in the value thereof, by reason of the
act or omission of any warehouseman, carrier, forwarding agency, consignee
or other agent or bailee selected by the Collateral Agent in good faith.
SECTION 8. 8. Application of Proceeds
(A) Upon the occurrence and during
the continuance of an Event of Default, the proceeds of any sale of, or
other realization upon, all or any part of the Collateral shall be applied
by the Collateral Agent in the following order of priorities:
first, to payment of the expenses of such sale or other
realization, including reasonable compensation to agents and
counsel for the Collateral Agent, and all expenses, liabilities
and advances incurred or made by the Collateral Agent in
connection therewith, and any other unreimbursed expenses for
which the Collateral Agent or any Lender is to be reimbursed
pursuant to Section 10.03 of the Credit Agreement or Section 12
hereof and unpaid fees owing to the Collateral Agent under the
Credit Agreement;
second, to the ratable payment of unpaid principal of the
Secured Obligations;
third, to the ratable payment of accrued but unpaid
interest on the Secured Obligations in accordance with the
provisions of the Credit Agreement;
fourth, to the ratable payment of all other Secured
Obligations, until all Secured Obligations shall have been paid in
full; and
finally, to payment to the Grantors or their successors
or assigns, or as a court of competent jurisdiction may direct, of
any surplus then remaining from such proceeds.
(B) The Collateral Agent may make distributions hereunder
in cash or in kind or, on a ratable basis, in any combination thereof. The
Collateral Agent shall invest all amounts to be applied to LC Exposures in
Cash Equivalents selected by it and hold such amounts in trust for
application to future drawings under the Letters of Credit notified to it
by the LC Issuing Banks in the order in which such drawings are made. If
the Collateral Agent holds any amounts which were distributable in respect
of LC Exposures after the Letters of Credit have expired and all amounts
payable with respect thereto have been paid, such amounts shall be applied
in the order set forth in subsection (A) above.
(C) In making the determinations and allocations required
by this Section, the Collateral Agent shall have no liability to any of the
Lenders for actions taken in reliance on information supplied by the
Lenders as to the amounts of the Secured Obligations held by them. All
distributions made by the Collateral Agent pursuant to this Section shall
be final, and the Collateral Agent shall have no duty to inquire as to the
application by the Lenders of any amount distributed to them. However, if
at any time the Collateral Agent determines that an allocation or
distribution previously made pursuant to this Section was based on a
mistake of fact (including, without limiting the generality of the
foregoing, mistakes based on any assumption that principal or interest has
been paid by payments which are subsequently recovered from the recipient
thereof through the operation of any bankruptcy, reorganization, insolvency
or other laws or otherwise), the Collateral Agent may in its discretion,
but shall not be obligated to, adjust subsequent allocations and
distributions hereunder so that, on a cumulative basis, the Collateral
Agent and the Lenders receive the distributions to which they would have
been entitled if such mistake of fact had not been made.
(D) All payments required to be made to the (i) Lenders
hereunder shall be made to the Collateral Agent for the account of the
respective Lenders and (ii) Derivatives Creditors hereunder shall be made
to the paying agent under the applicable Derivatives Obligations Agreement
or, in the case of Derivatives Obligations Agreements without a paying
agent, directly to the applicable Derivatives Creditor.
(E) For purposes of applying payments received in
accordance with this Section 8, the Collateral Agent shall be entitled to
rely upon (i) the Agent for a determination (which the Agent agrees to
provide upon request to the Collateral Agent) of the outstanding Loan
Document Obligations and (ii) upon any Derivatives Creditor for a
determination (which each Derivatives Creditor agrees to provide upon
request to the Collateral Agent) of the outstanding Secured Derivatives
Obligations owed to such Derivatives Creditor. Unless it has actual
knowledge (including by way of written notice from a Secured Creditor) to
the contrary, the Agent under the Credit Agreement, in furnishing
information pursuant to the preceding sentence, and the Collateral Agent,
in acting hereunder, shall be entitled to assume that (x) no Loans Document
Obligations other than principal, interest and regularly accruing fees are
owing to any Lender and (y) no Derivatives Obligations Agreements or
Secured Derivatives Obligations with respect thereto are in existence.
(F) Remedies Cumulative. Each and every right, power
and remedy hereby specifically given to the Collateral Agent shall be in
addition to every other right, power and remedy specifically given under
this Agreement, any Derivatives Obligations Agreement or the other Loan
Documents or now or hereafter existing at law or in equity, or by statute
and each and every right, power and remedy whether specifically herein
given or otherwise existing may be exercised from time to time or
simultaneously and as often and in such order as may be deemed expedient by
the Collateral Agent. All such rights, powers and remedies shall be
cumulative and the exercise or the beginning of exercise of one shall not
be deemed a waiver of the right to exercise of any other or others. No
delay or omission of the Collateral Agent in the exercise of any such
right, power or remedy and no renewal or extension of any of the Secured
Obligations shall impair any such right, power or remedy or shall be
construed to be a waiver of any Default or Event of Default or an
acquiescence therein. In the event that the Collateral Agent shall bring
any suit to enforce any of its rights hereunder and shall be entitled to
judgment, then in such suit the Collateral Agent may recover reasonable
expenses, including reasonable attorneys' fees, and the amounts thereof
shall be included in such judgment.
SECTION 9. Existing PST Secured Notes. Notwithstanding
anything to the contrary contained herein (i) so long as any Existing PST
Senior Secured Notes remain outstanding, the Security Interests in any of
the Collateral which has been pledged, or in which a security interest
has been granted, by PST or any of its Subsidiaries to secure the
Existing PST Senior Secured Notes in accordance with the requirements of
the Existing PST Senior Secured Notes Indenture shall be subject to the
prior security interests so created in favor of the holders of the
Existing PST Senior Secured Notes and any application of proceeds
pursuant to Section 8 shall be subject to any prior required application
of proceeds pursuant to the PST Documents, provided that at all times the
security interests created pursuant to the Loan Documents in all
Collateral granted to PST thereunder shall be required to be fully
perfected in accordance with applicable law.
SECTION 10. Concerning the Collateral Agent
The provisions of Article 7 of the Credit Agreement shall
inure to the benefit of the Collateral Agent in respect of this Agreement
and shall be binding upon the parties to the Credit Agreement in such
respect. In furtherance and not in derogation of the rights, privileges
and immunities of the Collateral Agent therein set forth:
(A) The Collateral Agent is authorized to take all such
action as is provided to be taken by it as Collateral Agent
hereunder and all other action reasonably incidental thereto. As
to any matters not expressly provided for herein (including,
without limitation, the timing and methods of realization upon the
Collateral) the Collateral Agent shall act or refrain from acting
in accordance with written instructions from the Required Lenders
or, in the absence of such instructions, in accordance with its
discretion.
(B) The Collateral Agent shall not be responsible for
the existence, genuineness or value of any of the Collateral or
for the validity, perfection, priority or enforceability of the
Security Interests in any of the Collateral, whether impaired by
operation of law or by reason of any action or omission to act on
its part hereunder. The Collateral Agent shall have no duty to
ascertain or inquire as to the performance or observance of any of
the terms of this Agreement by any Grantor.
SECTION 11. 11. Appointment of Co-Collateral Agents
At any time or times, in order to comply with any legal
requirement in any jurisdiction, the Collateral Agent may appoint another
bank or trust company or one or more other persons, either to act as co-
agent or co-agents, jointly with the Collateral Agent, or to act as
separate agent or agents on behalf of the Lenders with such power and
authority as may be necessary for the effectual operation of the provisions
hereof and may be specified in the instrument of appointment (which may, in
the discretion of the Collateral Agent, include provisions for the
protection of such co-agent or separate agent similar to the provisions of
Section 10).
SECTION 12. Expenses
In the event that any Grantor fails to comply with the
provisions of the Credit Agreement or this Agreement, such that the value
of any Collateral or the validity, perfection, rank or value of any
Security Interest is thereby diminished or potentially diminished or put at
risk, the Collateral Agent if requested by the Required Lenders may, but
shall not be required to, effect such compliance on behalf of such Grantor,
and such Grantor shall reimburse the Collateral Agent for the costs thereof
on demand. The Grantors jointly and severally agree that all insurance
expenses and all expenses of protecting, storing, warehousing, appraising,
insuring, handling, maintaining and shipping the Collateral, any and all
excise, property, sales and use taxes imposed by any state, federal or
local authority on any of the Collateral, or in respect of periodic
appraisals and inspections of the Collateral to the extent the same may
reasonably be requested by the Required Lenders from time to time, or in
respect of the sale or other disposition thereof shall be borne and paid by
the Grantors; and if the Grantors fail to promptly pay any portion thereof
when due, the Collateral Agent or any Lender may, at its option, but shall
not be required to, pay the same and charge any Grantor's account therefor,
and the Grantors jointly and severally agree to reimburse the Collateral
Agent or such Lender therefor on demand. All sums so paid or incurred by
the Collateral Agent or any Lender for any of the foregoing and any and all
other sums for which any Grantor may become liable hereunder and all costs
and expenses (including attorneys' fees, legal expenses and court costs)
reasonably incurred by the Collateral Agent or any Lender in enforcing or
protecting the Security Interests or any of their rights or remedies under
this Agreement, shall, together with interest thereon until paid at the
rate applicable to Base Rate Loans plus 2%, be additional Secured
Obligations hereunder.
SECTION 13. Termination of Security Interests;
Release of Collateral. (a) After the termination of the Total Commitment
and all Derivatives Obligations Agreements, when no Note or Letter of
Credit is outstanding and when all Loans and other Obligations (other than
contingent indemnity obligations) have been paid in full, this Agreement
shall terminate (provided that all indemnities set forth herein including,
without limitation, in Section 12 hereof shall survive such termination),
and the Collateral Agent, at the request and expense of the relevant
Grantor, will execute and deliver to such Grantor a proper instrument or
instruments (including Uniform Commercial Code termination statements on
form UCC-3) acknowledging the satisfaction and termination of this
Agreement, and will duly assign, transfer and deliver to such Grantor
(without recourse and without any representation or warranty) such of the
Collateral as may be in the possession of the Collateral Agent and as has
not theretofore been sold or otherwise applied or released pursuant to this
Agreement.
(b) The Collateral Agent shall, at the request of the
relevant Grantor evidence the release of any or all of the Collateral
pursuant to Section 4(J) provided that (x) such release is permitted by the
terms of the Credit Agreement (it being agreed for such purposes that a
release will be deemed "permitted by the terms of the Credit Agreement" if
the proposed transaction constitutes an exception to Section 5.07 of the
Credit Agreement) or otherwise has been approved in writing by the Required
Banks and (y) the proceeds of such Collateral are applied as required
pursuant to the Credit Agreement or any consent or waiver with respect
thereto.
(c) At any time that the relevant Grantor desires that
the Collateral Agent take any action to give effect to any release of
Collateral pursuant to clause (x) of the foregoing Section 13(b), it shall
deliver to the Collateral Agent a certificate signed by an authorized
officer describing the Collateral to be sold and the relevant provision of
Section 5.07 of the Credit Agreement on which it is relying to make such
sale. In the event that any part of the Collateral is released as provided
in the preceding paragraph (b), the Collateral Agent, at the request and
expense of such Grantor, will duly release such Collateral and assign,
transfer and deliver to such Grantor or its designee (without recourse and
without any representation or warranty) such of the Collateral as is then
being (or has been) so sold and as may be in the possession of the
Collateral Agent and has not theretofore been released pursuant to this
Agreement. The Collateral Agent shall have no liability whatsoever to any
Secured Creditor as the result of any release of Collateral by it as
permitted by this Section 13. Upon any release of Collateral pursuant to
Section 13(a) or (b), none of the Secured Creditors shall have any
continuing right or interest in such Collateral, or the proceeds thereof.
SECTION 14. Notices
All notices, communications and distributions hereunder
shall be given in accordance with Section 10.01 of the Credit Agreement.
SECTION 15. Waivers; Non-Exclusive Remedies
No failure on the part of the Collateral Agent to
exercise, and no delay in exercising and no course of dealing with respect
to, any right under this Agreement shall operate as a waiver thereof; nor
shall any single or partial exercise by the Collateral Agent of any right
under the Credit Agreement or this Agreement preclude any other or further
exercise thereof or the exercise of any other right. The rights in this
Agreement and the Credit Agreement are cumulative and are not exclusive of
any other remedies provided by law.
SECTION 16. Successors and Assigns
This Agreement is for the benefit of the Collateral Agent
and the Lenders and their successors and assigns, and in the event of an
assignment of all or any of the Secured Obligations, the rights hereunder,
to the extent applicable to the indebtedness so assigned, may be
transferred with such indebtedness. This Agreement shall be binding on
each Grantor and its successors and assigns.
SECTION 17. Changes in Writing
None of the terms and conditions of this Agreement may be
changed, waived, modified or varied in any manner whatsoever unless in
writing duly signed by the Agent (with the consent of the Required Lenders
or, to the extent required by Section 10.05 of the Credit Agreement, all of
the Lenders) and each Grantor affected thereby (it being understood that
the addition or release of any Grantor hereunder shall not constitute a
change, waiver, modification or variance affecting any Grantor other than
the Borrower and the Grantor so added or released) provided that (i) no
such change, waiver, modification or variance shall be made to Section 8(A)
or this Section 17 without the consent of each Secured Creditor adversely
affected thereby, and (ii) any change, waiver, modification or variance
affecting the rights and benefits of a single Class of Secured Creditors
(and not all Secured Creditors in a like or similar manner) shall require
the written consent of the Requisite Creditors of such Class of Secured
Creditors. For the purpose of this Agreement, the term "Class" shall mean
each class of Secured Creditors, i.e., whether (x) the Lenders as holders
of the Loan Document Obligations or (y) the Derivatives Creditors as
holders of the Secured Derivatives Obligations. For the purpose of this
Agreement, the term "Requisite Creditors" of any Class shall mean each of
(x) with respect to the Loan Document Obligations, the Required Banks and
(y) with respect to the Secured Derivatives Obligations, the holders of at
least a majority of all obligations outstanding from time to time under the
Derivatives Obligations Agreements.
SECTION 18. New York Law
This Agreement shall be construed in accordance with and
governed by the laws of the State of New York, except as otherwise required
by mandatory provisions of law and except to the extent that remedies
provided by the laws of any jurisdiction other than New York are governed
by the laws of such jurisdiction.
SECTION 19. Severability
If any provision hereof is invalid or unenforceable in
any jurisdiction, then, to the fullest extent permitted by law, (i) the
other provisions hereof shall remain in full force and effect in such
jurisdiction and shall be liberally construed in favor of the Collateral
Agent and the Lenders in order to carry out the intentions of the parties
hereto as nearly as may be possible; and (ii) the invalidity or
unenforceability of any provision hereof in any jurisdiction shall not
affect the validity or enforceability of such provision in any other
jurisdiction.
SECTION 20. Counterparts
This Agreement may be executed in any number of
counterparts, all of which taken together shall constitute one and the same
instrument, and any of the parties hereto may execute this Agreement by
signing any such counterpart.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed by their respective authorized officers as of
the day and year first above written.
Tekni-Plex, Inc.
By: /s/ Dr. F. Patrick Smith
_________________________________
Title: CEO
OZITE CORPORATION
By: /s/ Dr. F. Patrick Smith
_________________________________
Title: CEO
PTI PLASTICS, INC.
By: /s/ Dr. F. Patrick Smith
_________________________________
Title: CEO
PLASTIC SPECIALTIES AND TECHNOLOGIES, INC.
By: /s/ Dr. F. Patrick Smith
_________________________________
Title: CEO
BURLINGTON RESINS, INC.
By: /s/ Dr. F. Patrick Smith
_________________________________
Title: CEO
PLASTIC SPECIALTIES AND
TECHNOLOGIES INVESTMENTS, INC.
By: /s/ Dr. F. Patrick Smith
_________________________________
Title: CEO
PURE TECH APR, INC.
By: /s/ Dr. F. Patrick Smith
_________________________________
Title: CEO
MULTI CONTAINER RECYCLER, INC.
By: /s/ Dr. F. Patrick Smith
_________________________________
Title: CEO
COAST RECYCLING NORTH, INC.
By: /s/ Dr. F. Patrick Smith
_________________________________
Title: CEO
DISTRIBUTERS RECYCLING, INC.
By: /s/ Dr. F. Patrick Smith
_________________________________
Title: CEO
REI DISTRIBUTORS, INC.
By: /s/ Dr. F. Patrick Smith
_________________________________
Title: CEO
PURE TECH RECYCLING OF CALIFORNIA
By: /s/ Dr. F. Patrick Smith
_________________________________
Title: CEO
ALUMET SMELTING CORPORATION
By: /s/ Dr. F. Patrick Smith
_________________________________
Title: CEO
CONCONRE CORP.
By: /s/ Dr. F. Patrick Smith
_________________________________
Title: CEO
MORGAN GUARANTY TRUST COMPANY
OF NEW YORK, as Collateral Agent
By: /s/ Stephen Hannan
_________________________________
Title: Vice President
EXHIBIT A
TO SECURITY
AGREEMENT
PERFECTION CERTIFICATE
The undersigned, the chief executive officers and chief
legal officers of Tekni-Plex, Inc., a Delaware corporation (the "Borrower")
and Dolco Packaging Corp., a Delaware corporation (together with the
Borrower, the "Grantors" and each "Grantor"), hereby certify with reference
to the Security Agreement dated as of March 3, 1998 between the Grantors
and Morgan Guaranty Trust Company of New York, as Collateral Agent (terms
defined therein being used herein as therein defined), to the Collateral
Agent and each Lender as follows:
1. Names. (a) The exact corporate name of each Grantor
as it appears in its certificate of incorporation is as follows:
(b) Set forth below is each other corporate name each
Grantor has had since its organization, together with the date of the
relevant change:
(c) Except as set forth in Schedule 1, no Grantor has
changed its identity or corporate structure in any way within the past five
years. To the extent that any Grantor has changed its identity or
corporate structure within the past 5 years pursuant to a merger,
consolidation, acquisition or other change in form, Schedule 1 sets forth
the information required by paragraphs 1, 2 and 3 hereof as to each
acquiree or constituent party to such merger or consolidation, unless such
acquiree or constituent party was (i) transitory in nature, (ii) held no
assets (other than on a temporary basis for the sole purpose of
consummating such acquisition, merger or consolidation) and (iii) conducted
no activities. No such change in form has occurred with respect to any
Grantor since _______.
[Changes in identity or corporate structure would include
mergers, consolidations and acquisitions, as well as any change in the
form, nature or jurisdiction of corporate organization. If any such change
has occurred, include in Schedule 1 the information required by paragraphs
1, 2 and 3 of this certificate as to each acquiree or constituent party to
a merger or consolidation.]
(d) The following is a list of all other names
(including trade names or similar appellations) used by each Grantor or any
of its divisions or other business units at any time during the past five
years:
2. Current Locations. (a) The chief executive office
of each Grantor is located at the following address:
Mailing
Address County State
(b) The following are all the locations where each Grantor
maintains any books or records relating to any Accounts:
Mailing
Name Address County State
(c) The following are all the places of business of each
Grantor not identified above:
Mailing
Name Address County State
(d) The following are all the locations where each Grantor
maintains any Inventory not identified above:
Mailing
Name Address County State
(e) The following are the names and addresses of all Persons
other than the Grantors which have possession of any of the Inventory of any
Grantor:
Mailing
Name Address County State
3. Prior Locations. (a) Set forth below is the information
required by subparagraphs (a), (b) and (c) of paragraph 2 with respect to
each location or place of business maintained by each Grantor at any time
during the past five years:
(b) Set forth below is the information required by
subparagraphs (d) and (e) of paragraph 2 with respect to each location or
bailee where or with whom Inventory has been lodged at any time during the
past four months:
4. Unusual Transactions. Except as set forth in
Schedule 4, all Accounts have been originated by a Grantor and all
Inventory and Equipment has been acquired by a Grantor in the ordinary
course of its business.
5. File Search Reports. Attached hereto as Schedule
5(A) is a true copy of a file search report from the Uniform Commercial
Code filing officer in each jurisdiction identified in paragraph 2 or 3
above with respect to each name set forth in paragraph 1 above. Attached
hereto as Schedule 5(B) is a true copy of each financing statement or other
filing identified in such file search reports.
6. UCC Filings. A duly signed financing statement on
Form UCC-1 in substantially the form of Schedule 6(A) hereto has been duly
filed in the Uniform Commercial Code filing office in each jurisdiction
identified in paragraph 2 hereof. Attached hereto as Schedule 6(B) is a
true copy of each such filing duly acknowledged by the filing officer.
7. Schedule of Filings. Attached hereto as Schedule 7
is a schedule setting forth filing information with respect to the filings
described in paragraph 6 above.
8. Filing Fees. All filing fees and taxes payable in
connection with the filings described in paragraph 6 above have been paid.
IN WITNESS WHEREOF, we have hereunto set our hands this [ ]
day of [ ], 1998.
----------------------------
Title:
----------------------------
Title:
SCHEDULE 6(A)
Description of Collateral
All accounts, chattel paper, contract rights, general
intangibles, inventory, equipment and documents, now owned or hereafter
acquired, wherever located, and all proceeds thereof.
SCHEDULE 7
SCHEDULE OF FILINGS
Debtor Filing Officer File Number Date of Filing1
[TO BE PROVIDED BY BORROWER]
____________
1 Indicate lapse date, if other than fifth anniversary.
EXHIBIT B
TO SECURITY
AGREEMENT
1. The Security Agreement creates a valid security interest,
for the benefit of the Secured Creditors, in all of each Grantor's right,
title and interest in the Collateral to the extent that the Uniform
Commercial Code (the "UCC") is applicable to the creation of a security
interest therein and, to the extent provided in Section 9-306 of the UCC,
all proceeds thereof.
2. The filing of the financing statements described as
items ________ in the offices designated in Schedule A are the only
filings, recordings and registrations necessary to perfect, publish notice
of and preserve the security interest in the Collateral covered by the UCC
(the "UCC Collateral") created by the Security Agreement to the extent such
security interest may be perfected by filing under the UCC, and no further
filing or recording of any document or instrument or other action will be
required so to perfect and preserve such security interest, except that (i)
continuation statements relating to said financing statements must be filed
within ______________ [state time period] and (ii) additional filings may
be necessary with respect to the UCC Collateral if any Grantor changes its
name, identity or corporate structure or the jurisdiction in which its
places of business or the UCC Collateral are located.
3. The Liens and security interests created by the Security
Agreement on or in the UCC Collateral will validly secure the payment of
all future advances pursuant to the Credit Agreement, whether or not at the
time such advances are made an Event of Default or other event not within
the control of the Lenders has relieved or may relieve the Lenders from
their obligations to make such advances, and are perfected to the extent
set forth in paragraph 2 above with respect to such future advances.
EXHIBIT C
TO SECURITY
AGREEMENT
PATENT SECURITY AGREEMENT
(PATENT APPLICATIONS AND PATENT LICENSES)
WHEREAS, Tekni-Plex, Inc., a Delaware corporation (herein
referred to as "Grantor") owns the Patents (as defined in the Security
Agreement referred to below) (including design patents and applications
for patents) listed on Schedule 1 annexed hereto, and is a party to the
Patent Licenses (as defined in the Security Agreement referred to below)
identified in Schedule 1 annexed hereto;
WHEREAS, Grantor, certain lenders and Morgan Guaranty
Trust Company of New York, as Agent for such lenders, are parties to a
Credit Agreement of even date herewith (as the same may be amended and in
effect from time to time among said parties and such lenders (the
"Lenders") as may from time to time be parties thereto, the "Credit
Agreement");
WHEREAS, pursuant to the terms of the Security Agreement
of even date herewith (as said Agreement may be amended and in effect from
time to time, the "Security Agreement") between Grantor, other grantors
party thereto and Morgan Guaranty Trust Company of New York, as Collateral
Agent for the secured parties referred to therein (in such capacity,
together with its successors in such capacity, "Grantee"), Grantor has
granted to Grantee for the benefit of such secured parties a continuing
security interest in substantially all the assets of Grantor, including all
right, title and interest of Grantor in, to and under the Patent Collateral
(as defined herein) whether now owned or existing or hereafter acquired or
arising, to secure the Secured Obligations (as defined in the Security
Agreement);
NOW, THEREFORE, for good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, Grantor does
hereby grant to Grantee a continuing security interest in all of Grantor's
right, title and interest in, to and under the following (all of the
following items or types of property being herein collectively referred to
as the "Patent Collateral"), whether now owned or existing or hereafter
acquired or arising:
(i) each Patent (including each design patent and patent
application), including, without limitation, each Patent
(including each design patent and patent application) referred to
in Schedule 1 annexed hereto;
(ii) each Patent License, including, without limitation,
each Patent License identified in Schedule 1 annexed hereto; and
(iii) all proceeds of and revenues from the foregoing,
including, without limitation, all proceeds of and revenues from
any claim by Grantor against third parties for past, present or
future infringement of any Patent (including any design patent),
including, without limitation, any Patent referred to in Schedule
1 annexed hereto (including, without limitation, any such Patent
issuing from any application referred to in Schedule 1 annexed
hereto), and all rights and benefits of Grantor under any Patent
License, including, without limitation, any Patent License
identified in Schedule 1 annexed hereto.
Grantor hereby irrevocably constitutes and appoints
Grantee and any officer or agent thereof, with full power of substitution,
as its true and lawful attorney-in-fact with full power and authority in
the name of Grantor or in its name, from time to time, in Grantee's
discretion, so long as any Event of Default (as defined in the Credit
Agreement) has occurred and is continuing, to take with respect to the
Patent Collateral any and all appropriate action which Grantor might take
with respect to the Patent Collateral and to execute any and all documents
and instruments which may be necessary or desirable to carry out the terms
of this Patent Security Agreement and to accomplish the purposes hereof.
Except to the extent not prohibited in the Security
Agreement, Grantor agrees not to sell, license, exchange, assign or
otherwise transfer or dispose of, or grant any rights with respect to, or
mortgage or otherwise encumber, any of the foregoing Patent Collateral.
This security interest is granted in conjunction with the
security interests granted to Grantee pursuant to the Security Agreement.
Grantor does hereby further acknowledge and affirm that the rights and
remedies of Grantee with respect to the security interest in the Patent
Collateral made and granted hereby are more fully set forth in the Security
Agreement, the terms and provisions of which are incorporated by reference
herein as if fully set forth herein.
IN WITNESS WHEREOF, Grantor has caused this Patent
Security Agreement to be duly executed by its officer thereunto duly
authorized as of the ____ day of ____________, 19__.
Tekni-Plex, Inc.
By:_________________________________
Title:
Acknowledged:
MORGAN GUARANTY TRUST
COMPANY OF NEW YORK,
as Agent
By:_________________________________
Title:
SCHEDULE 1
TO PATENT
SECURITY AGREEMENT
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
I, ______________________, a Notary Public in and for said
County, in the State aforesaid, DO HEREBY CERTIFY, that
_________________________, _______________ of [NAME OF COMPANY], personally
known to me to be the same person whose name is subscribed to the foregoing
instrument as such _________________, appeared before me this day in person
and acknowledged that (s)he signed, executed and delivered the said
instrument as her/his own free and voluntary act and as the free and
voluntary act of said Company, for the uses and purposes therein set forth
being duly authorized so to do.
GIVEN under my hand and Notarial Seal this ___ day of
_______________, 19__.
[Seal]
- -----------------------------
Signature of notary public
My Commission expires __________
SCHEDULE 1
TO PATENT
SECURITY AGREEMENT
<TABLE>
<CAPTION>
PATENTS
A. U.S. Patents and Design Patents
Patent Patent No. Issue Date
- ------ ---------- ----------
<S> <C>
Plastic Foam Overwrap Tray 5,503,858 2/4/96
Molded Plastic Overwrap Tray 5,393,539 2/28/95
Molded Plastic Overwrap Tray 5,018,623 5/28/91
Hinged Container for Protecting 4,375,262 1/3/81
Lightbulbs
Egg Carton Container 5,494,164 2/27/97
Trays for Holding Food Products 5,597,073 1/28/97
Food Tray (Design) D360,808 8/1/95
Method for Blending Diverse Blowing 5,423,607 6/13/95
Agents
Food Tray (Design) D358,965 6/6/95
Four Cell Food Tray (Design) D353,765 12/27/94
Packaging Tray with Thick, 5,265,756 11/20/93
Curvilinear Perimeter Edges
Method for Forming an Opening in a 5,256,356 10/26/93
Container
Spring-Oriented Rotary Shear Key for 5,162,123 11/10/92
Use in a Mold
Mold Containing an Adjustable Key 5,085,571 2/4/92
Food Container (Design) D322,757 12/31/91
Egg Carton (Design) D308,822 6/26/90
Blowing Agent for Expandable 4,923,654 5/8/90
Polymeric Foams
Produce Container (Design) D307,387 4/24/90
Snaplock Thermoformed Container 4,915,251 4/10/90
Egg Carton (Design) D306,138 2/20/90
Method for Die Cutting Plastic Foam 4,856,393 8/15/89
Packaging Container (Design) D296,192 6/14/88
Molding Apparatus Having a Vented 4,419,068 12/6/83
Female Mold Member for Forming Foamed
Egg Cartons
Foam Egg Carton 4,382,536 5/10/83
Bowl and Cover Assembly 4,341,324 7/27/82
Egg Carton (Design) D256,667 9/2/80
Shear Molding of Reinforced Latch 4,155,692 5/22/79
Shear Molding of Reinforced Latch 4,108,941 8/22/78
B. Patents Pending
Patent Serial No. Filing Date
Apparatus and Method for Blending 421128 4/12/95
Diverse Blowing Agents
Vented Bowl and Cover Assembly 660980 6/12/96
</TABLE>
EXHIBIT D
TO SECURITY
AGREEMENT
TRADEMARK SECURITY AGREEMENT
(TRADEMARKS, TRADEMARK REGISTRATIONS, TRADEMARK
APPLICATIONS AND TRADEMARK LICENSES)
WHEREAS, Tekni-Plex, Inc., a Delaware corporation (herein
referred to as "Grantor"), owns the Trademarks (as defined in the Security
Agreement referred to below) listed on Schedule 1 annexed hereto, and is a
party to the Trademark Licenses (as defined in the Security Agreement
referred to below) identified in Schedule 1 annexed hereto;
WHEREAS, Grantor, certain Lenders and Morgan Guaranty Trust
Company of New York, as Agent for such Lenders, are parties to a Credit
Agreement of even date herewith (as the same may be amended and in effect from
time to time among said parties and such lenders (the "Lenders") as may from
time to time be parties thereto, the "Credit Agreement");
WHEREAS, pursuant to the terms of the Security Agreement of
even date herewith (as said Agreement may be amended and in effect from time to
time, the "Security Agreement") between Grantor and Morgan Guaranty Trust
Company of New York as Collateral Agent for the secured parties referred to
therein (in such capacity, together with its successors in such capacity,
"Grantee"), Grantor has granted to Grantee for the benefit of such secured
parties a security interest in substantially all the assets of Grantor,
including all right, title and interest of Grantor in, to and under the
Trademark Collateral (as defined herein), whether now owned or existing or
hereafter acquired or arising, to secure the Secured Obligations (as defined in
the Security Agreement);
NOW, THEREFORE, for good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, Grantor does hereby
grant to Grantee a continuing security interest in all of Grantor's right, title
and interest in, to and under the following (all of the following items or types
of property being herein collectively referred to as the "Trademark
Collateral"), whether now owned or existing or hereafter acquired or arising:
(i) each Trademark, including, without limitation, each
Trademark application referred to in Schedule 1 annexed hereto, and all
of the goodwill of the business connected with the use of, or
symbolized by, each such Trademark;
(ii) each Trademark License, including, without limitation, each
Trademark License identified in Schedule 1 annexed hereto, and all of
the goodwill of the business connected with the use of, or symbolized
by, each Trademark licensed pursuant thereto; and
(iii) all proceeds of and revenues from the foregoing, including,
without limitation, all proceeds of and revenues from any claim by
Grantor against third parties for past, present or future unfair
competition with, or violation of intellectual property rights in
connection with or injury to, or infringement or dilution of, any
Trademark, including, without limitation, any Trademark referred to in
Schedule 1 hereto, and all rights and benefits of Grantor under any
Trademark License, including, without limitation, any Trademark License
identified in Schedule 1 hereto, or for injury to the goodwill
associated with any of the foregoing.
Grantor hereby irrevocably constitutes and appoints Grantee
and any officer or agent thereof, with full power of substitution, as its true
and lawful attorney-in-fact with full power and authority in the name of Grantor
or in its name, from time to time, in Grantee's discretion, so long as any Event
of Default (as defined in the Credit Agreement) has occurred and is continuing,
to take with respect to the Trademark Collateral any and all appropriate action
which Grantor might take with respect to the Trademark Collateral and to execute
any and all documents and instruments which may be necessary or desirable to
carry out the terms of this Trademark Security Agreement and to accomplish the
purposes hereof.
Except to the extent not prohibited in the Security Agreement,
Grantor agrees not to sell, license, exchange, assign or otherwise transfer or
dispose of, or grant any rights with respect to, or mortgage or otherwise
encumber, any of the foregoing Trademark Collateral.
This security interest is granted in conjunction with the
security interests granted to Grantee pursuant to the Security Agreement.
Grantor does hereby further acknowledge and affirm that the rights and remedies
of Grantee with respect to the security interest in the Trademark Collateral
made and granted hereby are more fully set forth in the Security Agreement, the
terms and provisions of which are incorporated by reference herein as if fully
set forth herein.
IN WITNESS WHEREOF, Grantor has caused this Trademark Security
Agreement to be duly executed by its officer thereunto duly authorized as of the
____ day of __________, 19__.
Tekni-Plex, Inc.
By:___________________________
Title:
Acknowledged:
MORGAN GUARANTY TRUST
COMPANY OF NEW YORK,
as Agent
By:_________________________
Title:
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
I, ______________________, a Notary Public in and for said
County, in the State aforesaid, DO HEREBY CERTIFY, that
_________________________, _______________ of [NAME OF COMPANY], personally
known to me to be the same person whose name is subscribed to the foregoing
instrument as such _________________, appeared before me this day in person and
acknowledged that (s)he signed, executed and delivered the said instrument as
her/his own free and voluntary act and as the free and voluntary act of said
Company, for the uses and purposes therein set forth being duly authorized so to
do.
GIVEN under my hand and Notarial Seal this ___ day of
_______________, 19__.
[Seal]
- -----------------------------
Signature of notary public
My Commission expires __________
<PAGE>
Schedule 1
to Trademark Security Agreement
Page 2
Schedule 1
TO TRADEMARK
SECURITY AGREEMENT
U.S. TRADEMARKS AND TRADEMARK REGISTRATIONS2
A. U.S. Trademarks and Trademark Registrations
Mark Reg. No. Reg. Date
FRANGISEAL 1,965,749 4/2/96
TEKNISEAL 1,316,952 1/29/85
TEKNI PLEX and Design 1,316,950 1/29/85
FOAMSEAL 926,056 12/28/71
SARASEAL 921,959 10/12/71
KRAFTSEAL 913,546 6/8/71
SOLVSEAL 913,545 6/8/71
VAPOSEAL S 913,544 6/8/71
VINYLSEAL 909,590 3/9/71
DURAPREG 750,589 6/4/63
VAPOSEAL 647,209 6/15/57
BLACKOL 638,066 12/4/56
POUCH PAK 613,180 9/27/55
KOOL-PAK 1,245,310 7/12/83
B. U.S. Trademark Applications
Mark Application No. Filing Date
TEKNIFLEX 75/154,629 8/22/96
SUNNY DAY 74-715,751 8/15/95
(Notice of Allowance - 8/7/96; Notice of Allowance withdrawn - 8/7/96)
<PAGE>
Schedule E
Page 3
Schedule E
COPYRIGHT SECURITY AGREEMENT
(COPYRIGHTS, COPYRIGHT REGISTRATIONS, COPYRIGHT
APPLICATIONS AND COPYRIGHT LICENSES)
WHEREAS, _______________, a [__________] corporation (herein
referred to as "Grantor") owns the Copyrights (as defined in the Security
Agreement referred to below) listed on Schedule 1 annexed hereto, and is a party
to the Copyright Licenses (as defined in the Security Agreement referred to
below) identified in Schedule 1 annexed hereto;
WHEREAS, Grantor, [Tekni-Plex, Inc.,] certain banks and Morgan
Guaranty Trust Company of New York, as Agent for such lenders, are parties to a
Credit Agreement of even date herewith (as the same may be amended and in effect
from time to time among said parties and such banks (the "Banks") as may from
time to time be parties thereto, the "Credit Agreement");
WHEREAS, pursuant to the terms of the Security Agreement of
even date herewith (as said Agreement may be amended and in effect from time to
time, the "Security Agreement") between Grantor and Morgan Guaranty Trust
Company of New York, as Collateral Agent for the secured parties referred to
therein (in such capacity, together with its successors in such capacity, the
"Grantee"), Grantor has granted to Grantee for the benefit of such secured
parties a security interest in substantially all the assets of the Grantor,
including all right, title and interest of Grantor in, to and under the
Copyright Collateral (as defined herein), whether now owned or existing or
hereafter acquired or arising, to secure the Secured Obligations (as defined in
the Security Agreement);
NOW, THEREFORE, for good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, Grantor does hereby
grant to Grantee a continuing security interest in all of Grantor's right, title
and interest in, to and under the following (all of the following items or types
of property being herein collectively referred to as the "Copyright
Collateral"), whether now owned or existing or hereafter acquired or arising:
(i) each Copyright, including, without limitation, each
Copyright referred to in Schedule 1 annexed hereto;
(ii) each Copyright License, including, without limitation, each
Copyright License identified in Schedule 1 annexed hereto; and
(iii) all proceeds of and revenues from the foregoing, including,
without limitation, all proceeds of and revenues from any claim by
Grantor against third parties for past, present or future infringement
of any Copyright, including, without limitation, any Copyright referred
to in Schedule 1 annexed hereto, and all rights and benefits of Grantor
under any Copyright License, including, without limitation, any
Copyright License identified in Schedule 1 annexed hereto.
Grantor hereby irrevocably constitutes and appoints Grantee
and any officer or agent thereof, with full power of substitution, as its true
and lawful attorney-in-fact with full power and authority in the name of Grantor
or in its name, from time to time, in Grantee's discretion, so long as any Event
of Default (as defined in the Credit Agreement) has occurred and is continuing,
to take with respect to the Copyright Collateral any and all appropriate action
which Grantor might take with respect to the Copyright Collateral and to execute
any and all documents and instruments which may be necessary or desirable to
carry out the terms of this Copyright Security Agreement and to accomplish the
purposes hereof.
Except to the extent not prohibited in the Security Agreement,
Grantor agrees not to sell, license, exchange, assign or otherwise transfer or
dispose of, or grant any rights with respect to, or mortgage or otherwise
encumber, any of the foregoing Copyright Collateral.
This security interest is granted in conjunction with the
security interests granted to Grantee pursuant to the Security Agreement.
Grantor does hereby further acknowledge and affirm that the rights and remedies
of Grantee with respect to the security interest in the Copyright Collateral
made and granted hereby are more fully set forth in the Security Agreement, the
terms and provisions of which are incorporated by reference herein as if fully
set forth herein.
IN WITNESS WHEREOF, Grantor has caused this Copyright Security
Agreement to be duly executed by its officer thereunto duly authorized as of the
____ day of _______, 19__.
[COMPANY]
By:___________________________
Title:
Acknowledged:
MORGAN GUARANTY TRUST
COMPANY OF NEW YORK,
as Agent
By:_________________________
Title:
<PAGE>
Schedule E
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK)
I, ______________________, a Notary Public in and for said
County, in the State aforesaid, DO HEREBY CERTIFY, that
_________________________, _______________ of [NAME OF COMPANY], personally
known to me to be the same person whose name is subscribed to the foregoing
instrument as such _________________, appeared before me this day in person and
acknowledged that (s)he signed, executed and delivered the said instrument as
her/his own free and voluntary act and as the free and voluntary act of said
Company, for the uses and purposes therein set forth being duly authorized so to
do.
GIVEN under my hand and Notarial Seal this ___ day of
_______________, 19__.
[Seal]
- -----------------------------
Signature of notary public
My Commission expires __________
<PAGE>
Schedule 1
TO COPYRIGHT
SECURITY AGREEMENT
COPYRIGHTS AND COPYRIGHT REGISTRATION
Registration No. Reg. Date Title
COPYRIGHT APPLICATIONS
Serial No. Date Filed Title
COPYRIGHT LICENSES
Name of Parties Date of Subject
Agreement Licensor/Licensee Agreement Matter
PURETEC CORPORATION
By: /s/ Dr. F. Patrick Smith
------------------------
Dr. F. Patrick Smith
Title: CEO
2 To be updated.
EXHIBIT E
[CONFORMED AS EXECUTED]
PLEDGE AGREEMENT
AGREEMENT dated as of March 3, 1998 between TEKNI-PLEX, INC.
(with its successors, the "Borrower", and, together with any other Person which
becomes a Grantor pursuant to Section 3(B), the "Grantors" and each a "Grantor")
and MORGAN GUARANTY TRUST COMPANY OF NEW YORK, as Agent (with its successors in
such capacity, the "Pledgee").
W I T N E S S E T H :
WHEREAS, the Borrower, certain guarantors (the "Guarantors"),
certain lenders (the "Lenders") and Morgan Guaranty Trust Company of New York,
as Agent for such Lenders, are parties to a Credit Agreement of even date
herewith (as the same may be amended from time to time, the "Credit Agreement");
and
WHEREAS, in order to induce said Lenders and Morgan Guaranty
Trust Company of New York, as Agent for such Lenders, to enter into the Credit
Agreement, each Grantor has agreed to grant a continuing security interest in
and to the Collateral (as hereafter defined) to secure its obligations under the
Credit Agreement and the obligations of the Borrower under the Notes issued
pursuant thereto;
WHEREAS, the Borrower may from time to time be a party to one
or more agreements with respect to Derivatives Obligations (each such agreement
with respect to Derivatives Obligations with a Derivatives Creditor (as defined
below), a "Derivatives Obligations Agreement") with any Lender or Lenders or an
affiliate of a Lender (even if any such Lender ceases to be a Lender under the
Credit Agreement for any reason) and in each case their subsequent assigns
(collectively, the "Derivatives Creditors" and together with the Lenders and the
Agent, the "Creditors");
NOW, THEREFORE, in consideration of the premises and other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
Section 1. Definitions.
Terms defined in the Credit Agreement and not otherwise
defined herein have, as used herein, the respective meanings provided for
therein. The following additional terms, as used herein, have the following
respective meanings:
"Class" has the meaning assigned to such term in Section 21.
"Collateral" has the meaning assigned to such term in Section
3(A).
"Issuer" means (i) each of the Subsidiaries listed on Schedule
I hereto and (ii) any other Person which becomes a Domestic Subsidiary after the
date of this Agreement.
"Pledged Instruments" means (i) all intercompany notes listed
on Schedule I hereto and (ii) any instrument required to be pledged to the
Pledgee pursuant to Section 3(B).
"Pledged Securities" means the Pledged Instruments and the
Pledged Stock.
"Pledged Stock" means (i) the Subsidiaries Shares and (ii) any
other capital stock required to be pledged to the Pledgee pursuant to Section
3(B).
"PST Collateral" means all Collateral subject to the PST
Documents.
"PST Documents" means the Existing PST Senior Secured Notes
Indenture, the Existing PST Senior Secured Notes Indenture Supplement, the
Existing PST Senior Notes Collateral Documents and the Existing PST Senior
Secured Notes Collateral Documents Amendments.
"Requisite Creditors" has the meaning ascribed to such term in
Section 21.
"Secured Obligations" means (i) the full and prompt payment
when due (whether at stated maturity, by acceleration or otherwise) of all
obligations (including obligations which, but for the automatic stay under
Section 362(a) of the Bankruptcy Code, would become due) and liabilities of
each Grantor, now existing or hereafter incurred under any Loan Document to
which it is a party (all such obligations and liabilities under this clause
(i) being herein collectively called the "Loan Document Obligations");
(ii) the full and prompt payment when due (whether at the stated maturity,
by acceleration or otherwise) of all obligations (including obligations
which, but for the automatic stay under Section 362(a) of the Bankruptcy
Code, would become due) and liabilities of each Grantor, now existing or
hereafter incurred under, arising out of or in connection with any
Derivatives Obligations Agreement designated by such Grantor and the
related Derivatives Creditor as a "Secured Derivatives Obligations
Agreement", including all obligations, if any, under a Guaranty in respect
of any Derivatives Obligations Agreement (all such obligations and
indebtedness under this clause (ii) being herein collectively called the
"Secured Derivatives Obligations"); (iii) any and all sums advanced by the
Pledgee order to preserve the Collateral or preserve its security interest
in the Collateral in accordance with Section 11; (iv) in the event of any
proceeding for the collection or enforcement of any indebtedness,
obligations, or liabilities of each Grantor referred to in clauses (i),
(ii) and (iii) above after an Event of Default shall have occurred and be
continuing, the reasonable expenses of re-taking, holding, preparing for
sale or lease, selling or otherwise disposing of or realizing on the
Collateral, or of any exercise by the Pledgee of its rights hereunder,
together with reasonable attorneys' fees and court costs; and (v) all
amounts paid by any Indemnitee as to which such Indemnitee has the right to
reimbursement under Section 11 of this Agreement.
"Security Interests" means the security interests in the
Collateral granted hereunder securing the Secured Obligations.
"Subsidiaries Shares" means all shares of capital stock of the
Subsidiaries listed on Schedule I hereto.
Unless otherwise defined herein, or unless the context
otherwise requires, all terms used herein which are defined in the New York
Uniform Commercial Code as in effect on the date hereof shall have the meanings
therein stated.
Section 2. Representations and Warranties.
Each Grantor represents and warrants as follows:
(A) Title to Pledged Securities. The Grantors own all of the
Pledged Securities, free and clear of any Liens other than the Security
Interests. The Pledged Stock includes all of the issued and outstanding capital
stock of each Issuer owned by the Grantors. All of the Pledged Stock has been
duly authorized and validly issued, and is fully paid and non-assessable, and
is subject to no options to purchase or similar rights of any Person. No
Grantor is or will become a party to or otherwise bound by any agreement, other
than this Agreement, which restricts in any manner the rights of any present or
future holder of any of the Pledged Securities with respect thereto.
(B) Validity, Perfection and Priority of Security Interests.
Upon the delivery of the Pledged Instruments and certificates representing the
Pledged Stock to the Pledgee in accordance with Section 4 hereof, the Pledgee
will have valid and perfected security interests in the Collateral subject to
no prior Lien (except with respect to any outstanding Existing PST Senior
Secured Notes). No registration, recordation or filing with any governmental
body, agency or official is required in connection with the execution or
delivery of this Agreement or necessary for the validity or enforceability
hereof or for the perfection or enforcement of the Security Interests. Neither
the Borrower nor any of its Subsidiaries has performed or, subject to
bankruptcy, insolvency, reorganization and other laws relating to the rights or
relief of debtors, will perform any acts which might prevent the Pledgee from
enforcing any of the terms and conditions of this Agreement or which would
limit the Pledgee in any such enforcement.
(C) UCC Filing Locations. The chief executive office of the
Borrower and each of the Guarantors is located at its address set forth on the
signature pages of the Credit Agreement. Under the Uniform Commercial Code as
in effect in the State in which such office is located, no local filing is
required to perfect a security interest in collateral consisting of general
intangibles.
Section 3. The Security Interests.
In order to secure the full and punctual payment of the
Secured Obligations in accordance with the terms thereof, and to secure the
performance of all the obligations of the Grantors hereunder:
(A) Each Grantor hereby assigns and pledges to and with the
Pledgee for the benefit of the Lenders and grants to the Pledgee for the
benefit of the Lenders security interests in the Pledged Securities, and all of
its rights and privileges with respect to the Pledged Securities, and all
income and profits thereon, and all interest, dividends and other payments and
distributions with respect thereto, and all proceeds of the foregoing (the
"Collateral"). Contemporaneously with the execution and delivery hereof, the
Borrower is delivering the intercompany notes constituting the Pledged
Instruments and certificates representing the Subsidiaries Shares in pledge
hereunder other than any such Pledged Instruments or certificates subject to
the PST Documents.
(B) In the event that any Person becomes an Issuer, or any
Issuer at any time issues any additional or substitute shares of capital stock
of any class to a Grantor, or issues any substitute note, or owes any other
Debt to a Grantor evidenced by an instrument, the relevant Grantor will,
subject to the provisions of the PST Documents, immediately pledge and deposit
with the Pledgee certificates representing all such shares and such note or an
instrument evidencing such other Debt as additional security for the Secured
Obligations. All such shares, notes and instruments constitute Pledged
Securities and are subject to all provisions of this Agreement.
(C) The Security Interests are granted as security only and
shall not subject the Pledgee or any Lender to, or transfer or in any way
affect or modify, any obligation or liability of the Borrower or any of its
Subsidiaries with respect to any of the Collateral or any transaction in
connection therewith.
Section 4. Delivery of Pledged Securities.
All Pledged Instruments required to be delivered hereunder
shall be delivered to the Pledgee by the Grantors pursuant hereto endorsed to
the order of the Pledgee, and accompanied by any required transfer tax stamps,
all in form and substance satisfactory to the Pledgee. All certificates
representing Pledged Stock delivered to the Pledgee by the Grantors pursuant
hereto shall be in suitable form for transfer by delivery, or shall be
accompanied by duly executed instruments of transfer or assignment in blank,
with signatures appropriately guaranteed, and accompanied by any required
transfer tax stamps, all in form and substance satisfactory to the Pledgee.
Section 5. Further Assurances.
(A) Each Grantor agrees that it will, at its expense and in
such manner and form as the Pledgee may reasonably require, execute, deliver,
file and record any financing statement, specific assignment or other paper and
take any other action that may be necessary or desirable, or that the Pledgee
may request, in order to create, preserve, perfect or validate any Security
Interest or to enable the Pledgee to exercise and enforce its rights hereunder
with respect to any of the Collateral. To the extent permitted by applicable
law, each Grantor hereby authorizes the Pledgee to execute and file, in the
name of the Borrower or otherwise, Uniform Commercial Code financing statements
(which may be carbon, photographic, photostatic or other reproductions of this
Agreement or of a financing statement relating to this Agreement) which the
Pledgee in its sole discretion may deem necessary or appropriate to further
perfect the Security Interests.
(B) Each Grantor agrees that it will not change (i) its name,
identity or corporate structure in any manner or (ii) the location of its chief
executive office unless it shall have given the Pledgee not less than 30 days'
prior notice thereof.
Section 6. Record Ownership of Pledged Stock.
The Pledgee may at any time or from time to time during the
continuance of an Event of Default, in its sole discretion, cause any or all of
the Pledged Stock to be transferred of record into the name of the Pledgee or
its nominee, subject to the provisions of the PST Documents. Each Grantor will
promptly give to the Pledgee copies of any notices or other communications
received by it with respect to Pledged Stock registered in its name, and the
Pledgee will promptly give to the Borrower copies of any notices and
communications received by the Pledgee with respect to Pledged Stock registered
in the name of the Pledgee or its nominee.
Section 7. Right to Receive Distributions on Collateral.
During the continuance of any Event of Default, the Pledgee
shall, subject to the provisions of the PST Documents, have the right to receive
and to retain as Collateral hereunder all dividends, interest and other payments
and distributions made upon or with respect to the Collateral, and each Grantor
shall take all such action as the Pledgee may deem necessary or appropriate to
give effect to such right. All such dividends, interest and other payments and
distributions which are received by a Grantor shall be received in trust for the
benefit of the Pledgee and the Lenders (but, unless an Event of Default shall
have occurred and be continuing, may be used by such Grantor as permitted by the
other provisions of this Agreement and the other Loan Documents). If the Pledgee
so directs during the continuance of an Event of Default, such dividends,
interest and other payments and distributions shall be segregated from other
funds of such Grantor and shall, forthwith upon demand by the Pledgee during the
continuance of an Event of Default, be paid over to the Pledgee as Collateral in
the same form as received (with any necessary endorsement). After all Events of
Default have been cured, the Pledgee's right to retain dividends, interest and
other payments and distributions under this Section 7 shall cease, and the
Pledgee shall pay over to such Grantor any such Collateral retained by it during
the continuance of an Event of Default.
Section 8. Right to Vote Pledged Stock.
Unless an Event of Default shall have occurred and be
continuing, each Grantor shall, subject to the provisions of the PST Documents,
have the right, from time to time, to vote and to give consents, ratifications
and waivers with respect to the Pledged Stock, and the Pledgee shall, upon
receiving a written request from such Grantor accompanied by a certificate
signed by the principal executive officer or principal financial officer of the
Borrower stating that no Event of Default has occurred and is continuing,
deliver to such Grantor or as specified in such request such proxies, powers of
attorney, consents, ratifications and waivers in respect of any of the Pledged
Stock which is registered in the name of the Pledgee or its nominee as shall be
specified in such request and be in form and substance satisfactory to the
Pledgee.
If an Event of Default shall have occurred and be continuing,
the Pledgee shall have the right to the extent permitted by law and subject to
the provisions of the PST Documents, and each Grantor shall take all such action
as may be necessary or appropriate to give effect to such right, to vote and to
give consents, ratifications and waivers, and take any other action with respect
to any or all of the Pledged Stock with the same force and effect as if the
Pledgee were the absolute and sole owner thereof.
Section 9. General Authority.
Each Grantor hereby irrevocably appoints the Pledgee its true
and lawful attorney, with full power of substitution, in the name of the
Grantors, the Pledgee, the Lenders or otherwise, for the sole use and benefit of
the Pledgee and Lenders, but at the expense of such Grantor, to the extent
permitted by law to exercise, and subject to the provisions of the PST
Documents, at any time and from time to time while an Event of Default has
occurred and is continuing, all or any of the following powers with respect to
all or any of the Collateral:
(i) to demand, sue for, collect, receive and give
acquittance for any and all monies due or to become due upon or by
virtue thereof,
(ii) to settle, compromise, compound, prosecute or
defend any action or proceeding with respect thereto,
(iii) to sell, transfer, assign or otherwise deal in or
with the same or the proceeds or avails thereof, as fully and
effectually as if the Pledgee were the absolute owner thereof, and
(iv) to extend the time of payment of any or all thereof
and to make any allowance and other adjustments with reference thereto;
provided that the Pledgee shall give the relevant Grantor not less than thirty
(30) days' prior written notice of the time and place of any sale or other
intended disposition of any of the Collateral. The Pledgee and the Grantors
agree that such notice constitutes "reasonable notification" within the meaning
of Section 9-504(3) of the Uniform Commercial Code.
Section 10. Remedies upon Event of Default.
(a) If any Event of Default shall have occurred and be
continuing, the Pledgee may exercise on behalf of the Lenders all the rights of
a secured party under the Uniform Commercial Code (whether or not in effect in
the jurisdiction where such rights are exercised), and, in addition, the
Pledgee may, without being required to give any notice, except as herein
provided or as may be required by mandatory provisions of law, (i) apply the
cash, if any, then held by it as Collateral as specified in Section 13 and (ii)
if there shall be no such cash or if such cash shall be insufficient to pay all
the Secured Obligations in full, after not less than thirty (30) days' prior
written notice to the relevant Grantor, sell the Collateral or any part thereof
at public or private sale or at any broker's board or on any securities
exchange, for cash, upon credit or for future delivery, and at such price or
prices as the Pledgee may deem satisfactory. Any Lender may be the purchaser of
any or all of the Collateral so sold at any public sale (or, if the Collateral
is of a type customarily sold in a recognized market or is of a type which is
the subject of widely distributed standard price quotations, at any private
sale). The Pledgee is authorized, in connection with any such sale, if it deems
it advisable so to do, (i) to restrict the prospective bidders on or purchasers
of any of the Pledged Securities to a limited number of sophisticated investors
who will represent and agree that they are purchasing for their own account for
investment and not with a view to the distribution or sale of any of such
Pledged Securities, (ii) to cause to be placed on certificates for any or all
of the Pledged Securities or on any other securities pledged hereunder a legend
to the effect that such security has not been registered under the Securities
Act of 1933 and may not be disposed of in violation of the provisions of said
Act, and (iii) to impose such other limitations or conditions in connection
with any such sale as the Pledgee deems necessary or advisable in order to
comply with said Act or any other law. Each Grantor will execute and deliver
such documents and take such other action as the Pledgee reasonably deems
necessary or advisable in order that any such sale may be made in compliance
with law. Upon any such sale the Pledgee shall have the right to deliver,
assign and transfer to the purchaser thereof the Collateral so sold. Each
purchaser at any such sale shall hold the Collateral so sold absolutely and
free from any claim or right of whatsoever kind, including any equity or right
of redemption of the Grantors which may be waived, and each Grantor, to the
extent permitted by law, hereby specifically waives all rights of redemption,
stay or appraisal which it has or may have under any law now existing or
hereafter adopted. The notice of such sale required by Section 9 and this
Section 10 shall (1) in the case of a public sale, state the time and place
fixed for such sale, (2) in the case of a sale at a broker's board or on a
securities exchange, state the board or exchange at which such sale is to be
made and the day on which the Collateral, or the portion thereof so being sold,
will first be offered for sale at such board or exchange, and (3) in the case
of a private sale, state the day after which such sale may be consummated. Any
such public sale shall be held at such time or times within ordinary business
hours and at such place or places as the Pledgee may fix in the notice of such
sale. At any such sale the Collateral may be sold in one lot as an entirety or
in separate parcels, as the Pledgee may determine. The Pledgee shall not be
obligated to make any such sale pursuant to any such notice. The Pledgee may,
without notice or publication, adjourn any public or private sale or cause the
same to be adjourned from time to time by announcement at the time and place
fixed for the sale, and such sale may be made at any time or place to which the
same may be so adjourned. In the case of any sale of all or any part of the
Collateral on credit or for future delivery, the Collateral so sold may be
retained by the Pledgee until the selling price is paid by the purchaser
thereof, but the Pledgee shall not incur any liability in the case of the
failure of such purchaser to take up and pay for the Collateral so sold and, in
the case of any such failure, such Collateral may again be sold upon like
notice. The Pledgee, instead of exercising the power of sale herein conferred
upon it, may proceed by a suit or suits at law or in equity to foreclose the
Security Interests and sell the Collateral, or any portion thereof, under a
judgment or decree of a court or courts of competent jurisdiction.
(b) Notwithstanding anything to the contrary herein, the
exercise of any remedies and the taking of any other action by the Pledgee
pursuant to this Agreement shall be subject to the provisions of the PST
Documents, and in no event shall the Pledgee exercise any such remedies or take
any such other action to the extent such exercise or action would conflict with
such provisions.
Section 11. Expenses.
The Grantors jointly and severally agree that they will
forthwith upon demand pay to the Pledgee:
(i) the amount of any taxes which the Pledgee may have
been required to pay by reason of the Security Interests or to free any
of the Collateral from any Lien thereon, and
(ii) the amount of any and all reasonable out-of-pocket
expenses, including the fees and disbursements of counsel and of any
other experts, which the Pledgee may incur in connection with (w) the
administration or enforcement of this Agreement, including such
expenses as are incurred to preserve the value of the Collateral and
the validity, perfection, rank and value of any Security Interest, (x)
the collection, sale or other disposition of any of the Collateral, (y)
the exercise by the Pledgee of any of the rights conferred upon it
hereunder or (z) any Default or Event of Default.
Any such amount not paid within five business days after
demand shall bear interest at the rate applicable to Base Rate Loans plus 2% and
shall be an additional Secured Obligation hereunder.
Section 12. Limitation on Duty of Pledgee in Respect of Collateral.
Beyond the exercise of reasonable care in the custody thereof,
the Pledgee shall have no duty as to any Collateral in its possession or control
or in the possession or control of any Pledgee or bailee or any income thereon
or as to the preservation of rights against prior parties or any other rights
pertaining thereto. The Pledgee shall be deemed to have exercised reasonable
care in the custody and preservation of the Collateral in its possession if the
Collateral is accorded treatment substantially equal to that which it accords
its own property, and the Pledgee shall not be liable or responsible for any
loss or damage to any of the Collateral, or for any diminution in the value
thereof, by reason of the act or omission of any Pledgee or bailee selected by
the Pledgee in good faith.
Section 13. Application of Proceeds.
Upon the occurrence and during the continuance of an Event of
Default, the proceeds of any sale of, or other realization upon, all or any part
of the Collateral and any cash held shall be applied by the Pledgee in the
following order of priorities:
first, to payment of the expenses of such sale or other
realization, including reasonable compensation to Pledgees and counsel
for the Pledgee, and all expenses, liabilities and advances incurred or
made by the Pledgee in connection therewith, and any other unreimbursed
expenses for which the Pledgee or any Lender is to be reimbursed
pursuant to Section 10.03 of the Credit Agreement or Section 11 hereof
and unpaid fees owing to the Pledgee under the Credit Agreement;
second, to the ratable payment of unpaid principal of the
Secured Obligations;
third, to the ratable payment of accrued but unpaid interest
on the Secured Obligations in accordance with the provisions of the
Credit Agreement;
fourth, to the ratable payment of all other Secured
Obligations, until all Secured Obligations shall have been paid in
full; and
finally, to payment to the Grantors or their successors or
assigns, or as a court of competent jurisdiction may direct, of any
surplus then remaining from such proceeds.
The Pledgee may make distributions hereunder in cash or in
kind or, on a ratable basis, in any combination thereof.
Section 14. Existing PST Senior Secured Notes/Margin Stock.
Notwithstanding anything to the contrary contained herein, (i) so long as
any Existing PST Senior Secured Notes remain outstanding, the Security
Interests in any Collateral which has been pledged by PST or any of its
subsidiaries to secure the Existing PST Senior Secured Notes in accordance
with the requirements of the Existing PST Senior Secured Notes Indenture
shall be subject to the prior security interests so created in favor of the
holders of the Existing PST Senior Secured Notes and any application of
proceeds pursuant to Section 13 shall be subject to any prior required
application of proceeds pursuant to the PST Documents; provided that at all
times the security interests created pursuant to the Loan Documents in all
Collateral of PST thereunder shall be required to be fully perfected in
accordance with applicable law.
Section 15. Concerning the Pledgee.
The provisions of Article VII of the Credit Agreement shall
inure to the benefit of the Pledgee in respect of this Agreement and shall be
binding upon the parties to the Credit Agreement in such respect. In furtherance
and not in derogation of the rights, privileges and immunities of the Pledgee
therein set forth:
(A) The Pledgee is authorized to take all
such action as is provided to be taken by it as Pledgee hereunder and
all other action reasonably incidental thereto. As to any matters not
expressly provided for herein (including, without limitation, the
timing and methods of realization upon the Collateral), the Pledgee
shall act or refrain from acting in accordance with written
instructions from the Required Lenders or, in the absence of such
instructions, in accordance with its discretion.
(B) The Pledgee shall not be responsible
for the existence, genuineness or value of any of the Collateral or for
the validity, perfection, priority or enforceability of the Security
Interests in any of the Collateral, whether impaired by operation of
law or by reason of any action or omission to act on its part
hereunder. The Pledgee shall have no duty to ascertain or inquire as to
the performance or observance of any of the terms of this Agreement by
the Grantors.
Section 16. Appointment of Co-Pledgees.
At any time or times, in order to comply with any legal
requirement in any jurisdiction, the Pledgee may appoint another bank or trust
company or one or more other persons, either to act as co-Pledgee or
co-Pledgees, jointly with the Pledgee, or to act as separate Pledgee or Pledgees
on behalf of the Lenders, with such power and authority as may be necessary for
the effectual operation of the provisions hereof and may be specified in the
instrument of appointment (which may, in the discretion of the Pledgee, include
provisions for the protection of such co-Pledgee or separate Pledgee similar to
the provisions of Section 14).
Section 17. Termination of Security Interests; Release of Collateral.
(a) After the termination of the Total Commitment and
all Derivatives Obligations Agreements, when no Note or Letter of Credit is
outstanding and when all Loans and other Obligations (other than contingent
indemnity obligations) have been paid in full, this Agreement shall
terminate (provided that all indemnities set forth herein including,
without limitation, in Section 11 hereof shall survive such termination),
and the Pledgee, at the request and expense of the relevant Grantor, will
execute and deliver to such Grantor a proper instrument or instruments
acknowledging the satisfaction and termination of this Agreement, and will
duly assign, transfer and deliver to such Grantor (without recourse and
without any representation or warranty) such of the Collateral as may be in
the possession of the Pledgee and as has not theretofore been sold or
otherwise applied or released pursuant to this Agreement.
(b) In the event that any part of the Collateral is sold in
connection with a sale permitted by Section 5.07 of the Credit Agreement (it
being agreed for such purposes that a release will be deemed "permitted by
Section 5.07 of the Credit Agreement" if the proposed transaction constitutes
an exception to Section 5.07 of the Credit Agreement) or is otherwise released
at the direction of the Required Banks (or all the Banks if required by Section
10.05 of the Credit Agreement), and the proceeds of such sale or sales or from
such release are applied in accordance with the terms of the Credit Agreement
to the extent required to be so applied, the Pledgee, at the request and
expense of the respective Grantor will release such Collateral from this
Agreement, duly assign, transfer and deliver to such Grantor (without recourse
and without any representation or warranty) such of the Collateral as is then
being (or has been) so sold or released and as may be in possession of the
Pledgee and has not theretofore been released pursuant to this Agreement.
(c) At any time that the relevant Grantor desires that the
Pledgee take any action to give effect to any release of Collateral pursuant
to the foregoing Section 17(b), it shall deliver to the Collateral
Agent a certificate signed by an authorized officer describing the
Collateral to be sold and the relevant provision of Section 5.07 of the
Credit Agreement on which it is relying to make such sale. In the event
that any part of the Collateral is released as provided in the preceding
paragraph (b), the Pledgee, at the request and expense of such Grantor, will
duly release such Collateral and assign, transfer and deliver to such Grantor
or its designee (without recourse and without any representation or warranty)
such of the Collateral as is then being (or has been) so sold and as may be in
the possession of the Pledgee and not theretofore been released pursuant to
this Agreement. The Pledgee shall have no liability whatsoever to any Secured
Creditor as the result of any release of Collateral by it as permitted by this
Section 17. Upon any release of Collateral pursuant to Section 17(a) or (b),
none of the Secured Creditors shall have any continuing right or interest in
such Collateral, or the proceeds thereof.
Section 18. Notices.
All notices hereunder shall be given in accordance with
Section 10.01 of the Credit Agreement.
Section 19. Waivers, Non-exclusive Remedies.
No failure on the part of the Pledgee to exercise, and no
delay in exercising and no course of dealing with respect to, any right under
this Agreement shall operate as a waiver thereof; nor shall any single or
partial exercise by the Pledgee of any right under the Credit Agreement or this
Agreement preclude any other or further exercise thereof or the exercise of any
other right. The rights in this Agreement and the Credit Agreement are
cumulative and are not exclusive of any other remedies provided by law.
Section 20. Successors and Assigns.
This Agreement is for the benefit of the Pledgee and the
Lenders and their successors and assigns, and in the event of an assignment of
all or any of the Secured Obligations, the rights hereunder, to the extent
applicable to the indebtedness so assigned, may be transferred with such
indebtedness. This Agreement shall be binding on the Pledgee, the Lenders, the
Grantors and their respective successors and assigns.
Section 21. Waiver; Amendment. None of the terms
and conditions of this Agreement may be changed, waived, modified or varied in
any manner whatsoever unless in writing duly signed by the Pledgee (with the
consent of the Required Lenders or, to the extent required by Section 10.05 of
the Credit Agreement, all of the Lenders), and each Grantor affected thereby (it
being understood that the addition or release of any Grantor hereunder shall not
constitute a change, waiver, discharge or variance affecting any Grantor other
than the Company and the Grantor so added or released) provided that (i) no such
change, waiver, modification or variance shall be made to Section 13 hereof
(directly or indirectly by modifying Section 8(A) of the Security Agreement), or
this Section 21 without the consent of each Secured Creditor adversely affected
thereby and (ii) that any change, waiver, modification or variance affecting the
rights and benefits of a single Class of Secured Creditors (and not all Secured
Creditors in a like or similar manner) shall require the written consent of the
Requisite Creditors of such Class of Secured Creditors. For the purpose of this
Agreement, the term "Class" shall mean each class of Secured Creditors, i.e.,
whether (x) the Lenders and Pledgee as holders of the Loan Document Obligations
or (y) the Derivatives Creditors as holders of the Interest Rate Obligations.
For the purpose of this Agreement, the term "Requisite Creditors" of any Class
shall mean each of (x) with respect to each of the Loan Document Obligations,
the Required Lenders and (y) with respect to the Interest Rate Obligations, the
holders of at least a majority of all obligations outstanding from time to time
under the Derivatives Obligations Agreements.
Section 22. New York Law.
This Agreement shall be construed in accordance with and
governed by the laws of the State of New York, except as otherwise required by
mandatory provisions of law and except to the extent that remedies provided by
the laws of any jurisdiction other than New York are governed by the laws of
such jurisdiction.
Section 23. Severability.
If any provision hereof is invalid or unenforceable in any
jurisdiction, then, to the fullest extent permitted by law, (i) the other
provisions hereof shall remain in full force and effect in such jurisdiction and
shall be liberally construed in favor of the Pledgee and the Lenders in order to
carry out the intentions of the parties hereto as nearly as may be possible; and
(ii) the invalidity or unenforceability of any provision hereof in any
jurisdiction shall not affect the validity or enforceability of such provision
in any other jurisdiction.
Section 24. Attachment.
Each Grantor acknowledges that (i) value has been given, (ii)
it has rights in the Collateral (other than after-acquired Collateral), (iii) it
has not agreed to postopone the time of attachment of the Security Interest and
(iv) it has received a duplicate original copy of this Pledge Agreement
EXHIBIT E
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed by their respective authorized officers as of the
day and year first above written.
TEKNI-PLEX, INC.
By: /s/ Dr. F. Patrick Smith
______________________________
Title: CEO
OZITE CORPORATION
By: /s/ Dr. F. Patrick Smith
______________________________
Title: CEO
PTI PLASTICS, INC.
By: /s/ Dr. F. Patrick Smith
______________________________
Title: CEO
PLASTIC SPECIALITIES AND
TECHNOLOGIES, INC.
By: /s/ Dr. F. Patrick Smith
______________________________
Title: CEO
BURLINGTON RESINS, INC.
By: /s/ Dr. F. Patrick Smith
______________________________
Title: CEO
PLASTIC SPECIALTIES AND
TECHNOLOGIES INVESTMENTS, INC.
By: /s/ Dr. F. Patrick Smith
______________________________
Title: CEO
PURE TECH APR, INC.
By: /s/ Dr. F. Patrick Smith
______________________________
Title: CEO
MULTI TECH APR, INC.
By: /s/ Dr. F. Patrick Smith
______________________________
Title: CEO
COAST RECYCLING NORTH, INC.
By: /s/ Dr. F. Patrick Smith
______________________________
Title: CEO
DISTRIBUTERS RECYCLING, INC.
By: /s/ Dr. F. Patrick Smith
______________________________
Title: CEO
REI DISTRIBUTORS, INC.
By: /s/ Dr. F. Patrick Smith
______________________________
Title: CEO
PURE TECH RECYCLING OF CALIFORNIA
By: /s/ Dr. F. Patrick Smith
______________________________
Title: CEO
ALUMET SMELTING CORPORATION
By: /s/ Dr. F. Patrick Smith
______________________________
Title: CEO
CONCONRE CORP.
By: /s/ Dr. F. Patrick Smith
______________________________
Title: CEO
MORGAN GUARANTY TRUST COMPANY
OF NEW YORK, as Collateral Agent
By: /s/ Stephen Hannan
______________________________
Title: Vice President
SCHEDULE I
SUBSIDIARIES/PLEDGED STOCK
1. PureTec Corporation (Delaware)
2. Ozite Corporation (Delaware)
3. PTI Plastics, Inc. (Delaware)
4. Plastic Specialties and Technologies, Inc. (Delaware)
5. Burlington Resins, Inc. (Delaware)
6. Plastic Specialties and Technologies Investments, Inc. (Delaware)
7. Pure Tech APR, Inc. (New York)
8. Multi Container Recycler, Inc. (Michigan)
9. Coast Recycling North, Inc. (California)
10. Distributors Recycling, Inc. (New Jersey)
11. REI Distributors, Inc. (New Jersey)
12. Pure Tech Recycling of California (California)
13. Alumet Smelting Corporation (New Jersey)
14. Conconre Corp. (Connecticut)
INTERCOMPANY NOTES
None.
- ------------------------
1 TO BE UPDATED
EXHIBIT F
FORMS OF MORTGAGE, DEED OF TRUST, DEED TO SECURE DEBT, AMENDMENT TO
MORTGAGE AND AMENDMENT TO DEED OF TRUST
<PAGE>
This instrument was prepared by the attorney described below in consultation
with counsel in the State in which the Property is located and, when recorded,
the recorded counterparts should be returned to:
Jeffrey J. Temple, Esq.
White & Case LLP
1155 Avenue of the Americas
New York, New York 10036
================================================================================
MORTGAGE, ASSIGNMENT OF LEASES AND RENTS,
SECURITY AGREEMENT AND FIXTURE FILING
dated as of March __ 1998
by
[----------------------],
the Mortgagor,
to
MORGAN GUARANTY TRUST COMPANY OF NEW YORK,
as Agent for the Banks,
the Mortgagee
Property:
County of ___________
State of ___________
===============================================================================
THIS INSTRUMENT CONTAINS AFTER-ACQUIRED PROPERTY PROVISIONS AND SECURES
OBLIGATIONS CONTAINING PROVISIONS FOR CHANGES IN INTEREST RATES. THIS INSTRUMENT
ALSO SECURES FUTURE ADVANCES.
<PAGE>
THIS MORTGAGE, ASSIGNMENT OF LEASES AND RENTS, SECURITY AGREEMENT AND FIXTURE
FILING (this "Mortgage") dated as of March __, 1998 by
__________________________, a _________corporation, having an address at
________________________________________ (the "Mortgagor"), to MORGAN GUARANTY
TRUST COMPANY OF NEW YORK, a New York banking corporation, as Agent for the
Banks (hereinafter defined), having an address at 500 Stanton Christiana Road,
Newark, Delaware 19713 (the "Mortgagee").
W I T N E S S E T H:
RECITALS
A. Credit Agreement. Reference is hereby made to the Credit
Agreement (as amended from time to time, the "Credit Agreement"), dated as of
March 3, 1998 among Tekni-Plex, Inc. (the "Borrower"), each other Guarantor
which is or may hereafter become a party thereto, each Bank which is or may
hereafter become a party thereto, the LC Issuing Banks referred to therein, and
Morgan Guaranty Trust Company of New York, as Agent (the "Agent") providing for
the making of loans to the Borrower and the issuance of, and participation in,
letters of credit for the account of the Borrowers, as contemplated therein in
the maximum principal amount of $205,000,000.
B. Mortgage. The Lien of this Mortgage is being granted to
secure payment, performance and observance of the following indebtedness,
liabilities and obligations, whether now or hereafter owed or owing, hereinafter
referred to collectively as the "Secured Obligations":
(i) (a) all principal of and interest (including any interest
which accrues after the commencement of any case, proceeding or other
action relating to the bankruptcy, insolvency or reorganization of any
Obligor) on any Note or Loan, and any LC Reimbursement Obligation
arising under the Credit Agreement, (b) all other amounts payable by
the Mortgagor hereunder or under any other Loan Document and (c) any
renewals or extensions of any of the foregoing; and
(ii) the performance and observance of each other term,
covenant, agreement, obligation, requirement, condition and provision
to be performed or observed by the Mortgagor under this Mortgage or any
other Loan Document.
<PAGE>
GRANTING CLAUSES
NOW, THEREFORE, in consideration of the premises and other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, for the purpose of securing the due and punctual payment,
performance and observance of the Secured Obligations and intending to be bound
hereby, the Mortgagor does hereby GRANT, BARGAIN, SELL, CONVEY, MORTGAGE,
ASSIGN, TRANSFER and WARRANT to the Mortgagee and its successors under the Loan
Documents, with power of sale and right of entry as hereinafter provided, and
(to the extent covered by the Local UCC) does hereby GRANT AND WARRANT to the
Mortgagee and its successors under the Loan Documents, a continuing first
security interest in and to all of the property and rights described in the
following Granting Clauses (all of which property and rights are collectively
called the "Mortgaged Property"), to wit:
GRANTING CLAUSE I.
Land. The parcel or parcels of land located in ________County,
State of ____________ and more particularly described in Exhibit A annexed
hereto (the "Land").
GRANTING CLAUSE II.
Improvements. All estate, right, title and interest of the
Mortgagor in, to, under or derived from: all buildings, structures, facilities
and other improvements of every kind and description now or hereafter located on
the Land, including all parking areas, roads, driveways, walks, fences, walls
and berms; all estate, right, title and interest of the Mortgagor, if any, in,
to, under or derived from: all recreation, drainage and lighting facilities and
other site improvements; all water, sanitary and storm sewer, drainage,
electricity, steam, gas, telephone, telecommunications and other utility
equipment and facilities; all plumbing, lighting, heating, ventilating,
air-conditioning, refrigerating, incinerating, compacting, fire protection and
sprinkler, surveillance and security, vacuum cleaning, public address and
communications equipment and systems; all kitchen and laundry appliances; all
walls, screens, awnings, floor coverings, partitions, elevators, escalators,
motors, electrical, computer and other wiring, machinery, pipes, fittings and
racking and shelving; and all other items of fixtures, equipment and personal
property of every kind and description, in each case now or hereafter located on
the Land or affixed (actually or constructively) to the Improvements which by
the nature of their location thereon or affixation thereto are real property
under applicable law; and including all materials intended for the construction,
reconstruction, repair, replacement, alteration, addition or improvement of or
to such buildings, equipment, fixtures, structures and improvements, all of
which materials shall be deemed to be part of the Mortgaged Property immediately
upon delivery thereof on the Land and to be part of the Improvements immediately
upon their incorporation therein (the foregoing being collectively called the
"Improvements").
GRANTING CLAUSE III.
Equipment. All estate, right, title and interest of the
Mortgagor, if any, in, to, under or derived from: all fixtures, chattels and
articles of personal property owned or leased by the Mortgagor or in which the
Mortgagor has or shall acquire an interest, wherever situated, and now or
hereafter located on or in the Land or the Improvements, whether or not affixed
thereto (actually or constructively) and which are not real property under
applicable law, including all cabinets, lockers, bookcases, shelving, keys or
other entry systems, partitions, shades, blinds, curtains, drapes, draperies,
carpets, rugs, furniture and furnishings, china, glassware, silverware, pots,
pans, utensils, linens, stoves, refrigerators, freezers, dishwashers, laundry
and kitchen appliances and equipment; all heating, lighting, plumbing,
ventilating, air conditioning, refrigerating, gas, steam, electrical,
incinerating and compacting plants, systems, fixtures and equipment, bulbs and
bells; all elevators, stoves, ranges, vacuum and other cleaning systems, floor
cleaning, waxing and polishing equipment, intercom, paging and call systems,
switchboards, sprinkler systems and other fire prevention, alarm and
extinguishing apparatus and materials; all pictures, paintings, works of art and
decorations; all pipes, conduits, dynamos, engines, compressors, generators,
boilers, stokers, furnaces, pumps, trunks, ducts, utensils, tools, implements
and fittings; and all other furniture, appliances, equipment, supplies, and
tangible property of every kind and nature whatsoever owned or leased by the
Mortgagor, or in which the Mortgagor has or shall have an interest, now or
hereinafter located upon the Land, or appurtenances thereto, or usable in
connection with the present or future operation or occupancy of the Land or the
Improvements, and including any of the foregoing that is temporarily removed
from the Land or Improvements to be repaired and later reinstalled thereon or
therein (the foregoing being collectively called the "Equipment"; and the Land
with the Improvements thereon and the Equipment therein being collectively
called the "Property"). If the Lien of this Mortgage is subject to a security
interest covering any Property described in this GRANTING CLAUSE III, then all
of the right, title and interest of the Mortgagor in and to any and all such
Property is hereby assigned to the Mortgagee, together with the benefits of all
deposits and payments now or hereafter made thereon by or on behalf of the
Mortgagor.
GRANTING CLAUSE IV.
Appurtenant Rights. All estate, right, title and interest of
the Mortgagor, if any, in, to, under or derived from all tenements,
hereditaments and appurtenances now or hereafter relating to the Property; the
streets, roads, sidewalks and alleys abutting the Property; all strips and gores
within or adjoining the Land; all land in the bed of any body of water adjacent
to the Land; all land adjoining the Land created by artificial means or by
accretion; all air space and rights to use air space above the Land; all
development or similar rights now or hereafter appurtenant to the Land; all
rights of ingress and egress now or hereafter appertaining to the Property; all
easements and rights of way now or hereafter appertaining to the Property; and
all royalties and other rights now or hereafter appertaining to the use and
enjoyment of the Property, including alley, party walls, support, drainage,
crop, timber, agricultural, horticultural, oil, gas and other mineral, water
stock, riparian and other water rights.
GRANTING CLAUSE V.
Agreements. All estate, right, title and interest of the
Mortgagor, if any, in, to, under or derived from: all Insurance Policies
(including all unearned premiums and dividends thereunder), any zoning lot
agreements and air rights and development rights which may be vested in the
Mortgagor, all guarantees and warranties relating to the Property, all supply
and service contracts for water, sanitary and storm sewer, drainage,
electricity, steam, gas, telephone and other utilities now or hereafter relating
to the Property and all other contract rights, now or hereafter relating to the
use or operation of the Property (the foregoing being collectively called the
"Agreements").
GRANTING CLAUSE VI.
Leases. All estate, right, title and interest of the
Mortgagor, if any, in, to, under or derived from all Leases now or hereafter in
effect, whether or not of record, for the use or occupancy of all or any part of
the Property, together with all amendments, supplements, consolidations,
replacements, extensions, renewals and other modifications of any thereof.
GRANTING CLAUSE VII.
Rents, Issues and Profits. All estate, right, title and
interest of the Mortgagor, if any, in, to, under or derived from: all rents,
royalties, issues, profits, receipts, revenue, income and other benefits now or
hereafter, including during any period of redemption, accruing with respect to
the Property, including all rents and other sums now or hereafter, including
during any period of redemption, payable pursuant to the Leases; all other sums
now or hereafter, including during any period of redemption, payable with
respect to the use, occupancy, management, operation or control of the Property;
and all other claims, rights and remedies now or hereafter, including during any
period of redemption, belonging or accruing with respect to the Property,
including fixed, additional and percentage rents, occupancy charges, security
deposits, parking, maintenance, common area, tax, insurance, utility and service
charges and contributions (whether collected under the Leases or otherwise),
proceeds of sale of electricity, gas, heating, air-conditioning and other
utilities and services (whether collected under the Leases or otherwise), and
deficiency rents and liquidated damages following default or cancellation (the
foregoing rents and other sums described in this Granting Clause being
collectively called the "Rents"), all of which the Mortgagor hereby irrevocably
directs be paid to the Mortgagee, subject to the license granted to the
Mortgagor pursuant to Section 5.07(b), to be held, applied and disbursed as
provided in this Mortgage.
GRANTING CLAUSE VIII.
Permits. All estate, right, title and interest of the
Mortgagor, if any, in, to, under or derived from all licenses, authorizations,
certificates, variances, concessions, grants, franchises, consents, approvals
and other permits now or hereafter pertaining to the ownership, management or
operation of the Property (the foregoing being collectively called the
"Permits").
GRANTING CLAUSE IX.
Proceeds and Awards. All estate, right, title and interest of
the Mortgagor, if any, in, to, under or derived from all proceeds of any
Transfer, financing, refinancing or conversion into cash or liquidated claims,
whether voluntary or involuntary, of any of the Mortgaged Property, including
all Insurance Proceeds, Awards and title insurance proceeds under any title
insurance policy now or hereafter held by the Mortgagor, and all rights,
dividends and other claims of any kind whatsoever (including damage, secured,
unsecured, priority and bankruptcy claims) now or hereafter relating to any of
the Mortgaged Property, all of which the Mortgagor hereby irrevocably directs be
paid to the Mortgagee to the extent provided hereunder, to be held, applied and
disbursed as provided in this Mortgage.
GRANTING CLAUSE X.
Books and Records. All books and records (including customer
lists, credit files, computer programs, print outs and other computer materials
and records) of the Mortgagor, if any, now or hereafter pertaining to the
ownership, management or operation of the Property.
GRANTING CLAUSE XI.
Other Intangible Property. All estate, right, title and
interest of the Mortgagor, if any, in, to, under or derived from all intangible
property, to the extent not described in the foregoing Granting Clauses, now or
hereafter necessary to operate the Property as a going concern.
GRANTING CLAUSE XII.
Additional Property. All greater, additional or other estate,
right, title and interest of the Mortgagor in, to, under or derived from the
Mortgaged Property now or hereafter acquired by the Mortgagor, including all
right, title and interest of the Mortgagor in, to, under or derived from all
extensions, improvements, betterments, renewals, substitutions and replacements
of, and additions and appurtenances to, any of the Mortgaged Property hereafter
acquired by or released to the Mortgagor or constructed or located on, or
affixed to, the Property, in each case, immediately upon such acquisition,
release, construction, location or affixation; all estate, right, title and
interest of the Mortgagor in, to, under or derived from any other property and
rights which are, by the provisions of the Loan Documents, required to be
subjected to the Lien hereof; all estate, right, title and interest of the
Mortgagor in, to, under or derived from any other property and rights which are
necessary to maintain the Property and the Mortgagor's business or operations
conducted therein as a going concern, in each case, to the fullest extent
permitted by law, without any further conveyance, Mortgage, assignment or other
act by the Mortgagor; and all estate, right, title and interest of the Mortgagor
in, to, under or derived from all other property and rights which are by any
instrument or otherwise subjected to the Lien hereof by the Mortgagor or anyone
acting on its behalf.
GRANTING CLAUSE XIII.
Refunds, Credits or Reimbursements. All of the Mortgagor's
right, title and interest in and to any and all of the real estate tax refunds
payable to the Mortgagor with respect to the Land or the Improvements, and
refunds, credits or reimbursements payable with respect to bonds, escrow
accounts or other sums payable in connection with the use, development, or
ownership of the Land or Improvements.
TO HAVE AND TO HOLD the Mortgaged Property, together with all
estate, right, title and interest of the Mortgagor and anyone claiming by,
through or under the Mortgagor in, to, under or derived from the Mortgaged
Property and all rights and appurtenances relating thereto, to the Mortgagee,
forever.
PROVIDED ALWAYS that this Mortgage is upon the express
condition that the Mortgaged Property shall be released from the Lien of this
Mortgage in full or in part in the manner and at the time provided in Section
7.02.
THE MORTGAGOR ADDITIONALLY COVENANTS AND AGREES WITH THE
BENEFICIARY AS FOLLOWS:
ARTICLE I
DEFINITIONS AND INTERPRETATION
SECTION 1.01. Definitions. (a) Capitalized terms used in this
Mortgage, but not otherwise defined herein, are defined in, or are defined by
reference to, the Credit Agreement and have the same meanings herein as therein.
(b) In addition, as used herein, the following terms have the
following meanings:
"Agreements" is defined in Granting Clause V.
"Awards" means, at any time, all awards or payments received
or receivable by reason of any Condemnation, including all amounts
received or receivable with respect to any Transfer in lieu or
anticipation of Condemnation or in connection with any agreement with
any condemning authority which has been made in settlement of any
proceeding relating to a Condemnation.
"Bankruptcy Code" means the Bankruptcy Code of 1978, as
amended.
"Casualty" means any damage to, or destruction of, the
Property.
"Condemnation" means any condemnation or other taking or
temporary or permanent requisition of the Property, any interest
therein or right appurtenant thereto, or any change of grade affecting
the Property, as the result of the exercise of any right of
condemnation or eminent domain. A Transfer to a governmental authority
in lieu or anticipation of Condemnation shall be deemed to be a
Condemnation.
"Credit Agreement" is defined in the Recitals.
"Equipment" is defined in Granting Clause III.
"Impositions" means all taxes (including real estate taxes,
transfer taxes and sales and use taxes), assessments (including all
assessments for public improvements or benefits, whether or not
commenced or completed prior to the date hereof), water, sewer or other
rents, rates and charges, excises, levies, license fees, permit fees,
inspection fees and other authorization fees and other charges, in each
case whether general or special, ordinary or extraordinary, foreseen or
unforeseen, of every character (including all interest and penalties
thereon), which at any time may be assessed, levied, confirmed or
imposed on or in respect of, or be a Lien upon, (i) the Property, any
other Mortgaged Property or any interest therein, (ii) any occupancy,
use or possession of, or activity conducted on, the Property to the
extent that the failure to pay the same would create a Lien on the
Property, (iii) the Rents from the Property or the use or occupancy
thereof to the extent that the failure to pay the same would create a
Lien on the Property, or (iv) the Secured Obligations or the Loan
Documents, but excluding income, excess profits, franchise, capital
stock, estate, inheritance, succession, gift or similar taxes of the
Mortgagor or the Mortgagee or any other Secured Party, except to the
extent that such taxes of the Mortgagor or the Mortgagee or any other
Secured Party are imposed in whole or in part in lieu of, or as a
substitute for, any taxes which are or would otherwise be Impositions.
"Improvements" is defined in Granting Clause II.
"Insurance Policies" means the insurance policies and
coverages required to be maintained by the Mortgagor with respect to
the Property pursuant to the Credit Agreement.
"Insurance Premiums" means all premiums payable under the
Insurance Policies.
"Insurance Proceeds" means, at any time, all insurance
proceeds (except proceeds of business interruption insurance) or
payments to which the Mortgagor may be or become entitled under the
Insurance Policies by reason of any Casualty plus all insurance
proceeds and payments to which the Mortgagor may be or become entitled
by reason of any Casualty under any other insurance policies or
coverages maintained by the Mortgagor with respect to the Property.
"Insurance Requirements" means all provisions of the Insurance
Policies, all requirements of the issuer of any of the Insurance
Policies and all orders, rules, regulations and any other requirements
of the National Board of Fire Underwriters (or any other body
exercising similar functions) binding upon the Mortgagor and
applicable to the Property, any adjoining vaults, sidewalks, parking
areas or driveways or any use or condition thereof.
"Land" is defined in Granting Clause I.
"Lease" means each lease, sublease, tenancy, subtenancy,
license, franchise, concession or other occupancy agreement relating to
the Property, together with any guarantee of the obligations of the
tenant or occupant thereunder or any right to possession under any
federal or state bankruptcy code in the event of the rejection of any
sublease by the sublandlord thereof or its Mortgagee pursuant to said
code.
"Legal Requirements" means all provisions of the Leases, the
Agreements, the Permitted Liens, and the Permits and all applicable
laws, statutes, codes, acts, ordinances, orders, judgments, decrees,
injunctions, rules, regulations, directions and requirements of, and
agreements with, governmental bodies, agencies or officials, now or
hereafter applicable to the Property, any adjoining vaults, sidewalks,
streets or ways, or any use or condition thereof.
"Local UCC" means the Uniform Commercial Code as in effect in
the State in which the Property is located.
"Material Adverse Effect" is defined in the Credit Agreement.
"Mortgage" is defined in the Preamble.
"Mortgaged Property" is defined in the Granting clauses.
"Mortgagee" is defined in the Preamble.
"Mortgagor" is defined in the Preamble.
"National Flood Insurance Program" means the National Flood
Insurance Act of 1968 and the Flood Disaster Protection Act of 1973 (42
U.S.C. Sections 4001 et seq.).
"Permits" is defined in Granting Clause VIII.
"Permitted Disposition" means any (i) Transfer in connection
with a Condemnation, (ii) Transfer of obsolete unused, or unnecessary
Equipment in the ordinary course of business or (iii) easement or
similar encumbrance with respect to the Property granted by the
Mortgagor to any adjoining landowner or any railroad, telephone, cable
television, water, sewer, utility or similar company, municipality or
other governmental subdivision in the ordinary course of business.
"Permitted Liens" means (i) any Liens permitted under clauses
(g),(h) and (k) of Section 5.09 of the Credit Agreement and, with
respect to Equipment, clauses (a) through (f) of Section 5.09 of the
Credit Agreement, (ii) Liens being contested pursuant to Section 2.06
and (iii) Permitted Encumbrances.
"Permitted Encumbrances" means those matters set forth on
Exhibit B annexed hereto.
"Post-Default Rate" means, with respect to any amount payable
by the Mortgagor hereunder which is not paid when due, a rate per annum
equal to the sum of 2% plus the rate applicable to Base Rate Loans from
time to time.
"Property" is defined in Granting Clause III.
"Receiver" is defined in Section 5.02(a)(iv).
"Rents" is defined in Granting Clause VII.
"Restoration" means the restoration, repair, replacement or
rebuilding of the Property after a Casualty or Condemnation, and
"Restore" means to restore, repair, replace or rebuild the Property
after a Casualty or Condemnation, in each case to a utility and
condition adequate to the Mortgagor's use as conducted immediately
prior to the Casualty or Condemnation.
"Secured Obligations" is defined in the Recitals.
"Secured Parties" means the Mortgagee and all other holders of
any of the Secured Obligations (including all Persons to whom any of
the Secured Obligations may be payable from time to time).
"Transfer" means, when used as a noun, any sale, conveyance,
assignment, lease, or other transfer and, when used as a verb, to sell,
convey, assign, lease, or otherwise transfer, in each case (i) whether
voluntary or involuntary, (ii) whether direct or indirect and (iii)
including any agreement providing for a Transfer or granting any right
or option providing for a Transfer.
"Unavoidable Delays" means delays due to acts of God, fire,
flood, earthquake, explosion or other Casualty, inability to procure or
shortage of labor, equipment, facilities, sources of energy (including
electricity, steam, gas or gasoline), materials or supplies, failure of
transportation, strikes, lockouts, action of labor unions,
Condemnation, litigation relating to Legal Requirements, inability to
obtain Permits or other causes beyond the reasonable control of the
Mortgagor, provided that lack of funds shall not be deemed to be a
cause beyond the control of the Mortgagor.
(c) In this Mortgage, unless otherwise specified, references
to this Mortgage or to Agreements, Leases, Permits, the Credit Agreement, the
Security Agreement, Notes, Loan Documents and Collateral Documents include all
amendments, supplements, consolidations, replacements, restatements, extensions,
renewals and other modifications thereof, in whole or in part.
SECTION 1.02. Interpretation. In this Mortgage, unless
otherwise specified, (i) singular words include the plural and plural words
include the singular; (ii) words which include a number of constituent parts,
things or elements, including the terms Leases, Improvements, Land, Secured
Obligations, Property and Mortgaged Property, shall be construed as referring
separately to each constituent part, thing or element thereof, as well as to all
of such constituent parts, things or elements as a whole; (iii) words importing
any gender include the other genders; (iv) references to any Person include such
Person's successors and assigns and in the case of an individual, the word
"successors" includes such Person's heirs, devisees, legatees, executors,
administrators and personal representatives; (v) references to any statute or
other law include all applicable rules, regulations and orders adopted or made
thereunder and all statutes or other laws amending, consolidating or replacing
the statute or law referred to; (vi) the words "consent", "approve", "agree" and
"request", and derivations thereof or words of similar import, mean the prior
written consent, approval, agreement or request of the Person in question; (vii)
the words "include" and "including", and words of similar import, shall be
deemed to be followed by the words "without limitation"; (viii) the words
"hereto", "herein", "hereof" and "hereunder", and words of similar import, refer
to this Mortgage in its entirety; (ix) references to Articles, Sections,
Schedules, Exhibits, subsections, paragraphs and clauses are to the Articles,
Sections, Schedules, Exhibits, subsections, paragraphs and clauses of this
Mortgage; (x) the Schedules and Exhibits to this Mortgage are incorporated
herein by reference; (xi) the titles and headings of Articles, Sections,
Schedules, Exhibits, subsections, paragraphs and clauses are inserted as a
matter of convenience and shall not affect the construction of this Mortgage;
(xii) all obligations of the Mortgagor hereunder shall be satisfied by the
Mortgagor at the Mortgagor's sole cost and expense; and (xiii) all rights and
powers granted to the Mortgagee hereunder shall be deemed to be coupled with an
interest and be irrevocable.
SECTION 1.03. Resolution of Drafting Ambiguities. The
Mortgagor acknowledges that it was represented by counsel in connection with
this Mortgage, that it and its counsel reviewed and participated in the
preparation and negotiation of this Mortgage and that any rule of construction
to the effect that ambiguities are to be resolved against the drafting party or
the Mortgagee shall not be employed in the interpretation of this Mortgage.
ARTICLE II
CERTAIN WARRANTIES AND COVENANTS OF THE MORTGAGOR
SECTION 2.01. Title. (a) The Mortgagor warrants that, as of
the date hereof, (i) (x) the Mortgagor has good and marketable title to the fee
simple interest in the Land and the Improvements thereon, (y) the Mortgagor is
the owner of, or has a valid leasehold interest in, the Equipment and all other
items constituting the Mortgaged Property, and (z) this Mortgage constitutes a
valid, binding and enforceable first Lien on the Mortgaged Property, in each
case subject only to Permitted Encumbrances with respect thereto; and (ii) the
Permitted Encumbrances do not materially interfere with the enjoyment, use or
operation of the Property or materially, adversely affect the value thereof.
(b) The Mortgagor shall forever preserve, protect, warrant and
defend (i) the estate, right, title and interest of the Mortgagor in and to the
Mortgaged Property; (ii) the validity, enforceability and priority of the Lien
of this Mortgage on the Mortgaged Property; and (iii) the right, title and
interest of the Mortgagee, and any purchaser at any sale of the Mortgaged
Property hereunder or relating hereto, in each case against all other Liens and
claims whatsoever, subject only to Permitted Liens.
(c) The Mortgagor, at its sole cost and expense, shall (i)
promptly correct any defect or error which may be discovered in this Mortgage or
any financing statement or other document relating hereto; and (ii) promptly
execute, acknowledge, deliver, record and re-record, register and re-register,
and file and re-file this Mortgage and any financing statements or other
documents which the Mortgagee may require from time to time (all in form and
substance reasonably satisfactory to the Mortgagee) in order (A) to effectuate,
complete, perfect, continue or preserve the Lien of this Mortgage as a first
Lien on the Mortgaged Property, whether now owned or hereafter acquired, subject
only to the Permitted Liens, or (B) to effectuate, complete, perfect, continue
or preserve any right, power or privilege granted or intended to be granted to
the Mortgagee hereunder or otherwise accomplish the purposes of this Mortgage,
provided the same does not, in any material respect, increase the obligations
of, or diminish the rights reserved to, the Mortgagor hereunder. To the extent
permitted by law, the Mortgagor hereby authorizes the Mortgagee to execute and
file financing statements or continuation statements without the Mortgagor's
signature appearing thereon. The Mortgagor shall pay within fifteen (15) days of
demand therefor the costs of, or incidental to, any recording or filing of any
financing or continuation statement, or amendment thereto, concerning the
Mortgaged Property.
(d) Nothing herein shall be construed to subordinate the Lien
of this Mortgage to any Permitted Lien to which the Lien of this Mortgage is not
otherwise subordinate.
SECTION 2.02. Secured Obligations. The Mortgagor shall duly
and punctually pay, perform and observe the Secured Obligations to the extent
required of the Mortgagor in accordance with the terms and provisions of the
Loan Documents.
SECTION 2.03. Impositions. The Mortgagor shall (i) subject to
Section 2.06, duly and punctually pay all material Impositions, including any
accrued interest on the unpaid balance of any Imposition which is being paid in
installments prior to the delinquency date thereof; (ii) subject to Section
2.06, duly and punctually file all returns and other statements required to be
filed with respect to any material Imposition prior to the delinquency date
thereof; (iii) promptly notify the Mortgagee of the receipt by the Mortgagor of
any notice of default in the payment of any material Imposition or in the filing
of any return or other statement relating to any material Imposition and
simultaneously furnish to the Mortgagee a copy of such notice of default; and
(iv) not make deduction from or claim any credit on any Secured Obligation by
reason of any Imposition and, to the extent permitted under applicable law,
hereby irrevocably waives any right to do so, provided, however, that if any
such Imposition may be paid in installments (whether or not interest shall
accrue on the unpaid balance thereof), the Mortgagor may pay the same in
installments (together with any accrued interest payable on the unpaid balance
thereof) as the same respectively become due, before any fine or penalty,
attaches thereto, and provided further, that if the Mortgagor in good faith
contests the validity or amount of any such Imposition or claim by appropriate
proceedings and in accordance with Section 2.06, the Mortgagor may defer payment
thereof during the pendency of such contest including any appeal period.
SECTION 2.04. Legal and Insurance Requirements. (a) The
Mortgagor represents and warrants that as of the date hereof, (i) to the best of
the Mortgagor's knowledge, (x) the Property and the use and operation thereof
comply with all Insurance Requirements and all material Legal Requirements, and
(y) there is no default under any Legal Requirement or Insurance Requirement
which would have a material adverse effect on the use or operation of the
Property, and (ii) the execution, delivery and performance of this Mortgage will
not contravene any provision of or constitute a default under any Legal
Requirement or Insurance Requirement.
(b) The Mortgagor shall (i) duly and punctually comply with
all material Legal Requirements and Insurance Requirements other than Legal
Requirements and Insurance Requirements the validity or applicability of which
are being contested pursuant to Section 2.06; (ii) procure, maintain and duly
and punctually comply with all Permits required for any construction,
reconstruction, repair, alteration, addition, improvement, maintenance,
management, use and operation of the Property as then conducted other than
Permits the necessity of which are being contested pursuant to Section 2.06;
(iii) promptly notify the Mortgagee of the receipt by the Mortgagor of any
notice of default regarding any Legal Requirement, Insurance Requirement or
Permit or any possible or actual termination of any Permit or Insurance Policy
and furnish to the Mortgagee a copy of such notice of default or termination,
except with respect to any default or termination which would not have a
material adverse effect on the use or operation of the Property as then
conducted; and (iv) promptly after obtaining knowledge thereof notify the
Mortgagee of any condition which, with or without the giving of notice or the
passage of time or both, would constitute a default regarding any Legal
Requirement or Insurance Requirement or a termination of any Permit or Insurance
Policy which default or termination would have a material adverse effect on the
use or operation of the Property as then conducted and the action being taken to
remedy such condition.
SECTION 2.05. Status of the Property. The Mortgagor represents
and warrants that, to the best of the Mortgagor's knowledge, (i) the Property is
served by all necessary water, sanitary and storm sewer, drainage, electric,
steam, gas, telephone and other utilities and utility facilities, which utility
facilities have capacities which are sufficient to serve the current use and
occupancy of the Property; (ii) subject to Section 2.06, the Mortgagor will pay
when due all utility charges which are incurred by the Mortgagor for the benefit
of the Mortgaged Property or which may become a charge or lien against the
Mortgaged Property for gas, electricity, steam, water or sewer services
furnished to the Mortgaged Property and all other assessments or charges of a
similar nature, whether public or private, affecting the Mortgaged Property
whether or not such taxes, assessments or charges are liens thereon; (iii) the
Property has legal access to all streets, roads or alleys adjacent to the
Property (including, as appropriate, access over properly granted, perpetual,
private right-of-way or easement Agreements) sufficient to serve the current use
and operation of the Property; (iv) the Improvements are not located in an area
designated as "flood prone" (as defined under the regulations adopted under the
National Flood Insurance Program), or to the extent the Improvements are located
in an area designated as "flood prone", the Mortgagor maintains in full force
and effect flood insurance under the National Flood Insurance Program to the
extent and in the minimum amounts required by applicable law; and (v) to the
best of the Mortgagor's knowledge, since the date of the survey described on
Exhibit B, there have been no additions to or any alterations of the
Improvements that encroach upon any adjoining property or that fail to comply
with applicable zoning laws.
SECTION 2.06. Permitted Contests. After prior notice to the
Mortgagee, the Mortgagor may contest, by appropriate proceedings conducted in
good faith and with due diligence, any Legal Requirement, any Insurance
Requirement or any Imposition, provided that (i) no Event of Default has
occurred and is continuing (it being agreed that the failure to comply with such
Legal Requirement or Insurance Requirement, or to pay such Imposition or to
discharge such Lien during such contest shall not constitute an Event of
Default, provided that the Mortgagor is otherwise in compliance with this
Section); (ii) no Mortgaged Property or interest therein is in danger of being
sold, forfeited or lost, or the priority of the Lien of the Mortgagee is not at
risk, as a result of such contest or proceedings; (iii) in the case of any Legal
Requirement, the Mortgagee and the other Secured Parties are not in danger of
any criminal or material civil penalty or any other liability for failure to
comply therewith and no Mortgaged Property or interest therein is subject to the
imposition of any Lien as a result of such failure which is not properly
contested pursuant to this Section; and (iv) in the case of any Insurance
Requirement, no Insurance Policy or coverage is in danger of being forfeited or
lost as a result of such contest or proceedings, unless replaced; and provided
further that the Mortgagor establishes any reserve or other appropriate
provision required with respect to such contest under generally accepted
accounting principles consistently applied.
SECTION 2.07. Liens. Subject to the rights of contest provided
the Mortgagor in Section 2.06, the Mortgagor shall not create or permit to be
created or to remain, any Lien on the Mortgaged Property or any interest therein
and shall cause to be discharged any such Lien within forty-five (45) days
following receipt of notice of such Lien, in each case (i) whether voluntarily
or involuntarily created, (ii) whether directly or indirectly a Lien thereon and
(iii) whether subordinated hereto, except Permitted Liens. The provisions of
this Section shall apply to each and every Lien (other than Permitted Liens) on
the Mortgaged Property or any interest therein, regardless of whether a consent
to, or waiver of a right to consent to, any other Lien thereon has been
previously obtained in accordance with the terms of the Loan Documents. Nothing
herein shall obligate the Mortgagor to remove any inchoate statutory Lien in
respect of obligations not yet due and payable.
SECTION 2.08. Transfer. The Mortgagor shall not Transfer, or
suffer any Transfer of, the Mortgaged Property or any part thereof or interest
therein, except Permitted Dispositions. The provisions of this Section shall
apply to each and every Transfer of the Mortgaged Property or any interest
therein, regardless of whether a consent to, or waiver of a right to consent to,
any other Transfer thereof has been previously obtained in accordance with the
terms of the Loan Documents.
SECTION 2.09. Agreements. The Mortgagor has not entered into
any contract or other agreement providing for the transfer, conveyance or
encumbrance of the Mortgaged Property or any part thereof or interest therein
except as may be permitted by the Credit Agreement.
SECTION 2.10. Maintenance, Repair, Alterations, Etc. The
Mortgagor will: keep and maintain the Mortgaged Property in good working order
and condition (ordinary wear and tear excepted); subject to Section 3.02(c),
make or cause to be made, as and when necessary, all repairs, renewals and
replacements, structural and nonstructural, exterior and interior, ordinary and
extraordinary, foreseen and unforeseen which are necessary to so maintain the
Mortgaged Property, except to the extent that the failure to do so could not
reasonably be expected to result in a Material Adverse Effect; comply with all
applicable statutes, regulations and orders of and all applicable restrictions
imposed by, all governmental bodies, domestic and foreign (collectively, a
"Law") now or hereafter affecting this Mortgaged Property or any part thereof or
the use thereof or requiring any alterations or improvements, except to the
extent such non-compliances could not, individually or in the aggregate,
reasonably be expected to result in a Material Adverse Effect; not commit or
permit any waste or deterioration (ordinary wear and tear excepted) of the
Mortgaged Property; not permit the Improvements to be demolished or
substantially altered; comply with the provisions of any lease, easement or
other agreement affecting all or any part of the Mortgaged Property except to
the extent that the failure to do so could not reasonably be expected to result
in a Material Adverse Effect; and not permit the Improvements or any part
thereof to become abandoned.
SECTION 2.11. Actions Affecting this Mortgaged Property. The
Mortgagor will appear in and contest any action or proceeding brought by any
third parties unrelated to the Mortgagee purporting to affect the security
hereof or the rights or powers of the Mortgagee hereunder; and the Mortgagor
will pay all costs and expenses incurred by the Mortgagor, including cost of
evidence of title and reasonable attorneys' fees, in any such action or
proceeding. The Mortgagor shall give the Mortgagee prompt notice in writing of
any such action or proceeding.
SECTION 2.12. Environmental Protection Matters. The Mortgagor
shall comply with the provisions of the Credit Agreement relating to
environmental matters, including, but not limited to, Section 4.07 of the Credit
Agreement, which provision is incorporated herein by reference.
SECTION 2.13. The Credit Agreement and The Security Agreement.
This Mortgage is made pursuant to the Credit Agreement, and this Mortgage is
subject to all of the provisions of the Credit Agreement including, without
limitation, the provisions of the Credit Agreement entitling the Mortgagee, the
Banks and/or the other Secured Creditors to declare the respective indebtedness
secured hereby to be immediately due and payable, as the case may be, all of
which provisions are incorporated herein with the same force and with like
effect as if they were fully set forth herein at length and made a part hereof.
In the event of a conflict between any of the provisions of the Credit Agreement
and the Security Agreement on the one hand and any of the provisions of this
Mortgage, on the other, the provisions of the Credit Agreement and the Security
Agreement shall control.
SECTION 2.14. Brokers. The Mortgagor represents and warrants
that it has not dealt with any broker in connection with this transaction and
that it knows of no other Person who is entitled to a commission in connection
with this transaction. The Mortgagor hereby agrees to indemnify, defend and hold
the Indemnitees harmless from and against any and all claims, liabilities,
damages, demands, costs, expenses (including, without limitation, the costs and
expenses of defending or settling any such claims and all attorneys' fees and
disbursements) or causes of action arising out of a breach of the
representations, warranties or agreements contained in this Section 2.14. The
representations, warranties and agreements contained in this Section 2.14 shall
survive repayment of the Obligations and discharge of this Mortgage.
SECTION 2.15. Recordation of Mortgage and Financing
Statements. The Mortgagor will execute, acknowledge and deliver any financing
statements, continuation statements and other instruments in addition or
supplemental hereto, including, without limitation, contracts, licenses and
permits affecting the Mortgaged Property, which may be necessary or reasonably
requested by the Mortgagee from time to time in order to perfect and maintain
the validity and effectiveness of this Mortgage and the lien and security
thereof to the Mortgagee and in such manner and places and within such times, in
each case as is commercially reasonable and as may be necessary or appropriate
to accomplish such purposes and to preserve and protect the rights and remedies
of the Mortgagee. The Mortgagor or its agents will furnish reasonably
satisfactory evidence of every such recording, filing and registration to the
Mortgagee. The Mortgagor hereby appoints the Mortgagee as its true and lawful
attorney-in-fact to file, with the Mortgagor's signature, or without Mortgagor's
signature in the state and county where the Mortgaged Property is located and
any other jurisdiction in which such filing may lawfully and effectively be made
without the Mortgagor's signature, any and all Uniform Commercial Code financing
and continuation statements which the Mortgagee may reasonably deem necessary or
appropriate to file with respect to this Mortgage.
SECTION 2.16. Changes to Mortgage or Related Loan Documents.
If the Obligations or any part thereof are extended or varied or if any part of
the security is released, all persons now or at any time hereafter liable
therefor, or whose consent to this Mortgage was obtained, shall be held to
assent to such extension, variation or release, and their liability and the lien
and all provisions hereof shall continue in full force, the right of recourse,
if any, against all such persons being expressly reserved by the Mortgagee,
notwithstanding such extension, variation or release. Any person or entity
taking a junior mortgage or other lien upon the Mortgaged Property or any
interest therein, shall take said lien subject to the rights of the Mortgagee to
amend, modify, and supplement, restate and consolidate this Mortgage and/or the
other Financing Documents and to impose additional fees and other charges, and
to extend the maturity of said indebtedness, and to grant partial releases of
the lien of this Mortgage, in each and every case without obtaining the consent
of the holder of such lien and without the lien of this Mortgage losing its
priority over the rights of any such junior lien. Nothing contained in this
Section shall be construed as waiving any provision contained herein which
provides, among other things, that it shall constitute an Event of Default if
the Mortgaged Property be sold, conveyed, or encumbered unless permitted by this
Mortgage and/or the other Financing Documents.
ARTICLE III
INSURANCE, CASUALTY AND CONDEMNATION
SECTION 3.01. Insurance. (a) The Mortgagor shall maintain
in full force and effect Insurance Policies with respect to the Property as
required by the Credit Agreement.
The physical damage insurance maintained with respect to the Property shall name
the Mortgagee as an insured party and shall provide that all property losses
insured against shall be adjusted by the Mortgagor, subject to the Mortgagee's
rights pursuant to Section 3.03(a) hereof and the Credit Agreement. All
insurance maintained by the Mortgagor with respect to the Property shall provide
that no cancellation or material change thereof shall be effective until at
least 30 days after receipt by the Mortgagee of written notice thereof; and all
losses shall be payable notwithstanding any foreclosure or other action or
proceeding taken pursuant to this Mortgage.
(b) The Mortgagor shall furnish to the Mortgagee from time to
time not later than 15 days prior to the expiration date of each policy required
to be maintained by the Mortgagor hereunder, an insurance certificate or
certificates executed by the insurer or its authorized agent with respect to the
new or extended policy. If the Mortgagor fails to maintain the Insurance
Policies required to be maintained under this Section, the Mortgagee shall have
the right to obtain such Insurance Policies and pay the premiums therefor. If
the Mortgagee obtains such Insurance Policies or pays the premiums therefor,
upon demand, the Mortgagor shall reimburse the Mortgagee for its reasonable
expenses in connection therewith, together with interest thereon, pursuant to
Section 4.01.
(c) The Mortgagor may effect such coverage under subsection
(a) of this Section under blanket insurance policies covering other properties
of the Mortgagor, provided that (i) any such blanket insurance policy shall
specify therein, or the insurer under such policy shall certify to the
Mortgagee, (A) the maximum amount of the total insurance afforded by the blanket
policy allocated to the Property, and (B) any sublimits in such blanket policy
applicable to the Property, which sublimits shall not be less than the amounts
required pursuant to this Section; (ii) any such blanket insurance policy shall
comply in all respects with the other provisions of this Section; and (iii) the
protection afforded under any such blanket insurance policy shall be no less
than that which would have been afforded under a separate policy relating only
to the Property.
(d) The Mortgagor shall not maintain additional or separate
insurance concurrent in form or contributing in the event of loss with the
insurance required under this Section, unless (i) the policies providing such
additional or separate insurance are submitted to the Mortgagee for its
approval, which approval shall not be unreasonably withheld; (ii) the insurers
under such policies and the terms thereof are approved by the Mortgagee, which
approval shall not be unreasonably withheld; and (iii) the Mortgagee and the
other Secured Parties are included in such policies as additional insureds.
SECTION 3.02. Casualty and Condemnation. (a) The Mortgagor
represents and warrants that, as of the date hereof, (i) there is no Casualty or
Condemnation affecting in any material respect the use and occupancy of the
Property, (ii) there are no negotiations or proceedings presently pending in
connection with a Condemnation and (iii) to the knowledge of the Mortgagor, no
Condemnation is proposed or threatened.
(b) If any Casualty occurs, the Mortgagor shall immediately
take such action as is required by the Credit Agreement and the Other Loan
Documents.
(c) If any Casualty or Condemnation occurs (and provided the
applicable Insurance Proceeds or Awards have not been applied to the prepayment
of the Loans in accordance with Section 2.10(f) of the Credit Agreement and have
been made available to the Mortgagor), the Mortgagor shall promptly commence and
diligently pursue to completion the Restoration of such Property, subject to
Unavoidable Delays, whether or not the Insurance Proceeds or Awards with respect
to such Casualty or Condemnation are sufficient for such purpose; provided that
(i) any such Restoration shall be effected with due diligence, in a good and
workmanlike manner, in compliance with all applicable Legal Requirements and
Insurance Requirements; (ii) any such Restoration shall be conducted under the
supervision of an architect or engineer if customary for such Restoration; (iii)
any such Restoration shall be located wholly on the Land and, unless consented
to by the Mortgagee and by the owner of the adjacent property, shall be
independent of and not connected with improvements located on adjacent property;
(iv) each such Restoration shall be promptly and fully paid for by the Mortgagor
except to the extent that any such payment is being contested in good faith; and
(vi) the Mortgagor shall procure prior to the commencement of any such
Restoration, and maintain throughout the continuation of the work involved, such
insurance and performance and payment bonds as are customary for the type of
construction and work involved.
SECTION 3.03. Insurance Claims and Proceeds; Condemnation
Awards. (a) If any Casualty occurs, (i) the Mortgagor shall promptly make proof
of loss under the applicable Insurance Policies and diligently pursue to
conclusion its claim for the Insurance Proceeds payable thereunder and any suit,
action or other proceeding necessary or appropriate to obtain payment of such
Insurance Proceeds and (ii) all such Insurance Proceeds shall be paid to the
Mortgagor in accordance with the Credit Agreement. If such Insurance Proceeds
are required to be delivered by the Mortgagor to the Mortgagee, then, until so
delivered, any such Insurance Proceeds received by the Mortgagor shall be held
in trust by the Mortgagor for and as the property of the Mortgagee and the other
Secured Parties and shall not be commingled with any other funds or property of
the Mortgagor.
(b) If any Condemnation occurs, or if any negotiation or
proceeding is commenced which might in the reasonable judgment of the Mortgagor
result in a Condemnation, or if any Condemnation is proposed or threatened, the
Mortgagor shall, promptly after receiving notice or obtaining knowledge thereof,
do all things deemed reasonably necessary or appropriate by the Mortgagor to
preserve the Mortgagor's interest in such Property and promptly make claim for
the Awards payable with respect thereto and diligently pursue to conclusion such
claim for such Awards and any suit, action or other proceeding necessary or
appropriate to obtain payment thereof. All Awards with respect to any
Condemnation shall be paid to the Mortgagor in accordance with the Credit
Agreement. If such Awards are required to be delivered by the Mortgagor to the
Mortgagee, then, until so delivered, any such Awards received by the Mortgagor
shall be held in trust by the Mortgagor for and as the property of the Mortgagee
and the other Secured Parties and shall not be commingled with any other funds
or property of the Mortgagor.
ARTICLE IV
CERTAIN SECURED OBLIGATIONS
SECTION 4.01. Interest After Default. If, pursuant to the
terms of this Mortgage, the Mortgagee shall make any payment on behalf of the
Mortgagor (including any payment made by the Mortgagee pursuant to Section
5.10), or shall incur hereunder any expense for which the Mortgagee is entitled
to reimbursement pursuant to the terms of the Loan Documents, such Secured
Obligation shall be payable within fifteen (15) days of notice and any amounts
not paid within fifteen (15) days of notice shall bear interest from the date
incurred until paid at the Post-Default Rate. Such interest, and any other
interest on the Secured Obligations payable at the Post-Default Rate pursuant to
the terms of the Loan Documents, shall accrue through the date paid
notwithstanding any intervening judgment of foreclosure or sale. All such
interest shall be part of the Secured Obligations and shall be secured by this
Mortgage.
SECTION 4.02. Changes in the Laws Regarding Taxation. If,
after the date hereof, there shall be enacted any applicable law deducting from
the value of the Property for the purpose of taxation the Lien of any Collateral
Document or changing in any way the applicable law for the taxation of
mortgages, deeds of trust or other Liens or obligations secured thereby, or the
manner of collection of such taxes, so as to adversely affect this Mortgage, the
Secured Obligations or any Secured Party, upon demand by the Mortgagee or any
other affected Secured Party and to the extent permitted under applicable law,
the Mortgagor shall pay all taxes, assessments or other charges resulting
therefrom or shall reimburse such Secured Party for all such taxes, assessments
or other charges which such Secured Party is obligated to pay as a result
thereof.
SECTION 4.03. Indemnification. (a) The Mortgagor shall
protect, indemnify and defend each of the Mortgagee and the other Secured
Parties and their respective successors, assigns, employees, agents and servants
from and against all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements of any kind and
nature whatsoever (including reasonable attorneys' fees and expenses) which may
be imposed on, incurred by or asserted against any Secured Party by reason or on
account of, or in connection with (a) the Mortgagee's exercise of any of its
rights and remedies hereunder; (b) any accident, injury to or death of persons
or loss of or damage to property occurring in, on or about the Mortgaged
Property or any part thereof or on the adjoining sidewalks, curbs, adjacent
property or adjacent parking areas, street or ways; (c) any failure on the part
of the Mortgagor to perform or comply with any of the terms of this Mortgage;
(d) the performance of any labor or services or the furnishing of any materials
or other property in respect of the Mortgaged Property or any part thereof; or
(e) any other conduct or misconduct of the Mortgagor, any lessee of any of the
Mortgaged Property, or any of their respective agents, contractors,
subcontractors, servants, employees, licensees or invitees; provided, however,
that any claims caused by the willful misconduct or gross negligence of any
Secured Party as determined by a court of competent jurisdiction shall be
excluded from the foregoing indemnification of such Secured Party. Any amount
payable under this Section will be deemed a demand obligation and will bear
interest pursuant to Section 4.01. The obligations of the Mortgagor under this
Section shall survive the termination of this Mortgage.
(b) All sums payable by the Mortgagor hereunder shall be paid
without counterclaim, set-off, or deduction and without abatement, suspension,
deferment, diminution or reduction, and the obligations and liabilities of the
Mortgagor hereunder shall in no way be released, discharged or otherwise
affected (except as expressly provided herein) by reason of: (i) any damage or
any condemnation of the Mortgaged Property or any part thereof; (ii) any
restriction or prevention of or interference with any use of the Mortgaged
Property or any part thereof; (iii) any title defect or encumbrance or any
eviction from the Mortgaged Property or any part thereof by title paramount or
otherwise; (iv) any bankruptcy, insolvency, reorganization, composition,
adjustment, dissolution, liquidation or other like proceeding relating to the
Mortgagee, or the Mortgagor, or any action taken with respect to this Mortgage
by any agent or receiver of the Mortgagee; (v) any claim which the Mortgagor has
or might have against the Mortgagee; (vi) any default or failure on the part of
the Mortgagee to perform or comply with any of the terms hereof or of any other
Financing Documents; or (vii) any other occurrence whatsoever, whether similar
or dissimilar to the foregoing, whether or not the Mortgagor shall have notice
or knowledge of any of the foregoing. The Mortgagor waives, to the extent
permitted by law, all rights now or hereafter conferred by statute or otherwise
to any abatement, suspension, deferment, diminution or reduction of any of the
Obligations.
(c) Any amounts paid by any Indemnitee as to which such
Indemnitee has the right to reimbursement shall constitute Obligations secured
by the Mortgaged Property. The indemnity obligations of the Mortgagor contained
in this Section 4.03 shall continue in full force and effect notwithstanding the
full payment of all the notes issued under the Credit Agreement, and the payment
of all other Secured Obligations and notwithstanding the discharge thereof.
ARTICLE V
DEFAULTS, REMEDIES AND RIGHTS
SECTION 5.01. Events of Default. Any Event of Default under
the Credit Agreement shall constitute an Event of Default hereunder. All notice
and cure periods provided in the Credit Agreement and the other Loan Documents
shall run concurrently with any notice or cure periods provided under applicable
law.
SECTION 5.02. Remedies. (a) Upon the occurrence and
continuance of an Event of Default, the Mortgagee shall have the right and
power to exercise any of the following remedies and rights, subject to
mandatory provisions of applicable law, to wit:
(i) to institute a proceeding or proceedings, by
advertisement, judicial process or otherwise as provided under
applicable law, for the complete or partial foreclosure of this
Mortgage or the complete or partial sale of the Mortgaged Property
under the power of sale hereunder or under any applicable provision of
law; or
(ii) to sell the Mortgaged Property, and all estate, right,
title, interest, claim and demand of the Mortgagor therein and thereto,
and all rights of redemption thereof, at one or more sales, as an
entirety or in parcels, with such elements of real or personal
property, at such time and place and upon such terms as the Mortgagee
may deem expedient or as may be required under applicable law, and in
the event of a sale hereunder or under any applicable provision of law
of less than all of the Mortgaged Property, this Mortgage shall
continue as a Lien on the remaining Mortgaged Property; or
(iii) to institute a suit, action or proceeding for the
specific performance of any of the provisions of this Mortgage; or
(iv) to be entitled to the appointment of a receiver,
supervisor, Mortgagee, liquidator, conservator or other custodian (a
"Receiver") of the Mortgaged Property, without notice to Mortgagor, to
the fullest extent permitted by law, as a matter of right and without
regard to, or the necessity to disprove, the adequacy of the security
for the Secured Obligations or the solvency of the Mortgagor or any
other Obligor, and the Mortgagor hereby, to the fullest extent
permitted by applicable law, irrevocably waives such necessity and
consents to such appointment, without notice, said appointee to be
vested with the fullest powers permitted under applicable law,
including to the extent permitted under applicable law those under
clause (v) of this subsection (a); or
(v) to enter upon the Property, by the Mortgagee or a Receiver
(whichever is the Person exercising the rights under this clause), and,
to the extent permitted by applicable law, exclude the Mortgagor and
its managers, employees, contractors, agents and other representatives
therefrom in accordance with applicable law, without liability for
trespass, damages or otherwise, and take possession of all other
Mortgaged Property and all books, records and accounts relating
thereto, and upon demand the Mortgagor shall surrender possession of
the Property, the other Mortgaged Property and such books, records and
accounts to the Person exercising the rights under this clause; and
having and holding the same, the Person exercising the rights under
this clause may use, operate, manage, preserve, control and otherwise
deal therewith and conduct the business thereof, either personally or
by its managers, employees, contractors, agents or other
representatives, without interference from the Mortgagor or its
managers, employees, contractors, agents and other representatives;
and, upon each such entry and from time to time thereafter, at the
expense of the Mortgagor and the Mortgaged Property, without
interference by the Mortgagor or its managers, employees, contractors,
agents and other representatives, the Person exercising the rights
under this clause may, as such Person deems expedient, (A) insure or
reinsure the Property, (B) make all reasonably necessary or proper
repairs, renewals, replacements, alterations, additions, Restorations,
betterments and improvements to the Property and (C) in such Person's
own name or, at the option of such Person, in the Mortgagor's name,
exercise all rights, powers and privileges of the Mortgagor with
respect to the Mortgaged Property, including the right to enter into
Leases with respect to the Property, including Leases extending beyond
the time of possession by the Person exercising the rights under this
clause; and the Person exercising the rights under this clause shall
not be liable to account for any action taken hereunder, other than for
Rents actually received by such Person, and shall not be liable for any
loss sustained by the Mortgagor resulting from any failure to let the
Property or from any other act or omission of such Person, except to
the extent, in any case, such loss is caused by such Person's own
willful misconduct or gross negligence; or
(vi) with or, to the fullest extent permitted by applicable
law, without entry upon the Property, in the name of the Mortgagee or a
Receiver as required by law (whichever is the Person exercising the
rights under this clause) or, at such Person's option, in the name of
the Mortgagor, to collect, receive, sue for and recover all Rents and
proceeds of or derived from the Mortgaged Property, and after deducting
therefrom all costs, expenses and liabilities of every character
incurred by the Person exercising the rights under this clause in
collecting the same and in using, operating, managing, preserving and
controlling the Mortgaged Property and otherwise in exercising the
rights under clause (v) of this subsection (a) or any other rights
hereunder, including all amounts necessary to pay Impositions, Rents,
Insurance Premiums and other costs, expenses and liabilities relating
to the Property, as well as reasonable compensation for the services of
such Person and its managers, employees, contractors, agents or other
representatives, and to apply the remainder as provided in Section
5.06; or
(vii) to take any action with respect to any Mortgaged
Property permitted under the Local UCC; or
(viii) by notice to the Mortgagor (to the extent such notice
is required to be given under the Credit Agreement), but without formal
demand, presentment, notice of intention to accelerate or of
acceleration, protest or notice of protest, all of which are hereby
waived by the Mortgagor, declare all of the indebtedness secured hereby
to be immediately due and payable, and upon such declaration all of
such indebtedness shall become and be immediately due and payable,
anything in this Mortgage or the other Credit Documents to the contrary
notwithstanding; or
(ix) to take any other action, or pursue any other remedy or
right, as the Mortgagee may have under applicable law, including the
right to foreclosure through court action, and the Mortgagor does
hereby grant the same to the Mortgagee (as the case may be).
(b) To the fullest extent permitted by applicable law,
(i) each remedy or right hereunder shall be in addition to,
and not exclusive or in limitation of, any other remedy or right
hereunder, under any other Loan Document or under applicable law;
(ii) every remedy or right hereunder, under any other Loan
Document or under applicable law may be exercised concurrently or
independently and whenever and as often as deemed appropriate by the
Mortgagee;
(iii) no failure to exercise or delay in exercising any remedy
or right hereunder, under any other Loan Document or under applicable
law shall be construed as a waiver of any Default or other occurrence
hereunder or under any other Loan Document;
(iv) no waiver of, failure to exercise or delay in exercising
any remedy or right hereunder, under any other Loan Document or under
applicable law upon any Default or other occurrence hereunder or under
any other Loan Document shall be construed as a waiver of, or otherwise
limit the exercise of, such remedy or right upon any other or
subsequent Default or other or subsequent occurrence hereunder or under
any other Loan Document;
(v) no single or partial exercise of any remedy or right
hereunder, under any other Loan Document or under applicable law upon
any Default or other occurrence hereunder or under any other Loan
Document shall preclude or otherwise limit the exercise of any other
remedy or right hereunder, under any other Loan Document or under
applicable law upon such Default or occurrence or upon any other or
subsequent Default or other or subsequent occurrence hereunder or under
any other Loan Document;
(vi) the acceptance by the Mortgagee or any other Secured
Party of any payment less than the amount of the Secured Obligation in
question shall be deemed to be an acceptance on account only and shall
not be construed as a waiver of any Default hereunder or under any
other Loan Document with respect thereto; and
(vii) the acceptance by the Mortgagee or any other Secured
Party of any payment of, or on account of, any Secured Obligation shall
not be deemed to be a waiver of any Default or other occurrence
hereunder or under any other Loan Document with respect to any other
Secured Obligation.
(c) If the Mortgagee has proceeded to enforce any remedy or
right hereunder or with respect hereto by foreclosure, sale, entry or otherwise,
it may compromise, discontinue or abandon such proceeding for any reason without
notice to the Mortgagor or any other Person (except other Secured Parties to the
extent required by the other Loan Documents); and, if any such proceeding shall
be discontinued, abandoned or determined adversely for any reason, the Mortgagor
and the Mortgagee shall retain and be restored to their former positions and
rights hereunder with respect to the Mortgaged Property, subject to the Lien
hereof except to the extent any such adverse determination specifically provides
to the contrary.
(d) For the purpose of carrying out any provisions of Section
5.02(a)(v), 5.02(a)(vi), 5.05, 5.07, 5.10 or 6.01 or, if an Event of Default has
occurred, any other provision hereunder authorizing the Mortgagee or any other
Person to perform any action on behalf of the Mortgagor, the Mortgagor hereby
irrevocably appoints the Mortgagee or a Receiver appointed pursuant to Section
5.02(a)(iv) or such other Person as the attorney-in-fact of the Mortgagor (with
a power to substitute any other Person in its place as such attorney-in-fact) to
act in the name of the Mortgagor or, at the option of the Person appointed to
act under this subsection, in such Person's own name, to take the action
authorized under Section 5.02(a)(v), 5.02(a)(vi), 5.05, 5.07, 5.10 or 6.01 or
such other provision, and to execute, acknowledge and deliver any document in
connection therewith or to take any other action incidental thereto as the
Person appointed to act under this subsection shall deem appropriate in its
discretion (subject to the provisions of this Mortgage); and the Mortgagor
hereby irrevocably authorizes and directs any other Person to rely and act on
behalf of the foregoing appointment and a certificate of the Person appointed to
act under this subsection that such Person is authorized to act under this
subsection.
SECTION 5.03. WAIVERS BY THE MORTGAGOR. TO THE FULLEST EXTENT
PERMITTED UNDER APPLICABLE LAW, THE MORTGAGOR SHALL NOT ASSERT, AND HEREBY
IRREVOCABLY WAIVES, ANY RIGHT OR DEFENSE THE MORTGAGOR MAY HAVE UNDER ANY
STATUTE OR RULE OF LAW OR EQUITY NOW OR HEREAFTER IN EFFECT RELATING TO (I)
APPRAISEMENT, VALUATION, HOMESTEAD EXEMPTION, EXTENSION, MORATORIUM, STAY,
STATUTE OF LIMITATIONS, REDEMPTION, MARSHALLING OF THE MORTGAGED PROPERTY OR THE
OTHER ASSETS OF THE MORTGAGOR, SALE OF THE MORTGAGED PROPERTY IN ANY ORDER OR
NOTICE OF DEFICIENCY OR INTENTION TO ACCELERATE ANY SECURED OBLIGATION; (II)
IMPAIRMENT OF ANY RIGHT OF SUBROGATION OR REIMBURSEMENT; (III) ANY REQUIREMENT
THAT AT ANY TIME ANY ACTION MUST BE TAKEN AGAINST ANY OTHER PERSON, ANY PORTION
OF THE MORTGAGED PROPERTY OR ANY OTHER ASSET OF THE MORTGAGOR OR ANY OTHER
PERSON; (IV) ANY PROVISION BARRING OR LIMITING THE RIGHT OF THE BENEFICIARY TO
SELL ANY MORTGAGED PROPERTY AFTER ANY OTHER SALE OF ANY OTHER MORTGAGED PROPERTY
OR ANY OTHER ACTION AGAINST THE MORTGAGOR OR ANY OTHER PERSON; (V) ANY PROVISION
BARRING OR LIMITING THE RECOVERY BY THE BENEFICIARY OF A DEFICIENCY AFTER ANY
SALE OF THE MORTGAGED PROPERTY; OR (VI) THE RIGHT OF THE MORTGAGEE OR THE
BENEFICIARY AS AGENT TO FORECLOSE THIS MORTGAGE IN ITS OWN NAME ON BEHALF OF ALL
OF THE SECURED PARTIES BY JUDICIAL ACTION AS THE REAL PARTY IN INTEREST WITHOUT
THE NECESSITY OF JOINING ANY OTHER SECURED PARTY. NOTHING HEREIN, HOWEVER, SHALL
BE CONSTRUED TO LIMIT ANY RIGHTS, INCLUDING RIGHT TO NOTICE, AFFORDED TO THE
MORTGAGOR UNDER THE LOAN DOCUMENTS.
SECTION 5.04. Jurisdiction and Process. (a) To the extent
permitted under applicable law, in any suit, action or proceeding arising out of
or relating to this Mortgage or any other Collateral Document as it relates to
any Mortgaged Property, the Mortgagor (i) irrevocably consents to the
non-exclusive jurisdiction of any state or federal court sitting in the State in
which the Property is located and irrevocably waives any defense or objection
which it may now or hereafter have to the jurisdiction of such court or the
venue of such court or the convenience of such court as the forum for any such
suit, action or proceeding; and (ii) irrevocably consents to the service of (A)
any process in any such suit, action or proceeding, or (B) any notice relating
to any sale, or the exercise of any other remedy by the Mortgagee hereunder by
mailing a copy of such process or notice by United States registered or
certified mail, postage prepaid, return receipt requested to the Mortgagor at
its address specified in or pursuant to Section 7.03, such service to be
effective when such process or notice is mailed as aforesaid.
(b) Nothing in this Section shall affect the right of the
Mortgagee to bring any suit, action or proceeding arising out of or relating to
this Mortgage or any other Collateral Document in any court having jurisdiction
under the provisions of any other Collateral Document or applicable law or to
serve any process, notice of sale or other notice in any manner permitted by any
other Collateral Document or applicable law.
SECTION 5.05. Sales. Except as otherwise provided herein, to
the fullest extent permitted under applicable law, at the election of the
Mortgagee, the following provisions shall apply to any sale of the Mortgaged
Property hereunder, whether made pursuant to the power of sale hereunder, any
judicial proceeding or any judgment or decree of foreclosure or sale or
otherwise:
(a) The Mortgagee or the court officer (whichever is the
Person conducting any sale) may conduct any number of sales from time
to time. The power of sale hereunder or with respect hereto shall not
be exhausted by any sale as to any part or parcel of the Mortgaged
Property which is not sold, unless and until the Secured Obligations
shall have been paid in full, and shall not be exhausted or impaired by
any sale which is not completed or is defective. Any sale may be as a
whole or in part or parcels and, as provided in Section 5.03, the
Mortgagor has waived its right to direct the order in which the
Mortgaged Property or any part or parcel thereof is sold.
(b) Any sale may be postponed or adjourned by public
announcement at the time and place appointed for such sale or for such
postponed or adjourned sale without further notice.
(c) After each sale, the Person conducting such sale shall
execute and deliver to the purchaser or purchasers at such sale a good
and sufficient instrument or instruments granting, conveying,
assigning, Transferring and delivering all right, title and interest of
the Mortgagor in and to the Mortgaged Property sold and shall receive
the proceeds of such sale and apply the same as provided in Section
5.06. The Mortgagor hereby irrevocably appoints the Person conducting
such sale as the attorney-in-fact of the Mortgagor (with full power to
substitute any other Person in its place as such attorney-in-fact) to
act in the name of the Mortgagor or, at the option of the Person
conducting such sale, in such Person's own name, to make without
warranty by such Person any conveyance, assignment, Transfer or
delivery of the Mortgaged Property sold, and to execute, acknowledge
and deliver any instrument of conveyance, assignment, Transfer or
delivery or other document in connection therewith or to take any other
action incidental thereto, as the Person conducting such sale shall
deem appropriate in its discretion; and the Mortgagor hereby
irrevocably authorizes and directs any other Person to rely and act
upon the foregoing appointment and a certificate of the Person
conducting such sale that such Person is authorized to act hereunder.
Nevertheless, upon the request of such attorney-in-fact the Mortgagor
shall promptly execute, acknowledge and deliver any documentation which
such attorney-in-fact may require for the purpose of ratifying,
confirming or effectuating the powers granted hereby or any such
conveyance, assignment, Transfer or delivery by such attorney-in-fact.
(d) Any statement of fact or other recital made in any
instrument referred to in Section 5.05(c) given by the Person
conducting any sale as to the nonpayment of any Secured Obligation, the
occurrence of any Event of Default, the amount of the Secured
Obligations due and payable, the request to the Mortgagee to sell, the
notice of the time, place and terms of sale and of the Mortgaged
Property to be sold having been duly given, the refusal, failure or
inability of the Mortgagee to act, the appointment of any substitute or
successor agent, any other act or thing having been duly done by the
Mortgagor, the Mortgagee or any other such Person, shall be taken as
conclusive and binding against all other Persons as evidence of the
truth of the facts so stated or recited.
(e) The receipt by the Person conducting any sale of the
purchase money paid at such sale shall be sufficient discharge therefor
to any purchaser of any Mortgaged Property sold, and no such purchaser,
or its representatives, grantees or assigns, after paying such purchase
price and receiving such receipt, shall be bound to see to the
application of such purchase price or any part thereof upon or for any
trust or purpose of this Mortgage or the other Loan Documents, or, in
any manner whatsoever, be answerable for any loss, misapplication or
nonapplication of any such purchase money or be bound to inquire as to
the authorization, necessity, expediency or regularity of such sale.
(f) Subject to mandatory provisions of applicable law, any
sale shall operate to divest all of the estate, right, title, interest,
claim and demand whatsoever, whether at law or in equity, of the
Mortgagor in and to the Mortgaged Property sold, and shall be a
perpetual bar both at law and in equity against the Mortgagor and any
and all Persons claiming such Mortgaged Property or any interest
therein by, through or under the Mortgagor.
(g) At any sale, the Mortgagee may bid for and acquire the
Mortgaged Property sold and, in lieu of paying cash therefor, may make
settlement for the purchase price by causing the Secured Parties to
credit against the Secured Obligations, including the expenses of the
sale and the cost of any enforcement proceeding hereunder, the amount
of the bid made therefor to the extent necessary to satisfy such bid.
(h) If the Mortgagor or any Person claiming by, through or
under the Mortgagor shall transfer or fail to surrender possession of
the Mortgaged Property, after the exercise by the Mortgagee of the
Mortgagee's remedies under Section 5.02(a)(v) or after any sale of the
Mortgaged Property pursuant hereto, then the Mortgagor or such Person
shall be deemed a tenant at sufferance of the purchaser at such sale,
subject to eviction by means of summary process for possession of land,
or subject to any other right or remedy available hereunder or under
applicable law.
(i) Upon any sale, it shall not be necessary for the Person
conducting such sale to have any Mortgaged Property being sold present
or constructively in its possession.
(j) If a sale hereunder shall be commenced by the Mortgagee,
the Mortgagee may at any time before the sale abandon the sale, and may
institute suit for the collection of the Secured Obligations or for the
foreclosure of this Mortgage; or if the Mortgagee shall institute a
suit for collection of the Secured Obligations or the foreclosure of
this Mortgage, the Mortgagee may at any time before the entry of final
judgment in said suit dismiss the same and sell the Mortgaged Property
in accordance with the provisions of this Mortgage.
SECTION 5.06. Proceeds. Except as otherwise provided herein or
required under applicable law, upon being instructed to do so in an Enforcement
Notice, the proceeds of any sale of, or other realization upon, the Mortgaged
Property hereunder, whether made pursuant to the power of sale hereunder, any
judicial proceeding or any judgment or decree of foreclosure or sale or
otherwise, shall be applied and paid as follows:
(a) First: to the payment of all expenses of such sale or
other realization, including compensation for the Person conducting
such sale (which may include the Mortgagee), the cost of title
searches, foreclosure certificates and attorneys' fees and expenses
incurred by such Person, together with interest on any such expenses
paid by such Person at the Post-Default Rate from the date of demand
through the date repaid to such Person;
(b) Second: to the payment of the expenses and other amounts
payable under Sections 4.02 and 5.10, if any;
(c) Third: to the payment of the other Secured Obligations in
the order and priority set forth in Section 8 of the Security
Agreement, until all Secured Obligations shall have been paid in full;
and
(d) Fourth: to pay to the Mortgagor or its successors and
assigns, or as a court of competent jurisdiction may direct, any
surplus then remaining from such proceeds.
SECTION 5.07. Assignment of Leases. (a) Subject to paragraph
(d) below, the assignments of the Leases and the Rents under Granting Clauses VI
and VII are and shall be present, absolute and irrevocable assignments by the
Mortgagor to the Mortgagee and, subject to the license to the Mortgagor under
Section 5.07(b), a Receiver appointed pursuant to Section 5.02(a)(iv) (whichever
is the Person exercising the rights under this Section) shall have the absolute,
immediate and continuing right to collect and receive all Rents now or
hereafter, including during any period of redemption, accruing with respect to
the Property. At the request of the Mortgagee or such Receiver, the Mortgagor
shall promptly execute, acknowledge, deliver, record, register and file any
additional general assignment of the Leases or specific assignment of any Lease
which the Mortgagee or such Receiver may require from time to time (all in form
and substance satisfactory to the Mortgagee or such Receiver) to effectuate,
complete, perfect, continue or preserve the assignments of the Leases and the
Rents under Granting Clauses VI and VII.
(b) The Mortgagor shall have a license granted hereby to
collect and receive all Rents and apply the same subject to the provisions of
the Loan Documents, such license to be terminable by the Mortgagee as provided
in Section 5.07(c).
(c) Upon the occurrence and continuance of an Event of
Default, the Mortgagee or a Receiver appointed pursuant to Section 5.02(a)(iv)
(whichever is the Person exercising the rights under this Section) shall have
the right to terminate the license granted under Section 5.07(b) by notice to
the Mortgagor and to exercise the rights and remedies provided under Section
5.07(a), under Sections 5.02(a)(v) and (vi) or under applicable law. Upon demand
by the Person exercising the rights under this Section, the Mortgagor shall
promptly pay to such Person all security deposits under the Leases and all Rents
allocable to any period after such demand. Subject to Sections 5.02(a)(v) and
(vi) and any applicable requirement of law, any Rents received hereunder by such
Person shall be promptly paid to the Mortgagee, and any Rents received hereunder
by the Mortgagee shall be deposited in the Collateral Account, to be held as
provided in the Credit Agreement, provided that, subject to Sections 5.02(a)(v)
and (vi) and any applicable requirement of law, any security deposits actually
received by such Person shall be promptly paid to the Mortgagee, and any
security deposits actually received by the Mortgagee shall be held, applied and
disbursed as provided in the applicable Leases and applicable law. Once the
Event of Default is remedied, the license granted in Section 5.07(b) shall
automatically be reinstated.
(d) Nothing herein shall be construed to be an assumption by
the Person exercising the rights under this Section, or otherwise to make such
Person liable for the performance, of any of the obligations of the Mortgagor
under the Leases, provided that such Person shall be accountable as provided in
Section 5.07(c) for any Rents or security deposits actually received by such
Person.
SECTION 5.08. Dealing With the Mortgaged Property. Subject to
Section 7.02, the Mortgagee shall have the right to release any portion of the
Mortgaged Property, or grant or consent to the granting of any Lien affecting
any portion of the Mortgaged Property, to or at the request of the Mortgagor,
for such consideration as the Mortgagee may require without, as to the remainder
of the Mortgaged Property, in any way impairing or affecting the Lien or
priority of this Mortgage, or improving the position of any subordinate
lienholder with respect thereto, or the position of any guarantor, endorser,
co-maker or other obligor of the Secured Obligations, except to the extent that
the Secured Obligations shall have been reduced by any actual monetary
consideration received for such release and applied to the Secured Obligations,
and may accept by assignment, pledge or otherwise any other property in place
thereof as the Mortgagee may require without being accountable therefor to any
other lienholder.
SECTION 5.09. Right of Entry. The Mortgagee and the
representatives of the Mortgagee shall have the right, upon being instructed to
do so by the Required Banks (i) without notice, if an Event of Default has
occurred and is continuing, (ii) with simultaneous notice, if any payment or
performance is required in the reasonable opinion of the Mortgagee to preserve
the Mortgagee's rights under this Mortgage or with respect to the Mortgaged
Property, or (iii) after reasonable notice, in all other cases, to enter upon
the Property at reasonable times, and with reasonable frequency, to inspect the
Mortgaged Property or, subject to the provisions hereof, to exercise any right,
power or remedy of the Mortgagee hereunder, provided that any Person so entering
the Property shall not unreasonably interfere with the ordinary conduct of the
Mortgagor's business, and provided further that no such entry on the Property,
for the purpose of performing obligations under Section 5.10 or for any other
purpose, shall be construed to be (x) possession of the Property by such Person
or to constitute such Person as a mortgagee in possession, unless such Person
exercises its right to take possession of the Property under Section 5.02(a)(v),
or (y) a cure of any Default or waiver of any Default or Secured Obligation. The
expense of any inspection pursuant to clause (iii) above shall be borne by the
Mortgagee unless an Event of Default shall have occurred and be continuing at
the time of such inspection, in which case the Mortgagor shall pay, or reimburse
the Mortgagee for, such expense.
SECTION 5.10. Right to Perform Obligations. If the Mortgagor
fails to pay or perform any obligation of the Mortgagor hereunder, the Mortgagee
and the representatives of the Mortgagee shall have the right, upon being
instructed to do so by the Required Banks at any time, to pay or perform such
obligation (i) without notice, if an Event of Default has occurred and is
continuing, (ii) with simultaneous notice, if such payment or performance is
required in the reasonable opinion of the Mortgagee to preserve the Mortgagee's
rights under this Mortgage or with respect to the Mortgaged Property or (iii)
after notice given reasonably in advance to allow the Mortgagor an opportunity
to pay or perform such obligation, provided that the Mortgagor is not contesting
payment or performance in accordance with the terms hereof and further provided
that no such payment or performance shall be construed to be a cure of any
Default or waiver of any Default or Secured Obligation. The Mortgagor shall
reimburse the Mortgagee on demand for the reasonable costs of performing any
such obligations and any amounts not paid on demand shall bear interest, payable
on demand, for each day until paid at the Post-Default Rate for such day.
SECTION 5.11. Concerning the Mortgagee. (a) The provisions of
Article 7 of the Credit Agreement shall inure to the benefit of the Mortgagee in
respect of this Mortgage and shall be binding upon the parties to the Credit
Agreement in such respect. In furtherance and not in derogation of the rights,
privileges and immunities of the Mortgagee therein set forth:
(i) The Mortgagee is authorized to take all such action as is
provided to be taken by it as Mortgagee hereunder and all other action
reasonably incidental thereto. As to any matters not expressly provided
for herein (including the timing and methods of realization upon the
Mortgaged Property) the Mortgagee shall act or refrain from acting in
accordance with written instructions from the Required Banks or, in the
absence of such instructions, in accordance with its discretion.
(ii) The Mortgagee shall not be responsible for the existence,
genuineness or value of any of the Mortgaged Property or for the
validity, perfection, priority or enforceability of the Lien of this
Mortgage on any of the Mortgaged Property, whether impaired by
operation of law or by reason of any action or omission to act on its
part hereunder. The Mortgagee shall have no duty to ascertain or
inquire as to the performance or observance of any of the terms of this
Mortgage by the Mortgagor.
(b) At any time or times, in order to comply with any legal
requirement in any jurisdiction, the Mortgagee may appoint another bank or trust
company or one or more other Persons, either to act as co-agent or co-agents,
jointly with the Mortgagee, or to act as separate agent or agents on behalf of
the Secured Parties with such power and authority as may be necessary for the
effectual operation of the provisions hereof and may be specified in the
instrument of appointment (which may, in the discretion of the Mortgagee,
include provisions for the protection of such co-agent or separate agent similar
to the provisions of this Section 5.11). References to the Mortgagee in Section
5.12 shall be deemed to include any co-agent or separate agent appointed
pursuant to this Section 5.11.
SECTION 5.12. Expenses. The Mortgagor agrees that it will
within fifteen (15) days of demand pay to the Mortgagee (i) the amount of any
taxes which the Mortgagee may have been required to pay by reason of the Lien of
this Mortgage and has failed to pay or to free any of the Mortgaged Property
from any Lien thereon (other than Permitted Liens), (ii) the amount of any and
all reasonable out-of-pocket expenses, including the reasonable fees and
disbursements of counsel and of any other experts, which the Mortgagee may incur
in connection with preserving the value of the Mortgaged Property and the
validity, perfection, rank and value of the Lien of this Mortgage and (iii) the
amount of any and all out-of-pocket expenses, including the fees and
disbursements of counsel and of any other experts, which the Mortgagee may incur
in connection with the collection, sale or other disposition of any of the
Mortgaged Property.
ARTICLE VI
SECURITY AGREEMENT AND FIXTURE FILING
SECTION 6.01. Security Agreement. To the extent that the
Mortgaged Property constitutes or includes tangible or intangible personal
property, including goods or items of personal property which are or are to
become fixtures under applicable law, the Mortgagor hereby grants a security
interest therein and this Mortgage shall also be construed as a pledge and a
security agreement under the Local UCC; and, upon the occurrence and continuance
of an Event of Default, the Mortgagee shall be entitled to exercise with respect
to such tangible or intangible personal property all remedies available under
the Local UCC and all other remedies available under applicable law. Without
limiting the foregoing, any personal property may, at the Mortgagee's option
and, except as otherwise required by applicable law, without the giving of
notice, (i) be sold hereunder, (ii) be sold pursuant to the Local UCC or (iii)
be dealt with by the Mortgagee in any other manner permitted under applicable
law. The Mortgagee may require the Mortgagor to assemble the personal property
and make it available to the Mortgagee at a place to be designated by the
Mortgagee. At any time and from time to time upon the occurrence and continuance
of an Event of Default, the Mortgagee shall be the attorney-in-fact of the
Mortgagor with respect to any and all matters pertaining to the personal
property with full power and authority to give instructions with respect to the
collection and remittance of payments, to endorse checks, to enforce the rights
and remedies of the Mortgagor and to execute on behalf of the Mortgagor and in
Mortgagor's name any instruction, agreement or other writing required therefor.
The Mortgagor acknowledges and agrees that a disposition of the personal
property in accordance with the Mortgagee's rights and remedies in respect to
the Property as heretofore provided is a commercially reasonable disposition
thereof. Notwithstanding the foregoing, to the extent that the Mortgaged
Property includes personal property covered by the Security Agreement the
provisions of the Security Agreement shall govern with respect to such personal
property.
SECTION 6.02. Fixture Filing. To the extent that the Mortgaged
Property includes goods or items of personal property which are or are to become
fixtures under applicable law, and to the extent permitted under applicable law,
the filing of this Mortgage in the real estate records of the county in which
the Mortgaged Property is located shall also operate from the time of filing as
a fixture filing with respect to such Mortgaged Property, and the following
information is applicable for the purpose of such fixture filing, to wit:
(a) Name and Address of the debtor:
--------------------
--------------------
--------------------
(b) Name and Address of the secured party:
Morgan Guaranty Trust Company of New York, as Agent
500 Stanton Christiana Road
Newark, Delaware 19713
(c) This document covers goods or items of personal property
which are or are to become fixtures upon the Property.
(d) The name of the record owner of the real estate on which
such fixtures are or are to be located is ____________________
SECTION 6.03. Survival of Security Agreement. Notwithstanding
any release of any or all of the property included in the Mortgaged Property
which is deemed "real property", or any proceedings to foreclose this Mortgage
or its satisfaction of record, the terms hereof shall survive as a security
agreement with respect to the security interest created hereby and referred to
above until the repayment or satisfaction in full of the Secured Obligations.
ARTICLE VII
MISCELLANEOUS
SECTION 7.01. Revolving Loans. The Secured Obligations secured
by this Mortgage include Loans made and LC Reimbursement Obligations relating to
Letters of Credit issued or extended under the Credit Agreement which are
advanced, paid and readvanced from time to time. Notwithstanding the amount
outstanding at any particular time, this Mortgage secures the total amount of
Secured Obligations. The unpaid balance of the Loans and the unpaid balance of
the LC Reimbursement Obligations may at certain times be, or be reduced to,
zero. A zero balance, by itself, does not affect any Bank's or LC Issuing Bank's
obligation to issue or extend Letters of Credit or to make payments upon draws
under Letters of Credit, or any Bank's obligation to advance Revolving Loans
which are obligatory subject to the conditions stated in the Credit Agreement.
Each of the security interest of the Mortgagee hereunder and the priority of the
Lien of this Mortgage will remain in full force and effect with respect to all
of the Secured Obligations notwithstanding such a zero balance of the Loans or
the LC Reimbursement Obligations, and the Lien of this Mortgage will not be
extinguished until this Mortgage has been terminated pursuant to Section
7.02(a).
SECTION 7.02. Release of Mortgaged Property. (a) This Mortgage
shall cease, terminate and thereafter be of no further force or effect (except
as provided in Section 4.03) upon payment in full of all Secured Obligations,
the expiration of all Letters of Credit issued under the Credit Agreement and
the termination of all Commitments under the Credit Agreement. At any time and
from time to time prior to such termination of this Mortgage, the Mortgagee may
release any of the Mortgaged Property with the consent of the Required Banks,
provided that if such release is in connection with the release of all or
substantially all of the collateral granted to secure the Secured Obligations,
such release shall require the consent of all Banks. In addition, the Mortgagee
shall release any and all Mortgaged Property required in connection with any
transaction, or sale, transfer, assignment or other disposition of the Mortgaged
Property, consummated by the Mortgagor and not prohibited by any Loan Document,
and shall be fully protected in relying on a certificate of an authorized
officer of the Mortgagor to such effect.
(b) Any termination or release under this Section 7.02 shall
be at the Mortgagor's request and expense and either in the statutory form or in
a form reasonably satisfactory to the Mortgagee.
SECTION 7.03. Notices. All notices, requests and other
communications required or permitted to be given under this Mortgage shall be in
writing (including facsimile transmission or similar writing) and shall be given
to the Mortgagor or the Mortgagee as specified in Section 10.01 of the Credit
Agreement. Except as otherwise provided herein, each notice, request or other
communication shall be effective as determined by Section 10.01 of the Credit
Agreement.
SECTION 7.04. Amendments in Writing. No provision of this
Mortgage shall be modified, waived or terminated, and no consent to any
departure by the Mortgagor from any provision of this Mortgage shall be
effective, unless the same shall be by an instrument in writing, signed by the
Mortgagor and the Mortgagee in accordance with Section 10.05 of the Credit
Agreement. Any such waiver or consent shall be effective only in the specific
instance and for the specific purpose for which given.
SECTION 7.05. Severability. All rights, powers and remedies
provided in this Mortgage may be exercised only to the extent that the exercise
thereof does not violate applicable law, and all the provisions of this Mortgage
are intended to be subject to all mandatory provisions of applicable law and to
be limited to the extent necessary so that they will not render this Mortgage
illegal, invalid, unenforceable or not entitled to be recorded, registered or
filed under applicable law. If any provision of this Mortgage or the application
thereof to any Person or circumstance shall, to any extent, be illegal, invalid
or unenforceable, or cause this Mortgage not to be entitled to be recorded,
registered or filed, the remaining provisions of this Mortgage or the
application of such provision to other Persons or circumstances shall not be
affected thereby, and each provision of this Mortgage shall be valid and be
enforced to the fullest extent permitted under applicable law.
SECTION 7.06. Binding Effect. (a) The provisions of this
Mortgage shall be binding upon and inure to the benefit of each of the parties
hereto and their respective successors and assigns.
(b) To the fullest extent permitted under applicable law, the
provisions of this Mortgage binding upon the Mortgagor shall be deemed to be
covenants which run with the land.
(c) Nothing in this Section shall be construed to permit the
Mortgagor to Transfer or grant a Lien upon the Mortgaged Property contrary to
the provisions of the Credit Agreement.
SECTION 7.07. GOVERNING LAW. THIS Mortgage SHALL BE GOVERNED
BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE IN WHICH THE PROPERTY
IS LOCATED.
SECTION 7.08. Non-Agricultural Property. The Mortgaged
Property is not used for agricultural or farming purposes.
SECTION 7.09. Statute of Frauds Provision. ORAL AGREEMENTS
OR ORAL COMMITMENTS TO LOAN MONEY, EXTEND CREDIT, OR TO FORBEAR FROM ENFORCING
REPAYMENT OF A DEBT ARE NOT ENFORCEABLE UNDER APPLICABLE
STATE LAW.
SECTION 7.10. Commercial Purposes. The obligations and
indebtedness secured by this Mortgage were incurred primarily for commercial,
investment or business purposes and not for personal, family or household
purposes.
SECTION 7.11. Counterparts. This Agreement may be signed in
any number of counterparts each of which shall be an original, with the same
effect as if the signatures thereto and hereto were upon the same instrument.
SECTION 7.12. Last Dollars Secured. This Mortgage secures only
a portion of the Secured Obligations owing or which may become owing by the
Mortgagor Notwithstanding anything to the contrary contained in the Financing
Documents, the parties agree that any payments or repayments of such Secured
Obligations by the Mortgagor shall be deemed to apply first to the portion of
the Secured Obligations that is not secured hereby, it being the parties' intent
that the portion of the Secured Obligations last remaining unpaid shall be
deemed secured hereby.
SECTION 7.13. Obligations Absolute. The obligations of the
Mortgagor hereunder shall remain in full force and effect without regard to, and
shall not be impaired by, (a) any bankruptcy, insolvency, reorganization,
arrangement, readjustment, composition, liquidation or the like of the
Mortgagor; (b) any exercise or non-exercise, or any waiver of, any right,
remedy, power or privilege under or in respect of this Mortgage or any other
Financing Document; or (c) any amendment to or modification of any Financing
Document or any security for any of the Obligations; whether or not the
Mortgagor shall have notice or knowledge of any of the foregoing.
SECTION 7.14. Further Assurances. The Mortgagor, at its own
expense, will execute, acknowledge and deliver all such instruments and take all
such action as may be necessary to assure to the Mortgagee the interest in the
Mortgaged Property herein described and the rights intended to be provided to
the Mortgagee herein.
SECTION 7.15. Remedies Cumulative. Each and every right, power
and remedy hereby specifically given to the Mortgagee shall be in addition to
every other right, power and remedy specifically given under this Mortgage or
now or hereafter existing at law or in equity, or by statute and each and every
right, power and remedy whether specifically herein given or otherwise existing
may be exercised from time to time or simultaneously and as often and in such
order as may be deemed expedient by the Mortgagee. All such rights, powers and
remedies shall be cumulative and the exercise or the beginning of exercise of
one shall not be deemed a waiver of the right to exercise of any other or
others. No delay or omission of the Mortgagee in the exercise of any such right,
power or remedy and no renewal or extension of any of the Obligations shall
impair any such right, power or remedy or shall be construed to be a waiver of
any default or Event of Default or an acquiescence therein. In the event the
Mortgagee shall seek to enforce its rights hereunder and shall be entitled to
judgment, then in such suit the Mortgagee may recover reasonable expenses,
including attorneys' fees, and the amounts thereof shall be included in such
judgment.
SECTION 7.16. Partial Invalidity If any of the provisions of
this Mortgage or the application thereof to any person, party or circumstances
shall to any extent be invalid or unenforceable, the remainder of this Mortgage,
or the application of such provision or provisions to persons, parties or
circumstances other than those as to whom or which it is held invalid or
unenforceable, shall not be affected thereby, and every provision of this
Mortgage shall be valid and enforceable to the fullest extent permitted by law.
SECTION 7.17. Priority. This Mortgage is intended to and shall
be valid and have priority over all subsequent liens and encumbrances, including
statutory liens, excepting solely taxes and assessments levied on the real
estate, to the extent of the maximum amount secured hereby.
SECTION 7.18. Full Recourse. This Mortgage is made with full
recourse to the Mortgagor (including as to all assets of the Mortgagor,
including the Secured Mortgaged Property) and pursuant to and upon the
representations, warranties, covenants and the agreements on the part of the
Mortgagor contained herein, in the other Financing Documents and otherwise in
writing in connection herewith or therewith.
SECTION 7.19. Acknowledgment of Receipt. The Mortgagor
hereby acknowledges receipt of a true copy of this Mortgage.
[SECTION 7.20. Open-End Mortgage. This Mortgage is given to
secure the Mortgagor's obligations under, or in respect of, the Credit Documents
and the Interest Rate Agreements to which the Mortgagor is "party" and shall
secure not only obligations with respect to presently existing indebtedness
under the foregoing documents and agreements but also any and all other
indebtedness now owing or which may hereafter be owing by the Mortgagor to the
Secured Creditors, however incurred, whether interest, discount or otherwise,
and whether the same shall be deferred, accrued or capitalized, including future
advances and re-advances, pursuant to the Credit Agreement, whether such
advances are obligatory or to be made at the option of the Banks, or otherwise,
to the same extent as if such future advances were made on the date of the
execution of this Mortgage. The lien of this Mortgage shall be valid as to all
indebtedness secured hereby, including future advances, from the time of its
filing for record in the recorder's office of the county in which the Mortgaged
Property is located. This Mortgage is intended to and shall be valid and have
priority over all subsequent liens and encumbrances, including statutory liens,
excepting solely taxes and assessments levied on the real estate, to the extent
of the maximum amount secured hereby.]
SECTION 7.21. Leases. Any foreclosure of this Mortgage and any
other transfer of all or any part of the Mortgaged Property in extinguishment of
all or any part of the Obligations may, at the Mortgagee's option, be subject to
any or all leases of all or any part of the Mortgaged Property and the rights of
tenants under such leases. No failure to make any such tenant a defendant in any
foreclosure proceedings or to foreclose or otherwise terminate any such lease
and the rights of any such tenant in connection with any such foreclosure or
transfer shall be, or be asserted to be, a defense or hindrance to any such
foreclosure or transfer or to any proceedings seeking collection of all or any
part of the Obligations (including, without limitation, any deficiency remaining
unpaid after completion of any such foreclose or transfer).
SECTION 7.22. Limitation on Interest. Notwithstanding anything
contained in this Mortgage to the contrary, the Mortgagee shall never be deemed
to have contracted for or be entitled to receive, collect or apply as interest
of the indebtedness secured hereby, any amount in excess of the amount permitted
and calculated at the highest lawful rate, and, in the event the Mortgagee ever
receives, collects or applies as interest any amount in excess of the amount
permitted and calculated at the highest lawful rate, such amount which would be
excessive interest shall be applied to the reduction of the unpaid principal
balance of the indebtedness secured hereby, and, if the principal balance of the
indebtedness secured hereby is paid in full, any remaining excess shall
forthwith be paid to the Mortgagor. In determining whether or not the interest
paid or payable under any specific contingency exceeds the amount of interest
permitted and calculated at the highest lawful rate, the Mortgagor and the
Mortgagee shall, to the maximum extent permitted under applicable law, (i)
characterize any non-principal payment (other than payments which are expressly
designated as interest payments hereunder) as an expense, fee, or premium,
rather than as interest, (ii) exclude voluntary prepayments and the effect
thereof, and (iii) spread the total amount of interest throughout the entire
contemplated term of the indebtedness and other Obligations secured hereby.
<PAGE>
IN WITNESS WHEREOF, the Mortgagor has executed and
delivered this Mortgage as of the day first set forth above.
[MORTGAGOR]
[Seal]
By:_______________________
Name:
Title:
<PAGE>
STATE OF )
) ss.
COUNTY OF )
I certify that I know or have satisfactory evidence that
_____________ the person who appeared before me, and said person acknowledged
that he or she signed this instrument, on oath stated that he or she was
authorized to execute the instrument and acknowledged it as the ___________of
[____________________] to be the free and voluntary act of such party for the
uses and purposes mentioned in this instrument.
DATED: _____________________________
[Notary Signature]
-----------------------------
[Type or Print Name of Notary]
NOTARY PUBLIC for the State of
________________, residing
at ___________________________
My appointment expires:
------------------------------
<PAGE>
EXHIBIT A
DESCRIPTION OF THE LAND
EXHIBIT B
Permitted Encumbrances
TABLE OF CONTENTS*
Page
----
RECITALS.....................................................................2
GRANTING CLAUSES.............................................................3
GRANTING CLAUSE I. Land......................................................3
GRANTING CLAUSE II. Improvements.............................................3
GRANTING CLAUSE III. Equipment...............................................4
GRANTING CLAUSE IV. Appurtenant Rights.......................................4
GRANTING CLAUSE V. Agreements................................................5
GRANTING CLAUSE VI. Leases...................................................5
GRANTING CLAUSE VII. Rents, Issues and Profits...............................5
GRANTING CLAUSE VIII. Permits................................................6
GRANTING CLAUSE IX. Proceeds and Awards......................................6
GRANTING CLAUSE X. Books and Records.........................................6
GRANTING CLAUSE XI. Other Intangible Property................................6
GRANTING CLAUSE XII. Additional Property.....................................6
GRANTING CLAUSE XIII. Refunds, Credits or Reimbursements.....................7
ARTICLE I
DEFINITIONS AND INTERPRETATION...............................................7
SECTION 1.01. Definitions................................................7
SECTION 1.02. Interpretation............................................11
SECTION 1.03. Resolution of Drafting Ambiguities........................12
ARTICLE II
CERTAIN WARRANTIES AND COVENANTS OF THE MORTGAGOR...........................12
SECTION 2.01. Title.....................................................12
SECTION 2.02. Secured Obligations.......................................13
SECTION 2.03. Impositions...............................................13
SECTION 2.04. Legal and Insurance Requirements..........................14
SECTION 2.05. Status of the Property....................................14
SECTION 2.06. Permitted Contests........................................15
SECTION 2.07. Liens.....................................................15
SECTION 2.08. Transfer..................................................15
SECTION 2.09. Agreements................................................16
SECTION 2.10. Maintenance, Repair, Alterations, Etc.....................16
SECTION 2.11. Actions Affecting this Mortgaged Property.................16
SECTION 2.12. Environmental Protection Matters..........................16
SECTION 2.13. The Credit Agreement and The Security Agreement...........16
SECTION 2.14. Brokers...................................................17
SECTION 2.15. Recordation of Mortgage and Financing Statements..........17
SECTION 2.16. Changes to Mortgage or Related Loan Documents.............18
ARTICLE III
INSURANCE, CASUALTY AND CONDEMNATION........................................18
SECTION 3.01. Insurance.................................................18
SECTION 3.02. Casualty and Condemnation.................................19
SECTION 3.03. Insurance Claims and Proceeds; Condemnation Awards........20
ARTICLE IV
CERTAIN SECURED OBLIGATIONS.................................................20
SECTION 4.01. Interest After Default....................................20
SECTION 4.02. Changes in the Laws Regarding Taxation....................21
SECTION 4.03. Indemnification...........................................21
ARTICLE V
DEFAULTS, REMEDIES AND RIGHTS...............................................22
SECTION 5.01. Events of Default.........................................22
SECTION 5.02. Remedies..................................................22
SECTION 5.03. WAIVERS BY THE MORTGAGOR..................................26
SECTION 5.04. Jurisdiction and Process..................................27
SECTION 5.05. Sales.....................................................27
SECTION 5.06. Proceeds..................................................30
SECTION 5.07. Assignment of Leases......................................31
SECTION 5.08. Dealing With the Mortgaged Property.......................32
SECTION 5.09. Right of Entry............................................32
SECTION 5.10. Right to Perform Obligations..............................32
SECTION 5.11. Concerning the Mortgagee..................................33
SECTION 5.12. Expenses..................................................33
ARTICLE VI
SECURITY AGREEMENT AND FIXTURE FILING.......................................34
SECTION 6.01. Security Agreement........................................34
SECTION 6.02. Fixture Filing............................................34
SECTION 6.03. Survival of Security Agreement............................35
ARTICLE VII
MISCELLANEOUS...............................................................36
SECTION 7.01. Revolving Loans...........................................36
SECTION 7.02. Release of Mortgaged Property.............................36
SECTION 7.03. Notices...................................................36
SECTION 7.04 Amendments in Writng......................................36
SECTION 7.05. Severability..............................................37
SECTION 7.06. Binding Effect............................................37
SECTION 7.07. GOVERNING LAW.............................................37
SECTION 7.08. Non-Agricultural Property.................................37
SECTION 7.09. Statute of Frauds Provision...............................37
SECTION 7.10. Commercial Purposes.......................................38
SECTION 7.11. Counterparts..............................................38
SECTION 7.12. Last Dollars Secured......................................38
SECTION 7.13. Obligations Absolute......................................38
SECTION 7.14. Further Assurances........................................38
SECTION 7.15. Remedies Cumulative.......................................38
SECTION 7.16. Partial Invalidity........................................39
SECTION 7.17. Priority..................................................39
SECTION 7.18. Full Recourse.............................................39
SECTION 7.19. Acknowledgement of Receipt................................39
[SECTION 7.20. Open-End Mortgage.........................................39]
SECTION 7.21. Leases....................................................39
SECTION 7.22. Limitations on Interest...................................40
Exhibit A - Description of the Land
Exhibit B - Permitted Encumbrances
EXHIBIT 12.1
Tekni-Plex, Inc.
Ratio of Earning to Fixed Charges
<TABLE>
<CAPTION>
For the Periods For the Years Ended For the Six Months Ended
Jan. 1 to Jan. 1 to March 19,
Dec. 31, March 18, to July 1, June 30, June 28, June 27, December December
1993 1994 1994 1995 1996 1997 27, 1996 26, 1997
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Income before
income taxes $3,031 $825 $38 $377 $1,958 $13,103 $6,415 $7,648
Interest, Including
amortization of
deferred financing
and accretion of
warrants 160 22 1,141 4,322 5,816 8,094 4,129 4,336
Earnings 3,191 847 1,179 4,699 7,774 21,197 10,544 11,984
Ratio of eanrings to
fixed charges 19.9 38.5 1.0 1.1 1.3 2.6 2.6 2.8
</TABLE>
EXHIBIT 23.1
Consent of Independent Certified Public Accountants
We hereby consent to the inclusion in this Prospectus constituting part of
this Form S-4 of our report dated August 26, 1997, relating to the
consolidated financial statements of Tekni-Plex, Inc. appearing in the
Company's annual report on Form S-4.
We also consent to the reference to us under the caption "Experts" in such
Prospectus.
/s/ BDO Seidman, LLP
- -------------------------------
BDO Seidman, LLP
Woodbridge, NJ
April 21, 1998
EXHIBIT 23.2
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Registration Statement of
Tekni-Plex, Inc. on Form S-4 of our report dated November 13, 1997, appearing
in the Annual Report on Form 10-K (as amended) of PureTec Corporation for the
year ended July 31, 1997 and to the reference to us under the heading
"Experts" in the Prospectus, which is part of this Registration Statement.
/s/ Deloitte & Touche LLP
- -------------------------------
Deloitte & Touche LLP
Parsippany, New Jersey
April 17, 1998
EXHIBIT 23.3
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Registration Statement
of Tekni-Plex, Inc. on Form S-4 of our report dated November 13, 1997,
appearing in the Annual Report on Form 10-K of Plastic Specialties and
Technologies, Inc. for the year ended July 31, 1995 and to the reference to
us under the heading "Experts" in the Prospectus, which is part of this
Registration Statement.
/s/ Deloitte & Touche LLP
- -------------------------------
Deloitte & Touche LLP
Parsippany, New Jersey
April 17, 198
EXHIBIT 23.4
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation in the Registration Statement on Form
S-4 of Tekni-Plex, Inc. of our report on Styrex Industries, Inc. dated
September 12, 1995 and the reference to our firm under the caption
"experts" in the Prospectus, which is part of the Registration Statement.
/s/ Holtz Rubenstein & Co., LLP
- -----------------------------------
Holtz Rubenstein & Co., LLP
Melville, New York
April 16, 1998
EXHIBIT 25.1
Conformed Copy
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
----------
FORM T-1
STATEMENT OF ELIGIBILITY UNDER THE TRUST
INDENTURE ACT OF 1939 OF A CORPORATION
DESIGNATED TO ACT AS TRUSTEE
-----------
CHECK IF AN APPLICATION TO DETERMINE
ELIGIBILITY OF A TRUSTEE PURSUANT TO
SECTION 305(b)(2)
-----------
Marine Midland Bank
(Exact name of trustee as specified in its charter)
New York 16-1057879
(Jurisdiction of incorporation (I.R.S. Employer
or organization if not a U.S. Identification No.)
national bank)
140 Broadway, New York, N.Y. 10005-1180
(212) 658-1000 (Zip Code)
(Address of principal executive offices)
Charles E. Bauer
Vice President
Marine Midland Bank
140 Broadway
New York, New York 10005-1180
Tel: (212) 658-1792
(Name, address and telephone number of agent for service)
TEKNI-PLEX, INC*
(Exact name of obligor as specified in its charter)
Delaware 22-3286312
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
201 Industrial Parkway
Somerville, New Jersey, 08876
(908) 722-4800
(Address, including zip code, and telephone number, including area code,
of registrant's principal executive offices)
Series B 9 1/4% Senior Subordinated Notes due 2008
Guarantees of Series B 9 1/4% Senior Subordinated Notes due 2008
(Title of Indenture Securities)
*TABLE OF ADDITIONAL REGISTRANT'S
<TABLE>
<CAPTION>
State or Other
Jurisdiction of I.R.S. Employer
Incorporation or Identification
Name, Address and Telephone Number Organization Number
- ---------------------------------- ------------ ----------
<S> <C> <C>
PureTec Corporation(1)......................................... Delaware 22-3376449
PTI Plastics, Inc.(1).......................................... Delaware 22-3207289
Ozite Corporation(1)........................................... Delaware 36-3484843
Plastic Specialties and Technologies, Inc.(1).................. Delaware 22-2515864
Plastic Specialties and Technologies Investments, Inc.(1)...... Delaware 22-2663552
Burlington Resins, Inc.(1)..................................... Delaware 22-3334106
Pure Tech APR, Inc.(1)......................................... New York 11-3065942
Multi Container Recycler, Inc.(1).............................. Michigan 38-2959009
Coast Recycling North, Inc.(1)................................. California 68-0200870
Distributors Recycling, Inc.(1)................................ New Jersey 22-2466975
REI Distributors, Inc.(1)...................................... New Jersey 22-2418824
Pure Tech Recycling of California(1)........................... California 77-0356589
Alumet Smelting Corp.(1)....................................... New Jersey 22-2054447
Conconre Corp.(1).............................................. Connecticut 06-1012426
- ------------------------------------------------------------------------------
(1) The address of these additional registrant's is : 201 Industrial
Parkway, Somerville, New Jersey 08876. Their telephone number of (908)
722-4800.
</TABLE>
General
Item 1. General Information.
Furnish the following information as to the trustee:
(a) Name and address of each examining or supervisory
authority to which it is subject.
State of New York Banking Department.
Federal Deposit Insurance Corporation, Washington, D.C.
Board of Governors of the Federal Reserve System,
Washington, D.C.
(b) Whether it is authorized to exercise corporate trust powers.
Yes.
Item 2. Affiliations with Obligor.
If the obligor is an affiliate of the trustee, describe
each such affiliation.
None
Item 16. List of Exhibits.
Exhibit
- -------
T1A(i) * - Copy of the Organization
Certificate of Marine Midland Bank.
T1A(ii) * - Certificate of the State of New
York Banking Department dated
December 31, 1993 as to the
authority of Marine Midland Bank
to commence business.
T1A(iii) - Not applicable.
T1A(iv) * - Copy of the existing By-Laws of
Marine Midland Bank as adopted on
January 20, 1994.
T1A(v) - Not applicable.
T1A(vi) * - Consent of Marine Midland Bank
required by Section 321(b) of the
Trust Indenture Act of 1939.
T1A(vii) - Copy of the latest report of
condition of the trustee (December
31, 1997), published pursuant to
law or the requirement of its
supervisory or examining
authority.
T1A(viii) - Not applicable.
T1A(ix) - Not applicable.
* Exhibits previously filed with the Securities and Exchange
Commission with Registration No. 33-53693 and incorporated herein by
reference thereto.
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939, the Trustee,
Marine Midland Bank, a banking corporation and trust company organized under
the laws of the State of New York, has duly caused this statement of
eligibility to be signed on its behalf by the undersigned, thereunto duly
authorized, all in the City of New York and State of New York on the 20th day
of April, 1998.
MARINE MIDLAND BANK
By: /s/ Frank J. Godino
---------------------
Frank J. Godino
Vice President
Exhibit T1A (vii)
Board of Governors of the Federal Reserve System
OMB Number: 7100-0036
Federal Deposit Insurance Corporation
OMB Number: 3064-0052
Office of the Comptroller of the Currency
OMB Number: 1557-0081
Federal Financial Institutions Examination Council Expires March 31, 2000
- ------------------------------------------------------------------------------
Please refer to page i,
Table of Contents, for
the required disclosure
of estimated burden.
Consolidated Reports of Condition and Income for
A Bank With Domestic and Foreign Offices--FFIEC 031
Report at the close of business December 31, 1997
This report is required by law; 12 U.S.C. Section 324 (State member banks); 12
U.S.C. Section 1817 (State nonmember banks); and 12 U.S.C. Section 161
(National banks).
NOTE: The Reports of Condition and Income must be signed by an authorized
officer and the Report of Condition must be attested to by not less than two
directors (trustees) for State nonmember banks and three directors for State
member and National Banks.
I, Gerald A. Ronning, Executive VP & Controller
--------------------------------------------
Name and Title of Officer Authorized to Sign Report
of the named bank do hereby declare that these Reports of Condition and Income
(including the supporting schedules) have been prepared in conformance with
the instructions issued by the appropriate Federal regulatory authority and
are true to the best of my knowledge and believe.
/s/ Gerald A. Ronning
----------------------------------------------
Signature of Officer Authorized to Sign Report
1/26/98
----------------------------------------------
Date of Signature
Submission of Reports
Each Bank must prepare its Reports of Condition and Income either:
(a) in automated formand then file the computer data file directly with the
banking agencies' collection agent, Electronic Data System Corporation
(EDS), by modem or computer diskette; or
(971231)
- ---------
RCRI 9999
This report form is to be filed by banks with branches and consolidated
subsidiaries in U.S. territories and possessions, Edge or Agreement
subsidiaries, foreign branches, consoli-dated foreign subsidiaries, or
International Banking Facilities.
The Reports of Condition and Income are to be prepared in accordance with
Federal regulatory authority instructions.
We, the undersigned directors (trustees), attest to the correctness of this
Report of Condition (including the supporting schedules) and declare that it
has been examined by us and to the best of our knowledge and belief has been
prepared in conformance with the instructions issued by the appropriate
Federal regulatory authority and is true and correct.
/s/ Malcolm Burnett
----------------------------------------------
Director (Trustee)
/s/ Bernard J. Kennedy
----------------------------------------------
Director (Trustee)
/s/ Sal H. Alfiero
----------------------------------------------
Director (Trustee)
(b) in hard-copy (paper) form and arrange for another party to
convert the paper report to automated for. That party (if other than
EDS) must transmit the bank's computer data file to EDS
To fulfill the signature and attestation requirement for the Reports of
Condition and Income for this report date, attach this signature page to the
hard-copy of the completed report that the bank places in its files.
- ------------------------------------------------------------------------------
FDIC Certificate Number 00589
-----------
(RCRI 9030)
REPORT OF CONDITION
Consolidating domestic and foreign subsidiaries of the
Marine Midland Bank of Buffalo
Name of Bank City
in the state of New York, at the close of business
December 31, 1997
ASSETS
Thousands
of dollars
Cash and balances due from depository
institutions:
Noninterest-bearing balances
currency and coin.................................... $928,754
Interest-bearing balances ........................... 2,571,410
Held-to-maturity securities.......................... 0
Available-for-sale securities........................ 3,968,837
Federal funds sold and securities purchased
under agreements to resell............................ 497,992
Loans and lease financing receivables:
Loans and leases net of unearned
income............................... 21,550,115
LESS: Allowance for loan and lease
losses............................... 407,355
LESS: Allocated transfer risk reserve 0
Loans and lease, net of unearned
income, allownace, and reserve....... 21,142,760
Trading assets....................... 979,454
Premises and fixed assets (including
capitalized leases).................. 225,646
Other real estate owned................................. 8,092
Investments in unconsolidated
subsidiaries and associated companies................... 0
Customers' liability to this bank on
acceptances outstanding................................. 24,795
Intangible assets....................................... 479,713
Other assets............................................ 488,168
Total assets............................................31,315,621
LIABILITIES
Deposits:
In domestic offices..................................20,072,724
Noninterest-bearing.................................. 4,090,858
Interest-bearing.....................................15,981,866
In foreign offices, Edge and Agreement
subsidiaries, and IBFs.................................. 3,834,827
Noninterest-bearing.................................. 0
Interest-bearing..................................... 3,834,827
Federal funds purchased and securities sold
under agreements to repurchase....................... 2,007,482
Demand notes issued to the U.S. Treasury................ 192,186
Trading Liabilities....................................... 215,748
Other borrowed money:
With a remaining maturity of one year
or less.............................................. 1,402,449
With a remaining maturity of more than
one year through three years......................... 63,601
With a remaining maturity of more than
three years.......................................... 61,707
Bank's liability on acceptances
executed and outstanding................................ 24,795
Subordinated notes and debentures....................... 497,774
Other liabilities....................................... 719,423
Total liabilities.......................................29,092,716
EQUITY CAPITAL
Perpetual preferred stock and related
surplus................................................. 0
Common Stock............................................ 205,000
Surplus................................................. 1,984,326
Undivided profits and capital reserves.................. 8,678
Net unrealized holding gains (losses)
on available-for-sale securities........................ 24,901
Cumulative foreign currency translation
adjustments............................................. 0
Total equity capital.................................... 2,222,905
Total liabilities, limited-life
preferred stock, and equity capital.....................31,315,621
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THE SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM TEKNI
PLEX, INC. STATEMENT OF EARNINGS FOR THE EIX-MONTH PERIOD ENDED DECEMBER
26, 1997 AND BALANCE SHEET AS AT DECEMBER 26, 1997 AND IS QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> JUL-3-1998
<PERIOD-END> DEC-26-1997
<CASH> 9,235
<SECURITIES> 0
<RECEIVABLES> 15,371
<ALLOWANCES> 316
<INVENTORY> 13,893
<CURRENT-ASSETS> 41,446
<PP&E> 55,155
<DEPRECIATION> 13,509
<TOTAL-ASSETS> 130,684
<CURRENT-LIABILITIES> 13,046
<BONDS> 75,000
0
0
<COMMON> 0
<OTHER-SE> 35,071
<TOTAL-LIABILITY-AND-EQUITY> 130,684
<SALES> 37,831
<TOTAL-REVENUES> 37,831
<CGS> 27,367
<TOTAL-COSTS> 27,367
<OTHER-EXPENSES> 4,294
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 2,227
<INCOME-PRETAX> 3,943
<INCOME-TAX> 1,507
<INCOME-CONTINUING> 2,438
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 2,438
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
EXHIBIT 99.1
LETTER OF TRANSMITTAL
TEKNI-PLEX, INC.
OFFER TO EXCHANGE
ITS
SERIES B 9(1)/(4)% SENIOR SUBORDINATED NOTES DUE 2008
FOR ANY AND ALL OF ITS OUTSTANDING
9(1)/(4)% SENIOR SUBORDINATED NOTES DUE 2008
PURSUANT TO THE PROSPECTUS DATED__________ , 1998
THE EXCHANGE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00 P.M., NEW
YORK CITY TIME, ON ______________, 1998 UNLESS EXTENDED (THE "EXPIRATION
DATE").
PLEASE READ CAREFULLY THE ATTACHED INSTRUCTIONS.
If you desire to accept the Exchange Offer (as defined below),
this Letter of Transmittal should be completed, signed, and submitted to
Marine Midland Bank as the Exchange Agent:
<TABLE>
<S> <C> <C>
By Registered or Certified Mail: By Facsimile: By Overnight Courier or By Hand:
Marine Midland Bank Marine Midland Bank Marine Midland Bank
140 Broadway--A Level Attn: Frank Godino 140 Broadway--A Level
New York, New York 10005-1180 (212) 658-2292 New York, New York 10005-1180
Attn: Corporate Trust Operations Attn: Corporate Trust Operations
Tel: (212) 658-5931 Tel: (212) 658-5931
</TABLE>
Originals of this Letter of Transmittal and all other documents
submitted by facsimile must be sent promptly by registered or certified mail,
overnight courier or hand delivery.
DELIVERY OF THIS LETTER OF TRANSMITTAL TO AN ADDRESS OTHER THAN
AS SET FORTH ABOVE WILL NOT CONSTITUTE A VALID DELIVERY.
FOR ANY QUESTIONS REGARDING THIS LETTER OF TRANSMITTAL OR FOR
ANY ADDITIONAL INFORMATION, YOU MAY CONTACT THE EXCHANGE AGENT.
The undersigned hereby acknowledges receipt of the Prospectus
dated ____________, 1998 (the "Prospectus") of Tekni-Plex, Inc., a Delaware
corporation (the "Company"), and this Letter of Transmittal (the "Letter of
Transmittal"), that together constitute the Company's offer (the "Exchange
Offer") to exchange $1,000 in principal amount of its Series B 9(1)/(4)%
Senior Subordinated Notes due 2008 (the "Exchange Notes"), which have been
registered under the Securities Act of 1933, as amended (the "Securities
Act"), pursuant to a Registration Statement, for each $1,000 in principal
amount of its outstanding 9(1)/(4)% Senior Subordinated Notes due 2008 (the
"Old Notes"), of which $200,000,000 aggregate principal amount is outstanding.
The Exchange Notes will be fully and unconditionally guaranteed on a senior
subordinated basis by the Company's domestic subsidiaries (the "Guarantors").
Capitalized terms used but not defined herein have the meanings ascribed to
them in the Prospectus.
This Letter of Transmittal is to be used if certificates for
the Old Notes are to be forwarded herewith. If delivery of the Old Notes is to
be made through book-entry transfer into the Exchange Agent's account at The
Depository Trust Company, this Letter of Transmittal need not be delivered;
provided, however, that tenders of the Old Notes must be effected in
accordance with The Depository Trust Company's Automated Tender Offer Program
("ATOP") procedures and the procedures described under the caption "The
Exchange Offer--Procedures for Tendering" in the Prospectus, including the
delivery of an Agent's Message in lieu of this Letter of Transmittal.
The undersigned hereby tenders the Old Notes described in Box 1
below (the "Tendered Notes") pursuant to the terms and subject to the
conditions described in the Prospectus and this Letter of Transmittal. The
undersigned is the registered owner of all the Tendered Notes and the
undersigned represents that it has received from each beneficial owner of the
Tendered Notes ("Beneficial Owners") a duly completed and executed form of
"Instruction to Registered Holder and/or Book-Entry Transfer Facility
Participant from Beneficial Owner" accompanying this Letter of Transmittal,
instructing the undersigned to take the action described in this Letter of
Transmittal.
Subject to, and effective upon, the acceptance for exchange of
the Tendered Notes, the undersigned hereby exchanges, assigns, and transfers
to, or upon the order of, the Company, all right, title, and interest in, to,
and under the Tendered Notes.
Please issue the Exchange Notes exchanged for Tendered Notes in
the name(s) of the undersigned. Unless otherwise indicated under "Special
Delivery Instructions" below (Box 3), please send or cause to be sent the
certificates for the Exchange Notes (and accompanying documents, as
appropriate) to the undersigned at the address shown below in Box 1.
The undersigned hereby irrevocably constitutes and appoints the
Exchange Agent as the true and lawful agent and attorney-in-fact of the
undersigned with respect to the Tendered Notes, with full power of
substitution (such power of attorney being deemed to be an irrevocable power
coupled with an interest), to (i) deliver the Tendered Notes to the Company or
cause ownership of the Tendered Notes to be transferred to, or upon the order
of, the Company, on the books of the registrar for the Old Notes and deliver
all accompanying evidences of transfer and authenticity to, or upon the order
of, the Company upon receipt by the Exchange Agent, as the undersigned's
agent, of the Exchange Notes to which the undersigned is entitled upon
acceptance by the Company of the Tendered Notes pursuant to the Exchange
Offer, and (ii) receive all benefits and otherwise exercise all rights of
beneficial ownership of the Tendered Notes, all in accordance with the terms
of the Exchange Offer.
The undersigned understands that tenders of Old Notes pursuant
to the procedures described under the caption "The Exchange Offer" in the
Prospectus and in the instructions hereto will constitute a binding agreement
between the undersigned and the Company upon the terms and subject to the
conditions of the Exchange Offer, subject only to withdrawal of such tenders
on the terms set forth in the Prospectus under the caption "The Exchange
Offer--Withdrawal of Tenders." All authority herein conferred or agreed to be
conferred shall survive the death or incapacity of the undersigned and any
Beneficial Owner(s), and every obligation of the undersigned or any Beneficial
Owner hereunder shall be binding upon the heirs, representatives, successors,
and assigns of the undersigned and such Beneficial Owner(s).
The undersigned hereby represents and warrants that the
undersigned has full power and authority to tender, exchange, assign, and
transfer the Tendered Notes and that the Company will acquire good and
unencumbered title thereto, free and clear of all liens, restrictions,
charges, encumbrances, and adverse claims when the Tendered Notes are acquired
by the Company as contemplated herein. The undersigned and each Beneficial
Owner will, upon request, execute and deliver any additional documents
reasonably requested by the Company or the Exchange Agent as necessary or
desirable to complete and give effect to the transactions contemplated hereby.
The undersigned hereby represents and warrants that the
information set forth in this Letter of Transmittal is true and correct.
By accepting the Exchange Offer, the undersigned hereby
represents and warrants that (i) the Exchange Notes to be acquired by the
undersigned and any Beneficial Owner(s) in connection with the Exchange Offer
are being acquired by the undersigned and any Beneficial Owner(s) in the
ordinary course of business of the undersigned and any Beneficial Owner(s),
(ii) the undersigned and each Beneficial Owner are not participating, do not
intend to participate, and have no arrangement or understanding with any
person to participate, in the distribution of the Exchange Notes, (iii) except
as otherwise disclosed in writing herewith, neither the undersigned nor any
Beneficial Owner is an "affiliate," as defined in Rule 405 under the
Securities Act, of the Company, and (iv) the undersigned and each Beneficial
Owner acknowledge and agree that any person participating in the Exchange
Offer with the intention or for the purpose of distributing the Exchange Notes
must comply with the registration and prospectus delivery requirements of the
Securities Act of 1933, as amended (together with the rules and regulations
promulgated thereunder, the "Securities Act"), in connection with a secondary
resale of the Exchange Notes acquired by such person and cannot rely on the
position of the staff of the Securities and Exchange Commission (the
"Commission") set forth in the no-action letters that are discussed under the
caption "The Exchange Offer" in the Prospectus. In addition, by accepting the
Exchange Offer, the undersigned hereby (i) represents and warrants that, if
the undersigned or any Beneficial Owner of the Old Notes is a Participating
Broker-Dealer, such Participating Broker-Dealer acquired the Old Notes for its
own account as a result of market-making activities or other trading
activities and has not entered into any arrangement or understanding with the
Company or any affiliate of the Company (within the meaning of Rule 405 under
the Securities Act) to distribute the Exchange Notes to be received in the
Exchange Offer, and (ii) acknowledges that, by receiving Exchange Notes for
its own account in exchange for Old Notes, where such Old Notes were acquired
as a result of market-making activities or other trading activities, such
Participating Broker-Dealer will deliver a prospectus meeting the requirements
of the Securities Act in connection with any resale of such Exchange Notes.
[ ] Check here if Tendered Notes are being delivered herewith.
[ ] Check here if Tendered Notes are being delivered pursuant
to a Notice of Guaranteed Delivery previously delivered to
the Exchange Agent and complete "Use of Guaranteed Delivery"
below (Box 4).
[ ] Check here if Tendered Notes are being delivered by
Book-Entry Transfer made to the account maintained by the
Exchange Agent with the Book-Entry Transfer Facility and
complete "Use of Book-Entry Transfer" below (Box 5).
Please read this entire Letter of Transmittal carefully
before completing the boxes.
ALL TENDERING HOLDERS COMPLETE THIS BOX 1:
BOX 1
<TABLE>
DESCRIPTION OF OLD NOTES TENDERED
(ATTACH ADDITIONAL SIGNED PAGES, IF NECESSARY)
NAME(S) AND ADDRESS(ES) OF REGISTERED AGGREGATE
NOTE HOLDER(S), EXACTLY AS NAME(S) CERTIFICATE PRINCIPAL AMOUNT AGGREGATE
APPEAR(S) ON OLD NOTE CERTIFICATE(S) NUMBER(S) OF OLD REPRESENTED BY PRINCIPAL AMOUNT
(PLEASE FILL IN, IF BLANK): NOTES* CERTIFICATE(S) TENDERED**
- -------------------------------------- ---------------- ---------------- ----------------
<S> <C> <C> <C>
Total: $ Total: $
- ----------------------------------------------------------------------------------------------------------------------------
* Need not be completed by persons by book-entry transfer.
** The minimum permitted tender is $1,000 in principal amount of Old Notes. All other tenders must be in
integral multiples of $1,000 of principal amount. Unless otherwise indicated in this column, the principal
amount of all Old Note certificates identified in this Box 1 or delivered to the Exchange Agent herewith
shall be deemed tendered. See Instruction 4.
</TABLE>
BOX 2
<TABLE>
BENEFICIAL OWNER(S)
PRINCIPAL AMOUNT
OF TENDERED OLD
NOTES HELD FOR
STATE OF PRINCIPAL RESIDENCE ACCOUNT OF
OF EACH BENEFICIAL OWNER OF TENDERED OLD NOTES BENEFICIAL OWNER
- ---------------------------------------------- ----------------
<S> <C>
</TABLE>
BOX 3
SPECIAL DELIVERY INSTRUCTIONS
(See instructions 5, 6 and 7)
To be completed ONLY if Exchange Notes exchanged for Old Notes and/or
untendered Old Notes are to be sent to someone other than the undersigned, or
to the undersigned at an address other than that shown above.
Mail Exchange Notes and any untendered Old Notes to:
Name(s):______________________________________________________________________
(Please Print First, Middle and Last Names)
Address:______________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
(City, State and Zip Code)
Tax Identification or Social Security No.: ___________________________________
BOX 4
USE OF GUARANTEED DELIVERY
(See Instruction 2)
To be completed ONLY if Old Notes are being tendered by means of a Notice of
Guaranteed Delivery.
Name(s) of Registered Holder(s):______________________________________________
Date of Execution of Notice of Guaranteed Delivery:___________________________
Name of Institution which Guaranteed Delivery:________________________________
BOX 5
USE OF BOOK-ENTRY TRANSFER
(See Instruction 1)
To be completed ONLY if delivery of tendered Old Notes is to be made by
book-entry transfer.
Name of Tendering Institution:________________________________________________
Account Number:_______________________________________________________________
Transaction Code Number:______________________________________________________
BOX 6
TENDERING HOLDER SIGNATURE
(See Instructions 1 and 5)
In addition, complete Substitute Form W-9
X________________________________________________________: Signature Guarantee
X_______________________________________________(if required by Instruction 5)
Signature of Registered Holder(s) or Authorized Signatory)
Note: The above lines must be signed by the registered holder(s) of Old Notes
as their name(s) appear(s) on the Old Notes or by person(s) authorized to
become registered holder(s) (evidence of which authorization must be
transmitted with this Letter of Transmittal). If signature is by a trustee,
executor, administrator, guardian, attorney-in-fact, officer, or other person
acting in a fiduciary or representative capacity, such person must set forth
his or her full title below. See Instruction 5.
Name(s):______________________________________________________________________
______________________________________________________________________________
Capacity:_____________________________________________________________________
Street Address:_______________________________________________________________
______________________________________________________________________________
(include Zip Code)
Area Code and Telephone Number:_______________________________________________
Tax Identification or Social Security Number:_________________________________
Authorized Signature:_________________________________________________________
Name:_________________________________________________________________________
(Please print)
Title:________________________________________________________________________
Name of Firm:_________________________________________________________________
(Must be an Eligible Institution as defined in Instruction 2)
Address:______________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
(include Zip Code)
Area Code and Telephone Number:_______________________________________________
Dated:________________________________________________________________________
BOX 7
BROKER-DEALER STATUS
[ ] Check this box if the Beneficial Owner of the Old Notes is a Participating
Broker-Dealer and such Participating Broker-Dealer acquired the Old Notes
for its own account as a result of market-making activities or other
trading activities.
Payor's Name: Tekni-Plex, Inc.
<TABLE>
<S> <C> <C>
SUBSTITUTE Part 1: PLEASE PROVIDE YOUR
Form W_9 TAXPAYER IDENTIFICATION NUMBER
_________________________________________
Department of the ("TIN") IN THE BOX AT RIGHT AND Taxpayer Identification Number, Social
Treasury CERTIFY BY SIGNING AND DATING Security Number or Employer
Internal Revenue BELOW. Identification Number
Service ("IRS")
Name(s) (If joint names, list first and circle the
name of the person or entity whose number you
_________________________________________
enter in Part 1 below. See instructions if your
_________________________________________
name has changed.)
_________________________________________
Address: ________________________________________________________________________________________
________________________________________________________________________________________
List account number(s) here (optional):__________________________________________________________
_________________________________________________________________________________________________
Part 2__Certification__Check the box if you are NOT subject to backup withholding under the
provisions of _ section 3406(a)(1)(C) of the Internal Revenue Code because (1) you have not
been notified that you are subject to backup withholding as a result of failure to report all
interest or dividends or (2) the Internal Revenue Service has notified you that you are no longer
subject to backup withholding. [ ]
Certification Instructions__UNDER THE PENALTIES OF PERJURY, I CERTIFY THAT
THE INFORMATION PROVIDED ON THIS FORM IS TRUE, CORRECT AND
COMPLETE.
Part 3
Awaiting
TIN
SIGNATURE______________________ DATE_____________________________ [ ]
</TABLE>
NOTE: FAILURE TO COMPLETE AND RETURN THIS FORM MAY RESULT IN BACKUP
WITHHOLDING OF 31% OF ANY PAYMENTS MADE TO YOU PURSUANT TO THE EXCHANGE
OFFER. PLEASE REVIEW THE ENCLOSED GUIDELINES FOR CERTIFICATION OF
TAXPAYER IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9 FOR ADDITIONAL
DETAILS.
INSTRUCTIONS TO LETTER OF TRANSMITTAL
FORMING PART OF THE TERMS AND CONDITIONS OF THE EXCHANGE OFFER
1. Delivery of this Letter of Transmittal and Notes.
A properly completed and duly executed copy of this Letter of
Transmittal, including Substitute Form W-9, and any other documents required
by this Letter of Transmittal must be received by the Exchange Agent at its
address set forth herein, and either certificates for Tendered Notes must be
received by the Exchange Agent at its address set forth herein or such
Tendered Notes must be transferred pursuant to the procedures for book-entry
transfer described in the Prospectus under the caption "The Exchange
Offer--Procedures for Tendering" (and a confirmation of such transfer received
by the Exchange Agent), in each case prior to 5:00 p.m., New York City time,
on the Expiration Date. The method of delivery of certificates for Tendered
Notes, this Letter of Transmittal and all other required documents to the
Exchange Agent is at the election and risk of the tendering holder and the
delivery will be deemed made only when actually received by the Exchange
Agent. If delivery is by mail, registered mail with return receipt requested,
properly insured, is recommended. Instead of delivery by mail, it is
recommended that the holder of Old Notes use an overnight or hand delivery
service. In all cases, sufficient time should be allowed to assure timely
delivery. No Letter of Transmittal or Old Notes should be sent to the Company.
Neither the Company nor the Exchange Agent is under any obligation to notify
any tendering holder of the Company's acceptance of Tendered Notes prior to
the Expiration Date.
2. Guaranteed Delivery Procedures.
Holders who wish to tender their Old Notes but whose Old Notes
are not immediately available, and who cannot deliver their Old Notes, this
Letter of Transmittal or any other documents required hereby to the Exchange
Agent prior to the Expiration Date must tender their Old Notes according to
the guaranteed delivery procedures set forth below, including completion of
Box 4. Pursuant to such procedures: (i) such tender must be made by or
through a firm which is a member of a recognized Medallion Program approved by
the Securities Transfer Association Inc. (an "Eligible Institution") and the
Notice of Guaranteed Delivery must be signed by the holder; (ii) prior to the
Expiration Date, the Exchange Agent must have received from the holder and the
Eligible Institution a properly completed and duly executed Notice of
Guaranteed Delivery (by registered or certified mail, overnight courier or
hand delivery) setting forth the name and address of the holder, the
certificate number(s) of the Tendered Notes and the principal amount of
Tendered Notes, stating that the tender is being made thereby and guaranteeing
that, within three New York Stock Exchange trading days after the Expiration
Date, this Letter of Transmittal together with the certificate(s) representing
the Old Notes and any other required documents will be deposited by the
Eligible Institution with the Exchange Agent; and (iii) such properly
completed and executed Letter of Transmittal, as well as all other documents
required by this Letter of Transmittal and the certificate(s) representing all
Tendered Notes in proper form for transfer, must be received by the Exchange
Agent within three New York Stock Exchange trading days after the Expiration
Date. Any holder who wishes to tender Old Notes pursuant to the guaranteed
delivery procedures described above must ensure that the Exchange Agent
receives the Notice of Guaranteed Delivery relating to such Old Notes prior to
5:00 p.m., New York City time, on the Expiration Date. Failure to complete the
guaranteed delivery procedures outlined above will not, of itself, affect the
validity or effect a revocation of any Letter of Transmittal form properly
completed and executed by an eligible holder who attempted to use the
guaranteed delivery process.
3. Beneficial Owner Instructions to Registered Holders.
Only a holder in whose name Tendered Notes are registered on
the books of the registrar (or the legal representative or attorney-in-fact of
such registered holder) may execute and deliver this Letter of Transmittal. Any
Beneficial Owner of Tendered Notes who is not the registered holder must
arrange promptly with the registered holder to execute and deliver this Letter
of Transmittal on his or her behalf through the execution and delivery to the
registered holder of the "Instructions to Registered Holder and/or Book-Entry
Transfer Facility Participant from Beneficial Owner" form accompanying this
Letter of Transmittal.
4. Partial Tenders.
Tenders of Old Notes will be accepted only in integral
multiples of $1,000 in principal amount. If less than the entire principal
amount of Old Notes held by the holder is tendered, the tendering holder
should fill in the principal amount tendered in the column labeled "Aggregate
Principal Amount Tendered" of the box entitled "Description of Old Notes
Tendered" (Box 1) above. The entire principal amount of Old Notes delivered to
the Exchange Agent will be deemed to have been tendered unless otherwise
indicated. If the entire principal amount of all Old Notes held by the holder
is not tendered, then Old Notes for the principal amount of Old Notes not
tendered and Exchange Notes issued in exchange for any Old Notes tendered and
accepted will be sent to the holder at his or her registered address, unless a
different address is provided in the appropriate box on this Letter of
Transmittal, as soon as practicable following the Expiration Date.
5. Signatures on the Letter of Transmittal; Bond Powers and Endorsements;
Guarantee of Signatures.
If this Letter of Transmittal is signed by the registered
holder(s) of the Tendered Notes, the signature must correspond with the
name(s) as written on the face of the Tendered Notes without alteration,
enlargement or any change whatsoever.
If any of the Tendered Notes are owned of record by two or more
joint owners, all such owners must sign this Letter of Transmittal. If any
Tendered Notes are held in different names, it will be necessary to complete,
sign and submit as many separate copies of the Letter of Transmittal as there
are different names in which Tendered Notes are held.
If this Letter of Transmittal is signed by the registered
holder(s) of Tendered Notes, and Exchange Notes issued in exchange therefor
are to be issued (and any untendered principal amount of Old Notes is to be
reissued) in the name of the registered holder(s), then such registered
holder(s) need not and should not endorse any Tendered Notes, nor provide a
separate bond power. In any other case, such registered holder(s) must either
properly endorse the Tendered Notes or transmit a properly completed separate
bond power with this Letter of Transmittal, with the signature(s) on the
endorsement or bond power guaranteed by an Eligible Institution.
If this Letter of Transmittal is signed by a person other than
the registered holder(s) of any Tendered Notes, such Tendered Notes must be
endorsed or accompanied by appropriate bond powers, in each case, signed as the
name(s) of the registered holder(s) appear(s) on the Tendered Notes, with the
signature(s) on the endorsement or bond power guaranteed by an Eligible
Institution.
If this Letter of Transmittal or any Tendered Notes or bond
powers are signed by trustees, executors, administrators, guardians,
attorneys-in-fact, officers of corporations, or others acting in a fiduciary
or representative capacity, such persons should so indicate when signing and,
unless waived by the Company, evidence satisfactory to the Company of their
authority to so act must be submitted with this Letter of Transmittal.
Endorsements on Tendered Notes or signatures on bond powers
required by this Instruction 5 must be guaranteed by an Eligible Institution.
Signatures on this Letter of Transmittal must be guaranteed by
an Eligible Institution unless the Tendered Notes are tendered (i) by a
registered holder who has not completed the box set forth herein entitled
"Special Delivery Instructions" (Box 3) or (ii) by an Eligible Institution.
6. Special Delivery Instructions.
Tendering holders should indicate, in the applicable box (Box
3), the name and address to which the Exchange Notes and/or substitute Old
Notes for principal amounts not tendered or not accepted for exchange are to
be sent, if different from the name and address of the person signing this
Letter of Transmittal. In the case of issuance in a different name, the
taxpayer identification or social security number of the person named must
also be indicated.
7. Transfer Taxes.
The Company will pay all transfer taxes, if any, applicable to
the exchange of Tendered Notes pursuant to the Exchange Offer. If, however, a
transfer tax is imposed for any reason other than the transfer and exchange
of Tendered Notes pursuant to the Exchange Offer, then the amount of any such
transfer taxes (whether imposed on the registered holder or on any other
person) will be payable by the tendering holder. If satisfactory evidence of
payment of such taxes or exemption therefrom is not submitted with this Letter
of Transmittal, the amount of such transfer taxes will be billed directly to
such tendering holder.
Except as provided in this Instruction 7, it will not be
necessary for transfer tax stamps to be affixed to the Tendered Notes listed
in this Letter of Transmittal.
8. Tax Identification Number.
Federal income tax law requires that the holder(s) of any
Tendered Notes which are accepted for exchange must provide the Company (as
payor) with its correct taxpayer identification number ("TIN"), which, in the
case of a holder who is an individual, is his or her social security number.
If the Company is not provided with the correct TIN, the holder may be subject
to backup withholding and a $50 penalty imposed by the Internal Revenue
Service (if withholding results in an over-payment of taxes, a refund may be
obtained). Certain holders (including, among others, all corporations and
certain foreign individuals) are not subject to these backup withholding and
reporting requirements. See the enclosed "Guidelines for Certification of
Taxpayer Identification Number on Substitute Form W-9" for additional
instructions.
To prevent backup withholding, each holder of Tendered Notes
must provide such holder's correct TIN by completing the Substitute Form W-9
set forth herein, certifying that the TIN provided is correct (or that such
holder is awaiting a TIN), and that (i) the holder has not been notified by
the Internal Revenue Service that such holder is subject to backup withholding
as a result of failure to report all interest or dividends or (ii) the Internal
Revenue Service has notified the holder that such holder is no longer subject
to backup withholding. If the Tendered Notes are registered in more than one
name or are not in the name of the actual owner, consult the "Guidelines for
Certification of Taxpayer Identification Number on Substitute Form W-9" for
information on which TIN to report.
The Company reserves the right in its sole discretion to take
whatever steps are necessary to comply with the Company's obligation regarding
backup withholding.
9. Validity of Tenders.
All questions as to the validity, form, eligibility (including
time of receipt), acceptance and withdrawal of Tendered Notes will be
determined by the Company in its reasonable discretion, which determination
will be final and binding. The Company reserves the right to reject any and
all Old Notes not validly tendered or any Old Notes the Company's acceptance
of which would, in the opinion of the Company or their counsel, be unlawful.
The Company also reserves the right to waive any conditions of the Exchange
Offer or defects or irregularities in tenders of Old Notes as to any
ineligibility of any holder who seeks to tender Old Notes in the Exchange
Offer. The interpretation of the terms and conditions of the Exchange Offer
(including this Letter of Transmittal and the instructions hereto) by the
Company shall be final and binding on all parties. Unless waived, any defects
or irregularities in connection with tenders of Old Notes must be cured within
such time as the Company shall determine. Neither the Company, the Exchange
Agent nor any other person shall be under any duty to give notification of
defects or irregularities with respect to tenders of Old Notes, nor shall any
of them incur any liability for failure to give such notification. Tenders of
Old Notes will not be deemed to have been made until such defects or
irregularities have been cured or waived. Any Old Notes received by the
Exchange Agent that are not properly tendered and as to which the defects or
irregularities have not been cured or waived will be returned by the Exchange
Agent to the tendering holders, unless otherwise provided in this Letter of
Transmittal or the Prospectus, as soon as practicable following the Expiration
Date.
10. Waiver of Conditions.
The Company reserves the absolute right to amend, waive or
modify any of the conditions in the Exchange Offer in the case of any Tendered
Notes.
11. No Conditional Tender.
No alternative, conditional, irregular, or contingent tender of
Old Notes or transmittal of this Letter of Transmittal will be accepted.
12. Mutilated, Lost, Stolen or Destroyed Notes.
Any tendering holder whose Old Notes have been mutilated, lost,
stolen or destroyed should contact the Exchange Agent at the address indicated
herein for further instructions.
13. Requests for Assistance or Additional Copies.
Questions and requests for assistance and requests for
additional copies of the Prospectus or this Letter of Transmittal may be
directed to the Exchange Agent at the address indicated herein. Holders may
also contact their broker, dealer, commercial bank, trust company or other
nominee for assistance concerning the Exchange Offer.
14. Acceptance of Tendered Notes and Issuance of Notes; Return of Notes.
Subject to the terms and conditions of the Exchange Offer, the
Company will accept for exchange all validly tendered Old Notes as soon as
practicable after the Expiration Date and will issue Exchange Notes therefor
as soon as practicable thereafter. For purposes of the Exchange Offer, the
Company shall be deemed to have accepted tendered Old Notes when, as and if
the Company has given written or oral notice (immediately followed in writing)
thereof to the Exchange Agent. If any Tendered Notes are not exchanged
pursuant to the Exchange Offer for any reason, such unexchanged Old Notes will
be returned, without expense, to the undersigned at the address shown in Box 1
or at a different address as may be indicated herein under "Special Delivery
Instructions" (Box 3).
15. Withdrawal.
Tenders may be withdrawn only pursuant to the procedures set
forth in the Prospectus under the caption "The Exchange Offer--Withdrawal of
Tenders."
EXHIBIT 99.2
NOTICE OF GUARANTEED DELIVERY
TO BE USED IN CONNECTION WITH
TEKNI-PLEX, INC.
OFFER TO EXCHANGE
ITS
SERIES B 9(1)/(4)% SENIOR SUBORDINATED NOTES DUE 2008
FOR ANY AND ALL OF ITS OUTSTANDING
9(1)/(4)% SENIOR SUBORDINATED NOTES DUE 2008
This form must be used by a holder of 9(1)/(4)% Senior
Subordinated Notes due 2008 (the "Old Notes") of Tekni-Plex, Inc., a Delaware
corporation (the "Company"), who wishes to tender Old Notes to the Exchange
Agent pursuant to the guaranteed delivery procedures described under the
caption "The Exchange Offer--Guaranteed Delivery Procedures" in the
Prospectus, dated __________________, 1998 (the "Prospectus") and in
Instruction 2 to the related Letter of Transmittal (the "Letter of
Transmittal"). Any holder who wishes to tender Old Notes pursuant to such
guaranteed delivery procedures must ensure that the Exchange Agent receives
this Notice of Guaranteed Delivery, properly completed and executed, prior to
the Expiration Date of the Exchange Offer. Capitalized terms used but not
defined herein have the meanings ascribed to them in the Letter of Transmittal.
THE EXCHANGE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00 P.M., NEW
YORK CITY TIME, ON ______________, 1998 UNLESS EXTENDED (THE "EXPIRATION
DATE").
MARINE MIDLAND BANK
(the "Exchange Agent")
<TABLE>
<S> <C> <C>
By Registered or Certified Mail, By Facsimile: By Overnight Courier or Hand:
Marine Midland Bank Marine Midland Bank Marine Midland Bank
140 Broadway--A Level Attn: Frank Godino 140 Broadway--A Level
New York, New York 10005-1180 (212) 658-2292 New York, New York 10005-1180
Attn: Corporate Trust Operations Attn: Corporate Trust Operations
Tel: (212) 658-5931 Tel: (212) 658-5931
</TABLE>
Originals of this instrument and all other documents submitted
by facsimile must be sent promptly by registered or certified mail, overnight
courier or hand delivery.
DELIVERY OF THIS INSTRUMENT TO AN ADDRESS OTHER THAN AS SET
FORTH ABOVE WILL NOT CONSTITUTE A VALID DELIVERY.
This form is not to be used to guarantee signatures. If a
signature on a Letter of Transmittal is required to be guaranteed by an
"Eligible Institution" under the instructions thereto, such signature
guarantee must appear in the applicable space provided in the signature box on
the Letter of Transmittal.
Ladies and Gentlemen:
Upon the terms and subject to the conditions set forth in the
Prospectus and the Letter of Transmittal, receipt of which is hereby
acknowledged, the undersigned hereby tenders to the Company the principal
amount of Old Notes set forth below pursuant to the guaranteed delivery
procedures set forth in the Prospectus and in Instruction 2 of the Letter of
Transmittal.
The undersigned hereby tenders the Old Notes listed below:
<TABLE>
<CAPTION>
AGGREGATE AGGREGATE
PRINCIPAL PRINCIPAL
CERTIFICATE NUMBER(S) (IF KNOWN) OF OLD NOTES OR ACCOUNT AMOUNT AMOUNT
NUMBER AT THE BOOK-ENTRY FACILITY REPRESENTED TENDERED*
- -------------------------------------------------------- ----------- ---------
<S> <C> <C>
- --------------------------------------------------------------------------------------------------------------
* Must be in denominations of principal amount of $1,000 and any integral multiple thereof.
</TABLE>
PLEASE SIGN AND COMPLETE:
Signature(s) of Registered Holder(s) or Authorized Signatory
______________________________________________________________________________
______________________________________________________________________________
Name(s) of Registered Holder(s)
______________________________________________________________________________
______________________________________________________________________________
Date:__________________________________________________________________ , 1998
Address(es):__________________________________________________________________
______________________________________________________________________________
Area Code and Telephone Number(s):____________________________________________
This Notice of Guaranteed Delivery must be signed by the holder(s) exactly as
their name(s) appear on certificates for Old Notes or on a security position
listing as the owner of Old Notes, or by person(s) authorized to become
holder(s) by endorsements and documents transmitted with this Notice of
Guaranteed Delivery. If signature is by a trustee, executor, administrator,
guardian, attorney-in-fact, officer or other person acting in a fiduciary or
representative capacity, such person must provide the following information.
Please print names(s) and address(es):
Name(s):______________________________________________________________________
Capacity:_____________________________________________________________________
Address(es):__________________________________________________________________
GUARANTEE
(Not to be used for Signature Guarantee)
<TABLE>
<S> <C>
The undersigned, a firm which is a member of a registered national securities exchange or of the National
Association of Securities Dealers, Inc., or is a commercial bank or trust company having an office or
correspondent in the United States, or is otherwise an "eligible guarantor institution" within the meaning of
Rule 17Ad-15 under the Securities Exchange Act of 1934, as amended, guarantees deposit with the Exchange
Agent of the Letter of Transmittal (or facsimile thereof), together with the Old Notes tendered hereby in proper
form for transfer (or confirmation of the book-entry transfer of such Old Notes into the Exchange Agent's
account at the Book-Entry Transfer Facility described in the prospectus under the caption "The Exchange
Offer--Guaranteed Delivery Procedures" and in the Letter of Transmittal) and any other required documents,
all by 5:00 p.m., New York City time, on the third New York Stock Exchange trading day following the
Expiration Date.
Name of Firm:________________________________________ Address:______________________________________________
Date:__________________________________________, 1998 ______________________________________________________
Authorized Signature:________________________________ Area Code and
Telephone Number:_____________________________________
</TABLE>
DO NOT SEND CERTIFICATES FOR OLD NOTES WITH THIS FORM. ACTUAL SURRENDER OF
CERTIFICATES MUST BE MADE PURSUANT TO, AND BE ACCOMPANIED BY, AN EXECUTED
LETTER OF TRANSMITTAL.
INSTRUCTIONS FOR NOTICE OF GUARANTEED DELIVERY
1. Delivery of This Notice of Guaranteed Delivery.
A properly completed and duly executed copy of this Notice of
Guaranteed Delivery and any other documents required by this Notice of
Guaranteed Delivery must be received by the Exchange Agent at its address set
forth herein prior to the Expiration Date. The method of delivery of this
Notice of Guaranteed Delivery and any other required documents to the Exchange
Agent is at the election and sole risk of the holder, and the delivery will be
deemed made only when actually received by the Exchange Agent. If delivery is
by mail, registered mail with return receipt requested, properly insured, is
recommended. As an alternative to delivery by mail, the holders may wish to
consider using an overnight or hand delivery service. In all cases, sufficient
time should be allowed to assure timely delivery. For a description of the
guaranteed delivery procedures, see Instruction 2 of the Letter of Transmittal.
2. Signatures on This Notice of Guaranteed Delivery.
If this Notice of Guaranteed Delivery is signed by the
registered holder(s) of the Old Notes referred to herein, the signature must
correspond with the name(s) written on the face of the Old Notes without
alteration, enlargement, or any change whatsoever. If this Notice of
Guaranteed Delivery is signed by a participant of the Book-Entry Transfer
Facility whose name appears on a security position listing as the owner of the
Old Notes, the signature must correspond with the name shown on the security
position listing as the owner of the Old Notes.
If this Notice of Guaranteed Delivery is signed by a person
other than the registered holder(s) of any Old Notes listed or a participant
of the Book-Entry Transfer Facility, this Notice of Guaranteed Delivery must be
accompanied by appropriate bond powers, signed as the name of the registered
holder(s) appears on the Old Notes or signed as the name of the participant
shown on the Book-Entry Transfer Facility's security position listing.
If this Notice of Guaranteed Delivery is signed by a trustee,
executor, administrator, guardian, attorney-in-fact, officer of a corporation,
or other person acting in a fiduciary or representative capacity, such person
should so indicate when signing and submit with the Letter of Transmittal
evidence satisfactory to the Company of such person's authority to so act.
3. Requests for Assistance or Additional Copies.
Questions and requests for assistance and requests for
additional copies of the Prospectus may be directed to the Exchange Agent at
the address specified in the Prospectus. Holders may also contact their
broker, dealer, commercial bank, trust company, or other nominee for
assistance concerning the Exchange Offer.
EXHIBIT 99.3
INSTRUCTIONS TO REGISTERED HOLDER AND/OR
BOOK-ENTRY TRANSFER FACILITY PARTICIPANT FROM BENEFICIAL OWNER
OF
TEKNI-PLEX, INC.
9(1)/(4)% SENIOR SUBORDINATED NOTES DUE 2008
To Registered Holder and/or Participant of the Book-Entry Transfer
Facility:
The undersigned hereby acknowledge(s) receipt of the Prospectus,
dated _____________, 1998 (the "Prospectus") of Tekni-Plex, Inc., a Delaware
corporation (the "Company"), and the accompanying Letter of Transmittal (the
"Letter of Transmittal"), that together constitute the Company's offer (the
"Exchange Offer"). Capitalized terms used but not defined herein have the
meanings ascribed to them in the Letter of Transmittal.
This will instruct you, the registered holder and/or book-entry
transfer facility participant, as to action to be taken by you relating to the
Exchange Offer with respect to the 9(1)/(4)% Senior Subordinated Notes due
2008 (the "Old Notes") held by you for the account of the undersigned.
The aggregate face amount of the Old Notes held by you for the
account of the undersigned is (FILL IN AMOUNT): $________________of 9(1)/(4)%
Senior Subordinated Notes due 2008.
With respect to the Exchange Offer, the undersigned hereby
instructs you (CHECK APPROPRIATE BOX):
[ ] TO TENDER the following Old Notes held by you for the
account of the undersigned (INSERT PRINCIPAL AMOUNT OF OLD
NOTES TO BE TENDERED, IF ANY): $________________
[ ] NOT TO TENDER any Old Notes held by you for the account of
the undersigned.
If the undersigned instruct(s) you to tender the Old Notes held
by you for the account of the undersigned, it is understood that you are
authorized:
(a) to make, on behalf of the undersigned (and the
undersigned, by its signature below, hereby makes to you), the
representation and warranties contained in the Letter of
Transmittal that are to be made with respect to the undersigned
as a beneficial owner, including but not limited to the
representations that:
(i) the undersigned's principal residence is in
the state of ____________________________
(FILL IN STATE);
(ii) the undersigned is acquiring the Exchange
Notes in the ordinary course of business of the
undersigned;
(iii) the undersigned is not participating, does not
participate, and has no arrangement or understanding with
any person to participate in, the distribution of the
Exchange Notes;
(iv) the undersigned acknowledges that any person
participating in the Exchange Offer for the purpose of
distributing the Exchange Notes must comply with the
registration and prospectus delivery requirements of the
Securities Act of 1933, as amended (the "Securities Act"),
in connection with a secondary resale transaction of the
Exchange Notes acquired by such person and cannot rely on
the position of the staff of the Securities and Exchange
Commission set forth in no-action letters that are
discussed under the caption "The Exchange Offer--Resale of
the Exchange Notes" in the Prospectus; and
(v) the undersigned is not an "affiliate," as
defined in Rule 405 under the Securities Act, of the
Company;
(b) to agree, on behalf of the undersigned, as set forth
in the Letter of Transmittal; and
(c) to take such other action as necessary under the
Prospectus or the Letter of Transmittal to effect the valid
tender of such Old Notes.
SIGN HERE
Name of Beneficial Owner(s):__________________________________________________
Signature(s):_________________________________________________________________
Name(s) (please print):_______________________________________________________
Address(es):__________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
Telephone Number(s): _________________________________________________________
Taxpayer Identification or Social Security Number(s):_________________________
Date:_________________________________________________________________________
EXHIBIT 99.4
EXCHANGE AGENT AGREEMENT
_________________, 1998
Marine Midland Bank
140 Broadway, 12th Floor
New York, NY 10005-1180
Ladies and Gentlemen:
Tekni-Plex, Inc., a Delaware corporation (the "Company"), is
offering to issue, upon the terms and subject to the conditions set forth in
the Prospectus dated ____________ (the "Prospectus") and the related Letter of
Transmittal (which together constitute the "Offer"), $1,000 principal amount
of the Company's Series B 9(1)/(4)% Senior Subordinated Notes due 2008 (the
"Exchange Notes"), in exchange for each outstanding $1,000 principal amount of
its 9(1)/(4)% Senior Subordinated Notes due 2008 (the "Old Notes" and together
with the Exchange Notes, the "Notes"). Exchange Notes will be issued only in
minimum denominations of $1,000 and integral multiples thereof to each
tendering holder of Old Notes whose Old Notes are accepted in the Offer.
You are hereby appointed and authorized to act as agent (the
"Exchange Agent") to effectuate the exchange of Old Notes for Exchange Notes,
on the terms and subject to the conditions of this agreement (the
"Agreement"). In that regard, the following documents have been delivered to
you:
(i) the Prospectus;
(ii) the Letter of Transmittal to be used by the registered holders of
the Old Notes, including instructions;
(iii) the Notice of Guaranteed Delivery to be used by any registered
holder of the Old Notes when the Old Notes are not immediately
available or when the holder cannot deliver the Old Notes and
other required documents to the Exchange Agent or cannot complete
the procedure for book-entry transfer prior to the Expiration
Date;
(iv) the Instructions to Registered Holder and/or Book-Entry Transfer
Facility Participant from Beneficial owner to be used by any
beneficial owner of the Old Notes;
(v) the cover letter from the Company to brokers, dealers, commercial
banks, trust companies and other nominees generally describing
the Offer; and
(vi) the form of cover letter from brokers, dealers, commercial banks,
trust companies and other nominees to their respective clients
generally describing the Offer.
The Offer shall expire at the time and on the date specified in the Prospectus
(the "Initial Expiration Date") or at any subsequent time and date to which the
Company, in its sole discretion, may extend the Offer. The later of the Initial
Expiration Date and the latest time and date to which the Offer is so extended
is referred to herein as "Expiration Date."
You are hereby requested, and you hereby agree, to act as
follows:
1. You are to accept, subject to any withdrawal rights, Old
Notes that are accompanied by a Letter of Transmittal (or facsimile thereof),
properly completed and duly executed in accordance with the instructions
thereon and any requisite related collateral documents and all other
instruments and communications submitted to you in connection with the Offer
and to hold the same upon the terms and conditions set forth in this
Agreement. You shall advise the Company with respect to any Old Notes received
subsequent to the Expiration Date and accept the instructions of the Company
with respect to disposition of such Old Notes.
2. You are to examine the Letters of Transmittal, the Old
Notes, and the other documents delivered or mailed to you by or for the
holders of the Old Notes as soon as practicable after receipt to ascertain
whether (i) the Letters of Transmittal are properly completed and duly
executed in accordance with the instructions set forth therein, (ii) the Old
Notes have otherwise been properly tendered and (iii), if applicable, the
other documents are properly completed and duly executed. You need not pass on
the legal sufficiency of any signature or verify any signature guarantee.
3. In the event any Letter of Transmittal or other document has
been improperly executed or completed or any of the Old Notes are not in
proper form or have been improperly tendered, or if some other irregularity in
connection with the delivery of Old Notes by a registered holder thereof
exists, you shall promptly report such information to the Company and you are
authorized, upon consultation with the Company and its counsel, to endeavor to
take such action as may be necessary to cause such irregularity to be
corrected. You are authorized, upon consultation with the Company or one of
its representatives, to request from any person tendering Old Notes such
additional documents or undertakings as you may deem appropriate. All
questions as to the form of all documents and the validity, form, eligibility
(including time of receipt), acceptance and withdrawal of tendered Old Notes
will be determined by the Company, in its reasonable discretion, whose
determinations will be final and binding. The Company reserves the absolute
right to reject any or all tenders that are not in proper form or to refuse
the acceptance of any particular Old Notes that would, in the opinion of the
Company's counsel, be unlawful. The Company also reserves the absolute right
to waive any of the conditions of the Offer or any defect or irregularity in
the tender of any Old Notes, and the Company's interpretation of the terms and
conditions of the Offer (including the Letter of Transmittal and the
instructions set forth therein) will be final and binding; provided, however,
that any direction by the Company to accept a nonconforming Old Note, Letter
of Transmittal or other document, or to reject an Old Note, Letter of
Transmittal or other document believed by you to be conforming, shall be set
forth in writing by an Officer of the Company.
4. In carrying out your duties as Exchange Agent, you have
established an account with respect to the Old Notes at each of The Depository
Trust Company ("DTC"), the Midwest Securities Trust Company and the
Philadelphia Depository Trust Company (collectively referred to as the
"Book-Entry Facilities") for purposes of the Offer, and any financial
institution that is a participant in the Book-Entry Facilities system may make
book-entry delivery of the Old Notes into your account in accordance with each
such Book-Entry Facility's procedure for such transfer. You have confirmed
with DTC that any financial institution that is a participant in DTC's system
(a "Participant") may utilize DTC's Automated Tender Offer Program ("ATOP")
to tender the Old Notes for exchange in the Offer. You will request that DTC
establish an account with respect to the Old Notes for purposes of the Offer
within two business days after the date on which the Offer commences. Any
Participant may make book-entry delivery of Old Notes by causing DTC to
transfer such Old Notes into such account in accordance with DTC's ATOP
transfer procedures. However, the acceptance for exchange of the Old Notes so
tendered will only be made after timely confirmation (a "Book-Entry
Confirmation") of such book-entry transfer of Old Notes into such account, and
timely receipt by you of an Agent's Message (as such term is defined in the
next sentence) and any other documents required by the Letter of Transmittal
or the Prospectus. The term "Agent's Message" means a message, transmitted by
DTC and received by you and forming part of a Book-Entry Confirmation, which
states that DTC has received an express acknowledgment from a Participant
tendering for exchange Old Notes which are the subject of such Book-Entry
Confirmation that such Participant has received and agrees to be bound by the
terms of the Letter of Transmittal, and that the Company may enforce such
agreement against such Participant. No tender of Old Notes will be deemed to
have been properly made until all defects and irregularities have been cured
or waived.
5. Tender of Old Notes shall be made only as set forth in the
Prospectus and the Letter of Transmittal, and Old Notes shall be considered
properly tendered to you only when:
(a) a properly completed and duly executed Letter of
Transmittal (or facsimile thereof), with any required signature
guarantee and any other required documents, are received by you
at your address set forth in the Prospectus or in the Letter of
Transmittal and Old Notes are received by you at such address or
pursuant to book-entry delivery at your account at DTC; or a
properly completed and duly executed Notice of Guaranteed
Delivery substantially in the form provided by the Company, with
an appropriate guarantee of signature and delivery from an
Eligible Guarantor Institution within the meaning of Rule
17Ad-15 under the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), is received by you at or prior to the
Expiration Date. For purposes of this Agreement, an "Eligible
Guarantor Institution" within the meaning of Rule 17Ad-15 under
the Exchange Act shall mean a bank, broker, dealer, credit
union, savings association, clearing agency or other institution
that is a member of a recognized signature guarantee medallion
program (i.e. Securities Transfer Agents Medallion Program,
Stock Exchange Medallion Program or New York Stock Exchange
Medallion Signature Program). The Notice of Guaranteed Delivery
may be delivered to you by hand or transmitted by telegram,
facsimile transmission or letter;
(b) Old Notes (in respect of which there has been
delivered to you prior to the Expiration Date a properly
completed and duly executed Notice of Guaranteed Delivery) in
proper form for transfer together with a properly completed and
duly executed Letter of Transmittal (or facsimile thereof), and
any other required documents, are received by you within three
(3) trading days of The New York Stock Exchange, Inc. after the
Expiration Date; and
(c) the adequacy of the items relating to Old Notes, and
the Letters of Transmittal therefor and any Notice of Guaranteed
Delivery has been favorably passed upon as above provided.
Notwithstanding the provisions of the preceding paragraph, Old
Notes that the Company shall approve as having been properly tendered shall be
considered to be properly tendered.
6. (a) A tendering holder of Old Notes may withdraw tendered
Old Notes in accordance with the procedures set forth in the Prospectus at any
time on or prior to 5:00 p.m. New York City time on the Expiration Date, in
which event, except as may be otherwise specified in the holder's notice of
withdrawal, all items in your possession that shall have been received from
such holder with respect to those Old Notes shall be returned to or upon the
order of the holder as soon as practicable and the Old Notes covered by those
items shall no longer be considered to be properly tendered.
(b) A withdrawal of tender of Old Notes may not be rescinded
and any Old Notes withdrawn will thereafter be deemed not validly tendered for
purposes of the Offer, provided, however, that withdrawn Old Notes may be
retendered by again following one of the procedures therefor described in the
Prospectus at any time on or prior to the Expiration Date.
(c) All questions as to the validity (including time of
receipt) of notices of withdrawal will be determined by the Company, whose
determination will be final and binding.
7. You are to record and to hold all tenders received by you
and to promptly notify by telephone (with confirmation by facsimile
transmission) Dr. F. Patrick Smith of the Company (telephone 908-722-4800 and
facsimile 908-722-4967 on a weekly basis or more frequently if so requested by
the Company, as to the total number of Old Notes tendered during such week (or
other period) and the cumulative numbers with respect to the Old Notes
received and not withdrawn through the time of such notice. Each such report
should be divided into the Old Notes represented by (i) book-entry delivery
and/or certificates and (ii) Notices of Guaranteed Delivery actually received
by you through the time of the report. The foregoing information should also
be sent to the Company in a weekly written report. Each report should also
indicate the number of Old Notes tendered in good form and the number of Old
Notes tendered with a defect or irregularity (as well as the name of the
beneficial owner of each such Old Note, if such information has been provided
to you and a brief description of the nature of each such defect or
irregularity). In addition, you will also provide, and cooperate in making
available to the Company, such other information as it may reasonably request
and access to those persons on your staff who are responsible for receiving
tenders of Old Notes in order to insure that immediately prior to the
Expiration Date, the Company shall have received information in sufficient
detail to enable it to decide whether to extend the Offer.
8. Each Letter of Transmittal, Old Note, Notice of Guaranteed
Delivery and any other document received by you in connection with the Offer
shall be noted by you as to the date and time of receipt and, if defective,
the date and time the last defect was waived by the Company or was cured. Each
Letter of Transmittal and Old Note that is accepted by the Company shall be
retained in your Possession until the Expiration Date. As promptly as
practicable thereafter, you will deliver by registered mail with proper
insurance those items, together with all properly tendered and canceled Old
Notes, to the Company, Attention Dr. F. Patrick Smith.
9. You are to satisfy requests of brokers, dealers, commercial
banks, trust companies and other persons for copies of the documents and other
materials specified in items (i) through (vi) of the introduction to this
Agreement and such other forms as may be approved in writing from time to time
by the Company. You are not authorized to offer any concessions or to pay any
commissions to any brokers, banks or other persons or to engage or to utilize
any persons to solicit tenders.
10. You are to follow up and act upon any amendments,
modifications or supplements to these instructions and upon any further
information in connection with the terms of the Offer, any of which may be
given to you by the Company, including instructions with respect to any
extension of or the modification of the Offer and the cancellation of the
Offer.
11. Unless otherwise instructed by the Company no exchange
shall be made as to any Old Notes held in certificated form until you
physically receive a certificate or certificates representing those Old Notes,
a properly completed and duly executed Letter of Transmittal (or facsimile
thereof) and any other required documents. Promptly after the Expiration Date,
the Company will notify you (such notice if given orally, to be confirmed in
writing) of the tendered Old Notes which it has accepted and you, on behalf of
the Company, will exchange such Old Notes for Exchange Notes and cause such
Old Notes to be canceled all in accordance with this Agreement, the Prospectus
and the Letter of Transmittal.
12. For performing your services hereunder, you shall be
entitled to receive from the Company a fee in accordance with the Schedule of
Fees attached hereto. You shall also be reimbursed by the Company for all
reasonable expenses, including, but not limited to, reasonable counsel fees
and expenses, if any, you may incur in connection with the performance of your
duties hereunder. This paragraph will survive any termination of this
Agreement.
13. As Exchange Agent hereunder, you:
(a) shall not have duties or obligations other that those
specifically set forth herein or as may subsequently be agreed
to by you and the Company in writing;
(b) shall not be obligated to take any legal action
hereunder that might in your reasonable judgment involve any
expense or liability unless you have been furnished with
indemnification from the Company reasonably satisfactory to you;
(c) may rely on and shall be protected and fully
indemnified pursuant to paragraph 16 in acting in reliance upon
any instruction, direction, officers' certificate, instrument,
opinion, notice, letter, facsimile transmission, telex, telegram
or other document delivered to you and reasonably believed by
you to be genuine and to have been signed by the proper party or
parties;
(d) will be regarded as making no representations and
having no responsibilities in respect to the validity,
sufficiency, value or genuineness of any Prospectus, Letter of
Transmittal, Notice of Guaranteed Delivery or any other
disclosure materials delivered in connection therewith, or
certificates deposited with you hereunder, and will not make any
representation as to the validity, value or genuineness of the
Offer;
(e) may rely on and shall be protected and fully
indemnified pursuant to Paragraph 16 in acting upon the terms
and conditions of (i) this Agreement, and (ii) the documents
relating to the Offer, and (iii) any instructions given to you
in writing by the Company by Dr. F. Patrick Smith or Mr. Kenneth
W. R. Baker of the Company, with respect to any matters relating
to your activities as Exchange Agent covered by this Agreement,
and
(f) may consult with counsel satisfactory to you
(including counsel to the Company), and the opinion of such
counsel shall be full and complete authorization and protection
with respect to any action taken, suffered, or omitted by you in
reliance upon such opinion, provided that you shall promptly
notify the Company of any actions taken or omitted by you in
reliance upon such opinion.
14. You undertake the duties and obligations imposed herein
upon the following additional terms and conditions:
(a) you shall perform your duties and obligations
hereunder with due care; and
(b) you are not authorized to and shall not make any
recommendation on behalf of the Company as to whether a holder
of Old Notes of the Company should or should not participate in
the Offer.
15. All Exchange Notes shall be forwarded by you to the persons
at the addresses so indicated in the Letter of Transmittal by (i) first-class
mail under, a blanket surety bond protecting you and the Company from loss or
liability arising out of the nonreceipt or nondelivery of such certificate, or
(ii) registered mail, insured separately for the replacement value of such
certificates.
16. The Company shall indemnify and hold you (which for
purposes of this paragraph shall include your directors, officers, agents and
employees) harmless from and against any and all costs, damages, actions,
losses, liabilities, expenses and claims (including, but not limited to, the
reasonable fees and expenses of counsel) ("Losses") incurred by you as a
result of, in connection with or arising out of the performance by you of your
duties under this Agreement or the compliance by you with the instructions set
forth herein or delivered hereunder, other than those Losses resulting from
your bad faith, negligence, or willful misconduct. You shall notify the
Company of the written assertion of a claim against you or of any action
commenced against you, promptly after you shall have received any such written
assertion of a claim or shall have been served with the summons or other first
legal process, giving information as to the nature and basis of the claim;
provided, however, that your failure to so notify shall not affect the
Company's obligations hereunder so long as such failure to notify the Company
does not adversely affect any defense that would have been available to the
Company. The Company shall be entitled to participate in the defense of any
such claim or legal action and if the Company so elects at any time after
receipt of such notice, the Company may assume the defense of any suit brought
to enforce any such claim. Notwithstanding anything to the contrary set forth
herein, you shall be entitled to retain a single counsel of your choice in any
such suit and the Company shall pay the reasonable fees, expenses and
disbursements of such counsel if (i) the Company has failed within a
reasonable time to retain counsel reasonably satisfactory to you or (ii) the
representation of you and the Company by the same counsel would be
inappropriate due to actual or potential differing interests. The Company will
not be liable for any settlement of any proceedings effected without its
written consent (which consent shall not be unreasonably withheld). This
paragraph shall survive any termination of this Agreement.
17. You hereby acknowledge receipt of each of the documents
listed in items (i) through (vi) of the introduction of this Agreement and
further acknowledge that you have examined the same. Any inconsistency between
this Agreement on the one hand and the Prospectus and Letter of Transmittal,
as they may from time to time be amended, on the other, shall be resolved in
favor of the latter, except with respect to the duties, liabilities and
indemnification of you as Exchange Agent, which shall be governed exclusively
by this Agreement.
18. In the event that any of the terms of the Offer are
amended, the Company shall give you prompt written notice thereof describing
such amendment. The parties shall amend this Agreement to the extent necessary
to reflect any material changes to the terms hereof caused by any amendment of
the Offer.
19. You shall preserve, and shall provide the Company access
to, all records pertaining to the Offer and shall permit it to make
reproductions of the same, at its expense during normal business hours, for a
period of five (5) years following the Expiration Date.
20. This Agreement is effective as of the date hereof and is
binding upon and inures to the benefit of the parties' respective successors.
This Agreement shall be governed by and construed in accordance with the laws
of the State of New York.
21. This Agreement may be executed in one or more counterparts,
each of which shall be deemed to be an original, but all of which together
shall constitute one and the same document.
22. All notices and communications hereunder shall be in
writing and shall be deemed to be duly given if delivered or mailed first
class certified or registered mail, postage prepaid, or telecopied as follows:
If to the Company: Tekni-Plex, Inc.
201 Industrial Parkway
Somerville, NJ 08876
Attn: Dr. F. Patrick Smith
Telephone: (908) 722-4800
Fax: (908) 722-4967
and a copy to: Davis Polk & Wardwell
450 Lexington Avenue
New York, NY 10017
Attn: Winthrop B. Conrad
Telephone: (212) 450-4000
Fax: (212) 450-4800
if to you: Marine Midland Bank
Corporate Trust Administration
140 Broadway--12th floor
New York, NY 10005-1180
Attn: Frank J. Godino
Telephone: (212) 658-6433
Fax: (212) 658-6425
23. These instructions may be reasonably modified or
supplemented by the Company or by any officer thereof authorized to give
notice, approval or waiver on its behalf.
If the foregoing is acceptable to you, please countersign below
to acknowledge receipt of this letter and to confirm your agreement to the
arrangements herein provided.
Very truly yours,
TEKNI-PLEX
By:_______________________________
Name:
Title:
Accepted
MARINE MIDLAND BANK, as
Exchange Agent
By:_____________________________________
Name: Frank J. Godino
Title: Vice President
