<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JANUARY 14, 1998.
REGISTRATION STATEMENT NO. 333-39813
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
AMENDMENT NO. 1
TO
FORM S-4
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------------
B&G FOODS, INC.
(Exact Name of Registrant as specified in its charter)
<TABLE>
<S> <C> <C>
DELAWARE 2035 13-3916496
(State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer
incorporation or organization) Classification Code Number) Identification No.)
</TABLE>
------------------------
426 EAGLE ROCK AVENUE
ROSELAND, NJ 07068
(201) 228 2500
(Address, Including Zip Code, and Telephone Number, Including Area Code,
of Registrant's Principal Executive Offices)
------------------------------
SEE TABLE OF ADDITIONAL REGISTRANTS BELOW
------------------------
DAVID L. WENNER
426 EAGLE ROCK AVENUE
ROSELAND, NJ 07068
(201) 228 2500
(Address, Including Zip Code, and Telephone Number, Including Area Code,
of Agent For Service)
------------------------------
With a copy to:
GLYNDWR P. LOBO, ESQ.
DECHERT PRICE & RHOADS
30 ROCKEFELLER PLAZA
NEW YORK, NY 10112
(212) 698-3500
------------------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
As soon as practicable after the effective date of this Registration Statement.
------------------------
If the securities being registered on this form are to be offered in connection
with the formation of a holding company and there is compliance with General
Instruction G, check the following box. / /
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
PROPOSED MAXIMUM PROPOSED MAXIMUM AMOUNT OF
TITLE OF EACH CLASS OF AMOUNT TO BE OFFERING AGGREGATE REGISTRATION
SECURITIES TO BE REGISTERED REGISTERED PRICE PER UNIT OFFERING PRICE FEE(1)
<S> <C> <C> <C> <C>
9 5/8% Senior Subordinated
Notes due 2007 $120,000,000 100% $120,000,000(2) $36,364(3)
Subsidiary Guarantees $120,000,000 -- -- --
</TABLE>
(1) Calculated in accordance with Rule 457(o) of the Securities Act of 1933, as
amended.
(2) Estimated solely for purposes of calculating the registration fee.
(3) Previously paid.
------------------------------
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.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
B&G FOODS, INC.
TABLE OF ADDITIONAL REGISTRANTS
<TABLE>
<CAPTION>
PRIMARY STANDARD IRS
INDUSTRIAL EMPLOYER
STATE OF CLASSIFICATION IDENTIFICATION REGISTRATION
NAME INCORPORATION CODE NUMBER NO. STATEMENT NO.
- ------------------------------------------- ------------- ---------------------- ------------- ---------------
<S> <C> <C> <C> <C>
BGH Holdings, Inc. ........................ Delaware 6719 36-3867424 333-39813-04
Bloch & Guggenheimer, Inc. ................ Delaware 2035 11-2704725 333-39813-05
Burns & Ricker, Inc. ...................... Delaware 2052 22-2780678 333-39813-07
Trappey's Fine Foods, Inc. ................ Delaware 2099, 2035, 2033 22-2934591 333-39813-02
Roseland Distribution Company.............. Delaware 4225 22-3213725 333-39813-08
RWBV Acquisition Corp. .................... Delaware 2099 22-3518822 333-39813-10
</TABLE>
The address, including zip code, and telephone number, including area code,
of the principal offices of the additional registrants listed above (the
"Additional Registrants") is: 426 Eagle Rock Avenue, Roseland, NJ 07068; the
telephone number at that address is (201) 228-2500.
Effective January 3, 1998, BRH Holdings, Inc. (Registration No.
333-3813-06), JEM Brands, Inc. (Registration No. 333-39813-03), Roseland
Manufacturing, Inc. (Registration No. 333-39813-09), and RWBV Brands Company
(Registration No. 333-39813-01) merged with and into certain of the other
Additional Registrants and their separate corporate existence ceased to exist as
of such date.
<PAGE>
SUBJECT TO COMPLETION, DATED JANUARY 14, 1998
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 REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE.
<PAGE>
PROSPECTUS
OFFER TO EXCHANGE
9 5/8% SENIOR SUBORDINATED NOTES DUE 2007
FOR ALL OUTSTANDING
9 5/8% SENIOR SUBORDINATED NOTES DUE 2007
OF
B&G FOODS, INC.
THE EXCHANGE OFFER WILL EXPIRE AT 5:00 P.M.,
NEW YORK CITY TIME, ON , 1998, UNLESS EXTENDED
---------------------
THE NOTES (AS DEFINED) ARE AND WILL BE SUBORDINATE TO ALL OF THE CURRENT AND
FUTURE SENIOR DEBT (AS DEFINED) OF THE COMPANY AND WILL BE EFFECTIVELY
SUBORDINATE TO ALL OF THE INDEBTEDNESS OF THE GUARANTORS (AS DEFINED). NEITHER
THE COMPANY NOR ANY GUARANTOR HAS ISSUED, AND DOES NOT HAVE ANY CURRENT FIRM
ARRANGEMENTS TO ISSUE, ANY SIGNIFICANT ADDITIONAL INDEBTEDNESS TO WHICH THE
NOTES WOULD BE SENIOR.
B&G FOODS, INC., A DELAWARE CORPORATION ("B&G" OR THE "COMPANY"), HEREBY
OFFERS TO EXCHANGE AN AGGREGATE PRINCIPAL AMOUNT OF UP TO $120,000,000 OF ITS
9 5/8% SENIOR SUBORDINATED NOTES DUE 2007 (THE "NEW NOTES") FOR A LIKE PRINCIPAL
AMOUNT OF ITS 9 5/8% SENIOR SUBORDINATED NOTES DUE 2007 (THE "EXISTING NOTES")
OUTSTANDING ON THE DATE HEREOF UPON THE TERMS AND SUBJECT TO THE CONDITIONS SET
FORTH IN THIS PROSPECTUS AND IN THE ACCOMPANYING LETTER OF TRANSMITTAL (THE
"LETTER OF TRANSMITTAL" AND, TOGETHER WITH THIS PROSPECTUS, THE "EXCHANGE
OFFER"). THE NEW NOTES AND THE EXISTING NOTES ARE HEREINAFTER COLLECTIVELY
REFERRED TO AS THE "NOTES." THE TERMS OF THE NEW NOTES ARE IDENTICAL IN ALL
MATERIAL RESPECTS TO THOSE OF THE EXISTING NOTES, EXCEPT THAT (I) THE EXCHANGE
WILL HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
"SECURITIES ACT"), AND HENCE THE NEW NOTES WILL NOT BEAR LEGENDS RESTRICTING THE
TRANSFER THEREOF, AND (II) HOLDERS OF THE NEW NOTES WILL NOT BE ENTITLED TO
CERTAIN RIGHTS OF HOLDERS OF THE EXISTING NOTES UNDER THE REGISTRATION RIGHTS
AGREEMENT (AS DEFINED), WHICH RIGHTS WILL TERMINATE UPON THE CONSUMMATION OF THE
EXCHANGE OFFER. THE NEW NOTES WILL BE ISSUED PURSUANT TO, AND WILL BE ENTITLED
TO THE BENEFITS OF, THE INDENTURE (AS DEFINED) GOVERNING THE EXISTING NOTES.
THE NEW NOTES WILL BEAR INTEREST FROM AND INCLUDING THE DATE OF CONSUMMATION
OF THE EXCHANGE OFFER. INTEREST ON THE NEW NOTES WILL BE PAYABLE SEMI-ANNUALLY
ON FEBRUARY 1 AND AUGUST 1 OF EACH YEAR, COMMENCING FEBRUARY 1, 1998.
ADDITIONALLY, INTEREST ON THE NEW NOTES WILL ACCRUE FROM THE LAST INTEREST
PAYMENT DATE ON WHICH INTEREST WAS PAID ON THE EXISTING NOTES SURRENDERED IN
EXCHANGE THEREFOR OR, IF NO INTEREST HAS BEEN PAID ON THE EXISTING NOTES, FROM
THE DATE OF ORIGINAL ISSUE OF THE EXISTING NOTES. HOLDERS WHOSE EXISTING NOTES
ARE ACCEPTED FOR EXCHANGE WILL BE DEEMED TO HAVE WAIVED THE RIGHT TO RECEIVE ANY
INTEREST ACCRUED ON THE EXISTING NOTES.
THE NOTES WILL MATURE ON AUGUST 1, 2007. THE NOTES WILL BE REDEEMABLE AT THE
OPTION OF THE COMPANY, IN WHOLE OR IN PART, ON OR AFTER AUGUST 1, 2002, OR
EARLIER AT THE OPTION OF THE COMPANY UPON A CHANGE OF CONTROL (AS DEFINED) AT
THE REDEMPTION PRICES SET FORTH HEREIN, PLUS ACCRUED AND UNPAID INTEREST, IF
ANY, TO THE DATE OF REDEMPTION. IN ADDITION, AT ANY TIME PRIOR TO AUGUST 1,
2000, THE COMPANY, MAY, IN ITS DISCRETION, REDEEM UP TO 35% OF THE ORIGINAL
AGGREGATE PRINCIPAL AMOUNT OF THE NOTES AT A REDEMPTION PRICE EQUAL TO 109.625%
OF THE PRINCIPAL AMOUNT THEREOF, PLUS ACCRUED AND UNPAID INTEREST AND LIQUIDATED
DAMAGES (AS DEFINED), IF ANY, TO THE DATE OF REDEMPTION, WITH THE NET PROCEEDS
OF ONE OR MORE PUBLIC EQUITY OFFERINGS (AS DEFINED); PROVIDED THAT AT LEAST 65%
OF THE ORIGINAL AGGREGATE PRINCIPAL AMOUNT OF THE NOTES REMAINS OUTSTANDING
IMMEDIATELY AFTER EACH SUCH REDEMPTION.
UPON THE OCCURRENCE OF A CHANGE OF CONTROL, (I) THE COMPANY WILL HAVE THE
OPTION, AT ANY TIME ON OR PRIOR TO AUGUST 1, 2002, TO REDEEM THE NOTES, IN WHOLE
BUT NOT IN PART, AT A REDEMPTION PRICE EQUAL TO 100% OF THE PRINCIPAL AMOUNT
THEREOF PLUS THE APPLICABLE PREMIUM (AS DEFINED), PLUS ACCRUED AND UNPAID
INTEREST AND LIQUIDATED DAMAGES, IF ANY, TO THE DATE OF REDEMPTION AND (II) IF
THE COMPANY DOES NOT SO REDEEM THE NOTES OR IF SUCH CHANGE OF CONTROL OCCURS
AFTER AUGUST 1, 2002, THE COMPANY WILL BE REQUIRED TO MAKE AN OFFER TO
REPURCHASE THE NOTES AT A PRICE EQUAL TO 101% OF THE PRINCIPAL AMOUNT THEREOF,
TOGETHER WITH ACCRUED AND UNPAID INTEREST AND LIQUIDATED DAMAGES, IF ANY, TO THE
DATE OF REPURCHASE. THERE CAN BE NO ASSURANCE THAT THE COMPANY AND THE
GUARANTORS WOULD BE ABLE TO REPURCHASE THE NOTES. SEE "RISK FACTORS--CHANGE OF
CONTROL" AND "DESCRIPTION OF THE NOTES."
THE COMPANY HAS NO OPERATIONS OF ITS OWN AND DERIVES SUBSTANTIALLY ALL OF
ITS REVENUES FROM ITS SUBSIDIARIES. HOLDERS OF INDEBTEDNESS OF SUBSIDIARIES OF
THE COMPANY WOULD BE ENTITLED TO REPAYMENT OF SUCH INDEBTEDNESS FROM THE ASSETS
OF THE AFFECTED SUBSIDIARIES BEFORE SUCH ASSETS WERE MADE AVAILABLE FOR
DISTRIBUTION WITHIN THE LIMITS SET FORTH IN THE INDENTURE TO THE COMPANY.
THE NEW NOTES WILL BE GENERAL UNSECURED OBLIGATIONS OF THE COMPANY
SUBORDINATE IN RIGHT OF PAYMENT TO ALL EXISTING AND FUTURE SENIOR DEBT OF THE
COMPANY. AS OF SEPTEMBER 27, 1997, THE COMPANY HAD APPROXIMATELY $1.4 MILLION OF
SENIOR DEBT OUTSTANDING (EXCLUSIVE OF AN UNUSED COMMITMENT OF UP TO $50.0
MILLION UNDER THE NEW CREDIT FACILITY (AS DEFINED)). THE GUARANTORS (AS DEFINED)
WILL, JOINTLY AND SEVERALLY, AND FULLY AND UNCONDITIONALLY, GUARANTEE THE NEW
NOTES. THE SUBSIDIARY GUARANTEES (AS DEFINED) WILL BE JUNIOR AND SUBORDINATE IN
RIGHT OF PAYMENT TO ALL EXISTING AND FUTURE SENIOR DEBT AND ADDITIONAL
LIABILITIES (INCLUDING TRADE PAYABLES, ACCRUED EXPENSES, AMOUNTS DUE TO RELATED
PARTIES, DEFERRED INCOME TAXES AND OTHER LIABILITIES) OF THE GUARANTORS, WHICH
AGGREGATED APPROXIMATELY $42.8 MILLION AS OF SEPTEMBER 27, 1997. NEITHER THE
COMPANY NOR ANY OF THE GUARANTORS HAS ANY CURRENT OR PENDING ARRANGEMENT OR
AGREEMENT TO INCUR ANY ADDITIONAL SIGNIFICANT INDEBTEDNESS TO WHICH THE NOTES OR
THE SUBSIDIARY GUARANTEES WOULD BE SUBORDINATE OR RANK PARI PASSU IN RIGHT OF
PAYMENT. SEE "DESCRIPTION OF THE NOTES-- SUBORDINATION" AND "CAPITALIZATION."
THE INDENTURE RESTRICTS THE AMOUNT OF INDEBTEDNESS (AS DEFINED) THAT MAY BE
INCURRED BY THE COMPANY TO WITHIN A FIXED CHARGED COVERAGE RATIO (AS DEFINED) OF
2 TO 1, EXCEPT TO THE EXTENT THAT SUCH INDEBTEDNESS IS PERMITTED INDEBTEDNESS
(AS DEFINED). SEE "DESCRIPTION OF THE NOTES--CERTAIN COVENANTS--INCURRENCE OF
INDEBTEDNESS AND ISSUANCE OF PREFERRED STOCK."
THE NEW NOTES ARE BEING OFFERED HEREUNDER IN ORDER TO SATISFY CERTAIN
OBLIGATIONS OF THE COMPANY AND THE GUARANTORS CONTAINED IN THE REGISTRATION
RIGHTS AGREEMENT, DATED AS OF AUGUST 11, 1997 (THE "REGISTRATION RIGHTS
AGREEMENT"), BY AND BETWEEN THE COMPANY, THE GUARANTORS, AND LEHMAN BROTHERS AND
LAZARD FRERES & CO. INC. LLC (THE "INITIAL PURCHASERS") WITH RESPECT TO THE
INITIAL SALE OF THE EXISTING NOTES.
THE COMPANY WILL NOT RECEIVE ANY PROCEEDS FROM THE EXCHANGE OFFER. THE
COMPANY WILL PAY ALL THE EXPENSES INCIDENT TO THE EXCHANGE OFFER. TENDERS OF
EXISTING NOTES PURSUANT TO THE EXCHANGE OFFER MAY BE WITHDRAWN AT ANY TIME PRIOR
TO THE EXPIRATION DATE (AS DEFINED). IN THE EVENT THE COMPANY TERMINATES THE
EXCHANGE OFFER AND DOES NOT ACCEPT FOR EXCHANGE ANY EXISTING NOTES WITH RESPECT
TO THE EXCHANGE OFFER, THE COMPANY WILL PROMPTLY RETURN SUCH EXISTING NOTES TO
THE HOLDERS THEREOF. SEE "THE EXCHANGE OFFER."
(CONTINUED ON FOLLOWING PAGE)
------------------------------
SEE "RISK FACTORS" COMMENCING ON PAGE 14 FOR A DISCUSSION OF CERTAIN MATTERS
THAT SHOULD BE CONSIDERED BY HOLDERS OF EXISTING NOTES IN CONNECTION WITH THE
EXCHANGE OFFER.
---------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION NOR HAS THE 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 , 1998
<PAGE>
THE COMPANY IS OFFERING THE NEW NOTES IN RELIANCE ON CERTAIN INTERPRETIVE
LETTERS ISSUED BY THE STAFF OF THE SECURITIES AND EXCHANGE COMMISSION (THE
"COMMISSION") TO THIRD PARTIES IN UNRELATED TRANSACTIONS. BASED ON SUCH
INTERPRETIVE LETTERS, THE COMPANY IS OF THE VIEW THAT THE NEW NOTES ISSUED
PURSUANT TO THIS EXCHANGE OFFER IN EXCHANGE FOR EXISTING NOTES MAY BE OFFERED
FOR RESALE, RESOLD AND OTHERWISE TRANSFERRED BY A HOLDER THEREOF (OTHER THAN (I)
A BROKER-DEALER WHO PURCHASES SUCH NEW NOTES DIRECTLY FROM THE COMPANY TO RESELL
PURSUANT TO RULE 144A OR ANY OTHER AVAILABLE EXEMPTION UNDER THE SECURITIES ACT
OR (II) A PERSON THAT IS AN AFFILIATE OF THE COMPANY WITHIN THE MEANING OF RULE
405 UNDER THE SECURITIES ACT), WITHOUT COMPLIANCE WITH THE REGISTRATION AND
PROSPECTUS DELIVERY PROVISIONS OF THE SECURITIES ACT, PROVIDED THAT THE HOLDER
IS ACQUIRING THE NEW NOTES IN THE ORDINARY COURSE OF ITS BUSINESS AND IS NOT
PARTICIPATING, AND HAD NO ARRANGEMENT OR UNDERSTANDING WITH ANY PERSON TO
PARTICIPATE, IN THE DISTRIBUTION OF THE NEW NOTES, AND THAT SUCH HOLDER IS NOT
ENGAGED IN AND DOES NOT INTEND TO ENGAGE IN A DISTRIBUTION OF THE NOTES. HOLDERS
OF EXISTING NOTES WISHING TO ACCEPT THE EXCHANGE OFFER MUST REPRESENT TO THE
COMPANY, AS REQUIRED BY THE REGISTRATION RIGHTS AGREEMENT, THAT SUCH CONDITIONS
HAVE BEEN MET. EACH BROKER-DEALER THAT RECEIVES THE NEW NOTES FOR ITS OWN
ACCOUNT IN EXCHANGE FOR THE EXISTING NOTES, WHERE SUCH EXISTING NOTES WERE
ACQUIRED BY SUCH 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 NEW NOTES. THE COMPANY BELIEVES THAT NONE OF
THE REGISTERED HOLDERS OF THE EXISTING NOTES IS AN AFFILIATE (AS SUCH TERM IS
DEFINED IN RULE 405 UNDER THE SECURITIES ACT) OF THE COMPANY.
THE EXISTING NOTES ARE CURRENTLY ELIGIBLE FOR TRADING IN THE PRIVATE
OFFERINGS, RESALES AND TRADING THROUGH AUTOMATED LINKAGES ("PORTAL") MARKET.
FOLLOWING COMMENCEMENT OF THE EXCHANGE OFFER BUT PRIOR TO ITS CONSUMMATION, THE
EXISTING NOTES MAY CONTINUE TO BE TRADED IN THE PORTAL MARKET. FOLLOWING
CONSUMMATION OF THE EXCHANGE OFFER, THE NEW NOTES WILL NOT BE ELIGIBLE FOR
PORTAL TRADING. THE COMPANY CURRENTLY DOES NOT INTEND TO LIST THE NEW NOTES ON
ANY SECURITIES EXCHANGE OR TO SEEK APPROVAL FOR QUOTATION THROUGH ANY AUTOMATED
QUOTATION SYSTEM, AND NO ACTIVE PUBLIC MARKET FOR THE NEW NOTES IS CURRENTLY
ANTICIPATED. THERE CAN BE NO ASSURANCE THAT AN ACTIVE PUBLIC MARKET FOR THE NEW
NOTES WILL DEVELOP. SEE "RISK FACTORS--ABSENCE OF PUBLIC MARKET FOR THE NOTES."
EACH BROKER-DEALER THAT RECEIVES NEW 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 NEW NOTES. THE LETTER OF TRANSMITTAL STATES
THAT BY SO ACKNOWLEDGING AND BY DELIVERING A PROSPECTUS, A 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 BROKER-DEALER IN CONNECTION WITH RESALES OF NEW NOTES
RECEIVED IN EXCHANGE FOR EXISTING NOTES WHERE SUCH EXISTING NOTES WERE ACQUIRED
BY SUCH BROKER-DEALER AS A RESULT OF MARKET-MAKING ACTIVITIES OR OTHER TRADING
ACTIVITIES. THE COMPANY HAS INDICATED ITS INTENTION TO MAKE THIS PROSPECTUS (AS
IT MAY BE AMENDED OR SUPPLEMENTED) AVAILABLE TO ANY BROKER-DEALER FOR USE IN
CONNECTION WITH ANY SUCH RESALE FOR A PERIOD OF ONE YEAR FOLLOWING THE EFFECTIVE
DATE (AS DEFINED). SEE "PLAN OF DISTRIBUTION."
THE EXCHANGE OFFER IS NOT CONDITIONED UPON ANY MINIMUM PRINCIPAL AMOUNT OF
EXISTING NOTES BEING TENDERED FOR EXCHANGE PURSUANT TO THE EXCHANGE OFFER.
THE EXCHANGE OFFER IS NOT BEING MADE TO, NOR WILL THE COMPANY ACCEPT
SURRENDERS FOR EXCHANGE FROM, HOLDERS OF EXISTING NOTES IN ANY JURISDICTION IN
WHICH THE EXCHANGE OFFER OR THE ACCEPTANCE THEREOF WOULD NOT BE IN COMPLIANCE
WITH THE SECURITIES OR BLUE SKY LAWS OF SUCH JURISDICTION.
<PAGE>
AVAILABLE INFORMATION
The Company has filed with the Commission a Registration Statement on Form
S-4 under the Securities Act with respect to the New Notes offered hereby (the
"Registration Statement"). As permitted by the rules and regulations of the
Commission, this Prospectus omits certain information, exhibits and undertakings
contained in the Registration Statement. For further information with respect to
the Company and the New Notes offered hereby, reference is made to the
Registration Statement, including the exhibits thereto and the financial
statements, notes and schedules filed as a part thereof. Statements contained in
this Prospectus as to the contents of any contract or other document are not
necessarily complete, and in each instance reference is made to the copy of such
contract or document filed as an exhibit to the Registration Statement, each
such statement being qualified in all respects by such reference. The
Registration Statement, including the exhibits thereto, and other information
filed by the Company can be inspected and copied at the public reference
facilities maintained by the Commission at, 450 Fifth Street, N.W., Washington
D.C. 20549, and at the Regional Offices of the Commission at Seven World Trade
Center, Suite 1300, New York, New York 10048 and at Citicorp Center, 500 West
Madison Street, Suite 1400, Chicago, Illinois 60661. Copies of such materials
can also be obtained from the Public Reference Section of the Commission at 450
Fifth Street, N.W., Washington D.C. 20549, at prescribed rates. In addition, the
Commission maintains a Web site that contains reports, proxy and information
statements and other information regarding registrants that file electronically
with the Commission. The address of such Web site is: http://www.sec.gov.
As a result of the Exchange Offer, the Company will become subject to the
informational requirements of the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), and in accordance therewith will be required to file
periodic reports and other information with the Commission. In the event the
Company ceases to be subject to the informational requirements of the Exchange
Act, the Company has agreed that, so long as any Notes remain outstanding, it
will file with the Commission (but only if the Commission at such time is
accepting such voluntary filings) and distribute to holders of the Notes, copies
of the financial information that would have been contained in such annual
reports and quarterly reports, including management's discussion and analysis of
financial condition and results of operations, that would have been required to
be filed with the Commission pursuant to the Exchange Act. The Company will also
furnish such other reports as it may determine or as may be required by law.
------------------------
All statements other than statements of historical facts included in this
Prospectus, including, without limitation, the statements under "Summary,"
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" and "Business" and located elsewhere herein regarding industry
prospects and the Company's financial position are 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 expectations ("Cautionary
Statements") are disclosed in the Prospectus, including, without limitation, in
conjunction with the forward-looking statements in this Prospectus 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.
i
<PAGE>
CERTAIN DEFINITIONS AND MARKET SHARE DATA
Unless the context otherwise requires, (i) the term "Management" refers to
the management team of the Company and (ii) references to a "product" mean a
specific stock keeping unit. Market category and segment data reflect grocery
sales as gathered by A.C. Nielson & Co. for the U.S. markets for the 52-week
periods as follows: (i) the period ending June 7, 1997 for B&G Pickle and Pepper
Products and the Baked Snack Products (each as defined); (ii) the period ending
September 27, 1997 for B&G peppers; (iii) the period ending October 12, 1997 for
REGINA wine vinegar, VERMONT MAID syrup, BRER RABBIT molasses and RED DEVIL hot
sauce; and (iv) the period ending March 30, 1997 for WRIGHT'S liquid smoke.
While Management believes that such data are reliable, no assurance can be given
that such data are accurate in all material respects. Unless otherwise
indicated, all statements in this Prospectus regarding market share and brand
position are measured by retail dollar share.
B&G-REGISTERED TRADEMARK-, B&G SANDWICH TOPPERS-REGISTERED TRADEMARK-, BRER
RABBIT-REGISTERED TRADEMARK-, BURNS & RICKER-REGISTERED TRADEMARK-, NEW YORK
STYLE-REGISTERED TRADEMARK-, REGINA-REGISTERED TRADEMARK-, VERMONT
MAID-REGISTERED TRADEMARK- and WRIGHT'S-REGISTERED TRADEMARK- are registered
trademarks of the Company. BAGEL CHIPMIX-TM-, BLOCH & GUGGENHEIMER-TM-,
SAN-DEL-TM- and SANDWICH TOPPERS-TM- are trademarks of the Company. BULL'S-TM-,
DULCITO-REGISTERED TRADEMARK-, RED DEVIL-TM-, TRAPPEY'S-REGISTERED TRADEMARK-
and TRAPPEY'S LOUISIANA HOT SAUCE-TM- are trademarks or registered trademarks of
Trappey's Fine Foods, Inc. POLANER-REGISTERED TRADEMARK- and POLANER
ALL-FRUIT-REGISTERED TRADEMARK- are registered trademarks of International Home
Foods, Inc.
ii
<PAGE>
SUMMARY
THE FOLLOWING SUMMARY IS QUALIFIED IN ITS ENTIRETY BY, AND SHOULD BE READ IN
CONJUNCTION WITH, THE MORE DETAILED INFORMATION AND FINANCIAL STATEMENTS
(INCLUDING NOTES THERETO) INCLUDED ELSEWHERE IN THIS PROSPECTUS. UNLESS
OTHERWISE INDICATED OR THE CONTEXT OTHERWISE REQUIRES, REFERENCES TO THE
"COMPANY" ARE TO B&G FOODS, INC. AND ITS SUBSIDIARIES. THIS PROSPECTUS CONTAINS
FORWARD-LOOKING INFORMATION THAT INVOLVES RISKS AND UNCERTAINTIES, AND SUCH
INFORMATION IS SUBJECT TO THE ASSUMPTIONS SET FORTH IN CONNECTION THEREWITH AND
THE INFORMATION CONTAINED OR INCORPORATED BY REFERENCE HEREIN. HOLDERS OF
EXISTING NOTES SHOULD CAREFULLY CONSIDER THE INFORMATION SET FORTH UNDER THE
HEADING "RISK FACTORS."
THE COMPANY
OVERVIEW
The Company manufactures, markets and distributes a diversified portfolio of
shelf-stable branded food products with leading regional or national retail
market positions. In general, the Company positions its retail branded products
to appeal to the consumer desiring a high quality and reasonably priced branded
product. In its relevant regional or national retail markets, the Company holds
the number one position in six of its eight branded product categories. The
Company's sales of branded retail products are complemented by growing food
service sales with strong brand identity. For the fiscal year ended December 28,
1996, the Company's Pro Forma 1996 (as defined in "--Summary Pro Forma Condensed
Consolidated Financial Data") net sales and EBITDA would have been $175.7
million and $23.4 million, respectively.
The Company groups its products as follows: (i) pickles, relishes, peppers,
olives and other specialty products under the BLOCH & GUGGENHEIMER, SAN-DEL and
private label brands (collectively, "B&G Pickle and Pepper Products") (28% of
Pro Forma 1996 net sales); (ii) bagel chips and other baked snack products under
the BURNS & RICKER and NEW YORK STYLE brands (collectively, "Baked Snack
Products") (17% of Pro Forma 1996 net sales); (iii) the REGINA wine vinegars and
cooking wines, WRIGHT'S liquid smoke hickory flavoring, BRER RABBIT molasses and
VERMONT MAID syrup brands acquired from Nabisco, Inc. (collectively, the
"Nabisco Brands") (16% of Pro Forma 1996 net sales); (iv) TRAPPEY'S shelf-stable
peppers and RED DEVIL and other branded hot sauce products (collectively, the
"Trappey's Brands" and, together with the Nabisco Brands, the "Acquired Brands")
acquired from E. McIlhenny's Son Corporation ("McIlhenny"), the maker of
TABASCO-Registered Trademark- pepper sauce (10% of Pro Forma 1996 net sales);
and (v) POLANER ALL-FRUIT and other products (collectively, "IHF Products")
produced and/or distributed for International Home Foods, Inc. ("IHF") (29% of
Pro Forma 1996 net sales). See "Business--Company Overview" and "Business--
Products and Markets."
The Company manages its sales and distribution systems based upon the
channels through which its products are sold. The Company's Direct-Store-Door
("DSD") sales and distribution system sells and distributes the B&G Pickle and
Pepper Products and the IHF Products to over 2,200 store locations throughout
the Northeast, with heavy concentration in the greater New York metropolitan
area. For further discussion of the Company's DSD sales and distribution system,
see "--Strong Regional Sales and Distribution System" and "Business--Marketing,
Sales and Distribution--Direct-Store-Door (DSD)." The Company's national sales
and distribution system markets (i) the Baked Snack Products to deli wholesalers
and distributors through a nationwide deli broker network and (ii) the Nabisco
Brands and certain of the B&G Pickle and Pepper Products through a national
grocery broker network. The Company's food service business sells and
distributes branded food service products through national and regional
wholesalers and distributors which serve national and regional food service
customers. For further discussion of the Company's distribution system, see
"Business--Marketing, Sales and Distribution."
<PAGE>
COMPETITIVE STRENGTHS
Management believes that the following factors contribute to the Company's
position as a market leader in its competitive areas and will be the foundation
for the Company's strategy:
LEADING MARKET POSITIONS. In its relevant regional or national retail
markets, the Company holds the number one position (based on retail dollar
share) in six of its eight branded product categories. The B&G branded
shelf-stable pickle and pepper products are the market leaders in the greater
New York metropolitan area. The Company's BURNS & RICKER and NEW YORK STYLE
brands have a combined 86% national retail market share of the bagel chip
category. REGINA wine vinegars are the national leader in the retail wine and
flavored vinegar category. WRIGHT'S holds the number one national retail market
position in the liquid smoke flavoring category. VERMONT MAID is the number one
brand of syrup in the greater Boston area.
RETAIL MARKET POSITION OF THE COMPANY'S BRANDS
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RETAIL MARKET SHARE(1)
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BRAND CATEGORY SHARE POSITION PERCENTAGE
- ------------------------------------- ------------------------------------- ----------------------- ---------------
B&G PICKLE AND PEPPER PRODUCTS:
Bloch & Guggenheimer................. Shelf-stable Pickles and Relishes.... #1 Greater NY Metro 32%
Bloch & Guggenheimer................. Shelf-stable Peppers................. #1 Greater NY Metro 35%
#3 National(2) 10%
BAKED SNACK PRODUCTS:
Burns & Ricker....................... Bagel Chips.......................... #1 National 45%
New York Style....................... Bagel Chips.......................... #2 National 41%
Combined brands.................... Bagel Chips.......................... #1 National 86%
NABISCO BRANDS:
Regina............................... Wine and Flavored Vinegar............ #1 National 11%
Wright's............................. Liquid Smoke......................... #1 National 45%
Vermont Maid......................... Syrup................................ #1 Greater Boston 16%
Brer Rabbit.......................... Molasses............................. #2 National 21%
TRAPPEY'S BRANDS:
Red Devil and other.................. Hot Sauce............................ #6 National 6%
</TABLE>
- ------------------------
(1) Based on retail dollar share.
(2) Includes TRAPPEY'S branded peppers.
STRONG REGIONAL SALES AND DISTRIBUTION SYSTEM. Management believes that the
DSD sales and distribution system provides a competitive advantage compared to
the other food producers which market through independent brokers. Unlike
distribution systems which rely on independent brokers to market to large
grocery chains and deliver inventory directly to central warehouses which
service many stores, the DSD system requires the Company's sales representatives
to visit each individual store on a weekly basis. The DSD sales representatives
provide these stores with inventory control and value-added delivery services,
such as stocking shelves and delivering promotional displays. The direct
delivery of products through the Company's DSD system also allows the Company to
stock shelves with products having comparatively smaller retail sales, such as
bottled onions, which normally would be sold through a specialty foods
broker/distributor. Management believes that it is the regular personal
interaction between the
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Company's DSD sales representatives and the management of the individual stores
that provides the key
competitive advantage of the DSD sales and distribution system. Management
believes the DSD system of selling and distributing products has allowed it to
achieve leading retail market shares in its core regional markets for both the
B&G Pickle and Pepper Products and the POLANER ALL-FRUIT products. See
"--Business Strategy--Leverage DSD Sales and Distribution System" and
"Business--Marketing, Sales and Distribution--Direct-Store-Door (DSD)."
EXPERIENCED MANAGEMENT TEAM. The Company's management team has demonstrated
its ability to (i) operate successfully in a leveraged environment as part of
Specialty Foods (as defined, see "--Company History"), (ii) grow the core pickle
and pepper products business from $38.1 million in net sales and $3.3 million in
Adjusted EBITDA (as defined, see "Selected Historical Financial and Other Data")
in 1992 to $48.8 million in net sales and $4.5 million in Adjusted EBITDA in
1996, (iii) assume control of and restructure the BURNS & RICKER bagel chip
business and acquire and consolidate the NEW YORK STYLE bagel chip business,
increasing Adjusted EBITDA for the Baked Snack Products business from $1.0
million in 1993 to $4.5 million in 1996, and (iv) develop and expand
successfully the POLANER ALL-FRUIT products into national distribution,
achieving sales of $29.6 million in 1992, and subsequently realizing significant
value through the sale of the POLANER business to IHF in 1993. For additional
information relating to the background of the senior management, see
"Management--Directors and Executive Officers."
BUSINESS STRATEGY
The Company's goal is to increase its sales and profitability by enhancing
its portfolio of branded shelf-stable products and by capitalizing on its
competitive strengths to realize the benefits of combining the B&G products with
the Acquired Brands. The Company intends to implement its strategy through the
following initiatives:
ENHANCE OPERATION OF THE ACQUIRED BRANDS. The Company's objective is to
renew the growth and enhance the profitability of the Acquired Brands.
Management believes there is significant growth potential in the Acquired Brands
due to a lack of focused management and marketing support from their prior
corporate owners who concentrated their resources on dominant national brands.
Management plans to enhance the operations of the Acquired Brands by providing
increased management attention as part of a portfolio of related products of
comparable size, with dedicated sales personnel, focused marketing programs and
strategically timed new product initiatives.
LEVERAGE DSD SALES AND DISTRIBUTION SYSTEM. The Company's extensive and
focused DSD sales and distribution system, concentrated in the greater New York
metropolitan area, is one of its primary competitive strengths, providing it
with strong relationships at the food retailer level, superior store penetration
and preferred shelf product placement. This sales and distribution system also
enables the Company to introduce and sell new products effectively to its
existing grocery customers at a lower cost of introduction to the Company. The
Company has begun to capitalize on this competitive strength by selling and
distributing the Acquired Brands in the greater New York metropolitan area
through its existing DSD sales and distribution system. Similarly, the Company
recently completed the process of moving its Baked Snack Products into the DSD
sales and distribution system. Management believes that distributing the other
Acquired Brands and Baked Snack Products, and any future products, through the
DSD sales and distribution system will, in turn, enhance the total DSD system by
distributing costs over increased product volume. For further discussion of the
DSD sales and distribution system, see "Business--Marketing, Sales and
Distribution--Direct-Store-Door (DSD)."
NATIONAL DISTRIBUTION OPPORTUNITIES. The Company has a portfolio of
branded, national shelf-stable food products supported by a national sales and
distribution network. The combination of the Acquired Brands with the Baked
Snack Products and the B&G Pickle and Pepper products is expected to allow the
Company to distribute the costs of a national sales force and broker network
over increased product volume, reducing costs as a percentage of sales, and to
realize distribution economies of scale and provide
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a national platform for new products and product line extensions. The Company
believes that it will continue to increase the sales and expand the geographic
presence of certain of its regional branded products through its national sales
and distribution network, as evidenced by recent experience with its SANDWICH
TOPPERS line. Utilizing the regional sales managers for this brand, the Company
has expanded the distribution for all or part of the SANDWICH TOPPERS line into
16 grocery chains outside of its traditional regional market. These chains are
comprised of over 2,700 individual stores, representing a sizable growth
opportunity for the SANDWICH TOPPERS line.
NEW PRODUCT INTRODUCTIONS AND LINE EXTENSIONS. Management believes that the
Company's leading market positions, combined with the competitive strengths of
its regional DSD sales and distribution system and national sales and
distribution network, provide a strong platform for new product introductions
and product line extensions. Management has demonstrated its prior experience in
successfully introducing new products and product line extensions, including
SANDWICH TOPPERS, the BURNS & RICKER fat-free products and the POLANER ALL-FRUIT
line which was sold in 1993.
EXPAND PRESENCE WITH MASS MERCHANTS AND OTHER NON-GROCERY MARKETS. Grocery
retailers have been the traditional market for the Company's products.
Management believes that there are certain non-grocery retail markets that have
the potential to grow faster than the grocery retail industry as a whole and
that these non-grocery markets present considerable growth opportunities for the
Company's brands. These non-grocery retail markets include mass merchants,
warehouse and club stores, convenience stores, drug stores and vending machines.
For example, last spring the Company launched a new line of NEW YORK STYLE bagel
chips in distinctive pillow-pack bags for distribution in these alternative
channels. The Company sells these products to the Sam's Club division of
Wal-Mart, Wal-Mart Supercenters, and the eastern region of Price/Costco. To
date, the Company has also successfully completed trials of these products in
Wal-Mart discount stores in three regions. The pillow-pack product has also been
well received by national and regional drugstore and discount chains.
COMPLETE SELECT ACQUISITIONS. Management believes that the Company's
portfolio of branded food products, its highly effective DSD sales and
distribution system and its experienced management team provide an attractive
platform upon which to build a larger company focused on shelf-stable food
products. The Company believes that many diversified food companies have
undermanaged certain non-core or smaller brands, like the Nabisco Brands, as
they have focused on their larger national brands. Similarly, many small food
businesses lack the resources or the economies of scale to realize the growth
potential of their brands. The Company plans to pursue select acquisitions of
such brands when it believes it has an opportunity to enhance sales growth and
operating performance through increased management focus and integration into
the Company's administrative, manufacturing and distribution infrastructure (in
particular, its DSD sales and distribution system and/or its national broker
network). Management further believes that successful future acquisitions will,
in turn, enhance the Company's portfolio of existing businesses by broadening
the Company's product offerings. Furthermore, the Company believes that its
existing DSD sales and distribution system can be enhanced through certain
select acquisitions that include existing distribution networks that are
contiguous or complementary with the Company's existing DSD markets, thereby
expanding the geographic coverage of the Company's DSD sales and distribution
organization. The Company currently has no pending negotiations, agreements,
arrangements or understandings with respect to any material acquisitions.
OWNERSHIP AND MANAGEMENT
The Company is indirectly owned by Bruckmann, Rosser, Sherrill & Co., L.P.
("BRS") and certain members of the Company's management, including Leonard S.
Polaner, David L. Wenner, Robert C. Cantwell, David H. Burke and James H. Brown.
See "Management" and "Ownership of Capital Stock." BRS and these management
members, and Alfred Poe, a director of the Company, own all of the outstanding
capital stock of B&G Foods Holdings Corp. ("Holdings"), which in turn directly
owns all of
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the outstanding capital stock of the Company. The Company is managed by an
operating team led by Leonard S. Polaner, the Company's Chairman of the Board,
and David L. Wenner, the Company's President and Chief Executive Officer.
BRS is a private equity investment firm with approximately $400 million of
committed capital. The principals of BRS--Bruce C. Bruckmann, Harold O. Rosser
II, Stephen C. Sherrill and Stephen F. Edwards--are former senior officers of
Citicorp Venture Capital, Ltd. ("Citicorp Venture Capital") where they worked
from the mid 1980s until forming BRS in 1995. At Citicorp Venture Capital they
were primarily responsible for 25 acquisitions. Since its inception, BRS has
completed eight transactions including: B&G and the Nabisco Brands; Windy Hill
Pet Food Company, Inc., a leading manufacturer of branded and private label dry
pet food, and Windy Hill's acquisition of the pet food business of Hubbard
Milling Company; and Jitney-Jungle Stores of America, Inc., the largest
supermarket chain in Mississippi, which acquired Delchamps, Inc.
Leonard S. Polaner, the Company's Chairman, has managed the Polaner family's
fruit spread and wet spice business since 1956, overseeing the substantial
growth of his namesake brand and its successful sale to American Home Food
Products (now IHF). He has over 40 years of experience in the food industry and
has headed B&G's management team since 1986. David L. Wenner, B&G's President
and Chief Executive Officer, has over eight years of food industry experience.
Since 1993, he has led and overseen all of the Company's growth, new product,
cost reduction and acquisition initiatives. Members of the Company's senior
management team all have extensive experience in operating consumer packaged
food businesses in a leveraged environment.
For additional information relating to the background of the senior
management, see "Management--Directors and Executive Officers."
COMPANY HISTORY AND ORGANIZATION
The Company was organized by BRS in November 1996 to acquire Bloch &
Guggenheimer, Inc., Burns & Ricker, Inc. and certain related entities (the "B&G
and B&R Acquisition") from Specialty Foods Corporation ("Specialty Foods") which
is not an affiliate of the Company. The B&G and B&R Acquisition was consummated
on December 27, 1996 as a stock purchase for aggregate consideration of
approximately $70.0 million, including transaction costs.
On June 17, 1997, the Company acquired certain assets relating to the
Nabisco Brands (the "Nabisco Brands Acquisition"), including trademarks,
inventory and certain equipment used to bottle the REGINA wine vinegars and
cooking wines from Nabisco, which is not an affiliate of the Company. The
aggregate consideration for the Nabisco Brands Acquisition was approximately
$50.6 million in cash, including transaction costs. The Company also entered
into a co-packing agreement with Nabisco under which Nabisco will continue to
bottle the REGINA products until March 1998, and assumed certain co-packing
contracts relating to the other Nabisco Brands. In addition, the Company entered
into a transition services agreement with Nabisco, under which Nabisco provided
certain sales and distribution support for the Nabisco Brands on a national
basis through August 31, 1997. See "Business--Production and Facilities."
Financing for the Nabisco Brands Acquisition, the refinancing of the
indebtedness relating to the B&G and B&R Acquisition and certain related
transaction fees and expenses was provided by borrowings under an $85.0 million
Senior Secured Credit Facility among the Company, certain lenders and Heller
Financial, Inc., as administrative agent (the "Prior Credit Facility"), and
certain proceeds from the issuance by the Company of $23.0 million of 12% Senior
Subordinated Notes (the "Interim Notes").
On August 15, 1997, the Company's subsidiary BGH Holdings, Inc. ("BGH")
acquired from McIlhenny (the "Trappey's Acquisition") all of the outstanding
capital stock of JEM Brands, Inc. ("JEM"), the holding company of Trappey's Fine
Foods, Inc. (together with JEM, "Trappey's"). As consideration for the
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outstanding capital stock of JEM, BGH paid to McIlhenny, which is not an
affiliate of the Company, approximately $12.3 million in cash (the "Trappey's
Purchase Price").
The Company is a wholly owned subsidiary of Holdings, which in turn is
wholly owned by BRS and members of Company management. See "--Ownership and
Management." Each of the Company's operating subsidiaries is wholly owned,
directly or indirectly, by the Company.
In order to streamline the Company's structure, on January 3, 1998, certain
of the Subsidiaries were consolidated with each other. Specifically, JEM merged
with and into Trappey's Fine Foods, Inc., BRH Holdings, Inc. merged with and
into Burns & Ricker, Inc., RWBV Brands Company merged with and into RWBV
Acquisition Corp., and Roseland Manufacturing, Inc. merged with and into
Roseland Distribution Company. In each case, the separate corporate existence of
JEM, BRH Holding, Inc., RWBV Brands Company and Roseland Manufacturing, Inc.
ceased at the time of its merger.
THE FINANCING
The Existing Notes were issued on August 11, 1997. The net proceeds from the
sale of the Existing Notes were $116.4 million and were used (i) to repay a
total of approximately $100.0 million of indebtedness (the "Prior
Indebtedness"), consisting of approximately $76.5 million of outstanding
indebtedness under the Prior Credit Facility and approximately $23.0 million of
outstanding Interim Notes, together with accrued and unpaid interest of
approximately $0.5 million with respect to Prior Indebtedness being repaid, (ii)
to consummate the Trappey's Acquisition for consideration of $12.3 million, and
(iii) to pay certain fees and expenses incurred in connection with the sale of
the Existing Notes and the Trappey's Acquisition (the application of the
proceeds in accordance with the foregoing, the issuance and sale of the Existing
Notes, and the replacement of the Prior Credit Facility with a new $50.0 million
revolving credit facility maturing in 2002 (the "New Credit Facility") are
collectively the "Financing"). The Company intends to use the balance of the net
proceeds for general corporate purposes.
THE EXCHANGE OFFER
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<S> <C>
SECURITIES OFFERED................ Up to $120,000,000 aggregate principal amount of 9 5/8%
Senior Subordinated Notes due 2007. The terms of the New
Notes and Existing Notes are identical in all material
respects, except for certain transfer restrictions and
registration rights relating to the Existing Notes.
THE EXCHANGE OFFER................ The New Notes are being offered in exchange for a like
principal amount of Existing Notes. Existing Notes may
be exchanged only in integral multiples of $1,000. The
issuance of the New Notes is intended to satisfy
obligations of the Company contained in the Registration
Rights Agreement.
EXPIRATION DATE; WITHDRAWAL
TENDER.......................... The Exchange Offer will expire at 5:00 p.m. New York
City time, on , 1998, or such later date and time
to which it may be extended by the Company. The tender
of Existing Notes pursuant to the Exchange Offer may be
withdrawn at any time prior to the Expiration Date. Any
Existing Notes not accepted for exchange for any reason
will be returned without expense to the tendering holder
thereof as promptly as practicable after the expiration
or termination of the Exchange Offer.
</TABLE>
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<TABLE>
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ACCRUED INTEREST ON THE NEW NOTES
AND THE EXISTING NOTES.......... The New Notes will bear interest from and including the
date of consummation of the Exchange Offer.
Additionally, interest on the New Notes will accrue from
the last interest payment date on which interest was
paid on the Existing Notes surrendered in exchange
therefor or, if no interest has been paid on the
Existing Notes, from the date of original issue of the
Existing Notes. Holders whose Existing Notes are
accepted for exchange will be deemed to have waived the
right to receive any interest accrued on the Existing
Notes.
CERTAIN CONDITIONS TO THE EXCHANGE
OFFER........................... The Company's obligation to accept for exchange, or to
issue New Notes in exchange for, any Existing Notes is
subject to certain customary conditions relating to
compliance with any applicable law or any applicable
interpretation by the staff of the Commission, the
receipt of any applicable governmental approvals and the
absence of any actions or proceedings of any
governmental agency or court which could materially
impair the Company's ability to consummate the Exchange
Offer. The Company currently expects that each of the
conditions will be satisfied and that no waivers will be
necessary. See "The Exchange Offer--Certain Conditions
to the Exchange Offer."
PROCEDURES FOR TENDERING
EXISTING NOTES.................. Each holder of Existing Notes wishing to accept the
Exchange Offer must complete, sign and date the 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 such Existing Notes and
any other required documentation, to the Exchange Agent
(as defined) at the address set forth herein. Subject to
the satisfaction or waiver of the conditions to the
Exchange Offer, the Company will accept for exchange any
and all Existing Notes which are properly tendered in
the Exchange Offer prior to the Expiration Date. See
"The Exchange Offer-- Procedures for Tendering Existing
Notes."
</TABLE>
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<TABLE>
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SPECIAL PROCEDURES FOR BENEFICIAL
OWNERS.......................... Any beneficial owner whose Existing Notes are registered
in the name of a broker, dealer, commercial bank, trust
company or other nominee and who wishes to tender such
Existing Notes in the Exchange Offer should contact such
registered holder promptly and instruct such registered
holder to tender on such beneficial owner's behalf. See
"The Exchange Offer-- Procedures for Tendering Existing
Notes." 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 such owner's Existing Notes, either make
appropriate arrangements to register ownership of the
Existing 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 and may not be able to be completed prior to the
Expiration Date.
GUARANTEED DELIVERY PROCEDURES.... Holders of Existing Notes who wish to tender their
Existing Notes and whose Existing Notes are not
immediately available or who cannot deliver their
Existing Notes, the Letter of Transmittal or any other
document required by the Letter of Transmittal to the
Exchange Agent prior to the Expiration Date, must tender
their Existing Notes according to the guaranteed
delivery procedures set forth in "The Exchange Offer--
Guaranteed Delivery Procedures."
WITHDRAWAL RIGHTS................. Tenders of Existing Notes may be withdrawn at any time
prior to the Expiration Date. See "The Exchange
Offer--Withdrawal of Tenders."
CERTAIN FEDERAL INCOME TAX
CONSIDERATIONS.................. In the opinion of Dechert, Price & Rhoads, counsel to
the Company, the exchange of Notes pursuant to the
Exchange Offer should not be a taxable event for federal
income tax purposes. See "Certain Federal Income Tax
Considerations."
USE OF PROCEEDS................... The Company will not receive any proceeds from the
Exchange Offer. The net proceeds to the Company from the
sale of the Existing Notes, after deducting the Initial
Purchasers' discount and estimated fees and expenses,
were approximately $116.4 million. For further
discussion of the use of proceeds from the sale of the
Existing Notes, see "Use of Proceeds."
EXCHANGE AGENT.................... The Bank of New York (the "Exchange Agent") is serving
as the Exchange Agent in connection with Exchange Offer.
</TABLE>
CONSEQUENCES OF EXCHANGING EXISTING NOTES PURSUANT TO THE EXCHANGE OFFER
Based on certain interpretive letters issued by the staff of the Commission
to third parties in unrelated transactions, the Company is of the view that the
New Notes issued pursuant to this Exchange Offer in exchange for Existing Notes
may be offered for resale, resold and otherwise transferred by a holder thereof
(other than (i) a broker-dealer who purchases such New Notes directly from the
Company to resell pursuant to Rule 144A or any other available exemption under
the Securities Act or (ii) a person that is an affiliate of the Company within
the meaning of Rule 405 under the Securities Act), without compliance with the
registration and prospectus delivery provisions of the Securities Act, provided
that the holder is
8
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acquiring the New Notes in the ordinary course of its business and is not
participating, and had no arrangement or understanding with any person to
participate, in the distribution of the New Notes. Holders of Existing Notes
wishing to accept the Exchange Offer must represent to the Company, as required
by the Registration Rights Agreement, that such conditions have been met. Each
broker-dealer that receives the New Notes for its own account in exchange for
the Existing Notes, where such Existing Notes were acquired by such
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 New Notes. The Letter of Transmittal states that by so
acknowledging and by delivering a prospectus, a 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 broker-dealer in connection with resales of New Notes received in
exchange for Existing Notes where such Existing Notes were acquired by such
broker-dealer as a result of market-making activities or other trading
activities. The Company has indicated its intention to make this Prospectus (as
it may be amended or supplemented) available to any broker-dealer for use in
connection with any such resale for a period of one year following the date the
Registration Statement is declared effective by the Commission (the "Effective
Date"). See "Plan of Distribution."
In addition, to comply with the securities laws of certain jurisdictions, if
applicable, the New Notes may not be offered or sold unless they have been
registered or qualified for sale in such jurisdictions or in compliance with an
available exemption from registration or qualification. The Company has agreed,
pursuant to the Registration Rights Agreement and subject to certain specified
limitations therein, to register or qualify the New Notes for offer or sale
under the securities or blue sky laws of such jurisdictions as are necessary to
permit consummation of the Exchange Offer. If a holder of Existing Notes does
not exchange such Existing Notes for New Notes pursuant to the Exchange Offer,
such Existing Notes will continue to be subject to the restrictions on transfer
contained in the legend thereon. In general, the Existing Notes may not be
offered or sold, unless registered under the Securities Act, except pursuant to
an exemption from, or in a transaction not subject to, the Securities Act and
applicable state securities laws. Holders of Existing Notes do not have any
appraisal or dissenters' rights in connection with the Exchange Offer. See "The
Exchange Offer--Consequences of Failure to Exchange; Resales of New Notes."
The Existing Notes are currently eligible for trading in the PORTAL market.
Following commencement of the Exchange Offer but prior to its consummation, the
Existing Notes may continue to be traded in the PORTAL market. Following
consummation of the Exchange Offer, the New Notes will not be eligible for
PORTAL trading.
THE NEW NOTES
The terms of the New Notes are identical in all material respects to the
Existing Notes, except for certain transfer restrictions and registration rights
relating to the Existing Notes.
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SECURITIES OFFERED:............... $120,000,000 in aggregate principal amount of 9 5/8%
Senior Subordinated Notes due 2007.
INTEREST PAYMENT DATES:........... February 1 and August 1, commencing February 1, 1998.
MATURITY DATE:.................... August 1, 2007.
SINKING FUND PROVISION:........... None.
OPTIONAL REDEMPTION:.............. The Notes will not be redeemable at the Company's option
prior to August 1, 2002, except under the circumstances
set forth below under "Change of Control." Thereafter,
the Notes will be subject to redemption at any time at
the option of the Company, in whole or in part, at the
redemption prices set forth herein plus accrued and
unpaid interest and Liquidated Damages, if
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any, thereon to the applicable redemption date. In
addition, at any time prior to August 1, 2000, the
Company may on any one or more occasions redeem up to
35% of the original aggregate principal amount of Notes
at a redemption price of 109.625% of the principal
amount thereof, plus accrued and unpaid interest and
Liquidated Damages, if any, thereon to the date of
redemption, with the net cash proceeds of any Public
Equity Offering of common stock of the Company or a
capital contribution to the Company's common equity of
the net cash proceeds of a concurrent Public Equity
Offering of common stock by the Company's direct parent,
provided that at least 65% of the original aggregate
principal amount of Notes remains outstanding
immediately after each occurrence of such redemption.
There can be no assurance that the Company and the
Guarantors would be able to repurchase the Notes. See
"Description of the Notes--Optional Redemption."
RANKING:.......................... THE EXISTING NOTES ARE AND THE NEW NOTES WILL BE GENERAL
UNSECURED OBLIGATIONS OF THE COMPANY SUBORDINATE IN
RIGHT OF PAYMENT TO ALL EXISTING AND FUTURE SENIOR DEBT
OF THE COMPANY, AND SENIOR IN RIGHT OF PAYMENT TO OR
PARI PASSU WITH ALL OTHER INDEBTEDNESS OF THE COMPANY.
THE EXISTING NOTES ARE AND THE NEW NOTES WILL BE
EFFECTIVELY SUBORDINATE TO ALL OF THE INDEBTEDNESS OF
THE GUARANTORS. NEITHER THE COMPANY NOR ANY GUARANTOR
HAS ISSUED, AND DOES NOT HAVE ANY CURRENT FIRM
ARRANGEMENTS TO ISSUE, ANY SIGNIFICANT ADDITIONAL
INDEBTEDNESS TO WHICH THE NOTES WOULD BE SENIOR. As of
September 27, 1997, the Company had approximately $1.4
million of Senior Debt outstanding (exclusive of an
unused commitment of up to $50.0 million under the New
Credit Facility). See "Description of
Notes--Subordination" and "Capitalization." The
Guarantors will, jointly and severally, and fully and
unconditionally, guarantee the New Notes. The Subsidiary
Guarantees will be junior and subordinate in right of
payment to all existing and future Senior Debt and
additional liabilities (including trade payables,
accrued expenses, amounts due to related parties,
deferred income taxes and other liabilities) of the
Guarantors, which aggregated approximately $42.8 million
as of September 27, 1997. Neither the Company nor any of
the Guarantors has any current or pending arrangement or
agreement to incur any additional significant
indebtedness to which the Notes or the Subsidiary
Gurantees would be subordinate or rank PARI PASSU in
right of payment. See "Description of the Notes--
Subordination" and "Capitalization." The Indenture
restricts the amount of Indebtedness that may be
incurred by the Company to within a Fixed Charged
Coverage Ratio of 2 to 1, except to the extent that such
Indebtedness is Permitted Indebtedness. See "Description
of the Notes--Certain Covenants--Incurrence of
Indebtedness and Issuance of Preferred Stock."
SUBSIDIARY GUARANTEES:............ The Company's payment obligations under the New Notes
will be jointly and severally guaranteed on a senior
subordinated basis (the "Subsidiary Guarantees") by all
current and future Subsidiaries (as defined) of the
Company. See "Description of the Notes--Subsidiary
Guarantees."
</TABLE>
10
<PAGE>
<TABLE>
<S> <C>
CHANGE OF CONTROL:................ Upon the occurrence of a Change of Control, (i) the
Company will have the option, at any time prior to
August 1, 2002, to redeem the Notes, in whole but not in
part, at a redemption price equal to 100% of the
principal amount thereof plus the Applicable Premium set
forth herein, plus accrued and unpaid interest and
Liquidated Damages, if any, to the date of redemption
and (ii) if the Company does not so redeem the New Notes
or if such Change of Control occurs after August 1,
2002, the Company will be required to make an offer to
repurchase the Notes at a price equal to 101% of the
principal amount thereof, together with accrued and
unpaid interest and Liquidated Damages, if any, to the
date of purchase. See "Description of the
Notes--Optional Redemption" and "--Repurchase at the
Option of Holders--Change of Control."
CERTAIN COVENANTS:................ The indenture pursuant to which the Existing Notes were
issued and the New Notes will be issued (the
"Indenture") contains certain covenants that, among
other things, limit the ability of the Company and its
Subsidiaries to (i) incur additional indebtedness and
issue preferred stock, (ii) pay dividends or make
certain other restricted payments, (iii) enter into
transactions with affiliates, (iv) make certain asset
dispositions, (v) merge or consolidate with, or transfer
substantially all of its assets to, another Person (as
defined), (vi) encumber assets under certain
circumstances, (vii) restrict dividends and other
payments from subsidiaries, (viii) engage in sale and
leaseback transactions, (ix) issue Capital Stock (as
defined) of wholly owned subsidiaries or (x) engage in
certain business activities. See "Description of the
Notes--Certain Covenants." In addition, under certain
circumstances, the Company will be required to offer to
purchase the Notes at a price equal to 100% of the
principal amount thereof, plus accrued and unpaid
interest and Liquidated Damages, if any, to the date of
purchase, with the proceeds of certain Asset Sales (as
defined). See "Description of the Notes--Repurchase at
the Option of Holders--Asset Sales."
</TABLE>
RISK FACTORS
An investment in the Notes involves certain risks, including but not limited
to risks arising from the Company's substantial leverage and debt service
requirements, the fact that the Notes are and will be subordinated to the
Company's Senior Debt, the fact that the Notes are and will be effectively
subordinated to all of the indebtedness of the Company's subsidiaries, the
restrictions imposed on the Company by the terms of the Indenture, the risks
relating to potential future acquisitions by the Company, the competitive
environment in which the Company operates, risks arising from potential
environmental liability and the absence of a public market for the New Notes
following the consummation of the Exchange Offer. The foregoing and other risks
are described more fully under "Risk Factors" beginning on page 14 of this
Prospectus. Holders of Existing Notes should carefully evaluate all of the
specific factors described in "Risk Factors" as well as the other information
set forth in this Prospectus.
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<PAGE>
SUMMARY PRO FORMA CONDENSED CONSOLIDATED FINANCIAL DATA
The unaudited Summary Pro Forma Condensed Consolidated Financial Data set
forth below should be read in conjunction with the unaudited Pro Forma Condensed
Consolidated Financial Information included elsewhere herein, and is based on
the historical consolidated financial statements of the Company, the Nabisco
Brands and Trappey's. The unaudited pro forma summary statement of operations
data give effect to (i) the B&G and B&R Acquisition, (ii) the Nabisco Brands
Acquisition, (iii) the Trappey's Acquisition, and (iv) the Financing as if such
transactions had occurred on December 30, 1995 for the fiscal year ended
December 28, 1996 ("Pro Forma 1996") and for the 39-week period ended September
27, 1997. See "--Company History" and "--The Financing." The unaudited Summary
Pro Forma Condensed Consolidated Financial Data is intended for informational
purposes only and is not necessarily indicative of the future results of
operations of the Company had the transactions described above occurred on the
indicated dates or been in effect for the period presented. The unaudited
Summary Pro Forma Condensed Consolidated Financial Data should be read in
conjunction with, and is qualified in its entirety by, the Pro Forma Condensed
Consolidated Financial Information, the historical consolidated financial
statements of the Company, the Nabisco Brands and Trappey's, including, in each
case, the related notes thereto included elsewhere herein, and with
"Management's Discussion and Analysis of Financial Condition and Results of
Operations."
<TABLE>
<CAPTION>
FISCAL YEAR 39-WEEK PERIOD
ENDED ENDED
DEC. 28, SEPT. 27,
1996 1997
----------- --------------
<S> <C> <C>
(DOLLARS IN THOUSANDS)
STATEMENT OF OPERATIONS DATA:
Net sales.......................................................................... $ 175,708 $ 124,841
Cost of goods sold................................................................. 111,386 80,239
----------- --------------
Gross profit....................................................................... 64,322 44,602
Sales, general and administrative expenses and management fees..................... 47,242 33,899
----------- --------------
Operating income................................................................... $ 17,080 $ 10,703
----------- --------------
----------- --------------
OTHER DATA:
EBITDA(1).......................................................................... $ 23,366 $ 15,768
EBITDA as a % of net sales......................................................... 13.3% 12.6%
Depreciation and amortization...................................................... $ 6,286 $ 5,065
Capital expenditures............................................................... 2,869 2,985
Ratio of earnings to fixed charges(2).............................................. 1.4 1.2
</TABLE>
12
<PAGE>
- ------------------------
(1) EBITDA is defined as earnings before interest, taxes, depreciation and
amortization and is presented because it is commonly used by certain
investors and analysts to analyze and compare companies on the basis of
operating performance and to determine a company's ability to service and
incur debt. EBITDA should not be considered in isolation from or as a
substitute for net income, cash flows from operating activities or other
consolidated income or cash flow statement data prepared in accordance with
generally accepted accounting principles or as a measure of profitability or
liquidity.
(2) For purpose of this computation, earnings consist of income before taxes
plus fixed charges. Fixed charges consist of interest on indebtedness plus
that portion of lease rental expense representative of the interest factor.
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<PAGE>
RISK FACTORS
HOLDERS OF EXISTING NOTES SHOULD GIVE CAREFUL CONSIDERATION TO THE SPECIFIC
FACTORS SET FORTH BELOW AND THE OTHER INFORMATION SET FORTH HEREIN IN CONNECTION
WITH THE EXCHANGE OFFER. THE RISK FACTORS SET FORTH BELOW ARE GENERALLY
APPLICABLE TO THE NEW NOTES.
SUBSTANTIAL LEVERAGE AND DEBT SERVICE
The Company is highly leveraged. On September 27, 1997, the Company's total
debt and stockholder's equity was $121.1 million and $18.2 million,
respectively. See "Capitalization" and "Selected Historical Financial and Other
Data." The Company had borrowing availability under the New Credit Facility of
$50.0 million, subject to the borrowing conditions contained therein. For the
year ended December 28, 1996 and the 39-week period ended September 27, 1997,
the ratio of earnings to fixed charges would have been 1.4 to 1.0 and 1.2 to
1.0, respectively, after giving pro forma effect to the B&G and B&R Acquisition,
the Nabisco Brands Acquisition, the Trappey's Acquisition and the Financing as
if they had occurred on December 30, 1995.
The Company's ability to make scheduled payments of principal of, or to pay
the interest or Liquidated Damages, if any, on, or to refinance, its
indebtedness (including the Notes), or to fund planned capital expenditures,
will depend upon its future performance, which, in turn, is subject to general
economic, financial, competitive, legislative, regulatory and other factors that
are beyond its control. Based upon current levels of operations and anticipated
growth in revenues and cost savings, Management believes that the Company's cash
flow from operations, amounts available under the New Credit Facility and
available cash will be adequate to meet its anticipated future requirements for
working capital, capital expenditures, and scheduled payments of principal and
interest on its indebtedness, including the Notes. There can be no assurance,
however, that the Company's business will generate cash flow at or above
anticipated levels or that the Company will be able to borrow funds under the
New Credit Facility in an amount sufficient to enable the Company to service its
indebtedness, including the Notes, or make anticipated capital expenditures. In
particular, there can be no assurance that anticipated revenue growth will be
achieved at the levels currently anticipated or at all. If the Company is unable
to generate sufficient cash flow from operations or to borrow sufficient funds
in the future to service its debt, it may be required to sell assets, reduce
capital expenditures, refinance all or a portion of its existing debt (including
the Notes) or obtain additional financing. There can be no assurance that any
such refinancing would be available on commercially reasonable terms, or at all,
or that any additional financing could be obtained, particularly in view of the
Company's high level of debt, the restrictions on the Company's ability to incur
additional debt under the New Credit Facility and the Indenture, and the fact
that substantially all of the Company's assets will be pledged to secure
obligations under the New Credit Facility.
The degree to which the Company is leveraged could have important
consequences to holders of the Notes, including but not limited to (i) making it
more difficult for the Company to satisfy its obligations with respect to the
Notes, (ii) increasing the Company's vulnerability to general adverse economic
and industry conditions, (iii) limiting the Company's ability to obtain
additional financing to fund future working capital, capital expenditures and
other general corporate purpose requirements, (iv) requiring the dedication of a
substantial portion of the Company's cash flow from operations to the payment of
principal of, and interest on, its indebtedness, thereby reducing the
availability of such cash flow to fund working capital, capital expenditures or
other general corporate purposes, (v) limiting the Company's flexibility in
planning for, or reacting to, changes in its business and the industry and (vi)
placing the Company at a competitive disadvantage vis-a-vis less leveraged
competitors. In addition, the Indenture and the New Credit Facility contain
financial and other restrictive covenants that limit the ability of the Company,
among other things, to borrow additional funds. Failure by the Company to comply
with such covenants could result in an event of default which, if not cured or
waived, could have a material adverse effect on the Company's business,
financial condition or results of operations. In addition, the degree to which
the Company is leveraged could prevent it from repurchasing all of the Notes
tendered to it upon the
14
<PAGE>
occurrence of a Change of Control. See "Description of the Notes--Repurchase at
the Option of Holders--Change of Control" and "Description of Certain
Indebtedness--New Credit Facility."
SUBORDINATION OF THE NOTES TO SENIOR DEBT; ASSET ENCUMBRANCE
The Existing Notes are, and the New Notes will be, general unsecured
obligations of the Company, subordinate in right of payment to all current and
future Senior Debt of the Company, including all indebtedness under the New
Credit Facility and effectively subordinate to all secured indebtedness of the
Company and its Subsidiaries. By reason of such subordination, in the event of
an insolvency, liquidation, reorganization, dissolution or other winding-up of
the Company, the Senior Debt must be paid in full before the principal of,
premium, if any, and interest or Liquidated Damages, if any, on the Notes may be
paid. In the event of a bankruptcy, liquidation or reorganization of the
Company, holders of the Notes will participate ratably with all holders of
subordinated indebtedness of the Company that is deemed to be of the same class
as the Notes, based upon respective amounts owed to each holder or creditor, in
the remaining assets of the Company. If any of the foregoing events should
occur, there can be no assurance that there would be sufficient assets to pay
amounts due on the Notes. In addition, the Indenture provides that no
distribution with respect to the Notes may be made in the event of a default in
payment of principal, premium, if any, or interest with respect to Designated
Senior Debt (as defined) and the holders of Designated Senior Debt will be
entitled to block payments with respect to the Notes in the event of a
nonpayment default on Designated Senior Debt. At September 27, 1997, the Company
had approximately $1.4 million of Senior Debt outstanding (exclusive of an
unused commitment of up to $50.0 million under the New Credit Facility). The
Indenture permits the Company to incur additional indebtedness if certain
conditions are met. See "Capitalization," "Description of Certain
Indebtedness--New Credit Facility" and "Description of the Notes--Certain
Covenants."
HOLDING COMPANY STRUCTURE; EFFECTIVE SUBORDINATION
The Company has no operations of its own and derives substantially all of
its revenues from its subsidiaries. Holders of indebtedness of subsidiaries of
the Company would be entitled to repayment of such indebtedness from the assets
of the affected subsidiaries before such assets were made available for
distribution within the limits set forth in the Indenture to the Company. The
Indenture permits the incurrence of substantial additional indebtedness by the
Company and its subsidiaries within the limits set forth in the Indenture,
including up to $50.0 million under the Credit Facility and an additional $10.0
million of Senior Debt, all of which would be senior in right of payment to the
Notes. The Company and its Subsidiaries may also incur additional Indebtedness
if the Company's Fixed Charge Coverage Ratio would have been, on a pro forma
basis, at least 2.00 to 1.00, as further described under "Description of the
Notes--Certain Covenants--Incurrence of Indebtedness and Issuance of Preferred
Stock." This additional Indebtedness may be senior, PARI PASSU or junior in
right of payment to the Notes. In addition, the Indenture permits significant
investments by the Company in subsidiaries and requires all of the Company's
current and future subsidiaries to guarantee the Notes. See "Description of the
Notes--Certain Covenants--Additional Subsidiary Guarantees." As of September 27,
1997, the aggregate amount of indebtedness and other liabilities (including
trade payables, accrued expenses, amounts due to related parties, deferred
income taxes and other liabilities) of the Company's subsidiaries was
approximately $42.8 million.
RESTRICTIONS IMPROSED BY TERMS OF THE COMPANY'S INDEBTEDNESS
The Indenture contains covenants that restrict, among other things, the
ability of the Company to incur additional indebtedness, pay dividends or make
certain other Restricted Payments (as defined therein), enter into transactions
with affiliates, allow its subsidiaries to make certain payments, make certain
asset dispositions, merge or consolidate with, or transfer substantially all of
its assets to, another person, encumber assets under certain circumstances,
restrict dividends and other payments from subsidiaries, engage in sale and
leaseback transactions, issue Capital Stock of wholly-owned subsidiaries, engage
15
<PAGE>
in certain business activities, or engage in certain change of control
transactions. In addition, the New Credit Facility contains other restrictive
covenants which prohibit the Company from prepaying certain of its indebtedness,
including the Notes and prohibit the Company from altering significant terms of
the Notes. Under the New Credit Facility, the Company is required to maintain
specified financial ratios, including maximum capital expenditure limits, a
minimum total interest coverage ratio, a minimum fixed charge coverage ratio and
a maximum leverage ratio (each as defined in the New Credit Facility). The
failure by the Company to maintain such financial ratios or to comply with the
restrictions contained in the New Credit Facility or the Indenture could result
in a default thereunder, which in turn could cause such indebtedness (and by
reason of cross-default provisions, other indebtedness) to become immediately
due and payable. No assurance can be given that the Company's future operating
results will be sufficient to enable compliance with such covenants, or in the
event of a default, to remedy such default. See "Description of Certain
Indebtedness--New Credit Facility" and "Description of the Notes--Certain
Covenants."
RISKS RELATING TO FUTURE ACQUISITIONS
The Company plans to continue to pursue additional acquisitions of food
businesses. There can be no assurance, however, that the Company will be able to
identify additional acquisitions or that, if consummated, any anticipated
benefits will be realized from such acquisitions. Moreover, future acquisitions
by the Company could result in the incurrence of substantial additional
indebtedness, exposure to contingent liabilities and the amortization of
expenses related to goodwill and other intangible assets, all of which could
adversely affect the Company's financial condition and results of operations.
Acquisitions involve numerous risks, including difficulties in the assimilation
of the operations, technologies, services and products of the acquired companies
and the diversion of Management's attention from other business concerns. In the
event that any such acquisition were to occur, there can be no assurance that
the Company's business, financial condition or results of operations would not
be materially adversely affected. The Company currently has no pending
negotiations, agreements, arrangements or understandings with respect to any
material acquisitions.
COMPETITION
The Company operates in markets that are highly competitive, and the Company
faces competition in each of its product lines. The Company competes with a
significant number of companies of varying sizes, including divisions or
subsidiaries of larger companies. Many of these competitors have multiple
product lines, have substantially greater financial and other resources
available to them and may be substantially less leveraged than the Company.
There can be no assurance that the Company will be able to continue to compete
successfully or that such competition will not have a material adverse effect on
the Company's business, financial condition or results of operations. See
"Business--Competition."
GOVERNMENTAL REGULATION
The operations of the Company are subject to extensive regulation by the
United States Food and Drug Administration ("FDA"), the United States Department
of Agriculture and other state and local authorities regarding the processing,
packaging, storage, distribution and labeling of the Company's products. The
Company's processing facilities and products are subject to periodic inspection
by federal, state and local authorities. Compliance with existing federal, state
and local laws and regulations is not expected to have a material adverse effect
on the Company's business, financial condition or results of operations. The
Company cannot predict, however, the effect, if any, of laws and regulations
that may be enacted in the future, or of changes in the enforcement of existing
laws and regulations that are subject to extensive regulatory discretion.
Failure by the Company to comply, or the costs of compliance, with existing or
future applicable laws and regulations could have a material adverse effect on
the Company's business, financial condition or results of operations. See
"Business--Governmental Regulation."
16
<PAGE>
PUBLIC HEALTH REGULATORY MATTERS
As described above, the Company is subject to the Food, Drug and Cosmetic
Act and regulations promulgated thereunder by the FDA. This comprehensive
regulatory program governs, among other things, the manufacturing, composition
and ingredients, labeling, packaging and safety of food. For example, the FDA
regulates manufacturing practices for foods through its current "good
manufacturing practices" regulations and specifies the recipes for certain
foods. In addition, the Nutrition Labeling and Education Act of 1990 prescribes
the format and content of certain information required to appear on the labels
of food products. The Company is subject to regulation by certain other
governmental agencies, including the U.S. Department of Agriculture. Management
believes that the Company's facilities and practices are sufficient to maintain
compliance with applicable government regulations, although there can be no
assurances in this regard. See "Business--Governmental Regulation."
RAW MATERIALS
The Company purchases agricultural products, other raw materials and
packaging supplies from growers, commodity processors, other food companies and
packaging manufacturers. While all such materials are available from numerous
independent suppliers, raw materials are subject to fluctuations in price
attributable to a number of factors, including changes in crop size, federal and
state agricultural programs, export demand and weather conditions during the
growing and harvesting seasons. The Company purchases its raw materials from a
variety of suppliers and alternate sources of supply are readily available. The
Company purchases its agricultural raw materials in bulk on an as-needed basis
or pursuant to short-term supply contracts. The Company has no material
long-term supply agreements for raw materials. Although the Company enters into
advance commodities purchase agreements from time to time, increases in raw
material costs could have a material adverse effect on the Company's business,
financial condition or results of operations. See "Business--Raw Materials."
DEPENDENCE ON KEY PERSONNEL
The Company's success depends to a significant degree upon the continued
contributions of senior management, certain of whom would be difficult to
replace, namely David L. Wenner, Robert C. Cantwell and David H. Burke. The loss
of the services of certain of these executives could have a material adverse
effect on the Company's business, financial condition or results of operations.
The Company does not have employment contracts with any of its executives. There
can be no assurance that the services of such personnel will continue to be
available to the Company. The Company does not maintain key man life insurance
on any of its executives. See "Management."
LABOR RELATIONS
As of September 27, 1997, approximately 65 of the Company's employees at its
Roseland, New Jersey facility were represented by a collective bargaining
agreement with the International Brotherhood of Teamsters, Chauffeurs,
Warehousemen & Helpers of America (Local No. 863). This collective bargaining
agreement expires in March 1999. Although the Company considers its employee
relations generally to be good and the Company has not experienced any strikes
or work stoppages in the past, a prolonged work stoppage or strike at any
facility with union employees could have a material adverse effect on the
business, financial condition or results of operations of the Company. In
addition, there can be no assurance that upon the expiration of existing
collective bargaining agreements new agreements will be reached without union
action or that any such new agreements will be on terms satisfactory to the
Company. See "Business--Employees."
POTENTIAL LOSS OF IHF CONTRACTS
The Company has two co-packing contracts with IHF to produce certain IHF
Products and one contract to distribute certain IHF Products (collectively, the
"IHF Contracts"). The IHF Contracts, which
17
<PAGE>
arose from the sale of the POLANER business to a predecessor of IHF in 1993,
pertain to (i) the sale and distribution of IHF's POLANER fruit spreads and wet
spices through the Company's DSD system, (ii) the production of POLANER wet
spices at the Company's Hurlock, Maryland facility and (iii) the production of
POLANER fruit spreads at the Company's Roseland, New Jersey facility. See
"Business--Production and Facilities." The IHF Contracts accounted for $47.4
million, or 42.2%, $50.8 million, or 39.3%, and $31.5 million, or 30.2%, of net
sales during fiscal 1995, fiscal 1996 and the 39-week period ended September 27,
1997, respectively, although contribution to EBITDA for such contracts during
these periods was significantly lower than contribution from the Company's other
product lines. The IHF Contracts for production of fruit spreads and wet spices
expire in March 1999 and March 1998, respectively, and the contract for
distribution of IHF products is terminable on 12 months notice. There can be no
assurance that upon the expiration of these contracts new agreements will be
reached or that any such new agreements will be on terms satisfactory to the
Company. In addition, there can be no assurance that a failure to reach new
agreements will not have a material adverse effect on the Company's business,
financial conditions or results of operations. For additional information
regarding the IHF Products, including a description of the IHF Contracts, see
"Business--Production and Facilities."
ENVIRONMENTAL MATTERS
The Company is subject to various federal, state and local environmental
laws and regulations relating to the discharge, storage, treatment, handling,
disposal and remediation of certain materials, substances and wastes used in or
resulting from its operations. The Company's operations are also governed by
laws and regulations relating to workplace safety and worker health which, among
other things, regulate employee exposure to hazardous chemicals in the
workplace. Pursuant to the B&G and B&R Acquisition agreement, Specialty Foods is
obligated to indemnify the Company for certain environmental liabilities related
to events or activities prior to the consummation of the B&G and B&R
Acquisition, which could include liabilities related to past on-site releases or
off-site disposal of certain materials, substances or wastes from past
operations prior to the B&G and B&R Acquisition. The Company's right to seek
indemnification for such matters expires on June 26, 1998 for properties
acquired in the B&G and B&R Acquisition and on December 26, 2001 for off-site
locations or properties owned or operated by Block & Guggenheimer, Inc., Burns &
Ricker, Inc. and certain of their related entities prior to the B&G and B&R
Acquisition. To date, the Company has not incurred any losses for which it has
sought indemnity. See "Summary" and "Business--Environmental Matters." As with
other companies engaged in like businesses, the nature of the Company's
operations expose it to the risk of liabilities or claims with respect to
environmental matters, including those relating to the disposal and release of
hazardous substances, and there can be no assurance that material costs will not
be incurred in connection with such liabilities or claims.
Based on the Company's experience to date, the Company believes that the
future cost of compliance with existing environmental laws and regulations (and
liability for known environmental conditions) will not have a material adverse
effect on the Company's business, financial condition or results of operations.
However, the Company cannot predict what environmental or health and safety
legislation or regulations will be enacted in the future or how existing or
future laws or regulations will be enforced, administered or interpreted, nor
can it predict the amount of future expenditures which may be required in order
to comply with such environmental or health and safety laws or regulations or to
respond to such environmental claims. See "Business--Environmental Matters."
TRADEMARKS AND PATENTS
The Company owns 66 trademarks which are registered in the United States and
23 trademarks which are registered in foreign countries including Canada, the
Dominican Republic, Japan, South Korea, the Philippines and Thailand. In
addition, the Company has seven trademark applications pending in the United
States and one trademark application pending in Mexico. The Company considers
its trademarks to be of significant importance in the Company's business.
Although the Company is not aware of any
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<PAGE>
circumstances that would negatively impact its trademarks, there can be no
assurance that future litigation by the Company will not be necessary to enforce
its trademark rights or to defend the Company against claimed infringement of
the rights of others, adverse determinations in which could have a material
adverse effect on the Company's business, financial condition or results of
operations. See "Business-- Trademarks and Patents."
SEASONALITY
Sales of a number of the Company's products tend to be seasonal, but the
effect of seasonality on the Company's liquidity is tempered by the Company's
relatively varied product mix. The Company purchases most of the produce used to
make the B&G Pickle and Pepper Products during the period from July 1 to October
31 and, consequently, its liquidity needs are greatest during this period. See
"Management Discussion and Analysis of Financial Condition and Results of
Operations--Liquidity and Capital Resources" and "--Seasonality."
FRAUDULENT CONVEYANCE CONSIDERATIONS
Under applicable provisions of federal bankruptcy law or comparable
provisions of state fraudulent transfer law, if, among other things, the Company
or any Guarantor, at the time it incurred the indebtedness evidenced by the
Notes or its Subsidiary Guarantee, as the case may be, (i)(a) was or is
insolvent or rendered insolvent by reason of such occurrence or (b) was or is
engaged in a business or transaction for which the assets remaining with the
Company or 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) the Company or such
Guarantor received or receives less than reasonably equivalent value or fair
consideration for the incurrence of such indebtedness, then the Notes and the
Subsidiary Guarantees, and any pledge or other security interest securing such
indebtedness, could be voided, or claims in respect of the Notes or the
Subsidiary Guarantees could be subordinated to all other debts of the Company or
such Guarantor, as the case may be. In addition, the payment of interest and
principal by the Company pursuant to the Notes or the payment of amounts by a
Guarantor pursuant to a Subsidiary Guarantee could be voided and required to be
returned to the person making such payment, or to a fund for the credit of the
creditors of the Company or such Guarantor, as the case may be.
The measures of insolvency for purposes of the foregoing considerations will
vary depending upon the law applied in any proceeding with respect to the
foregoing. Generally, however, the Company or a Guarantor would be considered
insolvent if (i) the sum of its debts, including contingent liabilities, were
greater than the saleable value of all of its assets at a fair valuation or if
the present fair saleable value of its assets were less than the amount that
would be required to pay its probable liability on its existing debts, including
contingent liabilities, as they become absolute and mature or (ii) it could not
pay its debts as they become due.
On the basis of historical financial information, recent operating history
as discussed in "Pro Forma Condensed Consolidated Financial Information,"
"Selected Historical Financial and Other Data" and "Management's Discussion and
Analysis of Financial Condition and Results of Operations" and other factors,
the Company and each Guarantor believe that, after giving effect to the
indebtedness incurred in connection with the Financing, it will not be
insolvent, will not have unreasonably small capital for the business in which it
is engaged and will not incur debts beyond its ability to pay such debts as they
mature. There can be no assurance, however, as to what standard a court would
apply in making such determinations or that a court would agree with the
Company's or such Guarantors' conclusions.
VOTING CONTROL OF THE COMPANY
BRS owns approximately 85% of the outstanding voting stock of Holdings,
which owns all of the outstanding capital stock of the Company. Accordingly, BRS
has the ability to elect a majority of the Board
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of Directors of the Company and to determine the outcome of any other matter
submitted to the stockholders for approval, including the power to determine the
outcome of all corporate transactions, such as mergers, consolidations and the
sale of all or substantially all of the assets of the Company. See "Ownership of
Capital Stock."
CHANGE OF CONTROL
The Indenture provides that, upon the occurrence of a Change of Control, the
Company must make an offer to repurchase all of the Notes issued and then
outstanding under the Indenture at a purchase price equal to 101% of the
principal amount thereof plus accrued and unpaid interest and Liquidated
Damages, if any, thereon to the date of repurchase. See "Description of the
Notes--Repurchase at the Option of Holders--Change of Control." Any Change of
Control under the Indenture would constitute a default under the New Credit
Facility. Therefore, upon the occurrence of a Change of Control, the lenders
under the New Credit Facility would have the right to accelerate their loans and
the holders of the Notes would have the right to require the Company to
repurchase their Notes. Upon such event, such lenders would be entitled to
receive payment of all outstanding obligations under the New Credit Facility
before the Company may repurchase any of the Notes tendered pursuant to such an
offer. See "Description of Certain Indebtedness--New Credit Facility." If a
Change of Control were to occur, it is unlikely that the Company would be able
to repay all of its obligations under the New Credit Facility and the Notes
unless it could obtain alternate financing. There can be no assurance that the
Company would be able to obtain any such financing on commercially reasonable
terms, or at all, and consequently no assurance can be given that the Company
would be able to repurchase any of the Notes tendered pursuant to such an offer.
ABSENCE OF PUBLIC MARKET FOR THE NEW NOTES
The Existing Notes are currently eligible for trading in the PORTAL market.
The New Notes are a new issue of securities for which there is currently no
established trading market. The Company does not intend to apply for listing of
the New Notes on any securities exchange or the Nasdaq National Market. The
Initial Purchasers have advised the Company that they currently intend to make a
market in the New Notes; however, the Initial Purchasers are not obligated to do
so and any market making may be discontinued at any time without notice. There
can be no assurance as to the liquidity of any markets that may develop for the
New Notes, the ability of holders of the New Notes to sell their New Notes, or
the prices at which holders would be able to sell their New Notes.
USE OF PROCEEDS
The Company will not receive any proceeds from the Exchange Offer. The net
proceeds to the Company from the sale of the Existing Notes, after deducting the
Initial Purchasers' discount and estimated fees and expenses, were approximately
$116.4 million. The Company used the proceeds of the sale of the Existing Notes
as follows: (i) approximately $76.5 million was applied to repay the outstanding
indebtedness under the Prior Credit Facility; (ii) approximately $23.0 million
was applied to repay the outstanding indebtedness under the Interim Notes; (iii)
approximately $0.5 million was applied to repay accrued and unpaid interest on
the Prior Indebtedness being repaid; (iv) approximately $12.3 million was used
to consummate the Trappey's Acquisition; and (v) approximately $1.5 million was
used to pay certain fees and expenses. The Company intends to use the balance of
the net proceeds for general corporate purposes. See "Summary--The Financing,"
"Description of Certain Indebtedness--New Credit Facility," "Capitalization" and
"Pro Forma Condensed Consolidated Financial Information."
20
<PAGE>
CAPITALIZATION
The following table sets forth the capitalization of the Company as of
September 27, 1997. This table should be read in conjunction with the financial
statements, and the related notes thereto, included elsewhere herein. See "Use
of Proceeds," "Pro Forma Condensed Consolidated Financial Information" and
"Ownership of Capital Stock."
<TABLE>
<CAPTION>
AT SEPTEMBER 27,
1997
--------------------
<S> <C>
(DOLLARS IN
THOUSANDS)
Cash and cash equivalents................................................................... $ 3,699
--------
--------
Total debt (including current maturities):
Other................................................................................... $ 1,401
New Credit Facility(1).................................................................. --
9 5/8% Senior Subordinated Notes due 2007............................................... 120,000
--------
Total debt.............................................................................. 121,401
--------
Total stockholder's equity.............................................................. 18,229
--------
Total capitalization........................................................................ $ 139,630
--------
--------
</TABLE>
- ------------------------
(1) Represents an unused commitment of up to $50.0 million under the New Credit
Facility.
21
<PAGE>
PRO FORMA CONDENSED CONSOLIDATED FINANCIAL INFORMATION
The following presents certain unaudited pro forma condensed consolidated
financial information of the Company for the periods ended as indicated. The
unaudited pro forma condensed consolidated statements of operations data give
effect to (i) the B&G and B&R Acquisition, which occurred on December 27, 1996,
(ii) the Nabisco Brands Acquisition, which occurred on June 17, 1997, (iii) the
Trappey's Acquisition, which occurred on August 15, 1997, and (iv) the
Financing, in each case, as if such transaction had occurred on December 30,
1995 for the fiscal year ended December 28, 1996 and for the 39-week period
ended September 27, 1997. In addition, the unaudited pro forma condensed
consolidated statements of operations give effect to certain incremental
manufacturing, selling and general and administrative expenses related to the
Nabisco Brands Acquisition as such costs were not allocated to the Nabisco
Brands by Nabisco. The unaudited pro forma condensed consolidated statements of
operations also give effect to certain reductions in selling and general
administrative expenses related to Trappey's. The prior owner of Trappey's has
allocated certain of such costs on a basis that is higher than Management of the
Company believes necessary now that Trappey's is managed as part of the Company.
The unaudited pro forma condensed consolidated financial information set
forth below reflects pro forma adjustments that are based upon available
information and certain assumptions that the Company believes are reasonable.
The pro forma financial information does not purport to represent the Company's
results of operations or financial position that would have resulted had the
transactions to which pro forma effect is given been consummated as of the dates
or for the periods indicated. In preparing the pro forma financial information,
the Company believes it has utilized reasonable methods to conform the basis of
presentation. The B&G and B&R Acquisition, the Nabisco Brands Acquisition and
the Trappey's Acquisition have been accounted for herein by the purchase method
of accounting. The pro forma information reflects preliminary estimates of the
allocation of the purchase price and is subject to final determination.
The pro forma financial statements and accompanying notes should be read in
conjunction with the historical financial statements of B&G, the Nabisco Brands,
and Trappey's and with other financial information pertaining to the Company
including "Use of Proceeds," "Capitalization" and "Management's Discussion and
Analysis of Financial Condition and Results of Operations" included elsewhere in
this Prospectus.
22
<PAGE>
B&G FOODS, INC.
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE FISCAL YEAR ENDED DECEMBER 28, 1996
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
HISTORICAL
------------------------------------
NABISCO PRO FORMA PRO FORMA
B&G(1) BRANDS(2) TRAPPEY'S(3) ADJUSTMENTS CONSOLIDATED
---------- ----------- ----------- ----------- ------------
<S> <C> <C> <C> <C> <C>
STATEMENT OF OPERATIONS:
Net sales.......................................... $ 129,307 $ 27,718 $ 18,683 $ -- $ 175,708
Cost of goods sold................................. 91,187 8,782 11,712 (295)(4) 111,386
---------- ----------- ----------- ----------- ------------
Gross profit..................................... 38,120 18,936 6,971 295 64,322
Sales, general and administrative expenses......... 31,355 7,301 5,805 2,531(5) 46,992
Management fees.................................... 1,249 -- -- (999)(6) 250
---------- ----------- ----------- ----------- ------------
Operating income................................. 5,516 11,635 1,166 (1,237) 17,080
Other (income) expense:
Interest and other income........................ -- -- (180) 180(7) --
Interest expense--related parties................ 4,452 -- -- (4,452)(8) --
Interest expense................................. 197 -- 9 11,978(9) 12,184
---------- ----------- ----------- ----------- ------------
Income before income tax expense................. 867 11,635 1,337 (8,943) 4,896
Income tax expense................................. 591 -- 565 1,094 (10 2,250
---------- ----------- ----------- ----------- ------------
Net income....................................... $ 276 $ 11,635 $ 772 $ (10,037) $ 2,646
---------- ----------- ----------- ----------- ------------
---------- ----------- ----------- ----------- ------------
</TABLE>
See Notes to Unaudited Pro Forma Condensed Consolidated Financial Statements.
23
<PAGE>
B&G FOODS, INC.
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE 39-WEEK PERIOD ENDED SEPTEMBER 27, 1997
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
HISTORICAL
------------------------------------
NABISCO PRO FORMA PRO FORMA
B&G(1) BRANDS(2) TRAPPEY'S(3) ADJUSTMENTS CONSOLIDATED
---------- ----------- ----------- ----------- ------------
<S> <C> <C> <C> <C> <C>
STATEMENT OF OPERATIONS:
Net sales.......................................... $ 104,337 $ 9,916 $ 10,588 $ -- $ 124,841
Cost of goods sold................................. 70,064 3,531 6,668 (24)(4) 80,239
---------- ----------- ----------- ----------- ------------
Gross profit..................................... 34,273 6,385 3,920 24 44,602
Sales, general and administrative expenses......... 27,515 2,304 3,484 405(5) 33,708
Management fees.................................... 191 -- -- -- 191
---------- ----------- ----------- ----------- ------------
Operating income................................. 6,567 4,081 436 (381) 10,703
Other (income) expense:
Interest and other income........................ -- -- (151) 151(7) --
Interest expense--related parties................ 788 -- -- (788)(8) --
Interest expense................................. 5,320 -- 4 3,815(9) 9,139
---------- ----------- ----------- ----------- ------------
Income before income tax expense and
extraordinary item............................. 459 4,081 583 (3,559) 1,564
Income tax expense................................. 426 -- 282 87 (10 795
---------- ----------- ----------- ----------- ------------
Income before extraordinary item................... $ 33 $ 4,081 $ 301 $ (3,646) $ 769
---------- ----------- ----------- ----------- ------------
---------- ----------- ----------- ----------- ------------
</TABLE>
See Notes to Unaudited Pro Forma Condensed Consolidated Financial Statements.
24
<PAGE>
B&G FOODS, INC.
NOTES TO UNAUDITED PRO FORMA
CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(DOLLARS IN THOUSANDS)
The following pro forma adjustments give effect to (i) the B&G and B&R
Acquisition, (ii) the Nabisco Brands Acquisition, (iii) the Trappey's
Acquisition, and (iv) the Financing. The above acquisitions have been accounted
for using the purchase method of accounting.
The B&G and B&R Acquisition was consummated on December 27, 1996 as a stock
purchase and was accounted for using the purchase method. Accordingly, the
excess of the purchase price over the fair value of identifiable net assets
acquired, representing goodwill, is included in intangible assets. The
consideration (including acquisition costs of $1,329) and allocation of the
purchase price are summarized below:
<TABLE>
<S> <C>
PURCHASE PRICE CONSIDERATION:
Term Loan Facilities A and B..................................... $ 26,500
Revolving Credit Facility........................................ 11,240
Proceeds from Common Stock Issuance.............................. 12,500
12% Senior Subordinated Notes due to related parties............. 13,000
Cash paid subsequent to December 27, 1996........................ 5,337
Long-term liabilities assumed.................................... 1,445
---------
$ 70,022
---------
---------
ALLOCATION OF PURCHASE PRICE:
Property, plant and equipment.................................... $ 15,584(a)
Intangible assets--trademarks.................................... 29,804
Intangible assets--goodwill...................................... 20,846
Other assets, principally net current assets..................... 12,858
Deferred income tax liabilities.................................. (9,070)
---------
$ 70,022
---------
---------
</TABLE>
--------------------------------------
(a) As part of the allocation of the purchase price, property,
plant and equipment was written-down by $1,000 to estimated
fair market value.
On June 17, 1997, the Company acquired certain assets from Nabisco for a
purchase price of approximately $50,557, including transactions costs. Financing
for this acquisition and certain related transaction fees and expenses was
provided by $35,000 of new borrowings on an amended and restated Senior Secured
Credit Facility, and $17,000 of the proceeds from the issuance of $23,000 of
Interim Notes.
On August 15, 1997, the Company acquired all of the outstanding capital
stock of JEM for approximately $12,462, including transaction costs. Financing
for this acquisition and certain related transaction fees and expenses was
provided by the proceeds from the issuance of the Existing Notes on August 11,
1997.
The costs of the Nabisco Brands Acquisition and the Trappey's Acquisition
have been allocated to tangible and intangible assets as follows:
<TABLE>
<S> <C>
Property, plant and equipment...................................... $ 7,111(b)
Intangible assets--trademarks...................................... 24,500
Intangible assets--goodwill........................................ 28,045
Other assets, principally net current assets....................... 4,621
Deferred income tax liabilities, net............................... (1,258)
---------
$ 63,019
---------
---------
</TABLE>
--------------------------------------
(b) As part of the allocation of purchase price, property, plant
and equipment was written-up by $3,234 to estimated fair
market value.
25
<PAGE>
B&G FOODS, INC.
NOTES TO UNAUDITED PRO FORMA
CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(DOLLARS IN THOUSANDS)
The unaudited pro forma condensed consolidated financial statements have
been adjusted for the items set forth below. Such adjustments reflect
Management's estimates of the fair value of the assets acquired and the
liabilities assumed relating to the B&G and B&R Acquisition, the Nabisco Brands
Acquisition and the Trappey's Acquisition.
1. Represents the historical results of operations of B&G for the fiscal year
ended December 28, 1996 and the 39-week period ended September 27, 1997.
B&G's results of operations for the 39-week period ended September 27, 1997
include the results of operations of the Acquired Brands since their
respective dates of acquisition.
2. Represents the historical combined statements of product contribution for
the year ended December 31, 1996 and for the 24-week period ended June 17,
1997. Full financial statements, including complete historical balance sheet
and statements of operations, of the Nabisco Brands have not been presented
as Nabisco did not operate the Nabisco Brands as a separate division.
Accordingly, it is not practical to separate other components of assets,
liabilities, certain statement of operations data and cash flows related
specifically to the Nabisco Brands.
3. Represents the historical consolidated statements of earnings of Trappey's
for the year ended December 28, 1996 and for the 33-week period ended August
15, 1997.
STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
FISCAL
YEAR ENDED 39-WEEK
DEC. 28, PERIOD ENDED
1996 SEPT. 27, 1997
------------ ------------------
<S> <C> <C> <C>
4. Adjustment to depreciation and amortization expense relating to
estimated fair values of property, plant and equipment. Property, plant
and equipment is depreciated over 3 to 20 years.
-- B&G and B&R Acquisition............................................. $ (255) $ --
-- Nabisco Brands Acquisition.......................................... (22) (10)
-- Trappey's Acquisition............................................... (18) (14)
------------ -------
$ (295) $ (24)
------------ -------
------------ -------
5. Adjustment to amortization expense for the excess cost over fair value
of net assets acquired and other intangible assets. Excess cost over
fair value of net assets acquired (goodwill) and other intangible
assets (trademarks) are being amortized over 40 years and 20 to 40
years, respectively.
-- B&G and B&R Acquisition............................................. $ 628 $ --
-- Nabisco Brands Acquisition.......................................... 1,220 915
-- Trappey's Acquisition............................................... (160) (67)
------------ -------
1,688 848
</TABLE>
26
<PAGE>
B&G FOODS, INC.
NOTES TO UNAUDITED PRO FORMA
CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
FISCAL
YEAR ENDED 39-WEEK
DEC. 28, PERIOD ENDED
1996 SEPT. 27, 1997
------------ ------------------
<S> <C> <C> <C>
Adjustment to expense packaging design costs in the period the costs
are incurred........................................................... 392 --
Elimination of certain non-recurring costs related to the B&G and B&R
Acquisition............................................................ (129) --
Adjustment to record additional selling commissions, product management
costs and administrative costs relating to the Nabisco Brands
Acquisition. The seller did not allocate sales commissions to the
Nabisco Brands. The Company is adjusting to record a 5% commission on
net sales and to include costs relating to two new incremental sales
managers. The Company is also including costs related to an incremental
product manager and two incremental administrative staff members as
well as incremental insurance and professional expenses. Such
incremental costs are as follows:
Adjustments for additional costs of Nabisco Brands:
--Sales commissions and sales managers................................. $ 1,280 $ 324
-- Product manager..................................................... 125 57
-- Administrative costs................................................ 175 81
------------ -------
1,580 462
Adjustment to eliminate certain allocated historical sales, general and
administrative expenses allocated by McIlhenny to Trappey's and the
recording of incremental selling, general and administrative expenses
that the Company has estimated will be necessary to operate Trappey's.
The Company is adjusting to include two new sales manager, one
incremental administrative staff member as well as incremental
insurance and professional expenses. Such adjustments are as follows:
-- Historical allocated costs.......................................... $ (1,446) $ (1,176)
-- Sales manager....................................................... 250 146
-- Administrative staff................................................ 50 32
-- Insurance and professional expenses................................. 146 93
------------ -------
(1,000) (905)
------------ -------
$ 2,531 $ 405
------------ -------
------------ -------
</TABLE>
27
<PAGE>
B&G FOODS, INC.
NOTES TO UNAUDITED PRO FORMA
CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
FISCAL
YEAR ENDED 39-WEEK
DEC. 28, PERIOD ENDED
1996 SEPT. 27, 1997
------------ ------------------
<S> <C> <C> <C>
6. Adjustment to eliminate historical management fee paid by the Company
to Specialty Foods and to include the management fee that will be paid
to BRS as follows:
-- Historical management fee........................................... $ (1,249) $ --
-- BRS management fee.................................................. 250 --
------------ -------
$ (999) $ --
------------ -------
------------ -------
7. Adjustment to eliminate Trappey's historical interest and other
income................................................................. $ 180 $ 151
------------ -------
------------ -------
8. Adjustment to eliminate B&G historical interest expense with related
parties................................................................ $ (4,452) $ (788)
------------ -------
------------ -------
9. Adjustment to eliminate historical interest expense and to reflect pro
forma interest expense and amortization of deferred debt issuance costs
as shown below. The net proceeds from the sale of the Existing Notes
were used to repay approximately $76.5 million of the Prior Credit
Facility (weighted average interest rate of approximately 8.95%) and
$23.5 million of the Interim Notes (12%) which were incurred in
conjunction with the B&G and B&R Acquisition and the Nabisco Brands
Acquisition.
-- Historical interest expense......................................... $ (197) $ (5,320)
-- Other debt.......................................................... 110 83
-- Existing Notes (9.625%)............................................. 11,550 8,663
------------ -------
11,463 3,426
-- Amortization of deferred debt issuance costs. In connection with the
issuance of the Existing Notes, the Company incurred approximately $5.2
million in deferred debt issuance costs which are being amortized over
the life of the Existing Notes......................................... 524 393
------------ -------
11,987 3,819
------------ -------
Adjustment to eliminate Trappey's historical interest expense.......... (9) (4)
------------ -------
$ 11,978 $ 3,815
------------ -------
------------ -------
10. Adjustment to income tax expense to reflect the Company's effective tax
rate. The primary difference between the expense calculated at the
statutory rate (34%) and the amount reflected in the pro forma
statements is attributable primarily to non-deductible goodwill and the
provision for state income taxes....................................... $ 1,094 $ 87
------------ -------
------------ -------
</TABLE>
28
<PAGE>
SELECTED HISTORICAL FINANCIAL AND OTHER DATA
B&G FOODS, INC. AND SUBSIDIARIES(1)
The following selected historical financial and other data of B&G Foods,
Inc. and subsidiaries as of December 28, 1996 and September 27, 1997 and for the
years ended December 30, 1995 and December 28, 1996 and for the 39-week period
ended September 27, 1997 have been derived from, and should be read in
conjunction with, the financial statements of B&G Foods, Inc. and subsidiaries,
including the respective notes thereto, included elsewhere in this Prospectus,
which have been audited by KPMG Peat Marwick LLP. The selected historical
financial and other data of B&G Foods, Inc. and subsidiaries set forth below as
of and for the years ended January 2, 1993, January 1, 1994, December 31, 1994,
and as of December 30, 1995, and as of and for the 39-week period ended
September 28, 1996 have been derived from the unaudited financial statements of
B&G Foods, Inc. and subsidiaries, which are not included elsewhere in this
Prospectus and which, in the opinion of Management, include all adjustments
necessary for a fair presentation. The results of operations for the 39-week
period ended September 27, 1997 are not necessarily indicative of results to be
expected for the full year. All of the following information is qualified in its
entirety by, and should be read in conjunction with "Pro Forma Condensed
Consolidated Financial Information," "Management's Discussion and Analysis of
Financial Condition and Results of Operations," and the financial statements of
B&G Foods, Inc. and subsidiaries, including the respective notes thereto,
appearing elsewhere in this Prospectus.
<TABLE>
<CAPTION>
39-WEEK
FISCAL YEAR ENDED PERIOD ENDED
------------------------------------------------------------------------- --------------------------
JAN. 2, JAN. 1, DEC. 31, DEC. 30, DEC. 28, SEPT. 28, SEPT. 27,
1993 1994 1994 1995 1996 1996 1997
------------- ------------- ------------- ------------- ------------- ------------- -----------
(PREDECESSOR) (PREDECESSOR) (PREDECESSOR) (PREDECESSOR) (PREDECESSOR) (PREDECESSOR) (SUCCESSOR)
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C> <C>
STATEMENT OF OPERATIONS
DATA:
Net sales (2).......... $ 54,295 $ 102,629 $ 113,812 $ 112,245 $ 129,307 $ 97,067 $ 104,337
Cost of goods sold..... 33,386 73,222 82,833 79,293 91,187 68,873 70,064
------------- ------------- ------------- ------------- ------------- ------------- -----------
Gross profit......... 20,909 29,407 30,979 32,952 38,120 28,194 34,273
Sales, marketing and
distribution
expenses............. 18,507 24,124 23,336 23,863 28,414 21,555 24,350
General and
administrative
expenses............. 3,939 4,545 2,589 2,598 2,941 2,000 3,165
Management fees........ 155 -- -- 1,097 1,249 939 191
------------- ------------- ------------- ------------- ------------- ------------- -----------
Operating (loss)
income............. (1,692) 738 5,054 5,394 5,516 3,700 6,567
Interest expense....... 1,577 1,769 2,394 3,780 4,649 3,460 6,108
------------- ------------- ------------- ------------- ------------- ------------- -----------
(Loss) income before
income tax expense
and extraordinary
item............... (3,269) (1,031) 2,660 1,614 867 240 459
Income tax expense
(3).................. 143 116 1,458 896 591 35 426
------------- ------------- ------------- ------------- ------------- ------------- -----------
(Loss) income before
extraordinary
item............... (3,412) (1,147) 1,202 718 276 205 33
------------- ------------- ------------- ------------- ------------- ------------- -----------
Extraordinary item, net
of income tax
benefit(4)........... -- -- -- -- -- -- (1,804)
------------- ------------- ------------- ------------- ------------- ------------- -----------
Net (loss) income.... $ (3,412) $ (1,147) $ 1,202 $ 718 $ 276 $ 205 $ (1,771)
------------- ------------- ------------- ------------- ------------- ------------- -----------
------------- ------------- ------------- ------------- ------------- ------------- -----------
</TABLE>
29
<PAGE>
<TABLE>
<CAPTION>
39-WEEK
FISCAL YEAR ENDED PERIOD ENDED
------------------------------------------------------------------------- --------------------------
JAN. 2, JAN. 1, DEC. 31, DEC. 30, DEC. 28, SEPT. 28, SEPT. 27,
1993 1994 1994 1995 1996 1996 1997
------------- ------------- ------------- ------------- ------------- ------------- -----------
(PREDECESSOR) (PREDECESSOR) (PREDECESSOR) (PREDECESSOR) (PREDECESSOR) (PREDECESSOR) (SUCCESSOR)
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C> <C>
OTHER DATA:
EBITDA (2)(5).......... $ 1,470 $ 3,939 $ 8,452 $ 8,905 $ 9,621 $ 6,690 $ 10,323
EBITDA as a % of net
sales................ 2.7% 3.8% 7.4% 7.9% 7.4% 6.9% 9.9%
Adjusted EBITDA (6).... $ 1,625 $ 5,173 $ 8,452 $ 10,002 $ 10,999 $ 7,629 $ 10,514
Adjusted EBITDA as a %
of net sales......... 3.0% 5.0% 7.4% 8.9% 8.5% 7.9% 10.1%
Depreciation and
amortization,
excluding
amortization of
deferred debt
issuance costs....... $ 3,162 $ 3,201 $ 3,398 $ 3,511 $ 4,105 $ 2,990 $ 3,756
Capital expenditures... 1,977 1,789 1,770 2,571 2,573 2,209 2,976
Ratio of earnings to
fixed
charges (7).......... 1.9x 1.4x 1.2x 1.1x 1.1x
Cash flows from
operating
activities........... $ (2,092) $ 6,301 $ 3,031 $ 9,741 $ 2,284 $ 1,902 $ 4,720
Cash flows from
investing
activities........... (1,993) (16,547) (3,058) (8,871) (2,573) (2,209) (69,842)
Cash flows from
financing
activities........... 4,149 16,695 (12) (284) (318) (257) 68,530
<CAPTION>
JAN. 2, JAN. 1, DEC. 31, DEC. 30, DEC. 28, SEPT. 28, SEPT. 27,
1993 1994 1994 1995 1996 1996 1997
------------- ------------- ------------- ------------- ------------- ------------- -----------
(PREDECESSOR) (PREDECESSOR) (PREDECESSOR) (PREDECESSOR) (SUCCESSOR) (PREDECESSOR) (SUCCESSOR)
<S> <C> <C> <C> <C> <C> <C> <C>
BALANCE SHEET DATA (AT
PERIOD END):
Total assets........... $ 48,960 $ 80,469 $ 69,936 $ 82,012 $ 103,412 $ 77,345 $ 181,019
Long term debt,
including current
portion.............. 21,222 24,381 25,654 30,163 53,513 27,520 121,401
Total liabilities...... 31,669 52,387 40,675 52,033 90,912 47,161 162,790
Total stockholder's
equity............... 17,291 28,082 29,261 29,979 12,500 30,184 18,229
</TABLE>
- ------------------------
(1) The B&G and B&R Acquisition was consummated on December 27, 1996 and was
accounted for using the purchase method of accounting. The selected
historical financial and other data set forth above as of December 28, 1996
and as of and for the 39-week period ended September 27, 1997 (the
"Successor") is presented on a consolidated basis. The selected historical
financial and other data set forth above as of all periods ending prior to
December 28, 1996 and for each of the years in the five-year period ended
December 28, 1996, and for the 39-week period ended September 28, 1996 (the
"Predecessor") is presented on a combined basis because the Predecessor
companies were under common control. As a result of the B&G and B&R
Acquisition, the selected historical financial and other data subsequent to
the acquisition is presented on a different cost basis and uses certain
different accounting policies than the selected historical financial and
other data prior to the acquisition and, therefore, is not comparable.
Further, related party transactions affect the comparability of the selected
historical financial and other data. Additionally, the comparability of the
data presented above is affected by the acquisition of the Predecessor by
Specialty Foods in August 1993 and the acquisition by the Predecessor of the
NEW YORK STYLE brand in September 1995, both of which were accounted for
using the purchase method of accounting.
(2) B&G's net sales increased dramatically in 1993 due to the commencement of
co-packing and distribution agreements with American Home Food Products,
Inc. ("AHFP") upon the sale to AHFP of the POLANER business by Artal
International, the common corporate parent of the Company and the POLANER
business. The AHFP co-packing and distribution arrangements are now
conducted for IHF, the successor to AHFP, under the IHF Contracts. The
co-packing and distribution relationships under the IHF Contracts are
provided on a significantly lower profit margin level than B&G's base
businesses. As a result, the IHF Contract business did not increase EBITDA
to the same degree as net sales.
30
<PAGE>
(3) The Company was part of the consolidated federal income tax returns of its
parents during 1992 and through March 1993, and from August 1993 through
December 27, 1996. Income tax expense has been computed as if the Company
filed a separate federal income tax return for each period presented.
(4) Reflects the write-off of deferred debt issuance costs in connection with
the debt repayments and amendments relating to the Prior Credit Facility and
the Interim Notes.
(5) EBITDA is defined as earnings before interest, taxes, depreciation and
amortization and extraordinary item and is presented because it is commonly
used by certain investors and analysts to analyze and compare companies on
the basis of operating performance and to determine a company's ability to
service and incur debt. EBITDA should not be considered in isolation from or
as a substitute for net income, cash flows from operating activities or
other consolidated income or cash flow statement data prepared in accordance
with generally accepted accounting principles or as a measure of
profitability or liquidity.
(6) The Company's financial statements reflect various ownership changes and
management fee structures during the periods covered thereby. To provide a
better comparison of historical results of operations, the Company has
adjusted historical EBITDA to exclude historical management fees. Adjusted
EBITDA excludes management fees and nonrecurring expenses of $129 incurred
by the Company in connection with the sale of the Company in 1996.
(7) For purposes of this computation, earnings consist of income before income
taxes and extraordinary item plus fixed charges. Fixed charges consist of
interest on indebtedness plus that portion of lease rental expense
representative of the interest factor. For the years ended January 2, 1993
and January 1, 1994, the Company's earnings were insufficient to cover its
fixed charges by $3,269 and $1,031, respectively.
31
<PAGE>
SELECTED HISTORICAL FINANCIAL AND OTHER DATA
THE NABISCO BRANDS(1)
The following selected historical financial and other data with respect to
the Nabisco Brands for the years ended December 31, 1995 and December 31, 1996
and the 24-week period ended June 17, 1997 have been derived from, and should be
read in conjunction with, the combined financial statements of the Nabisco
Brands, including the respective notes thereto, included elsewhere in this
Prospectus, which have been audited by KPMG Peat Marwick LLP. The selected
historical financial and other data for the 26-week period ended June 29, 1996
have been derived from the unaudited combined financial statements of the
Nabisco Brands, which are not included elsewhere in this Prospectus and which,
in the opinion of Management, include all adjustments necessary for a fair
presentation. The results of operations for the 24-week period ended June 17,
1997 are not necessarily indicative of results to be expected for the full year.
All of the following information is qualified in its entirety by, and should be
read in conjunction with "Pro Forma Condensed Consolidated Financial
Information," "Management's Discussion and Analysis of Financial Condition and
Results of Operations" and the combined financial statements of the Nabisco
Brands, including the respective notes thereto, appearing elsewhere in this
Prospectus.
<TABLE>
<CAPTION>
26-WEEK 24-WEEK
YEAR ENDED PERIOD PERIOD
-------------------- ENDED ENDED
DEC. 31, DEC. 31, JUNE 29, JUNE 17,
1995 1996 1996 1997
--------- --------- --------- -----------
<S> <C> <C> <C> <C>
(DOLLARS IN THOUSANDS)
STATEMENT OF OPERATIONS DATA:
Net sales.............................................................. $ 28,937 $ 27,718 $ 12,335 $ 9,916
Cost of goods sold..................................................... 9,121 8,782 3,910 3,531
--------- --------- --------- -----------
Gross profit........................................................... 19,816 18,936 8,425 6,385
Sales and distribution expenses........................................ 3,753 3,572 1,804 1,350
Trade promotions and other marketing expenses.......................... 3,478 3,729 1,626 954
--------- --------- --------- -----------
Product contribution................................................... $ 12,585 $ 11,635 $ 4,995 $ 4,081
--------- --------- --------- -----------
--------- --------- --------- -----------
OTHER DATA:
Product contribution as a % of net sales............................... 43.5% 42.0% 40.5% 41.2%
Adjusted product contribution(2)....................................... $ 12,649 $ 11,699 $ 5,027 $ 4,111
Adjusted product contribution as a % of net sales...................... 43.7% 42.2% 40.8% 41.5%
Depreciation and amortization.......................................... $ 64 $ 64 $ 32 $ 30
</TABLE>
- ------------------------
(1) Reflects only assets acquired pursuant to the Nabisco Brands Acquisition.
Net sales represent net sales directly attributable to the Nabisco Brands.
Costs of goods sold and sales, distribution, trade promotions and other
marketing expenses in the selected historical financial and other data
represent direct costs and expenses related to the Nabisco Brands. Costs for
certain functions and services performed by centralized Nabisco, Inc.
organizations outside the defined scope of the Nabisco Brands are not
included. Items such as general and administrative expenses, interest
expense and income taxes were not allocated to the Nabisco Brands.
(2) Adjusted product contribution represents product contribution plus
depreciation expense.
32
<PAGE>
SELECTED HISTORICAL FINANCIAL AND OTHER DATA
TRAPPEY'S
The following selected historical financial and other data of JEM Brands,
Inc. and its subsidiary, Trappey's Fine Foods, Inc., as of December 28, 1996 and
August 15, 1997 and for the years ended December 31, 1995 and December 28, 1996
and the 33-week period ended August 15, 1997 have been derived from, and should
be read in conjunction with, the consolidated financial statements of JEM
Brands, Inc. and subsidiary, including the respective notes thereto, included
elsewhere in this Prospectus, which have been audited by KPMG Peat Marwick LLP.
The selected historical financial and other data of JEM Brands, Inc. and
subsidiary set forth below as of December 31, 1995 and as of and for the 34-week
period ended August 24, 1996 have been derived from the unaudited consolidated
financial statements of JEM Brands, Inc. and subsidiary, which are not included
elsewhere in this Prospectus and which, in the opinion of Management, include
all adjustments necessary for a fair presentation. The results of operations for
the 33-week period ended August 15, 1997 are not necessarily indicative of
results to be expected for the full year. All of the following information is
qualified in its entirety by, and should be read in conjunction with, "Pro Forma
Condensed Consolidated Financial Information," "Management's Discussion and
Analysis of Financial Condition and Results of Operations," and the consolidated
financial statements of JEM Brands, Inc. and subsidiary, including the
respective notes thereto, appearing elsewhere in this Prospectus.
<TABLE>
<CAPTION>
YEAR ENDED
------------------------------------------
<S> <C> <C> <C> <C>
34-WEEK 33-WEEK
PERIOD PERIOD
ENDED ENDED
DEC. 31, DEC. 28, AUG. 24, AUG.15,
1995 1996 1996 1997(1)
--------- --------- --------- ---------
<CAPTION>
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C>
STATEMENT OF OPERATIONS DATA:
Net sales........................................................ $ 16,945 $ 18,683 $ 12,559 $ 10,588
Cost of goods sold............................................... 9,827 11,712 7,516 6,668
--------- --------- --------- ---------
Gross profit................................................... 7,118 6,971 5,043 3,920
Sales, marketing and distribution expenses....................... 4,685 4,784 3,244 2,687
General and administrative expenses.............................. 1,011 1,021 750 797
--------- --------- --------- ---------
Operating income............................................... 1,422 1,166 1,049 436
Interest income, net............................................. 77 156 99 138
Other (expense) income........................................... (51) 15 15 9
--------- --------- --------- ---------
Earnings before income tax expense............................. 1,448 1,337 1,163 583
Income tax expense............................................... 636 565 492 282
--------- --------- --------- ---------
Net earnings................................................... $ 812 $ 772 $ 671 $ 301
--------- --------- --------- ---------
--------- --------- --------- ---------
OTHER DATA:
EBITDA(2)........................................................ $ 2,087 $ 1,905 $ 1,551 $ 900
EBITDA as a % of net sales....................................... 12.3% 10.2% 12.3% 8.5%
Depreciation and amortization.................................... $ 716 $ 724 $ 487 $ 455
Capital expenditures............................................. 994 296 134 9
Ratio of earnings to fixed charges(3)............................ 56.7x 100.7x 97.9x 65.8x
Cash flows from operating activities............................. $ 1,472 $ 988 $ 484 $ 3,011
Cash flows from investing activities............................. (994) (296) (134) (9)
Cash flows from financing activities............................. (500) (700) 350 (3,002)
BALANCE SHEET DATA (AT PERIOD END):
Total assets..................................................... $ 18,661 $ 19,081 $ 20,909 $ 16,107
Total liabilities................................................ 516 864 2,443 591
Total stockholder's equity....................................... 18,145 18,217 18,466 15,516
</TABLE>
33
<PAGE>
- ------------------------
(1) The Statement of Operations data for the period ended August 15, 1997
includes 32 weeks and 6 days; however, this period is referred to as the
33-week period ended August 15, 1997.
(2) EBITDA is defined as earnings before interest, taxes, depreciation and
amortization and is presented because it is commonly used by certain
investors and analysts to analyze and compare companies on the basis of
operating performance and to determine a company's ability to service and
incur debt. EBITDA should not be considered in isolation from or as a
substitute for net income, cash flows from operating activities or other
consolidated income or cash flow statement data prepared in accordance with
generally accepted accounting principles or as a measure of profitability or
liquidity.
(3) For the purposes of this calculation, earnings consist of income before
income taxes plus fixed charges. Fixed charges consist of interest on
indebtedness plus that portion of lease rental expense representative of the
interest factor.
34
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
The following discussion should be read in conjunction with the financial
statements and related notes, and the other financial information, included
elsewhere in this Prospectus.
GENERAL
The Company, a manufacturer, marketer and distributor of shelf-stable food
products, was organized by BRS in November 1996 to acquire Bloch & Guggenheimer,
Inc., Burns & Ricker, Inc. and certain related entities from Specialty Foods,
which businesses had been acquired by Specialty Foods from Artal International
in 1993.
The Company's financial statements reflect various ownership changes and
management fee structures during the periods covered thereby. To provide a
better comparison of historical results of operations, the Company has adjusted
historical EBITDA to exclude historical management fees. Adjusted EBITDA
excludes management fees and nonrecurring expenses incurred by the Company in
connection with the sale of the Company in 1993 and 1996. From 1992 to 1996,
B&G's sales and Adjusted EBITDA increased at compounded annual rates of 24.2%
and 61.3% respectively. This growth in sales and Adjusted EBITDA resulted from
the acquisition of new businesses, increased sales from existing and new
products, and cost reductions in the base B&G business and acquired businesses.
The Company's sales increased dramatically in 1993 due to the commencement of
co-packing and distribution agreements with American Home Food Products, Inc.
("AHFP") upon the sale to AHFP of the POLANER business by Artal International,
the common corporate parent of the Company and the POLANER business. The AHFP
co-packing and distribution arrangements are now conducted under the IHF
Contracts for IHF, the successor to AHFP, which is referred to in the following
discussion as IHF. The co-packing and distribution services provided under the
IHF Contracts are on a significantly lower profit margin level than the
Company's base businesses. As a result, the IHF Contracts business did not
increase EBITDA to the same degree as net sales.
In late 1995, the Company acquired the NEW YORK STYLE brand from Nabisco and
integrated it into the existing BURNS & RICKER bagel chip business. The NEW YORK
STYLE brand acquisition and higher B&G Pickle and Pepper Products sales in 1995
partially offset reduced sales of POLANER products to IHF in that year. During
such period, IHF significantly reduced marketing support and promotions for the
POLANER line and other IHF products, impacting the Company's sales of IHF
products both as a co-packer and distributor. Despite the decrease in sales,
Adjusted EBITDA grew by 18.3% in 1995 due to the NEW YORK STYLE brand
acquisition and continued growth in the Company's base B&G Pickle and Pepper
Products business. Upon the acquisition of the NEW YORK STYLE brands, Management
immediately focused on cost reductions. In 1996, the Company experienced the
first full year of NEW YORK STYLE sales and Adjusted EBITDA contribution. This,
plus B&G's Pickle and Pepper Products sales growth, increased net sales by 15.2%
and Adjusted EBITDA by 10.0%.
On June 17, 1997, the Company acquired certain assets relating to the
Nabisco Brands. The collective sales of the Nabisco Brands represented less than
1.0% of Nabisco's aggregate U.S. food sales in 1996. As such, Management
believes the Nabisco Brands were not considered part of Nabisco's core business.
Management further believes the Nabisco Brands did not receive a sufficient
level of management, marketing and promotional resources from Nabisco, which
resulted in a deterioration in the sales and operating performance of such
brands. Additionally, in 1996, Nabisco altered and restructured its sales and
marketing procedures, moving from a national network of independent brokers to
an in-house direct selling organization. Management believes this sales and
marketing policy change further reduced the level of management, marketing and
promotional resources available to the Nabisco Brands and further negatively
impacted their sales and operating performance.
The Nabisco Brands generally lost sales from 1992 through 1996. Retail sales
of REGINA, VERMONT MAID and BRER RABBIT products declined 20.3%, 18.0% and
16.2%, respectively, over that four-year period while
35
<PAGE>
WRIGHT'S sales remained relatively flat. Despite deterioration of sales at
retail, the food service sales component of the Nabisco Brands increased by
18.0% over the same four-year period, limiting the overall sales decrease of the
Nabisco Brands to 7.1% from 1992 to 1996. Management believes that there is
significant growth potential in the Nabisco Brands, especially through the
Company's DSD sales and distribution system, given proper management attention
and sales and marketing support. The Company has demonstrated its ability to
provide such management focus and sales and marketing support in its prior
acquisition of the BURNS & RICKER and NEW YORK STYLE product lines. Efforts are
underway to broaden the distribution of the Nabisco Brands and increase
marketing support in an attempt to recover the sales lost in the past four
years. New products are planned in the REGINA and WRIGHT'S lines to meet
consumer needs that have not been addressed to date. In addition, the Company
has recently introduced modern packaging for the VERMONT MAID product line to
enhance its brand image.
Management believes that the Trappey's Brands were not part of McIlhenny's
branded product focus and, in recent periods, have not received adequate
management focus and sales and marketing support. Management believes that there
is significant growth potential in the Trappey's Brands if sold through the DSD
system and its national retail grocery and food service systems.
B&G FOODS, INC.
39-WEEKS ENDED SEPTEMBER 27, 1997 COMPARED TO 39-WEEKS ENDED SEPTEMBER 28,
1996
NET SALES. Net sales increased by $7.2 million, or 7.5%, to $104.3 million
for the 39-weeks ended September 27, 1997 (the "1997 Period") from $97.1 million
for the 39-weeks ended September 28, 1996 (the "1996 Period"). The net sales
increase included $8.6 million of sales from the Acquired Brands. Sales of B&G
Pickle and Pepper Products increased by $3.1 million, or 8.6%, from the 1996
Period, largely reflecting increased sales of food service products and the
SANDWICH TOPPERS line. Sales of food service products increased in the 1997
Period by $2.5 million, or 16.7%, reflecting a higher unit volume. Sales of
retail B&G Pickle and Pepper Products increased by $0.6 million, or 3.0%,
reflecting the successful introduction of six new SANDWICH TOPPERS products and
generally higher retail unit volume. These sales increases were offset by a
decrease of $4.5 million, or 11.8%, in sales of co-packed POLANER products to
IHF and sales of POLANER products distributed by the Company in the northeastern
U.S.
GROSS PROFIT. Gross profit increased by $6.1 million, or 21.6%, to $34.3
million for the 1997 Period from $28.2 million in the 1996 Period. Gross profit
expressed as a percentage of net sales increased to 32.8% in the 1997 Period
from 29.0% in the 1996 Period due to a favorable shift in the sales mix to
higher gross profit margin B&G Pickle and Pepper Products sales and Acquired
Brands sales from lower gross profit margin POLANER co-packing sales.
SALES, MARKETING AND DISTRIBUTION EXPENSES. Sales, marketing and
distribution expenses increased by $2.8 million, or 13.0%, to $24.4 million for
the 1997 Period from $21.6 million for the 1996 Period. Such expenses expressed
as a percentage of net sales increased to 23.3% in the 1997 Period from 22.2% in
the 1996 Period due to the addition of the Acquired Brands.
GENERAL AND ADMINISTRATIVE EXPENSES. General and administrative expenses
(including amortization of intangibles and management fees) increased by $0.4
million, or 14.2%, primarily due to increased amortization of goodwill
associated with the B&G and B&R Acquisition in December 1996, the Nabisco Brands
Acquisition and the Trappey's Acquisition and other expenses, which were
partially offset by lower management fees in the 1997 Period. General and
administrative expenses expressed as a percentage of net sales remained
relatively constant at 3.2% in the 1997 Period and 3.0% in the 1996 Period.
OPERATING INCOME. As a result of the foregoing, operating income increased
by $2.9 million, or 77.5%, to $6.6 million for the 1997 Period from $3.7 million
for the 1996 Period. Operating income expressed as a percentage of net sales
increased to 6.3% in the 1997 Period from 3.8% in the 1996 Period.
36
<PAGE>
INTEREST EXPENSE. Interest expense increased $2.6 million or 76.5% to $6.1
million for the 1997 Period from $3.5 million in the 1996 Period as a result of
the additional debt incurred by the Company to fund the B&G and B&R Acquisition
and the Nabisco Acquisition.
YEAR ENDED DECEMBER 28, 1996 COMPARED TO YEAR ENDED DECEMBER 30, 1995
NET SALES. Net sales increased by $17.1 million, or 15.2%, to $129.3
million in the year ended December 28, 1996 ("Fiscal 1996") from $112.2 million
in the year ended December 30, 1995 ("Fiscal 1995") as all of the Company's
product lines experienced increased sales. The sales increase primarily reflects
higher sales of Baked Snack Products of $8.2 million, or 38.1%, in Fiscal 1996,
resulting from the full year effect of the acquisition and integration of the
NEW YORK STYLE brand, which was acquired in September 1995 from Nabisco. Sales
of B&G Pickle and Pepper Products increased by $5.5 million, or 12.6%, in Fiscal
1996 due to the introduction of the SANDWICH TOPPERS line in the territory
covered by the DSD sales and distribution system and increased sales of food
service products to national fast food sandwich chains. Additionally, sales of
the co-packed Polaner line of products increased by $3.4 million, or 7.2%, in
Fiscal 1996 reflecting increased marketing and promotional support for POLANER
products by IHF.
GROSS PROFIT. Gross profit increased by $5.1 million, or 15.7%, to $38.1
million in Fiscal 1996 from $33.0 million in Fiscal 1995. Gross profit expressed
as a percentage of net sales increased slightly to 29.5% in Fiscal 1996 from
29.4% in Fiscal 1995. The increase reflects the effect of a shift in the sales
mix to higher gross profit margin B&G Pickle and Pepper Products in Fiscal 1996
which were partially offset by increased sales of the lower gross profit margin
POLANER products.
SALES, MARKETING AND DISTRIBUTION EXPENSES. Sales, marketing and
distribution expenses increased by $4.5 million, or 19.1%, to $28.4 million in
Fiscal 1996 from $23.9 million in Fiscal 1995. Such expenses expressed as a
percentage of net sales increased to 22.0% in Fiscal 1996 from 21.3% in Fiscal
1995, primarily as a result of higher marketing expenditures to support the
introduction of the SANDWICH TOPPERS line in the territory covered by the DSD
sales and distribution system. The introduction of new products in the Baked
Snack Products line and the acquisition of the NEW YORK STYLE brand also
increased sales, marketing and distribution expenses during Fiscal 1996.
GENERAL AND ADMINISTRATIVE EXPENSES. General and administrative expense
(including amortization of intangibles and management fees) increased by $0.5
million, or 13.4%, to $4.2 million in Fiscal 1996 from $3.7 million in Fiscal
1995. General and administrative expenses expressed as a percentage of net sales
decreased to 3.2% in Fiscal 1996 from 3.3% in Fiscal 1995. This decline reflects
the Company's ability to integrate acquisitions efficiently and introduce new
products into its existing infrastructure without proportionately increasing
operating costs.
OPERATING INCOME. As a result of the foregoing, operating income increased
by $0.1 million, or 2.3%, to $5.5 million in Fiscal 1996 from $5.4 million in
Fiscal 1995. Operating income as a percentage of net sales decreased to 4.3% in
Fiscal 1996 from 4.8% in Fiscal 1995.
INTEREST EXPENSE. Interest expense increased $0.8 million or 23.0% to $4.6
million for the 1996 Period from $3.8 million in the 1995 Period. The change is
due to the Company having additional debt from SFC of $7.0 million, primarily
related to the acquisition of the NEW YORK STYLE bagel chip product line from
Nabisco in September 1995.
YEAR ENDED DECEMBER 30, 1995 COMPARED TO YEAR ENDED DECEMBER 31, 1994
NET SALES. Net sales declined by $1.6 million, or 1.4%, to $112.2 million
in Fiscal 1995 from $113.8 million in the year ended December 31, 1994 ("Fiscal
1994"). The decline in Fiscal 1995 was primarily due to a $8.6 million, or
15.3%, decrease in sales of POLANER products. Sales of POLANER products are
largely dependent on IHF's success in marketing and selling the POLANER brand.
In Fiscal 1995, IHF substantially reduced marketing and promotional support for
the POLANER brand and the resultant reduction in consumer demand impacted the
co-packing and distribution sales volume of B&G. The loss of low margin POLANER
37
<PAGE>
sales was partially mitigated by increased sales in the Company's other
businesses. Sales of Baked Snack Products increased by $4.9 million, or 29.4%,
in Fiscal 1995 compared to Fiscal 1994 largely reflecting the sales contribution
of the NEW YORK STYLE brand that was acquired from Nabisco in September 1995.
Sales of BURNS & RICKER brand Baked Snack Products in Fiscal 1995 were
essentially flat from Fiscal 1994 reflecting the discontinuation in Fiscal 1995
of certain low margin Baked Snack Products which represented approximately $1.0
million of sales in Fiscal 1994. Sales of the B&G Pickle and Pepper Products
increased by $2.1 million, or 5.1%, in Fiscal 1995 compared to Fiscal 1994 based
on strong sales in the food service and wet spice businesses.
GROSS PROFIT. Gross profit increased by $2.0 million, or 6.4%, to $33.0
million in Fiscal 1995 from $31.0 million in Fiscal 1994. Gross profit expressed
as a percentage of net sales increased to 29.4% in Fiscal 1995 from 27.2% in
Fiscal 1994. The increase resulted from a favorable shift in the sales mix to
higher gross profit margin B&G Pickle and Pepper Products and Baked Snack
Products from lower gross profit margin POLANER products.
SALES, MARKETING AND DISTRIBUTION EXPENSES. Sales, marketing and
distribution expenses increased by $0.6 million, or 2.3%, to $23.9 million in
Fiscal 1995 from $23.3 million in Fiscal 1994. Such expenses expressed as a
percentage of net sales increased to 21.3% in Fiscal 1995 from 20.5% in Fiscal
1994, primarily as a result of reduced sales of POLANER products in Fiscal 1995.
GENERAL AND ADMINISTRATIVE EXPENSES. General and administrative expenses
(including amortization of intangibles and management fees) increased by $1.1
million, or 42.7%, to $3.7 million in Fiscal 1995 from $2.6 million in Fiscal
1994. This increase reflects the introduction of a $1.1 million management fee
charge from the Company's prior corporate owner that was not charged in Fiscal
1994. General and administrative expenses expressed as a percentage of net sales
increased to 3.3% in Fiscal 1995 from 2.3% in Fiscal 1994. This increase
principally reflects the introduction of the $1.1 million management fee as well
as lower POLANER product- related sales.
OPERATING INCOME. As a result of the foregoing, operating income increased
by $0.3 million, or 6.7%, to $5.4 million in Fiscal 1995 from $5.1 million in
Fiscal 1994. Operating income as a percentage of net sales increased to 4.8% in
Fiscal 1995 from 4.4% in Fiscal 1994.
INTEREST EXPENSE. Interest expense increased $1.4 million or 57.9% to $3.8
million for the 1995 Period from $2.4 million in the 1994 Period. The majority
of interest expense relates to SFC debt and is part of an allocation based on
SFC's overall debt outstanding.
NABISCO BRANDS
24-WEEKS ENDED JUNE 17, 1997 COMPARED TO 26-WEEKS ENDED JUNE 29, 1996
NET SALES. Net sales decreased by $2.4 million, or 19.6%, to $9.9 million
for the 24-weeks ended June 17, 1997 (the "1997 Period") from $12.3 million for
the 26-weeks ended June 29, 1996 (the "1996 Period"). Retail sales decreased by
$2.0 million, or 27.3%, and food service sales decreased by $0.4 million, or
8.8%, from the 1996 Period. Retail sales decreased $0.8 million due to the short
period in 1997. Regina, Wright's and Brer Rabbit accounted for $0.6 million,
$0.4 million and $0.2 million, respectively of the remaining retail shortfall
which was due to a lack of promotional activity and reduced emphasis on
marketing the Nabisco Brands following the announcement of their sale. Food
service sales decreased $0.7 million due to the short period in 1997, offset by
continued growth in the base food service without any additional promotional
activity.
GROSS PROFIT. Gross profit decreased by $2.0 million, or 24.2%, to $6.4
million for the 1997 Period from $8.4 million in the 1996 Period. The short
period in 1997 accounted for $0.9 million of the gross profit shortfall. Gross
profit expressed as a percentage of net sales decreased to 64.4% in the 1997
Period from 68.3% in the 1996 Period due to the change in sales mix from higher
gross profit margin retail sales to
38
<PAGE>
lower gross profit margin food service sales and increased costs of production
of REGINA products due to start-up inefficiencies at the new REGINA retail
production facility.
SALES AND DISTRIBUTION EXPENSES. Sales and distribution expenses decreased
by 0.5 million or 25.2% to $1.3 million for the 1997 Period from $1.8 million in
the 1996 Period, as a result of the decline in net sales. Such expenses
expressed as a percentage of net sales decreased to 13.6% in the 1997 Period
from 14.6% in the 1996 Period. This is due primarily to the reduction of
brokerage expense as Nabisco moved to an in-house sales force.
TRADE PROMOTIONS AND OTHER MARKETING EXPENSES. Trade promotions and other
marketing expenses decreased by $0.7 million or 41.3% to $0.9 million for the
1997 Period from $1.6 million in the 1996 Period. The change in promotional
spending was a result of Nabisco's decision to pull back on the overall spending
for these brands.
PRODUCT CONTRIBUTION. Product contribution decreased by $0.9 million, or
18.3%, to $4.1 million for the 1997 Period from $5.0 million in the 1996 Period
as a result of the decline in net sales. While the lower net sales led to the
decrease in product contribution, however, product contribution expressed as a
percentage of net sales increased to 41.2% in the 1997 Period from 40.5% in the
1996 Period.
YEAR ENDED DECEMBER 31, 1996 COMPARED TO YEAR ENDED DECEMBER 31, 1995
NET SALES. Net sales decreased by $1.2 million, or 4.2%, to $27.7 million
in the year ended December 31, 1996 ("Fiscal 1996") from $28.9 million in the
year ended December 31, 1995 ("Fiscal 1995") due to a shortfall in retail sales
across all brands with the exception of WRIGHT'S. Retail sales declined $1.3
million, or 6.9%, while food service sales increased $0.1 million or 1.0%.
REGINA retail sales declined $0.7 million due to a shift from brokered retail
sales to a consolidated direct internal sales force, whose priority was
Nabisco's larger national brands.
GROSS PROFIT. Gross profit declined by $0.9 million, or 4.4%, to $18.9
million in Fiscal 1996 from $19.8 million in Fiscal 1995 as a result of the
decline in net sales. Gross profit expressed as a percentage of net sales
decreased slightly to 68.3% in Fiscal 1996 from 68.5% in Fiscal 1995. This
slight decrease in profit margin was as a result of the change in sales mix from
higher gross profit margin retail sales to lower gross profit margin food
service sales.
SALES AND DISTRIBUTION EXPENSES. Sales and distribution expenses decreased
by $0.2 million or 4.8% to $3.6 million for the 1996 Period from $3.8 million in
the 1995 Period, as a result of the decline in net sales. Such expenses
expressed as a percentage of net sales decreased to 12.9% in the 1996 Period
from 13.0% in the 1995 Period. This is due primarily to the reduction of
brokerage expenses as Nabisco moved to an in-house sales force.
TRADE PROMOTIONS AND OTHER MARKETING EXPENSES. Trade promotions and other
marketing expenses increased by $0.3 million or 7.2% to $3.7 million for the
1996 Period from $3.4 million in the 1995 Period. The increase in promotional
spending was a result of Nabisco's decision to provide additional support for
the REGINA and VERMONT MAID product lines.
PRODUCT CONTRIBUTION. Product contribution decreased by $1.0 million, or
7.5%, to $11.6 million in Fiscal 1996 from $12.6 million in Fiscal 1995. Lower
net sales led to the decrease in product contribution margin. Similarly, product
contribution expressed as a percentage of net sales also decreased to 42.0% in
Fiscal 1996 from 43.5% in Fiscal 1995.
TRAPPEY'S
33-WEEKS ENDED AUGUST 15, 1997 COMPARED TO 34-WEEKS ENDED AUGUST 24, 1996
NET SALES. Net sales decreased by $2.0 million, or 15.7%, to $10.6 million
for the 33-weeks ended August 15, 1997 (the "1997 Period") from $12.6 million
for the 34-weeks ended August 24, 1996 (the "1996 Period"). This decrease was
due primarily to a $1.2 million decrease in sales of branded hot sauces and
39
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retail peppers caused by a reduction in marketing and advertising efforts for
the 1997 Period and the elimination of certain unprofitable food service
products. The remaining $0.8 million is attributable to lower sales to an
affiliate of McIlhenny.
GROSS PROFIT. Gross profit decreased by $1.1 million, or 22.3%, to $3.9
million for the 1997 Period from $5.0 million in the 1996 Period. Gross profit
expressed as a percentage of net sales decreased to 37.0% in the 1997 Period
from 40.2% in the 1996 Period primarily due to the elimination of markups on
intercompany sales.
SALES, MARKETING AND DISTRIBUTION EXPENSES. Sales, marketing and
distribution expenses decreased by $0.6 million, or 17.2%, to $2.7 million for
the 1997 Period from $3.2 million for the 1996 Period. Such expenses expressed
as a percentage of net sales decreased to 25.4% in the 1997 Period from 25.8% in
the 1996 Period. The decrease was primarily the result of lower advertising
costs due to a reduction in management's advertising efforts in the 1997 Period.
The impact of lower advertising costs was partially offset by an increase in the
sales expense allocation from an affiliate as a percentage of net sales and by
an increase in freight and commissions expenses as a percentage of net sales.
GENERAL AND ADMINISTRATIVE EXPENSES. General and administrative expenses
(including amortization of goodwill and intangibles) increased $0.1 million, or
6.3%, to $0.8 million in the 1997 Period from $0.7 million in the 1996 Period.
General and administrative expenses expressed as a percentage of net sales
increased to 7.5% in the 1997 Period from 6.0% in the 1996 Period. This increase
is attributable to an increase in the general and administrative expense
allocations from an affiliate as a percentage of net sales which were partially
offset by reductions in amortization expense for intangibles as a percentage of
net sales which were fully amortized in the 1996 Period.
OPERATING INCOME. As a result of the foregoing, operating income decreased
by $0.6 million, or 58.4%, to $0.4 million for the 1997 Period from $1.0 million
for the 1996 Period. Operating income expressed as a percentage of net sales,
however, decreased to 4.1% in the 1997 Period from 8.4% in the 1996 Period.
YEAR ENDED DECEMBER 31, 1996 COMPARED TO YEAR ENDED DECEMBER 31, 1995
NET SALES. Net sales increased by $1.7 million, or 10.3%, to $18.7 million
in the year ended December 31, 1996 ("Fiscal 1996") from $17.0 million in the
year ended December 31, 1995 ("Fiscal 1995"). This increase was primarily a
result of a $1.0 million increase in affiliate sales. The remaining increase of
$0.7 million is attributable to increases in sales of RED DEVIL brand hot sauces
and increases in branded retail sliced and whole jalapeno peppers.
GROSS PROFIT. Gross profit decreased by $0.1 million, or 2.1%, to $7.0
million in Fiscal 1996 from $7.1 million in Fiscal 1995. Gross profit expressed
as a percentage of net sales decreased to 37.3% in Fiscal 1996 from 42.0% in
Fiscal 1995. Cost increases in ingredients and packaging resulting from changes
in product mix and an increase in general labor costs contributed to the
declining gross profit.
SALES, MARKETING AND DISTRIBUTION EXPENSES. Sales, marketing and
distribution expenses increased by $0.1 million, or 2.1%, to $4.8 million in
Fiscal 1996 from $4.7 million in Fiscal 1995. However, sales, marketing and
distribution expenses expressed as a percentage of net sales decreased 25.6% in
Fiscal 1996 from 27.6% in Fiscal 1995. This decrease is primarily a result of
lower advertising costs as a percentage of net sales due to a reduction in
management's advertising efforts during Fiscal 1996.
GENERAL AND ADMINISTRATIVE EXPENSES. General and administrative expenses
(including amortization of goodwill and intangibles) remained relatively
unchanged at $1.0 million in Fiscal 1996 and Fiscal 1995. General and
administrative expenses expressed as a percentage of net sales decreased to 5.5%
in Fiscal 1996 from 6.0% in Fiscal 1995. This decline is attributable to
reductions in amortization expense for intangibles as a percentage of net sales
which were fully amortized in Fiscal 1996.
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OPERATING INCOME. As a result of the foregoing, operating income decreased
by $0.2 million, or 18.0%, to $1.2 million in Fiscal 1996 from $1.4 million in
Fiscal 1995. Operating income as a percentage of net sales decreased to 6.2% in
Fiscal 1996 from 8.4% in Fiscal 1995.
LIQUIDITY AND CAPITAL RESOURCES
The Company's primary sources of capital are cash flow from operations and
borrowings under the New Credit Facility. The Company's primary capital
requirements include debt service, capital expenditures, working capital needs
and financing acquisitions. The Company is a holding company and its ability to
make payments of principal and interest on its indebtedness (including the
Notes) depends on its receipt of dividend or other payments from its operating
subsidiaries. The Company and the Guarantors are prohibited under the Indenture
from incurring any restrictions on the Guarantors' ability to pay dividends or
make certain other payments to the Company. See "Description of the
Notes--Certain Covenants-- Dividend and Other Payment Restrictions Affecting
Subsidiaries."
The Company's ability to make scheduled payments of principal of, or to pay
the interest or Liquidated Damages, if any, on, or to refinance, its
indebtedness (including the Notes), or to fund planned capital expenditures,
will depend upon its future performance, which, in turn, is subject to general
economic, financial, competitive, legislative, regulatory and other factors that
are beyond its control. Based upon current levels of operations and anticipated
growth in revenues and cost savings, Management believes that the Company's cash
flow from operations, amounts available under the New Credit Facility and
available cash will be adequate to meet its anticipated future requirements for
working capital, capital expenditures, and scheduled payments of principal and
interest on its indebtedness, including the Notes, for at least the next 12
months. There can be no assurance, however, that the Company's business will
generate cash flow at or above anticipated levels or that the Company will be
able to borrow funds under the New Credit Facility in an amount sufficient to
enable the Company to service its indebtedness, including the Notes, or make
anticipated capital expenditures. In particular, there can be no assurance that
anticipated revenue growth will be achieved at the levels currently anticipated
or at all. If the Company is unable to generate sufficient cash flow from
operations or to borrow sufficient funds in the future to service its debt, it
may be required to sell assets, reduce capital expenditures, refinance all or a
portion of its existing debt (including the Notes) or obtain additional
financing. There can be no assurance that any such refinancing would be
available on commercially reasonable terms, or at all, or that any additional
financing could be obtained, particularly in view of the Company's high level of
debt, the restrictions on the Company's ability to incur additional debt under
the New Credit Facility and the Indenture, and the fact that substantially all
of the Company's assets are pledged to secure obligations under the New Credit
Facility.
At September 27, 1997, the Company's total debt and stockholder's equity was
$121.1 million and $18.2 million, respectively. At September 27, 1997, the
Company also had borrowing availability under the New Credit Facility of an
additional $50.0 million for working capital and capital expenditure
requirements, subject to the borrowing conditions contained therein. The Company
currently has no material capital commitments for the next 12 months. See "Risk
Factors--Substantial Leverage and Debt Service."
If the Company consummates additional acquisitions in the future, it may be
required to raise additional debt or equity capital. The New Credit Facility and
the Notes will, and other debt instruments of the Company may, pose various
restrictions and covenants on the Company which could potentially limit the
Company's ability to respond to market conditions, to provide for unanticipated
capital investments, to raise additional debt or equity capital, or to take
advantage of business opportunities, including future acquisitions. See
"Description of Certain Indebtedness--New Credit Facility" and "Description of
the Notes."
Net cash provided by operating activities for the 39-week period ended
September 27, 1997 was $4.7 million as compared to cash provided of $1.9 million
for the 39-week period ended September 28, 1996. The increase of $2.8 million
related to an increase in the change in accounts payable and accrued expenses
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of $2.7 million, a decrease of intercompany payments to SFC of $2.5 million, an
increase of $3.8 million in trade accounts receivable, due to the new
acquisitions, and an increase of $0.8 million in depreciation and amortization.
Net cash provided by operating activities in 1996 was $2.3 million as compared
to $9.7 million in 1995. The decrease of $7.5 million related to lower
intercompany borrowings from SFC of $2.3 million and a decrease of $2.7 million
of accounts payable and accrued expenses. This was offset by a reduction in
inventory growth of $1.9 million due to better control of raw material
management.
Net cash used in investing activities for the 39-week period ended September
27, 1997 was $69.8 million as compared to $2.2 million in the 39-week period
ended September 28, 1996. The change of $67.6 million related to the Nabisco
Brands Acquisition and the Trappey's Acquisition and a final $4.0 million
payment to SFC for the B&G and B&R Acquisition. Net cash used in investing
activities in 1996 was $2.6 million as compared to $8.9 million in 1995. In
1995, the Company used $6.3 million to purchase New York Style Bagel Chips from
Nabisco.
Net cash provided by financing activities for the 39-week period ended
September 27, 1997 was $68.5 million as compared to $0.3 million used for the
39-week period ended September 28, 1996. Financing activities in 1997 included
primarily proceeds from the issuance of the Existing Notes and the Interim
Notes, repayments of Prior Credit Facility and the Interim Notes, and payments
related to debt issuance costs. Net cash used in financing activities in 1996
and 1995 was $0.3 million which represented capital lease payments.
SEASONALITY
Sales of a number of the Company's products tend to be seasonal, but the
effect of seasonality on the Company's liquidity is tempered by the Company's
relatively varied product mix. The Company purchases most of the produce used to
make the B&G Pickle and Pepper Products during the period from July 1 to October
31 and, consequently, its liquidity needs are greatest during this period.
COMPUTERIZED OPERATIONS AND THE YEAR 2000
During recent years, there has been significant global awareness raised
regarding the potential disruption to business operations worldwide resulting
from the inability of current technology to process properly the change from the
year 1999 to 2000. Although, based on a review of its data processing, operating
and other computer-based systems, the Company does not currently believe that it
will experience any significant adverse effects or material unbudgeted costs
resulting therefrom, the Company cannot provide any assurance in this regard,
and any such costs or effect could materially and adversely affect the
operations of the Company and thereby its ability to satisfy its obligations
under the Notes.
RECENT ACCOUNTING PRONOUNCEMENTS
In June 1997, Statement of Financial Accounting Standards (SFAS) No. 130
(SFAS 130), "Reporting Comprehensive Income," was issued to establish standards
for reporting and displaying of comprehensive income and its components in a
full set of general-purpose financial statements. This statement requires
disclosure of the components of comprehensive income including, among other
things, foreign currency translation adjustments, minimum pension liability
items and unrealized gains and losses on certain investments in debt and equity
securities. The Company would be required to show components of comprehensive
income in a financial statement displayed as prominently as the other required
financial statements. The statement is effective for fiscal years beginning
after December 15, 1997. The Company anticipates adopting this Statement in
1998.
In June 1997, SFAS 131 "Disclosures About Segments of an Enterprise and
Related Information", was issued to establish standards for public business
enterprises reporting information regarding operating segments in annual and
interim financial statements issued to shareholders. It also establishes
standards for related disclosures about products and services, geographic areas
and major customers. This statement is effective for financial statements for
periods beginning after December 15, 1997. In the initial year of application,
comparative information for earlier years is to be restated. The Company
operates in one business segment which manufactures and markets a diversified
portfolio of food products, and accordingly, does not believe the segment
reporting aspect of this statement will impact their financial statements. The
Company anticipates adopting this Statement in 1998.
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THE EXCHANGE OFFER
PURPOSE OF THE EXCHANGE OFFER
The Existing Notes were sold by the Company on August 11, 1997 (the "Closing
Date") to the Initial Purchasers pursuant to the Purchase Agreement. The Initial
Purchasers subsequently resold the Existing Notes to qualified institutional
buyers in reliance on Rule 144A under the Securities Act and a limited number of
institutional accredited investors within the meaning of Rule 501(a)(1), (2),
(3) or (7) under the Securities Act. As a condition to the sale of the Existing
Notes, the Company and the Guarantors were required to enter into the
Registration Rights Agreement. Pursuant to the Registration Rights Agreement,
the Company agreed that, unless the Exchange Offer is not permitted by
applicable law or Commission policy, it would (i) file with the Commission a
Registration Statement under the Securities Act with respect to the New Notes no
later than 90 days after the Closing Date, (ii) use its reasonable best efforts
to cause such Registration Statement to become effective under the Securities
Act no later than 150 days after the Closing Date and (iii) upon effectiveness
of the Registration Statement, to commence the Exchange Offer, maintain the
effectiveness of the Registration Statement for at least 20 business days (or a
longer period if required by law) and deliver to the Exchange Agent New Notes in
the same aggregate principal amount as the Existing Notes that were tendered by
holders thereof pursuant to the Exchange Offer. A copy of the Registration
Rights Agreement has been filed as an exhibit to the Registration Statement of
which this Prospectus is a part. The Exchange Offer is intended to satisfy
certain of the Company's and the Guarantors' obligations under the Registration
Rights Agreement and the Purchase Agreement.
The terms of the New Notes are identical in all material respects to those
of the Existing Notes, except that (i) the exchange will have been registered
under the Securities Act and hence the New Notes will not bear legends
restricting the transfer thereof, and (ii) holders of the New Notes will not be
entitled to certain registration rights of holders of the Existing Notes under
the Registration Rights Agreement, which rights will terminate upon the
consummation of the Exchange Offer. The New Notes will be issued pursuant to,
and will be entitled to the benefits of, the Indenture governing the Existing
Notes.
TERMS OF THE EXCHANGE OFFER; PERIOD FOR TENDERING EXISTING NOTES
Upon the terms and subject to the conditions set forth in this Prospectus
and in the accompanying Letter of Transmittal (which together constitute the
Exchange Offer), the Company will accept for exchange Existing Notes which are
properly tendered on or prior to the Expiration Date and not withdrawn as
permitted below. As used herein, the term "Expiration Date" means 5:00 p.m., New
York City time, on , 1998; provided, however, that if the Company has
extended the period of time for which the Exchange Offer is open, the term
"Expiration Date" means the latest time and date to which the Exchange Offer is
extended.
As of the date of this Prospectus, $120,000,000 aggregate principal amount
of the Existing Notes are outstanding. Only a registered holder of the Existing
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 the Existing Notes entitled to participate in the Exchange Offer. The
Existing Notes may be tendered only in integral multiples of $1,000. This
Prospectus, together with the Letter of Transmittal, is first being sent on or
about , 1998 to all holders of Existing Notes known to the Company. The
Company's obligation to accept Existing Notes for exchange pursuant to the
Exchange Offer is subject to certain conditions as set forth under "-- Certain
Conditions to the Exchange Offer" below.
The Company shall be deemed to have accepted validly tendered Existing 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 Existing Notes for the purposes of receiving the New Notes from the Company.
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The Company expressly reserves the right, at any time or from time to time,
to extend the period of time during which the Exchange Offer is open, and
thereby delay acceptance for any exchange of any Existing Notes, by giving
notice of such extension to the Exchange Agent and the holders thereof. During
any such extension, all Existing Notes previously tendered will remain subject
to the Exchange Offer and may be accepted for exchange by the Company. Any
Existing Notes not accepted for exchange for any reason will be returned without
expense to the tendering holder thereof as promptly as practicable after the
expiration or termination of the Exchange Offer.
The Company reserves the right, in its sole discretion, (i) to delay
accepting any Existing Notes, (ii) to extend the Exchange Offer, or (iii) if any
conditions set forth below under "The Exchange Offer-- Certain Conditions to the
Exchange Offer" shall not have been satisfied, to terminate the Exchange Offer
by giving oral or written notice of such delay, extension or termination to the
Exchange Agent. 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. If the Exchange Offer is amended in a manner
determined by the Company to constitute a material change, the Company will
promptly disclose such amendment by means of a prospectus supplement that will
be distributed to the registered holders, and the Company will extend the
Exchange Offer for a period of five to 10 business days, depending upon the
significance of the amendment and the manner of disclosure to the registered
holders, if the Exchange Offer would otherwise expire during such five to 10
business day period. Changes that might be considered material by the Company
include changes in the procedures for tendering Existing Notes or a change of
Exchange Agent.
Holders of Existing Notes do not have any appraisal or dissenters' rights
under the Delaware Corporation Law in connection with the Exchange Offer. The
Company intends to conduct the Exchange Offer in accordance with the provisions
of the Registration Rights Agreement and the applicable requirements of the
Securities Act, the Exchange Act and the rules and regulations of the Commission
thereunder.
PROCEDURES FOR TENDERING EXISTING NOTES
Only a registered holder of Existing Notes may tender such Existing Notes in
the Exchange Offer. To tender in the Exchange Offer, a holder must complete,
sign and date the Letter of Transmittal, or facsimile thereof, have the
signatures thereon guaranteed if required by the Letter of Transmittal, and mail
or otherwise deliver such Letter of Transmittal or such facsimile to the
Exchange Agent at the address set forth below under "The Exchange
Offer--Exchange Agent" for receipt prior to the Expiration Date. In addition,
either (i) certificates for such Existing Notes must be received by the Exchange
Agent along with the Letter of Transmittal, or (ii) a timely confirmation of a
book-entry transfer (a "Book-Entry Confirmation") of such Existing Notes, if
such procedure is available, into the Exchange Agent's account at the Depositary
pursuant to the procedure for book-entry transfer described below, must be
received by the Exchange Agent prior to the Expiration Date, or (iii) the holder
must comply with the guaranteed delivery procedures described below.
The tender by a holder which is not withdrawn prior to the Expiration Date
will constitute an agreement between such holder and the Company in accordance
with the terms and subject to the conditions set forth in herein and in the
Letter of Transmittal.
THE METHOD OF DELIVERY OF EXISTING NOTES AND THE LETTER OF TRANSMITTAL AND
ALL OTHER REQUIRED DOCUMENTS TO THE EXCHANGE AGENT IS AT THE ELECTION AND RISK
OF THE HOLDER. INSTEAD OF DELIVERY BY MAIL, IT IS RECOMMENDED THAT HOLDERS USE
AN OVERNIGHT OR HAND DELIVERY SERVICE, PROPERLY INSURED. IN ALL CASES,
SUFFICIENT TIME SHOULD BE ALLOWED TO ASSURE DELIVERY TO THE EXCHANGE AGENT
BEFORE THE EXPIRATION DATE. NO LETTER OF TRANSMITTAL OR EXISTING 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.
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Any beneficial owner(s) of the Existing Notes whose Existing 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. 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 such owner's Existing Notes, either make appropriate
arrangements to register ownership of the Existing 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.
Signatures on a Letter of Transmittal or a notice of withdrawal described
below (see "The Exchange Offer--Withdrawal of Tenders"), as the case may be,
must be guaranteed by an Eligible Institution (as defined below) unless the
Existing Notes tendered pursuant thereto are tendered (i) by a registered holder
who has not completed the box entitled "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 made by a
member firm of a registered national securities exchange or of the National
Association of Securities Dealers, Inc., a commercial bank or trust company
having an office or correspondent in the United States or an "eligible guarantor
institution" within the meaning of Rule 17Ad-15 under the Exchange Act which is
a member of one of the recognized signature guarantee programs identified in the
Letter of Transmittal (an "Eligible Institution").
If the Letter of Transmittal is signed by a person other than the registered
holder of any Existing Notes listed therein, such Existing 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 Existing
Notes.
If the Letter of Transmittal or any Existing 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 the Letter of Transmittal.
The Exchange Agent and the Depositary have confirmed that any financial
institution that is a participant in the Depositary's system may utilize the
Depositary's Automated Tender Offer Program to tender Existing Notes.
All questions as to the validity, form, eligibility (including time of
receipt), acceptance and withdrawal of tendered Existing Notes will be
determined by the Company in its sole discretion, which determination will be
final and binding. The Company reserves the absolute right to reject any and all
Existing Notes not properly tendered or any Existing Notes the Company's
acceptance of which would, in the opinion of counsel for the Company, be
unlawful. The Company also reserves the right to waive any defects,
irregularities or conditions of tender as to particular Existing 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 Existing 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 Existing Notes, neither the
Company, the Exchange Agent nor any other person shall incur any liability for
failure to give such notification. Tenders of Existing Notes will not be deemed
to have been made until such defects or irregularities have been cured or
waived.
While the Company has no present plan to acquire any Existing Notes which
are not tendered in the Exchange Offer or to file a registration statement to
permit resales of any Existing Notes which are not tendered pursuant to the
Exchange Offer, the Company reserves the right in its sole discretion to
purchase or make offers for any Existing Notes that remain outstanding
subsequent to the Expiration Date or, as set forth below under "-- Certain
Conditions to the Exchange Offer," to terminate the Exchange Offer and,
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to the extent permitted by applicable law, purchase Existing Notes in the open
market, in privately negotiated transactions or otherwise. The terms of any such
purchases or offers could differ from the terms of the Exchange Offer.
By tendering, each holder will represent to the Company that, among other
things, (i) the New Notes to be acquired by the holder of the Existing Notes in
connection with the Exchange Offer are being acquired by the holder in the
ordinary course of business of the holder, (ii) the holder has no arrangement or
understanding with any person to participate in the distribution of New Notes,
(iii) the holder acknowledges and agrees that any person who is a broker-dealer
registered under the Exchange Act or is participating in the Exchange Offer for
the purposes of distributing the New Notes must comply with the registration and
prospectus delivery requirements of the Securities Act in connection with a
secondary resale transaction of the New Notes acquired by such person and cannot
rely on the position of the staff of the Commission set forth in certain
no-action letters, (iv) the holder understands that a secondary resale
transaction described in clause (iii) above and any resales of New Notes
obtained by such holder in exchange for Existing Notes acquired by such holder
directly from the Company should be covered by an effective registration
statement containing the selling securityholder information required by Item 507
or Item 508, as applicable, of Regulation S-K of the Commission, and (v) the
holder is not an "affiliate," as defined in Rule 405 of the Securities Act, of
the Company. If the holder is a broker-dealer that will receive New Notes for
its own account in exchange for Existing Notes that were acquired as a result of
market-making activities or other trading activities, the holder is required to
acknowledge in the Letter of Transmittal that it will deliver a prospectus in
connection with any resale of such New Notes; however, by so acknowledging and
by delivering a prospectus, the holder will not be deemed to admit that it is an
"underwriter" within the meaning of the Securities Act.
RETURN OF EXISTING NOTES
If any tendered Existing Notes are not accepted for any reason set forth in
the terms and conditions of the Exchange Offer or if Existing Notes are
withdrawn or are submitted for a greater principal amount than the holders
desire to exchange, such unaccepted, withdrawn or non-exchanged Existing Notes
will be returned without expense to the tendering holder thereof (or, in the
case of Existing Notes tendered by book-entry transfer into the Exchange Agent's
account at the Depositary pursuant to the book-entry transfer procedures
described below, such Existing Notes will be credited to an account maintained
with the Depositary) as promptly as practicable.
BOOK-ENTRY TRANSFER
The Exchange Agent will make a request to establish an account with respect
to the Existing Notes at the Depositary for purposes of the Exchange Offer
within two business days after the date of this Prospectus, and any financial
institution that is a participant in the Depositary's systems may make book-
entry delivery of Existing Notes by causing the Depositary to transfer such
Existing Notes into the Exchange Agent's account at the Depositary in accordance
with the Depositary's procedures for transfer. However, although delivery of
Existing Notes may be effected through book-entry transfer at the Depositary,
the Letter of Transmittal or facsimile thereof, with any required signature
guarantees and any other required documents, must, in any case, be transmitted
to and received by the Exchange Agent at the address set forth below under "The
Exchange Offer--Exchange Agent" on or prior to the Expiration Date or pursuant
to the guaranteed delivery procedures described below.
GUARANTEED DELIVERY PROCEDURES
Holders who wish to tender their Existing Notes and (i) whose Existing Notes
are not immediately available or (ii) who cannot deliver their Existing Notes,
the Letter of Transmittal or any other required documents to the Exchange Agent
prior to the Expiration Date, may effect a tender if:
(a) The tender is made through an Eligible Institution;
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(b) Prior to the Expiration Date, the Exchange Agent receives from such
Eligible Institution a properly completed and duly executed Notice of
Guaranteed Delivery substantially in the form provided by the Company (by
facsimile transmission, mail or hand delivery) setting forth the name and
address of the holder, the certificate number(s) of such Existing Notes and
the principal amount of Existing Notes tendered, stating that the tender is
being made thereby and guaranteeing that, within five New York Stock
Exchange trading days after the Expiration Date, the Letter of Transmittal
(or a facsimile thereof) together with the certificate(s) representing the
Existing Notes in proper form for transfer or a Book-Entry Confirmation, as
the case may be, 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 executed Letter of Transmittal (or facsimile thereof),
as well as the certificate(s) representing all tendered Existing Notes in
proper form for transfer and all other documents required by the Letter of
Transmittal are received by the Exchange Agent within five 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 Existing Notes according to the
guaranteed delivery procedures set forth above.
WITHDRAWAL OF TENDERS
Except as otherwise provided herein, tenders of Existing Notes may be
withdrawn at any time prior to the Expiration Date.
To withdraw a tender of Existing Notes in the Exchange Offer, a written or
facsimile transmission notice of withdrawal must be received by the Exchange
Agent at its address set forth herein prior to the Expiration Date. Any such
notice of withdrawal must (i) specify the name of the person having deposited
the Existing Notes to be withdrawn (the "Depositor"), (ii) identify the Existing
Notes to be withdrawn (including the certificate number or numbers and aggregate
principal amount of such Existing Notes), and (iii) be signed by the holder in
the same manner as the original signature on the Letter of Transmittal by which
such Existing Notes were tendered (including any required signature guarantees).
All questions as to the validity, form and eligibility (including time of
receipt) of such notices will be determined by the Company in its sole
discretion, whose determination shall be final and binding on all parties. Any
Existing Notes so withdrawn will be deemed not to have been validly tendered for
purposes of the Exchange Offer and no New Notes will be issued with respect
thereto unless the Existing Notes so withdrawn are validly retendered. Properly
withdrawn Existing Notes may be retendered by following one of the procedures
described above under "The Exchange Offer--Procedures for Tendering Existing
Notes" at any time prior to the Expiration Date.
CERTAIN CONDITIONS TO THE EXCHANGE OFFER
Notwithstanding any other provision of the Exchange Offer, the Company shall
not be required to accept for exchange, or to issue New Notes in exchange for,
any Existing Notes and may terminate or amend the Exchange Offer if at any time
before the acceptance of such Existing Notes for exchange or the exchange of New
Notes for such Existing Notes, the Company determines that the Exchange Offer
violates applicable law, rule or regulation, any applicable interpretation of
the staff of the Commission or any order of any governmental agency or court of
competent jurisdiction.
The foregoing conditions are for the sole benefit of the Company and may be
asserted by the Company regardless of the circumstances giving rise to any such
condition or may be waived by the Company in whole or in part at any time and
from time to time in its reasonable discretion. The failure by the Company at
any time to exercise any of the foregoing rights shall not be deemed a waiver of
such right and each such right shall be deemed an ongoing right which may be
asserted at any time and from time to time.
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In addition, the Company will not accept for exchange any Existing Notes
tendered, and no New Notes will be issued in exchange for any such Existing
Notes, if at such time any stop order shall be threatened or in effect with
respect to the Registration Statement of which this Prospectus constitutes a
part or the qualification of the Indenture under the Trust Indenture Act of
1939, as amended (the "Trust Indenture Act"). In any such event the Company is
required to use every reasonable effort to obtain the withdrawal of any stop
order at the earliest possible time.
EXCHANGE AGENT
has been appointed as the Exchange Agent for the Exchange Offer. All
executed Letters of Transmittal should be directed to the Exchange Agent at one
of the addresses set forth below. Questions and requests for assistance,
requests for additional copies of this Prospectus or of the Letter of
Transmittal and requests for Notices of Guaranteed Delivery should be directed
to the Exchange Agent addressed as follows:
<TABLE>
<S> <C>
BY REGISTERED OR CERTIFIED MAIL: BY HAND OR OVERNIGHT COURIER:
The Bank of New York The Bank of New York
101 Barclay Street, 7E 101 Barclay Street
New York, New York 10286 Corporate Trust Services Window
Attn: Reorganization Section, Ground Level
Arwen Gibbons New York, New York 10286
Attn: Reorganization Section,
Arwen Gibbons
BY FACSIMILE:
(212) 571-3080
CONFIRM BY TELEPHONE:
(212) 815-6333
</TABLE>
Delivery 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 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 and are estimated in the aggregate to be approximately
$ . Such expenses include registration fees, fees and expenses of the
Exchange Agent and Trustee, accounting and legal fees and printing costs, among
others.
The Company will pay all transfer taxes, if any, applicable to the exchange
of Existing Notes pursuant to the Exchange Offer. If, however, a transfer tax is
imposed for any reason other than the exchange of the Existing Notes pursuant to
the Exchange Offer, then the amount of any such transfer taxes (whether imposed
on the registered holder or any other persons) will be payable by the tendering
holder. If satisfactory evidence of payment of such taxes or exemption therefrom
is not submitted with the Letter of Transmittal, the amount of such transfer
taxes will be billed directly to such tendering holder.
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ACCOUNTING TREATMENT
The New Notes will be recorded at the same carrying value as the Existing
Notes, which is the principal amount as reflected in the Company's accounting
records on the date of the exchange. Accordingly, no gain or loss for accounting
purposes will be recognized. The debt issuance costs will be capitalized for
accounting purposes and will be amortized over the term of the debt.
CONSEQUENCES OF FAILURE TO EXCHANGE; RESALES OF NEW NOTES
Participation in the Exchange Offer is voluntary. Holders of the Existing
Notes are urged to consult their financial and tax advisors in making their own
decisions on what action to take.
The Existing Notes which are not exchanged for the New Notes pursuant to the
Exchange Offer will remain restricted securities. Accordingly, such Existing
Notes may be resold only (i) 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, (ii) in a
transaction meeting the requirements of Rule 144 under the Securities Act, (iii)
outside the United States to a foreign person in a transaction meeting the
requirements of Rule 904 under the Securities Act or (iv) in accordance with
another exemption from the registration requirements of the Securities Act (and
based upon an opinion of counsel if the Company so requests), (v) to the Company
or (vi) 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
With respect to the New Notes, based upon an interpretation by the staff of
the Commission set forth in certain no-action letters issued to third parties,
the Company believes that a holder (other than (i) a broker-dealer who purchases
such New Notes directly from the Company to resell pursuant to Rule 144A or any
other available exemption under the Securities Act or (ii) any such holder which
is an "affiliate" of the Company within the meaning of Rule 405 under the
Securities Act) who exchanges the Existing Notes for the New Notes in the
ordinary course of business and who is not participating, does not intend to
participate, and has no arrangement with any person to participate, in the
distribution of the New Notes, will be allowed to resell the New Notes to the
public without further registration under the Securities Act and without
delivering to the purchasers of the New Notes a prospectus that satisfies the
requirements of Section 10 of the Securities Act. However, if any holder
acquires the New Notes in the Exchange Offer for the purpose of distributing or
participating in the distribution of the New Notes or is a broker-dealer, such
holder cannot rely on the position of the staff of the Commission enumerated in
certain no-action letters issued to third parties 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. Each broker-dealer that receives New Notes for its own
account in exchange for Existing Notes, where such Existing Notes were acquired
by such 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 New Notes. The Letter of Transmittal states that by so
acknowledging and by delivering a prospectus, a 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 broker-dealer in connection with resales of New Notes received in
exchange for Existing Notes where such Existing Notes were acquired by such
broker-dealer as a result of market-making or other trading activities. Pursuant
to the Registration Rights Agreement, the Company has agreed to make this
Prospectus, as it may be amended or supplemented from time to time, available to
broker-dealers for use in connection with any resale for a period of one year
following the Effective Date. See "Plan of Distribution."
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CERTAIN FEDERAL INCOME TAX CONSIDERATIONS
In the opinion of Dechert, Price & Rhoads, the following discussion
summarizes the material United States federal income tax consequences of the
Exchange Offer to a holder of Existing Notes that is an individual citizen or
resident of the United States or a United States corporation that purchased the
Existing Notes pursuant to their original issue (a "U.S. Holder"). It is based
on the Internal Revenue Code of 1986, as amended to the date hereof (the
"Code"), existing and proposed Treasury regulations, and judicial and
administrative determinations, all of which are subject to change at any time,
possibly on a retroactive basis. The following relates only to the Existing
Notes, and the New Notes received therefor, that are held as "capital assets"
within the meaning of Section 1221 of the Code by U.S. Holders. It does not
discuss state, local, or foreign tax consequences, nor does it discuss tax
consequences to subsequent purchasers (persons who did not purchase the Existing
Notes pursuant to their original issue), or to categories of holders that are
subject to special rules, such as foreign persons, tax-exempt organizations,
insurance companies, banks, and dealers in stocks and securities. Tax
consequences may vary depending on the particular status of an investor. No
rulings will be sought from the Internal Revenue Service with respect to the
federal income tax consequences of the Exchange Offer.
In the opinion of Dechert Price & Rhoads, counsel to the Company, (a) the
exchange of Notes pursuant to the Exchange Offer should not be a taxable event
for a U.S. Holder as set forth below under the caption "-- The Exchange Offer",
and (b) the summary of the United States federal income tax consequences to a
U.S. Holder that appears below under the captions "--Stated Interest", "--Sale,
Exchange or Retirement of the Notes" and "--Backup Withholding" is accurate in
all material respects.
THIS SECTION DOES NOT PURPORT TO DEAL WITH ALL ASPECTS OF FEDERAL INCOME
TAXATION THAT MAY BE RELEVANT TO AN INVESTOR'S DECISION TO EXCHANGE EXISTING
NOTES FOR NEW NOTES. EACH INVESTOR SHOULD CONSULT WITH ITS OWN TAX ADVISOR
CONCERNING THE APPLICATION OF THE FEDERAL INCOME TAX LAWS AND OTHER TAX LAWS TO
ITS PARTICULAR SITUATION BEFORE DETERMINING WHETHER TO EXCHANGE EXISTING NOTES
FOR NEW NOTES.
THE EXCHANGE OFFER
In the opinion of Dechert Price & Rhoads, counsel to the Company, the
exchange of Existing Notes pursuant to the Exchange Offer should be treated as a
continuation of the corresponding Existing Notes because the terms of the New
Notes are not materially different from the terms of the Existing Notes, and
accordingly (i) such exchange should not constitute a taxable event to a U.S.
Holder, (ii) no gain or loss should be realized by a U.S. Holder upon receipt of
a New Note, (iii) the holding period of the New Note should include the holding
period of the Existing Note exchanged therefor and (iv) the adjusted tax basis
of the New Note should be the same as the adjusted tax basis of the Existing
Note exchanged therefor immediately before the exchange.
STATED INTEREST
Stated interest on a Note will be taxable to a U.S. Holder as ordinary
interest income at the time that such interest accrues or is received, in
accordance with the U.S. Holder's regular method of accounting for federal
income tax purposes. The Notes are not considered to have been issued with
original issue discount for federal income tax purposes.
SALE, EXCHANGE OR RETIREMENT OF THE NOTES
A U.S. Holder's tax basis in a Note generally will be its cost. A U.S.
Holder generally will recognize gain or loss on the sale, exchange or retirement
of a Note in an amount equal to the difference between the amount realized on
the sale, exchange or retirement and the tax basis of the Note. Gain or loss
recognized on the sale, exchange or retirement of a Note (excluding amounts
received in respect of accrued interest,
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which will be taxable as ordinary interest income) generally will be capital
gain or loss. A U.S. Holder who is an individual or other person not taxable as
a corporation for federal income tax purposes who has held a Note for more than
18 months is subject to a maximum rate of tax of 20% on any capital gain
recognized upon its disposition. A noncorporate U.S. Holder who has held a Note
for more than 12 months but not more than 18 months is subject to a maximum rate
of tax of 28% on any capital gain recognized upon its disposition. Gain
recognized by a noncorporate U.S. Holder who has held a Note for 12 months or
less may be taxed at ordinary income rates. Capital losses of noncorporate U.S.
Holders in excess of capital gains may be offset against ordinary income up to
$3000; excess capital losses may be carried forward to subsequent years. Capital
gains of a U.S. Holder taxable as a corporation for federal income tax purposes
is classified as long or short term depending upon whether the Note has been
held for more than 12 months.
BACKUP WITHHOLDING
Under certain circumstances, a U.S. Holder of a Note may be subject to
"backup withholding" at a 31% rate with respect to payments of interest thereon
or the gross proceeds from the disposition thereof. This withholding generally
applies if the U.S. Holder fails to furnish his or her social security number or
other taxpayer identification number in the specified manner and in certain
other circumstances. Any amount withheld from a payment to a U.S. Holder under
the backup withholding rules is allowable as a credit against such U.S. Holder's
federal income tax liability provided that the required information is furnished
to the IRS. Corporations and certain other entities described in the Code and
Treasury regulations are exempt from backup withholding if their exempt status
is properly established.
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BUSINESS
COMPANY OVERVIEW
The Company manufactures, markets and distributes a diversified portfolio of
shelf-stable branded food products with leading regional or national retail
market positions. In general, the Company positions its retail branded products
to appeal to the consumer desiring a high quality and reasonably priced branded
product. In its relevant regional or national retail markets, the Company holds
the number one position in five of its seven branded product categories and
strong number two positions in the remaining two categories. The Company's sales
of branded retail products are complemented by growing food service sales with
strong brand identity. For the fiscal year ended December 28, 1996, the
Company's Pro Forma 1996 net sales and EBITDA would have been $175.7 million and
$23.4 million, respectively.
The Company groups its products as follows: (i) the B&G Pickles and Peppers
Products, which consist of pickles, relishes, peppers, olives and other
specialty products under the BLOCH & GUGGENHEIMER, SAN-DEL and private label
brands (28% of Pro Forma 1996 net sales); (ii) the Baked Snack Products, which
consist of bagel chips and other baked snack products under the BURNS & RICKER
and NEW YORK STYLE brands (17% of Pro Forma 1996 net sales); (iii) the Nabisco
Brands, which consist of the REGINA wine vinegars and cooking wines, WRIGHT'S
liquid smoke hickory flavoring, BRER RABBIT molasses and VERMONT MAID syrup
brands acquired from Nabisco, Inc. (16% of Pro Forma 1996 net sales); (iv) the
Trappey's Brands, which include TRAPPEY'S shelf-stable peppers and RED DEVIL and
other branded hot sauce products acquired from McIlhenny (10% of Pro Forma 1996
net sales); and (v) POLANER ALL-FRUIT and other IHF Products produced and/or
distributed for IHF (29% of Pro Forma 1996 net sales).
The Company manages its sales and distribution systems based upon the
channels through which its products are sold. The Company's DSD sales and
distribution system sells and distributes the B&G Pickle and Pepper Products and
the IHF Products to over 2,200 store locations throughout the Northeast, with
heavy concentration in the New York metropolitan area. The Company's national
sales and distribution system markets (i) the Baked Snack Products to deli
wholesalers and distributors through a nationwide deli broker network and (ii)
the Nabisco Brands and certain of the B&G Pickle and Pepper Products through a
national grocery broker network. The Company's food service business sells and
distributes branded food service products through national and regional
wholesalers and distributors which serve national and regional food service
customers.
COMPETITIVE STRENGTHS
Management believes that the following factors contribute to the Company's
position as a market leader in its competitive areas and will be the foundation
for the Company's strategy:
LEADING MARKET POSITIONS. In its relevant regional or national retail
markets, the Company holds the number one position (based on retail dollar
share) in six of its eight branded product categories. The B&G branded
shelf-stable pickle and pepper products are the market leaders in the greater
New York metropolitan area. The Company's BURNS & RICKER and NEW YORK STYLE
brands have a combined 86% national retail market share of the bagel chip
category. REGINA wine vinegars are the national leader in the retail wine and
flavored vinegar category. WRIGHT'S holds the number one national retail market
position in the liquid smoke flavoring category. VERMONT MAID is the number one
brand of syrup in the greater Boston area.
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RETAIL MARKET POSITION OF THE COMPANY'S BRANDS
<TABLE>
<CAPTION>
RETAIL MARKET SHARE(1)
------------------------------------------
<S> <C> <C> <C>
BRAND CATEGORY SHARE POSITION PERCENTAGE
- ------------------------------------ ------------------------------------ ------------------------- ---------------
B&G PICKLE AND PEPPER PRODUCTS:
Bloch & Guggenheimer................ Shelf-stable Pickles and Relishes... #1 Greater NY Metro 32%
Bloch & Guggenheimer................ Shelf-stable Peppers................ #1 Greater NY Metro 35%
#3 National(2) 10%
BAKED SNACK PRODUCTS:
Burns & Ricker...................... Bagel Chips......................... #1 National 45%
New York Style...................... Bagel Chips......................... #2 National 41%
Combined brands..................... Bagel Chips......................... #1 National 86%
NABISCO BRANDS:
Regina.............................. Wine and Flavored Vinegar........... #1 National 11%
Wright's............................ Liquid Smoke........................ #1 National 45%
Vermont Maid........................ Syrup............................... #1 Greater Boston 16%
Brer Rabbit......................... Molasses............................ #2 National 21%
TRAPPEY'S BRANDS:
Red Devil and other................. Hot Sauce........................... #6 National 6%
</TABLE>
- ------------------------
(1) Based on retail dollar share.
(2) Includes TRAPPEY'S branded peppers.
STRONG REGIONAL SALES AND DISTRIBUTION SYSTEM. Management believes that the
DSD sales and distribution system provides a competitive advantage compared to
the other food producers which market through independent brokers. Unlike
distribution systems which rely on independent brokers to market to large
grocery chains and deliver inventory directly to central warehouses which
service many stores, the DSD system requires the Company's sales representatives
to visit each individual store on a weekly basis. The DSD sales representatives
provide these stores with inventory control and value-added delivery services,
such as stocking shelves and delivering promotional displays. The direct
delivery of products through the Company's DSD system also allows the Company to
stock shelves with products having comparatively smaller retail sales, such as
bottled onions, which normally would be sold through a specialty foods
broker/distributor. Management believes that it is the regular personal
interaction between the Company's DSD sales representatives and the management
of the individual stores that provides the key competitive advantage of the DSD
sales and distribution system. Management believes the DSD system of selling and
distributing products has allowed it to achieve leading retail market shares in
its core regional markets for both the B&G Pickle and Pepper Products and the
POLANER ALL-FRUIT products.
EXPERIENCED MANAGEMENT TEAM. The B&G management team has demonstrated its
ability to (i) operate successfully in a leveraged environment as part of
Specialty Foods, (ii) grow the core pickle and pepper products business from
$38.1 million in net sales and $3.3 million in Adjusted EBITDA (as defined, see
"Selected Historical Financial and Other Dates") in 1992 to $48.8 million in net
sales and $4.5 million in Adjusted EBITDA in 1996, (iii) assume control of and
restructure the BURNS & RICKER bagel chip business and acquire and consolidate
the NEW YORK STYLE bagel chip business, increasing Adjusted EBITDA for the Baked
Snack Products business from $1.0 million in 1993 to $4.5 million in 1996, and
(iv) develop and expand successfully the POLANER ALL-FRUIT products into
national distribution, achieving sales of $29.6 million in 1992, and
subsequently realizing significant value through the sale of the Polaner
business to
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IHF in 1993. For additional information relating to the background of the senior
management, see "Management--Directors and Executive Officers."
BUSINESS STRATEGY
The Company's goal is to increase its sales and profitability by enhancing
its portfolio of branded shelf-stable products and by capitalizing on its
competitive strengths to realize the benefits of combining the B&G products with
the Acquired Brands. The Company intends to implement its strategy through the
following initiatives:
ENHANCE OPERATION OF THE ACQUIRED BRANDS. The Company's objective is to
renew the growth and enhance the profitability of the Acquired Brands.
Management believes there is significant growth potential in the Acquired Brands
due to a lack of focused management and marketing support from their prior
corporate owners who concentrated their resources on dominant national brands.
Management plans to enhance the operations of the Acquired Brands by providing
increased management attention as part of a portfolio of related products of
comparable size, with dedicated sales personnel, focused marketing programs and
strategically timed new product initiatives.
LEVERAGE DSD SALES AND DISTRIBUTION SYSTEM. The Company's extensive and
focused DSD sales and distribution system, concentrated in the greater New York
metropolitan area, is one of its primary competitive strengths, providing it
with strong relationships at the food retailer level, superior store penetration
and preferred shelf product placement. This sales and distribution system also
enables the Company to introduce and sell new products effectively to its
existing grocery customers at a lower cost of introduction to the Company. The
Company has begun to capitalize on this competitive strength by selling and
distributing the Acquired Brands in the greater New York metropolitan area
through its existing DSD sales and distribution system. Similarly, the Company
recently completed the process of moving its Baked Snack Products into the DSD
sales and distribution system. Management believes that distributing the other
Acquired Brands and Baked Snack Products, and any future products, through the
DSD sales and distribution system will, in turn, enhance the total DSD system by
distributing costs over increased product volume. For further discussion of the
DSD sales and distribution system, see "Business--Marketing, Sales and
Distribution--Direct-Store-Door (DSD)."
NATIONAL DISTRIBUTION OPPORTUNITIES. The Company has a portfolio of
branded, national shelf-stable food products supported by a national sales and
distribution network. The combination of the Acquired Brands with the Baked
Snack Products and the B&G Pickle and Pepper products is expected to allow the
Company to distribute the costs of a national sales force and broker network
over increased product volume, reducing costs as a percentage of sales, and to
realize distribution economies of scale and provide a national platform for new
products and product line extensions. The Company believes that it will continue
to increase the sales and expand the geographic presence of certain of its
regional branded products through its national sales and distribution network,
as evidenced by recent experience with its SANDWICH TOPPERS line. Utilizing the
regional sales managers for this brand, the Company has expanded the
distribution for all or part of the SANDWICH TOPPERS line into 16 grocery chains
outside of its traditional regional market. These chains are comprised of over
2,700 individual stores, representing a sizable growth opportunity for the
SANDWICH TOPPERS line.
NEW PRODUCT INTRODUCTIONS AND LINE EXTENSIONS. Management believes that the
Company's leading market positions, combined with the competitive strengths of
its regional DSD sales and distribution system and national sales and
distribution network, provide a strong platform for new product introductions
and product line extensions. Management has demonstrated its prior experience in
successfully introducing new products and product line extensions, including
SANDWICH TOPPERS, the BURNS & RICKER fat-free products and the POLANER ALL-FRUIT
line which was sold in 1993.
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EXPAND PRESENCE WITH MASS MERCHANTS AND OTHER NON-GROCERY MARKETS. Grocery
retailers have been the traditional market for the Company's products.
Management believes that there are certain non-grocery retail markets that have
the potential to grow faster than the grocery retail industry as a whole and
that these non-grocery markets present considerable growth opportunities for the
Company's brands. These non-grocery retail markets include mass merchants,
warehouse and club stores, convenience stores, drug stores and vending machines.
For example, last spring the Company launched a new line of NEW YORK STYLE bagel
chips in distinctive pillow-pack bags for distribution in these alternative
channels. The Company sells these products to the Sam's Club division of
Wal-Mart, Wal-Mart Supercenters, and the eastern region of Price/Costco. To
date, the Company has also successfully completed trials of these products in
Wal-Mart discount stores in three regions. The pillow-pack product has also been
well received by national and regional drugstore and discount chains.
COMPLETE SELECT ACQUISITIONS. Management believes that the Company's
portfolio of branded food products, its highly effective DSD sales and
distribution system and its experienced management team provide an attractive
platform upon which to build a larger company focused on shelf-stable food
products. The Company believes that many diversified food companies have
undermanaged certain non-core or smaller brands, like the Nabisco Brands, as
they have focused on their larger national brands. Similarly, many small food
businesses lack the resources or the economies of scale to realize the growth
potential of their brands. The Company plans to pursue select acquisitions of
such brands when it believes it has an opportunity to enhance sales growth and
operating performance through increased management focus and integration into
the Company's administrative, manufacturing and distribution infrastructure (in
particular, its DSD sales and distribution system and/or its national broker
network). Management further believes that successful future acquisitions will,
in turn, enhance the Company's portfolio of existing businesses by broadening
the Company's product offerings. Furthermore, the Company believes that its
existing DSD sales and distribution system can be enhanced through certain
select acquisitions that include existing distribution networks that are
contiguous or complementary with the Company's existing DSD markets, thereby
expanding the geographic coverage of the Company's DSD sales and distribution
organization. The Company currently has no pending negotiations, agreements,
arrangements or understandings with respect to any material acquisitions.
INDUSTRY
The U.S. food industry as a whole is characterized by relatively stable
growth based on modest price and population increases. Over the last ten years,
the industry has experienced consolidation as competitors have shed non-core
business lines and made strategic acquisitions to complement category positions,
maximize economies of scale in raw material sourcing and production and expand
retail distribution. The importance of sustaining strong relationships with
retailers has become a critical success factor for food companies and is driving
many initiatives such as Category Management and Efficient Consumer Response.
These two initiatives focus on retailers' need to minimize inventory investment
and maximize dollar sales returns from store shelf space. Food companies with
category leadership positions, value-added distribution and strong retail
relationships have increasingly benefited from these initiatives as a way to
maintain shelf space and maximize distribution efficiencies. In addition, the
food service and private label markets provide alternative opportunities for
growth by branded food companies.
PRODUCTS AND MARKETS
The Company manufactures, markets and distributes a diversified portfolio of
shelf-stable branded food products with leading regional or national retail
market positions. The Company's sales of branded retail products are
complemented by growing food service sales with strong brand identity. Each of
the Company's products are distributed through one or more of its three distinct
sales and distribution channels.
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BLOCH & GUGGENHEIMER. BLOCH & GUGGENHEIMER, in existence since 1889,
produces a product line ("B&G products") consisting primarily of pickles,
relishes, peppers, olives and other related specialty items. B&G Pickle and
Pepper products accounted for approximately 28% of Pro Forma 1996 net sales. The
B&G products are positioned to appeal to the consumer who values a high quality
and reasonably priced branded product. Management believes that the DSD sales
and distribution system allows it to bring the products to market more
effectively and offer superior value to the consumer.
B&G is the market leader in the greater New York metropolitan area retail
market in pickles and relishes, with a 32% market share of an approximately
$29.4 million shelf-stable pickle and relish market, which excludes refrigerated
pickles. This success has been based on the ability to place a wider variety of
products in retail stores and to achieve a higher rate of promotion and display
activity. Management believes B&G pickles offer the consumer quality products at
value prices. B&G currently offers 77 distinct pickle products, far more than
its national or regional competitors. Recent growth in the pickle line has been
driven by the introduction of the SANDWICH TOPPERS line in 1995. This concept,
reinforced by fast food sandwich franchises, encourages consumers to "top" their
sandwiches with pickles, peppers and other produce condiments.
B&G peppers are the market leader in the greater New York metropolitan area
retail market for peppers, with a 35% market share of an approximately $11.5
million market, a higher market share than the next three competitors combined.
B&G offers the consumer a wide variety of pepper products in most stores and
currently offers 41 distinct pepper products, a greater variety than all other
competitors in such market. The pepper line includes Italian and Hispanic style
peppers, which Management believes are growing in use and popularity. Management
believes that new products such as roasted peppers have significantly aided
B&G's sales and market share growth in the past five years. B&G has extended its
SANDWICH TOPPERS concept to include peppers and onions as well as pickles,
launching six new products (four pepper products and two onion products) in the
past six months. These products are unique in the sandwich category and have
been fundamental to extending the distribution of the SANDWICH TOPPERS line
beyond B&G's traditional regional area of distribution.
BAKED SNACK PRODUCTS. The Baked Snack Products are comprised of the BURNS &
RICKER and NEW YORK STYLE brands of bagel chips and other baked specialty
products. The Baked Snack Products accounted for approximately 17% of the
Company's Pro Forma 1996 net sales. Bagel chips were created in 1982 by Jim
Burns and Gary Ricker, with a competing product line, NEW YORK STYLE, created
shortly thereafter. In 1993, BURNS & RICKER was acquired by Specialty Foods and
was placed under the management of B&G in 1994. In 1995, the Company acquired
the NEW YORK STYLE brand from Nabisco and consolidated the two brands.
With the acquisition of the NEW YORK STYLE brand, BURNS & RICKER became a
national business, with the leading market share of the bagel chip category.
Presently, the BURNS & RICKER and NEW YORK STYLE brands represent 86% of the
national retail bagel chip category. Management believes that bagel chips appeal
to upscale consumers and are positioned well given the recent growth in bagel
consumption and the general impression that bagels and baked snacks are healthy
foods.
B&G has continued to introduce new products such as additional bagel chip
flavors and fat-free bagel chips and BAGEL CHIPMIX. To broaden product exposure,
distribution and sales, the Company recently introduced a 7.5 oz. pillow-pack
bag line of NEW YORK STYLE products for the non-grocery store distribution
channel. This line is positioned for distribution through mass merchants such as
Wal-Mart, where, Management believes, sales growth potential is significantly
higher than the existing supermarket deli department business. Management
believes the snack mix category is five times as large as the bagel chip
category and has placed particular emphasis on introducing the NEW YORK STYLE
BAGEL CHIPMIX products into these distribution channels. The new pillow-pack bag
line is gaining sales momentum, with placement in a number of mass merchants,
including the Sam's Club division of Wal-Mart, Wal-Mart Supercenters and
Price/Costco. To date, the Company has also successfully completed trials of
these products in Wal-Mart
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discount stores in three regions. The pillow-pack product has also been well
received by national and regional drug store and discount chains. Management
believes that this initiative has the ability to significantly enlarge the
Company's snack business over the next five years.
NABISCO BRANDS. The Nabisco Brands represent established businesses with
national or regional aspects of distribution, and include the REGINA wine
vinegars and cooking wines, WRIGHT'S liquid smoke hickory flavoring, BRER RABBIT
molasses and VERMONT MAID syrup brands. The acquisitions of the Acquired Brands
return the Company to national distribution of grocery products. The Company had
previously managed a similar national business in its POLANER brand, which was
sold to IHF in 1993. While the Company's retail pickle and pepper products have
had some distribution outside the traditional DSD region, the acquisition of the
Nabisco Brands affords the opportunity for significant additional growth of B&G
Pickle and Pepper Products as part of a portfolio of national brands.
REGINA. REGINA wine vinegar is the number one brand of wine vinegar
nationally, with an 11% market share of an approximately $63.2 million national
retail wine and flavored vinegar market. REGINA wine vinegar accounted for
approximately 8% of the Company's Pro Forma 1996 net sales. Its premium
packaging and product quality have allowed it to command a premium price versus
competitors' products while outselling all other brands. The REGINA line
maintained market leadership despite what Management believes to have been
inadequate marketing support and uneven distribution while under Nabisco
management. REGINA also sells flavored cooking wines and specialty vinegars and
has a growing branded food service component to its business.
WRIGHT'S. WRIGHT'S liquid smoke is the leading brand in the $6.6 million
retail liquid smoke category, enjoying a market share of 45%. WRIGHT'S accounted
for approximately 3% of the Company's Pro Forma 1996 net sales. WRIGHT'S also
enjoys a strong position in food service. WRIGHT'S all natural hickory seasoning
reproduces the flavor and aroma of hickory pit smoking in meats, chicken and
fish. Patented in 1895, WRIGHT'S is a completely natural product that does not
contain preservatives, sugar or sodium. WRIGHT'S is a concentrated product and
Management believes it therefore gives consumers a good value. While WRIGHT'S is
the leading brand, it has had limited marketing support in recent years. The
Company is planning to expand product awareness through the use of recipes on
packaging and through magazine advertising and is considering expanding the
product line to include a mesquite-flavored seasoning.
VERMONT MAID. VERMONT MAID maple-flavored syrup is a brand name that is
familiar to many consumers, but the brand's distribution is largely limited to
its core greater Boston area, where it has a 16% share of the syrup category.
VERMONT MAID accounted for approximately 2% of the Company's Pro Forma 1996 net
sales. Management believes that VERMONT MAID'S name recognition is a powerful
resource that will allow the Company to gain national distribution of the
product and increase sales. The product is available in two flavors, regular and
lite. The VERMONT MAID product line presently does not include sizes that appeal
to warehouse and club stores or food service. These additional channels of
distribution also represent sales growth potential for the VERMONT MAID brand.
BRER RABBIT. BRER RABBIT molasses holds the number two retail market
position nationally with a 21% market share of the molasses category. BRER
RABBIT molasses accounted for approximately 3% of the Company's Pro Forma 1996
net sales. In its top 18 markets, which are geographically spread across the
United States, BRER RABBIT has a market share greater than 40%. BRER RABBIT
molasses is available in two flavors, mild and full. The mild molasses is
designed for table use as well as cooking. The full flavor molasses has a
stronger flavor and is used primarily for cooking.
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TRAPPEY'S. Trappey's, founded in 1898, was one of the first packers of
pepper hot sauce and the first to process peppers for pickling. Since its
inception, Trappey's has introduced many new products including RED DEVIL brand
hot sauce, TRAPPEY'S brand peppers, TORRIDO brand chili peppers and Italian
peperoncini peppers under the DULCITO brand. TRAPPEY'S products accounted for
approximately 10% of the Company's Pro Forma 1996 net sales.
Trappey's products fall in two major categories, shelf-stable peppers and
hot sauces. Trappey's shelf-stable peppers have a 6% market share of a $139.4
million national retail market and Trappey's leading item, sliced jalapenos, is
the nation's number four selling pepper and the number two selling jalapeno.
Trappey's brands of hot sauces, RED DEVIL, BULL'S and TRAPPEY'S LOUISIANA HOT
SAUCE, have a combined 6% share of an approximately $68.8 million national
retail market.
POLANER AND OTHER CO-PACKING ARRANGEMENTS. The Company manufactures,
packages and, in certain circumstances, distributes specialty food products for
other companies under other brand names, an industry practice commonly known as
"co-packing." The Company's most significant co-packing arrangements are with
IHF to co-pack 100% of the national production of the POLANER line of preserves,
POLANER ALL-FRUIT and wet spices (primarily garlic). The Company also
distributes the POLANER products in the greater New York metropolitan area
through its DSD sales and distribution system. While the Company does not own
the POLANER brand, it remains a considerable presence in the DSD system. POLANER
products accounted for approximately 29% of the Company's Pro Forma 1996 net
sales.
Trappey's produces and packages certain TABASCO-Registered Trademark-
products for McIlhenny Company, continuing a production and packaging
arrangement that existed prior to the Trappey's Acquisition. Pursuant to a one-
year co-packing contract (the "McIlhenny Co-Packing Agreement"), the Company
produces certain TABASCO-Registered Trademark- products on a cost plus basis.
After one year, the McIlhenny Co-Packing Agreement can be terminated by either
party with six months notice. The McIlhenny intercompany production and
packaging arrangement accounted for approximately $2.8 million of Trappey's net
sales in 1996.
MARKETING, SALES AND DISTRIBUTION
The Company manages its sales and distribution systems based upon the
channels through which its products are sold. Each sales and distribution system
has its own strengths and advantages for specific product lines, which the
Company attempts to utilize as it sells its products. None of the Company's
customers, excluding IHF under the co-packing IHF Contracts, accounted for more
than 10.0% of Pro Forma 1996 net sales.
DIRECT-STORE-DOOR (DSD). The Company's DSD sales and distribution system is
the core of its B&G products business and supports the strong greater New York
metropolitan area base for its products. The DSD sales and distribution system
has historically distributed only the B&G Pickle and Pepper Products and the IHF
Products. The Company intends to leverage this competitive strength by improving
the sales and distribution of the Acquired Brands in the greater New York
metropolitan area through its DSD sales and distribution system. Similarly, the
Company is also in the process of moving its Baked Snack Products into the DSD
sales and distribution system. Management believes that the competitive
strengths of the DSD sales and distribution system, as compared with traditional
warehouse distribution systems, position the Acquired Brands and the Company's
Baked Snack Products to receive improved store penetration, promotional support
and shelf placement in the market, without incurring significant additional
slotting fees.
The DSD system is an organization of sales personnel and delivery vehicles
that directly service individual grocery stores with the Company's products. The
sales force consists of approximately 10 Account Managers who work with buyers
at the grocery chain's headquarters level, introducing new products and
organizing promotional support for existing product lines. Approximately 35
sales personnel operate at the store level, calling on store and grocery
department managers on a weekly basis, writing orders for products, positioning
new products and selling product displays to support promotional activity.
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Marketing support for the products sold and distributed through the DSD system
consists primarily of trade promotions aimed at gaining display activity to
produce impulse sales. Trade advertising and coupons support this activity. A
variety of in-store support vehicles such as hang tags, racks and signage are
used by the individual sales personnel to highlight the Company's products.
The distribution system operates on a two day delivery cycle. An order is
written and placed by a B&G salesman on Day One; ordered products are selected,
assembled and routed for delivery on Day Two; shipments are delivered directly
to stores on Day Three. Major promotional events are supported by special
distributions.
NATIONAL SALES AND DISTRIBUTION. While the Company's traditional
distribution strength has been its regional DSD system, the Company's BURNS &
RICKER and NEW YORK STYLE brands are sold on a national basis through
independent brokers and distributors servicing the deli section of the grocery
stores. The Company significantly expanded its national sales and distribution
system following the integration of the Nabisco Brands and Trappey's.
The Company intends to leverage this national network to expand the sales of
selected products currently distributed through its regional DSD sales and
distribution system. In addition, the Company intends to distribute certain of
the Nabisco Brands and Trappey's Brands through the DSD system to provide
focused sales, marketing and distribution support to increase regional sales.
The Nabisco Brands receive sales and distribution support under the
Company's transition services agreement with Nabisco. While receiving such
services from Nabisco, the Company has developed a national sales and
distribution network for the Nabisco Brands comprised primarily of brokers who
were responsible for the sales and marketing of such brands prior to Nabisco's
internalization of such services in 1996. The Company terminated its transition
services agreement with Nabisco effective September 1, 1997. The Company's
national sales and distribution network centers on six regional sales managers
and five to six strategically located distribution points. Sales are coordinated
by the regional sales managers, who supervise brokers calling on buyers at
grocery chain headquarters and providing retail coverage of the products at the
store level. Management believes that this network will allow the Company to
expand the sales and distribution of the Acquired Brands and will also provide a
platform for the broader penetration of the SANDWICH TOPPERS line into national
distribution.
Marketing support for items going through the national system typically
consists of scheduled trade promotions, targeted coupons and cross-promotions
with supporting products. Initially, advertising has consisted of magazine and
trade ads, to be supplemented at a later date with television advertising for
selected brands.
The deli component of the national sales and distribution system consists of
regional sales managers supervising an independent broker network focused on the
deli section of grocery stores. These brokers are appointed by the Company in
writing, which appointment is terminable upon 30 days' notice, and do not work
for the Company exclusively. These brokers call on buyers at chain headquarters
and provide retail store support for the products. Distribution is either
directed to the grocery chain's deli warehouse or to distributors who service
the grocery chains. Marketing support for the Baked Snack Products consists of
trade promotions, in-store displays and on-package coupons designed to encourage
product trial and repeat purchases. Cross-promotions with cheeses or other deli
items are also run to encourage product trials.
The Company is also expanding this sales and distribution system to target
customers such as Wal-Mart and Sam's Clubs and other non-grocery outlets by
having the regional sales managers call directly on buyers at mass merchants and
warehouse and club stores, often in conjunction with brokers. Shipments are
direct to the customers, usually in truckload quantity. In the fourth quarter of
1996, the Company created a new line of snacks specifically for these
non-grocery outlets. This line, branded NEW YORK STYLE baked bagel snacks,
features convenient packaging in pillow-pack bags, and includes new prepacked
displays to meet
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the unique merchandising needs of these stores. The new pillow-pack bag line is
gaining sales momentum, with placement in a number of mass merchants, including
the Sam's Club division of Wal-Mart, Wal-Mart Supercenters, and Price/Costco.
The Company also exports its Baked Snack Products to select international
markets including Australia, Canada, Greece, Israel, Switzerland, Japan and New
Zealand. Export sales comprised approximately 1.0% of the Company's Pro Forma
1996 net sales.
FOOD SERVICE. The food service sales and distribution system stands
separate from the other means by which the Company sells and distributes its
products. Food service sales are managed by a separate sales force dedicated to
this channel. Food service sales managers direct brokers who sell the product to
distributors or directly to customers depending on the product and account.
Distribution is done directly from the Company's warehouses to either a
distributor or customer. Marketing support for this channel consists of trade
promotions to encourage volume purchases and trade advertising. In addition, the
Company distributes brochures providing product knowledge and recipe suggestions
to end users.
Sales of the B&G Pickle and Pepper Products include a sizable food service
component, primarily under the SAN-DEL label, a business acquired by the Company
in 1987. Management believes that the Company has a cost advantage over most
competitors in this area due to plant efficiency and local sourcing of produce.
The Company's ability to produce specialty food service items efficiently has
allowed it to gain business with the growing fast food sandwich franchises,
expanding the Company food service business to a national scale. This business
has grown approximately 25% per year for the past two years due to this success.
The REGINA and WRIGHT'S brands also have significant food service sales, which
are national in scope. Both REGINA and WRIGHT'S have a strong following among
chefs and cooks in the food service industry due to their high quality and
consistent performance in recipes. Food service sales are lower gross profit
margin sales than retail sales.
COMPETITION
The food products business is highly competitive. The Company competes with
other producers of its products on the basis of price, convenience, quality and
product development expertise. The Company operates in markets that are highly
competitive, and the Company faces competition in each of its product lines. The
Company competes with a significant number of companies of varying sizes,
including divisions or subsidiaries of larger companies. Many of these
competitors have multiple product lines and may have substantially greater
financial and other resources.
RAW MATERIALS
The Company purchases agricultural products and other raw materials from
growers, commodity processors and other food companies. The Company's principal
raw materials include peppers, cucumbers and other vegetables as well as flour
and vegetable oils. The Company purchases its agricultural raw materials in bulk
on an as-needed basis or pursuant to short-term supply contracts. The Company
purchases most of its agricultural products during the period from July 1 to
October 31 from a variety of suppliers. The Company purchases approximately 75%
of its agricultural products from sources near its manufacturing facilities in
order to minimize the high transportation costs associated with transporting
bulk agricultural products. The Company also uses packaging materials,
particularly glass jars. The Company purchases its raw materials from a variety
of suppliers and alternate sources of supply are readily available. The Company
has no material long-term supply agreements for raw materials. See "Risk
Factors--Raw Materials."
PRODUCTION AND FACILITIES
The Company operates the manufacturing plants described in the following
table. In general, the plants are strategically located near major customer
markets and raw materials. Management believes that
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the Company's manufacturing plants have sufficient capacity to accommodate the
Company's planned growth over the next five years. The Company's Hurlock,
Maryland manufacturing facility operates at an average capacity utilization of
approximately 40%, with peak capacity utilization of 70% occurring during the
height of the pickle and pepper production season from June 1 to November 1. In
June 1997, as part of the continuous focus on cost levels and production
efficiencies, the Company consolidated two manufacturing facilities and a
separate warehouse facility for its Baked Snack Products into a new
manufacturing and warehouse facility.
The Company operates the manufacturing and warehouse facilities described in
the following table. Management believes that these facilities are suitable for
its operations and provide sufficient capacity to meet the Company's
requirements for the foreseeable future.
<TABLE>
<CAPTION>
APPROX. SQ.
FACILITY LOCATION PRODUCTS MANUFACTURED FT.
- ------------------------------------------------ ------------------------------------------------ --------------
<S> <C> <C>
Roseland, NJ.................................... Headquarters/Preserves manufacturing 124,534
South Brunswick, NJ............................. Baked Snack Products manufacturing/ Warehouse 144,000
Hurlock, MD*.................................... Pickles, peppers, wet spices manufacturing/
Warehouse 236,000
Hurlock, MD*.................................... Warehouse 80,000
Hurlock, MD..................................... Warehouse 35,000
Hurlock, MD..................................... Warehouse 66,000
Sharptown, MD*.................................. Pickle storage facility 3,000
Sandtown, DE*................................... Warehouse 70,000
Bad Axe, MI*.................................... Undeveloped Property 10 acres
Albertson, NC................................... Produce receiving station 2,400
New Iberia, LA*................................. Manufacturing/Warehouse 157,846
</TABLE>
- ------------------------
* Owned.
The Company manufactures and packages food products under other brand names,
an industry practice commonly known as "co-packing." Under two co-packing
contracts with IHF, the Company produces 100% of all of IHF's national
requirements for the POLANER lines of fruit spreads, preserves and wet spices.
In addition, the Company has a third contract with IHF under which the Company
distributes the POLANER line of fruit spreads, preserves and wet spices in the
New York metropolitan area.
The Company manufactures POLANER wet spices in the Hurlock, Maryland
facility pursuant to a five-year agreement expiring in March 1998 with a minimum
production volume guarantee from IHF. The production of POLANER wet spices
accounted for approximately 2% of the Company's Pro Forma 1996 net sales. The
Hurlock facility, which the Company also uses to produce its pickle and relish
products, is owned by the Company and all employees at the facility are employed
by the Company. The Company sells the POLANER spices to IHF at a fixed price
above the costs of raw materials, labor and allocated overhead. The Company
produces POLANER preserves and fruit spreads at its Roseland, New Jersey
facility, pursuant to a contract through March 1999. Unlike the IHF Contract for
production of wet spices at Hurlock, IHF provides the manufacturing equipment
(IHF invested $3.0 million to upgrade the manufacturing equipment technology in
1995) and all working capital for the production of POLANER preserves and fruit
spread products and the Company earns a fixed amount per unit of co-packed
product. The Company includes
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allocations of overhead in its cost, thus improving the profitability of its
overall business. The production of POLANER fruit spread and preserves accounted
for approximately 16% of the Company's Pro Forma 1996 net sales.
The Company sells and distributes the POLANER products though the Company's
DSD system pursuant to a perpetual contract that is cancellable upon 12 month's
notice by either party. While the contract pertains to the distribution of
POLANER products only, the Company has expanded its distribution relationship to
include other IHF products, including PAM-Registered Trademark-,
ROTEL-Registered Trademark-, RANCH STYLE-Registered Trademark-,
LUCK'S-Registered Trademark- and G. WASHINGTON-Registered Trademark- label
brands (approximately 11.0% of the IHF products distributed). Distribution of
IHF Products accounted for approximately 11% of the Company's Pro Forma 1996 net
sales.
Trappey's produces certain TABASCO-Registered Trademark- products for
McIlhenny Company under the McIlhenny Co-Packing Agreement. See
"Business--Products and Markets." The McIlhenny products are produced at
Trappey's New Iberia, Louisiana facility.
The Company also has agreements for the co-packing of some of its products.
Although the Company owns certain processing, storage and bottling equipment
used in the manufacture of REGINA wine vinegars and cooking wines and WRIGHT'S
liquid smoke, all of the Nabisco Brand products are produced for the Company by
third parties under co-packing agreements. WRIGHT'S liquid smoke and BRER RABBIT
molasses are produced by a contract manufacturer under a co-packing arrangement
that expires in February 2001, or earlier upon nine months written notice to the
other party, or, if the termination applies only to WRIGHT'S products, upon six
months notice. The VERMONT MAID products are produced pursuant to a co-packing
agreement that continues in effect from year to year unless terminated by either
party by October 1 of any contract year. Both of these co-packing arrangements
require the Company to pay a fixed price per unit of the co-packed product,
which prices are subject to annual adjustment. Each of the Company's co-packers
produces products for other companies. The Company believes that there are
alternative sources of co-packing production readily available for its products.
For a discussion of the net sales and contribution to EBITDA of the VERMONT MAID
and WRIGHT'S products, see "--Products and Markets."
In connection with the Nabisco Brands Acquisition, the Company entered into
a co-pack agreement with Nabisco, pursuant to which Nabisco will provide
co-packing services for the REGINA products for up to nine months following the
closing date of the Nabisco Brands Acquisition at Nabisco's direct variable cost
(excluding overhead) for such services and at levels consistent with those
provided by Nabisco for the Nabisco Brands for the year ended December 31, 1996.
The Company entered into the Nabisco co-packing arrangement to continue
production and bottling of the REGINA retail products until February 1998. The
Company expects to move production of REGINA retail products to the current
co-packer of REGINA food service products following the expiration of the
Nabisco co-pack agreement.
TRADEMARKS AND PATENTS
The Company owns 66 trademarks which are registered in the United States and
23 trademarks which are registered in foreign countries including Canada, the
Dominican Republic, Japan, South Korea, the Philippines and Thailand. In
addition, the Company has seven trademark applications pending in the United
States and one trademark application pending in Mexico. Examples of the
Company's trademarks include B&G, BLOCK & GUGGENHEIMER, BAGEL CHIPMIX, BRER
RABBIT, BURNS & RICKER, NEW YORK STYLE, REGINA, SAN-DEL, SANDWICH TOPPERS,
VERMONT MAID and WRIGHT'S.
The Company considers its trademarks to be of significant importance in the
Company's business. The Company is not aware of any circumstances that would
negatively impact its trademarks. See "Risk Factors--Trademarks and Patents."
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GOVERNMENTAL REGULATION
The operations of the Company are subject to extensive regulation by the
United States Food and Drug Administration, the United States Department of
Agriculture and other state and local authorities regarding the processing,
packaging, storage, distribution and labeling of the Company's products. The
Company's processing facilities and products are subject to periodic inspection
by federal, state and local authorities. The Company believes that it is
currently in substantial compliance with all material governmental laws and
regulations and maintains all material permits and licenses relating to its
operations. Nevertheless, there can be no assurance that the Company is in full
compliance with all such laws and regulations or that it will be able to comply
with any future laws and regulations in a cost-effective manner. Failure by the
Company to comply with applicable laws and regulations could subject it to civil
remedies, including fines, injunctions, recalls or seizures, as well as
potential criminal sanctions, which could have a material adverse effect on the
business, financial condition or results of operation of the Company.
As described above, the Company is subject to the Food, Drug and Cosmetic
Act and regulations promulgated thereunder by the FDA. This comprehensive
regulatory program governs, among other things, the manufacturing, composition
and ingredients, labeling, packaging and safety of food. For example, the FDA
regulates manufacturing practices for foods through its current "good
manufacturing practices" regulations and specifies the recipes for certain
foods. In addition, the Nutrition Labeling and Education Act of 1990 prescribes
the format and content of certain information required to appear on the labels
of food products. The Company is subject to regulation by certain other
governmental agencies, including the U.S. Department of Agriculture. Management
believes that the Company's facilities and practices are sufficient to maintain
compliance with applicable government regulations, although there can be no
assurances in this regard.
ENVIRONMENTAL MATTERS
The Company's operations are subject to various federal, state and local
environmental laws and regulations relating to the emission, discharge, storage,
treatment, handling, generation, transportation, release, disposal,
investigation and remediation of certain materials, substances and wastes used
in or resulting from its operations. The Company's operations are also governed
by laws and regulations relating to workplace safety and worker health which,
among other things, regulate employee exposure to hazardous chemicals in the
workplace. As with other companies engaged in like businesses, the nature of the
Company's operations expose it to the risk of liabilities or claims with respect
to environmental matters, including those relating to the disposal and release
of hazardous substances, and there can be no assurance that material costs will
not be incurred in connection with such liabilities or claims. The Company
believes, however, that its operations are in substantial compliance with
applicable environmental laws.
In connection with the B&G and B&R Acquisition, the Company identified
certain historic environmental conditions or possible permit exceedances for
which no current response obligation exists or enforcement response is pending.
However, such obligation or enforcement activity cannot be ruled out in the
future. Pursuant to the B&G and B&R Acquisition Agreement, Specialty Foods is
obligated to indemnify the Company with respect to expense for such identified
matters, subject to certain limitations. Even without such an indemnity, the
Company has no reason to believe that the cost of any such response or
compliance activity, if required, would be material. In addition, the Company's
facility in Hurlock, Maryland has, since as early as 1987, intermittently
exceeded its waste water discharge limitations for sodium chloride and, in some
cases, total suspended solids in its discharges to the Town of Hurlock waste
water treatment plant. During that time period, the Town of Hurlock issued
several notices of violations and assessed surcharges for these exceedences. The
Company has since resolved this matter by negotiating higher limits for sodium
chloride and total suspended solids in its waste water discharge permit and,
accordingly, the Company is now in compliance.
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The Company has not made any material expenditures during the last three
fiscal years in order to comply with environmental laws or regulations. Based on
the Company's experience to date, the Company believes that the future cost of
compliance with existing environmental laws and regulations (and liability for
known environmental conditions) will not have a material adverse effect on the
Company's business, financial condition or results of operations. However, the
Company cannot predict what environmental or health and safety legislation or
regulations will be enacted in the future or how existing or future laws or
regulations will be enforced, administered or interpreted, nor can it predict
the amount of future expenditures which may be required in order to comply with
such environmental or health and safety laws or regulations or to respond to
such environmental claims. See "--Governmental Regulation."
LEGAL PROCEEDINGS
From time to time the Company is involved in legal proceedings arising in
the ordinary course of its business. Management believes that there is no
litigation pending that could have a material adverse effect on its operations.
EMPLOYEES
On September 27, 1997, B&G's workforce consisted of 419 employees. Of the
total number of employees, 334 were engaged in manufacturing, 58 were engaged in
marketing and sales and 27 were engaged in administration. The Company considers
its employee relations generally to be good.
Approximately 65 of the Company's employees at its Roseland, New Jersey
facility are represented by a collective bargaining agreement with the
International Brotherhood of Teamsters, Chauffeurs, Warehousemen & Helpers of
America (Local No. 863). This collective bargaining agreement expires in March
1999. A prolonged work stoppage or strike at any facility with union employees
could have a material adverse effect on the business, financial condition or
results of operations of the Company. In addition, there can be no assurance
that upon the expiration of existing collective bargaining agreements new
agreements will be reached without union action or that any such new agreements
will be on terms satisfactory to the Company.
The Company also employs 51 persons at the Trappey's facility in New Iberia,
Louisiana, all of whom are engaged in manufacturing. None of these employees are
represented by a collective bargaining agreement.
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MANAGEMENT
DIRECTORS AND EXECUTIVE OFFICERS
The following table sets forth certain information with respect to the
persons who are members of the Board of Directors or executive officers of B&G.
Other officers may also be appointed to fill certain positions. Each director of
B&G holds office until the next annual meeting of stockholders of B&G or until
his successor has been elected and qualified.
<TABLE>
<CAPTION>
NAME AGE TITLE
- ---------------------------------------------------- ----------- ----------------------------------------------------
<S> <C> <C>
Leonard S. Polaner.................................. 66 Chairman of the Board of Directors
David L. Wenner..................................... 48 President, Chief Executive Officer and Director
Robert C. Cantwell.................................. 40 Executive Vice President of Finance and Chief
Financial Officer
David H. Burke...................................... 56 Executive Vice President of Sales and Marketing
James H. Brown...................................... 55 Executive Vice President of Manufacturing
Thomas J. Baldwin................................... 38 Director
Alfred Poe.......................................... 48 Director
Harold O. Rosser II................................. 48 Director
Stephen C. Sherrill................................. 43 Director
</TABLE>
LEONARD S. POLANER, CHAIRMAN OF THE BOARD: Leonard Polaner has been
Chairman of the Board of B&G since March 1993 when the Polaner business was sold
to IHF. Prior to that time, Mr. Polaner was President and Chief Executive
Officer of B&G, positions which he had assumed upon joining the Company in 1986.
Mr. Polaner began his career in the food products industry in 1956 when, after
earning his Masters Degree from Harvard Business School, he joined M. Polaner
Inc., a family-run business. He has been active in many industry trade groups,
including the New York Preservers Association and the International Jelly and
Preservers Association, organizations in which he served as President and a
member of the Board, respectively.
DAVID L. WENNER, PRESIDENT AND CHIEF EXECUTIVE OFFICER: David Wenner is the
President and Chief Executive Officer of the Company, positions he has held
since March 1993. Mr. Wenner joined B&G in 1989 as Assistant to the President,
directly responsible for the Company's distribution and operations. In 1991, he
was promoted to Vice President. He continued to be responsible for distribution
and operations, but also took new responsibility for the production of
POLANERproducts. Prior to joining B&G, Mr. Wenner spent nine years in the
consumer products division at Johnson & Johnson in supervision and management
positions responsible for manufacturing, maintenance and purchasing. In 1985,
Mr. Wenner transferred to Ethicon, a subsidiary of Johnson & Johnson, where he
was a plant superintendent responsible for manufacturing.
ROBERT C. CANTWELL, EXECUTIVE VICE PRESIDENT OF FINANCE AND CHIEF FINANCIAL
OFFICER: Robert Cantwell is the Executive Vice President of Finance and Chief
Financial Officer of B&G. He joined the Company in 1983 as the Assistant Vice
President of Finance. In that position, Mr. Cantwell had responsibility for all
financial reporting, including budgeting. Mr. Cantwell was promoted to his
current position in 1991, assuming full responsibility for all financial
matters, as well as MIS, Data Processing, Administration and Corporate Human
Resources. Prior to joining the Company, Mr. Cantwell spent four years at
Deloitte & Touche, where he received accreditation as a Certified Public
Accountant.
DAVID H. BURKE, EXECUTIVE VICE PRESIDENT OF SALES AND MARKETING: David
Burke is the Executive Vice President of Sales and Marketing of the Company. Mr.
Burke has an extensive background with major consumer products companies. His
experience includes eight years with Procter & Gamble in sales and
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sales management and 12 years at Quaker Oats, where he was a Regional Sales
Manager and later the director of Broker Sales. Mr. Burke also spent four years
with Pet Inc. as Vice President of sales and marketing for their frozen foods
business. Mr. Burke joined B&G in 1990 and since that time has been responsible
for the national expansion of POLANER ALL-FRUIT and the sales and marketing of
all of the B&G, BURNS & RICKER and NEW YORK STYLE products.
JAMES H. BROWN, EXECUTIVE VICE PRESIDENT OF MANUFACTURING: James Brown is
the Senior Vice President of Manufacturing and has 24 years of experience in
manufacturing with B&G and POLANER. He has been responsible for all
manufacturing at the Roseland facility since 1981. In 1994, he assumed
responsibility for B&G's other four manufacturing facilities. Prior to joining
B&G (Polaner) in 1972, Mr. Brown worked at Kraft Foods for two years as a
project engineer and spent four years in the U.S. Navy.
THOMAS J. BALDWIN, DIRECTOR: Since 1995, Thomas J. Baldwin has been the
Chief Executive Officer and a founding stockholder of Christmas Corner, Inc., a
specialty retail chain that owns and operates seasonal Christmas stores. Mr.
Baldwin is also a principal and co-founder of PB Ventures. From 1988 through
1995, Mr. Baldwin was a Managing Director of the leveraged buyout firm Invus
Group, Ltd.
ALFRED POE, DIRECTOR: Since 1996, Alfred Poe has been a consultant to
companies engaged in various industries, including the food industry. Mr. Poe
was the President of the Meal Enhancement Group of Campbell's Soup Company from
1993 through 1996, and was a Corporate Vice President of Campbell's from 1991
through 1996. Previously, from 1982 to 1991, he held various positions,
including Vice President, Branch Director and Commercial Director, with Mars,
Inc.
HAROLD O. ROSSER II, DIRECTOR: Since its formation in 1995, Harold Rosser
has been a principal of BRS. Mr. Rosser was an officer of Citicorp Venture
Capital from 1987 through 1994. Previously, he spent 12 years with
Citicorp/Citibank in various management and corporate finance positions. Mr.
Rosser is a director of Jitney-Jungle Stores of America, Inc., Restaurant
Associates Corp. and Holdings.
STEPHEN C. SHERRILL, DIRECTOR: Since its formation in 1995, Stephen
Sherrill has been a principal of BRS. Mr. Sherrill was an officer of Citicorp
Venture Capital from 1983 through 1994. Previously, he was an associate at the
New York law firm of Paul, Weiss, Rifkind, Wharton & Garrison. Mr. Sherrill is a
director of Galey & Lord, Inc., Jitney-Jungle Stores of America, Inc.,
Restaurant Associates Corp., Windy Hill Pet Food Company, Inc. and Holdings.
DIRECTOR COMPENSATION AND ARRANGEMENTS
Directors of the Company will receive compensation for their services as
directors in the amount of $1,000 per meeting of the Board of Directors.
Directors of the Company are entitled to reimbursement of their reasonable
out-of-pocket expenses in connection with their travel to and attendance at
meetings of the board of directors or committees thereof.
ANNUAL BONUS PLAN
The Company also maintains an Annual Bonus Plan that provides for annual
incentive awards to be made to key executives upon the Company's attainment of
pre-set annual financial objectives. The amount of the annual award to each
executive is based upon a percentage of the executive's annualized base salary.
Awards are paid in a cash lump sum following the close of each plan year. The
plan provides for forfeiture or proration of awards in the event of certain
circumstances such as the executive's promotion or demotion, death, retirement
or resignation.
STOCK OPTION PLAN
In order to attract, retain and motivate selected employees and officers of
the Company, Holdings adopted the B&G Foods Holdings Corp. 1997 Incentive Stock
Option Plan (the "Option Plan") for key
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employees of the Company and its subsidiaries. The Option Plan provides that it
may be administered by Holdings' Board of Directors or a committee designated by
the Board of Directors of Holdings. Holdings' Board of Directors has designated
a committee comprised initially of Stephen C. Sherrill and Harold O. Rosser II.
Options granted under the Option Plan will be exercisable in accordance with
terms established by the Holdings Board. Options will expire on the date
determined by the Holdings Board, which shall not be later than the tenth
anniversary of the date of grant.
No grants of options were made under the Option Plan during fiscal 1997.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Board of Directors of the Company has appointed a Compensation Committee
comprised of Messrs. Sherrill and Rosser. Mr. Sherrill is a former officer of
the Company, for which position he received no compensation; Mr. Rosser is not
and has not been an officer of the Company. Each of Mssrs. Sherrill and Rosser
are principals of BRS. See "Ownership of Capital Stock" and "Certain
Relationships and Related Transactions."
EXECUTIVE COMPENSATION
The following table presents certain summary information concerning
compensation earned by the Company's Chief Executive Officer and the four other
most highly paid executive officers of the Company, including the Chairman
(collectively, the "Named Executive Officers"), for services rendered in all
capacities to the Company for the year ended December 28, 1996:
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
ANNUAL COMPENSATION
-----------------------------------
<S> <C> <C> <C> <C>
ALL OTHER
NAME AND PRINCIPAL POSITION SALARY BONUS(1) OTHER(2) COMPENSATION(3)
- --------------------------------------------------------------- --------- ----------- ----------- -----------------
Leonard S. Polaner
Chairman of the Board........................................ $ 100,000 $ 54,000 $ 7,650 $ 9,000
David L. Wenner
President and Chief Executive Officer........................ 160,313 78,092 10,000 9,000
Robert C. Cantwell
Executive Vice President of Finance and Chief
Financial Officer.......................................... 127,230 63,262 10,000 9,000
David H. Burke
Executive Vice President of Sales and Marketing.............. 128,174 64,622 9,800 9,000
James H. Brown
Executive Vice President of Manufacturing.................... 122,209 61,432 9,850 9,000
</TABLE>
- ------------------------
(1) Includes annual bonus payments under the Company's Annual Bonus Plan.
(2) Includes personal use of a Company automobile or automobile allowances.
(3) Includes the Company's matching contributions to the 401(k) Plan and to the
Company's pension plan.
EMPLOYMENT AGREEMENTS
The Company has no employment agreements.
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401(K) PLAN
The Company maintains a tax-qualified defined contribution plan with a cash
or deferred arrangement intended to qualify under Section 401(k) of the Internal
Revenue Code of 1986, as amended. Company employees become eligible to
participate in the plan upon reaching age 21 and completing one year of
employment with the Company. Each participant in the plan may elect to defer, in
the form of contributions to the plan, up to 17% of compensation that would
otherwise be paid to the participant in the applicable year, which percentage
may be increased or decreased by the administrative committee of the plan, but
is otherwise not to exceed the statutorily prescribed annual limit ($9,500 in
1997). The Company makes a 50% matching contribution with respect to each
participant's elective contributions, up to four percent of such participant's
compensation. Matching contributions vest over a rolling five-year period.
PENSION PLAN
PENSION PLAN TABLE
<TABLE>
<CAPTION>
YEARS OF SERVICE
-----------------------------------------------------
REMUNERATION 15 20 25 30 35
- ----------------------------------------------------------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C>
40,000..................................................... $ 5,141 $ 6,855 $ 8,568 $ 10,282 $ 11,996
60,000..................................................... $ 8,591 $ 11,455 $ 14,318 $ 17,182 $ 20,046
80,000..................................................... $ 12,041 $ 16,055 $ 20,068 $ 24,082 $ 28,096
100,000.................................................... $ 15,491 $ 20,655 $ 25,818 $ 30,982 $ 36,146
120,000.................................................... $ 18,941 $ 25,255 $ 31,568 $ 37,882 $ 44,196
140,000.................................................... $ 22,391 $ 29,855 $ 37,318 $ 44,782 $ 52,246
160,000.................................................... $ 25,841 $ 34,455 $ 43,068 $ 51,682 $ 60,296
</TABLE>
Benefits under the plans are calculated generally under a formula of 0.75%
of final average earnings multiplied by service plus 0.4% of final average
earnings in excess of covered compensation multiplied by service limited to 35
years. The compensation covered by the pension plan is W-2 earnings and any
amounts contributed to any tax qualified profit sharing plan or cafeteria plan
limited to $160,000 as required by Section 401(a)(17). As of September 27, 1997,
the years of credited service for each of the Named Executive Officers were: Mr.
Polaner, 10; Mr. Wenner, 8; Mr. Cantwell, 14; Mr. Burke, 7; and Mr. Brown, 10.
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OWNERSHIP OF CAPITAL STOCK
The Company is a wholly owned subsidiary of Holdings. The following table
sets forth certain information as of December 31, 1997 with respect to the
beneficial ownership of the 13% Series A Cumulative Preferred Stock, par value
$.01 per share, of Holdings ("Holdings Preferred Stock") and the common stock,
par value $.01 per share, of Holdings ("Holdings Common Stock") by (i) each
person or entity who owns five percent or more thereof, (ii) each director of
the Company who is a stockholder, (iii) the Named Executive Officers and (iv)
all directors and officers of the Company as a group. Unless otherwise
specified, all shares are directly held.
<TABLE>
<CAPTION>
NUMBER AND PERCENT OF SHARES
--------------------------------------------------
<S> <C> <C> <C> <C>
HOLDING HOLDING
COMMON STOCK PREFERRED STOCK
------------------------ ------------------------
<CAPTION>
NAME OF BENEFICIAL OWNER NUMBER PERCENT NUMBER PERCENT
- --------------------------------------------------------------------------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Bruckmann, Rosser, Sherrill & Co., L.P.(1).................................
Two Greenwich Plaza, Suite 100
Greenwich, CT 06830 85,000 84.6% 18,775 98.2%
Leonard S. Polaner......................................................... 3,000 3.0 145 0.8
David L. Wenner............................................................ 3,000 3.0 20 0.1
David H. Burke............................................................. 3,000 3.0 20 0.1
James H. Brown............................................................. 3,000 3.0 20 0.1
Robert C. Cantwell......................................................... 3,000 3.0 20 0.1
Stephen C. Sherrill(1)..................................................... 85,000 84.6 18,775 98.2
Harold O. Rosser II(1)..................................................... 85,000 84.6 18,775 98.2
Thomas J. Baldwin.......................................................... -- -- -- --
Alfred Poe................................................................. 500 -- 110.44 0.6
All directors and officers as a group (9 persons)(2)....................... 17,488 17.5 774.44 4.1
</TABLE>
- ------------------------
(1) Includes shares held by certain other entities and individuals affiliated
with BRS (together with BRS, the "BRS Investors"). BRS disclaims beneficial
ownership of such shares. BRS is a limited partnership, the sole general
partner of which is BRS Partners, Limited Partnership ("BRS Partners") and
the manager of which is Bruckmann, Rosser, Sherrill & Co., Inc. ("BRS &
Co."). The sole general partner of BRS Partners is BRSE Associates, Inc.
("BRSE Associates"). Bruce C. Bruckmann, Harold O. Rosser II and Stephen C.
Sherrill are stockholders of BRS & Co. and BRSE Associates and may be deemed
to share beneficial ownership of the shares shown as beneficially owned by
BRS. Such individuals disclaim beneficial ownership of any such shares.
(2) With respect to Messrs. Sherrill and Rosser, directors of the Company,
excludes shares held by BRS and certain other entities and individuals
affiliated with BRS, of which shares Messrs. Sherrill and Rosser disclaim
beneficial ownership.
HOLDINGS PREFERRED STOCK
The Amended and Restated Certificate of Incorporation of Holdings provides
that Holdings may issue 50,000 shares of preferred stock, par value $.01 per
share, of which 22,000 shares have been designated as the Holdings Preferred
Stock. Holders of Holdings Preferred Stock are entitled to receive, when, as and
if declared by the Board of Directors of Holdings, out of funds legally
available for payment thereof, cash dividends on each share of Holdings
Preferred Stock at a rate PER ANNUM equal to 13% of the Liquidation Preference
(as defined below) of such share before any dividends are declared and paid, or
set apart for payment, on any shares of capital stock junior to the Holdings
Preferred Stock ("Junior Stock") with respect to the same dividend period. All
dividends shall be cumulative without interest, whether or not earned or
declared. "Liquidation Preference" means, on any specific date, with respect to
each share of Holdings Preferred Stock, the sum of (i) $1,000 per share plus
(ii) the accumulated dividends with
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respect to such share. The payment of dividends is limited by the Indenture and
the New Credit Facility. There is no mandatory redemption for the Holdings
Preferred Stock, which is redeemable at the option of Holdings.
In the event of a voluntary or involuntary liquidation, dissolution or
winding up of Holdings, holders of Holdings Preferred Stock shall be entitled to
be paid out of the assets of Holdings available for distribution to its
stockholders an amount in cash equal to the Liquidation Preference per share,
plus an amount equal to a prorated dividend from the last dividend payment date
to the date fixed for liquidation, dissolution or winding up, before any
distribution is made on any shares of Junior Stock. If such available assets are
insufficient to pay the holders of the outstanding shares of Holdings Preferred
Stock in full, such assets, or the proceeds thereof, shall be distributed
ratably among such holders. Holdings may optionally redeem, in whole or in part,
the Holdings Preferred Stock at any time at a price per share of 100% of the
then effective Liquidation Preference per share, plus an amount equal to a
prorated dividend for the period from the dividend payment date immediately
prior to the redemption date to the redemption date. Except as otherwise
required by law, the holders of Holdings Preferred Stock have no voting rights
and are not entitled to any notice of meeting of stockholders.
HOLDINGS COMMON STOCK
The Amended and Restated Certificate of Incorporation of Holdings provides
that Holdings may issue 250,000 shares of Holdings Common Stock. The holders of
Holdings Common Stock are entitled to one vote for each share held of record on
all matters submitted to a vote of the stockholders.
STOCKHOLDERS AGREEMENT
The BRS Investors, Messrs. Polaner, Wenner, Cantwell, Burke and Brown
(collectively, the "Management Investors") and Holdings are parties to a
Securities Purchase and Holders Agreement (the "Stockholders Agreement")
containing certain agreements among such stockholders with respect to the
capital stock and corporate governance of Holdings and certain of its
subsidiaries. The following is a summary description of the principal terms of
the Stockholders Agreement, a copy of which has been filed as an exhibit to the
Registration Statement of which this Prospectus forms a part.
Pursuant to the Stockholders Agreement, the Board of Directors of Holdings
shall be comprised of at least two individuals designated by BRS and one
individual designated by the Management Investors. The initial designees of BRS
are Stephen C. Sherrill and Harold O. Rosser II. For so long as he shall be
President of BGH Holdings, Inc., a Delaware corporation and a subsidiary of B&G,
and subject to certain rights of removal, David L. Wenner shall be the designee
of the Management Investors.
The Stockholders Agreement contains certain provisions that restrict the
ability of the Management Investors from transferring any Holdings Common Stock
or Holdings Preferred Stock except pursuant to the terms of the Stockholders
Agreement. If the Board of Directors of Holdings and holders of more than 50% of
the Holdings Common Stock approve the sale of Holdings or certain of its
subsidiaries (an "Approved Sale"), each stockholder has agreed to consent to
such Approved Sale and, if such sale includes the sale of stock, each
stockholder has agreed to sell such stockholder's Holdings Common Stock and
Holdings Preferred Stock on the terms and conditions approved by the Board of
Directors of Holdings and the holders of a majority of the Holdings Common Stock
then outstanding. The Stockholders Agreement also provides for certain
additional restrictions on transfer of Holdings Common Stock and Holdings
Preferred Stock by the Management Investors, including the right of Holdings to
purchase any and all Holdings Common Stock and Holdings Preferred Stock held by
a Management Investor upon termination of such Management Investor's employment
prior to March 27, 2002, at a formula price, and the grant of a right of first
refusal in favor of Holdings in the event a Management Investor elects to
transfer such Holdings Common Stock or Holdings Preferred Stock.
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REGISTRATION RIGHTS AGREEMENT
The BRS Investors, the Management Investors and Holdings are parties to a
Registration Rights Agreement, dated as of March 27, 1997 (the "Holdings
Registration Rights Agreement"), pursuant to which Holdings has granted certain
registration rights to the stockholders of Holdings with respect to the Holdings
Common Stock. Under the Holdings Registration Rights Agreement, Holdings has
granted to the BRS Investors two demand registration rights with respect to the
shares of Holdings Common Stock held by the BRS Investors. All of the
stockholders party to the Holdings Registration Rights Agreement have the right
to participate, or "piggyback," in certain registrations initiated by Holdings.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
STOCKHOLDERS AGREEMENT AND REGISTRATION RIGHTS AGREEMENT
The BRS Investors, the Management Investors and Holdings are parties to the
Stockholders Agreement and the Holdings Registration Rights Agreement. See
"Ownership of Capital Stock--Stockholders Agreement" and "--Registration Rights
Agreement."
BRS MANAGEMENT AND TRANSACTION SERVICES AGREEMENTS
The Company and Holdings are party to a management services agreement (the
"BRS Management Agreement") with BRS & Co., the manager of BRS, pursuant to
which BRS & Co. is paid $250,000 per annum for certain management, business and
organizational strategy and merchant and investment banking services rendered to
the Company and Holdings, which services include, but are not limited to, advice
on corporate and financial planning, oversight of operations, including the
manufacturing, marketing and sales of the Company's products, development of
business plans, the structure of the Company's debt and equity capitalization
and the identification and development of business opportunities. Any future
increase in payments under the BRS Management Agreement are restricted by the
terms of the Indenture. See "Description of the Notes." The Company and BRS &
Co. also are party to a transaction services agreement pursuant to which BRS &
Co. will be paid a transaction fee for management, financial and other corporate
advisory services rendered by BRS & Co. in connection with acquisitions by the
Company, which fee will not exceed 1.0% of total transaction value. In the case
of the Nabisco Brands and Trappey's Acquisitions, the transaction fees equaled
$500,000 and $120,000, respectively.
REDEMPTION OF BRS NOTES
In connection with the B&G and B&R Acquisition, on December 27, 1996 the
Company entered into a Note Purchase Agreement with the BRS Investors for the
issuance of $13.0 million of Senior Subordinated Notes of the Company (the "BRS
Notes"). In connection with the Nabisco Brands Acquisition, on June 17, 1997
$6.0 million of the proceeds of the Interim Notes were used to repay a portion
of the BRS Notes, and the remaining $7.0 million of the BRS Notes were exchanged
by the BRS Investors for Holdings Preferred Stock having a liquidation value of
$7.0 million in a transaction exempted from the registration requirements of the
Securities Act under sections 3(a)(9) and 4(2) thereof. In turn, Holdings
immediately thereafter contributed the $7.0 million of BRS Notes to the Company
for cancellation. Since all of the BRS Notes have been either redeemed or
cancelled, the Company has no further obligations under the Note Purchase
Agreement.
EAGLE ROCK NOTES
The Company's subsidiary, Roseland Distribution Company ("RDC"), is party to
a lease (the "Roseland Lease") for its Roseland facility with 426 Eagle Rock
Avenue Associates ("Eagle Rock"), a real estate partnership of which Leonard S.
Polaner, the Company's Chairman, is the general partner. RDC pays $43,090 per
month in rent in cash to Eagle Rock and, pursuant to a Memorandum of Agreement
entered into in connection with the Roseland Lease, an additional amount in the
form of promissory notes
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<PAGE>
payable to Eagle Rock (the "Eagle Rock Notes"), which are issued in an annual
aggregate principal amount of $187,740. The Eagle Rock Notes mature on the
expiration date of the Roseland Lease, April 18, 1999, and bear interest at a
rate equal to the rate, as of the issue date of an Eagle Rock Note, for
Treasuries with a maturity of April 1999. The Eagle Rock Notes are not
guaranteed by the Company. RDC's liability under the Eagle Rock Notes as of
September 27, 1997 was $795,000, and the Company estimates that the aggregate
principal amount of all Eagle Rock Notes issued and to be issued will be
approximately $1.2 million. In the opinion of Management, the terms of the Eagle
Rock Notes and the Roseland Lease are at least as favorable to the Company as
the terms that could have been obtained from unaffiliated third parties.
DESCRIPTION OF CERTAIN INDEBTEDNESS
The following is a summary of certain indebtedness of the Company. To the
extent such summary contains descriptions of the New Credit Facility and other
loan documents, such descriptions do not purport to be complete and are
qualified in their entirety by reference to such documents, which are available
upon request from the Company. As of September 27, 1997, the Company had not
borrowed under the New Credit Facility.
NEW CREDIT FACILITY
In connection with the Financing, the Company entered into the New Credit
Facility with a syndicate of financial institutions for which Heller Financial,
Inc. acts as agent (the "Agent"). The following is a summary of the material
terms and conditions of the New Credit Facility and is subject to the detailed
provisions of the credit agreement (the "Credit Agreement") entered into on
August 11, 1997 by and among the Company, the lenders party thereto (the
"Lenders") and the Agent, and various related documents entered into in
connection therewith. Capitalized terms used but not defined herein have the
respective meanings assigned to them in the Credit Agreement.
GENERAL. The New Credit Facility provides up to a maximum aggregate amount
of $50.0 million financing through a $50.0 million revolving credit facility,
which includes a $3.0 million letter of credit facility providing for the
issuance or guarantee of standby and trade letters of credit.
Proceeds of the New Credit Facility are restricted to funding the Company's
working capital requirements, capital expenditures and acquisitions. The Company
may use the New Credit Facility to finance future acquisitions of companies that
are in the same line of business as the Company, subject to certain criteria.
The New Credit Facility will limit acquisitions to $20.0 million per year as
well as a $20.0 million limit per acquisition. Other conditions include: (i) the
maintenance by the Company of certain financial targets, after giving effect to
any such acquisitions, including, but not limited to, total debt and total
senior debt to EBITDA tests; (ii) compliance by the Company with the Credit
Agreement and the Indenture; (iii) a positive historical cash flow by such
acquisition targets; and (iv) satisfactory completion of due diligence on the
acquisition targets.
INTEREST RATES; FEES. Interest is computed on the outstanding daily balance
of the revolving portion of the New Credit Facility at the Company's option of
either: (i) a floating rate per annum equal to 1.0% in excess of the Base Rate;
or (ii) a floating rate per annum equal to 2.50% in excess of the LIBOR Rate.
The Company is charged a fee of 0.50% per annum on the average daily balance
of the unused portion of the New Credit Facility, payable monthly in arrears.
The Company also pays the Lenders a fee, calculated daily and payable monthly,
in addition to any bank fees incurred, in an amount equal to 2.50% per annum of
the aggregate undrawn face amount of all letters of credit issued or guaranteed
from time to time under the letter of credit facility.
REPAYMENT. The New Credit Facility may be borrowed, repaid and reborrowed
from time to time until August 31, 2002, subject to certain conditions on the
date of any such borrowing.
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<PAGE>
SECURITY. The New Credit Facility is secured by a first priority lien upon
all of the real and personal property of the Company and its Subsidiaries and a
pledge of all of the capital stock of the Company and its Subsidiaries.
GUARANTEES. The Obligations of the Company under the New Credit Facility
are guaranteed by the Company's Subsidiaries. In addition, Holdings has
guaranteed the Company's obligations under the Credit Agreement, which guarantee
has been secured by a pledge of the capital stock of the Company.
PREPAYMENTS. The Company is required to make prepayments on loans under the
New Credit Facility in an amount equal to the net proceeds received by the
Company (giving effect to applicable taxes) and/or its Subsidiaries from the
disposition of any assets, including proceeds from the sale of stock of any of
the Company's Subsidiaries or certain equity issuances.
CONDITIONS AND COVENANTS. The obligations of the lenders under the Credit
Agreement are subject to the satisfaction of certain conditions precedent
customary in credit facilities or otherwise appropriate under the circumstances.
The Company and each of its subsidiaries are subject to certain financial and
negative covenants contained in the Credit Agreement, including without
limitation covenants that restrict, subject to specified exceptions, (i) the
incurrence of additional indebtedness and other obligations and the granting of
additional liens, (ii) mergers, acquisitions, investments and acquisitions and
dispositions of assets, (iii) the incurrence of capitalized and operating lease
obligations, (iv) advances, dividends, and stock repurchases and redemptions,
(v) prepayment or repurchase of other indebtedness and amendments to certain
agreements governing indebtedness, including the Indenture and the Notes, (vi)
engaging in transactions with affiliates and formation of subsidiaries, (vii)
capital expenditures, (viii) payment of management fees, (ix) the use of
proceeds and (x) changes of lines of business. There are also covenants relating
to compliance with ERISA and environmental and other laws, payment of taxes,
maintenance of corporate existence and rights, maintenance of insurance and
interest rate protection, and financial reporting. Certain of these covenants
are more restrictive than those set forth in the Indenture. In addition, the
Credit Agreement requires the Company to maintain compliance with certain
specified financial ratios, including maximum capital expenditure limits, a
minimum fixed charge coverage ratio, a minimum total interest coverage ratio and
a maximum leverage ratio.
EVENTS OF DEFAULT. The New Credit Facility also includes events of default
that are typical for these types of credit facilities and appropriate in the
context of the Financing, including, without limitation, a default in the event
of a change of control of Holdings or the Company. The occurrence of any of such
events of default could result in acceleration of the Company's obligations
under the New Credit Facility and foreclosure on the collateral securing such
obligations, which could have material adverse results to holders of the Notes.
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DESCRIPTION OF THE NOTES
THE NOTES ARE AND WILL BE SUBORDINATE TO ALL CURRENT AND FUTURE SENIOR DEBT
OF THE COMPANY AND WILL BE EFFECTIVELY SUBORDINATE TO ALL OF THE INDEBTEDNESS OF
THE GUARANTORS. NEITHER THE COMPANY NOR ANY GUARANTOR HAS ISSUED, AND DOES NOT
HAVE ANY CURRENT FIRM ARRANGEMENTS TO ISSUE, ANY SIGNIFICANT ADDITIONAL
INDEBTEDNESS TO WHICH THE NOTES WOULD BE SENIOR.
GENERAL
The Existing Notes were issued pursuant to an Indenture (the "Indenture"),
dated August 11, 1997, between the Company and The Bank of New York, as trustee
(the "Trustee"), in a private transaction that is not subject to the
registration requirements of the Securities Act. See "Notice to Investors." The
terms of the Indenture apply to the Existing Notes and to the New Notes to be
issued in exchange therefor pursuant to the Exchange Offer (all Notes being
referred to herein collectively as the "Notes"). The terms of the Notes include
those stated in the Indenture and those made part of the Indenture by reference
to the Trust Indenture Act of 1939 (the "Trust Indenture Act"). The Notes are
subject to all such terms, and Holders of Notes are referred to the Indenture
and the Trust Indenture Act for a statement thereof. The following summary of
the material provisions of the Indenture does not purport to be complete and is
qualified in its entirety by reference to the Indenture, including the
definitions therein of certain terms used below. Copies of the proposed form of
Indenture and Registration Rights Agreement are available as set forth below
under "--Additional Information." The definitions of certain terms used in the
following summary are set forth below under "--Certain Definitions." For
purposes of this summary, the term "Company" refers only to B&G Foods, Inc. and
not to any of its Subsidiaries.
The Notes are general unsecured obligations of the Company, subordinated in
right of payment to all current and future Senior Debt, including borrowings
under the Credit Agreement. Borrowings under the Credit Agreement are secured by
substantially all of the Company's assets, including the Capital Stock of the
Company's existing and future Subsidiaries, and are guaranteed by all such
Subsidiaries, which guarantees are secured by all of such Subsidiaries' assets.
The Notes are guaranteed by all of the Company's existing and future
Subsidiaries. The Notes rank PARI PASSU in right of payment with all other
senior subordinated Indebtedness of the Company issued in the future, if any,
and senior in the right of payment to all subordinated Indebtedness of the
Company issued in the future, if any. As of September 27, 1997, the Company had
no Senior Debt and, through its Subsidiaries, had Senior Debt and additional
liabilities (including trade payables, accrued expenses, amounts due to related
parties, deferred income taxes and other liabilities) aggregating approximately
$42.8 million. The Indenture limits, subject to certain financial tests, the
amount of additional Indebtedness, including Senior Debt, that the Company and
its Subsidiaries may incur. See "--Certain Covenants--Incurrence of Indebtedness
and Issuance of Preferred Stock."
The operations of the Company are conducted through its Subsidiaries and,
therefore, the Company is dependent upon the cash flow of its Subsidiaries to
meet its obligations, including its obligations under the Notes. The Notes are
effectively subordinated to all Indebtedness and other liabilities and
commitments (including trade payables and lease obligations) of the Company's
Subsidiaries. Any right of the Company to receive assets of any of its
Subsidiaries upon the latter's liquidation or reorganization (and the consequent
right of the Holders of the Notes to participate in those assets) will be
effectively subordinated to the claims of that Subsidiary's creditors, except to
the extent that the Company is itself recognized as a creditor of such
Subsidiary, in which case the claims of the Company would still be subordinate
to any security in the assets of such Subsidiary and any indebtedness of such
Subsidiary senior to that held by the Company. See "Risk Factors--Holding
Company Structure; Effective Subordination" and "Risk Factors-- Fraudulent
Conveyance Considerations."
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PRINCIPAL, MATURITY AND INTEREST
The Notes will be limited in aggregate principal amount to $120.0 million
and will mature on August 1, 2007. Interest on the Notes will accrue at the rate
of 9 5/8% per annum and will be payable semi-annually in arrears on February 1
and August 1, commencing on February 1, 1998, to Holders of record on the
immediately preceding January 15 and July 15. Interest on the Notes will accrue
from the most recent date on which interest has been paid or, if no interest has
been paid, from the date of original issuance. Interest will be computed on the
basis of a 360-day year comprised of twelve 30-day months. Principal, premium,
if any, and interest and Liquidated Damages, if any, on the Notes will be
payable at the office or agency of the Company maintained for such purpose
within the City and State of New York or, at the option of the Company, payment
of interest and Liquidated Damages, if any, may be made by check mailed to the
Holders of the Notes at their respective addresses set forth in the register of
Holders of Notes; PROVIDED THAT all payments of principal, premium, interest and
Liquidated Damages, if any, with respect to Notes the Holders of which have
given wire transfer instructions to the Company will be required to be made by
wire transfer of immediately available funds to the accounts specified by the
Holders thereof. Until otherwise designated by the Company, the Company's office
or agency in New York will be the office of the Trustee maintained for such
purpose. The Notes will be issued in denominations of $1,000 and integral
multiples thereof.
SUBORDINATION
The payment of principal of, premium, if any, and interest on the Notes will
be subordinated in right of payment, as set forth in the Indenture, to the prior
payment in full in cash or Cash Equivalents of all Senior Debt, whether
outstanding on the date of the Indenture or thereafter incurred.
Upon any distribution to creditors of the Company in a liquidation or
dissolution of the Company or in a bankruptcy, reorganization, insolvency,
receivership or similar proceeding relating to the Company or its property, in
an assignment for the benefit of creditors or any marshaling of the Company's
assets and liabilities, the holders of Senior Debt will be entitled to receive
payment in full in cash or Cash Equivalents of all Obligations due in respect of
such Senior Debt (including interest after the commencement of any such
proceeding at the rate specified in the applicable Senior Debt) before the
Holders of Notes will be entitled to receive any payment with respect to the
Notes, and until all Obligations with respect to Senior Debt are paid in full in
cash or Cash Equivalents, any distribution to which the Holders of Notes would
be entitled shall be made to the holders of Senior Debt (except that Holders of
Notes may receive and retain (i) Permitted Junior Securities and (ii) payments
made from the trust described under "--Legal Defeasance and Covenant
Defeasance"). If a distribution is made to holders of the Notes that, due to the
subordination provisions, such distribution should not have been made to them,
such holders will be required to hold such distribution in trust for the holders
of Senior Debt and pay it over to them (pursuant to such written instructions as
the holders of Senior Debt or a representative on their behalf may provide to
such holders of the Notes) as their interests may appear.
The Company also may not make any payment upon or in respect of the Notes
(except in Permitted Junior Securities or from the trust described under
"--Legal Defeasance and Covenant Defeasance") if (i) a default in the payment of
the principal of, premium, if any, or interest on Designated Senior Debt occurs
and is continuing beyond any applicable period of grace or (ii) any other
default occurs and is continuing with respect to Designated Senior Debt that
permits holders of the Designated Senior Debt as to which such default relates
to accelerate its maturity and the Trustee receives a notice of such default (a
"Payment Blockage Notice") from the holders of any Designated Senior Debt, which
notice states it is a Payment Blockage Notice under the Indenture. Payments on
the Notes may and shall be resumed (a) in the case of a payment default, upon
the date on which such default is cured or waived and (b) in case of a
nonpayment default, the earlier of the date on which such nonpayment default is
cured or waived or 179 days after the date on which the applicable Payment
Blockage Notice is received, unless the maturity of any Designated Senior Debt
has been accelerated. However, the Company may pay such amounts without
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regard to the foregoing if the Company and the Trustee receive written notice
approving such payment from the Representative of the Designated Senior Debt
with respect to which either of the events set forth in clause (i) or (ii) of
the immediately preceding sentence has occurred and is continuing. No new period
of payment blockage may be commenced unless and until 360 days have elapsed
since the effectiveness of the immediately prior Payment Blockage Notice. No
nonpayment default that existed or was continuing on the date of delivery of any
Payment Blockage Notice to the Trustee shall be, or be made, the basis for a
subsequent Payment Blockage Notice unless such default shall have been waived
for a period of not less than 90 days.
The Indenture requires that the Company promptly notify holders of Senior
Debt if payment of the Notes is accelerated because of an Event of Default.
As a result of the subordination provisions described above, in the event of
a liquidation or insolvency, Holders of Notes may recover less ratably than
creditors of the Company who are holders of Senior Debt. As of September 27,
1997, the Company had approximately $1.4 million of Senior Debt (exclusive of an
unused commitment of up to $50.0 million under the Credit Agreement). The
Indenture limits, subject to certain financial tests, the amount of additional
Indebtedness, including Senior Debt, that the Company and its Subsidiaries can
incur. See "--Certain Covenants--Incurrence of Indebtedness and Issuance of
Preferred Stock."
"DESIGNATED SENIOR DEBT" means (i) any Indebtedness outstanding under the
Credit Agreement and (ii) any other Senior Debt permitted hereunder the
principal amount of which is $15.0 million or more and that has been designated
by the Company as "Designated Senior Debt."
"PERMITTED JUNIOR SECURITIES" means (i) Equity Interests in the Company or
any Guarantor which, to the extent received by any Holder in connection with any
bankruptcy, reorganization, insolvency or similar proceeding in which any Equity
Interests are also exchanged for or distributed in respect of Senior Debt, are
either common equity securities or are subordinated to all such Equity Interests
so exchanged or distributed to substantially the same extent as, or to a greater
extent than, the Notes are subordinated to Senior Debt pursuant to the
Indenture, and (ii) debt securities that are subordinated to all Senior Debt
(and any debt securities issued in exchange for Senior Debt) to substantially
the same extent as, or to a greater extent than, the Notes are subordinated to
Senior Debt pursuant to the Indenture.
"SENIOR DEBT" means (i) all Obligations from time to time outstanding under
the Credit Agreement, including all Hedging Obligations with respect thereto and
any Permitted Refinancing Indebtedness thereunder (and, for purposes of the
Indenture, any such Senior Debt shall be considered to be outstanding whenever
any loan commitment under the Credit Agreement is outstanding), (ii) any other
Indebtedness of the Company or any Guarantor that is a Subsidiary of the Company
that is permitted to be incurred by the Company or such Guarantor pursuant to
the Indenture unless the instrument under which such Indebtedness is incurred
expressly provides that it is on a parity with or subordinated in right of
payment to the Notes, and (iii) all Obligations of the Company or any Guarantor
that is a Subsidiary of the Company with respect to any of the foregoing.
Notwithstanding anything to the contrary in the foregoing, Senior Debt will not
include (v) any Obligation of the Company to any Subsidiary of the Company or
any of its Affiliates, (w) any liability for federal, state, local or other
taxes owed or owing by the Company (other than such taxes owed or owing to the
lenders under the Credit Agreement), (x) any accounts payable or other liability
to trade creditors arising in the ordinary course of business (including
Guarantees thereof or instruments evidencing such liabilities), (y) any
Obligations in respect of Capital Stock of the Company or (z) that portion of
the principal amount of any Indebtedness (and any obligations with respect to
such incremental principal amount) which at the time of incurrence is incurred
in violation of the Indenture.
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SUBSIDIARY GUARANTEES
The Company's payment obligations under the Notes will be jointly and
severally guaranteed (the "Subsidiary Guarantees") by the Guarantors. The
Subsidiary Guarantee of each Guarantor will be subordinated to the prior payment
in full of all Senior Debt of such Guarantor, which as of September 27, 1997
(including trade payables, accrued expenses, amounts due to related parties,
deferred income taxes and other liabilities) was approximately $42.8 million;
and the amounts for which the Guarantors will be liable under the guarantees
issued from time to time with respect to Senior Debt, to the same extent as the
Obligations of the Company are subordinated to Senior Debt of the Company. The
obligations of each Guarantor under its Subsidiary Guarantee is limited so as
not to constitute a fraudulent conveyance under applicable law. See, however,
"Risk Factors--Fraudulent Conveyance Considerations."
The Indenture provides that no Guarantor may consolidate with or merge with
or into (whether or not such Guarantor is the surviving Person), another
corporation, Person or entity (except the Company or another Guarantor) unless
(i) subject to the provisions of the following paragraph, the Person formed by
or surviving any such consolidation or merger (if other than such Guarantor)
assumes all the obligations of such Guarantor pursuant to a supplemental
indenture in form and substance reasonably satisfactory to the Trustee, under
the Notes and the Indenture; (ii) immediately after giving effect to such
transaction, no Default or Event of Default exists; (iii) such Guarantor, or any
Person formed by or surviving any such consolidation or merger, would have
Consolidated Net Worth (immediately after giving effect to such transaction)
equal to or greater than the Consolidated Net Worth of such Guarantor
immediately preceding the transaction; and (iv)(a) the Company would be
permitted by virtue of the Company's pro forma Fixed Charge Coverage Ratio,
immediately after giving effect to such transaction, to incur at least $1.00 of
additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test set
forth in the covenant described below under the caption "--Certain
Covenants--Incurrence of Indebtedness and Issuance of Preferred Stock" or (b)
would have a pro forma Fixed Charge Coverage Ratio that is greater than the
actual Fixed Charge Coverage Ratio for the same four-quarter period.
Notwithstanding the foregoing paragraph, (i) any Guarantor may consolidate
with, merge into or transfer all or a part of its properties and assets to the
Company or any other Guarantor and (ii) any Guarantor may merge with an
Affiliate that has no significant assets or liabilities and was incorporated
solely for purpose of reincorporating such Guarantor in another State of the
United States; PROVIDED THAT such merged entity continues to be a Guarantor.
The Indenture provides that in the event of a sale or other disposition of
all of the assets of any Guarantor, by way of merger, consolidation or
otherwise, or a sale or other disposition of all of the capital stock of any
Guarantor, then such Guarantor (in the event of a sale or other disposition, by
way of such a merger, consolidation or otherwise, of all of the capital stock of
such Guarantor) or the corporation acquiring the property (in the event of a
sale or other disposition of all of the assets of such Guarantor) will be
released and relieved of any obligations under its Subsidiary Guarantee;
PROVIDED THAT the Net Proceeds of such sale or other disposition are applied in
accordance with the applicable provisions of the Indenture. See "--Repurchase at
the Option of Holders--Asset Sales."
OPTIONAL REDEMPTION
Except as set forth below, the Notes will not be redeemable at the Company's
option prior to August 1, 2002. Thereafter, the Notes will be subject to
redemption at any time at the option of the Company, in whole or in part, upon
not less than 30 nor more than 60 days' notice, at the redemption prices
(expressed as percentages of principal amount) set forth below plus accrued and
unpaid interest and
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Liquidated Damages thereon, if any, to the applicable redemption date, if
redeemed during the twelve-month period beginning on August 1 of the years
indicated below:
<TABLE>
<CAPTION>
YEAR PERCENTAGE
- ---------------------------------------------------------------------------------- -----------
<S> <C>
2002.............................................................................. 104.813%
2003.............................................................................. 103.208
2004.............................................................................. 101.604
2005 and thereafter............................................................... 100.000%
</TABLE>
Notwithstanding the foregoing, at any time prior to August 1, 2000, the
Company may on any one or more occasions redeem an aggregate of up to 35% of the
original aggregate principal amount of Notes at a redemption price of 109.625%
of the principal amount thereof, plus accrued and unpaid interest and Liquidated
Damages thereon, if any, to the redemption date, with the net cash proceeds of
any Public Equity Offering of common stock of the Company or a capital
contribution to the Company's common equity of the net cash proceeds of a
concurrent Public Equity Offering of common stock by the Company's direct
parent; PROVIDED THAT at least 65% of the original aggregate principal amount of
Notes remain outstanding immediately after each occurrence of such redemption;
and PROVIDED, further, that each such redemption shall occur within 60 days of
the date of the closing of such Public Equity Offering.
Notwithstanding the foregoing, at any time on or prior to August 1, 2002,
the Notes also may be redeemed, in whole but not in part, at the option of the
Company upon the occurrence of a Change of Control, upon not less than 30 nor
more than 60 days' prior notice (but in no event may such redemption date occur
more than 90 days after the occurrence of such Change of Control) mailed by
first-class mail to each Holder's registered address, at a redemption price
equal to 100% of the principal amount thereof plus the Applicable Premium as of,
and accrued and unpaid interest and Liquidated Damages, if any, to, the date of
redemption (subject to the right of Holders of record on the relevant record
date to receive interest due on the relevant interest payment date).
"APPLICABLE PREMIUM" means, with respect to a Note at any redemption date,
the greater of (i) 1.0% of the principal amount of such Note and (ii) the excess
of (A) the present value at such redemption date of the redemption price of such
Note at August 1, 2002 (such redemption price being set forth in the table
above) PLUS all required interest payments due on such Note through August 1,
2002, such present value computed using a discount rate equal to the Treasury
Rate plus 50 basis points over (B) the principal amount of such Note.
"TREASURY RATE" means the yield to maturity at the time of computation of
United States Treasury securities with a constant maturity (as compiled and
published in the most recent Federal Reserve Statistical Release H.15 (519)
which has become publicly available at least two business days prior to such
redemption date (or, if such Statistical Release is no longer published, any
publicly available source or similar market data)) most nearly equal to the
period from such redemption date to August 1, 2002; PROVIDED, HOWEVER, that if
the period from such redemption date to August 1, 2002 is less than one year,
the weekly average yield on actually traded United States Treasury securities
adjusted to a constant maturity of one year shall be used.
SELECTION AND NOTICE
If less than all of the Notes are to be redeemed at any time, selection of
Notes for redemption will be made by the Trustee in compliance with the
requirements of the principal national securities exchange, if any, on which the
Notes are listed, or, if the Notes are not so listed, on a pro rata basis, by
lot or by such method as the Trustee shall deem fair and appropriate; PROVIDED
THAT no Notes of $1,000 or less shall be redeemed in part. Notices of redemption
shall be mailed by first class mail at least 30 but not more than 60 days before
the redemption date to each Holder of Notes to be redeemed at its registered
address. Notices of redemption may not be conditional. If any Note is to be
redeemed in part only, the notice of redemption
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that relates to such Note shall state the portion of the principal amount
thereof to be redeemed. A new Note in principal amount equal to the unredeemed
portion thereof will be issued in the name of the Holder thereof upon
cancellation of the original Note. Notes called for redemption become due on the
date fixed for redemption. On and after the redemption date, interest ceases to
accrue on Notes or portions of them called for redemption.
MANDATORY REDEMPTION
Except as set forth below under "--Repurchase at the Option of Holders," the
Company is not required to make mandatory redemption or sinking fund payments
with respect to the Notes.
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REPURCHASE AT THE OPTION OF HOLDERS
CHANGE OF CONTROL
Upon the occurrence of a Change of Control, each Holder of Notes will have
the right to require the Company to repurchase all or any part (equal to $1,000
or an integral multiple thereof) of such Holder's Notes pursuant to the offer
described below (the "Change of Control Offer") at an offer price in cash equal
to 101% of the aggregate principal amount thereof plus accrued and unpaid
interest and Liquidated Damages thereon, if any, to the date of purchase (the
"Change of Control Payment"). Within 30 days following any Change of Control,
the Company will mail a notice to each Holder describing the transaction or
transactions that constitute the Change of Control and offering to repurchase
Notes on the date specified in such notice, which date shall be no earlier than
30 days and no later than 60 days from the date such notice is mailed (the
"Change of Control Payment Date"), pursuant to the procedures required by the
Indenture and described in such notice. The Company will comply with the
requirements of Rule 14e-1 under the Exchange Act and any other securities laws
and regulations thereunder to the extent such laws and regulations are
applicable in connection with the repurchase of the Notes as a result of a
Change of Control.
On the Change of Control Payment Date, the Company will, to the extent
lawful, (1) accept for payment all Notes or portions thereof properly tendered
pursuant to the Change of Control Offer, (2) deposit with the Paying Agent an
amount equal to the Change of Control Payment in respect of all Notes or
portions thereof so tendered and (3) deliver or cause to be delivered to the
Trustee the Notes so accepted together with an Officers' Certificate stating the
aggregate principal amount of Notes or portions thereof being purchased by the
Company. The Paying Agent will promptly mail to each Holder of Notes so tendered
the Change of Control Payment for such Notes, and the Trustee will promptly
authenticate and mail (or cause to be transferred by book entry) to each Holder
a new Note equal in principal amount to any unpurchased portion of the Notes
surrendered, if any; PROVIDED THAT each such new Note will be in a principal
amount of $1,000 or an integral multiple thereof. The Indenture will provide
that, prior to complying with the provisions of this covenant, but in any event
within 90 days following a Change of Control, the Company will either repay all
outstanding Senior Debt or obtain the requisite consents, if any, under all
agreements governing outstanding Senior Debt to permit the repurchase of Notes
required by this covenant. The Company will publicly announce the results of the
Change of Control Offer on or as soon as practicable after the Change of Control
Payment Date.
The Change of Control provisions described above will be applicable whether
or not any other provisions of the Indenture are applicable. Except as described
above with respect to a Change of Control, the Indenture does not contain
provisions that permit the Holders of the Notes to require that the Company
repurchase or redeem the Notes in the event of a takeover, recapitalization or
similar transaction.
The Credit Agreement currently prohibits the Company from purchasing any
Notes and also provides that certain change of control events with respect to
the Company would constitute a default or event of default thereunder. Any
future credit agreements or other agreements relating to Senior Debt 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 purchasing Notes, the Company could seek the consent of its lenders to the
purchase of Notes or could attempt to refinance the borrowings that contain such
prohibition. If the Company does not obtain such a consent or repay such
borrowings, the Company will remain prohibited from purchasing Notes. In such
case, the Company's failure to purchase tendered Notes would constitute an Event
of Default under the Indenture which would, in turn, constitute a default or
event of default under the Credit Agreement. In such circumstances, the
subordination provisions in the Indenture would likely restrict payments to the
Holders of Notes.
The Company will not be required to make a Change of Control Offer upon a
Change of Control if a third party makes the Change of Control Offer in the
manner, at the times and otherwise in compliance
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with the requirements set forth in the Indenture applicable to a Change of
Control Offer made by the Company and purchases all Notes validly tendered and
not withdrawn under such Change of Control Offer.
"CHANGE OF CONTROL" means the occurrence of any of the following: (i) the
sale, lease, transfer, conveyance or other disposition (other than by way of
merger or consolidation), in one or a series of related transactions, of all or
substantially all of the assets of the Company and its Subsidiaries taken as a
whole to any "person" (as such term is used in Section 13(d)(3) of the Exchange
Act) (other than persons who are, or groups of persons who are, made up entirely
of Principals or their Related Parties) other than in the ordinary course of
business; (ii) the adoption of a plan relating to the liquidation or dissolution
of the Company; (iii) prior to the first public offering of Voting Stock of the
Company, the consummation of any transaction the result of which is that the
Principals or the Related Parties cease to be the "beneficial owner" (as such
term is defined in Rule 13d-3 and Rule 13d-5 under the Exchange Act), directly
or indirectly, of majority voting power of the Voting Stock of the Company
(measured by voting power rather than number of shares), whether as a result of
issuance of securities of the Company, any merger, consolidation, liquidation or
dissolution of the Company, any direct or indirect transfer of securities by any
Principal or Related Party or otherwise (for purposes of this clause (iii) and
(iv) below, the Principals and Related Parties shall be deemed to have
"beneficial ownership" of the Voting Stock of a Person (the "specified
corporation") held by any other Person (the "parent corporation") so long as the
Principals or Related Parties beneficially own (as so defined) directly or
indirectly, a majority of the voting power of the Voting Stock of the parent
corporation); (iv) following the first Public Equity Offering of Voting Stock of
the Company, the consummation of any transaction the result of which is that any
"person" (as such term is defined in Sections 13(d) and 14(d) of the Exchange
Act), other than one or more Principals or Related Parties becomes the
"beneficial owner" (as such term is defined in clause (iii) above, except that a
person shall be deemed to have "beneficial ownership" of all securities that
such person has the right to acquire, whether such right is exercisable
immediately or is exercisable only after the passage of time or upon the
occurrence of a subsequent condition), directly or indirectly, of more than 35 %
of the Voting Stock of the Company, PROVIDED THAT the Principals and Related
Parties beneficially own (as defined in clause (iii) above), directly or
indirectly, in the aggregate a lesser percentage of the total voting power of
the Voting Stock of the Company than such other person and do not have the right
or ability by voting power, contract or otherwise, to elect or designate for
election a majority of the Board of Directors of the Company (for purposes of
this clause (iv), such other person shall be deemed to beneficially own any
Voting Stock of a specified corporation held by a parent corporation, if such
other person "beneficially owns" (as defined in clause (iii) above), directly or
indirectly, more than 35% of the voting power of the Voting Stock of such parent
corporation and the Principals and the Related Parties "beneficially own" (as
defined in clause (iii) above), directly or indirectly, in the aggregate a
lesser percentage of the total voting power of the Voting Stock of such parent
corporation than such other person and do not have the right or ability by
voting power, contract or otherwise, to elect or designate for election a
majority of the Board of Directors of such parent corporation); (v) the first
day on which a majority of the members of the Board of Directors of the Company
are not Continuing Directors; or (vi) the Company consolidates with, or merges
with or into, any Person, or any Person consolidates with, or merges with or
into, the Company, in any such event pursuant to a transaction in which any of
the outstanding Voting Stock of the Company is converted into or exchanged for
cash, securities or other property, other than any such transaction where the
Voting Stock of the Company outstanding immediately prior to such transaction is
converted into or exchanged for Voting Stock of the surviving or transferee
Person constituting a majority of the outstanding shares of such Voting Stock of
such surviving or transferee Person (immediately after giving effect to such
conversion or exchange).
"PRINCIPALS" means BRS, any equity owner of Holdings on the date of the
Indenture, and the members of management of the Company or Holdings or any of
their respective Subsidiaries as of the date of the Indenture.
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"RELATED PARTY" means, with respect to any Principal, (A) any spouse or
immediate family member (in the case of an individual) of such Principal or (B)
a trust, corporation, partnership or other entity, the beneficiaries,
stockholders, partners or Persons beneficially holding a 66 2/3% or more
controlling interest of which consist of such Principal and/or such other
Persons referred to in the immediately preceding clause (A).
ASSET SALES
The Indenture provides that the Company will not, and will not permit any of
its Subsidiaries to, consummate an Asset Sale unless (i) the Company or such
Subsidiary receives consideration at the time of such Asset Sale at least equal
to the fair market value (which, in the case of any Asset Sale involving shares
or assets having a fair market value in excess of $2.0 million, shall be
determined in good faith by the Company's Board of Directors) of the assets or
Equity Interests issued or sold or otherwise disposed of and (ii) at least 75%
of the consideration therefor received by the Company or such Subsidiary is in
the form of cash or Cash Equivalents; PROVIDED THAT the amount of (x) any Senior
Debt of the Company or any Subsidiary of the Company that is assumed by the
transferee of any such assets pursuant to a customary novation agreement that
releases the Company or such Subsidiary from further liability thereon and (y)
any securities, notes or other obligations received by the Company or any such
Subsidiary from such transferee that are immediately converted by the Company or
such Subsidiary into cash (to the extent of the cash received), shall be deemed
to be cash for purposes of this provision; and PROVIDED, FURTHER, that any Asset
Sale pursuant to a condemnation, appropriation or other similar taking,
including by deed in lieu of condemnation, or pursuant to the foreclosure or
other enforcement of a Permitted Lien or exercise by the related lienholder of
rights with respect thereto, including by deed or assignment in lieu of
foreclosure shall not be required to satisfy the conditions set forth in clauses
(i) and (ii) of this paragraph.
Within 270 days after the receipt of any Net Proceeds from an Asset Sale,
the Company may apply such Net Proceeds, at its option, (a) to repay
Indebtedness under any Credit Facility (and to correspondingly permanently
reduce the commitments with respect thereto; PROVIDED THAT the Company will not
be required to effect such permanent reductions from the Issue Date in excess of
an aggregate of $25.0 million) or (b) to acquire or make a controlling
Investment in or with respect to a Permitted Business or the acquisition of all
or substantially all of the assets of a Permitted Business, or the making of a
capital expenditure or the acquisition of other long-term assets in a Permitted
Business. Pending the final application of any such Net Proceeds, the Company
may temporarily reduce Indebtedness under any Credit Facility or otherwise
invest such Net Proceeds in any manner that is not prohibited by the Indenture.
Any Net Proceeds from an Asset Sale that are not applied or invested as provided
in the first sentence of this paragraph shall be deemed to constitute "Excess
Proceeds" from an Asset Sale. When the aggregate amount of Excess Proceeds
exceeds $5.0 million, the Company shall be required to make an offer to all
Holders of Notes (an "Asset Sale Offer") to purchase the maximum principal
amount of Notes that may be purchased out of the Excess Proceeds, at an offer
price in cash in an amount equal to 100% of the principal amount thereof plus
accrued and unpaid interest and Liquidated Damages thereon, if any, to the date
of purchase, in accordance with the procedures set forth in the Indenture. To
the extent that the aggregate amount of Notes tendered pursuant to an Asset Sale
Offer is less than the Excess Proceeds, the Company may use any remaining Excess
Proceeds for general corporate purposes. If the aggregate principal amount of
Notes surrendered by Holders thereof exceeds the amount of Excess Proceeds, the
Trustee shall select the Notes to be purchased on a PRO RATA basis. Upon
completion of such offer to purchase, the amount of Excess Proceeds shall be
reset at zero.
CERTAIN COVENANTS
RESTRICTED PAYMENTS
The Indenture provides that the Company will not, and will not permit any of
its Subsidiaries to, directly or indirectly: (i) declare or pay any dividend or
make any other payment or distribution on account
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of the Company's or any of its Subsidiaries' Equity Interests (including,
without limitation, any payment in connection with any merger or consolidation
involving the Company) or to the direct or indirect holders of the Company's or
any of its Subsidiaries' Equity Interests in their capacity as such (other than
dividends or distributions payable in Equity Interests (other than Disqualified
Stock) of the Company); (ii) purchase, redeem or otherwise acquire or retire for
value (including without limitation, in connection with any merger or
consolidation involving the Company) any Equity Interests of the Company or any
direct or indirect parent of the Company or other Affiliate of the Company
(other than any such Equity Interests owned by a Wholly Owned Subsidiary of the
Company); (iii) make any payment on or with respect to, or purchase, redeem,
defease or otherwise acquire or retire for value any Indebtedness that is
subordinated to the Notes, except a payment of interest or principal at Stated
Maturity; or (iv) make any Restricted Investment (all such payments and other
actions set forth in clauses (i) through (iv) above being collectively referred
to as "Restricted Payments"), unless, at the time of and after giving effect to
such Restricted Payment:
(a) no Default or Event of Default shall have occurred and be continuing
or would occur as a consequence thereof; and
(b) the Company would, at the time of such Restricted Payment and after
giving pro forma effect thereto as if such Restricted Payment had been made
at the beginning of the applicable four-quarter period, have been permitted
to incur at least $1.00 of additional Indebtedness pursuant to the Fixed
Charge Coverage Ratio test set forth in the first paragraph of the covenant
described below under the caption "--Incurrence of Indebtedness and Issuance
of Preferred Stock;" and
(c) such Restricted Payment, together with the aggregate amount of all
other Restricted Payments made by the Company or any of its Subsidiaries
after the date of the Indenture (excluding Restricted Payments permitted by
clauses (ii), (iii) or (vi) of the next succeeding paragraph), is less than
the sum of (i) 50% of the Consolidated Net Income of the Company for the
period (taken as one accounting period) from the beginning of the first
fiscal quarter immediately following the date of the Indenture to the end of
the Company's most recently ended fiscal quarter for which internal
financial statements are available at the time of such Restricted Payment
(or, if such Consolidated Net Income for such period is a deficit, less 100%
of such deficit), plus (ii) 100% of the aggregate net cash proceeds received
by the Company as a contribution to its capital or from the issue or sale
since the date of the Indenture of Equity Interests of the Company (other
than Disqualified Stock and other than as provided in clause (h) of the
definition of Permitted Investments), or of Disqualified Stock or debt
securities of the Company that have been converted into such Equity
Interests (other than Equity Interests (or Disqualified Stock or convertible
debt securities) sold to a Subsidiary of the Company and other than
Disqualified Stock or convertible debt securities that have been converted
into Disqualified Stock), plus (iii) to the extent that any Restricted
Investment that was made by the Company or any of its Subsidiaries after the
date of the Indenture is sold for cash or otherwise liquidated or repaid for
cash, the lesser of (A) the cash return of capital with respect to such
Restricted Investment (less the cost of disposition, if any) and (B) the
initial amount of such Restricted Investment.
The foregoing provisions shall not prohibit (i) the payment of any dividend
within 60 days after the date of declaration thereof, if at said date of
declaration such payment would have complied with the provisions of the
Indenture; (ii) the redemption, repurchase, retirement, defeasance or other
acquisition of any Indebtedness which is subordinated to the Notes or Equity
Interests of the Company in exchange for, or out of the net cash proceeds of the
substantially concurrent sale (other than to a Subsidiary of the Company) of,
other Equity Interests of the Company (other than any Disqualified Stock);
PROVIDED THAT the amount of any such net cash proceeds that are utilized for any
such redemption, repurchase, retirement, defeasance or other acquisition shall
be excluded from clause (c) (ii) of the preceding paragraph; (iii) the
defeasance, redemption, repurchase or other acquisition of Indebtedness which is
subordinated to the Notes with the net cash proceeds from an incurrence of
Permitted Refinancing Indebtedness; (iv) the
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payment of any dividend or distribution by a Subsidiary of the Company to the
holders of its common Equity Interests on a PRO RATA basis; (v) the repurchase,
redemption or other acquisition or retirement for value of Equity Interests of
the Company or Holdings held by any former employee, director or consultant of
the Company or any Subsidiary or Holdings issued pursuant to any management
equity plan or stock option plan or any other management or employee benefit
plan or agreement; PROVIDED, HOWEVER, that the aggregate amount of Restricted
Payments made under this clause (v) does not exceed (A) $1.0 million in any
calendar year and (B) $3.0 million in the aggregate since the date of the
Indenture; PROVIDED FURTHER, that cancellation of Indebtedness owing to the
Company from members of management of the Company or any of its Subsidiaries in
connection with a repurchase of Equity Interests of the Company will not be
deemed to constitute a Restricted Payment for purposes of this covenant or any
other provision of the Indenture; (vi) repurchases of Equity Interests deemed to
occur upon exercise of stock options upon surrender of Equity Interests to pay
the exercise price of such option; (vii) the payment by the Company of dividends
to Holdings for the purpose of (A) permitting Holdings to satisfy federal, state
and local income tax obligations to the extent such obligations are actually due
and owing and are a direct result of the net income of the Company being
included on a consolidated, combined or unitary income tax return filed by
Holdings or otherwise being attributed to Holdings for tax purposes and (B)
permitting Holdings to pay the necessary fees and expenses to maintain its
corporate existence and good standing (which shall not exceed $500,000 per
annum); PROVIDED THAT the amount of dividends described in this clause (vii)
shall be excluded from the calculation of the amounts of Restricted Payments
hereunder; and (viii) reasonable and customary directors' fees to the members of
Holdings' or the Company's board of directors, PROVIDED THAT with respect to
clauses (ii), (iii), (v), (vi) and (vii) above, no Default or Event of Default
shall have occurred and be continuing immediately after such transaction.
The amount of all Restricted Payments (other than cash) shall be the fair
market value on the date of the Restricted Payment of the asset(s) or securities
proposed to be transferred or issued by the Company or such Subsidiary of the
Company, pursuant to the Restricted Payment. The fair market value of any non-
cash Restricted Payment shall be determined by the Board of Directors of the
Company whose resolution with respect thereto shall be delivered to the Trustee.
Not later than the date of making any Restricted Payment, the Company shall
deliver to the Trustee an Officers' Certificate stating that such Restricted
Payment is permitted and setting forth the basis upon which the calculations
required by the covenant
"--Restricted Payments" were computed, together with a copy of any fairness
opinion or appraisal required by the Indenture.
INCURRENCE OF INDEBTEDNESS AND ISSUANCE OF PREFERRED STOCK
The Indenture provides that the Company will not, and will not permit any of
its Subsidiaries to, directly or indirectly, create, incur, issue, assume,
guarantee or otherwise become directly or indirectly liable, contingently or
otherwise, with respect to (collectively, "incur") any Indebtedness (including
Acquired Debt) and that the Company shall not issue any Disqualified Stock and
shall not permit any of its Subsidiaries to issue any shares of preferred stock;
PROVIDED, HOWEVER, that the Company may incur Indebtedness (including Acquired
Debt) or issue shares of Disqualified Stock if the Company's Fixed Charge
Coverage Ratio for the Company's most recently ended four full fiscal quarters
for which internal financial statements are available immediately preceding the
date on which such additional Indebtedness is incurred or such Disqualified
Stock is issued would have been at least 2.00 to 1, determined on a pro forma
basis (including a pro forma application of the net proceeds therefrom), as if
the additional Indebtedness had been incurred, or the Disqualified Stock had
been issued, as the case may be, at the beginning of such four-quarter period.
The provisions of the first paragraph of this covenant do not apply to the
incurrence of any of the following items of Indebtedness (collectively,
"Permitted Debt"):
(i) the incurrence by the Company of term Indebtedness, revolving credit
Indebtedness and indebtedness under letters of credit (with letters of
credit being deemed to have a principal amount
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equal to the maximum potential liability of the Company thereunder) under
any Credit Facility (and the Guarantee thereof by the Guarantors); provided
that, subject to clause (xii) below, the aggregate principal amount of all
Indebtedness and letters of credit outstanding at any one time under all
Credit Facilities after giving effect to such incurrence, does not exceed
$50.0 million less the aggregate amount of all permanent repayments from Net
Proceeds of Asset Sales or as stated amortization of a term loan, if
applicable, optional or mandatory, of the principal of any Indebtedness
under a Credit Facility (or any such Permitted Refinancing Indebtedness)
that have been made since the date of the Indenture; provided that such
deduction will not exceed, in the aggregate, $25.0 million;
(ii) the incurrence by the Company and its Subsidiaries of the Existing
Indebtedness;
(iii) the incurrence by the Company of Indebtedness represented by the
Notes and the incurrence by the Guarantors of the Subsidiary Guarantees;
(iv) the incurrence by the Company or any of its Subsidiaries of
Indebtedness represented by Capital Lease Obligations, mortgage financings
or purchase money obligations, in each case incurred for the purpose of
financing all or any part of the purchase price or cost of construction or
improvement of property, plant or equipment used in the business of the
Company or such Subsidiary, in an aggregate principal amount, including all
Permitted Refinancing Indebtedness incurred to refund, refinance or replace
Indebtedness incurred pursuant to this clause (iv), not to exceed $5.0
million at any time outstanding;
(v) the incurrence by the Company or any of its Subsidiaries of
Permitted Refinancing Indebtedness;
(vi) the incurrence by the Company or any of its Subsidiaries of
intercompany Indebtedness between or among the Company and any of its
Subsidiaries that are Guarantors; PROVIDED, HOWEVER, that (i) if the Company
is the obligor on such Indebtedness, such Indebtedness is expressly
subordinated to the prior payment in full in cash of all Obligations with
respect to the Notes and the Indenture, (ii) if a Subsidiary of the Company
is the obligor on such Indebtedness, such Indebtedness is expressly
subordinated to the prior payment in full in cash of such Subsidiary's
Subsidiary Guarantee and (iii)(A) any subsequent event or issuance or
transfer of Equity Interests that results in any such Indebtedness being
held by a Person other than the Company or a Subsidiary of the Company and
(B) any sale or other transfer of any such Indebtedness to a Person that is
not either the Company or a Subsidiary of the Company that is a Guarantor
shall be deemed, in each case, to constitute an incurrence of such
Indebtedness by the Company or such Subsidiary, as the case may be, that was
not permitted by this clause (vi);
(vii) the issuance by a Subsidiary that is a Guarantor of preferred stock
to the Company or to any of its Subsidiaries that are Guarantors; PROVIDED,
HOWEVER, that any subsequent event or issuance or transfer of any Equity
Interests that results in the owner of such preferred stock ceasing to be
the Company or one of its Subsidiaries that are Guarantors or any subsequent
transfer of such preferred stock to a Person other than the Company or any
of its Subsidiaries that are Guarantors, shall be deemed to be an issuance
of preferred stock by such Subsidiary that was not permitted by this clause
(vii);
(viii) the incurrence by the Company or any of its Subsidiaries of Hedging
Obligations that are incurred for the purpose of fixing or hedging interest
rate risk with respect to any floating rate Indebtedness that is permitted
by the terms of the Indenture to be outstanding;
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(ix) Indebtedness arising from agreements of the Company or a Subsidiary
providing for indemnification, adjustment of purchase price or similar
obligations, in each case, incurred in connection with the disposition of
any business, assets or a Subsidiary, other than the guarantees of
Indebtedness incurred by any Person acquiring all or any portion of such
business, assets or a Subsidiary for the purpose of financing such
acquisition; PROVIDED, HOWEVER, that (A) such Indebtedness is not reflected
on the balance sheet of the Company or any Subsidiary (contingent
obligations referred to in a footnote to financial statements and not
otherwise reflected on the balance sheet will not be deemed to be reflected
on such balance sheet for purposes of this clause (A)) and (B) the maximum
assumable liability in respect of all such Indebtedness shall at no time
exceed the gross proceeds including noncash proceeds (the fair market value
of such noncash proceeds being measured at the time received and without
giving effect to any subsequent changes in value) actually received by the
Company and its Subsidiaries in connection with such disposition;
(x) the guarantee by the Company or any of the Guarantors of
Indebtedness of the Company or a Subsidiary of the Company that was
permitted to be incurred by another provision of this covenant "--Incurrence
of Indebtedness and Issuance of Preferred Stock";
(xi) the incurrence of Indebtedness by one of the Company's Subsidiaries
evidenced by the promissory notes (the "Eagle Rock Notes") issued and
issuable under the certain Lease Agreement date April 19, 1986, as amended
by a Memorandum of Agreement dated February 26, 1993, between one of the
Company's Subsidiaries (as successor in interest to DSD, Inc.) and 426 Eagle
Rock Avenue Associates; or
(xii) the incurrence by the Company of additional Indebtedness in an
aggregate principal amount (or accreted value, as applicable) at any time
outstanding, including all Permitted Refinancing Indebtedness incurred to
refund, refinance or replace any other Indebtedness incurred pursuant to
this clause (xii), not to exceed $10.0 million; PROVIDED THAT such
additional Indebtedness may be Senior Debt under any Credit Facility.
For purposes of determining compliance with this covenant, in the event that
an item of Indebtedness meets the criteria of more than one of the categories of
Permitted Debt described in clauses (i) through (xii) above or is entitled to be
incurred pursuant to the first paragraph of this covenant, the Company shall, in
its sole discretion, classify such item of Indebtedness in any manner that
complies with this covenant. Accrual of interest, the accretion of accreted
value and the payment of interest in the form of additional Indebtedness will
not be deemed to be an incurrence of Indebtedness for purposes of this covenant.
LIENS
The Indenture provides that the Company will not, and will not permit any of
its Subsidiaries to, create, incur, assume or otherwise cause or suffer to exist
or become effective any Lien of any kind securing Indebtedness or trade payables
(other than Permitted Liens) upon any of their property or assets, now owned or
hereafter acquired, unless all payments due under the Indenture and the Notes
are secured on an equal and ratable basis with the obligations so secured until
such time as such obligations are no longer secured by a Lien.
DIVIDEND AND OTHER PAYMENT RESTRICTIONS AFFECTING SUBSIDIARIES
The Indenture provides that the Company will not, and will not permit any of
its Subsidiaries to, directly or indirectly, create or otherwise cause or suffer
to exist or become effective any encumbrance or restriction on the ability of
any Subsidiary of the Company or the Company to (i)(x) pay dividends or make any
other distributions to the Company or any of its Subsidiaries that are
Guarantors (1) on its Capital Stock or (2) with respect to any other interest or
participation in, or measured by, its profits, or (y) pay any Indebtedness owed
to the Company or any of its Subsidiaries, (ii) make loans or advances to the
Company or any of its Subsidiaries or (iii) transfer any of its properties or
assets to the Company or any of its
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Subsidiaries, except for such encumbrances or restrictions existing under or by
reason of (a) the Indenture, the Notes and the Credit Agreement as in effect on
the date of the Indenture, (b) applicable law, (c) any instrument governing
Indebtedness or Capital Stock of a Person acquired by the Company or any of its
Subsidiaries as in effect at the time of such acquisition (except with respect
to Indebtedness incurred in connection with or in contemplation of such
acquisition), which encumbrance or restriction is not applicable to any Person,
or the properties or assets of any Person, other than the Person, or the
property or assets of the Person, so acquired, PROVIDED THAT, in the case of
Indebtedness, such Indebtedness was permitted by the terms of the Indenture to
be incurred, (d) restrictions of the nature described in clause (iii) above by
reason of customary non-assignment, sub-letting and restriction on transfer
provisions in contracts, agreements, and leases entered into in the ordinary
course of business and consistent with past practices, (e) purchase money
obligations for property acquired in the ordinary course of business that impose
restrictions of the nature described in clause (iii) above on the property so
acquired, (f) any restriction with respect to a Subsidiary imposed pursuant to
an agreement entered into for the sale or disposition of all or substantially
all of the Capital Stock or assets of such Subsidiary pending the closing of
such sale or disposition, (g) agreements relating to secured Indebtedness
otherwise permitted to be incurred pursuant to the covenants described under the
"--Incurrence of Indebtedness and Issuance of Preferred Stock" and "--Liens"
that limit the right of the debtor to dispose of assets securing such
Indebtedness, (h) restrictions on cash or other deposits or net worth imposed by
customers under contracts entered into in the ordinary course of business, and
(i) Permitted Refinancing Indebtedness in respect of Indebtedness referred to in
clause (a), (c) and (e) of this paragraph, PROVIDED THAT the restrictions
contained in the agreements governing such Permitted Refinancing Indebtedness
are no more restrictive than those contained in the agreements governing the
Indebtedness being refinanced.
MERGER, CONSOLIDATION OR SALE OF ASSETS
The Indenture provides that the Company will not consolidate or merge with
or into (whether or not the Company is the surviving corporation), or sell,
assign, transfer, lease, convey or otherwise dispose of all or substantially all
of its properties or assets in one or more related transactions, to another
corporation, Person or entity unless (i) the Company is the surviving
corporation or the entity or the Person formed by or surviving any such
consolidation or merger (if other than the Company) or to which such sale,
assignment, transfer, lease, conveyance or other disposition shall have been
made is a corporation organized or existing under the laws of the United States,
any state thereof or the District of Columbia; (ii) the entity or Person formed
by or surviving any such consolidation or merger (if other than the Company) or
the entity or Person to which such sale, assignment, transfer, lease, conveyance
or other disposition shall have been made assumes all the obligations of the
Company under the Notes and the Indenture pursuant to a supplemental indenture
in a form reasonably satisfactory to the Trustee; (iii) immediately after such
transaction no Default or Event of Default exists; and (iv) except in the case
of a merger of the Company with or into a Wholly Owned Subsidiary of the
Company, the Company or the entity or Person formed by or surviving any such
consolidation or merger (if other than the Company), or to which such sale,
assignment, transfer, lease, conveyance or other disposition shall have been
made (A) will have Consolidated Net Worth immediately after the transaction
equal to or greater than the Consolidated Net Worth of the Company immediately
preceding the transaction and (B) will, at the time of such transaction and
after giving pro forma effect thereto as if such transaction had occurred at the
beginning of the applicable four-quarter period, be permitted to incur at least
$1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Ratio
test set forth in the first paragraph of covenant described above under the
caption "--Incurrence of Indebtedness and Issuance of Preferred Stock."
TRANSACTIONS WITH AFFILIATES
The Indenture provides that the Company will not, and will not permit any of
its Subsidiaries to, make any payment to, or sell, lease, transfer or otherwise
dispose of any properties or assets to, or purchase any
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property or assets from, or enter into or make or amend any transaction,
contract, agreement, understanding, loan, advance or Guarantee with, or for the
benefit of, any Affiliate of any such Person (each of the foregoing, an
"Affiliate Transaction"), unless (i) such Affiliate Transaction is on terms that
are no less favorable to the Company or the relevant Subsidiary than those that
would have been obtained in a comparable transaction by the Company or such
Subsidiary with an unrelated Person and (ii) the Company delivers to the Trustee
(a) with respect to any Affiliate Transaction or series of related Affiliate
Transactions involving aggregate consideration in excess of $1.0 million, a
resolution of its Board of Directors set forth in an Officers' Certificate
certifying that such Affiliate Transaction complies with clause (i) above and
that such Affiliate Transaction has been approved by a majority of the
disinterested members of its Board of Directors and (b) with respect to any
Affiliate Transaction or series of related Affiliate Transactions involving
aggregate consideration in excess of $5.0 million, an opinion as to the fairness
to the Holders of such Affiliate Transaction from a financial point of view
issued by an investment banking firm (or, if an investment banking firm is
generally not qualified to give such an opinion, by an appraisal firm) of
national standing; PROVIDED THAT none of the following shall be deemed to be
Affiliate Transactions: (1) any employment agreement entered into by the Company
or any of its Subsidiaries in the ordinary course of business and consistent
with the past practice of the Company or such Subsidiary, as the case may be,
(2) transactions between or among the Company and/or its Subsidiaries that are
Guarantors, (3) Restricted Payments that are permitted by the covenant described
above under the caption
"--Restricted Payments" and payments made under the Eagle Rock Notes permitted
by the covenant described above under the caption "--Incurrence of Indebtedness
and Issuance of Preferred Stock," (4) fees and compensation paid to members of
the Board of Directors of the Company and of its Subsidiaries in their capacity
as such, to the extent such fees and compensation are reasonable and customary,
(5) advances to employees for moving, entertainment and travel expenses, drawing
accounts and similar expenditures in the ordinary course of business and
consistent with past practices; (6) management or similar fees payable to BRS or
an Affiliate thereof (to the extent such fees do not, in the aggregate, exceed
2.0% of the actual Consolidated Cash Flow of the Company for the period in
respect of which such fees are paid); (7) fees payable to BRS or its Affiliate
under a transaction services agreement in effect on the date of the Indenture;
(8) maintenance in the ordinary course of business of customary benefit programs
or arrangements for employees, officers or directors, including vacation plans,
health and life insurance plans, deferred compensation plans and retirement or
savings plans and similar plans and (9) fees and compensation paid to, and
indemnity provided on behalf of, officers, directors or employees of the Company
or any of its Subsidiaries, as determined by the Board of Directors of the
Company or of any such Subsidiary, shall not be deemed to be Affiliate
Transactions.
SALE AND LEASEBACK TRANSACTIONS
The Indenture provides that the Company will not, and will not permit any of
its Subsidiaries to, enter into any sale and leaseback transaction; PROVIDED
THAT the Company may enter into a sale and leaseback transaction if (i) the
Company could have incurred Indebtedness in an amount equal to the Attributable
Debt relating to such sale and leaseback transaction pursuant to the Fixed
Charge Coverage Ratio test set forth in the first paragraph of the covenant
described above under the caption "--Incurrence of Indebtedness and Issuance of
Preferred Stock" and (ii) the gross cash proceeds of such sale and leaseback
transaction are at least equal to the fair market value (as determined in good
faith by the Board of Directors and set forth in an Officers' Certificate
delivered to the Trustee if such fair market value exceeds $2.5 million) of the
property that is the subject of such sale and leaseback transaction and (iii)
the transfer of assets in such sale and leaseback transaction is permitted by,
and the Company applies the proceeds of such transaction in compliance with, the
covenant described above under the caption
"--Repurchase at the Option of Holders--Asset Sales," if applicable.
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LIMITATION ON ISSUANCES AND SALES OF CAPITAL STOCK OF WHOLLY OWNED
SUBSIDIARIES
The Indenture provides that the Company (i) will not, and will not permit
any Wholly Owned Subsidiary of the Company to, transfer, convey, sell, lease or
otherwise dispose of any Capital Stock of any Wholly Owned Subsidiary of the
Company to any Person (other than the Company or a Wholly Owned Subsidiary of
the Company that is a Guarantor), unless (a) such transfer, conveyance, sale,
lease or other disposition is of all the Capital Stock of such Wholly Owned
Subsidiary and (b) the cash Net Proceeds from such transfer, conveyance, sale,
lease or other disposition are applied in accordance with the covenant described
above under the caption "--Repurchase at the Option of Holders--Asset Sales,"
and (ii) shall not permit any Wholly Owned Subsidiary of the Company to issue
any of its Equity Interests (other than, if necessary, shares of its Capital
Stock constituting directors' qualifying shares) to any Person other than to the
Company or a Wholly Owned Subsidiary of the Company that is a Guarantor.
ADDITIONAL SUBSIDIARY GUARANTEES
The Indenture provides that, if the Company or any of its Subsidiaries shall
acquire or create another Subsidiary after the date of the Indenture, then such
newly acquired or created Subsidiary will (i) execute a supplemental indenture
in form and substance satisfactory to the Trustee providing that such Subsidiary
will become a Guarantor under the Indenture and (ii) deliver an Opinion of
Counsel to the effect, INTER ALIA, that such supplemental indenture has been
duly authorized and executed by such Subsidiary.
NO SENIOR SUBORDINATED DEBT
The Indenture provides that, notwithstanding any other provision thereof,
(i) the Company will not incur, create, issue, assume, guarantee or otherwise
become liable directly or indirectly for any Indebtedness (including Acquired
Debt) that is subordinate or junior in right of payment to any Senior Debt and
senior in any respect in right of payment to the Notes and (ii) no Guarantor
will incur, create, issue, assume, guarantee or otherwise become liable for any
Indebtedness (including Acquired Debt) that is subordinate or junior in right of
payment to any Senior Debt of a Guarantor and senior in any respect in right of
payment to the Subsidiary Guarantees.
BUSINESS ACTIVITIES
The Indenture provides that the Company will not, and the Company will not
permit any of its Subsidiaries to, directly or indirectly, engage in any line of
business other than a Permitted Business, except to such extent as would not be
material to the Company and its Subsidiaries taken as a whole.
PAYMENTS FOR CONSENT
The Indenture provides that the Company will not, and will not permit any of
its Subsidiaries to, directly or indirectly, pay or cause to be paid any
consideration, whether by way of interest, fee or otherwise, to any Holder of
any Notes for or as an inducement to any consent, waiver or amendment of any of
the terms or provisions of the Indenture or the Notes unless such consideration
is offered to be paid or is paid to all Holders of the Notes that consent, waive
or agree to amend in the time frame set forth in the solicitation documents
relating to such consent, waiver or agreement.
REPORTS
The Indenture provides that whether or not the Company is required by the
rules and regulations of the SEC, so long as any Notes are outstanding, the
Company will furnish to each of the Holders of Notes (i) all quarterly and
annual financial information that would be required to be contained in a filing
with the SEC on Forms 10-Q and 10-K if the Company were required to file such
forms, including a "Management's Discussion and Analysis of Financial Condition
and Results of Operations" that describes the financial condition and results of
operations of the Company and any consolidated Subsidiaries and, with
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respect to the annual information only, reports thereon by the Company's
independent public accountants (which shall be firm(s) of established national
reputation) and (ii) all information that would be required to be filed with the
SEC on Form 8-K if the Company were required to file such reports. All such
information and reports shall be filed with the SEC on or prior to the dates on
which such filings would have been required to be made had the Company been
subject to the rules and regulations of the SEC. In addition, whether or not
required by the rules and regulations of the SEC, the Company shall file a copy
of all such information and reports with the SEC for public availability within
the time periods specified in the SEC's rules and regulations (unless the SEC
will not accept such a filing) and make such information available to securities
analysts and prospective investors upon request; PROVIDED, HOWEVER, that if
prior to the effectiveness of the Exchange Offer Registration Statement, the
information that would be required to be filed in a Form 10-K, 10-Q or 8-K
pursuant to this sentence is filed as part of the Exchange Offer Registration
Statement, such filing shall be deemed to satisfy the requirements of this
sentence; and PROVIDED FURTHER, that the quarterly information required to be
filed for the quarter ended June 30, 1997 shall not be required to be so filed
until 90 days after the Closing Date (unless the Exchange Offer Registration
Statement shall have already been filed, in which event such filing for the
quarter ended June 30, 1997 shall not be required). For so long as any Notes
remain outstanding, the Company and the Guarantors shall furnish to the Holders
and to securities analysts and prospective investors, upon their request, the
information required to be delivered pursuant to Rule 144A(d)(4) under the
Securities Act.
EVENTS OF DEFAULT AND REMEDIES
The Indenture provides that each of the following constitutes an Event of
Default: (i) default for 30 days in the payment when due of interest on, or
Liquidated Damages with respect to, the Notes (whether or not prohibited by the
subordination provisions of the Indenture); (ii) default in payment when due of
the principal of or premium, if any, on the Notes (whether or not prohibited by
the subordination provisions of the Indenture); (iii) failure by the Company or
any of its Subsidiaries to comply with the provisions described under the
caption "--Certain Covenants--Merger, Consolidation or Sale of Assets"; (iv)
failure by the Company or any of its Subsidiaries for 30 days after notice to
comply with the provisions described under the captions "--Certain
Covenants--Restricted Payments," "--Certain Covenants-- Incurrence of
Indebtedness and Issuance of Preferred Stock," "--Repurchase at the Option of
Holders-- Asset Sales" or "--Repurchase at the Option of Holders--Change of
Control"; (v) failure by the Company or any of its Subsidiaries for 60 days
after notice to comply with any of its other agreements in the Indenture or the
Notes; (vi) default under any mortgage, indenture or instrument under which
there may be issued or by which there may be secured or evidenced any
Indebtedness for money borrowed by the Company or any of its Subsidiaries (or
the payment of which is guaranteed by the Company or any of its Subsidiaries)
whether such Indebtedness or guarantee now exists, or is created after the date
of the Indenture, which default (a) is caused by a failure to pay principal of
or premium, if any, or interest on such Indebtedness prior to the expiration of
the grace period provided in such Indebtedness on the date of such default (a
"Payment Default") or (b) results in the acceleration of such Indebtedness prior
to its express maturity and, in each case, the principal amount of any such
Indebtedness, together with the principal amount of any other such Indebtedness
under which there has been a Payment Default or the maturity of which has been
so accelerated, aggregates without duplication $5.0 million or more and such
default shall not have been cured or acceleration rescinded within a five
business day period; (vii) failure by the Company or any of its Subsidiaries to
pay final judgments aggregating in excess of $5.0 million (excluding amounts
covered by insurance), which judgments are not paid, discharged or stayed for a
period of 60 days; (viii) certain events of bankruptcy or insolvency with
respect to the Company or any of its Subsidiaries and (ix) except as permitted
by the Indenture, any Subsidiary Guarantee shall be held in any judicial
proceeding to be unenforceable or invalid or shall cease for any reason to be in
full force and effect or any Guarantor, or any Person acing on behalf of any
Guarantor, shall deny or disaffirm its obligations under its Subsidiary
Guarantee.
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If any Event of Default occurs and is continuing, the Trustee or the Holders
of at least 25% in principal amount of the then outstanding Notes may declare
all the Notes to be due and payable immediately; PROVIDED, HOWEVER, that so long
as any Designated Senior Debt is outstanding, such declaration shall not become
effective until the earlier of (i) five days after the receipt by
representatives of Designated Senior Debt of such written notice of acceleration
or (ii) the date of acceleration of any Designated Senior Debt. Notwithstanding
the foregoing, in the case of an Event of Default arising from certain events of
bankruptcy or insolvency, with respect to the Company, any Significant
Subsidiary or any group of Subsidiaries that, taken together, would constitute a
Significant Subsidiary, all outstanding Notes will become due and payable
without further action or notice. Holders of the Notes may not enforce the
Indenture or the Notes except as provided in the Indenture. Subject to certain
limitations, Holders of a majority in principal amount of the then outstanding
Notes may direct the Trustee in its exercise of any trust or power. The Trustee
may withhold from Holders of the Notes notice of any continuing Default or Event
of Default (except a Default or Event of Default relating to the payment of
principal or interest) if it determines that withholding notice is in their
interest.
In the case of any Event of Default occurring by reason of any willful
action (or inaction) taken (or not taken) by or on behalf of the Company with
the intention of avoiding payment of the premium that the Company would have had
to pay if the Company then had elected to redeem the Notes pursuant to the
optional redemption provisions of the Indenture, an equivalent premium shall
also become and be immediately due and payable to the extent permitted by law
upon the acceleration of the Notes. If an Event of Default occurs prior to
August 1, 2002 by reason of any willful action (or inaction) taken (or not
taken) by or on behalf of the Company with the intention of avoiding the
prohibition on redemption of the Notes prior to August 1, 2002, then the premium
specified in the Indenture shall also become immediately due and payable to the
extent permitted by law upon the acceleration of the Notes.
The Holders of a majority in aggregate principal amount of the Notes then
outstanding by notice to the Trustee may on behalf of the Holders of all of the
Notes waive any existing Default or Event of Default and its consequences under
the Indenture except a continuing Default or Event of Default in the payment of
interest on, or the principal of, the Notes.
The Company is required to deliver to the Trustee annually a statement
regarding compliance with the Indenture, and the Company is required upon
becoming aware of any Default or Event of Default, to deliver to the Trustee a
statement specifying such Default or Event of Default.
NO PERSONAL LIABILITY OF DIRECTORS, OFFICERS, EMPLOYEES AND STOCKHOLDERS
No director, officer, employee, incorporator or stockholder of the Company,
as such, shall have any liability for any obligations of the Company under the
Notes or the Indenture or for any claim based on, in respect of, or by reason
of, such obligations or their creation. Each Holder of Notes by accepting a Note
waives and releases all such liability. The waiver and release are part of the
consideration for issuance of the Notes. Such waiver may not be effective to
waive liabilities under the federal securities laws and it is the view of the
Commission that such a waiver is against public policy.
LEGAL DEFEASANCE AND COVENANT DEFEASANCE
The Company may, at its option and at any time, elect to have all of its
obligations discharged with respect to the outstanding Notes ("Legal
Defeasance") except for (i) the rights of Holders of outstanding Notes to
receive payments in respect of the principal of, premium, if any, and interest
and Liquidated Damages, if any, on such Notes when such payments are due from
the trust referred to below, (ii) the Company's obligations with respect to the
Notes concerning issuing temporary Notes, registration of Notes, mutilated,
destroyed, lost or stolen Notes and the maintenance of an office or agency for
payment and money for security payments held in trust, (iii) the rights, powers,
trusts, duties and immunities of the Trustee, and the Company's obligations in
connection therewith and (iv) the Legal Defeasance provisions
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of the Indenture. In addition, the Company may, at its option and at any time,
elect to have the obligations of the Company released with respect to certain
covenants that are described in the Indenture ("Covenant Defeasance") and
thereafter any omission to comply with such obligations shall not constitute a
Default or Event of Default with respect to the Notes. In the event Covenant
Defeasance occurs, certain events (not including non-payment, bankruptcy,
receivership, rehabilitation and insolvency events) described under "--Events of
Default and Remedies" will no longer constitute an Event of Default with respect
to the Notes.
In order to exercise either Legal Defeasance or Covenant Defeasance, (i) the
Company must irrevocably deposit with the Trustee, in trust, for the benefit of
the Holders of the Notes, cash in U.S. dollars, non-callable Government
Securities, or a combination thereof, in such amounts as will be sufficient, in
the opinion of a nationally recognized firm of independent public accountants,
to pay the principal of, premium, if any, and interest and Liquidated Damages,
if any, on the outstanding Notes on the stated maturity or on the applicable
redemption date, as the case may be, and the Company must specify whether the
Notes are being defeased to maturity or to a particular redemption date; (ii) in
the case of Legal Defeasance, the Company shall have delivered to the Trustee an
opinion of counsel in the United States reasonably acceptable to the Trustee
confirming that (A) the Company has received from, or there has been published
by, the Internal Revenue Service a ruling or (B) since the date of the
Indenture, there has been a change in the applicable federal income tax law, in
either case to the effect that, and based thereon such opinion of counsel shall
confirm that, the Holders of the outstanding Notes will not recognize income,
gain or loss for federal income tax purposes as a result of such Legal
Defeasance and will be subject to federal income tax on the same amounts, in the
same manner and at the same times as would have been the case if such Legal
Defeasance had not occurred; (iii) in the case of Covenant Defeasance, the
Company shall have delivered to the Trustee an opinion of counsel in the United
States reasonably acceptable to the Trustee confirming that, subject to
customary assumptions and exclusions, the Holders of the outstanding Notes will
not recognize income, gain or loss for federal income tax purposes as a result
of such Covenant Defeasance and will be subject to federal income tax on the
same amounts, in the same manner and at the same times as would have been the
case if such Covenant Defeasance had not occurred; (iv) no Default or Event of
Default shall have occurred and be continuing on the date of such deposit (other
than a Default or Event of Default resulting from the borrowing of funds to be
applied to such deposit) or insofar as Events of Default from bankruptcy or
insolvency events are concerned, at any time in the period ending on the 91st
day after the date of deposit; (v) such Legal Defeasance or Covenant Defeasance
will not result in a breach or violation of, or constitute a default under any
material agreement or instrument (other than the Indenture) to which the Company
or any of its Subsidiaries is a party or by which the Company or any of its
Subsidiaries is bound; (vi) the Company must have delivered to the Trustee an
opinion of counsel to the effect that, subject to customary assumptions and
exclusions, after the 91st day following the deposit, the trust funds will not
be subject to the effect of any applicable bankruptcy, insolvency,
reorganization or similar laws affecting creditors' rights generally; (vii) the
Company must deliver to the Trustee an Officers' Certificate stating that the
deposit was not made by the Company with the intent of preferring the Holders of
Notes over the other creditors of the Company with the intent of defeating,
hindering, delaying or defrauding creditors of the Company or others; and (viii)
the Company must deliver to the Trustee an Officers' Certificate and an opinion
of counsel, each stating that, subject to customary assumptions and exclusions,
all conditions precedent provided for relating to the Legal Defeasance or the
Covenant Defeasance have been complied with.
TRANSFER AND EXCHANGE
A Holder may transfer or exchange Notes in accordance with the Indenture.
The Registrar and the Trustee may require a Holder, among other things, to
furnish appropriate endorsements and transfer documents and the Company may
require a Holder to pay any taxes and fees required by law or permitted by the
Indenture. The Company is not required to transfer or exchange any Note selected
for redemption.
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Also, the Company is not required to transfer or exchange any Note for a period
of 15 days before a selection of Notes to be redeemed.
The registered Holder of a Note will be treated as the owner of it for all
purposes.
AMENDMENT, SUPPLEMENT AND WAIVER
Except as provided in the next two succeeding paragraphs, the Indenture or
the Notes may be amended or supplemented with the consent of the Holders of at
least a majority in principal amount of the Notes then outstanding (including,
without limitation, consents obtained in connection with a purchase of, or
tender offer or exchange offer for, Notes), and any existing default or
compliance with any provision of the Indenture or the Notes may be waived with
the consent of the Holders of a majority in principal amount of the then
outstanding Notes (including consents obtained in connection with a tender offer
or exchange offer for Notes).
Without the consent of each Holder affected, an amendment or waiver may not
(with respect to any Notes held by a non-consenting Holder): (i) reduce the
principal amount of Notes whose Holders must consent to an amendment, supplement
or waiver, (ii) reduce the principal of or change the fixed maturity of any Note
or alter the provisions with respect to the redemption of the Notes (other than
provisions relating to the covenants described above under the caption
"--Repurchase at the Option of Holders"), (iii) reduce the rate of or change the
time for payment of interest on any Note, (iv) waive a Default or Event of
Default in the payment of principal of or premium, if any, or interest on the
Notes (except a rescission of acceleration of the Notes by the Holders of at
least a majority in aggregate principal amount of the Notes and a waiver of the
payment default that resulted from such acceleration), (v) make any Note payable
in money other than that stated in the Notes, (vi) make any change in the
provisions of the Indenture relating to waivers of past Defaults or the rights
of Holders of Notes to receive payments of principal of or premium, if any, or
interest on the Notes, (vii) waive a redemption payment with respect to any Note
(other than a payment required by one of the covenants described above under the
caption "-- Repurchase at the Option of Holders") or (viii) make any change in
the foregoing amendment and waiver provisions. In addition, any amendment to the
provisions of Article 10 of the Indenture (which relate to subordination) will
require the consent of the Holders of at least 75% in aggregate principal amount
of the Notes then outstanding if such amendment would adversely affect the
rights of Holders of Notes.
Notwithstanding the foregoing, without the consent of any Holder of Notes,
the Company and the Trustee may amend or supplement the Indenture or the Notes
to cure any ambiguity, defect or inconsistency, to provide for uncertificated
Notes in addition to or in place of certificated Notes, to provide for the
assumption of the Company's obligations to Holders of Notes in the case of a
merger or consolidation, to make any change that would provide any additional
rights or benefits to the Holders of Notes or that does not adversely affect the
legal rights under the Indenture of any such Holder, or to comply with
requirements of the Commission in order to effect or maintain the qualification
of the Indenture under the Trust Indenture Act.
GOVERNING LAW
The Indenture provides that it and the Notes will be governed by, and
construed in accordance with, the laws of the State of New York without giving
effect to applicable principles of conflicts of law to the extent that the
application of the law of another jurisdiction would be required thereby.
CONCERNING THE TRUSTEE
The Indenture contains certain limitations on the rights of the Trustee,
should it become a creditor of the Company, to obtain payment of claims in
certain cases, or to realize on certain property received in respect of any such
claim as security or otherwise. The Trustee will be permitted to engage in other
transactions; however, if it acquires any conflicting interest it must eliminate
such conflict within 90 days, apply to the Commission for permission to continue
or resign.
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The Holders of a majority in principal amount of the then outstanding Notes
have the right to direct the time, method and place of conducting any proceeding
for exercising any remedy available to the Trustee, subject to certain
exceptions. The Indenture provides that in case an Event of Default shall occur
(which shall not be cured), the Trustee will be required, in the exercise of its
power, to use the degree of care of a prudent man in the conduct of his own
affairs. Subject to such provisions, the Trustee will be under no obligation to
exercise any of its rights or powers under the Indenture at the request of any
Holder of Notes, unless such Holder shall have offered to the Trustee security
and indemnity satisfactory to it against any loss, liability or expense.
ADDITIONAL INFORMATION
Anyone who receives this Prospectus may obtain a copy of the Indenture and
Registration Rights Agreement without charge by writing to B&G Foods, Inc., 426
Eagle Rock Avenue, Roseland, New Jersey 07068, Attention: Chief Financial
Officer.
BOOK-ENTRY, DELIVERY AND FORM
Except as set forth in the next paragraph, the Existing Notes are and the
New Notes will be issued in the form of one Global Note (the "Global Note"). The
Global Note will be deposited on the date of the closing of the Exchange Offer
with, or on behalf of, The Depository Trust Company (the "Depositary") and
registered in the name of Cede & Co., as nominee of the Depositary (such nominee
being referred to herein as the "Global Note Holder").
Notes that are issued as described below under "-- Certificated Securities"
will be issued in the form of registered definitive certificates (the
"Certificated Securities"). Upon the transfer of Certificated Securities, such
Certificated Securities may, unless the Global Note has previously been
exchanged for Certificated Securities, be exchanged for an interest in the
Global Note representing the principal amount of Notes being transferred.
The Depositary is a limited-purpose trust company that was created to hold
securities for its participating organizations (collectively, the "Participants"
or the "Depositary's Participants") and to facilitate the clearance and
settlement of transactions in such securities between Participants through
electronic book-entry changes in accounts of its Participants. The Depositary's
Participants include securities brokers and dealers (including the Initial
Purchasers), banks and trust companies, clearing corporations and certain other
organizations. Access to the Depositary's system is also available to other
entities such as banks, brokers, dealers and trust companies (collectively, the
"Indirect Participants" or the "Depositary's Indirect Participants") that clear
through or maintain a custodial relationship with a Participant, either directly
or indirectly. Persons who are not Participants may beneficially own securities
held by or on behalf of the Depositary only thorough the Depositary's
Participants or the Depositary's Indirect Participants.
The Company expects that pursuant to procedures established by the
Depositary (i) upon deposit of the Global Note, the Depositary will credit the
accounts of Participants designated by the Initial Purchasers with portions of
the principal amount of the Global Note and (ii) ownership of the Notes
evidenced by the Global Note will be shown on, and the transfer of ownership
thereof will be effected only through, records maintained by the Depositary
(with respect to the interests of the Depositary's Participants), the
Depositary's Participants and the Depositary's Indirect Participants.
Prospective purchasers are advised that the laws of some states require that
certain persons take physical delivery in definitive form of securities that
they own. Consequently, the ability to transfer Notes evidenced by the Global
Note will be limited to such extent.
So long as the Global Note Holder is the registered owner of any Notes, the
Global Note Holder will be considered the sole Holder under the Indenture of any
Notes evidenced by the Global Note. Beneficial owners of Notes evidenced by the
Global Note will not be considered the owners or Holders thereof under
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the Indenture for any purpose, including with respect to the giving of any
directions, instructions or approvals to the Trustee thereunder. Neither the
Company nor the Trustee will have any responsibility or liability for any aspect
of the records of the Depositary or for maintaining, supervising or reviewing
any records of the Depositary relating to the Notes.
Payments in respect of the principal of, premium, if any, interest and
Liquidated Damages, if any, on any Notes registered in the name of the Global
Note Holder on the applicable record date will be payable by the Trustee to or
at the direction of the Global Note Holder in its capacity as the registered
Holder under the Indenture. Under the terms of the Indenture, the Company and
the Trustee may treat the persons in whose names Notes, including the Global
Note, are registered as the owners thereof for the purpose of receiving such
payments. Consequently, neither the Company nor the Trustee has or will have any
responsibility or liability for the payment of such amounts to beneficial owners
of Notes. The Company believes, however, that it is currently the policy of the
Depositary to immediately credit the accounts of the relevant Participants with
such payments, in amounts proportionate to their respective holdings of
beneficial interests in the relevant security as shown on the records of the
Depositary. Payments by the Depositary's Participants and the Depositary's
Indirect Participants to the beneficial owners of Notes will be governed by
standing instructions and customary practice and will be the responsibility of
the Depositary's Participants or the Depositary's Indirect Participants.
CERTIFICATED SECURITIES
Subject to certain conditions, any person having a beneficial interest in
the Global Note may, upon request to the Trustee, exchange such beneficial
interest for Notes in the form of Certificated Securities. Upon any such
issuance, the Trustee is required to register such Certificated Securities in
the name of, and cause the same to be delivered to, such person or persons (or
the nominee of any thereof). If (i) the Company notifies the Trustee in writing
that the Depositary is no longer willing or able to act as a depositary and the
Company is unable to locate a qualified successor within 90 days or (ii) the
Company, at its option, notifies the Trustee in writing that it elects to cause
the issuance of Notes in the form of Certificated Securities under the
Indenture, then, upon surrender by the Global Note Holder of its Global Note,
Notes in such form will be issued to each person that the Global Note Holder and
the Depositary identify as being the beneficial owner of the related Notes.
Neither the Company nor the Trustee will be liable for any delay by the
Global Note Holder or the Depositary in identifying the beneficial owners of
Notes and the Company and the Trustee may conclusively rely on, and will be
protected in relying on, instructions from the Global Note Holder or the
Depositary for all purposes.
REGISTRATION RIGHTS; LIQUIDATED DAMAGES
The Company and the Initial Purchasers have entered into the Registration
Rights Agreement. Pursuant to the Registration Rights Agreement, the Company has
agreed to file with the Commission the Exchange Offer Registration Statement on
the appropriate form under the Securities Act with respect to the New Notes.
Upon the effectiveness of the Exchange Offer Registration Statement, the Company
will offer to the Holders of Transfer Restricted Securities pursuant to the
Exchange Offer who are able to make certain representations the opportunity to
exchange their Transfer Restricted Securities for New Notes. If (i) the Company
is not required to file the Exchange Offer Registration Statement or permitted
to consummate the Exchange Offer because the Exchange Offer is not permitted by
applicable law or Commission policy or (ii) any Holder of Transfer Restricted
Securities notifies the Company prior to the 20th day following consummation of
the Exchange Offer that (A) it is prohibited by law or Commission policy from
participating in the Exchange Offer or (B) that it may not resell the New Notes
acquired by it in the Exchange Offer to the public without delivering a
prospectus and the prospectus contained in the Exchange Offer Registration
Statement is not appropriate or available for such resales or (C) that it is a
broker-dealer and owns Existing Notes acquired directly from the Company or an
affiliate of the
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Company, the Company will file with the Commission a Shelf Registration
Statement to cover resales of the Notes by the Holders thereof who satisfy
certain conditions relating to the provision of information in connection with
the Shelf Registration Statement. The Company will use its best efforts to cause
the applicable registration statement to be declared effective as promptly as
possible by the Commission. For purposes of the foregoing, "Transfer Restricted
Securities" means each Note until (i) the date on which such Note has been
exchanged by a person other than a broker-dealer for a New Note in the Exchange
Offer, (ii) following the exchange by a broker-dealer in the Exchange Offer of a
Note for a New Note, the date on which such New Note is sold to a purchaser who
receives from such broker-dealer on or prior to the date of such sale a copy of
the prospectus contained in the Exchange Offer Registration Statement, (iii) the
date on which such Note has been effectively registered under the Securities Act
and disposed of in accordance with the Shelf Registration Statement or (iv) the
date on which such Note is distributed to the public pursuant to Rule 144 under
the Act.
The Registration Rights Agreement provides that (i) the Company will file an
Exchange Offer Registration Statement with the Commission on or prior to 90 days
after the Closing Date, (ii) the Company will use its best efforts to have the
Exchange Offer Registration Statement declared effective by the Commission on or
prior to 150 days after the Closing Date, (iii) unless the Exchange Offer would
not be permitted by applicable law or Commission policy, the Company will
commence the Exchange Offer and use its best efforts to issue on or prior to 30
business days after the date on which the Exchange Offer Registration Statement
was declared effective by the Commission, New Notes in exchange for all Notes
tendered prior thereto in the Exchange Offer and (iv) if obligated to file the
Shelf Registration Statement, the Company will use its best efforts to file the
Shelf Registration Statement with the Commission on or prior to 30 days after
such filing obligation arises and to cause the Shelf Registration to be declared
effective by the Commission on or prior to 45 days after such obligation arises.
If (a) the Company fails to file any of the Registration Statements required by
the Registration Rights Agreement on or before the date specified for such
filing, (b) any of such Registration Statements is not declared effective by the
Commission on or prior to the date specified for such effectiveness (the
"Effectiveness Target Date"), or (c) the Company fails to consummate the
Exchange Offer within 30 business days of the Effectiveness Target Date with
respect to the Exchange Offer Registration Statement, or (d) the Shelf
Registration Statement or the Exchange Offer Registration Statement is declared
effective but thereafter ceases to be effective or usable in connection with
resales of Transfer Restricted Securities during the periods specified in the
Registration Rights Agreement and is not succeeded within 30 days by another
effective Registration Statement; PROVIDED THAT the Shelf Registration Statement
or the Exchange Offer Registration Statement shall not cease to be effective or
usable in connection with resales of Transfer Restricted Securities for more
than 30 days in any calendar year (each such event referred to in clauses (a)
through (d) above a "Registration Default"), then the Company will pay
Liquidated Damages to each Holder of Notes, with respect to the first 90-day
period immediately following the occurrence of the first Registration Default in
an amount equal to $.05 per week per $1,000 principal amount of Notes held by
such Holder. The amount of the Liquidated Damages will increase by an additional
$.05 per week per $1,000 principal amount of Notes with respect to each
subsequent 90-day period until all Registration Defaults have been cured, up to
a maximum amount of Liquidated Damages of $.25 per week per $1,000 principal
amount of Notes. All accrued Liquidated Damages will be paid by the Company on
each Damages Payment Date to the Global Note Holder by wire transfer of
immediately available funds or by federal funds check and to Holders of
Certificated Securities by wire transfer to the accounts specified by them or by
mailing checks to their registered addresses if no such accounts have been
specified. Following the cure of all Registration Defaults, the accrual of
Liquidated Damages will cease.
Holders of Notes will be required to make certain representations to the
Company (as described in the Registration Rights Agreement) in order to
participate in the Exchange Offer and 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
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Agreement in order to have their Notes included in the Shelf Registration
Statement and benefit from the provisions regarding Liquidated Damages set forth
above.
CERTAIN DEFINITIONS
Set forth below are certain defined terms used in the Indenture. Reference
is made to the Indenture for a full disclosure of all such terms, as well as any
other capitalized terms used herein for which no definition is provided.
"ACQUIRED DEBT" means, with respect to any specified Person, (i)
Indebtedness of any other Person existing at the time such other Person is
merged with or into or became a Subsidiary of such specified Person, including,
without limitation, Indebtedness incurred in connection with, or in
contemplation of, such other Person merging with or into or becoming a
Subsidiary of such specified Person, and (ii) Indebtedness secured by a Lien
encumbering any asset acquired by such specified Person; PROVIDED THAT, the
amount of Acquired Debt only at the time so acquired shall include the accreted
value together with any interest thereon that is more than 30 days past due.
"AFFILIATE" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For purposes of this definition, "control "
(including, with correlative meanings, the terms "controlling," "controlled by"
and "under common control with"), as used with respect to any Person, shall mean
the possession, directly or indirectly, of the power to direct or cause the
direction of the management or policies of such Person, whether through the
ownership of voting securities, by agreement or otherwise; PROVIDED THAT
beneficial ownership of 10% or more of the voting securities of a Person shall
be deemed to be control.
"ASSET SALE" means (i) the sale, lease, conveyance or other disposition of
any assets or rights (including, without limitation, by way of a sale and
leaseback) other than in the ordinary course of business consistent with past
practices (PROVIDED THAT the sale, lease, conveyance or other disposition of all
or substantially all of the assets of the Company and its Subsidiaries taken as
a whole will be governed by the covenants described above under the captions
"--Repurchase at the Option of Holders--Change of Control" and "--Certain
Covenants--Merger, Consolidation, or Sale of Assets" and not by the provisions
of the covenant described above under the caption "--Repurchase at the Option of
Holders--Asset Sales"), and (ii) the issue or sale by the Company or any of its
Subsidiaries of Equity Interests of any of the Company's Subsidiaries, in the
case of either clause (i) or (ii), whether in a single transaction or a series
of related transactions (a) that have a fair market value in excess of $1.0
million or (b) for Net Proceeds in excess of $1.0 million. Notwithstanding the
foregoing: (i) a transfer of assets by the Company to a Wholly Owned Subsidiary
of the Company that is a Guarantor or by a Wholly Owned Subsidiary of the
Company to the Company or to another Wholly Owned Subsidiary of the Company that
is a Guarantor, (ii) an issuance or sale of Equity Interests by a Subsidiary of
the Company to the Company or to another Wholly Owned Subsidiary of the Company
that is a Guarantor, (iii) a disposition of obsolete equipment or equipment that
is no longer useful in the conduct of business of the Company and its
Subsidiaries and that is disposed of in the ordinary course of business;
PROVIDED, HOWEVER, that such dispositions do not exceed $500,000 per annum, (iv)
a Restricted Payment that is permitted by the covenant described above under the
caption "--Certain Covenants--Restricted Payments" and (v) a disposition of
inventory or Cash Equivalents in the ordinary course of business will not be
deemed to be Asset Sales.
"ATTRIBUTABLE DEBT" in respect of a sale and leaseback transaction means, at
the time of determination, the present value (discounted at the rate of interest
implicit in such transaction, determined in accordance with GAAP) of the
obligation of the lessee for net rental payments during the remaining term of
the lease included in such sale and leaseback transaction (including any period
for which such lease has been extended or may, at the option of the lessor, be
extended).
"BRS" means Bruckmann, Rosser, Sherrill & Co., L.P., a Delaware limited
partnership.
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"CAPITAL LEASE OBLIGATION" means, at the time any determination thereof is
to be made, the amount of the liability in respect of a capital lease that would
at such time be required to be capitalized on a balance sheet in accordance with
GAAP.
"CAPITAL STOCK" means (i) in the case of a corporation, corporate stock,
(ii) in the case of an association or business entity, any and all shares,
interests, participation, rights or other equivalents (however designated) of
corporate stock, (iii) in the case of a partnership or limited liability
company, partnership or membership interests (whether general or limited) and
(iv) any other interest or participation that confers on a Person the right to
receive a share of the profits and losses of, or distributions of assets of, the
issuing Person.
"CASH EQUIVALENTS" means (i) United States dollars, (ii) securities issued
or directly and fully guaranteed or insured by the United States government or
any agency or instrumentality thereof having maturities of not more than one
year from the date of acquisition, (iii) certificates of deposit and eurodollar
time deposits with maturities of not more than one year from the date of
acquisition, bankers' acceptances with maturities of not more than one year from
the date of acquisition and overnight bank deposits, in each case with any
domestic commercial bank having capital and surplus in excess of $500.0 million
and a Thompson Bank Watch Rating of "B" or better, (iv) repurchase obligations
with a term of not more than seven days for underlying securities of the types
described in clauses (ii) and (iii) above entered into with any financial
institution meeting the qualifications specified in clause (iii) above, (v)
commercial paper having the highest rating obtainable from Moody's Investors
Service, Inc. or one of the two highest ratings from Standard & Poor's with
maturities of not more than one year from the date of acquisition, (vi)
investment funds investing 95% of their assets in securities of the types
described in clauses (i)--(v) above, and (vii) readily marketable direct
obligations issued by any State of the United States of America or any political
subdivision thereof having maturities of not more than one year from the date of
acquisition and having one of the two highest rating categories obtainable from
either Moody's Investors Service, Inc. or Standard & Poor's.
"CONSOLIDATED CASH FLOW" means, with respect to any Person for any period,
the Consolidated Net Income of such Person for such period plus (i) an amount
equal to any extraordinary loss plus any net loss realized in connection with an
Asset Sale (to the extent such losses were deducted in computing such
Consolidated Net Income), plus (ii) provision for taxes based on income or
profits of such Person and its Subsidiaries for such period, to the extent that
such provision for taxes was included in computing such Consolidated Net Income,
plus (iii) Fixed Charges, to the extent that any such Fixed Charge was deducted
in computing such Consolidated Net Income, plus (iv) depreciation and
amortization (including amortization of goodwill and other intangibles but
excluding amortization of prepaid cash expenses that were paid in a prior
period) of such Person and its Subsidiaries for such period to the extent that
such depreciation and amortization were deducted in computing such Consolidated
Net Income, minus (v) non-cash items increasing such Consolidated Net Income for
such period, in each case, on a consolidated basis and determined in accordance
with GAAP.
"CONSOLIDATED NET INCOME" means, with respect to any Person for any period,
the aggregate of the Net Income of such Person and its Subsidiaries (for such
period, on a consolidated basis, determined in accordance with GAAP); provided
that (i) the Net Income (but not loss) of any Person that is not a Subsidiary or
that is accounted for by the equity method of accounting shall be included only
to the extent of the amount of dividends or distributions paid in cash to the
referent Person or a Wholly Owned Subsidiary thereof, (ii) the Net Income of any
Subsidiary shall be excluded to the extent that the declaration or payment of
dividends or similar distributions by that Subsidiary of that Net Income is not
at the date of determination permitted without any prior governmental approval
(that has not been obtained) or, directly or indirectly, by operation of the
terms of its charter or any agreement, instrument, judgment, decree, order,
statute, rule or governmental regulation applicable to that Subsidiary or its
stockholders, (iii) the Net Income of any Person acquired in a pooling of
interests transaction for any period prior to the
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date of such acquisition shall be excluded, and (iv) the cumulative effect of a
change in accounting principles shall be excluded.
"CONSOLIDATED NET WORTH" means, with respect to any Person as of any date,
the sum of (i) the consolidated equity of the common stockholders of such Person
and its consolidated Subsidiaries as of such date plus (ii) the respective
amounts reported on such Person's balance sheet as of such date with respect to
any series of preferred stock (other than Disqualified Stock) that by its terms
is not entitled to the payment of dividends unless such dividends may be
declared and paid only out of net earnings in respect of the year of such
declaration and payment, but only to the extent of any cash received by such
Person upon issuance of such preferred stock, less (x) all write-ups (other than
write-ups resulting from foreign currency translations and write-ups of tangible
assets of a going concern business made within 12 months after the acquisition
of such business) subsequent to the date of the Indenture in the book value of
any asset owned by such Person or a consolidated Subsidiary of such Person, (y)
all investments as of such date in unconsolidated Subsidiaries and in Persons
that are not Subsidiaries (except, in each case, Permitted Investments) and (z)
all unamortized debt discount and expense and unamortized deferred charges as of
such date, all of the foregoing determined in accordance with GAAP.
"CONTINUING DIRECTOR" means, as of any date of determination, any member of
the Board of Directors of the Company who (i) was a member of such Board of
Directors on the date of the Indenture or (ii) was nominated for election or
elected to such Board of Directors with the approval of a majority of the
Continuing Directors who were members of such Board at the time of such
nomination or election.
"CREDIT AGREEMENT" means the Second Amended and Restated Credit Agreement,
dated as of August 11, 1997, among the Company, Heller Financial, Inc. and the
lenders from time to time party thereto (the "Heller Agreement"), as such
agreement may be amended, restated, modified, renewed, refunded, replaced or
refinanced from time to time thereafter, including any appendices, exhibits or
schedules to any of the foregoing, as the same may be in effect from time to
time, in each case, as such agreements may be amended, modified, supplemented,
renewed, refunded, replaced, refinanced, extended or restated from time to time
(whether with the original agents and lenders or other agents and lenders or
otherwise, and whether provided under the original credit agreement or other
credit agreements or otherwise), including any appendices, exhibits or schedules
to any of the foregoing.
"CREDIT FACILITIES" means, with respect to the Company, one or more debt
facilities (including, without limitation, the Credit Agreement) or commercial
paper facility with banks or other institutional lenders providing for revolving
credit loans, receivables financing (including through the sale of receivables
to such lenders or to special purpose entities formed to borrow from such
lenders against such receivables) or letters of credit, in each case, as
amended, restated, modified, renewed, refunded, replaced or refinanced in whole
or in part from time to time.
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"DEFAULT" means any event that is or with the passage of time or the giving
of notice (or both) would be an Event of Default.
"DISQUALIFIED STOCK" means any Capital Stock that, by its terms (or by the
terms of any security into which it is convertible or for which it is
exchangeable at the option of the holder thereof), or upon the happening of any
event, matures or is mandatorily redeemable, pursuant to a sinking fund
obligation or otherwise, or redeemable at the option of the holder thereof, in
whole or in part, on or prior to the date that is 91 days after the date on
which the Notes mature, except to the extent that such Capital Stock is solely
redeemable with, or solely exchangeable for, any Capital Stock of such Person
that is not Disqualified Stock.
"EQUITY INTERESTS" means Capital Stock and all warrants, options or other
rights to acquire Capital Stock (but excluding any debt security that is
convertible into, or exchangeable for, Capital Stock).
"EXISTING INDEBTEDNESS" means up to $1.0 million in aggregate principal
amount of Indebtedness of the Company and its Subsidiaries (other than
Indebtedness under the Credit Agreement and the Notes) in existence on the date
of the Indenture, until such amounts are repaid.
"FIXED CHARGES" means, with respect to any Person for any period, the sum,
without duplication, of (i) the consolidated interest expense of such Person and
its Subsidiaries for such period, whether paid or accrued (including, without
limitation, amortization of debt issuance costs and original issue discount
(other than issuance costs and discounts incurred on the date of the Indenture),
non-cash interest payments, the interest component of any deferred payment
obligations, the interest component of all payments associated with Capital
Lease Obligations, commissions, discounts and other fees and charges incurred in
respect of letter of credit or bankers' acceptance financings, and net payments
(if any) pursuant to Hedging Obligations), (ii) the consolidated interest of
such Person and its Subsidiaries that was capitalized during such period, (iii)
any interest expense on Indebtedness of another Person that is Guaranteed by
such Person or one of its Subsidiaries or secured by a Lien on assets of such
Person or one of its Subsidiaries (whether or not such Guarantee or Lien is
called upon) and (iv) the product of (a) all dividend payments, whether or not
in cash, on any series of preferred stock of such Person or any of its
Subsidiaries, other than dividend payments on Equity Interests payable solely in
Equity Interests of the Company (other than Disqualified Stock), times (b) a
fraction, the numerator of which is one and the denominator of which is one
minus the then current combined federal, state and local statutory tax rate of
such Person, expressed as a decimal, in each case, on a consolidated basis and
in accordance with GAAP.
"FIXED CHARGE COVERAGE RATIO" means with respect to any Person for any
period, the ratio of the Consolidated Cash Flow of such Person for such period
to the Fixed Charges of such Person for such period. In the event that the
Company or any of its Subsidiaries incurs, assumes, Guarantees or redeems any
Indebtedness (other than revolving credit borrowings under any Credit Facility)
or issues preferred stock subsequent to the commencement of the period for which
the Fixed Charge Coverage Ratio is being calculated but on or prior to the date
on which the event for which the calculation of the Fixed Charge Coverage Ratio
is made (the "Calculation Date"), then the Fixed Charge Coverage Ratio shall be
calculated giving pro forma effect to such incurrence, assumption, Guarantee or
redemption of Indebtedness, or such issuance or redemption of preferred stock,
as if the same had occurred at the beginning of the applicable four-quarter
reference period. In addition, for purposes of making the computation referred
to above, (i) acquisitions that have been made by the Company or any of its
Subsidiaries, including through mergers or consolidations and including any
related financing transactions, during the four-quarter reference period or
subsequent to such reference period and on or prior to the Calculation Date
shall be deemed to have occurred on the first day of the four-quarter reference
period and Consolidated Cash Flow for such reference period shall be calculated
without giving effect to clause (iii) of the proviso set forth in the definition
of Consolidated Net Income, (ii) the Consolidated Cash Flow attributable to
discontinued operations, as determined in accordance with GAAP, and operations
or businesses disposed of prior to the Calculation Date, shall be excluded, and
(iii) the Fixed Charges attributable to discontinued operations, as
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determined in accordance with GAAP, and operations or businesses disposed of
prior to the Calculation Date, shall be excluded, but only to the extent that
the obligations giving rise to such Fixed Charges will not be obligations of the
referent Person or any of its Subsidiaries following the Calculation Date.
"GAAP" means generally accepted accounting principles set forth in the
opinions and pronouncements of the Accounting Principles Board of the American
Institute of Certified Public Accountants, the statements and pronouncements of
the Financial Accounting Standards Board and such other statements by such other
entities as have been approved by a significant segment of the accounting
profession, which are applicable at the date of determination.
"GUARANTEE" means a guarantee (other than by endorsement of negotiable
instruments for collection in the ordinary course of business), direct or
indirect, in any manner (including, without limitation, letters of credit and
reimbursement agreements in respect thereof), of all or any part of any
Indebtedness.
"HEDGING OBLIGATIONS" means, with respect to any Person, the net payment
Obligations of such Person under (i) interest rate swap agreements, interest
rate cap agreements and interest rate collar agreements and (ii) other
agreements or arrangements designed to protect such Person against fluctuations
in interest rates or currency exchange rates.
"INDEBTEDNESS" means, with respect to any Person, any indebtedness of such
Person, whether or not contingent, in respect of borrowed money or evidenced by
bonds, notes, debentures or similar instruments or letters of credit (or
reimbursement agreements in respect thereof) or banker's acceptances or
representing Capital Lease Obligations or the balance deferred and unpaid of the
purchase price of any property or representing any Hedging Obligations, except
any such balance that constitutes an accrued expense or trade payable, if and to
the extent any of the foregoing indebtedness (other than letters of credit and
Hedging Obligations) would appear as a liability upon a balance sheet of such
Person prepared in accordance with GAAP, as well as all Indebtedness of others
secured by a Lien on any asset of such Person (whether or not such Indebtedness
is assumed by such Person) and, to the extent not otherwise included, the
Guarantee by such Person of any Indebtedness of any other Person, and any
liability, whether or not contingent, whether or not it appears on the balance
sheet of such Person. The amount of any Indebtedness outstanding as of any date
shall be the accreted value thereof, in the case of any Indebtedness that does
not require current payments of interest.
"INVESTMENTS" means, with respect to any Person, all investments by such
Person in other Persons (including Affiliates) in the forms of direct or
indirect loans (including Guarantees of Indebtedness or other Obligations),
advances or capital contributions (excluding commission, travel and
entertainment, moving, and similar advances to officers and employees made in
the ordinary course of business), purchases or other acquisitions for
consideration of Indebtedness, Equity Interests or other securities, together
with all items that are or would be classified as investments on a balance sheet
prepared in accordance with GAAP. If Holdings, the Company or any of their
respective Subsidiaries sells or otherwise disposes of any Equity Interests of
any direct or indirect Subsidiary of Holdings or the Company such that, after
giving effect to any such sale or disposition, such Person is no longer a direct
or indirect Subsidiary of Holdings or the Company, Holdings, the Company, or
such Subsidiary, as the case may be, shall be deemed to have made an Investment
on the date of any such sale or disposition equal to the fair market value of
the Equity Interests of such Subsidiary not sold or disposed of in an amount
determined as provided in the final paragraph of the covenant described above
under the caption "--Certain Covenants--Restricted Payments."
"LIEN" means, with respect to any asset, any mortgage, lien, pledge, charge,
security interest or encumbrance of any kind in respect of such asset, whether
or not filed, recorded or otherwise perfected under applicable law (including
any conditional sale or other title retention agreement, any lease in the nature
thereof, any option or other agreement to sell or give a security interest in
any asset and any filing of or agreement to give any financing statement under
the Uniform Commercial Code (or equivalent statutes) of any jurisdiction).
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"NET INCOME" means, with respect to any Person, the net income (loss) of
such Person, determined in accordance with GAAP and before any reduction in
respect of preferred stock dividends, excluding, however, (i) any gain (but not
loss), together with any related provision for taxes on such gain (but not
loss), realized in connection with (a) any Asset Sale (including, without
limitation, dispositions pursuant to sale and leaseback transactions) or (b) the
disposition of any securities by such Person or any of its Subsidiaries or the
extinguishment of any Indebtedness of such Person or any of its Subsidiaries and
(ii) any extraordinary or nonrecurring gain (but not loss), together with any
related provision for taxes on such extraordinary or nonrecurring gain (but not
loss).
"NET PROCEEDS" means the aggregate cash proceeds or Cash Equivalents
received by the Company or any of its Subsidiaries in respect of any Asset Sale
(including, without limitation, any cash received upon the sale or other
disposition of any non-cash consideration received in any Asset Sale), net of
all costs relating to such Asset Sale (including, without limitation, legal,
accounting, investment banking and brokers fees, and sales and underwriting
commissions) and any relocation expenses incurred as a result thereof, taxes
paid or payable as a result thereof (after taking into account any available tax
credits or deductions and any tax sharing arrangements), amounts required to be
applied to the repayment of Indebtedness (other than Indebtedness under any
Credit Facility) secured by a Lien on the asset or assets that were the subject
of such Asset Sale and any reserve for adjustment in respect of the sale price
of such asset or assets established in accordance with GAAP.
"OBLIGATIONS" means any principal, premium (if any), interest (including
interest accruing on or after the filing of any petition in bankruptcy or for
reorganization relating to Holdings, the Company or their Subsidiaries whether
or not a claim for post-filing interest is allowed in such proceeding),
penalties, fees, charges, expenses, indemnifications, reimbursement obligations,
damages (including Liquidated Damages), guarantees and other liabilities or
amounts payable under the documentation governing any Indebtedness or in respect
thereof.
"PERMITTED BUSINESS" means the lines of business conducted by the Company on
the date hereof and businesses reasonably related thereto.
"PERMITTED INVESTMENTS" means (a) any Investment in the Company or in a
Wholly Owned Subsidiary of the Company that is a Guarantor; (b) any Investment
in Cash Equivalents; (c) any Investment by the Company or any Subsidiary of the
Company in a Person engaged in a Permitted Business, if as a result of such
Investment (i) such Person becomes a Wholly Owned Subsidiary of the Company and
a Guarantor or (ii) such Person is merged, consolidated or amalgamated with or
into, or transfers or conveys substantially all of its assets to, or is
liquidated into, the Company or a Wholly Owned Subsidiary of the Company that is
a Guarantor; (d) any Restricted Investment made as a result of the receipt of
non-cash consideration from an Asset Sale that was made pursuant to and in
compliance with the covenant described above under the caption "--Repurchase at
the Option of Holders--Asset Sales;" (e) any acquisition of assets solely in
exchange for the issuance of Equity Interests (other than Disqualified Stock) of
Holdings; (f) other Investments by the Company or any of its Subsidiaries in any
Person having an aggregate fair market value (measured as of the date made and
without giving effect to subsequent changes in value), when taken together with
all other Investments made pursuant to this clause (f) that are at the time
outstanding, not to exceed $4.0 million; (g) intercompany loans to the extent
permitted by the covenant described above under the caption "--Certain
Covenants--Incurrence of Indebtedness and Issuance of Preferred Stock;" and (h)
loans by the Company in an aggregate principal amount not exceeding $1.0 million
to employees of the Company or its Subsidiaries to finance the sale of Holdings
Capital Stock by Holdings to such employees; PROVIDED THAT the net cash proceeds
from such sales respecting such loaned amounts will not be included in the
calculation described in clause (c) of the second paragraph of the covenant
described above under the caption "--Certain Covenants--Restricted Payments."
"PERMITTED LIENS" means (i) Liens on assets of the Company or any of the
Guarantors to secure Senior Debt permitted by the Indenture to be incurred; (ii)
Liens on the assets of the Company or any of the
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Guarantors to secure Hedging Obligations with respect to Indebtedness under any
Credit Facility permitted by the Indenture to be incurred; (iii) Liens on
property of a Person existing at the time such Person is merged into or
consolidated with the Company or any Subsidiary of the Company; PROVIDED THAT
such Liens were in existence prior to the contemplation of such merger or
consolidation and do not extend to any assets other than those of the Person
merged into or consolidated with the Company; (iv) Liens on property existing at
the time of acquisition thereof by the Company or any Subsidiary of the Company,
PROVIDED THAT such Liens were in existence prior to the contemplation of such
acquisition and only extend to the property so acquired; (v) Liens existing on
the date of the Indenture; (vi) Liens to secure any Permitted Refinancing
Indebtedness incurred to refinance any Indebtedness secured by any Lien referred
to in the foregoing clauses (i) through (v), PROVIDED, HOWEVER, that such new
Lien shall be limited to all or part of the same property that secured the
original Lien (PROVIDED THAT such Liens may extend to after-acquired property,
including any assets or Capital Stock of any subsequently formed or acquired
Subsidiary, if such original Lien included such property or assets as
collateral) and the Indebtedness secured by such Lien at such time is not
increased to any amount greater than permitted under clauses (i) and (xii) of
the Covenant described above under the caption "--Certain Covenants--Incurrence
of Indebtedness and Issuance of Preferred Stock" in the case of Senior Debt
under any Credit Facility, or, in the case of other Indebtedness, the
outstanding principal amount or, if greater, committed amount of the
Indebtedness described under clauses (i) through (v), as the case may be, at the
time the original Lien became a permitted Lien; (vii) Liens in favor of the
Company or any Wholly Owned Subsidiary that is a Guarantor; (viii) Liens
incurred in the ordinary course of business of the Company or any Subsidiary of
the Company with respect to obligations that do not exceed $5.0 million in the
aggregate at any one time outstanding and that (a) are not incurred in
connection with the borrowing of money or the obtaining of advances or credit
(other than trade credit in the ordinary course of business) and (b) do not in
the aggregate materially detract from the value of the property or materially
impair the use thereof in the operation of business by the Company or such
Subsidiary; (ix) Liens to secure the performance of statutory obligations,
surety or appeal bonds, performance bonds, deposits to secure the performance of
bids, trade contracts, government contracts, leases or licenses or other
obligations of a like nature incurred in the ordinary course of business
(including, without limitation, landlord Liens on leased properties); (x) Liens
for taxes, assessments or governmental charges or claims that are not yet
delinquent or that are being contested in good faith by appropriate proceedings
promptly instituted and diligently prosecuted, PROVIDED THAT any reserve or
other appropriate provision as shall be required to conform with GAAP shall have
been made therefor; (xi) Liens to secure Indebtedness (including Capital Lease
Obligations) permitted by clause (v) of the second paragraph of the covenant
described above under the caption "--Certain Covenants--Incurrence of
Indebtedness and Issuance of Preferred Stock" covering only the assets acquired
with such Indebtedness; (xii) carriers', warehousemen's, mechanics', landlords'
materialmen's, repairmen's or other like Liens arising in the ordinary course of
business in respect of obligations not overdue for a period in excess of 60 days
or which are being contested in good faith by appropriate proceedings promptly
instituted and diligently prosecuted; PROVIDED THAT any reserve or other
appropriate provision as shall be required to conform with GAAP shall have been
made therefor; (xiii) easements, rights-of-way, zoning and similar restrictions
and other similar encumbrances or title defects incurred, or leases or subleases
granted to others, in the ordinary course of business, which do not in any case
materially detract from the value of the property subject thereto or do not
interfere with or adversely affect in any material respect the ordinary conduct
of the business of the Company and its Subsidiaries taken as a whole; (xiv)
Liens in favor of customs and revenue authorities to secure payment of customs
duties in connection with the importation of goods in the ordinary course of
business and other similar Liens arising in the ordinary course of business;
(xv) leases or subleases granted to third Persons not interfering with the
ordinary course of business of Holdings, the Company or any of their respective
Subsidiaries; (xvi) Liens (other than any Lien imposed by ERISA or any rule or
regulation promulgated thereunder) incurred or deposits made in the ordinary
course of business in connection with workers' compensation, unemployment
insurance, and other types of social security; (xvii) deposits, in an aggregate
not to exceed $250,000, made in the ordinary course of business to secure
liability to insurance carriers; (xviii) Liens for purchase money obligations
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(including refinancings thereof permitted under the covenant described above
under the caption
"--Certain Covenants--Incurrence of Indebtedness and Issuance of Preferred
Stock"), PROVIDED THAT (A) the Indebtedness secured by any such Lien is
permitted under the covenant described above under the caption "--Certain
Covenants--Incurrence of Indebtedness and Issuance of Preferred Stock" and (B)
any such Lien encumbers only the asset so purchased; (xix) any attachment or
judgment Lien not constituting an Event of Default under clause (i) of the first
paragraph of the section described above under the caption "--Events of Default
and Remedies"; (xx) any interest or title of a lessor or sublessor under any
operating lease; and (xxi) Liens under licensing agreements for use of
Intellectual Property entered into in the ordinary course of business.
"PERMITTED REFINANCING INDEBTEDNESS" means any Indebtedness of the Company
or any of its Subsidiaries issued in exchange for, or the net proceeds of which
are used to extend, refinance, renew, replace, defease or refund other
Indebtedness of the Company or any of its Subsidiaries (other than intercompany
Indebtedness); PROVIDED THAT: (i) the principal amount (or accreted value, if
applicable) of such Permitted Refinancing Indebtedness does not exceed the
amount permitted by clause (i) of the second paragraph under the covenant
described above under the caption "--Certain Covenants--Incurrence of
Indebtedness and Issuance of Preferred Stock;" plus accrued and unpaid interest
thereon in the case of the Credit Agreement, or the principal amount of (or
accreted value, if applicable), plus accrued and unpaid interest on, any other
Indebtedness so extended, refinanced, renewed, replaced, defeased or refunded
(plus the amount of reasonable expenses incurred in connection therewith); (ii)
such Permitted Refinancing Indebtedness has a final maturity date later than the
final maturity date of, and has a Weighted Average Life to Maturity equal to or
greater than the Weighted Average Life to Maturity of, the Indebtedness being
extended, refinanced, renewed, replaced, defeased or refunded; (iii) if the
Indebtedness being extended, refinanced, renewed, replaced, defeased or refunded
is subordinated in right of payment to the Notes, such Permitted Refinancing
Indebtedness has a final maturity date later than the final maturity date of,
and is subordinated in right of payment to, the Notes on terms at least as
favorable to the Holders of Notes as those contained in the documentation
governing the Indebtedness being extended, refinanced, renewed, replaced,
defeased or refunded; and (iv) such Indebtedness is incurred either by the
Company or a Subsidiary who is the obligor on the Indebtedness being extended,
refinanced, renewed, replaced, defeased or refunded.
"PUBLIC EQUITY OFFERING" means any underwritten primary public offering of
the Common Stock or other Voting Stock of the Company or Holdings, pursuant to
an effective registration statement (other than a registration statement on Form
S-4, Form S-8, or any successor or similar form) under the Securities Act.
"REPRESENTATIVE" means the administrative agent under the Credit Agreement
or its successor thereunder or any similar agent for any Designated Senior Debt.
"RESTRICTED INVESTMENT" means an Investment other than a Permitted
Investment.
"SIGNIFICANT SUBSIDIARY" means any Subsidiary that would be a "significant
subsidiary" as defined in Article 1, Rule 1-02 of Regulation S-X, promulgated
pursuant to the Securities Act, as such Regulation is in effect on the date of
the Indenture.
"STATED MATURITY" means, with respect to any installment of interest or
principal on any series of Indebtedness, the date on which such payment of
interest or principal was scheduled to be paid in the Credit Agreement or other
original documentation governing such Indebtedness, and shall not include any
contingent obligations to repay, redeem or repurchase any such interest or
principal prior to the date originally scheduled for the payment thereof.
"SUBSIDIARY" means, with respect to any Person, (i) any corporation,
association or other business entity of which more than 50% of the total voting
power of shares of Capital Stock entitled (without regard to the occurrence of
any contingency) to vote in the election of directors, managers or trustees
thereof is at
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the time owned or controlled, directly or indirectly, by such Person and (ii)
any partnership (a) the sole general partner or the managing general partner of
which is such Person or an entity described in clause (i) and related to such
Person or (b) the only general partners of which are such Person or one or more
entities described in clause (i) and related to such Person (or any combination
thereof).
"SUBSIDIARY GUARANTEE" means the Guarantee of the Notes by each of the
Guarantors pursuant to Article 11 of the Indenture and in the form of Guarantee
endorsed on the form of Note attached as Exhibit A to the Indenture and any
additional Guarantee of the Notes to be executed by any Subsidiary of the
Company pursuant to the covenant described above under the caption "--Certain
Covenants-- Additional Subsidiary Guarantees."
"VOTING STOCK" of any Person as of any date means the Capital Stock of such
Person that is at the time entitled to vote in the election of the Board of
Directors of such Person.
"WEIGHTED AVERAGE LIFE TO MATURITY" means, when applied to any Indebtedness
at any date, the number of years obtained by dividing (i) the sum of the
products obtained by multiplying (a) the amount of each then remaining
installment, sinking fund, serial maturity or other required payments of
principal, including payment at final maturity, in respect thereof, by (b) the
number of years (calculated to the nearest one-twelfth) that will elapse between
such date and the making of such payment, by (ii) the then outstanding principal
amount of such Indebtedness.
"WHOLLY OWNED SUBSIDIARY" means a Subsidiary, 100% of the outstanding
Capital Stock and other Equity Interests of which is directly or indirectly
owned by the Company or Holdings.
PLAN OF DISTRIBUTION
Each broker-dealer that receives New 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 New Notes. This Prospectus, as it may be
amended or supplemented from time to time, may be used by a broker-dealer in
connection with resales of New Notes received in exchange for Existing Notes
where such Existing Notes were acquired as a result of market-making activities
or other trading activities. The Company has agreed that, for a period of one
year after the Effective Date, it will make this Prospectus, as amended or
supplemented, available to any broker-dealer for use in connection with any such
resale. In addition, until , 1998 (90 days after the date of this
Prospectus), all dealers effecting transactions in the New Notes may be required
to deliver a prospectus.
The Company will not receive any proceeds from any sale of New Notes by
broker-dealers. New Notes received by 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 New 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 price or negotiated prices. Any such resale may be made
directly to purchasers or to or through brokers or dealers who may receive
compensation in the form of commissions or concessions from any such
broker-dealer or the purchasers of any such New Notes. Any broker-dealer that
resells New 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 New Notes may be deemed to be an "underwriter" within the meaning of the
Securities Act and any profit on any such resale of New 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 broker-dealer will not be deemed to admit that it is an
"underwriter" within the meaning of the Securities Act. For a period of one year
after the Effective Date, the Company will promptly send additional copies of
this Prospectus and any amendment or supplement to this Prospectus to any
broker-dealer that requests such documents in the Letter of Transmittal. The
Company has agreed to pay all expenses incident to the Exchange Offer (including
the expenses of one counsel for the holders of the Existing Notes) other than
commissions or
105
<PAGE>
concessions of any brokers or dealers and will indemnify the holders of the
Existing Notes (including any broker-dealers) against certain liabilities,
including liabilities under the Securities Act.
The Company has covenanted with the Initial Purchasers that it will file
with the Commission an Exchange Offer Registration Statement under the
Securities Act with respect to an issue of New Notes, will use its best efforts
to cause the Exchange Offer Registration Statement to become effective under the
Securities Act, will offer to the holders of the Notes who are not prohibited by
law or policy of the Commission from participating in the Exchange Offer the
opportunity to exchange their Notes for New Notes, which New Notes will be
substantially identical in all respects to the Notes (except that the New Notes
generally will not contain terms with respect to transfer restrictions). Under
certain circumstances, the Company has agreed to file a Shelf Registration
Statement and to use its best efforts to cause such Shelf Registration Statement
to be declared effective. The Company, under certain circumstances, will be
required to pay Liquidated Damages if the Company is not in compliance with
certain of its obligations under the Registration Rights Agreement. See
"Description of Notes -- Registration Rights; Liquidated Damages."
LEGAL MATTERS
The validity of the New Notes offered hereby will be passed upon for the
Company by Dechert Price & Rhoads, New York, New York.
EXPERTS
The financial statements of B&G Foods, Inc. and subsidiaries as of September
27, 1997 and December 28, 1996, and for the 39-week period ended September 27,
1997, and the years ended December 28, 1996 and December 30, 1995, have been
included herein and in the Registration Statement in reliance upon the report of
KPMG Peat Marwick LLP, independent certified public accountants, appearing
elsewhere herein, and upon the authority of said firm as experts in accounting
and auditing. The report of KPMG Peat Marwick LLP states that as further
described in note 1 to the financial statements, the Predecessor was acquired on
December 27, 1996 in a business combination accounted for as a purchase. As a
result, the Successor Consolidated financial statements are presented on a
different basis of accounting than the Predecessor Combined financial statements
and, therefore, are not comparable.
The combined financial statements of the Nabisco Brands as of June 17, 1997
and December 31, 1996, and for the 24-week period ended June 17, 1997 and the
years ended December 31, 1996 and 1995, have been included herein and in the
Registration Statement in reliance upon the report of KPMG Peat Marwick LLP,
independent certified public accountants, appearing elsewhere herein, and upon
the authority of said firm as experts in accounting and auditing. The report of
KPMG Peat Marwick LLP states that the financial statements of the Nabisco Brands
were prepared to present the net assets acquired and the product contribution of
the Nabisco Brands pursuant to the purchase agreement between Nabisco, Inc. and
RWBV Acquisition Corp., a wholly-owned, indirect subsidiary of B&G Foods, Inc.
(the "Buyer") as described in note 1 and are not intended to be a complete
presentation of the Nabisco Brands' financial position, results of operations
and cash flows.
The consolidated financial statements of JEM Brands, Inc. and subsidiary as
of August 15, 1997 and December 28, 1996, and the 33-week period ended August
15, 1997 and the years ended December 28, 1996 and December 31, 1995, have been
included herein and in the Registration Statement in reliance upon the report of
KPMG Peat Marwick LLP, independent certified public accountants, appearing
elsewhere herein, and upon the authority of said firm as experts in accounting
and auditing.
106
<PAGE>
INDEX TO FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
PAGE
---------
<S> <C>
B&G FOODS, INC.
Independent Auditors' Report............................................................................... F-2
Balance Sheets as of September 27, 1997 and December 28, 1996.............................................. F-3
Statements of Operations for the 39-week period ended September 27, 1997
and fiscal years ended December 28, 1996 and December 30, 1995........................................... F-4
Statements of Cash Flows for the 39-week period ended September 27, 1997
and fiscal years ended December 28, 1996 and December 30, 1995........................................... F-5
Notes to Financial Statements.............................................................................. F-6
THE NABISCO BRANDS
Independent Auditors' Report............................................................................... F-23
Combined Statements of Net Assets Acquired as of June 17, 1997
and December 31, 1996.................................................................................... F-24
Combined Statements of Product Contribution for the 24-week period ended
June 17, 1997 and fiscal years ended December 31, 1996 and December 31, 1995............................. F-25
Notes to Combined Financial Statements..................................................................... F-26
JEM BRANDS, INC.
Independent Auditors' Report............................................................................... F-29
Consolidated Balance Sheets as of August 15, 1997 and December 28, 1996.................................... F-30
Consolidated Statements of Earnings for the 33-week period ended August 15, 1997
and fiscal years ended December 28, 1996 and December 31, 1995........................................... F-31
Consolidated Statements of Retained Earnings for the 33-week period ended
August 15, 1997 and fiscal years ended December 28, 1996 and December 31, 1995........................... F-32
Consolidated Statements of Cash Flows for the 33-week period ended August 15, 1997
and fiscal years ended December 28, 1996 and December 31, 1995........................................... F-33
Notes to Consolidated Financial Statements................................................................. F-34
</TABLE>
F-1
<PAGE>
INDEPENDENT AUDITORS' REPORT
The Board of Directors and Stockholders
B&G Foods, Inc.:
We have audited the accompanying balance sheets of B&G Foods, Inc. and
subsidiaries (Successor Consolidated) as of September 27, 1997 and December 28,
1996, and the related statements of operations, and cash flows for the 39-week
period ended September 27, 1997, and the statements of operations, and cash
flows for the Predecessor Combined (as described in note 1) for the years ended
December 28, 1996 and December 30, 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 audits.
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.
As further described in note 1, the Predecessor was acquired on December 27,
1996 in a business combination accounted for as a purchase. As a result, the
Successor Consolidated financial statements are presented on a different basis
of accounting than the Predecessor Combined financial statements and, therefore,
are not comparable.
In our opinion, the Successor Consolidated financial statements referred to
above present fairly, in all material respects, the financial position of B&G
Foods, Inc. and subsidiaries as of September 27, 1997 and December 28, 1996, and
the results of their operations and their cash flows for the 39-week period
ended September 27, 1997 in conformity with generally accepted accounting
principles. Further, in our opinion, the Predecessor Combined financial
statements referred to above present fairly, in all material respects, the
results of operations and cash flows of the Predecessor Combined for the years
ended December 28, 1996 and December 30, 1995 in conformity with generally
accepted accounting principles.
KPMG Peat Marwick LLP
Short Hills, New Jersey
October 31, 1997
F-2
<PAGE>
B&G FOODS, INC. AND SUBSIDIARIES
BALANCE SHEETS
(DOLLARS IN THOUSANDS, EXCEPT SHARE DATA)
<TABLE>
<CAPTION>
SEPT. 27, DEC. 28,
1997 1996
(SUCCESSOR (SUCCESSOR
CONSOLIDATED) CONSOLIDATED)
------------- -------------
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents......................................................... $ 3,699 $ 291
Trade accounts receivable, less allowance for doubtful accounts of $564 in 1997... 13,117 8,373
Inventories....................................................................... 28,670 23,609
Prepaid expenses and other current assets......................................... 2,116 494
Deferred income taxes............................................................. 2,958 2,260
------------- -------------
Total current assets............................................................ 50,560 35,027
Property, plant and equipment, net.................................................. 23,489 15,584
Intangible assets, net.............................................................. 101,635 50,650
Other assets........................................................................ 5,335 2,151
------------- -------------
Total assets.................................................................... $ 181,019 $ 103,412
------------- -------------
------------- -------------
LIABILITIES AND STOCKHOLDER'S EQUITY
Current liabilities:
Current installments of long-term debt............................................ $ 280 $ 1,976
Trade accounts payable............................................................ 19,881 14,334
Accrued expenses.................................................................. 9,569 7,716
Due to related parties............................................................ 121 4,009
------------- -------------
Total current liabilities....................................................... 29,851 28,035
Long-term debt, including amounts payable to related parties of $795 and $13,650 in
1997 and 1996, respectively....................................................... 121,121 51,537
Other liabilities................................................................... 186 730
Deferred income taxes............................................................... 11,632 10,610
------------- -------------
Total liabilities............................................................... 162,790 90,912
------------- -------------
Stockholder's equity:
Common stock, $.01 par value per share.
Authorized 1,000 shares; issued and outstanding 1 share in 1997
and 1996........................................................................ -- --
Additional paid-in capital........................................................ 20,000 13,000
Receivable from stock issuance.................................................... -- (500)
Accumulated deficit............................................................... (1,771) --
------------- -------------
Total stockholder's equity...................................................... 18,229 12,500
------------- -------------
Commitments and contingencies (notes 6, 12 and 13)
Total liabilities and stockholder's equity...................................... $ 181,019 $ 103,412
------------- -------------
------------- -------------
</TABLE>
See accompanying notes to financial statements.
F-3
<PAGE>
B&G FOODS, INC. AND SUBSIDIARIES
STATEMENTS OF OPERATIONS
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
39-WEEK 39-WEEK
PERIOD ENDED PERIOD ENDED YEAR ENDED
SEPT. 27, SEPT. 28, YEAR ENDED DEC. 30,
1997 1996 DEC. 28, 1996 1995
(SUCCESSOR (PREDECESSOR (PREDECESSOR (PREDECESSOR
CONSOLIDATED) COMBINED) COMBINED) COMBINED)
------------- ------------- ------------- ------------
<S> <C> <C> <C> <C>
(UNAUDITED)
Net sales............................................. $ 104,337 $ 97,067 $ 129,307 $ 112,245
Cost of goods sold.................................... 70,064 68,873 91,187 79,293
------------- ------------- ------------- ------------
Gross profit...................................... 34,273 28,194 38,120 32,952
Sales, marketing and distribution expenses............ 24,350 21,555 28,414 23,863
General and administrative expenses................... 3,165 2,000 2,941 2,598
Management fees--related parties...................... 191 939 1,249 1,097
------------- ------------- ------------- ------------
Operating income.................................. 6,567 3,700 5,516 5,394
Other expense:
Interest expense--related parties................... 788 3,304 4,452 3,624
Interest expense.................................... 5,320 156 197 156
------------- ------------- ------------- ------------
Income before income tax expense and extraordinary
item............................................ 459 240 867 1,614
Income tax expense.................................... 426 35 591 896
------------- ------------- ------------- ------------
Income before extraordinary item.................. 33 205 276 718
Extraordinary item, net of income tax benefit of
$1,138.............................................. (1,804) -- -- --
------------- ------------- ------------- ------------
Net (loss) income................................. $ (1,771) $ 205 $ 276 $ 718
------------- ------------- ------------- ------------
------------- ------------- ------------- ------------
</TABLE>
See accompanying notes to financial statements.
F-4
<PAGE>
B&G FOODS, INC. AND SUBSIDIARIES
STATEMENTS OF CASH FLOWS
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
39-WEEK 39-WEEK
PERIOD ENDED PERIOD ENDED
SEPT. 27, SEPT. 28, YEAR ENDED YEAR ENDED
1997 1996 DEC. 28, 1996 DEC. 30, 1995
(SUCCESSOR (PREDECESSOR (PREDECESSOR (PREDECESSOR
CONSOLIDATED) COMBINED) COMBINED) COMBINED)
------------- ------------- ------------- ---------------
<S> <C> <C> <C> <C>
(UNAUDITED)
Cash flows from operating activities:
Net (loss) income................................................. $ (1,771) $ 205 $ 276 $ 718
Adjustments to reconcile net (loss) income to net cash provided by
operating activities:...........................................
Depreciation and amortization................................. 3,756 2,990 4,105 3,511
Amortization of deferred debt issuance costs.................. 473 -- -- --
Deferred income tax (benefit) expense......................... (934) -- 386 395
Extraordinary item............................................ 2,942 -- -- --
Provision for doubtful accounts............................... 564 -- -- --
Changes in assets and liabilities, net of effects from
businesses acquired:
Trade accounts receivable................................. (4,430) -- (190) (23)
Inventories............................................... 185 (967) (1,305) (3,198)
Prepaid expenses and other current assets................. (1,610) (656) (595) 194
Other assets.............................................. (8) -- (11) 3
Trade accounts payable.................................... 5,082 4,181 (1,214) 4,742
Accrued expenses.......................................... 749 (1,041) (1,496) (2,123)
Due to related parties.................................... 121 (2,239) 2,316 5,221
Other liabilities......................................... (399) (571) 12 301
------------- ------------- ------------- ------
Net cash provided by operating activities............. 4,720 1,902 2,284 9,741
------------- ------------- ------------- ------
Cash flows from investing activities:
Acquisition of New York Style..................................... -- -- -- (6,300)
Paid for Successor Acquisitions................................... (63,019) -- -- --
Paid for Acquired Companies....................................... (4,009) -- -- --
Capital expenditures.............................................. (2,976) (2,209) (2,573) (2,571)
Proceeds from sales of property, plant and equipment.............. 162 -- -- --
------------- ------------- ------------- ------
Net cash used in investing activities................. (69,842) (2,209) (2,573) (8,871)
------------- ------------- ------------- ------
Cash flows from financing activities:
Payments of long-term debt........................................ (68,379) (257) (318) (284)
Proceeds from issuance of long-term debt.......................... 143,000 -- -- --
Proceeds from issuance of common stock............................ 500 -- -- --
Payments of debt issuance costs................................... (6,591) -- -- --
------------- ------------- ------------- ------
Net cash provided by (used in) financing activities........... 68,530 (257) (318) (284)
------------- ------------- ------------- ------
Increase (decrease) in cash and cash equivalents.............. 3,408 (564) (607) 586
Cash and cash equivalents at beginning of period...................... 291 898 898 312
------------- ------------- ------------- ------
Cash and cash equivalents at end of period............................ $ 3,699 $ 334 $ 291 $ 898
------------- ------------- ------------- ------
------------- ------------- ------------- ------
Supplemental disclosure of cash flow information--cash paid for:
Interest.......................................................... $ 3,975 $ 138 $ 197 $ 155
------------- ------------- ------------- ------
------------- ------------- ------------- ------
Income taxes...................................................... $ 180 $ -- $ 203 $ 108
------------- ------------- ------------- ------
------------- ------------- ------------- ------
B&G Foods, Inc. Cash Transactions as of December 27, 1996:
Cash paid for Acquired Companies (note 1)......................... $ 63,240
Cash paid for deferred debt issuance costs........................ 1,328
-------------
Total investing activities.................................... $ 64,568
-------------
-------------
Cash proceeds from debt ($52,068) and equity ($12,500) financing
activities (note 1)............................................. $ 64,568
-------------
-------------
</TABLE>
See accompanying notes to financial statements.
F-5
<PAGE>
B&G FOODS, INC. AND SUBSIDIARIES
NOTES TO FINANCIAL STATEMENTS
(DOLLARS IN THOUSANDS)
(1) BUSINESS ACQUISITIONS AND NATURE OF OPERATIONS
ORGANIZATION, ACQUISITION AND FINANCING
B&G Foods, Inc. (formerly known as B Companies Acquisition Corp.) was
incorporated on November 13, 1996 to acquire (the "Acquisition") BGH Holdings,
Inc., the holding company of Bloch & Guggenheimer, Inc. and related companies,
and BRH Holdings, Inc., the holding company of Burns & Ricker, Inc.
(collectively, the "Acquired Companies" or the "Predecessor"), subsidiaries of
Specialty Foods Corporation ("SFC"). B&G Foods, Inc. and the Acquired Companies
upon the Acquisition are hereinafter referred to as the "Successor" or the
"Company." The Acquisition was structured as a stock purchase with an aggregate
purchase price of approximately $70,000, including transaction costs, and was
consummated on December 27, 1996. As part of the Acquisition, SFC guaranteed the
Company's trade receivables at December 27, 1996. On December 27, 1996, the
Company issued one share of common stock to, and became a wholly-owned
subsidiary of, B Companies Holdings Corp., which in turn is majority owned by
Bruckmann, Rosser, Sherrill and Co., L.P. ("BRS"), a private equity investment
firm, and minority owned by management and certain other investors.
In addition to initial equity of $12,500, the financing of the Acquisition
was provided through a $50,000 Senior Secured Credit Facility which consisted of
a Revolving Credit Facility of $23,500 and Term Loan Facilities A and B of
$14,500 and $12,000, respectively. Additionally, the Company issued $13,000 of
12% Senior Subordinated Notes due 2004 to BRS and other certain investors (the
"BRS Note").
NATURE OF OPERATIONS
The Company is a manufacturer, marketer and distributor of branded pickles,
peppers, bagel chips and other specialty food products to retailers and food
service establishments. The Company distributes these products to retailers in
the greater New York metropolitan area through a direct-store-door sales and
distribution system and elsewhere in the United States through a nationwide
network of independent brokers and distributors.
ACQUISITION ACCOUNTING
The Acquisition has been accounted for using the purchase method.
Accordingly, the excess of the purchase price over the fair value of
identifiable net assets acquired, representing goodwill, is included in
intangible assets. The consideration (including acquisition costs of $1,329) and
allocation of the purchase price are summarized below:
<TABLE>
<CAPTION>
<S> <C>
Purchase Price Consideration:
Term Loan Facilities A and B..................................................... $ 26,500
Revolving Credit Facility........................................................ 11,240
Proceeds from Common Stock Issuance.............................................. 12,500
12% Senior Subordinated Notes due to related parties............................. 13,000
Cash paid subsequent to December 27, 1996........................................ 5,337
Long-term liabilities assumed.................................................... 1,445
---------
$ 70,022
---------
---------
</TABLE>
F-6
<PAGE>
B&G FOODS, INC. AND SUBSIDIARIES
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
(DOLLARS IN THOUSANDS)
(1) BUSINESS ACQUISITIONS AND NATURE OF OPERATIONS (CONTINUED)
<TABLE>
<CAPTION>
Allocation of Purchase Price:
<S> <C>
Property, plant and equipment.................................................... $ 15,584
Intangible assets--trademarks.................................................... 29,804
Intangible assets--goodwill...................................................... 20,846
Other assets, principally net current assets..................................... 12,858
Deferred income tax liabilities.................................................. (9,070)
---------
$ 70,022
---------
---------
</TABLE>
RESTRUCTURING
As part of the Acquisition, management authorized and committed to a plan to
undertake certain restructuring moves, principally involving the consolidation
of several warehouse and production facilities resulting in restructuring
accruals of $1,536 as part of the allocation of the purchase price. The
restructuring consisted primarily of approximately $952 of estimated lease and
other tenancy costs through 1998, $228 in severance and termination benefits for
approximately 100 employees, and the remaining portion relating to charges
resulting from changes in the production process as part of the consolidation,
which was completed in June 1997. The Company does not expect to incur material
incremental costs. As of September 27, 1997, the restructuring reserve balance
was reduced to $738 as a result of cash expenditures relating primarily to
tenancy costs and severance payments.
SUCCESSOR ACQUISITIONS AND ACCOUNTING
On June 17, 1997, the Company acquired certain assets from Nabisco, Inc.
("Nabisco") for a purchase price of approximately $50,557, including
transactions costs. Financing for this acquisition and certain related
transaction fees and expenses was provided by $35,000 of new borrowings on an
amended and restated Senior Secured Credit Facility, and $17,000 of the proceeds
from the issuance of $23,000 of 12% Senior Subordinated Notes due December 16,
1997 (the "Interim Notes"), with $6,000 used to repay a portion of the BRS Note.
On August 15, 1997, the Company acquired all of the outstanding capital
stock of JEM Brands, Inc. ("JEM"), a manufacturer of peppers and branded hot
sauces, for approximately $12,462, including transaction costs. Financing for
this acquisition and certain related transaction fees and expenses was provided
by the proceeds from the issuance of $120,000 Senior Subordinated Notes on
August 11, 1997.
The above acquisitions (collectively, the "Successor Acquisitions") have
been accounted for using the purchase method and, accordingly, the assets
acquired, liabilities assumed, and results of operations are included in the
Successor Consolidated financial statements from the date of the acquisitions.
The excess of the purchase price over the fair value of identifiable net assets
acquired, representing goodwill, is included in intangible assets.
F-7
<PAGE>
B&G FOODS, INC. AND SUBSIDIARIES
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
(DOLLARS IN THOUSANDS)
(1) BUSINESS ACQUISITIONS AND NATURE OF OPERATIONS (CONTINUED)
The costs of the Successor Acquisitions have been allocated to tangible and
intangible assets as follows:
<TABLE>
<S> <C>
Property, plant and equipment...................................... $ 7,111
Intangible assets--trademarks...................................... 24,500
Intangible assets--goodwill........................................ 28,045
Other assets, principally net current assets....................... 4,621
Deferred income tax liabilities, net............................... (1,258)
---------
$ 63,019
---------
---------
</TABLE>
PREDECESSOR ACQUISITION AND ACCOUNTING
On September 11, 1995, the Predecessor completed the acquisition of
substantially all of the assets and certain liabilities of New York Style Bagel
Chips ("NYS") for total consideration of approximately $6,300. The transaction
was financed through additional borrowings from SFC. The Predecessor's
acquisition has been accounted for using the purchase method and, accordingly,
the assets acquired, liabilities assumed, and results of operations are included
in the Predecessor Combined financial statements from the date of acquisition.
The purchase price was allocated to the underlying assets and liabilities based
on their fair values, with the excess recorded as goodwill.
PRO FORMA SUMMARY OF OPERATIONS
The following unaudited pro forma summary of operations for the 39-week
period ended September 27, 1997 and fiscal year ended December 28, 1996 presents
the results of operations of the Company as if the Acquisition and Successor
Acquisitions had occurred as of the beginning of each of the respective fiscal
years. In addition to including the results of operations of the Acquired
Companies and the Successor Acquisitions, the pro forma information gives effect
primarily to interest on additional borrowings and changes in depreciation and
amortization of intangible assets.
<TABLE>
<CAPTION>
39-WEEK
PERIOD YEAR
ENDED ENDED
SEPT.27, DEC.28,
1997 1996
---------- ----------
<S> <C> <C>
Net sales............................................................. $ 124,841 $ 175,708
Income before extraordinary item...................................... $ 769 $ 2,646
---------- ----------
---------- ----------
</TABLE>
The pro forma information presented above does not purport to be indicative
of the results that actually would have been attained if the Acquisition, the
Successor Acquisitions, and related financing transactions had occurred at the
beginning of the years presented and is not intended to be a projection of
future results.
F-8
<PAGE>
B&G FOODS, INC. AND SUBSIDIARIES
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
(DOLLARS IN THOUSANDS)
(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(A) FISCAL YEAR AND BASIS OF PRESENTATION
The Company utilizes, as did the Predecessor, a 52-53 week fiscal year
ending on the last Saturday in December. Fiscal years 1996 and 1995 contain 52
weeks.
The Successor's financial statements are presented on a consolidated basis.
The Predecessor's financial statements are presented on a combined basis because
all of the Acquired Companies were under common control. All significant
intercompany balances and transactions have been eliminated.
B&G Foods, Inc. had no operations prior to the Acquisition and neither B&G
Foods, Inc. nor the Acquired Companies had any operations on Saturday, December
28, 1996. As a result, the statements of operations and cash flows for the
fiscal years ended December 28, 1996 and December 30, 1995 present the combined
results of operations of the Acquired Companies (Predecessor Combined). The
financial statements subsequent to the Acquisition are presented on a different
cost basis and use a different accounting policy (see note 2(f)) than the
financial statements prior to the Acquisition and, therefore, are not
comparable. Further, related party transactions (see note 11) affect the
comparability of the financial statements.
(B) CASH AND CASH EQUIVALENTS
For purposes of the statements of cash flows, all highly liquid debt
instruments with original maturities of three months or less are considered to
be cash and cash equivalents.
(C) INVENTORIES
Inventories are stated at the lower of cost or market. Cost is determined
using the first- in, first-out and average cost methods.
(D) PROPERTY, PLANT, AND EQUIPMENT
Property, plant, and equipment are stated at cost. Plant and equipment under
capital leases are stated at the present value of minimum lease payments.
Depreciation on plant and equipment is calculated using the straight-line method
over the estimated useful lives of the assets, generally 12 to 20 years for
buildings and improvements, 5 to 10 years for machinery and equipment, and 3 to
5 years for office furniture and vehicles. Plant and equipment held under
capital leases and leasehold improvements are amortized on a straight-line basis
over the shorter of the lease term or estimated useful life of the asset.
Expenditures for maintenance, repairs and minor replacements are charged to
current operations. Expenditures for major replacements and betterments are
capitalized.
Capital lease obligations of $122 and $759 were incurred during the 39-week
period ended September 27, 1997 and fiscal year 1995, respectively (none in
1996), when the Company entered into leases for new machinery and equipment.
(E) INTANGIBLE ASSETS
Intangible assets consist of goodwill and trademarks. Goodwill is amortized
on a straight-line basis over 40 years. Trademarks are amortized on a
straight-line basis over 20 to 40 years. The Company assesses the recoverability
of the intangible assets by determining whether the amortization of the
intangible
F-9
<PAGE>
B&G FOODS, INC. AND SUBSIDIARIES
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
(DOLLARS IN THOUSANDS)
(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(E) INTANGIBLE ASSETS (CONTINUED)
assets over their remaining lives can be recovered through undiscounted future
operating cash flows. The amount of impairment, if any, is measured based on
projected discounted future operating cash flows using a discount rate
reflecting the Company's average cost of funds. The assessment of the
recoverability of intangible assets will be impacted if estimated future
operating cash flows are not achieved.
(F) PACKAGE DESIGN COSTS
Package design costs relate to the development of product packaging and
labels. Prior to the Acquisition, the Predecessor capitalized package design
costs and amortized such costs over a four-year period. Since the Acquisition,
the Successor has expensed package design costs as incurred. Package design
costs expensed in the 39-week period ended September 27, 1997 were $161.
Amortization of package design costs in fiscal years 1996 and 1995 was $77 and
$25, respectively.
(G) DEFERRED DEBT ISSUANCE COSTS
Deferred debt issuance costs are amortized using the straight-line method
over the term of the related debt agreements and are classified as other
non-current assets. Amortization of deferred debt issuance costs for the 39-week
period ended September 27, 1997 was $473 (none in fiscal years 1996 and 1995).
As a result of the debt repayments and amendments described in note 7,
during the 39-week period September 27, 1997, the Company recorded an
extraordinary charge of $1,804, net of income tax benefit of $1,138, to write
off deferred debt issuance costs relating to its Senior Secured Credit Agreement
and the Interim Notes.
(H) ADVERTISING COSTS
Advertising costs are expensed as incurred. Advertising costs amounted to
approximately $87, $285 and $151 during the 39-week period ended September 27,
1997 and the fiscal years 1996 and 1995, respectively.
(I) INCOME TAXES
From August 17, 1993 to the date of the Acquisition, the Predecessor was
included in the consolidated federal income tax return of SFC. SFC was
responsible for the filing of income tax returns and payment of income taxes. No
formal tax sharing agreement existed between SFC and the Predecessor, and no
federal income taxes were allocated to the Predecessor. State income taxes were
allocated to the Predecessor based on the actual state income tax liability.
Income tax expense reported in the accompanying statements of operations for
fiscal 1996 and 1995 has been computed as if the Predecessor filed a separate
federal tax return.
Effective December 28, 1996, the Company is included in the consolidated
federal income tax return of B Companies Holdings Corp. Income tax expense
reported in the accompanying statement of operations for the 39-week period
ended September 27, 1997 has been computed as if the Company filed a separate
federal tax return.
F-10
<PAGE>
B&G FOODS, INC. AND SUBSIDIARIES
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
(DOLLARS IN THOUSANDS)
(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(I) INCOME TAXES (CONTINUED)
Deferred tax assets and liabilities of the Company are recognized for the
future tax consequences attributable to differences between the financial
statement carrying amounts of existing assets and liabilities and their
respective tax bases and operating loss and tax credit carryforwards. Deferred
tax assets and liabilities are measured using enacted tax rates expected to
apply to taxable income in the years in which those temporary differences are
expected to be recovered or settled. The effect on deferred tax assets and
liabilities of a change in tax rates is recognized in income in the period that
includes the enactment date.
(J) PENSION PLANS
The Company has defined benefit pension plans covering substantially all of
its employees. The Company's funding policy is to contribute annually the amount
recommended by its actuaries. Such plans are the same as the plans of the
Predecessor.
(K) FAIR VALUE OF FINANCIAL INSTRUMENTS
Cash and cash equivalents, accounts receivable, accounts payable and accrued
expenses are reflected in the financial statements at carrying value, which
approximates fair value due to the short-term nature of these instruments. The
carrying value of the Company's borrowings approximates the fair value based on
the current rates available to the Company for similar instruments.
(L) USE OF ESTIMATES
The preparation of financial statements in accordance with generally
accepted accounting principles requires management to make estimates and
assumptions relating to the reporting of assets and liabilities and the
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.
(M) IMPAIRMENT OF LONG-LIVED ASSETS AND LONG-LIVED ASSETS TO BE DISPOSED OF
The provisions of Statement of Financial Accounting Standards No. 121,
"Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to
Be Disposed Of", were adopted on December 31, 1995. This statement requires that
long-lived assets and certain identifiable intangibles be reviewed for
impairment whenever events or changes in circumstances indicate that the
carrying amount of an asset may not be recoverable. Recoverability of assets to
be held and used is measured by a comparison of the carrying amount of an asset
to future net cash flows expected to be generated by the asset. If such assets
are considered to be impaired, the impairment to be recognized is measured by
the amount by which the carrying amount of the assets exceeds the fair value of
the assets. Assets to be disposed of are reported at the lower of the carrying
amount or fair value less costs to sell. Adoption of this statement did not have
a material impact on the Company's financial position, results of operations, or
liquidity.
(N) RECLASSIFICATIONS
Certain amounts in the December 28, 1996 financial statements have been
reclassified to conform with the September 27, 1997 financial statement
presentation.
F-11
<PAGE>
B&G FOODS, INC. AND SUBSIDIARIES
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
(DOLLARS IN THOUSANDS)
(3) INVENTORIES
Inventories consist of the following:
<TABLE>
<CAPTION>
SEPT. 27, DEC. 28,
1997 1996
--------- ---------
<S> <C> <C>
Raw materials and packaging............................................. $ 6,286 $ 4,495
Work in progress........................................................ 2,251 1,948
Finished goods.......................................................... 20,133 17,166
--------- ---------
$ 28,670 $ 23,609
--------- ---------
--------- ---------
</TABLE>
(4) PROPERTY, PLANT AND EQUIPMENT
Property, plant and equipment, net consists of the following:
<TABLE>
<CAPTION>
SEPT. 27, DEC. 28,
1997 1996
--------- ---------
<S> <C> <C>
Land.................................................................... $ 2,307 $ 582
Buildings and improvements.............................................. 6,751 4,496
Leasehold improvements.................................................. 622 34
Machinery and equipment................................................. 14,015 9,224
Office furniture and vehicles........................................... 801 508
Leased property under capital leases.................................... 908 740
Construction in progress................................................ 227 --
--------- ---------
25,631 15,584
Less accumulated depreciation and amortization.......................... 2,142 --
--------- ---------
$ 23,489 $ 15,584
--------- ---------
--------- ---------
</TABLE>
As a result of the Acquisition, the cost of property, plant and equipment at
December 28, 1996 represents estimated fair value with no accumulated
depreciation.
Plant and equipment includes amounts under capital leases as follows:
<TABLE>
<CAPTION>
SEPT. 27, DEC. 28,
1997 1996
----------- -----------
<S> <C> <C>
Machinery and equipment................................................... $ 122 $ 122
Office furniture and vehicles............................................. 786 618
----- -----
908 740
Less accumulated amortization............................................. 203 --
----- -----
$ 705 $ 740
----- -----
----- -----
</TABLE>
Amortization of assets held under capital leases is included with
depreciation expense.
F-12
<PAGE>
B&G FOODS, INC. AND SUBSIDIARIES
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
(DOLLARS IN THOUSANDS)
(5) INTANGIBLE ASSETS
Intangible assets consist of the following:
<TABLE>
<CAPTION>
SEPT. 27, DEC. 28,
1997 1996
---------- ---------
<S> <C> <C>
Goodwill............................................................... $ 48,945 $ 20,846
Trademarks............................................................. 54,304 29,804
---------- ---------
103,249 50,650
Less accumulated amortization.......................................... 1,614 --
---------- ---------
$ 101,635 $ 50,650
---------- ---------
---------- ---------
</TABLE>
(6) LEASES
The Company has several noncancelable operating leases, primarily for
warehouses, transportation equipment and machinery. These leases generally
require the Company to pay all executory costs such as maintenance, taxes and
insurance.
Future minimum lease payments under noncancelable operating leases (with
initial or remaining lease terms in excess of one year) for the periods set
forth below are as follows:
<TABLE>
<S> <C>
October through December 1997....................................... $ 517
Years ended December:
1998.............................................................. 1,844
1999.............................................................. 854
2000.............................................................. 673
2001.............................................................. 628
2002.............................................................. 567
Thereafter........................................................ 2,736
---------
$ 7,819
---------
---------
</TABLE>
Future minimum capital lease payments as of September 27, 1997 are as
follows:
<TABLE>
<S> <C>
Year ending September 27:
1998.............................................................. $ 351
1999.............................................................. 289
2000.............................................................. 44
2001.............................................................. --
2002.............................................................. --
Thereafter........................................................ --
---------
Total minimum lease payments.................................... 684
Less amount representing interest (at 9% to 13%).................... 78
---------
Present value of net minimum capital lease payments............... 606
Less current installments of obligations under capital leases....... 280
---------
Obligations under capital leases, excluding current installments
(included in long-term debt).................................... $ 326
---------
---------
</TABLE>
F-13
<PAGE>
B&G FOODS, INC. AND SUBSIDIARIES
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
(DOLLARS IN THOUSANDS)
(6) LEASES (CONTINUED)
Total rental expense was $1,122, $1,735 and $1,500 for the 39-week period
ended September 27, 1997 and the fiscal years 1996 and 1995, respectively.
The Company leases a manufacturing facility from the Chairman of the Board
of the Company under an operating lease expiring in April 1999. Total rent
expense associated with this lease for the 39-week period ended September 27,
1997 and the fiscal years 1996 and 1995 was $346, $492 and $477, respectively.
(7) LONG-TERM DEBT
Long-term debt consists of the following:
<TABLE>
<CAPTION>
SEPT. 27, DEC. 28,
1997 1996
---------- ---------
<S> <C> <C>
Revolving credit facility.............................................. $ -- $ 12,568
Term Loan A, payable in quarterly installments beginning June 30, 1997
through December 31, 2001............................................ -- 14,500
Term Loan B, payable in quarterly installments beginning June 30, 1997
through December 31, 2003............................................ -- 12,000
9.625% Senior Subordinated Notes due August 1, 2007.................... 120,000 --
12% Senior Subordinated Note payable to related parties due December
31, 2004............................................................. -- 13,000
Obligations under capital leases with interest at 9% to 13%
collateralized by certain machinery, equipment and vehicles.......... 606 795
Unsecured notes payable to related party with various interest rates
ranging from 6.20% to 6.68%, due April 1999.......................... 795 650
---------- ---------
Total long-term debt............................................... 121,401 53,513
Less current installments.............................................. 280 1,976
---------- ---------
Long-term debt, excluding current installments..................... $ 121,121 $ 51,537
---------- ---------
---------- ---------
</TABLE>
In connection with the Acquisition, B&G Foods, Inc. entered into a $50,000
Credit Agreement (the "Credit Facility") which consists of a $23,500 revolving
credit facility, Term Loan A of $14,500 and Term Loan B of $12,000. Interest was
determined based on several available rates as stipulated in the Credit Facility
and borrowings on the revolver were limited to specified percentages of eligible
accounts receivable and inventories, as defined. In connection with the
Company's acquisition of certain assets from Nabisco, Inc. on June 17, 1997, the
Credit Facility was amended and restated to increase the Company's revolving
credit facility by $1,500 and increase Term Loans A and B by $33,500 in the
aggregate, with new repayment terms beginning September 1997 on the term loans.
Additionally, on June 17, 1997, $6,000 of the BRS Note was repaid (plus accrued
interest) and $7,000 of the BRS Note was contributed to capital. In connection
with the issuance of the 9.625% $120,000 Senior Subordinated Notes on August 11,
1997, the term loans were repaid in full, and the Credit Facility was further
amended and restated to provide for, among other things, a maximum $50,000
revolving credit facility due August 31, 2002. Borrowings under the revolver are
not limited by percentages of underlying assets. There was no outstanding
balance at September 27, 1997 under the Credit Facility.
Interest on the Credit Facility is determined based on several alternative
rates as stipulated in the Credit Facility, including the base lending rate per
annum plus 1.0% or LIBOR plus 2.50%. The Credit
F-14
<PAGE>
B&G FOODS, INC. AND SUBSIDIARIES
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
(DOLLARS IN THOUSANDS)
(7) LONG-TERM DEBT (CONTINUED)
Facility is secured by substantially all of the Company's assets. The Credit
Facility also provides for mandatory prepayment requirements based on asset
dispositions and issuance of securities, as defined. The Credit Facility
contains covenants that will restrict, among other things, the ability of the
Company to incur additional indebtedness, pay dividends and create certain
liens. The Credit Facility also contains certain financial covenants which,
among other things, specify maximum capital expenditure limits, a minimum fixed
charge coverage ratio, a minimum total interest coverage ratio and a maximum
indebtedness to EBIDAT ratio, each ratio as defined. Proceeds of the Credit
Facility are restricted to funding the Company's working capital requirements,
capital expenditures and acquisitions of companies in the same line of business
as the Company, subject to certain criteria. The Credit Facility limits
acquisitions to $20,000 per year as well as $20,000 per acquisition.
The Credit Facility requires an annual commitment fee of an amount equal to
0.50% of the average daily unused portion of the Credit Facility. The Credit
Facility also provides a maximum commitment for letters of credit of $3,000 and
requires an annual commitment fee of 2.50% of the aggregate unused portion. At
September 27, 1997, letters of credit of approximately $361 have been issued
under the Credit Facility.
On February 7, 1997, the Company entered into a two-year $13,000 interest
rate cap agreement in order to reduce the exposure of changes in interest rates
on the Credit Facility. The interest rate cap agreement consists of a cap rate
of 11.25%. The cost of the interest rate cap agreement was $16, which is
recorded in deferred financing fees (other assets) in the accompanying
consolidated balance sheet at September 27, 1997 and is being amortized over the
life of the Credit Facility. The fair value of the agreement at September 27,
1997 is not materially different than the carrying amount.
On August 11, 1997, the Company issued $120,000 of 9.625% Senior
Subordinated Notes (the "Notes") due August 1, 2007 with interest payable
semiannually on February 1 and August 1 of each year, commencing February 1,
1998. The proceeds of the Notes were used to repay the outstanding balances
together with accrued and unpaid interest with respect to the Credit Facility
and the Interim Notes, to finance the acquisition of JEM, to pay certain related
fees and expenses and for general corporate purposes. The indenture for the
Notes contain certain covenants that, among other things, limit the ability of
the Company to incur additional debt, issue preferred stock, pay dividends or
make certain other restricted payments, enter into transactions with affiliates,
make certain asset dispositions, merge or consolidate with, or transfer
substantially all of its assets to, another person, as defined, encumber assets
under certain circumstances, restrict dividends and other payments from
subsidiaries, engage in sale and leaseback transactions, issue capital stock, as
defined, or engage in certain business activities.
The Notes will be redeemable at the option of the Company, in whole or in
part, at any time on or after August 1, 2002 at 104.813% of their principal
amount plus accrued and unpaid interest and Liquidated Damages, as defined, if
any, beginning August 1, 2002, and thereafter at prices declining annually to
100% on or after August 1, 2005. In addition, at any time prior to August 1,
2000, the Company may, in its discretion, redeem up to 35% of the original
aggregate principal amount of the Notes at a redemption price equal to 109.625%
of the principal amount thereof, plus accrued and unpaid interest and Liquidated
Damages, as defined, if any, to the date of redemption, with the net proceeds of
one or more Public Equity Offering, as defined; provided that at least 65% of
the original aggregate principal amount of the Notes remains outstanding
immediately after each redemption. Upon the occurrence of a Change in Control,
as defined, the Company will have the option, at any time on or prior to August
1, 2002, to redeem the Notes, in whole but not in part, at a redemption price
equal to 100% of the principal amount
F-15
<PAGE>
B&G FOODS, INC. AND SUBSIDIARIES
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
(DOLLARS IN THOUSANDS)
(7) LONG-TERM DEBT (CONTINUED)
plus the Applicable Premium, as defined, plus accrued and unpaid interest and
Liquidated Damages, as defined, if any, to the date of redemption and if the
Company does not so redeem the Notes or if such Change in Control, as defined,
occurs after August 1, 2002, the Company will be required to make an offer to
repurchase the Notes at a price equal to 101% of the principal amount, together
with accrued and unpaid interest and Liquidated Damages, as defined, if any, to
the date of repurchase. The Notes are not subject to any sinking fund
requirements.
All of the Company's subsidiaries (the "Guarantors") are wholly-owned, and
all of the Company's subsidiaries jointly and severally, and fully and
unconditionally, guarantee the Notes (the "Subsidiary Guarantees").
Consequently, separate financial statements have not been presented for the
Guarantors. The Subsidiary Guarantee of each Guarantor is subordinate to the
prior payment in full of all Senior Debt, as defined. As of September 27, 1997,
the Company and its subsidiaries had Senior Debt and additional liabilities
(including trade payables, accrued expenses, amounts due to related parties,
deferred income taxes and other liabilities) aggregating approximately $42.8
million.
As part of the registration rights agreement dated August 11, 1997 entered
into with the initial purchasers of the Notes, the Company agreed to offer to
exchange an aggregate principal amount of up to $120,000 of its 9.625% Senior
Subordinated Notes due 2007 (the "New Notes") for a like principal amount of its
Notes outstanding (the "Exchange Offer"). The terms of the New Notes are
identical in all material respects to those of the Notes (including principal
amount, interest rate, maturity and guarantees), except for certain transfer
restrictions and registration rights relating to the Notes.
As described in note 6, the Company leases a manufacturing facility from the
Chairman of the Board of the Company. The Company pays $43 per month in rent in
cash and, pursuant to a Memorandum of Agreement, an additional amount in the
form of unsecured notes payable, which are issued in an annual aggregate
principal amount of $188. The Company's liability under the issued unsecured
notes as of September 27, 1997 and December 28, 1996 was $795 and $650,
respectively. The notes are due in April 1999, the date of the lease expiration.
The Company estimates that the remaining obligation of the notes to be issued is
$354 and $507 as of September 27, 1997 and December 28, 1996, respectively. Such
amounts are included in accrued expenses and other liabilities.
At September 27, 1997 and December 28, 1996, accrued interest of $1,653 and
$13, respectively, is included in accrued expenses in the accompanying balance
sheets.
The aggregate maturities of long-term debt are as follows:
<TABLE>
<S> <C>
October through December 1997..................................... $ 68
Years ended December:
1998............................................................ 317
1999............................................................ 977
2000............................................................ 39
2001............................................................ --
2002............................................................ --
Thereafter...................................................... 120,000
---------
$ 121,401
---------
---------
</TABLE>
F-16
<PAGE>
B&G FOODS, INC. AND SUBSIDIARIES
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
(DOLLARS IN THOUSANDS)
(8) INCOME TAX (BENEFIT) EXPENSE
Income tax (benefit) expense has been classified in the accompanying
statements of operations as follows:
<TABLE>
<CAPTION>
39-WEEK
PERIOD YEAR YEAR
ENDED ENDED ENDED
SEPT. 27, DEC. 28, DEC. 30,
1997 1996 1995
--------- ----------- -----------
<S> <C> <C> <C>
Income before extraordinary item.................................................... $ 426 $ 591 $ 896
Extraordinary item.................................................................. (1,138) -- --
--------- ----- -----
$ (712) $ 591 $ 896
--------- ----- -----
--------- ----- -----
</TABLE>
Income tax (benefit) expense consists of the following:
<TABLE>
<CAPTION>
39-WEEK
PERIOD YEAR YEAR
ENDED ENDED ENDED
SEPT. 27, DEC. 28, DEC. 30,
1997 1996 1995
--------- ----------- -----------
<S> <C> <C> <C>
Current:
Federal........................................................................... $ -- $ 95 $ 317
State............................................................................. 222 110 184
--------- ----- -----
222 205 501
--------- ----- -----
Deferred:
Federal........................................................................... (716) 271 383
State............................................................................. (218) 115 12
--------- ----- -----
(934) 386 395
--------- ----- -----
$ (712) $ 591 $ 896
--------- ----- -----
--------- ----- -----
</TABLE>
Income tax (benefit) expense differs from the expected income tax (benefit)
expense (computed by applying the U.S. federal income tax rate of 34% to pretax
income) as a result of the following:
<TABLE>
<CAPTION>
39-WEEK
PERIOD YEAR YEAR
ENDED ENDED ENDED
SEPT. 27, DEC. 28, DEC. 30,
1997 1996 1995
----------- ----------- -----------
<S> <C> <C> <C>
Computed expected tax (benefit) expense............................................. $ (844) $ 295 $ 549
State income taxes, net of federal income tax benefit............................... 3 149 129
Non-deductible expenses, principally amortization of goodwill....................... 129 147 218
----- ----- -----
$ (712) $ 591 $ 896
----- ----- -----
----- ----- -----
</TABLE>
F-17
<PAGE>
B&G FOODS, INC. AND SUBSIDIARIES
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
(DOLLARS IN THOUSANDS)
(8) INCOME TAX (BENEFIT) EXPENSE (CONTINUED)
The tax effects of temporary differences that give rise to significant
portions of the deferred tax assets and deferred tax liabilities are presented
below:
<TABLE>
<CAPTION>
SEPT. 27, DEC. 28,
1997 1996
---------- ----------
<S> <C> <C>
Deferred tax assets:
Accounts receivable, principally due to allowance....................................... $ 225 $ --
Inventories, principally due to additional costs capitalized for tax purposes........... 571 400
Accruals and other liabilities not currently deductible................................. 2,585 2,026
Net operating loss carryforwards........................................................ 3,802 2,482
Deferred financing costs................................................................ 1,231 --
---------- ----------
Total gross deferred tax assets..................................................... 8,414 4,908
Less valuation allowance................................................................ (950) (824)
---------- ----------
Net deferred tax assets............................................................. 7,464 4,084
---------- ----------
Deferred tax liabilities:
Plant and equipment..................................................................... (2,143) (436)
Intangible assets....................................................................... (13,995) (11,998)
---------- ----------
Total gross deferred tax liabilities................................................ (16,138) (12,434)
---------- ----------
Net deferred tax liability.......................................................... $ (8,674) $ (8,350)
---------- ----------
---------- ----------
</TABLE>
In assessing the realizability of deferred tax assets, management considers
whether it is more likely than not that some portion or all of the deferred tax
assets will not be realized. The ultimate realization of deferred tax assets is
dependent upon the generation of future taxable income during the periods in
which those temporary differences become deductible. Management considers the
scheduled reversal of deferred tax liabilities, projected future taxable income,
and tax planning strategies in making this assessment. Based upon the level of
historical taxable income and projections for future taxable income over the
periods in which the deferred tax assets are deductible, management believes it
is more likely than not the Company will realize the benefits of these
deductible differences, net of the existing valuation allowances at September
27, 1997. The amount of the deferred tax asset considered realizable, however,
could be reduced in the near term if estimates of future taxable income during
the carryforward period are reduced. The valuation allowance at September 27,
1997 and December 28, 1996 of $950 and $824, respectively, represents the
allowance for state net operating loss carryforwards of $15.7 million and $13.6
million, respectively, which are available to offset future state taxable
income, if any, through 2003. Any future utilization of these state net
operating loss carryforwards will result in an adjustment to goodwill to the
extent it reduces the valuation allowance.
At September 27, 1997, the Company has net operating loss carryforwards for
federal income tax purposes of $8,414 which are available to offset future
federal taxable income, if any, through 2009. As a result of the Acquisition and
Successor Acquisitions, the annual utilization of the net operating loss
carryforwards is limited under certain provisions of the Internal Revenue Code.
F-18
<PAGE>
B&G FOODS, INC. AND SUBSIDIARIES
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
(DOLLARS IN THOUSANDS)
(9) PENSION BENEFITS
The Company has defined benefit pension plans covering substantially all of
its employees, which plans were previously provided by the Predecessor. The
benefits are based on years of service and the employee's compensation, as
defined. The Company makes annual contributions to the plans equal to the
maximum amount that can be deducted for income tax purposes. The following table
sets forth the plans' funded status and amounts recognized in the Successor
Consolidated balance sheets.
<TABLE>
<CAPTION>
SEPT.27, DEC.28,
1997 1996
--------- ---------
<S> <C> <C>
Actuarial present value of benefit obligations--vested benefit
obligation............................................................. $ (4,731) $ (4,434)
--------- ---------
--------- ---------
Accumulated benefit obligation........................................... $ (4,810) $ (4,508)
--------- ---------
Projected benefit obligation............................................. (6,551) (6,047)
Plan assets at fair value................................................ 4,781 4,190
--------- ---------
Excess of projected benefit obligation over plan assets.............. (1,770) (1,857)
Unrecognized net gain.................................................... (178) --
--------- ---------
Accrued pension cost................................................. $ (1,948) $ (1,857)
--------- ---------
--------- ---------
</TABLE>
Plan assets are invested primarily in government securities and mutual
funds.
Net pension cost includes the following components:
<TABLE>
<CAPTION>
39-WEEK
PERIOD YEAR YEAR
ENDED ENDED ENDED
SEPT. 27, DEC. 28, DEC. 30,
1997 1996 1995
----------- ----------- -----------
<S> <C> <C> <C>
Service cost--benefits earned during the period..................................... $ 331 $ 412 $ 335
Interest cost on projected benefit obligation....................................... 324 387 332
Actual return on plan assets........................................................ (283) (168) (499)
Net amortization and deferral....................................................... 17 (107) 232
----- ----- -----
Net pension cost................................................................ $ 389 $ 524 $ 400
----- ----- -----
----- ----- -----
</TABLE>
Assumptions used in accounting for the pension plans as of September 27,
1997 and December 28, 1996 were:
<TABLE>
<S> <C>
Discount rates............................................. 7.25 to 7.50%
Rate of increase in compensation levels.................... 5.00%
Expected long-term rate of return on assets................ 7.75 to 8.50%
--------------
--------------
</TABLE>
The Company sponsors several defined contribution plans covering
substantially all of its employees, which plans were previously sponsored by the
Predecessor. Employees may contribute to these plans and these contributions are
matched at varying amounts by the Company. Company contributions for the
matching component of these plans amounted to $132, $229 and $216 for the
39-week period ended September 27, 1997 and the fiscal years ended December 28,
1996 and December 30, 1995, respectively.
F-19
<PAGE>
B&G FOODS, INC. AND SUBSIDIARIES
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
(DOLLARS IN THOUSANDS)
(10) CHANGES IN STOCKHOLDER'S EQUITY
The changes in stockholder's equity for the 39-week period ended September
27, 1997 and the fiscal years ended December 28, 1996 and December 30, 1995 are
as follows:
<TABLE>
<CAPTION>
COMMON STOCK ADDITIONAL RECEIVABLE ACCUMU-
--------------------- PAID-IN FROM STOCK LATED
SHARES AMOUNT CAPITAL ISSUANCE DEFICIT TOTAL
--------- ---------- ----------- ----------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
Balance at December 31, 1994................... 8,900 $ 15,131 $ 13,331 $ -- $ 799 $ 29,261
Net income..................................... -- -- -- -- 718 718
--------- ---------- ----------- ----- --------- ---------
Balance at December 30, 1995................... 8,900 15,131 13,331 -- 1,517 29,979
Net income..................................... -- -- -- -- 276 276
--------- ---------- ----------- ----- --------- ---------
Balance at December 27, 1996, immediately prior
to acquisition............................... 8,900 15,131 13,331 -- 1,793 30,255
Adjustment associated with acquisition*........ -- -- 369 -- -- 369
Eliminate predecessor equity upon
acquisition.................................. (8,900) (15,131) (13,700) -- (1,793) (30,624)
Successor shares issued upon acquisition....... 1 -- 13,000 (500) -- 12,500
--------- ---------- ----------- ----- --------- ---------
Balance at December 28, 1996................... 1 -- 13,000 (500) -- 12,500
Net loss....................................... -- -- -- -- (1,771) (1,771)
Capital contribution (note 7).................. -- -- 7,000 -- -- 7,000
Payment of receivable from stock issuance...... -- -- -- 500 -- 500
--------- ---------- ----------- ----- --------- ---------
Balance at September 27, 1997.................. 1 $ -- $ 20,000 $ -- $ (1,771) $ 18,229
--------- ---------- ----------- ----- --------- ---------
--------- ---------- ----------- ----- --------- ---------
</TABLE>
- ------------------------
* In accordance with the acquisition agreement between Specialty Foods Corp.
and the Company, the net of all inter-company accounts was settled by way of
a capital contribution to the Company immediately prior to the Acquisition.
(11) RELATED PARTY TRANSACTIONS
In conjunction with the Acquisition, the Company entered into a Management
Agreement with BRS, in which BRS is paid an annual fee of $250 for certain
management, business and organizational strategy, and merchant and investment
banking services. Charges for such services amounted to approximately $191
during the 39-week period ended September 27, 1997. The Management Agreement
will expire either on December 27, 2006 or the date that BRS owns less than 20%
of the outstanding common stock, if sooner.
The Company entered into a Transaction Services Agreement pursuant to which
BRS will be paid a transaction fee for management, financial and other corporate
advisory services rendered by BRS in connection with acquisitions by the
Company, which fee will not exceed 1.0% of the total transaction value. In
connection with the Successor Acquisitions, the Company paid transaction fees
aggregating $620, which was included in the allocation of the respective
purchase prices.
F-20
<PAGE>
B&G FOODS, INC. AND SUBSIDIARIES
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
(DOLLARS IN THOUSANDS)
(11) RELATED PARTY TRANSACTIONS (CONTINUED)
DUE TO RELATED PARTIES
Due to related parties includes final amounts payable to SFC for the
Acquisition at December 28, 1996 (paid in 1997) and management fees to BRS and
accrued interest payable under the unsecured notes payable to related parties at
September 27, 1997.
Related party interest expense on the unsecured notes payable to related
parties and the BRS Note was $788, $38 and $31 for the 39-week period ended
September 27, 1997 and the fiscal years ended December 28, 1996 and December 30,
1995, respectively.
In connection with the Company's acquisition of certain assets from Nabisco
on June 17, 1997, the Company entered into a co-packing agreement with Nabisco
under which Nabisco will continue to bottle products bottled by Nabisco until
March 1998, and assumed certain co-packing contracts. In addition, the Company
entered into a Transition Services Agreement (as defined) with Nabisco, under
which Nabisco will provide certain sales and distribution support on a national
basis through December 17, 1997. Amounts paid by the Company for the co-packing
agreement and the Transition Services Agreement (as defined) in 1997 amounted to
$292 and $884, respectively.
Prior to the Acquisition, SFC provided certain financing and cash management
services for the Company and allocated certain costs for services provided. Such
charges terminated upon the completion of the Acquisition and have been replaced
with the Company's own costs. Allocations to the Company by SFC were based on
the Company's share of costs paid by SFC on its behalf for consolidated
programs. Such allocations may not be reflective of the costs which would have
been incurred if the Company operated on a stand-alone basis or which will be
incurred in the future. Management believes that the basis for allocation was
reasonable. The following is a summary of the amounts charged or allocated to
the Company:
TRADE ACCOUNTS RECEIVABLE
During the period the Company was a subsidiary of SFC (from August 1993
through December 27, 1996), the Company sold its trade accounts receivable as
they arose from sales to a financing subsidiary of SFC. Discounting expense, net
of servicing income, related to this arrangement was recorded as interest
expense and totaled approximately $807 and $657 in fiscal years 1996 and 1995,
respectively.
MANAGEMENT FEE
On January 1, 1995, the Company entered into an Administrative Services and
Management Agreement with SFC, in which SFC is paid an annual fee equal to one
percent of gross revenues, as defined, for certain accounting, legal, tax and
management advisory services. Charges for such services amounted to $1,249 and
$1,097 in fiscal years 1996 and 1995, respectively.
BORROWINGS
The weighted average interest rate on borrowings from SFC for fiscal years
1996 and 1995 was 9.94% and 10.75%, respectively. The related interest expense
recognized by the Company on such borrowings was $3,607 and $2,936 in fiscal
years 1996 and 1995, respectively.
F-21
<PAGE>
B&G FOODS, INC. AND SUBSIDIARIES
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
(DOLLARS IN THOUSANDS)
(12) COMMITMENTS AND CONTINGENCIES
The Company is involved in various claims and legal actions arising in the
ordinary course of business. In the opinion of management, the ultimate
disposition of these matters will not have a material adverse effect on the
Company's consolidated financial position, results of operations or liquidity.
On September 27, 1997, the Company had purchase commitments with various
suppliers to purchase certain raw materials in the aggregate amount of
approximately $1,842. Management believes that all such commitments will be
fulfilled within one year.
The Company is subject to environmental regulations in the normal course of
business. Management believes that the cost of compliance with such regulations
will not have a material adverse effect on the Company's business, financial
condition or results of operations.
(13) BUSINESS AND CREDIT CONCENTRATIONS
The Company's exposure to credit loss in the event of non-payment of
accounts receivable by customers is represented in the amount of those
receivables. The Company performs ongoing credit evaluations of its customers'
financial condition and generally requires no collateral from those customers.
As of September 27, 1997, other than accounts receivable from International Home
Foods, Inc. ("IHF"), the Company does not believe it has any significant
concentration of credit risk with respect to its trade accounts receivable.
The Company produces fruit spreads and wet spices pursuant to contracts with
IHF which expire in March 1999 and March 1998, respectively. Additionally, the
Company distributes certain IHF products under a contract terminable on 12
months notice. There can be no assurance that upon expiration of these
contracts, new agreements will be reached or that any such new agreements will
be on terms satisfactory to the Company. Sales to IHF under these contracts
during the 39-week period ended September 27, 1997 and in fiscal years 1996 and
1995 were $31,540, $50,778 and $47,368, respectively. Receivables due from IHF
included in trade accounts receivable at September 27, 1997 and December 28,
1996 were $2,807 and $1,190, respectively.
F-22
<PAGE>
INDEPENDENT AUDITORS' REPORT
The Board of Directors and Stockholders
B&G Foods, Inc.:
We have audited the accompanying combined statements of net assets acquired
as of June 17, 1997 and December 31, 1996, and the related combined statements
of product contribution for the 24-week period ended June 17, 1997 and the years
ended December 31, 1996 and 1995 of Regina, Wright's, Brer Rabbit, and Vermont
Maid (the "Nabisco Brands"), product lines acquired from Nabisco, Inc. 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 audits.
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.
The accompanying financial statements were prepared to present the net
assets acquired and the product contribution of the Nabisco Brands pursuant to
the purchase agreement between Nabisco, Inc. and RWBV Acquisition Corp., a
wholly-owned, indirect subsidiary of B&G Foods, Inc. (the "Buyer") as described
in note 1 and are not intended to be a complete presentation of the Nabisco
Brands' financial position, results of operations and cash flows.
In our opinion, the combined financial statements referred to above present
fairly, in all material respects, the combined net assets acquired of the
Nabisco Brands as of June 17, 1997 and December 31, 1996, and the Nabisco
Brands' combined product contribution for the 24-week period ended June 17, 1997
and the years ended December 31, 1996 and 1995, pursuant to the purchase
agreement referred to in note 1, in conformity with generally accepted
accounting principles.
KPMG Peat Marwick LLP
Short Hills, New Jersey
September 30, 1997
F-23
<PAGE>
THE NABISCO BRANDS
(CERTAIN PRODUCT LINES OF NABISCO, INC.)
COMBINED STATEMENTS OF NET ASSETS ACQUIRED
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
JUNE 17, DEC. 31,
1997 1996
----------- -----------
<S> <C> <C>
Inventories................................................................................... $ 2,181 $ 2,370
Machinery and equipment, net.................................................................. 1,559 1,585
Coupon liabilities............................................................................ (242) (248)
----------- -----------
Net assets to be acquired................................................................. $ 3,498 $ 3,707
----------- -----------
----------- -----------
</TABLE>
The accompanying notes are an integral part of the combined financial
statements.
F-24
<PAGE>
THE NABISCO BRANDS
(CERTAIN PRODUCT LINES OF NABISCO, INC.)
COMBINED STATEMENTS OF PRODUCT CONTRIBUTION
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
24-WEEK 26-WEEK YEAR YEAR
PERIOD PERIOD ENDED ENDED
ENDED ENDED DEC. 31, DEC. 31,
JUNE 17, 1997 JUNE 29, 1996 1996 1995
------------- ------------- --------- ---------
<S> <C> <C> <C> <C>
(UNAUDITED)
Net sales..................................................... $ 9,916 $ 12,335 $ 27,718 $ 28,937
Cost of goods sold............................................ 3,531 3,910 8,782 9,121
------ ------------- --------- ---------
Gross profit.............................................. 6,385 8,425 18,936 19,816
Sales and distribution expenses............................... 1,350 1,804 3,572 3,753
Trade promotions and other marketing expenses................. 954 1,626 3,729 3,478
------ ------------- --------- ---------
Product contribution...................................... $ 4,081 $ 4,995 $ 11,635 $ 12,585
------ ------------- --------- ---------
------ ------------- --------- ---------
</TABLE>
The accompanying notes are an integral part of the combined statements.
F-25
<PAGE>
THE NABISCO BRANDS
(CERTAIN PRODUCT LINES OF NABISCO, INC.)
NOTES TO COMBINED FINANCIAL STATEMENTS
(DOLLARS IN THOUSANDS)
1. DESCRIPTION OF BUSINESS
In May 1997, RWBV Acquisition Corp. ("RWBV"), a wholly-owned subsidiary of
Bloch & Guggenheimer, Inc., and an indirect subsidiary of B&G Foods, Inc.,
entered into an Asset Purchase Agreement (the "Agreement") with Nabisco, Inc.
("Nabisco") which was consummated on June 17, 1997. The Agreement provides for
the sale of certain assets and the assumption of certain liabilities of Nabisco,
pertaining to four of its product lines: Regina wine vinegars and cooking wines
("Regina"), Wright's liquid smoke ("Wright's"), Brer Rabbit molasses and syrups
("Brer"), and Vermont Maid maple-flavored syrups ("Vermont"), collectively known
as the "Nabisco Brands." The Nabisco Brands were operated as a part of the
Specialty Products Company and Food Service Company, components of Nabisco. The
Nabisco Brands' products consist of vinegar and cooking wines (Regina), liquid
smoke hickory seasoning (Wright's), molasses (Brer), and syrup (Vermont).
Regina, Wright's and Brer are distributed on a national basis, and Vermont is
distributed primarily in the Northeast. Approximately 50% of Regina and Wright's
net sales are to food service customers, with the remaining 50% of sales to
retail customers. Brer and Vermont sell primarily to retail customers.
Under the terms of the Agreement, Nabisco sold to RWBV certain assets
exclusively used in the Nabisco Brands, as defined in the Agreement, and
retained the manufacturing plants, employees and the retained liabilities, as
defined in the Agreement. The Company also entered into a co-packing agreement
with Nabisco under which Nabisco will continue to bottle products bottled by
Nabisco until March 1998, and assumed certain co-packing contracts relating to
the other Nabisco Brands. In addition, the Company entered into a Transition
Services Agreement (as defined) with Nabisco, under which Nabisco will provide
certain sales and distribution support for the Nabisco Brands on a national
basis through December 17, 1997.
Throughout the periods covered by the combined financial statements, the
Nabisco Brands were operated and accounted for as part of Nabisco. These
combined financial statements have been carved out from Nabisco's historical
accounting records. The period from January 1, 1997 to June 17, 1997 is
hereinafter referred to as the 24-week period ended June 17, 1997.
Under Nabisco's centralized cash management system, cash requirements of the
Nabisco Brands were generally provided directly by Nabisco and cash generated by
the Nabisco Brands was remitted directly to Nabisco. Transaction systems (e.g.,
payroll, employee benefits, accounts payable) used to record and account for
cash disbursements were provided by centralized company organizations outside
the defined scope of the Nabisco Brands. Most of these corporate systems are not
designed to track assets/liabilities and receipts/payments on a brand specific
basis. Given these constraints and the fact that only certain assets of the
Nabisco Brands were sold, complete balance sheets, statements of operations and
statements of cash flows could not be prepared.
The manufacturing and distribution operations of the Nabisco Brands are
conducted where other Nabisco manufacturing and distribution operations, not
included in the Nabisco Brands, are present. In addition, certain
non-manufacturing operations of the Nabisco Brands share facilities and space
with other Nabisco operations. At shared sites, only the assets of the Nabisco
Brands (inventories and machinery and equipment acquired) are included in the
combined statements of net assets acquired.
Net sales in the accompanying statements of product contribution represent
net sales directly attributable to the Nabisco Brands. Costs and expenses in the
accompanying combined statements of
F-26
<PAGE>
THE NABISCO BRANDS
(CERTAIN PRODUCT LINES OF NABISCO, INC.)
NOTES TO COMBINED FINANCIAL STATEMENTS (CONTINUED)
(DOLLARS IN THOUSANDS)
1. DESCRIPTION OF BUSINESS (CONTINUED)
product contribution represent direct costs and expenses related to the Nabisco
Brands. It is not practicable to determine the nature and magnitude of indirect
costs for certain functions and services performed by centralized N abisco
organizations/departments outside the defined scope of the Nabisco Brands which
have not been allocated in the accompanying combined statements of product
contribution, or to reasonably estimate what such costs would have been had the
Nabisco Brands operated on a stand alone basis.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
INCOME RECOGNITION. Net sales and related cost of products sold are
included in income and expense, respectively, when products are shipped to
customer.
INVENTORIES. Inventories are valued at the lower of cost or market with
cost determined by the full absorption standard cost system which approximates a
weighted average inventory cost method on a FIFO basis.
MACHINERY AND EQUIPMENT. Machinery and equipment is stated at historical
cost. Nabisco calculates depreciation using the straight-line method over the
useful lives of its machinery and equipment.
COST OF GOODS SOLD. Cost of good sold includes direct costs of materials,
labor, and overhead. Overhead allocations are based on estimated time spent by
employees, relative use of facilities and other related costs.
SELLING, MARKETING AND DISTRIBUTION EXPENSES INCLUDE THE FOLLOWING:
DISTRIBUTION. Distribution includes costs of inbound and outbound freight
and warehousing.
TRADE PROMOTIONS. Trade promotions represent promotional incentives offered
to retailers.
CONSUMER MARKETING. Consumer marketing is comprised of all costs associated
with coupons. Coupon expense is accrued as incurred. Production costs are
expensed on the initial use of the advertisement.
SELLING. Selling consists solely of broker expenses.
ESTIMATES. The preparation of combined 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 these estimates.
INTERIM REPORTING. The Nabisco Brands' fiscal year ends December 31.
Interim results are not necessarily indicative of results that might be expected
for the entire fiscal year.
F-27
<PAGE>
THE NABISCO BRANDS
(CERTAIN PRODUCT LINES OF NABISCO, INC.)
NOTES TO COMBINED FINANCIAL STATEMENTS (CONTINUED)
(DOLLARS IN THOUSANDS)
3. INVENTORIES
Inventories consist of the following:
<TABLE>
<CAPTION>
JUNE 17, DEC. 31,
1997 1996
----------- -----------
<S> <C> <C>
Raw materials and packaging............................................... $ 528 $ 739
Work in progress.......................................................... -- 228
Finished goods............................................................ 1,653 1,403
----------- -----------
$ 2,181 $ 2,370
----------- -----------
----------- -----------
</TABLE>
4. COMMITMENTS AND CONTINGENCIES
From time to time, the Nabisco Brands may be subject to certain lawsuits and
claims and other actions arising in the normal course of business. Such lawsuits
and claims, as defined in the Agreement, are the responsibility of Nabisco.
Wright's, Brer, and Vermont are manufactured by third parties and in each
instance RWBV assumed Nabisco's co-packing agreements with these third parties
with varying terms.
F-28
<PAGE>
INDEPENDENT AUDITORS' REPORT
The Board of Directors
JEM Brands, Inc.:
We have audited the accompanying consolidated balance sheets of JEM Brands,
Inc. and subsidiary as of August 15, 1997 and December 28, 1996, and the related
consolidated statements of earnings, retained earnings, and cash flows for the
33-week period ended August 15, 1997 and years ended December 28, 1996 and
December 31, 1995. 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 audits.
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, the consolidated financial statements referred to above
present fairly, in all material respects, the financial position of JEM Brands,
Inc. and subsidiary as of August 15, 1997 and December 28, 1996, and the results
of their operations and their cash flows for the 33-week period ended August 15,
1997 and years ended December 28, 1996 and December 31, 1995 in conformity with
generally accepted accounting principles.
KPMG Peat Marwick LLP
New Orleans, Louisiana
September 17, 1997
F-29
<PAGE>
JEM BRANDS, INC.
AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS
(DOLLARS IN THOUSANDS, EXCEPT SHARE DATA)
<TABLE>
<CAPTION>
AUGUST 15,
1997 DECEMBER 28, 1996
-------------- -----------------
<S> <C> <C>
ASSETS
Current assets:
Cash........................................................................ $ -- $ --
Accounts receivable......................................................... 879 1,487
Due from parent and affiliates, net......................................... -- 1,148
Inventories................................................................. 3,215 3,868
Prepaid expenses............................................................ 12 6
Deferred income taxes....................................................... 184 217
------- -------
Total current assets...................................................... 4,290 6,726
------- -------
Deferred income taxes......................................................... 652 744
Property, plant and equipment................................................. 6,159 6,150
Less accumulated depreciation............................................... (2,526) (2,221)
------- -------
Net property, plant and equipment......................................... 3,633 3,929
------- -------
Goodwill and other intangibles, net of accumulated amortization............... 7,532 7,682
------- -------
Total assets.............................................................. $ 16,107 $ 19,081
------- -------
------- -------
LIABILITIES AND STOCKHOLDER'S EQUITY
Current liabilities:
Accounts payable............................................................ $ 435 $ 694
Accrued expenses............................................................ 114 130
------- -------
Total current liabilities................................................. 549 824
------- -------
Other liabilities............................................................. 42 40
------- -------
Stockholder's equity:
Common stock, par value $.01 per share; authorized 250,000 shares; 200,000
shares issued and outstanding............................................. 2 2
Preferred stock, par value $100 per share; authorized 50,000 shares; 34,338
shares issued and outstanding............................................. 3,434 3,434
Additional paid-in capital.................................................. 11,333 11,333
Retained earnings........................................................... 747 3,448
------- -------
Total stockholder's equity................................................ 15,516 18,217
Commitments...................................................................
------- -------
Total liabilities and stockholder's equity................................ $ 16,107 $ 19,081
------- -------
------- -------
</TABLE>
See accompanying notes to consolidated financial statements.
F-30
<PAGE>
JEM BRANDS, INC.
AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF EARNINGS
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
33-WEEK 34-WEEK
PERIOD ENDED PERIOD ENDED YEAR ENDED YEAR ENDED
AUGUST 15, AUGUST 24, DEC. 28, DEC. 31,
1997 1996 1996 1995
-------------- -------------- ----------- -----------
<S> <C> <C> <C> <C>
(UNAUDITED)
Net sales.............................................. $ 10,588 $ 12,559 $ 18,683 $ 16,945
Cost of goods sold..................................... 6,668 7,516 11,712 9,827
------- ------- ----------- -----------
Gross profit....................................... 3,920 5,043 6,971 7,118
Sales, marketing and distribution expenses............. 2,687 3,244 4,784 4,685
General and administrative expenses.................... 797 750 1,021 1,011
------- ------- ----------- -----------
Operating income................................... 436 1,049 1,166 1,422
Other income (expenses):
Interest income...................................... 142 106 165 97
Loss on disposal of equipment........................ -- -- -- (51)
Interest expense..................................... (4) (7) (9) (20)
Other, net........................................... 9 15 15 --
------- ------- ----------- -----------
Earnings before income taxes....................... 583 1,163 1,337 1,448
Income tax expense..................................... 282 492 565 636
------- ------- ----------- -----------
Net earnings....................................... $ 301 $ 671 $ 772 $ 812
------- ------- ----------- -----------
------- ------- ----------- -----------
</TABLE>
See accompanying notes to consolidated financial statements.
F-31
<PAGE>
JEM BRANDS, INC.
AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF RETAINED EARNINGS
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
33-WEEK
PERIOD ENDED YEAR ENDED YEAR ENDED
AUGUST 15, DEC. 28, DEC. 31,
1997 1996 1995
------------- ----------- -----------
<S> <C> <C> <C>
Balance at beginning of period............................................ $ 3,448 $ 3,376 $ 3,064
Net earnings.............................................................. 301 772 812
Cash dividends............................................................ (3,002) (700) (500)
------------- ----------- -----------
Balance at end of period.................................................. $ 747 $ 3,448 $ 3,376
------------- ----------- -----------
------------- ----------- -----------
</TABLE>
See accompanying notes to consolidated financial statements.
F-32
<PAGE>
JEM BRANDS, INC.
AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
33-WEEK 34-WEEK
PERIOD ENDED PERIOD ENDED YEAR ENDED YEAR ENDED
AUGUST 15, AUGUST 24, DEC. 28, DEC. 31,
1997 1996 1996 1995
------------- ------------- ------------- -----------
<S> <C> <C> <C> <C>
(UNAUDITED)
Net earnings............................................... $ 301 $ 671 $ 772 $ 812
Adjustments to reconcile net earnings to net cash provided
by operating activities:
Depreciation and amortization............................ 455 487 724 716
Loss on disposal of equipment............................ -- -- -- 51
Deferred income taxes.................................... 125 -- 127 222
Changes in operating assets and liabilities:
Accounts receivable.................................... 608 290 (114) (271)
Due from parent and affiliates, net.................... 1,148 (1,224) (957) 178
Inventories............................................ 653 (184) 19 255
Prepaid expenses....................................... (6) 32 68 (29)
Accounts payable....................................... (259) 290 443 (16)
Accrued expenses....................................... (16) 118 (83) (436)
Other liabilities...................................... 2 4 (11) (10)
------------- ------------- ----- -----------
Net cash provided by operating activities............ 3,011 484 988 1,472
------------- ------------- ----- -----------
Cash flows from investing activities--purchases of
property, plant and equipment............................ (9) (134) (296) (994)
------------- ------------- ----- -----------
Cash flows from financing activities--cash dividends
paid..................................................... (3,002) 350 (700) (500)
------------- ------------- ----- -----------
Decrease in cash..................................... -- -- (8) (22)
Cash at beginning of period................................ -- 8 8 30
------------- ------------- ----- -----------
Cash at end of period...................................... $ -- $ 8 $ -- $ 8
------------- ------------- ----- -----------
------------- ------------- ----- -----------
Supplemental cash flow information--interest paid.......... $ 4 $ 7 $ 9 $ 20
------------- ------------- ----- -----------
------------- ------------- ----- -----------
</TABLE>
See accompanying notes to consolidated financial statements.
F-33
<PAGE>
JEM BRANDS, INC.
AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(DOLLARS IN THOUSANDS)
(1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(a) ORGANIZATION AND CONSOLIDATION
JEM Brands, Inc. (JEM) is a wholly-owned subsidiary of E. McIlhenny's Son
Corporation (Parent). The consolidated financial statements include the accounts
of Jem and its wholly-owned subsidiary, Trappey's Fine Foods, Inc. (Trappey's).
The stock of Jem was sold by its Parent on August 15, 1997 (see note 6). All
significant intercompany balances and transactions between Jem and Trappey's
have been eliminated.
JEM Brands, Inc. and subsidiary (the Company) manufactures and distributes a
variety of hot pepper sauces and pickled peppers throughout the United States.
The Company's primary raw materials are readily available, and the Company is
not dependent upon a single supplier or a few suppliers.
Due from parent and affiliates, net includes gross receivables from sales of
the Company to affiliates net of gross payables to the Parent and affiliates.
In 1996, the Company changed its fiscal year end to coincide with the last
Saturday in December. Consequently, the accompanying consolidated statements of
earnings for the period ended December 28, 1996 includes 51 weeks and 6 days and
for the year ended December 31, 1995 includes 52 weeks and 1 day. In conjunction
with the change in fiscal year end, the Company changed its interim reporting to
a 13-week quarter, whereas the first two periods of each quarter are comprised
of 4 weeks and the last period is comprised of 5 weeks. The accompanying
consolidated statement of earnings for the period ended August 15, 1997 includes
32 weeks and 6 days; however, this period is referred to in the accompanying
financial statements as the 33-week period ended August 15, 1997.
(b) INVENTORIES
Inventories are stated at the lower of cost or market. Cost is determined
using the first-in, first-out (FIFO) method.
(c) PROPERTY, PLANT AND EQUIPMENT
Property, plant and equipment are stated at cost. Depreciation is provided
on the straight-line method over the following estimated useful lives:
<TABLE>
<S> <C>
20-30
Buildings....................................................... years
Machinery and equipment......................................... 3-15 years
Furniture and fixtures.......................................... 3-5 years
</TABLE>
(d) GOODWILL AND OTHER INTANGIBLES
Goodwill and other intangibles, resulting from the Parent's acquisition of
Jem in 1991, are being amortized on a straight-line basis over a 40-year and
5-year period, respectively.
Amortization expense of $150, $271, and $334 is included in selling, general
and administrative expense for the periods ended August 15, 1997, December 28,
1996 and December 31, 1995, respectively. Accumulated amortization at August 15,
1997 and December 28, 1996 was $2,251 and $2,101, respectively. Other
intangibles were fully amortized in 1996. The Company's policy is to
periodically evaluate such costs
F-34
<PAGE>
JEM BRANDS, INC.
AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(DOLLARS IN THOUSANDS)
(1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
to determine whether there has been any impairment in value primarily by
comparing current and projected sales, operating income and cash flows with the
related annual amortization expense.
(e) INCOME TAXES
The Company is included in the Parent's consolidated federal income tax
return. For financial reporting purposes, the Company accounts for federal
income taxes as if it were a separate taxpayer based upon the Parent's U.S.
Federal income tax rate.
Income taxes are accounted for in accordance with the provisions of
Statement of Financial Accounting Standards (SFAS) No. 109, "ACCOUNTING FOR
INCOME TAXES," whereby deferred tax assets and liabilities are determined based
on the differences between the financial statement and tax bases of assets and
liabilities using enacted tax rates in effect for the year in which the
differences are expected to reverse.
(f) IMPAIRMENT OF LONG-LIVED ASSETS
The Company adopted the provisions of SFAS No. 121, "ACCOUNTING FOR THE
IMPAIRMENT OF LONG-LIVED ASSETS AND FOR LONG-LIVED ASSETS TO BE DISPOSED OF," in
1996. This statement requires that long-lived assets and certain identifiable
intangibles be reviewed for impairment whenever events or changes in
circumstances indicate that the carrying amount of an asset may not be
recoverable. Recoverability of assets to be held and used is measured by a
comparison of the carrying amount of an asset to future net cash flows expected
to be generated by the asset. If such assets are considered to be impaired, the
impairment to be recognized is measured by the amount by which the carrying
amount of the assets exceeds the fair value of the assets. Assets to be disposed
of are reported at the lower of the carrying amount or fair value less costs to
sell. Adoption of this statement did not have a material impact on the Company's
consolidated financial position, results of operations, or liquidity.
(g) USE OF ESTIMATES
The preparation of consolidated 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 consolidated
financial statements and the reported amounts of revenues and expenses during
the reporting period. Actual results could differ from those estimates.
(2) PROPERTY, PLANT AND EQUIPMENT
A summary of property, plant and equipment follows:
<TABLE>
<CAPTION>
AUGUST 15, DECEMBER 28,
1997 1996
----------- -------------
<S> <C> <C>
Buildings.......................................................... $ 1,425 $ 1,425
Machinery and equipment............................................ 4,003 3,998
Furniture and fixtures............................................. 133 133
Land............................................................... 598 594
----------- ------
$ 6,159 $ 6,150
----------- ------
----------- ------
</TABLE>
F-35
<PAGE>
JEM BRANDS, INC.
AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(DOLLARS IN THOUSANDS)
(3) INCOME TAXES
Income tax expense consists of:
<TABLE>
<CAPTION>
CURRENT DEFERRED TOTAL
----------- ----------- ---------
<S> <C> <C> <C>
1997:
Federal......................................................... $ 137 $ 113 $ 250
State........................................................... 20 12 32
----- ----- ---------
$ 157 $ 125 $ 282
----- ----- ---------
----- ----- ---------
1996:
Federal......................................................... $ 438 $ 116 $ 554
State........................................................... -- 11 11
----- ----- ---------
$ 438 $ 127 $ 565
----- ----- ---------
----- ----- ---------
1995:
Federal......................................................... $ 414 $ 200 $ 614
State........................................................... -- 22 22
----- ----- ---------
$ 414 $ 222 $ 636
----- ----- ---------
----- ----- ---------
</TABLE>
The allocated tax expense differed from the amounts computed by applying the
U.S. Federal income tax rate of 35% to earnings before income taxes as a result
of the following:
<TABLE>
<CAPTION>
1997 1996 1995
--------- --------- ---------
<S> <C> <C> <C>
Computed "expected" tax expense........................................................... $ 204 $ 468 $ 507
Amortization of goodwill and other intangibles............................................ 51 92 114
State taxes, net of federal income tax benefit............................................ 21 7 14
Other..................................................................................... 6 (2) 1
--------- --------- ---------
$ 282 $ 565 $ 636
--------- --------- ---------
--------- --------- ---------
</TABLE>
F-36
<PAGE>
JEM BRANDS, INC.
AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(DOLLARS IN THOUSANDS)
(3) INCOME TAXES (CONTINUED)
The tax effects of temporary differences that give rise to significant
portions of the deferred tax assets and deferred tax liabilities at August 15,
1997 and December 28, 1996 are presented below:
<TABLE>
<CAPTION>
AUGUST 15, DECEMBER 28,
1997 1996
----------- -------------
<S> <C> <C>
Deferred tax assets:
Net operating loss carryforwards..................................................... $ 1,255 $ 1,345
Inventories.......................................................................... 82 78
----------- ------
Total deferred tax assets........................................................ 1,337 1,423
----------- ------
Deferred tax liabilities:
Property, plant and equipment........................................................ 364 360
Goodwill and other intangibles....................................................... 99 101
Pension and other related costs...................................................... 38 1
----------- ------
Total deferred tax liabilities................................................... 501 462
----------- ------
Net deferred tax asset........................................................... $ 836 $ 961
----------- ------
----------- ------
</TABLE>
There was no valuation allowance for deferred tax assets at August 15, 1997
and December 28, 1996 as management believes that the deferred tax assets will
be realized through future operations and the reversal of taxable temporary
differences.
At August 15, 1997, the Company has net operating loss carryforwards for
federal income tax purposes of approximately $3,586 which are available to
offset future taxable income of the Company through 2006. The federal net
operating loss carryforwards are subject to an annual deductible limit of
approximately $410.
(4) PENSION PLAN AND TAX DEFERRED SAVINGS PLAN
The Company has a defined benefit pension plan covering substantially all of
its employees. The plan provides benefits based on the participants' years of
service and compensation. The Company makes annual contributions to the plan
that comply with the minimum funding provisions of the Employee Retirement
Income Security Act of 1974.
Pension cost for 1997, 1996 and 1995 includes the following components:
<TABLE>
<CAPTION>
1997 1996 1995
--------- --------- ---------
<S> <C> <C> <C>
Service cost--benefits earned during the period....................................... $ 31 $ 54 $ 31
Interest cost on projected benefit obligations........................................ 106 166 171
Actual return on plan assets.......................................................... (175) (88) (419)
Net amortization and deferral......................................................... 55 (115) 258
--------- --------- ---------
Net pension cost.................................................................. $ 17 $ 17 $ 41
--------- --------- ---------
--------- --------- ---------
</TABLE>
F-37
<PAGE>
JEM BRANDS, INC.
AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(DOLLARS IN THOUSANDS)
(4) PENSION PLAN AND TAX DEFERRED SAVINGS PLAN (CONTINUED)
The following sets forth the plan's funded status and the related amounts
recognized in the Company's balance sheets as of August 15, 1997 and December
28, 1996:
<TABLE>
<CAPTION>
AUGUST 15, DECEMBER 28,
1997 1996
----------- ------------
<S> <C> <C>
Actuarial present value of benefit obligations-
accumulated benefit obligations, including vested benefits of $2,646 and $2,204 at
August 15, 1997 and December 28, 1996, respectively.................................. $ 2,646 $ 2,250
Effect of projected future compensation levels......................................... -- 105
----------- ------------
Projected benefit obligation for services rendered to date............................. 2,646 2,355
Plan assets at fair market value....................................................... (2,646) (2,250)
----------- ------------
Plan assets less than projected benefit obligation..................................... -- 105
Unrecognized prior service costs....................................................... (41) (46)
Unrecognized gain (loss)............................................................... 38 (83)
----------- ------------
Prepaid pension cost............................................................... $ (3) $ (24)
----------- ------------
----------- ------------
</TABLE>
Assumptions used in accounting for the pension plan as of August 15, 1997
and December 28, 1996 are:
<TABLE>
<CAPTION>
1997 1996
----- -----
<S> <C> <C>
Discount rate................................................................... 7.5% 7.5%
Rates of increase in compensation levels........................................ 5.5% 5.5%
Expected long-term rate of return on assets..................................... 8.5% 8.5%
-- --
-- --
</TABLE>
Plan assets consist of common stocks and fixed income investments.
Additionally, the Company has a tax deferred savings plan (the Savings Plan)
available to all full-time employees of the Company who have completed six
months of service and have attained age 20 1/2. Under the terms of the Savings
Plan, any eligible employee can choose to have a percentage (minimum of 2%) of
his compensation deducted and contributed to the Savings Plan. The maximum
contribution allowed is determined annually in accordance with the applicable
provisions of the Internal Revenue Code. Provided there are sufficient company
profits, the Company will match 50% of the first 6% of a participant's
compensation contributed to the Savings Plan. In order to qualify for the
Company's matching contribution, the participant must either be a participant of
the Savings Plan at the end of the year or have terminated due to retirement,
disability or death. During 1997, 1996 and 1995, the Company contributed
approximately $15, $22 and $18, respectively, to the Savings Plan.
(5) RELATED PARTY TRANSACTIONS
The Company sells various inventory items to a wholly-owned subsidiary of
the Parent (subsidiary) at cost plus an approximate markup of 20% in 1996 and
1995. There was no markup in 1997. The Company also earns interest from the
subsidiary on the gross receivable balance related to such sales. In addition,
included in the Company's cost of goods sold, sales, marketing and distribution
expenses, and general and
F-38
<PAGE>
JEM BRANDS, INC.
AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(DOLLARS IN THOUSANDS)
(5) RELATED PARTY TRANSACTIONS (CONTINUED)
administrative expenses are overhead costs and selling, general and
administrative costs allocated from the subsidiary. These allocations are a
result of the subsidiary providing warehouse space, inventory handling and all
general and administrative services for the Company.
The allocation of cost of goods sold is based on the inventory volume
(weight) handled by the subsidiary for the Company and the inventory space
utilized by the Company at the subsidiary's facility. The allocation of selling
and general and administrative expenses is based upon sales volume (dollars).
Management believes that these allocation methods are reasonable and approximate
the cost that would have been incurred if the Company had operated as an
unaffiliated entity.
The net sales, allocated cost and interest earned related to the subsidiary
that are included in the accompanying consolidated statements of earnings are as
follows:
<TABLE>
<CAPTION>
1997 1996 1995
--------- --------- ---------
<S> <C> <C> <C>
Net sales............................................................................ $ 1,127 $ 2,799 $ 1,768
--------- --------- ---------
--------- --------- ---------
Cost of goods sold (overhead cost)................................................... $ 75 $ 122 $ 120
--------- --------- ---------
--------- --------- ---------
Sales, marketing and administrative expenses......................................... $ 529 $ 716 $ 658
--------- --------- ---------
--------- --------- ---------
General and administrative expenses.................................................. $ 550 $ 730 $ 551
--------- --------- ---------
--------- --------- ---------
Interest income...................................................................... $ 142 $ 165 $ 97
--------- --------- ---------
--------- --------- ---------
</TABLE>
During 1995, the Company purchased various inventory items and machinery and
equipment from the subsidiary, at cost and net book value, respectively. The
inventory purchases, which were included in cost of goods sold in 1995, amounted
to $159, and the machinery and equipment purchases amounted to $75.
(6) SALE OF COMPANY'S STOCK
On August 15, 1997, the Parent sold its interest in the common and preferred
stock of the Company to B&G Foods, Inc. for $12,250. Immediately prior to the
sale of the Company's stock, a cash dividend of $2,652 was declared and paid.
The cash dividend paid represented the net amount due from parent and
affiliates, which was received by the Company immediately prior to the August
15, 1997 dividend payment.
The accompanying consolidated financial statements of the Company as of and
for the period ended August 15, 1997 represent the financial position, results
of operations, and cash flows of the Company prior to the sale of the Company's
stock.
F-39
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
NO DEALER, SALESPERSON OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS NOT CONTAINED IN THIS PROSPECTUS,
AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED
UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY. THIS PROSPECTUS DOES NOT
CONSTITUTE AN OFFER TO SELL, OR A SOLICITATION OF AN OFFER TO BUY, ANY OF THE
NEW NOTES OFFERED HEREBY IN ANY JURISDICTION TO ANY PERSON TO WHOM IT IS
UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION IN SUCH JURISDICTION. NEITHER THE
DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL, UNDER ANY
CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THE INFORMATION CONTAINED HEREIN IS
CORRECT AS OF ANY TIME SUBSEQUENT TO THE DATE HEREOF OR THAT THERE HAS BEEN NO
CHANGE IN THE AFFAIRS OF THE COMPANY SINCE SUCH DATE.
------------------------
<TABLE>
<CAPTION>
PAGE
-----
<S> <C>
Available Information.......................... i
Summary........................................ 1
Risk Factors................................... 14
Use of Proceeds................................ 20
Capitalization................................. 21
Pro Forma Condensed Consolidated Financial
Information................................... 22
Selected Historical Financial and Other Data... 28
Management's Discussion and Analysis of
Financial Condition and Results of
Operations.................................... 34
The Exchange Offer............................. 41
Certain Federal Income Tax Considerations...... 48
Business....................................... 50
Management..................................... 63
Ownership of the Capital Stock................. 68
Certain Relationships and Related
Transactions.................................. 70
Description of Certain Indebtedness............ 71
Description of Notes........................... 73
Plan of Distribution........................... 104
Legal Matters.................................. 105
Experts........................................ 105
Index to Financial Statements.................. F-1
</TABLE>
UNTIL , 1998 (90 DAYS AFTER THE DATE OF THIS PROSPECTUS), ALL DEALERS
EFFECTING TRANSACTIONS IN THE NOTES, WHETHER OR NOT PARTICIPATING IN THE
ORIGINAL DISTRIBUTION, MAY BE REQUIRED TO DELIVER A PROSPECTUS. THIS IS IN
ADDITION TO THE OBLIGATION OF DEALERS TO DELIVER A PROSPECTUS WHEN ACTING AS
UNDERWRITERS AND WITH RESPECT TO THEIR UNSOLD ALLOTMENTS OR SUBSCRIPTIONS.
$120,000,000
[LOGO]
B&G FOODS, INC.
---------------------
PROSPECTUS
---------------------
OFFER TO EXCHANGE
9 5/8% SENIOR SUBORDINATED NOTES
DUE 2007
FOR ALL OUTSTANDING
9 5/8% SENIOR SUBORDINATED NOTES
DUE 2007
, 1998
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 20. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Section 145 of the Delaware General Corporation Law (the "GCL") provides in
relevant part that a corporation may 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 (other than an action 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 the corporation, or is or was serving at the request of the corporation
as a director, officer, employee or agent of another corporation, partnership,
joint venture, trust or other enterprise, against 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 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 action or proceeding, had no reasonable cause to believe
such person's conduct was unlawful.
In addition, Section 145 provides that a corporation may indemnify any
person who was or is a party 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 such
person 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 the corporation, or is or was serving at the request of the
corporation as a director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise against expenses
(including attorneys' fees) actually and reasonably incurred by such person in
connection with the defense or settlement of such action or suit 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 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 to the corporation
unless and only to the extent that the Delaware Court of Chancery or the court
in which such action or suit was brought shall determine upon application that,
despite the adjudication of liability but in view of all the circumstances of
the case, such person is fairly and reasonably entitled to indemnity for such
expenses which the Delaware Court of Chancery or such other court shall deem
proper.
Section 145 also provides that to the extent a director, officer, employee
or agent of a corporation has been successful on the merits or otherwise in
defense of any action, suit or proceeding referred to above, or defense of any
claim issue or matter therein, he shall be indemnified against expenses
(including attorney's fees) actually and reasonably incurred by him in
connection therewith.
Furthermore, Section 145 provides that nothing in the above-described
provisions shall be deemed exclusive of any other rights to indemnification or
advancement of expenses to which any person may be entitled under any bylaw,
agreement, vote of stockholders or disinterested directors or otherwise.
Section 102(b)(7) of the GCL provides that a corporation may in its
certificate of incorporation eliminate or limit the personal liability of a
director to the corporation 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 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 (pertaining to
certain prohibited acts including unlawful payment of dividends or unlawful
purchase or redemption of the corporation's capital stock); or (iv) for any
transaction from which the director derived an improper personal benefit.
The Certificates of Incorporation of the Company and RWBV Acquisition Corp.
provide that the respective directors of such corporations shall be entitled to
the benefits of all limitations on the liability of directors generally under
Delaware law and such corporations shall indemnify all persons whom they are
II-1
<PAGE>
permitted to indemnify to the full extent permitted under Section 145 of the
GCL. The Certificates of Incorporation of BGH Holdings, Inc., Bloch &
Guggenheimer, Inc., and Roseland Distribution Company provide for the limitation
or elimination of the liability of directors to such corporations or their
stockholders for monetary damages for breach of their fiduciary duties to the
fullest extent permitted by the laws of Delaware. The Certificate of
Incorporation of Burns & Ricker, Inc. provides for the indemnification of all
persons held liable by reason of being a director or officer and for the
limitation or elimination of the liabilities of directors, to the fullest extent
permitted under Delaware law, to the corporation or its stockholders for
monetary damages for breach of their fiduciary duties as a director.
In addition, the Bylaws of the Company and RWBV Acquisition Corp. provide
for the indemnification of their directors and officers to the fullest extent
permitted under Delaware law as in effect from time to time and by their
respective certificate of incorporation. The Bylaws of BGH Holdings, Inc., Bloch
& Guggenheimer, Inc., and Roseland Distribution Company provide for the
indemnification of each director and officer 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 if
the director or officer acted in good faith and in a manner such person
reasonably believed to be in or not opposed to the best interest of such
corporation and had no reason to believe that his conduct was unlawful. The
Bylaws of Burns & Ricker, Inc. contain no provision with respect to the
indemnification of directors and officers of the corporation.
ITEM 21. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
(A) EXHIBITS.
<TABLE>
<C> <S>
3.1 Certificate of Incorporation of B&G Foods, Inc.
3.2 Bylaws of B&G Foods, Inc.
3.3 Certificate of Incorporation of BGH Holdings, Inc.
3.4 Bylaws of BGH Holdings, Inc.
3.5 Certificate of Incorporation of Trappey's Fine Foods, Inc.
3.6 Bylaws of Trappey's Fine Foods, Inc.
3.7 Certificate of Incorporation for Bloch & Guggenheimer, Inc.
3.8 Bylaws of Bloch & Guggenheimer, Inc.
3.9 Certificate of Incorporation of RWBV Acquisition Corp.
3.10 Bylaws of RWBV Acquisition Corp.
3.11 Certificate of Incorporation of Roseland Distribution Company
3.12 Bylaws of Roseland Distribution Company
3.13 Certificate of Incorporation of Burns & Ricker, Inc.
3.14 Bylaws of Burns & Ricker, Inc.
4.1 Indenture dated as of August 11, 1997 between B&G Foods, Inc. (the "Company"), BGH
Holdings, Inc., RWBV Acquisition Corp., BRH Holdings, Inc., Bloch & Guggenheimer,
Inc., Roseland Distribution Company, Burns & Ricker, Inc., Roseland Manufacturing,
Inc., and RWBV Brands Company (collectively, the "Guarantors") and The Bank of New
York, as trustee (the "Trustee").+
4.2 Form of the Company's 9 5/8% Senior Notes due 2007 (filed as Exhibit 4.1)+
5.1 Opinion of Dechert Price & Rhoads re: legality
8.1 Opinion of Dechert Price & Rhoads re: tax matters
10.1 Registration Rights Agreement dated as of August 11, 1997 by and among the Company,
the Guarantors party thereto, Lehman Brothers, Inc. and Lazard Freres & Co. LLC.+
10.2 Purchase Agreement dated August 6, 1997 among the Company, the Guarantors party
thereto, Lehman Brothers, Inc. and Lazard Freres & Co. LLC+
</TABLE>
II-2
<PAGE>
<TABLE>
<C> <S>
10.3 Second Amended and Restated Credit Agreement dated as of August 11, 1997 among the
Company, the guarantors party thereto, Heller Financial Inc., as agent and lender,
and the lenders party thereto.
10.4 Securities Purchase and Holders Agreement, dated as of March 27, 1997, by and among B
Companies Holdings Corp., Bruckmann, Rosser, Sherrill & Co., L.P., and the management
investors party thereto.
12.1 Computation of Ratio of Earnings to Fixed Charges
21.1 Subsidiaries of the Company and the Additional Registrants
23.1 Consent of KPMG Peat Marwick LLP relating to B&G Foods, Inc.
23.2 Consent of KPMG Peat Marwick LLP relating to the Nabisco Brands
23.3 Consent of KPMG Peat Marwick LLP relating to JEM Brands, Inc.
23.4 Consent of Dechert Price & Rhoads (included in Exhibit 5.1)
24 Power of Attorney+
25 Statement of Eligibility and Qualification of The Bank of New York on Form T-1+
99.1 Form of Letter of Transmittal
99.2 Form of Notice of Guaranteed Delivery
</TABLE>
- ------------------------
+ Previously filed
(B) FINANCIAL STATEMENT SCHEDULES
Schedule II B & G Foods, Inc. Valuation and Qualifying Accounts
Schedules not listed above are omitted because of the absence of the
conditions under which they are required or because the information required by
such omitted schedules is set forth in the financial statements or the notes
thereto.
ITEM 22. UNDERTAKINGS
(a) The undersigned registrants hereby undertake:
(1) to file, during any period in which offers or sales are being made,
a post-effective amendment to this registration statement:
(i) to include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(ii) to reflect in the prospectus any facts or events arising after
the effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth in
the registration statement. Notwithstanding the foregoing, any increase
or decrease in volume of securities offered (if the total dollar value of
securities offered would not exceed that which was registered) and any
deviation from the low or high end of the estimated maximum offering
range may be reflected in the form of prospectus filed with the
Commission pursuant to Rule 424(b) if, in the aggregate, the changes in
volume and price represent no more than a 20% change in the maximum
aggregate offering price set forth in the "Calculation of Registration
Fee" table in the effective registration statement; and
(iii) to include any material information with respect to the plan of
distribution not previously disclosed in the registration statement or
any material change to such information in the registration statement;
(2) 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
II-3
<PAGE>
offered therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof; and
(3) 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) 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
registrants have been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the Act
and is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the registrant of expenses
incurred or paid by a director, officer or controlling person of the registrant
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 registrants will, unless in the opinion of their 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.
(c) The undersigned registrants hereby undertake to respond to requests for
information that is incorporated by reference into the prospectus pursuant to
Item 4, 10(b), 11 or 13 of this Form, within one business day of receipt of such
request, and to send the incorporated documents by first class mail or other
equally prompt means. This includes information contained in documents filed
subsequent to the effective date of the registration statement through the date
of responding to the request.
(d) The undersigned registrants hereby undertake to supply by means of a
post-effective amendment all information concerning a transaction, and the
corporation being acquired involved therein, that was not the subject of and
included in the registration statement when it became effective.
II-4
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, each of the
Registrants have duly caused this Amendment to the Registration Statement to be
signed on its behalf by the undersigned, thereunto duly authorized on January
13, 1998.
B&G FOODS, INC.
By: /s/ DAVID L. WENNER
-----------------------------------------
David L. Wenner
PRESIDENT AND CHIEF EXECUTIVE OFFICER
BGH HOLDINGS, INC.
BLOCH & GUGGENHEIMER, INC.
ROSELAND DISTRIBUTION COMPANY
TRAPPEY'S FINE FOODS, INC.
BURNS & RICKER, INC.
BY: /S/ DAVID L. WENNER
-----------------------------------------
David L. Wenner
PRESIDENT AND CHIEF EXECUTIVE OFFICER
RWBV ACQUISITION CORP.
BY: *
-----------------------------------------
STEPHEN C. SHERRILL
PRESIDENT
II-5
<PAGE>
Pursuant to the requirements of the Securities Act of 1933, this Amendment
to the Registration Statement has been signed by the following persons in the
capacities and on the date indicated.
B&G FOODS, INC.
NAME TITLE DATE
- ------------------------------ -------------------------- -------------------
President, Chief Executive
/s/ DAVID L. WENNER Officer and Director
- ------------------------------ (Principal Executive January 13, 1998
David L. Wenner Officer)
Executive Vice President
of Finance and Chief
* Financial Officer
- ------------------------------ (Principal Financial January 13, 1998
Robert C. Cantwell Officer and Accounting
Officer)
*
- ------------------------------ Director January 13, 1998
Thomas J. Baldwin
*
- ------------------------------ Director January 13, 1998
Alfred Poe
*
- ------------------------------ Director January 13, 1998
Harold O. Rosser II
*
- ------------------------------ Director January 13, 1998
Stephen C. Sherrill
*
- ------------------------------ Director January 13, 1998
Leonard S. Polaner
II-6
<PAGE>
TRAPPEY'S FINE FOODS, INC.
NAME TITLE DATE
- ------------------------------ -------------------------- -------------------
President and Chief
/s/ DAVID L. WENNER Executive Officer
- ------------------------------ (Principal Executive January 13, 1998
David L. Wenner Officer)
Executive Vice President
of Finance and Chief
* Financial Officer
- ------------------------------ (Principal Financial January 13, 1998
Robert C. Cantwell Officer and Accounting
Officer)
*
- ------------------------------ Director January 13, 1998
Stephen C. Sherrill
RWBV ACQUISITION CORP.
NAME TITLE DATE
- ------------------------------ -------------------------- -------------------
President, Secretary and
* Director (Principal
- ------------------------------ Executive, Financial and January 13, 1998
Stephen C. Sherrill Accounting Officer)
Vice President of Finance
* and Treasurer (Principal
- ------------------------------ Financial Officer and January 13, 1998
Robert C. Cantwell Accounting Officer)
BURNS & RICKER, INC.
NAME TITLE DATE
- ------------------------------ -------------------------- -------------------
President and Chief
/s/ DAVID L. WENNER Executive Officer
- ------------------------------ (Principal Executive January 13, 1998
David L. Wenner Officer)
Executive Vice President
of Finance and Chief
* Financial Officer
- ------------------------------ (Principal Financial January 13, 1998
Robert C. Cantwell Officer and Accounting
Officer)
*
- ------------------------------ Vice President and January 13, 1998
Stephen Sherrill Director
II-7
<PAGE>
<TABLE>
<C> <S> <C>
ROSELAND DISTRIBUTION COMPANY
NAME TITLE DATE
- ------------------------------ -------------------------- -------------------
President and Chief
/s/ DAVID L. WENNER Executive Officer
- ------------------------------ (Principal Executive January 13, 1998
David L. Wenner Officer)
Executive Vice President
of Finance and Chief
* Financial Officer
- ------------------------------ (Principal Financial January 13, 1998
Robert C. Cantwell Officer and Accounting
Officer)
*
- ------------------------------ Vice President and January 13, 1998
Stephen Sherrill Director
BLOCH & GUGGENHEIMER, INC.
NAME TITLE DATE
- ------------------------------ -------------------------- -------------------
President and Chief
/s/ DAVID L. WENNER Executive Officer
- ------------------------------ (Principal Executive January 13, 1998
David L. Wenner Officer)
Executive Vice President
of Finance and Chief
* Financial Officer
- ------------------------------ (Principal Financial January 13, 1998
Robert C. Cantwell Officer and Accounting
Officer)
*
- ------------------------------ Vice President and January 13, 1998
Stephen Sherrill Director
BGH HOLDINGS, INC.
NAME TITLE DATE
- ------------------------------ -------------------------- -------------------
President and Chief
/s/ DAVID L. WENNER Executive Officer
- ------------------------------ (Principal Executive January 13, 1998
David L. Wenner Officer)
Executive Vice President
of Finance and Chief
* Financial Officer
- ------------------------------ (Principal Financial January 13, 1998
Robert C. Cantwell Officer and Accounting
Officer)
*
- ------------------------------ Vice President and January 13, 1998
Stephen Sherrill Director
</TABLE>
*By: /s/ DAVID L. WENNER
-------------------------
David L. Wenner
ATTORNEY-IN-FACT
II-8
<PAGE>
SCHEDULE II
B&G FOODS, INC.
VALUATION AND QUALIFYING ACCOUNTS
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
ADDITIONS
--------------------------------
BALANCE AT CHARGED TO BALANCE
BEGINNING OF COSTS AND CHARGED TO AT END OF
PERIOD EXPENSES OTHER ACCOUNTS DEDUCTIONS PERIOD
------------- --------------- --------------- ------------- -------------
<S> <C> <C> <C> <C> <C>
Allowance for doubtful accounts:
39-week period ended September 27, 1997........... $ -- 564 -- -- 564
Year ended:
December 28, 1996................................. $ -- -- -- -- --
December 30, 1995................................. $ -- -- -- -- --
</TABLE>
S-1
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NO. EXHIBIT PAGE
- ----------- -------------------------------------------------------------------------------------------------- -----
<C> <S> <C>
3.1 Certificate of Incorporation of B&G Foods, Inc.
3.2 Bylaws of B&G Foods, Inc.
3.3 Certificate of Incorporation of BGH Holdings, Inc.
3.4 Bylaws of BGH Holdings, Inc.
3.5 Certificate of Incorporation of Trappey's Fine Foods, Inc.
3.6 Bylaws of Trappey's Fine Foods, Inc.
3.7 Certificate of Incorporation for Bloch & Guggenheimer, Inc.
3.8 Bylaws of Bloch & Guggenheimer, Inc.
3.9 Certificate of Incorporation of RWBV Acquisition Corp.
3.10 Bylaws of RWBV Acquisition Corp.
3.11 Certificate of Incorporation of Roseland Distribution Company
3.12 Bylaws of Roseland Distribution Company
3.13 Certificate of Incorporation of Burns & Ricker, Inc.
3.14 Bylaws of Burns & Ricker, Inc.
4.1 Indenture dated as of August 11, 1997 between B&G Foods, Inc. (the "Company"), BGH Holdings, Inc.,
RWBV Acquisition Corp., BRH Holdings, Inc., Bloch & Guggenheimer, Inc., Roseland Distribution
Company, Burns & Ricker, Inc., Roseland Manufacturing, Inc., and RWBV Brands Company
(collectively, the "Guarantors") and The Bank of New York, as trustee (the "Trustee").+
4.2 Form of the Company's 9 5/8% Senior Notes due 2007 (filed as Exhibit 4.1)+
5.1 Opinion of Dechert Price & Rhoads re: legality
8.1 Opinion of Dechert Price & Rhoads re: tax matters
10.1 Registration Rights Agreement dated as of August 11, 1997 by and among the Company, the Guarantors
party thereto, Lehman Brothers, Inc. and Lazard Freres & Co. LLC.+
10.2 Purchase Agreement dated August 6, 1997 among the Company, the Guarantors party thereto, Lehman
Brothers, Inc. and Lazard Freres & Co. LLC+
10.3 Second Amended and Restated Credit Agreement dated as of August 11, 1997 among the Company, the
guarantors party thereto, Heller Financial Inc., as agent and lender, and the lenders party
thereto.
10.4 Securities Purchase and Holders Agreement, dated as of March 27, 1997, by and among B Companies
Holdings Corp., Bruckmann, Rosser, Sherrill & Co., L.P., and the management investors party
thereto.
12.1 Computation of Ratio of Earnings to Fixed Charges
21.1 Subsidiaries of the Company and the Additional Registrants
23.1 Consent of KPMG Peat Marwick LLP relating to B&G Foods, Inc
23.2 Consent of KPMG Peat Marwick LLP relating to the Nabisco Brands.
23.3 Consent of KPMG Peat Marwick LLP relating to JEM Brands, Inc.
23.4 Consent of Dechert Price & Rhoads (included in Exhibit 5.1)
24 Power of Attorney+
25 Statement of Eligibility and Qualification of The Bank of New York on Form T-1+
99.1 Form of Letter of Transmittal
99.2 Form of Notice of Guaranteed Delivery
</TABLE>
- ------------------------
+ Previously filed
<PAGE>
Exhibit 3.1
CERTIFICATE OF INCORPORATION
of
B COMPANIES ACQUISITION CORP.
1. NAME. The name of the corporation is B COMPANIES ACQUISITION
CORP. (the "Corporation").
2. REGISTERED OFFICE AND REGISTERED AGENT. The registered office of
the Corporation in the State of Delaware is located at Corporation Trust Center,
1209 Orange Street, in the City of Wilmington, County of New Castle. The name
and address of the Corporation's registered agent is The Corporation Trust
Company, Corporation Trust Center, 1209 Orange Street, Wilmington, Delaware
19801.
3. CORPORATE PURPOSES. 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.
4. AUTHORIZED CAPITAL. The total number of shares of all classes of
capital stock which the Corporation shall have authority to issue is 1,000
shares of common stock, par value $0.01 per share (the "Stock").
The powers, preferences and rights and the qualifications, limitations
and restrictions of the Stock are as set forth below:
(a) DIVIDENDS. When, as and if dividends are declared on the Stock,
whether payable in cash, in property or in securities of the Corporation, the
holders of shares of the Stock shall be entitled to share equally, share for
share, in such dividends.
(b) VOTING RIGHTS. Except as otherwise provided by law and this
Certificate of Incorporation, the holders of shares of the Stock shall be
entitled to one vote per share on all matters to be voted on by the Stockholders
of the Corporation.
(c) No holder of the Stock shall, except as provided herein, be
entitled as a matter of right to subscribe for or purchase, or have any
preemptive right with respect to, any part
<PAGE>
of any new or additional issue of stock of any class whatsoever, or of
securities convertible into any stock of any class whatsoever, whether now or
hereafter authorized and whether issued for cash or other consideration or by
way of dividend.
5. MANAGEMENT OF BUSINESS. 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:
5.1 BY-LAWS. The original By-Laws of the Corporation shall be
adopted by the sole incorporator. In furtherance and not in limitation of the
powers conferred by statute, the Board of Directors is expressly authorized to
adopt, amend or repeal the By-Laws of the Corporation.
5.2 NUMBER AND ELECTION OF DIRECTORS. The number of directors from
time to time shall be fixed by, or in the manner provided in, the By-Laws of the
Corporation. The election of directors need not be by written ballot unless the
By-Laws of the Corporation so provide.
6. INDEMNIFICATION BY THE CORPORATION; LIABILITY OF DIRECTORS. The
directors of the Corporation shall be entitled to the benefits of all
limitations on the liability of directors generally that are now or hereafter
become available under the Corporation Law, and the Corporation shall indemnify
all persons whom it is permitted to indemnify to the full extent permitted by
Section 145 of the Corporation Law, as amended from time to time. Without
limiting the generality of the foregoing, no director of the Corporation shall
be liable to the Corporation 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 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 Corporation Law, or
(iv) for any transaction from which the director derived an improper personal
benefit. Any repeal or modification of this Section 6 shall be prospective
only, and shall not affect, to the detriment of any director, any limitation on
the personal liability of a director of the Corporation existing at the time of
such repeal or modification.
2
<PAGE>
7. INCORPORATOR. The name and mailing address of the sole
incorporator is as follows:
Name Mailing Address
---- ---------------
Susan D. Chow Dechert Price & Rhoads
477 Madison Avenue
New York, New York 10022
The undersigned, being the sole incorporator hereinbefore named, for
the purpose of forming a corporation pursuant to the General Corporation Law of
the State of Delaware, does make this Certificate, hereby declaring and
certifying that the facts herein stated are true, and accordingly has hereunto
set her hand this 13th day of November, 1996.
/s/ Susan D. Chow
------------------------------
Susan D. Chow
3
<PAGE>
CERTIFICATE OF AMENDMENT OF
CERTIFICATE OF INCORPORATION OF
B COMPANIES ACQUISITION CORP.
Pursuant to Section 242 of the General Corporation Law of the State of
Delaware:
B COMPANIES ACQUISITION CORP., a corporation organized and existing
under and by virtue of the General Corporation Law of the State of Delaware (the
"Corporation"), DOES HEREBY CERTIFY:
FIRST: That, by means of certificates of consent of the sole
director and sole stockholder of the Corporation, resolutions were
duly adopted setting forth proposed amendments to the Certificate of
Incorporation of the Corporation, and declaring said amendment to be
advisable; and that the resolution setting forth said proposed
amendments is as follows:
RESOLVED, that the Certificate of Incorporation of the
Corporation be amended by: (1) deleting the terms "B
COMPANIES ACQUISITION CORP." where they appear in the
heading of the Certificate of Incorporation of the
Corporation and adding in lieu thereof the terms "B&G FOODS,
INC."; and (2) deleting Article 1 of the Certificate of
Incorporation of the Corporation and adding in lieu thereof
the following new Article 1:
1. NAME. The name of the corporation is B&G
FOODS, INC. (the "Corporation").
SECOND: That said amendments were authorized by the sole
stockholder of the Corporation, by means of a certificate of consent
of said stockholder.
<PAGE>
THIRD: That said amendments were duly adopted in accordance with
the provisions of Section 242 of the General Corporation Law of the
State of Delaware.
IN WITNESS WHEREOF, the Corporation has caused this Certificate to be
signed by its officers thereto duly authorized this ____ day of June, 1997.
By:
/s/ Stephen C. Sherrill
------------------------------
Stephen C. Sherrill
President
ATTEST:
/s/ Robert Cantwell
- -----------------------------
Robert Cantwell
Assistant Secretary
-2-
<PAGE>
Exhibit 3.2
BY-LAWS
OF
B COMPANIES ACQUISITION CORP.
(now known as B&G Foods, Inc.)
ARTICLE I
STOCKHOLDERS
SECTION 1. ANNUAL MEETINGS. The annual meeting of the stockholders
(the "Annual Meeting of Stockholders") of B COMPANIES ACQUISITION CORP. (the
"Corporation") for the purpose of electing directors and for the transaction of
such other business as nay be brought before the meeting shall be held, in each
year on such day, at such time and such place within or without the State of
Delaware as shall be fixed by the Board of Directors and stated in the notice of
the meeting.
SECTION 2. SPECIAL MEETINGS. Special meetings of the stockholders
may be called at any time by the Board of Directors, by the Chairman of the
Board, by the President or by any number of stockholders owning an aggregate of
not less than fifty percent (50%) of outstanding shares of capital stock
entitled to vote. special meetings shall be held on such day, at such time and
such place either within or without the State of Delaware specified in the
notice thereof.
SECTION 3. NOTICE OF MEETINGS. Except as otherwise expressly
required by law or the Certificate of Incorporation of the Corporation, written
notice to stockholders stating the place and time of the meeting, and in the
case of a special meeting, the purpose or purposes of such meeting, shall be
given either by delivering a notice personally or mailing a notice to each
stockholder of record entitled to vote thereat at his address as it appears on
the records of the Corporation not less than ten (10) nor more than sixty (60)
days prior to the meeting. No business other than that stated in the notice
shall be transacted at any special meeting. Notice of any meeting of
stockholders shall not be required to be given to any stockholder who shall
attend such meeting in person or represented by proxy; and if any stockholder
shall, in person or by attorney thereunto duly authorized, in writing or by
telegraph, cable or wireless, waive notice of any meeting, whether before or
after such meeting be held, the notice thereof need not be given to him. Notice
of any adjourned meeting of stockholders need not be given except as provided in
section 5 of this Article I.
<PAGE>
SECTION 4. QUORUM. Subject to the provisions of law or the
Certificate of Incorporation in respect of the vote that shall be required for a
specific action, the number of shares the holders of which shall be present or
represented by proxy at any meeting of stockholders in order to constitute a
quorum for the transaction of any business, shall be majority of all the shares
issued and outstanding and entitled to vote at such meeting.
SECTION 5. ADJOURNMENT. At any meeting of stockholders, whether or
not there shall be a quorum present, the holders of a majority of shares voting
at the meeting, whether present in person at the meeting or represented by proxy
at the meeting, may adjourn the meeting from time to time. Except as otherwise
provided by law, notice of such adjourned meeting need not be given otherwise
than by announcement of the time and place of such adjourned meeting at the
meeting at which the adjournment is taken. At any adjourned meeting at which a
quorum shall be present, any business may be transacted which might have been
transacted at the original meeting.
SECTION 6. ORGANIZATION. The Chairman of the Board, or in his
absence or nonelection, the President, or in the absence of both of the
foregoing officers, a vice President, shall call meetings of the stockholders to
order, and shall act as Chairman of such meetings. In the absence of the
Chairman of the Board, the President, or a Vice President, the holders of a
majority in number of the shares of the capital stock of the Corporation present
in person or represented by proxy and entitled to vote at such meeting shall
elect a chairman, who may be the Secretary of the Corporation. The Secretary of
the Corporation shall act as secretary of all meetings of the stockholders, but
in the absence of the Secretary, the Chairman may appoint any person to act as
secretary of the meeting.
SECTION 7. VOTING. Each stockholder of record, as determined in
accordance with Section 4 of Article V hereof, shall, except as otherwise
provided by law or by the Certificate of Incorporation, at every meeting of the
stockholders be entitled to one vote in person or by proxy for each share of
capital stock entitled to vote held by such stockholder, but no proxy shall be
voted on after three years from its date, unless said proxy provides for a
longer period. Unless otherwise provided by law or the Certificate of
Incorporation, no vote upon any matter before the meeting, including the
election of directors need be by ballot, PROVIDED, HOWEVER, upon the demand of
any stockholder, the vote for directors and the vote upon any matter before the
meeting, shall be by ballot. Except as otherwise provided by law, by the
Certificate of Incorporation or by these By-laws, all elections for directors
shall be decided by plurality vote; and all other matters shall be decided by
a majority of the votes cast thereon.
2
<PAGE>
SECTION 8. STOCKHOLDERS LIST. A complete list of the stockholders
entitled to vote at any meeting of the stockholders, arranged in alphabetical
order, with the address of each, and the number of shares held by each, shall be
open to the examination of any stockholder, for any purpose germane to the
meeting, during ordinary business hours, f or 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 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 9. ADDRESSES OF STOCKHOLDERS. Each stockholder shall
designate to the Secretary of the Corporation an address to which noticed of
meetings and all other corporate notices may be served upon or mailed to him,
and if any stockholder shall fail to designate such address, corporate notices
may be served upon him by mail directed to him at his last known post office
address.
SECTION 10. JUDGES OF VOTING. The Board of Directors may at any time
appoint one or more persons to serve as Judges of Voting at the next succeeding
Annual Meeting of Stockholders or at any other meeting or meetings and the Board
of Directors may at any time fill any vacancy in the office of Judges of Voting.
If the Board of Directors fails to appoint Judges of Voting, or if any Judges of
Voting appointed be absent or refuse to act, or if his office becomes vacant and
be not filled by the Board of Directors, the Chairman of any meeting of the
stockholders may appoint one or more temporary Judges of Voting for such
meeting. All proxies shall be filed with the Judges of Voting of the meeting
before being voted upon.
SECTION 11. CONSENT OF STOCKHOLDERS IN LIEU OF MEETING. Except as
otherwise provided by law, by the Certificate of Incorporation or by these
By-laws, any action required to be taken, or which may be taken, at any meeting
of 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 shares 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 of stock entitled to vote thereon were present
and voted; provided that prompt notice of the taking of corporate action without
a meeting by less than unanimous written consent shall be given to those
stockholders who have not consented in writing.
3
<PAGE>
ARTICLE II
BOARD OF DIRECTORS
SECTION 1. GENERAL POWERS. The property, affairs and business of the
Corporation shall be managed by or under the direction of the Board of
Directors. The Board of Directors may exercise all the powers of the Corporation
and do all lawful acts and things which are not reserved to the stockholders by
law or by the Certificate of Incorporation.
SECTION 2. NUMBER, QUALIFICATION, TERM OF OFFICE AND ELECTION. The
number of Directors shall be such as the Board of Directors may from time to
time by resolution direct. Directors need not be stockholders. The initial
number of Directors shall be one (1), consisting of one class of Directors,
until such time as the Board of Directors may by resolution direct that the
Board of Directors be divided into three classes in accordance with this Section
2. At such time as the Board of Directors by resolution directs, the Board of
Directors shall be divided into three classes, as nearly equal in number as
possible, with the term of office of the first class to expire at the Annual
Meeting of Stockholders next ensuing, the term of office of the second class to
expire at the Annual Meeting of Stockholders one year thereafter, and the term
of office of the third class to expire at the Annual Meeting of Stockholders two
years thereafter. At the time of the initial classification, any vacancy on the
Board of Directors caused by such increase in the number of Directors shall be
filed in accordance with Section 11 of this Article II. At each annual election
held after the initial classification and election, the Directors chosen to
succeed those whose terms have expired shall be elected to hold office until the
third succeeding Annual Meeting of Stockholders after their election. If the
number of Directors is changed, any increase or decrease in Directors shall be
apportioned among the classes so as to maintain all classes as equal in number
as possible, and any additional Director elected to any class shall hold office
for a term which shall coincide with the terms of the other Directors in such
class. Each Director shall hold office for the term for which he is appointed or
elected and until his successor, if any, shall have been elected and shall have
qualified, or until his death or until he shall have resigned or shall have been
removed in the manner hereinafter provided. Directors need not be elected by
ballot, except upon demand of any stockholder.
4
<PAGE>
SECTION 3. QUORUM AND MANNER OF ACTION. Except as otherwise provided
by statute or by these By-laws, a majority of the number of the Board of
Directors shall be required to constitute a quorum for the transaction of
business at any meeting, and 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. In the absence of a quorum, a majority of the directors present may
adjourn any meeting from time to time until a quorum be had. Notice of any
adjourned meeting need not be given if the time and place thereof are announced
at the meeting at which adjournment is taken. The directors shall act only as a
board and individual directors shall have no power as such.
SECTION 4. PLACE OF MEETING, ETC. The Board of Directors may hold
its meetings, have one or more offices, and keep the books and records of the
Corporation, at such place or places within or without the State of Delaware, as
the Board of Directors may from time to time determine or as shall be specified
or fixed in the respective notices or waivers of notice hereof.
SECTION 5. REGULAR MEETINGS. Commencing in 1997, a regular meeting
of the Board of Directors shall be held.as soon as practicable after each Annual
Meeting of Stockholders, for the election of officers and the transaction of
other business, and other regular meetings of said Board of Directors shall be
held at such times and places as said Board shall direct. No notice shall be
required for any regular meeting of the Board of Directors but a copy of every
resolution fixing or changing the time or place of regular meetings shall be
mailed to every director at least five days before the first meeting held
pursuant to such resolution.
SECTION 6. SPECIAL MEETINGS; NOTICE AND WAIVER OF NOTICE. Special
meetings of the Board of Directors may be called by the Chairman of the Board,
the Secretary on the request of the Chairman of the Board, the President or any
two Directors. The Secretary or an Assistant Secretary shall give notice of the
time and place of each special meeting by mailing a written notice of the same
to each director at his last known post office address or usual place of
business at least two days before the meeting or by causing the same to be
delivered personally or to be transmitted by telegraph, cable, telephone or
orally at least 24 hours before the meeting to each Director. Neither the
business to be transacted at, nor the purpose of any special meeting of the
Board of Directors need be specified in any notice or written waiver of notice
unless so required by law, the Certificate of Incorporation or these By-laws.
Notice of any meeting of the Board of Directors need not be given to any
Director if he shall sign a written waiver thereof either before or after
the time
5
<PAGE>
stated therein, or if he shall be present at the meeting and participate in the
business transacted thereat, except if a director attends for the purpose of
objecting, at the beginning of the meeting, to the transaction of any business
because the meeting is not lawfully called or convened. Any meeting of the Board
of Directors shall be a legal meeting without any notice thereof having been
given if all of the members shall be present thereat. Unless limited by law, by
the Certificate of Incorporation, by these By-laws, or by the terms of the
notice thereof, any and all business may be transacted at any special meeting.
SECTION 7. ACTION BY CONSENT. 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 a written consent thereto is signed by all
members of the Board of Directors or of such committee, as the case nay be, and
such written consent is filed with the minutes or proceedings of the Board of
Directors or committee.
SECTION 8. ORGANIZATION. At each meeting of the Board of Directors,
the Chairman of the Board, or, in his absence or nonelection, the President, or,
in the absence of both of the foregoing officers, a director chosen by a
majority of the Directors shall act as chairman. The Secretary, or in his
absence, an Assistant Secretary, or in the absence of both the Secretary and
Assistant Secretaries, any person appointed by the chairman shall act as
secretary of the meeting.
SECTION 9. RESIGNATIONS. Any Director of the Corporation may resign
at any time by giving written notice to the Board of Directors or to the
President or to the Secretary of the Corporation. The resignation of any
Director shall take effect immediately unless a date certain specified therein
for it to take effect, in which event it shall be effective upon such date, and
the acceptance of such resignation shall not be necessary to make it effective,
irrespective of whether the resignation is tendered subject to such acceptance.
SECTION 10. REMOVAL OF DIRECTORS. Subject to the rights of any class
or series of stock having a preference over the Common Stock of the Corporation
to elect directors under specified circumstances, any Director may be removed
from office, with or without cause, at any time, by the affirmative vote of a
majority in interest of the holders of record of the stock having voting power
at a special meeting of the stockholders called for the purpose, and the vacancy
in the Board of Directors caused by any such removal may be filled by the
stockholders at such meeting or filled by the Board of Directors in the manner
provided in Section 11 of this Article II.
6
<PAGE>
SECTION 11. VACANCIES. Any vacancy in the Board of Directors caused
by death, resignation, removal, disqualification, an increase in the number of
Directors, or any other cause may be filled by the affirmative vote of a
majority of the remaining Directors, even though less than a quorum, by a sale
remaining Director or by the stockholders of the Corporation at the next Annual
Meeting of Stockholders or any special meeting called for the purpose. Except as
otherwise provided by the Certificate of Incorporation, each Director so elected
shall hold office for the remainder of the full term of the class of Directors
in which the vacancy occurred or to which the new directorship was apportioned
pursuant to Section 2 of this Article II and until his successor, if any, shall
have been duly elected and shall have qualified, or until his death or until he
shall have resigned or shall have been removed in the manner herein provided. No
decrease in the number of Directors constituting the Board of Directors shall
shorten the term of any incumbent Director. In case all the Directors shall die
or resign or be removed or be disqualified, any stockholder having voting powers
may call a special meeting of the stockholders, upon notice given as herein
provided for meetings of the stockholders, at which Directors may be elected for
the unexpired term.
SECTION 12. COMPENSATION OF DIRECTORS. Directors, as such, shall
receive such sum for their services and expenses as may be directed by
resolution of the Board of Directors; provided that nothing herein contained
shall be construed to 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 their services and
expenses.
SECTION 13. COMMITTEES. By resolution or resolutions passed by a
majority of the whole Board of Directors at any meeting of the Board of
Directors, the Directors may designate one or more committees, including without
limitation executive, audit and compensation committees, each committee to
consist of two or more Directors. To the extent provided in said resolution or
resolutions, unless otherwise provided by law, such committee or committees
shall have and may exercise all of the powers of the Board of Directors in the
management of the business and affairs of the Corporation, including without
limitation the power and authority to authorize the seal of the Corporation to
be affixed to all papers which may require it, except that no such committee
shall have any power or authority with respect to (i) amending the Certificate
of Incorporation of the Corporation or these By-laws, (ii) approving or
recommending to the stockholders of the Corporation any agreement or plan of
merger or consolidation, any sale, lease or exchange of all or substantially
all of the property and assets of the Corporation
7
<PAGE>
or the dissolution or liquidation of the Corporation (or the abandonment or
revocation thereof) or (iii) the declaration of dividends and the authorization
of the issuance of shares of capital stock of the Corporation. The Board of
Directors may designate one or more Directors as alternate members of a
committee who may replace an absent or disqualified member at any meeting. 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. A committee may make such rules for the conduct of its
business and may appoint such committees and assistants as it shall from time to
time deem necessary for the transaction of business of such committee. Regular
meetings of a committee shall be held at such times as such committee shall from
time to time by resolution determine.
SECTION 14. PARTICIPATION IN MEETINGS. Members of the Board of
Directors or of any committee may participate in any meeting of the Board of
Directors or committee, as the case may be, by means of conference telephone or
similar communication equipment by means of which all persons participating in
the meeting can hear each other, and such participation shall constitute
presence in person at such meeting.
ARTICLE III
OFFICERS
SECTION 1. EXECUTIVE OFFICERS. The officers of the Corporation shall
be a President, a Treasurer, and a Secretary. In addition, the Board of
Directors may elect a Chairman of the Board and such other officers as may be
appointed in accordance with the provisions of Section 3 of this Article III.
Any number of offices may be held by the same person. Whenever any officer of
the corporation ceases to be an employee of the Corporation and of all
corporations which control or are under common control with the Corporation such
officer shall thereupon also cease to be an officer of the corporation without
any further action on his part or on the part of the Board of Directors or the
Chairman.
SECTION 2. ELECTION, TERM OF OFFICE AND QUALIFICATION. So far as is
practicable, the officers shall be elected annually by the Board of Directors at
their first meeting after each Annual Meeting of Stockholders of the
Corporation. Each officer, except such officers as may be appointed in
accordance with the provisions of Section 3 of this Article III, shall hold
office until his successor shall have been duly elected and shall have
8
<PAGE>
qualified in his stead, or until his death or until he shall have resigned or
shall have become disqualified or shall have been removed in the manner
hereinafter provided. The Chairman of the Board shall be chosen from among the
directors.
SECTION 3. SUBORDINATE OFFICERS. The Board of Directors or the
President may from time to time appoint such other officers, including one or
more Vice Presidents, one or more Assistant Treasurers and one or more Assistant
Secretaries, and such agents and employees of the Corporation as may be deemed
necessary or desirable. Such officers, agents and employees shall hold office
for such period and upon such terms and conditions, have such authority and
perform such duties as provided in these By-laws or as the Board of Directors or
the President may from time to time prescribe. The Board of Directors or the
President may from time to time authorize any officer to appoint and remove
agents and employees and to prescribe the powers and duties thereof.
SECTION 4. REMOVAL. Any officer may be removed, either with or
without cause, by the Board of Directors or, except in the case of any officer
elected by the Board of Directors, by any committee or superior officer upon
whom the power of removal may be conferred by the Board of Directors or by these
By-laws.
SECTION 5. RESIGNATIONS. Any officer may resign at any time by
giving written notice to the Board of Directors or to the President or to the
Secretary. Any such resignation shall take effect immediately unless a date
certain is specified therein for it to take effect, in which event it shall be
effective upon such date, and the acceptance of such resignation shall not be
necessary to make it effective, irrespective of whether the resignation is
tendered subject to such acceptance.
SECTION 6. VACANCIES. A vacancy in any office because of death,
resignation, removal, disqualification or any other cause shall be filled for
the unexpired portion of the term in the manner prescribed in the By-laws for
the regular election or appointment to such office.
SECTION 7. THE CHAIRMAN OF THE BOARD. The Chairman of the Board, if
one be elected, shall preside, if present, at all meetings of the stockholders
and at all meetings of the Board of Directors and he shall perform such other
duties and have such other powers as may from time to time be designated and
assigned to him by the Board of Directors.
SECTION 8. THE PRESIDENT. The President shall have. general
direction of the affairs of the Corporation and general supervision over its
several officers, subject, however, to the
9
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control of the Board of Directors. He shall at each annual meeting and from time
to time report to the stockholders and to the Board of Directors all matters
within his knowledge which the interest of the Corporation may require to be
brought to their notice; may sign with the Treasurer or an Assistant Treasurer
or the Secretary or an Assistant Secretary any or all certificates of stock of
the Corporation; in the absence of the Chairman of the Board, shall preside at
all meetings of the stockholders and at all meetings of the Board of Directors;
shall have the power to sign and execute in the name of the Corporation all
contracts, or other instruments authorized by the Board of Directors, 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. or as are prescribed by these By-laws.
SECTION 9. THE VICE PRESIDENTS. Each Vice President shall have such
powers and shall perform such duties as may from time to time be assigned to him
by the Board of Directors or by the President; and shall have the power to sign
and execute in the name of the Corporation all contracts or other instruments
authorized by the Board of Directors, except where the Board of Directors or the
By-laws shall expressly delegate or permit some other officer to do so. A Vice
President may also sign with the Treasurer or an Assistant Treasurer or the
Secretary or an Assistant Secretary certificates of stock of the Corporation.
SECTION 10. THE SECRETARY. The Secretary shall keep or cause to be
kept the minutes of the meetings of the stockholders, of the Board of Directors
and of any committee when so required; shall see that all notices are duly given
in accordance with the provisions of these By-laws and as required by law; shall
be custodian of the corporate records and of the seal of the Corporation and see
that the seal is affixed to all documents on which it is required, the execution
of which on behalf of the Corporation under its seal is duly authorized in
accordance with the provisions of the By-laws; shall keep or cause to be kept a
register of the post office address of each stockholder; may sign with the
President or Vice President certificates of stock of the Corporation; and, in
general, the Secretary shall 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 by the President.
SECTION 11. ASSISTANT SECRETARIES. At the request of the secretary,
or in his absence or disability, an Assistant Secretary shall perform the duties
of the Secretary and, when so acting, shall have all the powers of, and be
subject to all the restrictions upon, the Secretary. An Assistant Secretary
shall perform such other duties as from time to time may be assigned to him by
the President, the Secretary or the Board of Directors.
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SECTION 12. THE TREASURER. The Treasurer shall have charge and
custody of, and be responsible for, all funds and securities of the Corporation,
and deposit all such funds in the name of the Corporation in such banks, trust
companies or other depositaries as shall be selected in accordance with the
provisions of these By-laws; at all reasonable times exhibit his books of
account and records, and cause to be exhibited the books of account and records
of any corporation controlled by the corporation, to any of the Directors of the
Corporation upon application during business hours at the office of the
Corporation, or such other corporation where such books and records are kept;
render a statement of the condition of the finances of the Corporation at all
regular meetings of the Board of Directors and a full financial report at the
Annual Meeting of Stockholders; if called upon to do so, receive and give
receipts for moneys due and payable to the Corporation from any source
whatsoever; may sign with the President or Vice President certificates of stock
of the Corporation; and, in general, perform all the duties incident to the
office of Treasurer and such other duties as from time to time may be assigned
to him by the Board of Directors or the President.
SECTION 13. ASSISTANT TREASURERS. At the request of the Treasurer,
or in his absence or disability, an Assistant Treasurer shall perform the duties
of the Treasurer, and, when so acting, shall have all the powers of, and be
subject to all the restrictions upon, the Treasurer. An Assistant Treasurer
shall perform such duties as from time to time may be assigned to him by the
President, the Treasurer or the Board of Directors.
SECTION 14. SALARIES. The salaries of the officers 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 is also a director of the
Corporation.
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ARTICLE IV
CONTRACTS-CHECKS, DRAFTS, BANK ACCOUNTS, ETC.
SECTION 1. CONTRACTS, ETC., HOW EXECUTED. The Board of Directors,
except as otherwise provided in these By-laws, may authorize any officer or
agent of the corporation to enter into any contract or execute and deliver any
instrument in the name of and on behalf of the corporation, and such authority
may be general or confined to specific instances; and, unless so authorized by
the Board of Directors or by such Committee or by these By-laws, no agent or
employee, other than an officer of the Corporation acting within the scope of
his authority, shall have any power or authority to bind the Corporation by any
contract or engagement or to pledge its credit or to render it liable for any
purpose or to any amount.
SECTION 2. CHECKS, DRAFTS, ETC. All checks" drafts or other orders
for the payment of money and all notes or other evidences of indebtedness issued
in the name of the Corporation shall be signed by such officer or officers,
employee or employees of the Corporation as shall from time to time be
determined by resolution of the Board of Directors.
SECTION 3. 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 depositaries as the Board of Directors may from time to time
designate, or as may be designated by any officer or officers of the Corporation
to whom such power may be delegated by the Board of Directors, and for the
purpose of such deposit, the President, or a Vice President, or the Treasurer or
an Assistant Treasurer, or the Secretary.or an Assistant Treasurer, or the
Secretary or an Assistant Secretary may endorse, assign and deliver checks,
drafts and other orders for the payment of money which are payable to the order
of the Corporation.
SECTION 4. GENERAL AND SPECIAL BANK ACCOUNTS. The Board of Directors
may from time to time authorize the opening and keeping with such banks, trust
companies or other depositaries as it may designate or general and special bank
accounts, and may make such special rules and regulations with respect thereto,
not inconsistent with the provisions of these By-laws, as it-may deem expedient.
SECTION 5. PROXIES. Except as otherwise provided in these By-laws or
in the Certificate of Incorporation of the Corporation, and unless otherwise
provided by resolution of the Board of Directors, the President may from time
to time appoint an attorney or attorneys, or agent or agents, of the
Corporation, in the name of and on behalf of the Corporation, to cast the
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votes which the Corporation may be entitled to cast as a stockholder or
otherwise of any other corporation any of whose stock or other securities may be
held by the Corporation at meetings of the holders of the stock or other
securities of such other corporation, or to consent in writing to any action by
such other corporation, and may instruct the person or persons so appointed as
to the manner of casting such votes or giving such consent, and may execute or
cause to be executed in the name of and on behalf of the corporation and under
its corporate seal, or otherwise, all such written proxies or other instruments
as he may deem necessary or proper in the premises.
ARTICLE V
STOCK AND TRANSFER OF STOCK
SECTION 1. CERTIFICATES OF STOCK. Certificates for shares of the
capital stock of the Corporation shall be in such form, not inconsistent with
law, as shall be approved by the Board of Directors. They shall be numbered in
order of their issue, and shall be signed by 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 the seal of the Corporation shall be affixed
thereto. The signatures of any of such officers and the seal of the Corporation
upon such certificate may be facsimiles. In case any officer, transfer agent or
registrar who has signed or whose facsimile signature has been placed upon a
certificate shall have ceased to be such officer, transfer agent or registrar
before such certificate is issued, it may nevertheless be issued and delivered
by the Corporation with the same effect as if he were such officer, transfer
agent or registrar.
SECTION 2. TRANSFERS OF STOCK. Transfers of shares of the capital
stock of the Corporation shall be made only on the books of the Corporation by
the holder thereof, or by his attorney thereunto authorized by a power of
attorney duly executed and filed with the Secretary of the Corporation or with a
transfer agent of the Corporation, if any, and on surrender of the certificate
or certificates for such shares properly endorsed. A person in whose name shares
of stock stand on the books of the Corporation shall be deemed the owner thereof
as regards the Corporation and the Corporation shall not be bound to recognize
any equitable or other claim to, or interest in , such 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 the State of Delaware.
SECTION 3. LOST, DESTROYED AND MUTILATED CERTIFICATES. The holder of
any stock issued by the Corporation shall
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immediately notify the Corporation of any loss, destruction or mutilation of the
certificate therefor, or failure to receive a certificate of stock issued by the
Corporation, and the Board of Directors or the Secretary of the Corporation may,
in its or his discretion, cause to be issued to such holder of stock a new
certificate or certificates of stock upon compliance with such rules!
regulations and/or procedures as may have been prescribed by the Board of
Directors with respect to the issuance of new certificates in lieu of such other
certificate or certificates of stock.
SECTION 4. FIXING DATE FOR 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 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 (60) nor
less than ten (10) days before the date of such meeting, nor more than sixty
(60) days prior to any other action, and such stockholders and only such
stockholders as shall be entitled to such notice of, and to vote at, such
meeting and (except as provided in Section 4 of Article I hereof) any
adjournment thereof, or to express consent to any such corporate action, or to
receive payment of such dividend, or to receive allotment of rights, or to
exercise such rights, as the case may be, notwithstanding any transfer of any
stock on the books of the Corporation after any such record date fixed as
aforesaid.
ARTICLE VI
SEAL
The Board of Directors shall provide a suitable seal containing the
name of the Corporation, which seal shall be in the charge of the Secretary and
which may be used by causing it or a facsimile thereof to be impressed or
affixed or in any other manner reproduced. If and when so directed by the Board
of Directors, a duplicate of the seal may be kept and be used by any officer of
the Corporation designated by the Board.
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ARTICLE VII
MISCELLANEOUS PROVISIONS
SECTION 1. FISCAL YEAR. The fiscal year of the Corporation shall end
on such date in each year as shall be determined by resolution of the Board of
Directors of the Corporation.
SECTION 2. WAIVERS OF NOTICE. Whenever any notice whatever is
required to be given by law, or under the provisions of the Certificate of
Incorporation or of 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 3. QUALIFYING IN FOREIGN JURISDICTIONS. The Board of
Directors shall have the power at any time and from time to time to take or
cause to be taken any and all measures which they may deem necessary for
qualification to do business as a foreign corporation in any one or more foreign
jurisdictions and for withdrawal therefrom.
SECTION 4. INDEMNIFICATION. The Corporation shall, to the full
extent permitted by the General Corporation Law of Delaware and the Certificate
of Incorporation, in each case as amended from time to time, indemnify all
persons whom it has the power to indemnify pursuant thereto. Without limiting
the generality of the foregoing:
(a) 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 (other than an action by or in the
right of the Corporation) by reason of the fact that he 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 corporation, partnership, joint venture,
trust or other enterprise, against expenses (including attorneys'
fees), judgments, fines and amounts paid in settlement actually and
reasonably incurred by him in connection with such action, suit or
proceeding if he acted in good faith and in a manner he reasonably
believed to be in or not opposed to the best interests of the
Corporation, and, with respect to any criminal action or proceeding,
had no reasonable cause to
15
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believe his 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 he reasonably believed to be in or not opposed to the
best interests of the Corporation and, with respect to any criminal
action or proceeding, had reasonable cause to believe that his conduct
was unlawful.
(b) 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 or suit by or in the right of the Corporation to
procure a judgment in its favor by reason of the fact that he 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 corporation,
partnership, joint venture, trust or other enterprise against expenses
(including attorneys' fees) actually and reasonably incurred by him in
connection with the defense or settlement of such action or suit if he
acted in good faith and in a manner he reasonably believed to be in or
not opposed to the best interests of the Corporation and 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 his duty to the
corporation unless and only to the extent that the Court of Chancery
or the court in which such action or suit was brought shall determine
upon application that, despite the adjudication of liability but in
view of all the circumstances of the case, such person is fairly and
reasonably entitled to indemnity for such expenses which the Court of
Chancery or such other court shall deem proper.
(c) To the extent that a director, officer, employee or agent of
the Corporation has been successful on the merits or otherwise in
defense of any action, suit or proceeding referred to in paragraphs
(a) and (b), or in defense of any claim, issue or matter therein, he
shall be indemnified against expenses (including attorneys' fees)
actually and reasonably incurred by him in connection therewith.
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(d) Any indemnification under paragraphs (a) and (b) (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, officer, employee or agent is proper
in the circumstances because he has met the applicable standard of
conduct set forth in.paragraphs (a) and (b). Such determination shall
be made (1) by the Board of Directors by a majority vote of a quorum
consisting of directors who were not parties to such action, suit or
proceeding, or (2) if such a quorum is not obtainable, or, even if
obtainable a quorum of disinterested directors so directs, by
independent legal counsel in a written opinion, or (3) by the
stockholders.
(e) Expenses (including attorneys' fees) incurred in defending
any civil, criminal, administrative or investigative action, suit or
proceeding may be paid by the corporation in advance of the final
disposition of such action, suit or proceeding as authorized by the
Board of Directors in the specific case upon receipt of an undertaking
by or on the behalf of the director, officer, employee or agent to
repay such amount unless it shall ultimately be determined that he is
entitled to be indemnified by the Corporation as authorized in this
Section.
(f) The indemnification provided by this Section shall not have
been deemed exclusive of any other rights to which those seeking
indemnification may be entitled under any bylaw, agreement, vote of
stockholders or disinterested directors or otherwise, both as to
action in his official capacity and as to action in another capacity
while holding such office, and shall continue as to a person who has
ceased to be a director, officer, employee or agent and shall inure to
the benefit of the heirs, executors and administrators of such a
person.
(g) The Corporation shall have power to 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, employee or agent
of another corporation, partnership, joint venture, trust or other
enterprise against any liability asserted against him and incurred by
him in any such
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capacity, or arising out of his status as such, whether or not the
corporation would have the power to indemnify him against such
liability under the provisions of this Section.
(h) For the purposes of this Section, references to "the
Corporation" include all constituent corporations absorbed in a
consolidation or merger as well as the resulting or surviving
corporation so that any person who is or was a director, officer,
employee or agent of such a constituent corporation or is or was
serving at the request of such constituent corporation as a director,
officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise shall stand in the same position
under the provisions of this Section with respect to the resulting or
surviving corporation as he would if he had served the resulting or
surviving corporation in the same capacity.
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ARTICLE VIII
AMENDMENTS
All By-laws of the corporation shall be subject to alteration or
repeal, and new By-laws not inconsistent with any provision of the Certificate
of Incorporation of the Corporation or any provision of law may be made, either
by the affirmative vote of a majority in interest of the holders of record of
the outstanding voting stock of the corporation or by the affirmative vote of
the majority of the Board of Directors.
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B COMPANIES ACQUISITION CORP.
Written Consent of the Sole Director
THE UNDERSIGNED, being the sole director of B Companies
Acquisition Corp., a Delaware corporation (the "Company"), hereby consents to
the taking of the following actions and adoption of the following resolutions
without a meeting, in accordance with the procedures established in Section
141(f) of the Delaware General Corporation Law, such actions and resolutions to
have the same force and effect as though duly taken and adopted at a meeting of
the directors of the Company duly called and legally held:
RESOLVED, that the first paragraph of Article III, Section 3.1 of the
ByLaws of BGH Holdings, Inc. ("BGH Holdings") be deleted in its entirety
and replaced with the following:
"Section 3.1. NUMBER; TERM OF OFFICE; QUALIFICATIONS; VACANCIES. The
business and affairs of the Corporation shall be managed under the
direction of the Board of Directors. The number of directors that
shall constitute the entire Board of Directors shall be one and shall
be fixed from time to time by the affirmative vote of a majority of
the entire Board of Directors. No decrease in the number of directors
shall shorten the term of any incumbent director. No director need be
a stockholder of the Corporation."
RESOLVED, that the first paragraph of Article III, Section 3.1 of the
ByLaws of BRH Holdings, Inc. ("BRH Holdings") be deleted in its entirety
and replaced with the following:
"Section 3.1. NUMBER; TERM OF OFFICE, QUALIFICATIONS; VACANCIES. The
business and affairs of the Corporation shall be managed under the
direction of the Board of Directors. The number of directors that
shall constitute the entire Board of Directors shall be one
and shall be fixed from time to time by the affirmative vote of a
majority
<PAGE>
of the entire Board of Directors. No decrease in the number of
directors shall shorten the term of any incumbent director. No
director need be a stockholder of the Corporation."
RESOLVED, that the existing directors of BGH Holdings and BRH Holdings
be removed from their respective board of directors and that the following
individual be elected as the sole director of BGH Holdings and BRH
Holdings, to serve until the next respective annual meeting of stockholders
of BGH Holdings and BRH Holdings and until his successor shall have been
elected and shall have qualified or as otherwise provided in the By-laws of
BGH Holdings or BRH Holdings, as the case may be:
Stephen C. Sherrill; and
RESOLVED, that any one or more of the officers of the Company are, and
each of them hereby is, authorized and directed to execute and deliver such
agreements, documents, assignments, certificates and other instruments and
to take such other action as may be necessary, advisable, convenient or
proper to carry out the intent of these resolutions and to fully perform
the provisions of any and all agreements, documents, assignments,
certificates and instruments executed on behalf of the Company pursuant to
these resolutions.
IN WITNESS WHEREOF, the undersigned has executed this Written Consent
this 27th day of December, 1996.
--------------------------
Stephen C. Sherrill
Sole Director
2
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Exhibit 3.3
AMENDED AND RESTATED
CERTIFICATE OF INCORPORATION
OF
BGH HOLDINGS, INC.
BGH Holdings, Inc., a corporation organized and existing under the
laws of the State of Delaware, hereby certifies as follows:
1. The name of the Corporation in "BGH Holdings, Inc." The original
Certificate of Incorporation was filed an January 27, 1993 with the Secretary
of State of the State of Delaware.
2. The Corporation ham not received any payment for any of its
stock. This Amended and Restated Certificate of Incorporation has been duly
adopted by written consent of the sole director of the Corporation in
accordance with Sections 241 and 245 of the Delaware General Corporation Law.
3. This Amended and Restated Certificate of Incorporation amends,
restates and integrates the provisions of the Certificate or Incorporation as
hereby and heretofore amended or supplemented.
4. The text of the Certificate of Incorporation as amended
heretofore is hereby amended and restated to read as herein set forth in full:
FIRST: The name of the Corporation is:
BGH Holdings, Inc.
SECOND: The address of the Corporation's registered office in the
State of Delaware is 1209 Orange Street, in the City of Kilmington, County of
Now Castle. The name of its registered agent at such address is The
Corporation Trust Company.
THIRD: The purpose for which the Corporation's organized 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 common stock which the
Corporation shall have authority to issue is ten thousand (10,000), par value
$0.01 per share.
<PAGE>
FIFTH: In furtherance and not in limitation of the powers
conferred by statute, the Board of Directors of the Corporation is authorized
to adopt, amend or repeal the By-Laws of the Corporation.
SIXTH: Election of directors of the Corporation need not be by
ballot unless the By-Laws so require.
SEVENTH: 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 of 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 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 a 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 the Corporation, as the case may be,
and also on the Corporation.
EIGHTH: To the fullest extent that the General Corporation Law of
the State of Delaware as it exists on the date hereof or as it may hereafter be
amended permits the limitation or elimination of the liability of directors, no
director of the Corporation shall be liable to the Corporation or its
stockholders for monetary damages for breach of fiduciary duty as a director.
No amendment to this Certificate of Incorporation, directly or indirectly by
merger, consolidation or otherwise, having the effect of amending or repealing
any of the provisions of this ARTICLE EIGHTH 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 or repeal, unless such amendment shall have the effect of further
limiting or eliminating such liability.
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IN WITNESS WHEREOF, said BGH Holdings, Inc. has caused this Amended
and Restated Certificate of incorporation to be signed by its President and
attested to by its Secretary and has caused its corporate seal to be hereunto
affixed on this 17th day of March, 1993.
BGH HOLDINGS, INC.
By: /s/ David E. Van Zakdt
---------------------------
David E. Van Zakdt
President
ATTEST: /s/ David E. Van Zandt
----------------------------
David E. Van Zandt
Secretary
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<PAGE>
CERTIFICATE OF DESIGNATION OF
CLASSES OF COMMON STOCK OF
BGH HOLDINGS, INC.
To: The Secretary of State
State of Delaware
Dated: August 13, 1993
Pursuant to the provisions of Section 151(g) and Section 103 of the
General Corporation Law of the State of Delaware, the undersigned corporation
executes the following Certificate of Designation of Class of Common Stock of
BGH Holdings, Inc. (the "Corporation"):
1. The name of the Corporation is BGH Holdings, Inc.
2. The following designation of a classes of common stock of the
Corporation was approved by the directors of the Corporation by unanimous
written consent on the 13th day of August 1993:
RESOLVED, that the Corporation hereby designate a class of
its stock, the share of such class to have the following
designations, rights, qualifications, limitations or
restrictions:
(a) The series of shares shall be designated Class A Common
stock and such series shall include 1,000 shares, which number may be
decreased (but not below the number of shares then outstanding) from
time to time by action of the Board of Directors;
(b) The shares of Class A Common stock shall bear dividends on
a pro rata basis with all outstanding shares of any class or series
of Common Stock of the corporation, and such dividends shall not be
cumulative and shall be declared and paid at such times set from time
to time by the Board of Directors;
(c) The shares of Class A Common Stock shall not be redeemable,
in whole or.in part;
(d) The holder of each share of Class A Common Stock shall be
entitled to a liquidation payment of the Class A
<PAGE>
Liquidation Value (as defined below) plus all declared but unpaid
dividends upon the voluntary or involuntary liquidation, dissolution,
distribution of assets or winding up of the Corporation (the
"Liquidation"), "Class A Liquidation Value" means:
(i) difference between
(A) the total amount available to all holders of Common
Stock upon the Liquidation of the Corporation, and
(B) the total amount payable by the Corporation as the
class B Liquidation value (as defined below),
divided by
(ii) the total number of issued and outstanding shares of Class A
Common Stock;
(e) The shares of Class A Common Stock shall not be subject to
the operation of any purchase, retirement or sinking fund;
(f) The shares of Class A common Stock shall not be convertible
into, or exchangeable for, any other securities;
(g) Each share of Class A Common Stock shall have one vote in
the affairs or business of the Corporation; and
(h) The issuance of any additional shares of Class A Common
Stock or of any shares of any other series and the authority of the
Board of Directors to specify the conditions of such issuance are not
affected by the issuance of Class A Common Stock.
"RESOLVED, that the corporation hereby designate a class of its
stock, the shares of such class to have the following designations,
rights, qualifications, limitations or restrictions:
(a) The series of shares shall be designated Class B Common
stock and such series shall include 1,000 shares, which number may be
decreased (but not below the number of shares then outstanding) from
time to time by action of the Board of Directors;
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(b) The shares of Class B Common stock shall bear dividends on
a pro rata basis with all outstanding shares of any class or series
of Common Stock of the corporation, and such dividends shall not be
cumulative and shall be declared and paid at such times set from time
to time by the Board of Directors;
(c) The shares of Class B Common Stock shall not be redeemable,
in whole or in part, at any time by the Corporation upon payment to
the holders thereof of an amount equal to the class B Liquidation
Value plus the Declared Dividends;
(d) The holder of each share of Class B Common Stock shall be
entitled to a liquidation payment of the Class B Liquidation Value
(as defined below) plus all declared but unpaid dividends ("Declared
Dividends") upon the voluntary or involuntary liquidation,
dissolution, distribution of assets or winding up of the Corporation
(the "Liquidation"). "Class B Liquidation Value" means:
(i) difference between
(A) the total amount available to all holders of
Common Stock upon the Liquidation of the Corporation, and
(B) the total amount payable by the Corporation as
the class B Liquidation value (as defined below),
divided by
(ii) the total number of issued and outstanding shares of
Common Stock of the Corporation of any class or series;
(e) The shares of Class B Common Stock shall not be subject to
the operation of any purchase, retirement or sinking fund;
(f) The shares of Class B Common Stock shall not be convertible
into, or exchangeable for, any other securities;
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<PAGE>
(g) Each share of Class B Common Stock shall have one vote in
the affairs or business of the Corporation; and
(h) The issuance of any additional shares of Class B Common
Stock or of any shares of any other series and the authority of the
Board of Directors to specify the conditions of such issuance are not
affected by the issuance of Class B Common Stock.
Dated: August 13, 1993
Attest: BGH HOLDINGS, INC.
By: /s/ David E. Van Zandt By: /s/ David E. Van Zandt
--------------------------- ---------------------------
David E. Van Zandt David E. Van Zandt
Secretary President
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CERTIFICATE OF AMENDMENT
OF
CERTIFICATE OF DESIGNATION FILED WITH THE SECRETARY OF
STATE OF THE STATE OF DELAWARE
OF
BGH HOLDINGS, INC.
(Pursuant to Section 242 of the General
Corporation Law of the State of Delaware)
The undersigned, David E. Van Zandt, President and Secretary of BGH Holdings,
Inc., a corporation organized and existing under the laws of the State of
Delaware, does hereby certify that the following amendment to the Certificate
of Designation of Common Stock of BGH Holdings, Inc. has been duly adopted, and
the filing of this certificate has been duly authorized, in accordance with the
provisions of Section 242 of the General Corporation Law of the State of
Delaware.
RESOLVED, that the Certificate of Designation of this corporation
dated August 13, 1993 and filed with the secretary of State of the " State
of Delaware on August 13, 1993 be amended as follows: (i) each
outstanding share of Class B Common Stock is hereby automatically
converted into one share of Class A Common Stock, (ii) the name of Class A
Common Stock is hereby changed to Common Stock, and (iii) each reference
to-Class B Common Stock shall hereinafter have no effect or meaning.
IN WITNESS WHEREOF, BGH Holdings, Inc. has caused its corporate seal
to be hereunto affixed and this certificate to be signed by David E. Van.Zandt,
its President and Secretary this 13th day of August, 1993.
BGH HOLDINGS, INC.
By: /s/ David E. Van Zandt,
-----------------------------
David E. Van Zandt,
President
By: /s/ David E. Van Zandt,
-----------------------------
David E. Van Zandt, Secretary
[CORPORATE SEAL]
<PAGE>
Exhibit 3.4
BY-LAWS
OF
BGH HOLDINGS, INC.
ARTICLE I
OFFICES
Section 1.1. CORPORATION'S OFFICE IN DELAWARE; MAILING ADDRESS FOR
SERVICE OF PROCESS. The location of the Corporation's registered office within
the State of Delaware, the name of the registered agent of the Corporation at
such office and the post office address to which the Secretary of State of the
State of Delaware shall mail a copy of process in any action or proceeding
against the Corporation that may be served upon him, shall be in each case as
stated in the.Certificate of Incorporation.
Section 1.2. OTHER OFFICES. The Corporation may have other offices
within or without the State of Delaware.
ARTICLE II
STOCKHOLDERS MEETINGS
Section 2.1. ANNUAL MEETINGS. An annual meeting of stockholders to
elect directors and transact such other business as may properly be presented to
the meeting shall be held at such date and time as the Board of Directors from
time shall fix; provided, that such date shall be within five months after the
end of the preceding fiscal year of the Corporation and within 13 months after
the last annual meeting.
Section 2.2. SPECIAL MEETINGS. A special meeting of stockholders may
be called at any time and for any purpose by the Board of Directors and shall be
called by the Board of Directors or by the Secretary upon receipt of a written
request to do so specifying the matter or matters (which must be appropriate for
action at a special meeting) proposed to be presented to the meeting and signed
by holders of record of a majority of the shares outstanding and entitled to act
on such matter or matters on the date of receipt of such
<PAGE>
request. At any special meeting only such business may be transacted as is
related to the purpose or purposes set forth in the notice of such meeting
required by Section 2.4.
Section 2.3. PLACE OF MEETINGS. Each annual meeting shall be held at
such place, within or without the State of Delaware, as the Board of Directors
shall fix. -Each special meeting shall be held at such place, within or without
the State of Delaware, as the person or persons calling the meeting shall fix.
If no place is so fixed, the meeting shall be held at the registered office of
the Corporation in the State of Delaware.
Section 2.4. NOTICE OF MEETINGS.
(a) Written notice of a meeting of stockholders shall be given,
personally or by mail, not less than ten nor more than sixty days before
the meeting (unless otherwise required by law) to each stockholder entitled
to vote at such meeting. Such notice shall state the place, date and hour
of the meeting and, if it relates to a special meeting, the purpose or
purposes for which the meeting is called and the name or names of the
persons who have directed the calling of the meeting. If mailed, such
notice shall be deemed to be duly given when deposited in the United States
mail, first class postage prepaid, directed to each stockholder at his
address as it appears on the records of the Corporation.
(b) When a meeting is adjourned to another time or place, it shall
not be necessary to give any 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 for more than thirty days, however, a notice of
the adjourned meeting shall be given to each stockholder who is entitled to
vote at such adjourned meeting. At any adjourned meeting, any business may
be transacted that might have been transacted on the original date of the
meeting.
Section 2.5. QUORUM. Except as otherwise required by law or the
Certificate of Incorporation, the presence in person or by proxy of the holders
of record of a majority of the issued and outstanding shares entitled to vote at
a meeting shall be necessary
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and sufficient to constitute a quorum for the transaction of business at the
meeting. In the absence of a quorum, the holders of record present or
represented by proxy at such meeting may vote to adjourn the meeting from time
to time, in which case the provisions of section 2.4(b) shall apply. A quorum
once present to organize a meeting is not broken by the subsequent withdrawal of
any stockholder.
Section 2.6. PRESIDING OFFICER AND SECRETARY AT MEETING. Each
meeting of stockholders shall be presided over by the Chairman of the Board, if
any, or if no such officer has been elected or, if elected, in his absence, by
the President or by a person designated in writing by the President. If the
President fails to so designate any person, then the meeting shall be presided
over by the Vice President or, if there is more than one Vice President, the
highest ranking Vice President as designated by the-Board of Directors in
accordance with Section 4.9 or, in his absence, the next highest ranking Vice
President so designated who is present at the meeting. If no Vice President is
present at the meeting, then a chairman of the meeting shall be chosen by a
plurality vote of the stockholders present, in person or by proxy, at the
meeting. The Secretary or, in his absence, an Assistant Secretary shall act as
secretary of the meeting, or, if no such officer is present, a secretary of the
meeting shall be designated by the person presiding at the meeting.
Section 2.7. VOTING. Except as otherwise provided in these By-Laws
or in the Certificate of Incorporation:
(a) each stockholder of record shall be entitled at every
meeting of stockholders to one vote, in person or by proxy, for each
share of stock entitled to vote held by him;
(b) directors shall be elected by a plurality vote;
(c) each other matter properly presented to any meeting shall be
decided by a majority of the votes cast thereon;
(d) the holders of any and all classes or series of common Stock
and Preferred Stock which is entitled to vote shall vote as one class;
and
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<PAGE>
(e) election of directors and the vote on any other matter
before a meeting shall be by ballot only if so ordered by the person
presiding at the meeting or if so requested by any stockholder
present, in person or by proxy, such matter, as the case may be.
Section 2.8. PROXIES. Each stockholder entitled to vote at a meeting
of stockholders or to express consent or dissent to corporate action in writing
without a meeting may authorize another person or persons to act for him by
proxy, but no such proxy shall be voted or acted upon after three years from its
date', unless the proxy provides for a longer period. Every proxy must be
executed in writing by the stockholder or by his attorney-in-fact. 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.
Section 2.9. CONSENT OF STOCKHOLDERS IN LIEU OF MEETING. Unless
otherwise provided by the Certificate of Incorporation or by law, any action
which is required or-permitted to be taken at any meeting of stockholders may be
taken without a meeting, without prior notice and without a vote, if a written
consent setting forth the action so taken is signed by the holders of record of
outstanding shares 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 2.10. RECORD DATE AND STOCKHOLDER LIST.
(a) For the purpose of determining the stockholders entitled to
notice of or to vote at any meeting of stockholders or any adjournment
thereof, to express consent to any corporate action in writing without
a meeting, to receive payment of any dividend or other distribution or
allotment of
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<PAGE>
any rights, to exercise any rights in respect of any change,
conversation or exchange of stock or for the purpose of any other
lawful action, the Board of Directors may fix in advance a date as the
record date for any such determination of stockholders. Such date
shall not be more then sixty nor less than ten days before the date of
the meeting, nor more than sixty days prior to any other action. If no
record date is fixed, 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 next preceding the day on which the meeting is held; 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; and the record date 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.
(b) When a determination of stockholders of record entitled to
notice of or to vote at any meeting of stockholders has been made,
such determination shall apply to any adjournment thereof, unless the
Board of Directors fixes a new record date for the adjourned meeting.
(c) The Secretary shall, or shall cause any other person who has
charge of the stock ledger of the Corporation to, prepare and make, 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, and number of the shares
registered in the name, of each stockholder. Such list shall be open
to the examination of any stockholder, for nay 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
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<PAGE>
thereof, and may be inspected by any stockholder who is present.
ARTICLE III
DIRECTORS
Section 3.1. NUMBER; TERM OF OFFICE; QUALIFICATIONS; VACANCIES. The
business and affairs of the Corporation shall be managed under the direction of
the Board-of Directors. The number of directors that shall constitute the entire
Board of Directors shall be at least five, unless fewer directors are permitted
by law, and shall be fixed from time to time by the affirmative vote of a
majority of the entire Board of Directors. No decrease in the number of
directors shall shorten the term of any incumbent director. No director need be
a stockholder of the Corporation. Each director shall be elected at each annual
meeting of stockholders to hold office, subject to Sections 3.2 and 3.3, until
the next annual meeting of stockholders and until his successor has been elected
and qualified. Newly created directorships resulting from an increase in the
number of directors or vacancies occurring in the Board of Directors for any
reason may be filled by vote of a majority of the directors then in office,
although less than a quorum exists, or by a sole remaining director, and any
director elected .t; fill a vacancy shall hold office until the next meeting of
stockholders at which the election of directors is in the regular order of
business and until his successor is duly elected and has been qualified or until
his earlier death, resignation or removal. If at any time, by reason of any
cause, there are no directors in office, then any officer, stockholder or any
executor, administrator, trustee, guardian or other fiduciary entrusted with
like responsibility for the person or estate of a stockholder, may call a
special meeting of stockholders in accordance with the provisions of the
Certificate of Incorporation or the ByLaws, or may apply to the Delaware Court
of Chancery for a decree summarily ordering an election as provided in the
General Corporation Law of Delaware.
Section 3.2. RESIGNATION. Any director of the corporation may resign
at any time by giving written notice of such resignation to the Board of
Directors, the Chairman of the Board, if any, the President or the Secretary of
the Corporation. Any such resigna-
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<PAGE>
tion shall be effective at the time specified therein or, if no time is
specified, upon receipt thereof by the Board of Directors or one of the
aforementioned officers, and, unless specified in the notice, the acceptance of
such resignation shall not be necessary to make it effective.
Section 3.3. REMOVAL. A director may be removed, with or without
cause, by the vote of majority of the issued and outstanding shares of the
Corporation.
Section 3.4. REGULAR AND ANNUAL MEETING; NOTICE. Regular meetings of
the Board of Directors shall be held at such time and at such place, within or
without the State of Delaware, as the Board of Directors may from time to time
prescribe. No notice need be given of any regular meeting and a notice, if
given, need not specify the purposes thereof. A meeting of the Board of
Directors may be held without notice immediately after, and at the same place
as, an annual meeting of stockholders.
Section 3.5. SPECIAL MEETING; NOTICE. A special meeting of the Board
of Directors shall be called at any time by the Board of Directors, the chairman
of the Board, if any, the President, or the Secretary upon receipt of a written
request to do so specifying the matter or matters (which must be appropriate for
action at such a meeting) proposed to be presented at the meeting and signed by
at least three directors. Any such meeting shall be held at such time and at
such place, within or without the State of Delaware, as stated in the request.
Notice of such meeting stating the date, hour and place thereof shall be given
either:
(a) personally, at least 24 hours before the time fixed for the
meeting,
(b) by deposit of the notice in the United States mails, first
class postage prepaid, at least ten days before the day fixed for the
meeting, addressed to each director at this address as it appears on
the Corporation's records or at such other address as the director may
have furnished the Corporation for that purpose, or
(c) by delivery of the notice (appropriately addressed for
dispatch) by telegraph,.telephone,
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cable or radio, at least 24 hours before the time fixed for the
meeting.
Section 3.6. PRESIDING OFFICER AND SECRETARY AT MEETING. Each meeting
of the Board of Directors shall be presided over by the chairman of the Board,
if any, or, if no such officer has been elected, by the President, if a
director, or, if neither is present, by such member of the Board of Directors as
shall be chosen by the meeting. The Secretary, or, in his absence an Assistant
Secretary, shall act as secretary of the meeting, or is no such officer is
present, a secretary of the meeting shall be designated by the person presiding
over the meeting.
Section 3.7. QUORUM; VOTING. Except as otherwise provided in these
By-Laws or in the Certificate of Incorporation, a majority of the entire Board
of Directors shall constitute a quorum for the transaction of business at any
meeting thereof, and each matter acted on at any meeting shall be decided by the
vote of a majority of the Board of Directors present and constituting a quorum.
In the absence of a quorum, a majority of those present (or if only one is
present, then that one) may adjourn the meeting, without notice other than
announcement at the meeting, until such time as a quorum is present. In the
absence of any such announcement, notice of any adjournment shall be given in
accordance with the provisions of Section 3.5.
Section 3.8. MEETING BY TELEPHONE. Members of the Board of Directors
or of any committee thereof may participate in meetings of the Board of
Directors of such committee by means of conference telephone or similar
communications equipment by means of which all persons participating in the
meeting can hear each other, and such participation shall constitute presence in
person at such meeting.
Section 3.9. ACTION WITHOUT MEETING. Unless otherwise provided by
the Certificate of Incorporation, 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 of Directors or of such
committee, as the case may be, consent thereto in writing and the writing or
writings are filed with the minutes of the proceedings of the Board of Directors
or of such committee.
Section 3.10. EXECUTIVE AND OTHER COMMITTEE.
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(a) The Board of Directors, by resolution adopted by a majority
of the entire Board of Directors, may designate from.among its members
an executive committee and other committees, each consisting of three
or more directors and each of which, to the extent provided in the
resolution, may exercise all of the powers and shall have all the
authority of the Board of Directors, except that no such committee
shall have power or authority with respect to the following matters:
(i) amending the Certificate of Incorporation, adapting an
agreement of merger of consolidation or recommending to the
stockholders the (A) sale, lease or exchange of all or
substantially all of the Corporation's property and assets or (B)
a dissolution of the Corporation or a revocation of such
dissolution;
(ii) the filling of vacancies in the Board of Directors or
in any committee;
(iii) the fixing of compensation of any director for serving
on the Board of Directors or on any committee thereof;
(iv) the amendment or repeal of the ByLaws or the adoption
of new By-Laws; and
(v) the declaration of any dividends, whether of cash,
stock or property, and the issuance of any securities of the
Corporation.
(b) The Board of Directors may designate one or more directors
as alternate members of any such committee, who may replace any absent
or disqualified member or members at any meeting thereof.
(c) Each such committee shall serve at the pleasure of the Board
of Directors.
Section 3.11. COMPENSATION. Unless authorized by a resolution of the
Board of Directors, no director shall receive any stated salary for his services
as a director or as a member of a committee but shall receive such sum, if any,
as may from time to
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time be fixed by the Board of Directors for attendance at each meeting of the
Board of Directors or of a committee thereof. He may also be reimbursed for his
expenses in attending any meeting. Any director who serves the Corporation in
any capacity other than as a member of the Board of Directors or of a committee,
however, may receive compensation therefore.
ARTICLE IV
OFFICERS
Section 4.1. ELECTION; QUALIFICATION. The officers of the
Corporation shall be a President, a Secretary and a Treasurer, each of whom
shall be elected by the Board of Directors. The Board of Directors may elect
such other officers, including a Chairman of the Board, a Vice Chairman of the
Board, a Chief Executive officer, a chief Operating Officer, one or more
Executive Vice Presidents or Vice Presidents, a Chief Financial officer, a
Controller, and one or more Assistant Secretaries and Assistant Treasurers, as
it may from time to time determine. Two or more offices may be held by the same
person.
Section 4.2. TERM OF OFFICE. Each officer shall hold office from the
time of his election and qualification to the time of the earlier of the
election and qualification of his successor, his death or resignation or his
removal pursuant to Section 4.4. officers shall be elected annually by the Board
of Directors at a meeting thereof to be held immediately after each annual
meeting of stockholders.
Section 4.3. RESIGNATION. Any officer of the Corporation may resign
at any time by giving written notice of such resignation to the Board of
Directors, the President or the Secretary of the Corporation. Any such
resignation shall be effective at the time specified therein or, if no time is
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 4.4. REMOVAL. Any officer of the Corporation may be removed
at any time, with or without cause, by the vote of a majority of the entire
Board of Directors.
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Section 4.5. VACANCIES. Any vacancy occurring in any office of the
Corporation, however caused, may be filled by the Board of Directors.
Section 4.6. COMPENSATION. The compensation of each officer shall be
as determined by the Board of Directors from time to time.
Section 4.7. CHAIRMAN OF THE BOARD; VICE CHAIRMAN OF THE BOARD. The
Chairman of the Board, if elected, shall preside at all meetings of stockholders
and of the Board of Directors, shall be entitled to vote upon all questions at
meetings of the Board of Directors, and shall perform all such other duties as
are prescribed by the Board of Directors, subject to the direction of the Board
of Directors and the Executive committee, if any. The Vice Chairman of the
Board, if elected, shall, if the Chairman of the Board is absent or unable to
act, exercise the powers and perform the duties thereof, subject to the
direction of the Board of Directors and the Executive Committee, if any.
Section 4.8. CHIEF EXECUTIVE OFFICER; PRESIDENT. The Chief Executive
officer shall have charge of the Business and affairs of the Corporation,
subject to the right of the Board of Directors to confer specified powers on
other officers and, generally, to the direction of the Board of Directors and
the Executive Committee, if any. If no Chairman of the Board or Vice Chairman of
the Board has been elected, or if elected, during his or their absence or
inability to act, the Chief Executive officer shall exercise the powers and
perform the duties thereof, subject tot he direction of the Board of Directors
and the Executive Committee, if any. The President shall have such powers and
duties as generally pertain to the office of President and as the Board of
Directors may from time to time prescribe, and such additional duties as the
Chief Executive Officer may from time to time prescribe, and, during the absence
or inability to act of the Chief Executive Officer, the President shall exercise
the powers and perform the duties of the Chief Executive officer.
Section 4.9. VICE PRESIDENT. Each Vice President shall have such
powers and duties as generally pertain to the office of Vice President and as
the Board of Directors may from time to time prescribe. If there is more than on
vice President, they shall be ranked in an order designated by the Board of
Direc-
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tors, or failing such designation, the Vice Presidents will be deemed to be
ranked by the Board of Directors in the order of their election as set fourth in
the resolution or resolutions of the Board of Directors providing for their
election. During the absence of the President of his inability to act, the Vice
President, or, if there is more than one Vice President, the highest ranking
Vice President designated or deemed designated by the Board of Directors, shall
exercise the powers and perform the duties of the President, subject to the
direction of the Board of Directors and the Executive Committee, if any.
Section 4.10. SECRETARY AND ASSISTANT SECRETARIES. The secretary
shall attend and keep the minutes of all meetings of stockholders and of the
Board of Directors and any committees thereof. He shall be custodian of the
corporate seal and shall affix it or cause it be affixed to such instruments as
require such seal and attest the same and shall exercise the powers and perform
the duties incident to the office of Secretary, subject tot he direction of the
Board of Directors and the Executive Committee, if any. The Assistant secretary
(or in the event there is more than one, the Assistant Secretaries in the order
designated by the Board of Directors, or in the absence of such designation,
then in the order of their election), shall, in the absence of the Secretary or
in the event of his inability or refusal to act, perform the duties and exercise
the powers of the Secretary and perform such other duties and exercise such
other powers as the Board of Directors may from time to time prescribe, subject
to the direction of the Board of Directors and the Executive Committee, if any.
Section 4.11. TREASURER AND ASSISTANT TREASURERS. The Treasurer
shall have care of all funds and securities of the Corporation and shall
exercise the powers and perform the duties incident to the office of Treasurer,
subject to the direction of the Board of Directors and the Executive Committee,
if any. The Assistant Treasurer (or if there is more than one, the Assistant
Treasurers in the order designated by the Board of Directors, or in the absence
of such designation, then in the order of their election) shall, in the absence
of the Treasurer or in the event of his inability or refusal to act, perform the
duties and exercise the powers of the Treasurer and perform such other duties
and exercise such other powers as the Board of Directors may from time to time
prescribe,
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subject to the direction of the Board of Directors and the Executive Committee,
if any.
Section 4.12. OTHER OFFICERS. Each other officer of the Corporation
shall exercise the powers and perform the duties incident to this office,
subject to the direction of the Board of Directors and the Executive Committee,
if any.
Section 4.13. BOND. Any officer of the Corporation, if so required
by the Board of Directors, shall give to the Corporation such bond or other
security of the faithful performance of his duties and the return to the
Corporation of any books, records, accounts, monies and other property
whatsoever in his possession or control which are the property of the
corporation, as may be satisfactory tot he Board of Directors of the Executive
Committee, if any.
ARTICLE V
INDEMNIFICATION OF OFFICERS AND DIRECTORS
Section 5.1. GENERALLY. The Company shall, with respect to directors
and officers, and may (in the sole discretion of the Board of Directors), with
respect to employees and agents, indemnify, subject to the provisions of Section
5.4 of this Article V, 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 (other than an action
by or in the right of the Corporation), by reason of the fact that he 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 corporation, partnership, joint venture, trust or other enterprise
against expenses (including attorneys' fees), judgments, fines and amounts paid
in settlement actually and reasonably incurred by him in connection with such
action, suit or proceeding if he acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests of the
Corporation and, with respect to any criminal action or proceeding, had no
reasonable cause to believe his conduct was unlawful. The termination of any
action, suit or proceeding by judgment, order, settlement, conviction or upon a
pleas of nolo contendere or its equivalent, shall not, of itself, create a
presumption that the person did not act in good faith
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and in a manner which he reasonably believed to be in or not opposed to the best
interests of the Corporation, and, with respect to any criminal action or
proceeding, had reasonable cause to believe that his conduct was unlawful.
Section 5.2. ACTION BY CORPORATION. The Company shall, with respect
to directors and officers, and may (in the sole discretion of the Board of
Directors), with respect to employees and agents indemnify, subject to the
provisions of Section 5.4 of this Article V, any person who was or is a party 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 he 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 corporation, partnership, joint
venture, trust or other enterprise against expenses (including attorneys' fees)
actually and reasonably incurred by him in connection with the defense or
settlement of such action or suit if he acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interest 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 to the Corporation unless and only to the extent that the court of
Chancery or the court in which such action or suit was brought determines upon
application that, despite the adjudication of liability but in view of all the
circumstances of the case, such person is fairly and reasonably entitled to
indemnity for such expenses which the Court of Chancery or such other court
deems proper.
Section 5.3. EXPENSES. To the extent that a director, officer,
employee or agent of the Corporation has been successful on the merits or
otherwise in defense of any action, suit or proceeding referred to in Sections
5.1 and 5.2 of this Article V, or in defense of any claim, issue or matter
therein, he shall be indemnified against expenses (including attorneys' fees)
actually and reasonably incurred by him in connection therewith.
Section 5.4. DETERMINATION OF ENTITLEMENT. Any indemnification under
Sections 5.1 and 5.2 of this Article. V (unless ordered by a court) shall be
made by
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the Corporation only as authorized in the specific case upon a determination
that indemnification of the director, officer, employee or agent is proper.in
the circumstances because he has met the applicable standard of conduct set
forth in such Sections 5.1 and 5.2. Such determination shall be made:
(a) by the Board of Directors by a majority vote of a quorum
consisting of directors who were not parties to such action, suit or
proceeding, or
(b) if such a quorum is not obtainable, or, even if obtainable a
quorum of disinterested directors so directs, by independent legal
counsel in a written opinion or
(c) by the stockholders.
Section 5.5. EXPENSES IN ADVANCE. Expenses incurred in defending a
civil or criminal action, suit or proceeding shall, in the case of a director or
officer, and may (in the sole discretion of the Board of Directors), with
respect to an employee or agent, be paid by the Corporation in advance of the
final disposition of such action, suit or proceeding as authorized by the Board
of Directors in the specific case upon receipt of an undertaking by or on behalf
of the director, officer, employee or agent to repay such amount if it shall
ultimately be determined that he is not entitled to be indemnified by the
Corporation as authorized in this Article.
Section 5.6. NOT EXCLUSIVE. The indemnification provided by this
Section shall not be deemed exclusive of any other rights to which those seeking
indemnification may be entitled under any ByLaw, agreement, vote of stockholders
or disinterested directors or otherwise, both as to action in his official
capacity and as to action in another capacity while holding such office, and
shall continue as to a person who has ceased to be a director, officer, employee
or agent and shall inure to the benefit of the heirs, executors and
administrators of such a person.
Section 5.7. 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, employee or agent of another corporation,
partnership, joint ven-
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<PAGE>
ture, trust or other enterprise against any liability asserted against him and
incurred by him in any such capacity, or arising out of his status as such,
whether or not the Corporation would have the power to indemnify him against
such liability under the provisions of this Article V.
Section 5.8. DEFINITIONS
(a) For purposes of this Article V, references to "the
Corporation" shall include, in addition to the resulting corporation,
any constituent corporation (including any constituent of a
constituent) absorbed in a consolidation or merger which, if its
separate existence had continued, would have had power and authority
to indemnify its directors, officers, employees or agents, so that nay
person who is or was a director, officer, employee or agent of such
constituent corporation, or is or was serving at the request of such
constituent corporation as a director, officer, employee or agent of
another corporation, partnership, joint venture, trust or other
enterprise, shall stand in the same position under the provisions of
this section with respect to the resulting or surviving corporation as
he would have with respect to such constituent corporation if its
separate existence had continued.
(b) For purposes of this Article V, references to:
(i) "Other enterprises" shall include employee benefit
plans;
(ii) "fines" shall include any excise taxes assessed on a
person with respect to an employee benefit plan; and
(iii) "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
(iv) "not opposed to the best interests of the corporation"
shall be deemed to in-
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<PAGE>
clude the actions of 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.
ARTICLE VI
CAPITAL STOCK
Section 6.1. CERTIFICATES REPRESENTING SHARES. The shares of the
Corporation shall be represented by certificates in such form consistent with
law and the Certificate of Incorporation as the Board of Directors may from time
to time prescribe and be signed by or in the name of the Corporation by the
Chairman of the Board, if any, or the President or any vice president and by the
Treasurer or an Assistant Treasurer of the Secretary of an Assistant Secretary.
Any and all of the signatures on a certificate may be a facsimile. In the event
that nay officer, transfer agent or registrar who has signed, or whose facsimile
signature has been placed upon, a certificate ceases to be such officer,
transfer agent or registrar before such certificate is issued, it may be issued
by the Corporation with the same effect as if he were such officer, transfer
agent or registrar at the date of issue. In the event that the Corporation
issues one or more series of Preferred Stock, the relative designations, powers,
preferences, rights, qualifications, limitations and restrictions of the shares
of each such series shall be set forth in full or summarized on the face or back
of the certificates for the shares of each such series.
Section 6.2. TRANSFER OF SHARES. Shares of the corporation shall be
transferable on the books of the Corporation, pursuant to applicable law and
such rule as the Board of Directors may prescribe from time to time, only by the
holder of record thereof or by his duly authorized attorney, upon the surrender
of the certificate or certificates for such shares to the Secretary or an
Assistant Secretary duly endorsed with proper evidence of authority.to transfer.
The Corporation shall issue a new certificate or certificates for the shares
surrendered to the person or persons entitled thereto, cancel the old
certificate or certificates and shall record such transfer on the books of the
Corporation.
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<PAGE>
Section 6.3. TRANSFER AGENT; REGISTRAR. The Board of Directors any
appoint one or more transfer agents and one or more registrars and may require
each certificate representing shares to bear the signature of a transfer agent,
of a registrar or of both.
Section 6.4. Holders of Record. Prior to due presentment for
registration of transfer, the Corporation may treat the holder of record of a
share as the owner thereof in fact, exclusively entitled to vote, and receive
dividends on, such share and otherwise entitled to all the rights and powers of
an owner thereof, notwithstanding notice to the contrary.
Section 6.5. LOST, DESTROYED OR STOLEN CERTIFICATES. The Corporation
shall issue a new certificate for shares to replace a certificate theretofore
issued by it and alleged to have been lost, stolen or destroyed, if the owner or
his legal representative (a) requests a new certificate before the Corporation
has notice that the certificate has been acquired by a bona fide purchaser, (b)
files with the Corporation a bond 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 any such new
certificate and (c) satisfies such other terms and conditions as the Board of
Directors may from time to time require, including, without limitation, the
owner's furnishing an affidavit to the Board of Directors to the effect that
such certificate has been lost, stolen or destroyed.
Section 6.6. DIVIDENDS. Except as otherwise provided by the
Certificate of Incorporation or by law, the Board of Directors, at any regular
or special meeting thereof, may declare dividends upon the issued and
outstanding shares of the stock of the Corporation. Dividends may be paid in
cash I in property or in shares of the stock of the Corporation, subject to the
provisions of the Certificate of Incorporation and of law.
Before payment of any dividend, there may be set aside out of any funds of the
Corporation available for dividends such sums as the Board of Directors, from
time to time, in its absolute discretion, deems advisable as a reserve or
reserves to meet contingencies, for equalizing dividends, for repairing or
maintaining any property of the corporation or for such other purpose as the
Board of Directors deems to be in the best interest of the Corporation, and the
Board of Directors
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<PAGE>
may modify or abolish any such reserve in the manner in which it was created.
ARTICLE VII
MISCELLANEOUS
Section 7.1. INSPECTION OF RECORDS. Any stockholder of record, in
person or by attorney or other agent, shall upon written demand under oath
stating the purpose thereof, have the right, during usual business hours, 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 means a purpose reasonably related to such persons's
interest as a stockholder. In every instance where an attorney or other agent is
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 authorizes 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 the State
of Delaware or at its principal place of business.
Section 7.2. FORM OF RECORDS. Any records maintained by the
Corporation in the regular course of its business, including its stock ledger,
books of account and minute books, may be kept on, or be in the form of, punch
cards, magnetic tape, photographs, micro-photographs or any other information
storage device, provided that the records so kept can be converted into clearly
legible written form within a reasonable time. The Corporation shall so convert
any records so kept upon the request of any person entitled to inspect the same.
Section 7.3. WAIVER OF NOTICE. Whenever notice is required to be
given under t Certificate of Incorporation of the By-Laws, a written waiver
thereof, signed by the person entitled to notice, whether before or after the
time stated therein, shall be deemed equivalent to notice.Attendance of a person
at a meeting shall constitute a waiver of notice of such meeting, except when
the person attends a meeting for the express purpose of objecting, at the
beginning of the meeting, 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,
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<PAGE>
any regular or special meeting of the stockholders or of the Board of Directors
or any committee thereof need be specified in any written waiver of notice
unless so required by the Certificate of Incorporation or the ByLaws.
Section 7.4. FISCAL YEAR. The fiscal year of the Corporation shall
start on such date as the Board of Directors shall from time to time prescribe.
Section 7.5. CORPORATE-SEAL. The corporate seal shall be in such
form consistent with law as the Board of Directors may from time to time
prescribe. The Board of Directors may give general authority to any officer in
addition to the Secretary to affix the corporate seal and to attest the affixing
by his signature.
ARTICLE VIII
AMENDMENT OF BY-LAWS
Section 8.1. AMENDMENT. The Board of Directors is authorized to
adopt, alter, amend or repeal the By-Laws of the Corporation, but any By-Laws
adopted, altered, amended or repealed by the Board of Directors may be altered,
amended or repealed by the stockholders of the Corporation.
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<PAGE>
BGH HOLDINGS, INC.
WRITTEN CONSENT OF THE SOLE DIRECTOR
THE UNDERSIGNED, being the sole director of BGH Holdings, Inc., a
Delaware corporation (the "Company"), hereby consents to the taking of- the
following actions and adoption of the following resolutions without a meeting,
in accordance with the procedures established in Section 141(f) of the Delaware
General Corporation Law, such actions and resolutions to have the same force and
effect as though duly taken and adopted at a meeting of the directors of the
Company duly called and legally held:
RESOLVED, that the first paragraph of Article III, Section 3.1 of the
ByLaws of B&G-DSD Holdings, Inc. ("B&G-DSD") be deleted in its entirety and
replaced with the following:
"Section 3.1. NUMBER; TERM OF OFFICE, QUALIFICATIONS; VACANCIES.
The business and affairs of the Corporation shall be managed
under the direction of the Board of Directors. The number of
directors that shall constitute the entire Board of Directors
shall be one and shall be fixed from time to time by the
affirmative vote of a majority of the entire Board of Directors.
No decrease in the number of directors shall shorten the term of
any incumbent director. No director need be a stockholder of the
Corporation."
RESOLVED, that the existing directors of B&G-DSD be removed from the
board of directors and that the following individual be elected as the sole
director of B&G-DSD, to serve until the next annual meeting of stockholders
of B&G-DSD and until his successor shall have been elected and shall have
qualified or as otherwise provided in the By-laws of B&G DSD:
Stephen C. Sherrill; and
RESOLVED, that any one or more of the officers of the Company are, and
each of them hereby is, authorized and directed to execute and
<PAGE>
deliver such agreements, documents, assignments, certificates and other
instruments and to take such other action as may be necessary, advisable,
convenient or proper to carry out the intent of these resolutions and to
fully perform the provisions of any and all agreements, documents,
assignments, certificates and instruments executed on behalf of the Company
pursuant to these resolutions.
IN WITNESS WHEREOF, the undersigned has executed this Written Consent
this 27th day of December, 1996.
/s/ Stephen C. Sherrill
---------------------------------
Stephen C. Sherrill
Sole Director
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<PAGE>
Exhibit 3.5
CERTIFICATE OF INCORPORATION
OF
BFT ACQUISITION CORPORATION
____________________________
ARTICLE FIRST
The name of the corporation (herein called the "Corporation") is BFT
Acquisition Corporation.
ARTICLE SECOND
The address of the registered office of the Corporation in the State
of Delaware is Corporation Trust Center, 1209 Orange Street, City of Wilmington,
County of New Castle. The name of the registered agent of the Corporation at
such address is The corporation Trust Company.
ARTICLE 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.
<PAGE>
ARTICLE FOURTH
The total number of shares of all classes of stock which the
Corporation shall have authority to issue is one thousand shares, all of which
shall be of one class, shall be designated Common Stock and shall have a par
value of one cent ($0.01) per share.
ARTICLE FIFTH
The name and mailing address of the incorporator is as follows:
Name Mailing Address
Victoria Barnes c/o O'Sullivan Graev & Karabell
30 Rockefeller Plaza
4lSt Floor
New York, New York 10112
ARTICLE SIXTH
The number of directors of the Corporation shall be such as from time
to time shall be fixed in the manner provided in the By-laws of the corporation.
The election of directors of the Corporation need not be by ballot unless the
By-laws so require.
ARTICLE SEVENTH
A director of the Corporation shall not be personally liable to the
Corporation 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
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<PAGE>
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 Delaware General Corporation Law, or (iv) for any
transaction from which the director derived any improper personal benefit. If
the Delaware General Corporation Law is amended after the date of incorporation
of the Corporation to authorize corporate action further eliminating or limiting
the personal liability of directors, then the liability of a director of the
Corporation shall be eliminated or limited to the fullest extent permitted by
the Delaware General Corporation Law, as so amended.
Any repeal or modification of the foregoing paragraph by the
stockholders 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.
ARTICLE EIGHTH
For the management of the business and for the conduct of the affairs
of the Corporation, and in further definition, limitation and regulation of the
powers of the Corporation and of its directors and stockholders, it is further
provided:
(a) In furtherance and not in limitation of the powers conferred by
the laws of the State of Delaware, the Board of Directors is expressly
authorized and empowered:
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<PAGE>
(i) to make, alter, amend or repeal the By-laws in any manner
not inconsistent with the laws of the State of Delaware or this
Certificate of Incorporation;
(ii) without the assent or vote of the stockholders, to
authorize and issue securities and obligations of the Corporation,
secured or unsecured, and to include therein such provisions as to
redemption, conversion or other terms thereof as the Board of
Directors in its Bole discretion may determine, and to authorize the
mortgaging or pledging, as security therefor, of any property of the
Corporation, real or personal, including after-acquired property;
(iii) to determine whether any, and if any, what part, of the
net profits of the Corporation or of its surplus shall be declared in
dividends and paid to the stockholders, and to direct and determine
the use and disposition of any such net profits or such surplus; and
(iv) to fix from time to time the amount of net profits of the
Corporation or of its surplus to be reserved as working capital or for
any other lawful purpose.
In addition to the powers and authorities herein or by
statute expressly conferred upon it, the Board of Directors may
exercise all such powers and do all such acts and things
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<PAGE>
as may be exercised or done by the Corporation, subject,
nevertheless, to the provisions of the laws of the State of Delaware,
of this Certificate of Incorporation and of the By-laws of the
Corporation.
(b) Any director or any officer elected or appointed by the
stockholders or by the Board of Directors may be removed at any time in
such manner as shall be provided in the By-laws of the Corporation.
(c) From time to time any of the provisions of this Certificate of
Incorporation may be altered, amended or repealed, and other provisions
authorized by the laws of the State of Delaware at the time in force may be
added or inserted, in the manner and at the time prescribed by said laws,
and all rights at any time conferred upon the stockholders of the
Corporation by this Certificate of Incorporation are granted subject to the
provisions of this paragraph (c).
ARTICLE NINTH
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
-5-
<PAGE>
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 the Corporation under the provisions of Section 279 of 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 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 on any compromise or arrangement and to
any reorganization of the Corporation as a 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 the Corporation, as the case may be,
and also on the Corporation.
IN WITNESS WHEREOF, I, the undersigned, being the sole incorporator
hereinabove named, for the purpose of forming a corporation pursuant to the
General Corporation Law of the State of Delaware, Do HEREBY CERTIFY, under
penalties of perjury, that this is my act and deed and that the facts
hereinabove stated are truly set forth and, accordingly, I have hereunto set
my hand as of the 14th day of November, 1988.
/s/ Victoria Barnes
_____________________________
Victoria Barnes
Sole Incorporator
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<PAGE>
CERTIFICATE OF AMENDMENT
OF
CERTIFICATE OF INCORPORATION
OF
BFT ACQUISITION CORPORATION
We, the undersigned, R.J. Blenderman and Tom Schmidt, President and
Secretary, respectively, of BFT Acquisition Corporation, a corporation organized
and existing under the laws of the State of Delaware, on behalf of said
Corporation, hereby certify as follows:
FIRST: The Certificate of Incorporation of the Corporation shall be
amended by deleting ARTICLE FIRST thereof and inserting in place thereof a new
ARTICLE FIRST to read an follows:
"FIRST: The name of the corporation (herein called the
"Corporation") shall be "Trappey's Fine Foods, Inc."
SECOND: That, by unanimous written consent of the Board of
Directors of the Corporation in lieu of a meeting pursuant to Section
141(f) of the General Corporation Law of the State of Delaware, resolutions
were duly adopted setting forth the foregoing amendment to the Certificate
of Incorporation, declaring said amendment to the Certificate of
Incorporation, declaring said amendment to be advisable and seeking the
written consent of the directors of the Corporation to such amendment.
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<PAGE>
THIRD: That said amendment was duly adopted in accordance with the
provisions of Section 228 and 242 of the General Corporation Law of the State of
Delaware by written consent of the directors of the Corporation in lieu of a
meeting.
IN WITNESS WHEREOF, we have executed this Certificate this 12 day of
December, 1988.
/s/
----------------------------
President
/s/
----------------------------
Secretary
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<PAGE>
AMENDMENT TO
CERTIFICATE OF INCORPORATION
OF
TRAPPEY'S FINE FOODS, INC.
Trappey's Fine Foods, Inc., a corporation organized and existing under
the laws of the State of Delaware, hereby certifies as follows:
1. The name of the company is Trappey's Fine Foods, Inc. The date of
filing of the company's original certificate of incorporation with the Secretary
of State was November 15, 1988. A Certificate of Amendment was filed with the
Secretary of State on December 14, 1988.
2. The first paragraph of Article Fourth of the Certificate of
Incorporation is deleted and the following is inserted in lieu thereof:
"ARTICLE FOURTH
The total number of shares of all classes of stock which the
Corporation shall have authority to issue is two thousand shares, all
of which shall be of one class, shall be designated Common Stock and
shall have a par value of one cent ($0.01) per share."
3. This Amendment to the Certificate of Incorporation was duly
adopted by the unanimous written consent of the shareholders in accordance with
the applicable provisions of Section 228 and 242 of the General Corporation Law
of the State of Delaware.
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<PAGE>
IN WITNESS WHEREOF, Trappey's Fine Foods, Inc. has caused this
Amendment to be signed by its President duly authorized, and attested by its
Secretary, this 26th day of June, 1989.
TRAPPEY'S FINE FOODS, INC.
By: /s/ Ronald J. Blenderman, Jr.
-----------------------------
Ronald J. Blenderman, Jr.
President and
Chief Executive Officer
ATTEST:
By: /s/ Tom Schmidt
--------------------------
Tom Schmidt
Secretary
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<PAGE>
STATE OF DELAWARE
CERTIFICATE FOR RENEWAL AND REVIVAL
OF CHARTER
________________________________________________, 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 Trappey's Fine Foods, Inc.
____________________________________________
2. Its registered office in the State of Delaware is located 1209 Orange
Street, City of: Wilmington Zip Code: 19801 County of: New Castle
the name of its registered agent is: The Corporation Trust Company.
3. The date of filing of the original Certificate of Incorporation in
Delaware was 11/15/88.
4. The date when restoration, renewal, and revival of the charter of this
company is to commence is the 28th day of February 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. 1995, 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 provision of Section
312 of the General Corporation Law of the State of Delaware, as amended,
providing for the renewal, extension and restoration of charters, Vincent J.
Piere the last and acting President, and Paul C.P. McIlhenny, the last and
acting Secretary, have hereunto set their hands to this certificate this 26th
day of June, 1997.
/s/
----------------------------
Last and Acting President
ATTEST:
/s/
----------------------------
Last and Acting Secretary
<PAGE>
Exhibit 3.6
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
TRAPPEY'S FINE FOODS, INC.
formerly BFT ACQUISITION CORPORATION
Incorporated under the laws
of the State of Delaware
---------------------
BY-LAWS
---------------------
As adopted on November 15, 1988
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
BFT ACQUISITION CORPORATION
ARTICLE I
OFFICES
SECTION 1. REGISTERED OFFICE. The registered office of BFT
Acquisition Corporation (the "Corporation") in the State of Delaware shall be at
Corporation Trust Center, 1209 Orange Street, City of Wilmington, County of New
Castle, and the registered agent in charge thereof shall be The Corporation
Trust Company.
SECTION 2. OTHER OFFICES. The Corporation may also have an office or
offices at other place or places within or outside the State of Delaware.
ARTICLE II
MEETING OF STOCKHOLDERS; STOCKHOLDERS'
CONSENT IN LIEU OF MEETING
SECTION 1. ANNUAL MEETINGS. The annual meeting of the stockholders
for the election of directors, and for the transaction of such other business
as may properly come before the meeting, shall be held at such place, date
and hour as shall be fixed by the Board of Directors (the "Board") and
designated in the notice or waiver of notice thereof; except that no annual
meeting need be held if all actions, including the election of directors,
required by the General Corporation Law of the State of Delaware (the
"Delaware Statute") to be taken at a stockholders' annual meeting are taken
by written consent in lieu of meeting pursuant to Section 10 of this Article
II.
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<PAGE>
SECTION 2. SPECIAL MEETINGS. A special meeting of the stockholders
for any purpose or purposes may be called by the Board, the Chairman, the
President or the Secretary or the record holders of at least a majority of the
issued and outstanding shares of Common Stock of the Corporation, to be held at
such place, date and hour as shall be designated in the notice or waiver of
notice thereof.
SECTION 3. NOTICE OF MEETINGS. Except as otherwise required by
statute or by the Certificate of Incorporation (the "Certificate") or these
By-laws, notice of each annual or special meeting of the stockholders shall be
given to each stockholder of record entitled to vote at such meeting not less
than ten or more than sixty days before the day on which the meeting is to be
held, by delivering written notice thereof to him personally, or by mailing a
copy of such notice, postage prepaid, directly to him at his address as it
appears in the records of the Corporation, or by transmitting such notice
thereof to him at such address by telegraph, cable or other telephonic
transmission. Every such notice shall state the place, the date and hour of the
meeting, and, in case of a special meeting, the purpose or purposes for which
the meeting is called. Notice of any meeting of stockholders shall not be
required to be given to any stockholder who shall attend such meeting in person
or by proxy, or who shall, in person or by attorney thereunto authorized, waive
such notice in writing, either before or after such meeting.
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<PAGE>
Except as otherwise provided in these By-laws, neither the business to be
transacted at, nor the purpose of, any meeting of the stockholders need be
specified in any such notice or waiver of notice. Notice of any adjourned
meeting of stockholders shall not be required to be given, except when expressly
required by law.
SECTION 4. QUORUM. At each meeting of the stockholders, except where
otherwise provided by the Certificate or these By-laws, the holders of a
majority of the issued and outstanding shares of stock of the Corporation
entitled to vote at such meeting, present in person or represented by proxy,
shall constitute a quorum for the transaction of business. In the absence of a
quorum a majority in interest of the stockholders present in person or
represented by proxy and entitled to vote, or, in the absence of all the
stockholders entitled to vote, any officer entitled to preside at, or act as
secretary of, such meeting, shall have the power to adjourn the meeting from
time to time, until stockholders holding the requisite amount of stock shall be
present or represented. At any such adjourned meeting at which a quorum shall
be present, any business may be transacted which might have been transacted at
the meeting as originally called.
SECTION 5. ORGANIZATION. At each meeting of the stockholders, one of
the following shall act as chairman of the meeting and preside thereat, in the
following order of precedence:
(a) the Chairman;
(b) the President;
(c) any other officer of the Corporation designated by the Board
to act as chairman of such
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<PAGE>
meeting and to preside thereat if the Chairman or the President shall be
absent from such meeting; or
(d) a stockholder of record who shall be chosen chairman of such
meeting by a majority in voting interest of the stockholders present in
person or by proxy and entitled to vote thereat.
The Secretary or, if he shall be presiding over such meeting in
accordance with the provisions of this Section 5 or absent from such meeting,
the person (who shall be an Assistant Secretary, if an Assistant Secretary has
been appointed and is present) whom the chairman of such meeting shall appoint,
shall act as secretary of such meeting and keep the minutes thereof.
SECTION 6. ORDER OF BUSINESS. The order of business at each meeting
of the stockholders shall be determined by the chairman of such meeting, but
such order of business may be changed by a majority in voting interest of those
present in person or by proxy at such meeting and entitled to vote thereat.
SECTION 7. VOTING. Except as otherwise provided by law or by the
Certificate or these By-laws, at each meeting of the stockholders, every
stockholder of the Corporation shall be entitled to one vote in person or by
proxy for each share of Common Stock of the Corporation held by him and
registered in his name on the books of the Corporation on the date fixed
pursuant to Section 7 of Article VI as the record date for the determination
of stockholders entitled to vote at such meeting. Persons holding stock in a
fiduciary capacity shall be
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<PAGE>
entitled to vote the shares so held. A person whose stock is pledged shall be
entitled to vote, unless, in the transfer by the pledgor on the books of the
Corporation, he has expressly empowered the pledgee to vote thereon, in which
case only the pledgee or his proxy may represent such stock and vote thereon. If
shares or other securities having voting power stand in the record of two or
more persons, whether fiduciaries, members of a partnership, joint tenants,
tenants in common, tenants by the entirety or otherwise, or if two or more
persons have the same fiduciary relationship respecting the same shares, unless
the Secretary shall be given written notice to the contrary and furnished with a
copy of the instrument or order appointing them or creating the relationship
wherein it is so provided, their acts with respect to voting shall have the
following effect:
(a) if only one votes, his act binds all;
(b) if more than one votes, the act of the majority so voting
binds all; and
(c) if more than one votes, but the vote is evenly split on any
particular matter, such shares shall be voted in the manner provided by
law.
If the instrument so filed shows that any such tenancy is held in unequal
interests, a majority or even-split for the purposes of this Section 7 shall be
a majority or even-split in interest. The Corporation shall not vote directly or
indirectly any share of its own capital stock. Any vote of stock may be given by
the stockholder entitled thereto in person or by his proxy appointed
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by an instrument in writing, subscribed by such stockholder or by his attorney
thereunto authorized, delivered to the secretary of the meeting; PROVIDED,
HOWEVER, that no proxy shall be voted after three years from its date, unless
said proxy provides for a longer period. At all meetings of the stockholders,
all matters (except where other provision is made by law, the Certificate or
these By-laws) shall be decided by the vote of a majority in interest of the
stockholders present in person or by proxy at such meeting and entitled to vote
thereon, a quorum being present. Unless demanded by a stockholder present in
person or by proxy at any meeting and entitled to vote thereon, the vote on any
question need not be by ballot. Upon a demand by any such stockholder for a vote
by ballot upon any question, such vote by ballot shall be taken. on a vote by
ballot, each ballot shall be signed by the stockholder voting, or by his proxy,
if there be such proxy, and shall state the number of shares voted.
SECTION 8. INSPECTION. The chairman of the meeting may at any time
appoint two or more inspectors to serve at any meeting of the stockholders.
Any inspector may be removed, and a new inspector or inspectors appointed, by
the Board at any time. Such inspectors shall decide upon the qualifications
of voters, accept and count votes, declare the results of such vote, and
subscribe and deliver to the secretary of the meeting a certificate stating
the number of shares of stock issued and outstanding and entitled to vote
thereon and the number of shares voted for and against the question,
respectively. The inspectors need not be stockholders of the Corporation,
and any director or officer of the Corporation may be an inspector on any
question other than a vote for or against his election to any position with
the
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Corporation or on any other matter in which he may be directly interested.
Before acting as herein provided, each inspector shall subscribe an oath
faithfully to execute the duties of an inspector with strict impartiality and
according to the best of his ability.
SECTION 9. LIST OF STOCKHOLDERS. It shall be the duty of the
Secretary or other officer of the Corporation who shall have charge of its stock
ledger to prepare and make, at least ten days before every meeting of the
stockholders, a complete list of the stockholders entitled to vote thereat,
arranged in alphabetical order, and 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 any
such meeting, during ordinary business hours, for a period of at least ten days
prior to such meeting, either at a place within the city where such 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. Such list shall
also be produced and kept at the time and place of the meeting during the whole
time thereof, and ray be inspected by any stockholder who is present.
SECTION 10. STOCKHOLDERS' CONSENT IN LIEU OF MEETING. Any action
required by the Delaware Statute to be taken at any annual or special meeting
of the 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
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prior notice and without a vote, by a consent in writing, as permitted by the
Delaware Statute.
ARTICLE III
BOARD OF DIRECTORS
SECTION 1. GENERAL POWERS. The business, property and affairs of the
Corporation shall be managed by the Board, which may exercise all such powers of
the Corporation and do all such lawful acts and things as are not by law or by
the Certificate directed or required to be exercised or done by the
stockholders.
SECTION 2. NUMBER AND TERM OF OFFICE. The number of directors shall
be fixed from tine to time by the Whole Board. The term "Whole Board" is used
to herein to refer to the number of directors from time to time authorized to be
on the Board regardless of the number of directors then in office. Directors
need not be stockholders. Each director shall hold office until his successor
is elected and qualified, or until his earlier death or resignation or removal
in the manner hereinafter provided.
SECTION 3. ELECTION OF DIRECTORS. At each meeting of the
stockholders for the election of directors at which a quorum is present, the
persons receiving the greatest number of votes, up to the number of directors
to be elected, of the stockholders present in person or by proxy and entitled
to vote thereon, shall be the directors; provided that for purposes of such
vote no stockholder shall be allowed to cumulate his votes. Unless an
election by ballot shall be demanded as provided in Section 7 of
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Article II, election of directors may be conducted in any manner approved at
such meeting.
SECTION 4. RESIGNATION, REMOVAL AND VACANCIES. Any director may
resign at any time by giving written notice to the Board, the Chairman, the
President or the Secretary. Such resignation shall take effect at the time
specified therein or, if the time be not specified, upon receipt thereof; and,
unless otherwise specified therein, the acceptance of such resignation shall not
be necessary to make it effective.
Any director or the entire Board may be removed, with or without
cause, at any time by vote of the holders of a majority of the shares then
entitled to vote at an election of directors, or by written consent of the
stockholders pursuant to Section 10 of Article 11.
Vacancies occurring in the Board for any reason may be filled by vote
of the stockholders or by the stockholders' written consent pursuant to Section
10 of Article II, or by vote of the Board or by the directors' written consent
pursuant to Section 6 of this Article III. If the number of directors then in
office is less than a quorum, such vacancies may be filled by a vote of a
majority of the directors then in office.
SECTION 5. MEETINGS.
(a) ANNUAL MEETINGS. As soon as practicable after. each annual
election of directors, the Board shall meet for the purpose of organization
and the transaction of other business, unless it shall have transacted all
such business by written consent pursuant to Section 6 of this Article III.
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(b) OTHER MEETINGS. Other meetings of the Board shall be held at
such times and places as the Board, the Chairman, the President shall from time
to time determine.
(c) NOTICE OF MEETINGS. The Secretary shall give notice to each
director of each meeting, including the time, place and purpose of such meeting.
Notice of each such meeting shall be mailed to each director, addressed to him
at his residence or usual place of business, at least two days before the date
on which such meeting is to be held, or shall be sent to him at such place by
telegraph, cable, wireless or other form of recorded communication, or be
delivered personally or by telephone not later than the day before the day on
which such meeting is to be held, but notice need not be given to any director
who shall attend such meeting. A written waiver of notice, signed by the person
entitled thereto, whether before or after the time of the meeting stated
therein, shall be deemed equivalent to notice.
(d) PLACE OF MEETINGS. The Board may hold its meetings at such place
or places within or outside the State of Delaware as the Board may from time to
time determine, or as shall be designated in the respective notices or waivers
of notice thereof.
(e) QUORUM AND MANNER OF ACTING. A majority of the total number of
directors then in office shall be present in person at any meeting of the
Board in order to constitute a quorum for the transaction of business at such
meeting, and the vote of a majority of those directors present at any such
meeting at which a quorum is present shall be necessary for the passage of
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any resolution or act of the Board, except as otherwise expressly required by
law or these By-laws. in the absence of a quorum for any such meeting, a
majority of the directors present thereat may adjourn such meeting from time to
time until a quorum shall be present.
(f) ORGANIZATION. At each meeting of the Board, one of the following
shall act as chairman of the meeting and preside thereat, in the following order
of precedence:
(a) the Chairman;
(b) the President (if a director);
(c) any director chosen by a majority of the directors present.
The Secretary or, in the case of his absence, any person (who shall be
an Assistant Secretary, if an Assistant Secretary has been appointed and is
present) whom the chairman of the meeting shall appoint shall act as secretary
of such meeting and keep the minutes thereof.
SECTION 6. DIRECTORS' CONSENT IN LIEU OF MEETING. Any action
required or permitted to be taken at any meeting of the Board 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 all the directors
and such consent is filed with the minutes of the proceedings of the Board.
SECTION 7. ACTION BY MEANS OF CONFERENCE TELEPHONE OR SIMILAR
COMMUNICATIONS EQUIPMENT. Any one or more members of the
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Board 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, and participation in a meeting by such means
shall constitute presence in person at such meeting.
SECTION 8. COMMITTEES. The Board may, by resolution or resolutions
passed by a majority of the Whole Board, designate one or more committees, each
such committee to consist of one or more directors of the Corporation, which to
the extent provided in said resolution or resolutions shall have and may
exercise the powers of the Board 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, such committee or committees to have such
name or names as may be determined from time to time by resolution adopted by
the Board. A majority of all the members of any such committee may determine its
action and fix the time and place of its meetings, unless the Board shall
otherwise provide. The Board shall have power to change the members of any such
committee at any time, to fill vacancies and to discharge any such committee,
either with or without cause, at any time.
ARTICLE IV
OFFICERS
SECTION 1. EXECUTIVE OFFICERS. The principal officers of the
Corporation shall be a Chairman, a President, a Secretary and a Treasurer,
and may include such other officers as the Board nay appoint pursuant to
Section 3 of this Article IV. Any two or more offices may be held by the
same person.
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SECTION 2. AUTHORITY AND 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 so provided, by the Board.
SECTION 3. OTHER OFFICERS. The Corporation may have such other
officers, agents and employees as the Board may deem necessary, including one or
more Assistant Secretaries, one or more Assistant Treasurers and one or more
Vice-Presidents, each of whom shall hold office for such period, have such
authority, and perform such duties as the Board, the Chairman, or the President
may from time to tine determine. The Board may delegate to any principal
officer the power to appoint and define the authority and duties of, or remove,
any such officers, agents or employees.
SECTION 4. TERM OF OFFICE, RESIGNATION AND REMOVAL. All officers
shall be elected or appointed by the Board and shall hold office for such term
as may be prescribed by the Board. Each officer shall hold office until his
successor has been elected or appointed and qualified or until his earlier death
or resignation or removal in the manner hereinafter provided. The Board may
require any officer to give security for the faithful performance of his duties.
Any officer may resign at any time by giving written notice to the
Board, the Chairman, the President or the Secre-
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tary. Such resignation shall take effect at the time specified therein or, if
the time be not specified, at the time it is accepted by action of the Board.
Except as aforesaid, the acceptance of such resignation shall not be necessary
to make it effective.
All officers and agents elected or appointed by the Board shall be
subject to removal at any time by the Board or by the stockholders of the
Corporation with or without cause.
SECTION 5. VACANCIES. If the office of Chairman, President,
Secretary or Treasurer becomes vacant for any reason, the Board shall fill such
vacancy, and if any other office becomes vacant, the Board may fill such
vacancy. Any officer so appointed or elected by the Board shall serve only
until such time as the unexpired term of his predecessor shall have expired
unless reelected or reappointed by the Board.
SECTION 6. THE CHAIRMAN. The Chairman shall preside at meetings of
the Board and of the stockholders at which he is present, and shall give counsel
and advice to the Board and the officers of the Corporation on all subjects
concerning the welfare of the Corporation and the conduct of its business. He
shall perform such other duties as the Board may from time to time determine.
SECTION 7. THE PRESIDENT. The President shall be the chief executive
officer of the Corporation. He shall have general and active management and
control of the business and affairs
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of the Corporation subject to the control of the Board and to the Chairman,
under whose supervision he shall act, and shall see that all orders and
resolutions of the Board are carried into effect.
SECTION 8. THE SECRETARY. The Secretary shall, to the extent
practicable, attend all meetings of the Board and all meetings of the
stockholders and shall record all votes and the minutes of all proceedings in a
book to be kept for that purpose. He may give, or cause to be given, notice of
all meetings of the stockholders and of the Board, and shall perform such other
duties as may be prescribed by the Board, the Chairman or the President, under
whose supervision he shall act. He shall keep in safe custody the seal of the
Corporation and affix the same to any duly authorized instrument requiring it
and, when so affixed, it shall be attested by his signature or by the signature
of the Treasurer or, if appointed, an Assistant Secretary or an Assistant
Treasurer. He shall keep in safe custody the certificate books and stockholder
records and such other books and records as the Board may direct, and shall
perform all other duties incident to the office of Secretary and such other
duties as from time to time may be assigned to him by the Board, the Chairman or
the President.
SECTION 9. THE TREASURER. The Treasurer shall have the care and
custody of the corporate funds and other valuable effects, including securities,
and shall keep full and accurate
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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. The Treasurer shall disburse the funds of the Corporation as nay be
ordered by the Board, taking proper vouchers for such disbursements, and shall
render to the Chairman, President and directors, at the regular meetings of the
Board,or whenever they may require it, an account of all his transactions as
Treasurer and of the financial condition of the Corporation, and shall perform
all other duties incident to the office of Treasurer and such other duties as
from time to time may be assigned to him by the Board, the Chairman or the
President.
ARTICLE V
CONTRACTS, CHECKS, DRAFTS, BANK ACCOUNTS, ETC.
SECTION 1. EXECUTION OF DOCUMENTS. The Board shall designate the
officers, employees and agents of the Corporation who shall have the power to
execute and deliver deeds, contracts, mortgages, bonds, debentures, checks,
drafts and other orders for the payment of money and other documents for and in
the name of the Corporation, and may authorize such officers, employees and
agents to delegate such power (including authority to redelegate) by written
instrument to other officers, employees or agents of the Corporation; and,
unless so designated or expressly authorized by these By-laws, no officer,
employee or agent shall
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have any power or authority to bind the Corporation by any contract or
engagement, to pledge its credit or to render it liable pecuniarily for any
purpose or to any amount.
SECTION 2. DEPOSITS. All funds of the Corporation not otherwise
employed shall be deposited from time to time to the credit of the Corporation
or otherwise as the Board or Treasurer,
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or any other officer of the Corporation to whom power in this respect shall have
been given by the Board, shall select.
SECTION 3. PROXIES IN RESPECT OF STOCK OR OTHER SECURITIES OF OTHER
CORPORATIONS. The Board shall designate the officers of the Corporation who
shall have authority from time to time to appoint an agent or agents of the
Corporation to exercise in the name and on behalf of the Corporation the powers
and rights which the Corporation nay have as the holder of stock or other
securities in any other corporation, and to vote or consent in respect of such
stock or securities. Such designated officers' may instruct the person or
persons so appointed as to the manner of exercising such powers and rights, and
such designated officers may execute or cause to be executed in the name and on
behalf of the Corporation and under its corporate seal or otherwise, such
written proxies, powers of attorney or other instruments as they nay deem
necessary or proper in order that the corporation may exercise its said powers
and rights.
ARTICLE VI
SHARES AND THEIR TRANSFER; FIXING RECORD DATE
SECTION 1. CERTIFICATES FOR SHARES. Every owner of stock of the
Corporation shall be entitled to have a certificate certifying the number and
class of shares owned by him in the Corporation, which shall be in such form
as shall be prescribed by the Board. Certificates shall be numbered and
issued in consecutive order and shall be signed by, or in the name of, the
Corporation by the Chairman, the President or any Vice President
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and by the Treasurer (or an Assistant Treasurer, if appointed) or the Secretary
(or an Assistant Secretary, if appointed). In case any officer or officers who
shall have signed any such certificate or certificates shall cease to be such
officer or officers of the Corporation, whether because of death, resignation or
otherwise, before such certificate or certificates shall have been delivered by
the Corporation, such certificate or certificates may nevertheless be adopted by
the Corporation and be issued and delivered as though the person or persons who
assigned such certificate had not ceased to be such officer or officers of the
Corporation.
SECTION 2. RECORD. A record in one or more counterparts shall be
kept of the name of the person, firm or corporation owning the shares
represented by each certificate for stock of the Corporation issued, the number
of shares represented by each such certificate, the date thereof and, in the
case of cancellation, the date of cancellation. Except as otherwise expressly
required by law, the person in whose name shares of stock stand on the stock
record of the Corporation shall be deemed the owner thereof for all purposes as
regards the Corporation.
SECTION 3. TRANSFER AND REGISTRATION OF STOCK.
(a) The transfer of stock and certificates of stock which
represent the stock of the Corporation shall be governed by Article 8 of
Subtitle 1 of Title 6 of the Delaware Code (the Uniform Commercial Code), as
amended from time to time.
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(b) Registration of transfers of shares of the Corporation shall
be made only on the books of the Corporation upon request of the registered
holder thereof, or of his attorney thereunto authorized by power of attorney
duly executed and filed with the Secretary of the Corporation, and upon the
surrender of the certificate or certificates for such shares properly endorsed
or accompanied by a stock power duly executed.
SECTION 4. ADDRESSES OF STOCKHOLDERS. Each stockholder shall
designate to the Secretary an address at which notices of meetings and all other
corporate notices may be served or mailed to him, and, if any stockholder shall
fail to designate such address, corporate notices may be served upon him by mail
directed to him at his post-office address, if any, as the same appears on the
share record books of the Corporation or at his last known post-office address.
SECTION 5. LOST, DESTROYED AND MUTILATED CERTIFICATES. The holder
of any shares of the Corporation shall immediately notify the Corporation of
any loss, destruction or mutilation of the certificate therefor, and the
Board may, in its discretion, cause to be issued to him a new certificate or
certificates for shares, upon the surrender of the mutilated certificates or,
in the case of loss or destruction of the certificate, upon satisfactory
proof of such loss or destruction, and the Board may, in its discretion,
require the owner of the lost or destroyed certificate or his legal
representative to give the Corporation a bond in such sum and with such
surety or sureties as it may direct to indemnify the Corporation against any
claim that nay be made against it on account of the alleged loss or
destruction of any such certificate.
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SECTION 6. REGULATIONS. The Board may make such rules and
regulations as it may deem expedient, not inconsistent with these By-laws,
concerning the issue, transfer and registration of certificates for stock of the
Corporation.
SECTION 7. FIXING DATE FOR DETERMINATION OF STOCKHOLDERS OF RECORD.
(a) 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, the Board may fix a record date, which record date shall
not precede the date upon which the resolution fixing the record date is adopted
by the Board, and which record date shall be not more than sixty nor less than
ten days before the date of such meeting. If no record date is fixed by the
Board, 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 next preceding the day on which the meeting is
held. 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 may fix a new record date for the adjourned
meeting.
(b) In order that the corporation may determine the stockholders
entitled to consent to corporate action in writ-
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ing without a meeting, the Board may fix a record date, which record date shall
not precede the date upon which the resolution fixing the record date is adopted
by the Board, and which date shall be not more than ten days after the date upon
which the resolution fixing the record date is adopted by the Board. If no
record date has been fixed by the Board, the record date for determining
stockholders entitled to consent to corporate action in writing without a
meeting, when no prior action by the Board is required by the Delaware Statute,
shall be the first date on which a signed written consent setting forth the
action taken or proposed to be taken is delivered to the Corporation by delivery
to its registered office in this State, its principal place of business, or an
officer or agent of the Corporation having custody of the book in which
proceedings of meetings of stockholders are recorded. Delivery made to the
Corporation's registered office shall be by hand or by certified or registered
mail, return receipt requested. If no record date has been fixed by the Board
and prior action by the Board is required by the Delaware Statute, the record
date for determining stockholders entitled to consent to corporate action in
writing without a meeting shall be at the close of business on the day on which
the Board adopts the resolution taking such prior action.
(c) In order that the Corporation may determine the stockholders
entitled to receive payment of any dividend or other distribution or allotment
of any rights or the stockholders
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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 may fix a
record date, which record date shall not precede the date upon which the
resolution fixing the record date is adopted, and which record date shall be not
more than sixty days prior to such action. If no record date is fixed, the
record date for determining stockholders for any such purpose shall be at the
close of business on the day on which the Board adopts the resolution relating
thereto.
ARTICLE VII
SEAL
The Board may provide a corporate seal, which shall be in the form of
a circle and shall bear the full name of the Corporation and the words and
figures "Corporate Seal - 1988 Delaware."
ARTICLE VIII
FISCAL YEAR
The fiscal year of the Corporation shall be determined by the Board.
ARTICLE IX
INDEMNIFICATION AND INSURANCE
SECTION 1. INDEMNIFICATION.
(a) As provided in the Certificate, to the fullest extent
permitted by the Delaware Statute as the same exists or may hereafter be
amended, a director of this Corporation shall not be liable to the
Corporation or its stockholders for breach of fiduciary duty as a director.
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(b) Without limitation of any right conferred by paragraph (a)
of this Section 1, any person made, or threatened to be made, a party to any
threatened, pending or completed action, suit or proceeding, whether civil,
criminal, administrative or investigative, by reason of the fact that he, his
testator or intestate is or was a director, officer, employee or agent of the
corporation, or is or was acting at the request of the Corporation as a
director, officer, employee or agent of another corporation, partnership,
joint venture, trust or other enterprise, including, without limitation, as a
fiduciary of, or otherwise rendering services to, any employee benefit plan
of or relating to the Corporation, shall be indemnified by the Corporation
against expenses (including attorneys' fees), judgments, fines, excise taxes
and amounts paid in settlement actually and reasonably incurred by him in
connection with such action, suit or proceeding, or in connection with any
appeal therein; provided, that such person acted in good faith and in a
manner he reasonably believed to be in, or not opposed to, the best interests
of the Corporation, and with respect to a criminal action or proceeding, had
no reasonable cause to believe his conduct was unlawful; except that no
indemnification shall be made in the case of an action, suit or proceeding by
or in the right of the Corporation in relation to matters as to which it
shall be adjudged in such action, suit or proceeding that such director,
officer, employee or agent is liable to the Corporation, unless a court
having jurisdiction shall determine that, despite such
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adjudication, such person is fairly and reasonably entitled to indemnification.
(c) The foregoing rights of indemnification shall not be deemed
exclusive of any other rights to which any director, officer, employee or agent
may be entitled or of any power of the Corporation apart from the provisions of
this Section 1.
SECTION 2. 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 any person who is or was serving at the request of
the Corporation as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise, to the full
extent and in the manner permitted by the applicable laws of the United States
and the State of Delaware from time to time in effect, whether or not the
Corporation would have the power to indemnify such person under Section 1 of
this Article IX.
ARTICLE X
AMENDMENT
Any by-law (including these By-laws) may be adopted, amended or
repealed by the vote of the holders of a majority of the shares then entitled to
vote or by the stockholders' written consent pursuant to Section 10 of Article
II, or by the vote of the Board or by the directors' written consent pursuant to
Section 6 of Article III.
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Exhibit 3.7
SS1-S
CERTIFICATE OF INCORPORATION OF
B & G ACQUISITION CORP.
-----------------------
FIRST. The name of the corporation is B & G Acquisition Corp.
SECOND. The address of its registered office in the State of Delaware
is Corporation Trust Center, 1209 Orange Street, in the City of Wilmington,
County of New Castle. The name of its 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 Delaware.
FOURTH. The total number of shares of all classes of stock which the
corporation shall have authority to issue is 15,000 shares which shall be
divided into two classes as follows: 5,000 shares of Preferred Stock without
par value (Preferred Stock) and 10,000 shares of Common Stock without par value.
The designations, voting powers, preferences and relative, participating,
optional or other special rights, and qualifications, limitations or
restrictions of the above classes of stock and other general provisions relating
thereto shall be as follows:
<PAGE>
PART 1
Preferred Stock
1. Shares of Preferred Stock may be issued in one or more series at
such time or times as the Board of Directors may determine. All shares of any
one series shall be of equal rank and identical in all respects except the dates
from which dividends accrue or accumulate with respect thereto may vary.
2. The Board of Directors is expressly authorized at any time, and
from time to time, to provide for the issuance of shares of Preferred Stock in
one or more series, with such voting powers, full or limited, or without voting
powers and with such designations, preferences and relative, participating,
optional or other special rights, and qualifications, limitations or
restrictions thereof, as shall be stated and expressed in the resolution or
resolutions providing for the issue thereof adopted by the Board of Directors,
and as are not stated and expressed in this Certificate of Incorporation, or any
amendment thereof, including (but without limiting the generality of the
foregoing) the following:
(a) The distinctive designation and number of shares comprising
such series, which number may (except where otherwise provided by the Board' of
Directors in creating such series) be increased or decreased (but not below the
number of shares then outstanding) from time to time by action of the
Board of Directors.
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(b) The dividend rate or rates on the shares of such series and
the relation which such dividends shall bear to the dividends payable on any
other class or classes or of any other series of capital stock, the terms and
conditions upon which and the periods in respect of which dividends shall be
payable, whether and upon what conditions such dividends shall, be cumulative
and, if cumulative, the date or dates from which dividends shall accumulate.
(c) Whether the shares of such series shall be redeemable, the
limitations and restrictions with respect to such redemption, the time or times
when, the price or prices at which and the manner in which such shares shall be
redeemable, including the manner of selecting shares of such series for
redemption if less than all shares are to be redeemed.
(d) The rights to which the holders of shares of such series
shall be entitled, and the preferences, if any, over any other series (or of any
other series over such series), upon the voluntary or involuntary liquidation,
dissolution, distribution of assets or winding up of the corporation, which
rights may vary depending on whether such liquidation, dissolution, distribution
or winding up is voluntary or involuntary, and, if voluntary, may vary at
different dates.
(e) Whether the-shares of such series shall be subject to the
operation of a purchase, retirement or sinking fund, and, if so, whether and
upon what conditions such purchase, retirement or sinking fund shall be
cumulative or noncumulative, the extent to which and the manner in which such
fund shall be applied to the purchase or redemption of the
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<PAGE>
shares of such series for retirement or to other corporate purposes and the
terms and provisions relative to the operation thereof.
(f) Whether the shares of such series shall be convertible into,
or exchangeable for, at the option of either the holder or the corporation or
upon the happening of a specified event, shares of any other class or classes or
of any other series of the same or any other class or classes of stock of the
corporation, and, if so convertible or exchangeable, the price or prices or the
rate or rates of conversion or exchange and the method, if any, of adjusting the
same, and any other terms and conditions of such conversion or exchange.
(g) The voting powers, full, limited, if any, of the shares of
such series, and whether and under what conditions the shares of such series
(alone or together with the shares of one or more other series having similar
provisions) shall be entitled to vote separately as a single class, for the
election of one or more additional directors of the corporation in case of
dividend arrearages or other specified events, or upon other matters.
(h) Whether the issuance of any additional shares of
such.series, or of any shares of any other series, shall be subject to
restrictions as to issuance, or as to the powers, preferences or rights of any
such other series.
(i) Any other preferences, privileges and powers, and relative,
participating, optional or other special rights, and qualifications, limitations
or restrictions of such
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<PAGE>
series, as the Board of Directors may deem advisable and as shall not be
inconsistent with the provision, of this Certificate of Incorporation.
3. No dividends shall be paid or declared or set apart on any
particular series of Preferred Stock in respect of any period unless accumulated
dividends shall be or shall have been paid, or declared and set apart for
payment, PRO RATA on all shares of Preferred Stock at the time outstanding of
each other series which ranks equally as to dividends with such particular
series, so that the amount of dividends declared on such particular series shall
bear the same ratio to the amount declared on each such other series as the
dividend rate of such particular series shall bear to the dividend rate of such
other series.
4. Unless and except to the extent otherwise required by law or
provided in the resolution or resolutions of the Board of Directors creating any
series of Preferred Stock pursuant to this Part 1, holders of the Preferred
Stock shall have no voting power with respect to any matter whatsoever.
5. Shares of Preferred Stock redeemed, converted, exchanged,
purchased, retired or surrendered to the corporation, or which have been issued
and reacquired in any manner, shall, upon compliance with any applicable
provisions of the General Corporation Law of the State of Delaware, have the
status of authorized and unissued shares of Preferred Stock and may be reissued
by the Board of Directors as part of the series of which they were
originally a part or may be reclassified
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into and reissued as part of a new series or as a part of any other series, all
subject to the protective conditions or restrictions of any outstanding series
of Preferred Stock.
PART II
Common Stock
1. Except as provided by law or this Certificate of Incorporation,
each holder of Common Stock shall have one vote in respect of each share of
stock held by him of record on the books of the corporation on all matters voted
upon by the stockholder.
2. Subject to the preferential dividend rights, if any, applicable
to shares of Preferred Stock and subject to applicable requirements, if any,
with respect to the setting aside of sums for purchase, retirement or sinking
funds for Preferred Stock, the holders of Common Stock shall be entitled to
receive, to the extent permitted by law, such dividends as may be declared from
time to time by the Board of Directors.
3. In the event of the voluntary or involuntary liquidation,
dissolution, distribution of assets or winding up of the corporation, after
distribution in full of the preferential amounts, if any, to be distributed to
the holders of shares of Preferred Stock, holders of Common Stock shall be
entitled to receive all of the remaining assets of the corporation of whatever
kind available for distribution to stockholders ratably in proportion to the
number of shares of Common Stock held by them respectively. The Board of
Directors may distribute in kind to the holders of Common Stock such
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<PAGE>
remaining assets of the corporation or may sell, transfer or otherwise dispose
of all or any part of such remaining assets to any other corporation, trust or
other entity and receive payment therefor in cash, stock or obligations of such
other corporation, trust or entity, or any combination thereof, and may sell all
or any part of the consideration so received and distribute the proceeds of such
sale, together with any balance thereof in kind to holders of Common Stock. The
merger or consolidation of the corporation into or with any other corporation,
or the merger of any other corporation into it, or any purchase or redemption of
shares of stock of the corporation of any class, shall not be deemed to be a
dissolution, liquidation or winding up of the corporation for the purposes of
this paragraph.
4. Such numbers of shares of Common Stock as may from time to time
be required for such purpose shall be reserved for issuance (i) upon conversion
of any shares of Preferred Stock or any obligation of the corporation
convertible into shares of Common Stock which is at the time outstanding or
issuable upon exercise of any options or warrants at the time outstanding and
(ii) upon exercise of any options or warrants at the time outstanding to
purchase shares of Common Stock.
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<PAGE>
PART III
General Provisions
1. At any meeting of stockholders, the presence in person or by
proxy of the holders of record of outstanding shares of stock of the corporation
entitled to vote a majority of the votes entitled to be voted at such meeting
shall constitute a quorum for all purposes, except as otherwise provided by this
Certificate of Incorporation or required by applicable law.
2. Subject to the protective conditions or restrictions of any
outstanding series of Preferred stock, any amendment to this Certificate of
Incorporation which shall increase or decrease the authorized capital stock or
any class or classes may be adopted by the affirmative vote of the holders of a
majority of the outstanding shares of the voting stock of the corporation.
3. No holder of stock of any class of the corporation shall be
entitled as a matter of right to purchase or subscribe for any part of any
unissued stock of any class, or of any additional stock of any class of capital
stock of the corporation, or of any bonds, certificates of indebtedness,
debentures, or other securities convertible into stock of the corporation, now
or hereafter authorized, but any such stock or other securities convertible into
stock may be issued and disposed of pursuant to resolution by the Board of
Directors to such persons, firms, corporations or associations and upon such
terms and for such consideration as the Board of Directors in
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the exercise of its discretion may determine and as may be permitted by law
without action by the stockholders. The Board of Directors may provide for
payment therefor to be received by the corporation in cash, personal property,
real property (or leases thereof) or services. Any and all shares of stock so
issued for which consideration so fixed has been paid or delivered, shall be
deemed full paid and not liable to any further call or assessment.
4. In all elections for directors every holder of stock of any class
of the corporation entitled to vote shall have the right to vote, to the
extent.of the voting power of the class of stock held, whether full or limited,
for the number of shares owned by him, for as many persons as there are
directors to be elected, or to cumulate said shares, and give one candidate as
many votes as the number of directors to be elected multiplied by the number of
his shares and further multiplied by the extent of the voting power per share of
the shares held shall be equal, or.to distribute them on the same principle
among as many candidates as he shall think, fit.
FIFTH. (a) The name and mailing address of the incorporator is:
Steven H. Shapiro
19 South LaSalle Street
Chicago, Illinois 60603
(b) The name and mailing address of the person, who is to serve
as a director until. the first annual meeting of the stockholders or until a
successor is elected and qualified, is:
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<PAGE>
Denis A. Mola
540 Frontage Rd.
Northbrook, Illinois 60062
SIXTH. The corporation is to have perpetual existence.
SEVENTH. In furtherance and not in limitation of the powers conferred
by statute, the Board of Directors is expressly authorized to make, alter or
repeal the by-laws of the corporation.
EIGHTH. Elections of directors need not be by written ballot unless
the by-laws of the corporation shall so provide.
NINTH. The corporation shall indemnify to the full extent authorized
or permitted by the General Corporation Law of the State of Delaware any person
made, or threatened to be made, a party to any action, suit or proceeding,
whether civil, criminal, administrative or investigative, by reason of the fact
that he is or was a director or officer of the corporation or serves or served
at the request of the corporation as a director or officer of any other
enterprise. The corporation may, but shall not be required to, indemnify to the
full extent authorized or permitted by the General Corporation Law of the State
of Delaware any person made, or threatened to be made, a party to any action,
suit or proceeding, by reason of the fact that he is or was an employee or agent
of the corporation or serves or served at the request of the corporation as an
employee or agent of any other enterprise.
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TENTH. 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 statute, and all rights conferred upon
stockholders and directors are granted subject to this reservation.
I, THE UNDERSIGNED, being the incorporator herein-before named, for
the purpose of forming a corporation pursuant to the General Corporation Law of
the State of Delaware, do make this certificate, hereby declaring and certifying
that is my act and deed and the facts herein stated are true, and accordingly
have hereunto set my hand this 24th day of September, 1984.
/s/
-------------------------------
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B & G ACQUISITION CORP.
CERTIFICATE OF AMENDMENT
TO
CERTIFICATE OF INCORPORATION
B & G Acquisition Corp., 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 the corporation duly adopted by
unanimous written consent a resolution proposing the following amendment to the
Certificate of Incorporation of the corporation:
RESOLVED, that the Certificate of Incorporation of B &
G Acquisition Corp. be amended by changing Article First
thereof to read as follows:
"FIRST. The name of the corporation is Bloch &
Guggenheimer, Inc."
SECOND: That, in lieu of a meeting and vote of stockholders, the
stockholders have given unanimous written consent to said amendment in
accordance with the provisions of section 228 of the General Corporation Law of
the State of Delaware.
THIRD: That the aforesaid amendment was duly adopted in accordance
with the applicable provisions of sections
242 and 228 of the General Corporation Law of the State of
Delaware on January 10, 1985.
<PAGE>
IN WITNESS WHEREOF, B & G Acquisition Corp. has caused this
certificate to be signed by Denis A. Mola, its President, and attested by
Frederick A. Bragiel, its Assistant Secretary, this 10 day of January, 1985.
/s/
-------------------------------
President
Attest:
/s/
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Asst. Secretary
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Exhibit 3.8
BY-LAWS OF
B&G ACQUISITION CORP.
(Now known as "Bloch & Guggenheimer, Inc.")
1. OFFICES.
1.1 REGISTERED OFFICE. The registered office of the corporation in
the State of Delaware is the Corporation Trust Center, 1209 Orange Street, in
the City of Wilmington, County of New Castle, and the registered agent in charge
thereof shall be the Corporation Trust Company.
1.2 OTHER OFFICES. The corporation may also have offices at such
other places, both within and without the State of Delaware, as the board of
directors may from time to time determine or the business of the corporation may
require.
2. MEETINGS OF STOCKHOLDERS.
2.1 PLACE OF MEETINGS. All meetings of the stockholders shall be
held in the offices of Reuben & Proctor, 19 South LaSalle Street, Chicago,
Illinois, or at such other place, within or without the State of Delaware, as
shall be designated from time to time by the board of directors and stated in
the notice of the meeting or in a duly executed waiver of notice thereof.
2.2 ANNUAL MEETINGS. Annual meetings of stockholders, commencing
with the year 1985, shall be held on the third Monday
<PAGE>
in April of each year, at 11:30 a.m., for the purpose of electing directors and
for transacting such other business as may properly be brought before the
meeting.
2.3 SPECIAL MEETINGS. Special meetings of the stockholders, for any
purpose or purposes, unless otherwise prescribed by statute or by the
certificate of incorporation, may be called by the board of directors or by the
president.
2.4 NOTICE OF MEETINGS. Written notice of the annual meeting of
stockholders, stating the place, date and hour of the meeting, shall be given to
each stockholder entitled to vote at such meeting not less than ten nor more
than sixty days before the date of the meeting. Written notice of a special
meeting of stockholders, stating the place, date and hour of the meeting and the
purposes for which the meeting is called, shall be given to each stockholder
entitled to vote at such meeting not less than ten nor more than sixty days
before the date of the meeting.
2.5 BUSINESS AT SPECIAL MEETINGS. Business transacted at any special
meeting of stockholders shall be limited to the purposes stated in the notice of
such meeting.
2.6 LIST OF STOCKHOLDERS. 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,
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arranged in alphabetical order and 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. The stock
ledger shall be the only evidence as to who are the stockholders entitled to
examine the stock ledger, the list required by this section, or the books of the
corporation, or to vote in person or by proxy at any meeting of stockholders.
2.7 QUORUM AT MEETINGS. Except as otherwise provided by statute or
by the certificate of incorporation, a majority of the stock of the corporation
issued and outstanding 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. If, however, such quorum shall
not be present or represented at any such meeting of the stockholders, the
stockholders entitled to vote thereat, present in person or
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represented by proxy, shall have power to adjourn the meeting from time to time
to another time and place, without notice other than announcement at the meeting
of such other time and place. At the adjourned meeting, if a quorum shall be
present or represented, any business may be transacted which might have been
transacted at the original meeting. 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.
2.8 VOTING AND PROXIES. Unless otherwise provided in the certificate
of incorporation, and subject to the provisions of Section 6.4 of these By-Laws,
each stockholder shall be entitled to one vote on each matter, in person or by
proxy, for each share of the corporation's capital stock having voting power
which is held by such stockholder. No proxy shall be voted or acted upon after
three years from its date, unless the proxy provides for a longer period. 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 proxy.
2.9 REQUIRED VOTE. When a quorum is present at any meeting of
stockholders, the vote (which need not be by ballot
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except in the case of election of directors) of a majority of the stock having
voting power, present in person or represented by proxy, shall be necessary for
the transaction of any business properly brought before such meeting, unless the
proposed action is one upon which, by express provision of statutes or of the
certificate of incorporation, a different vote is specified and required, in
which case such express provision shall govern and control the decision of such
question. Notwithstanding the foregoing, candidates for election as members of
the board of directors who receive the highest number of votes, up to the number
of directors to be chosen, shall stand elected, and an absolute majority of the
votes cast shall not be a prerequisite to the election of any candidate to the
board of directors.
2.10 ACTION WITHOUT A 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, is 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
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corporation action without a meeting by less than unanimous written consent
shall be given to those stockholders who shall not have consented in writing.
3. DIRECTORS.
3.1 POWERS. The business and affairs of the corporation shall be
managed by or under the direction of the board of directors, which may exercise
all such powers of the corporation and do 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 stockholders.
3.2 NUMBER. The number of directors which shall constitute the whole
board shall be one. The directors shall be elected at the annual meeting of the
stockholders, except as provided in Section 3.3 hereof, and shall hold office
until their successors are elected and qualified or until their earlier
resignation or removal. Directors need not be stockholders.
3.3 VACANCIES. Vacancies 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 a
sole remaining director, and each director so chosen shall hold office until the
next annual election of directors and until his
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<PAGE>
successor is elected and qualified, or until his earlier resignation or removal.
If there are no directors in office, then an election of directors may be held
in the manner provided by statute. If, at any time of filling any vacancy or any
newly created directorship, the directors then in office shall constitute less
than a majority of the whole board (as constituted immediately prior to any such
increase), the Court of Chancery of the State of Delaware may, upon application
of any stockholder or stockholders holding at least ten percent (10%) of the
total number of the then outstanding shares having the right to vote for such
directors, summarily order an election to be held to fill any such vacancies or
newly created directorships, or to replace the directors chosen by the directors
then in office, in accordance with the General Corporation Law of the State of
Delaware. In the event that one or more directors resign(s) from the board,
effective at a future date, a majority of the directors then in office,
including those who have so resigned, shall have power to fill such vacancy or
vacancies, the vote thereon to take effect when such resignation or resignations
shall become effective, and each director so chosen shall hold office until the
next annual election and until his successor is elected and qualified or until
his earlier resignation or removal.
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<PAGE>
3.4 PLACE OF MEETINGS. The board of directors of the corporation may
hold meetings, both regular and special, either within or without the State of
Delaware.
3.5 FIRST MEETING OF EACH BOARD. The first meeting of each newly
elected board of directors shall 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, or as shall be specified in a written waiver of notice
signed by all of the directors.
3.6 REGULAR MEETINGS. Regular meetings of the board of directors may
be held without notice at such time and at such place as shall from time to time
be determined by the board of directors.
3.7 SPECIAL MEETINGS. Special meetings of the board may be called by
the president on at least five (5) business days' notice to each director,
either personally or by telephone, by mail or by telegram; PROVIDED than in the
case of special meetings conducted by conference telephone or other similar
communications devices, the corporation need only give actual notice to each
director prior to such meetings.
3.8 QUORUM AT MEETINGS. At all meetings of the board, a majority of
the total number of directors then in office shall constitute a quorum for the
transaction of business. The vote of
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a majority of the directors present at any meeting at which there is a quorum
shall be the act of the board of directors, expect as may be otherwise
specifically provided by statute or by the certificate of incorporation. If a
quorum shall not be present at any meeting of the board of directors, the
directors present thereat may adjourn the meeting to another time and place,
without notice other than the announcement at the meeting of such other time and
place.
3.9 TELEPHONE MEETINGS. Members of the board of directors or any
committee designated by the board may participate in a meeting of such board or
committee 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 in a meeting pursuant to this section shall constitute
presence in person at such meeting.
3.10 ACTION WITHOUT MEETING. 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 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 of directors or committee.
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<PAGE>
3.11 COMMITTEES OF DIRECTORS. The board of directors may, by
resolution passed by a majority of the whole board, 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
of any committee, who may replace any absent or disqualified member at any
meeting of the committee. If a member of a committee shall be absent from any
meeting, or disqualified from voting thereat, the remaining member or members
present and not disqualified from voting, whether or not he or they constitute a
quorum, may, be unanimous vote, appoint another member of the board of directors
to act at the meeting in the place of such absent or disqualified member. Any
such committee, to the extent provided in the resolution of the board of
directors, shall have and may exercise all the powers and authority 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; but no such committee shall have such power or authority in
reference to amending the certificate of incorporation, adopting an agreement of
merger of consolidation, recommending to the stockholders the sale, lease or
exchange of all or substantially all of the corporation's property and assets,
recommending to the stockholders a
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<PAGE>
dissolution of the corporation or a revocation of a dissolution, or amending the
By-Laws of the corporation; and, unless otherwise expressly provided in the
resolution, no such committee shall have the power or authority to declare a
dividend, to authorize the issuance of stock or to adopt a certificate of
ownership and merger pursuant to Section 253 of the General Corporation Law of
the State of Delaware. Such committee or committees shall have such name or
names as may be determined from time to time by resolution adopted by the board
of directors. Each committee shall keep regular minutes of its meetings and
report the same to the board of directors, when required.
3.12 COMPENSATION OF DIRECTORS. Unless 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 paid like compensation for
attending committee meetings.
4. NOTICES OF MEETINGS.
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<PAGE>
4.1 NOTICE PROCEDURE. Whenever, whether under the provisions of any
statute or of the certificate of incorporation or of these By-Laws, notice is
required to be given to any director or stockholder, such requirement shall not
be construed to require the giving of personal notice. 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 first class postage
thereon prepaid, and such notice shall be deemed to be given at the time when
the same is deposited in the United States mail. Notice to directors may also
be given by telegram or telephone.
4.2 WAIVERS OF NOTICE. Whenever the giving of any notice is required
by statute, 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 event as to which such notice is required, shall be deemed
equivalent to notice. Attendance of a person at a meeting shall constitute a
waiver of notice of such meeting, except when the person attends a meeting for
the express purpose of objecting, at the beginning of the meeting, 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 stockholders,
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directors of members of a committee of directors need by specified in any
written waiver of notice, unless so required by the certificate of
incorporation, by statute or by these By-Laws.
5. OFFICERS.
5.1 POSITIONS. The officers of the corporation shall be president, a
secretary and a treasurer, and such other officers as the board of directors may
appoint, including a chairman of the board, and one or more vice presidents,
assistant secretaries and assistant treasurers, who shall exercise such powers
and perform such duties as shall be determined from time to time by the board.
Any number of officers may be held by the same person, unless the certificate of
incorporation provides otherwise.
5.2 APPOINTMENT. The officers of the corporation shall be chosen by
the board of directors at its first meeting after each annual meeting of
stockholders.
5.3 COMPENSATION. The compensation of all officers and agents of the
corporation shall be fixed by the board of directors.
5.4 TERM OF OFFICE. The officers of the corporation shall hold
office until their successors are chosen and qualify or until their earlier
resignation or removal. Any officer may resign at any time upon written notice
to the corporation. Any
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officer elected or appointed by the board of directors may be removed at any
time, with or without cause, 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.
5.5 FIDELITY BONDS. The corporation may secure the fidelity of any
or all of its officers or agents by bond or otherwise.
5.6 PRESIDENT. The president shall be the chief executive officer of
the corporation, shall be ex officio a member of all standing committees, shall
have general and active management of the business of the corporation, shall be
responsible for making sure that all orders and resolutions of the board of
directors are carried into effect, and, unless otherwise provided by the board
of directors, shall preside at all meetings of the stockholders and the board of
directors. The president shall execute bonds, mortgages and other contracts
requiring a seal, under the seal of the corporation, except where required by
law to be otherwise signed and executed or where the signing and execution
thereof shall be expressly delegated by the board of directors to some other
officers or agent of the corporation.
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5.7 VICE PRESIDENT. In the absence of the president or in the event
of his inability 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, or in
the absence of any designation, then in the order of their election) shall
perform the duties of the president, and when so acting shall have all the
powers of, and be subject to all the restrictions upon, the president. The vice
presidents shall perform such other duties and have such other powers as the
board of directors may from time to time prescribe.
5.8 CHAIRMAN OF THE BOARD. If the directors shall appoint a chairman
of the board, he shall, when present, preside at all meetings of the board of
directors and shall perform such other duties and have such other powers as may
be vested in him by the board of directors.
5.9 SECRETARY. The secretary shall attend all meetings of the board
of directors and all meetings of the stockholders, and shall record all the
proceedings of the meetings of the stockholders 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 stockholders and special meetings of the board of
directors, and shall perform
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such other duties as may be prescribed by the board of directors or by the
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. The secretary may also attest all instruments signed by the chairman
of the board, the president or any vice president.
5.10 ASSISTANT SECRETARY. The assistant secretary, or if there be
more than one, the assistant secretaries in the order determined by the board of
directors (or if there shall have been no such determination, then in the order
of their election), shall, in the absence of the secretary or in the event of
his inability or refusal to act, 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.
5.11 TREASURER.
5.11.1 DUTIES. The treasurer shall have the custody of the
corporate funds and securities and shall keep full
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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. The treasurer shall disburse the funds of the
corporation as ordered by the board of directors, taking proper vouchers for
such disbursements, and shall render to the president, and to 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.
5.11.2 BOND. If required by the board of directors, the
treasurer 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 and belonging to the corporation.
5.12 ASSISTANT TREASURER. The assistant treasurer, or if there shall
be more than one, the assistant treasurers in the order determined by the board
of directors (of if there shall
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have been no such determination, then in the order of their election), shall, in
the absence of the treasurer or in the event of his inability or refusal to act,
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.
6. CAPITAL STOCK.
6.1 CERTIFICATES OF STOCK. Every holder of stock in the corporation
shall be entitled to have a certificate signed in the name of the corporation by
the chairman or vice chairman of the board of directors 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, certifying the number of shares
owned by him in the corporation. Any or all the signature son the certificate
may be facsimile. In case any officer, transfer agent or registrar whose
signature or facsimile signature appears on a certificate shall have ceased to
be such officer, transfer agent or registrar before such certificate is issued,
it may be issued by the corporation with the same effect as if he were such
officer, transfer agent or registrar at the date of issue.
6.2 LOST CERTIFICATES. Upon receipt of evidence reasonably
satisfactory to the corporation of the ownership and
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the loss, theft, destruction or mutilation of any certificate evidencing one or
more shares of any class of its capital stock, and in the case of any such loss,
theft or destruction, upon receipt of indemnity reasonably satisfactory to the
corporation, or, in the case of any such mutilation, upon surrender of such
certificate, the corporation will execute and deliver in lieu of such
certificate a new certificate of like kind, representing the number of shares of
such class represented by such lost, stolen, destroyed or mutilated certificate
and dated the date of such lost, stolen, destroyed or mutilated certificate.
6.3 REGISTRATION OF TRANSFER. The corporation will keep at its
principal office (or such other place as the corporation reasonably designates)
a register for the registration of shares of its capital stock. Upon the
surrender of any certificate representing shares of any class of its capital
stock at such place, the corporation will, at the request of registered holder
of such certificate, execute and deliver a new certificate or certificates in
exchange therefore representing in the aggregate the number of shares of such
class represented by the surrendered certificate and the corporation forthwith
will cancel such surrendered certificate. Each such new certificate will be
registered in such name and will represent such number of shares of such class
as is requested by
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the holder of the surrendered certificate and will be substantially identical in
form to the surrendered certificate. The issuance of new certificates will be
made without charge to the holders of the surrendered certificates for any
issuance tax in respect thereof or other cost incurred by the corporation in
connection with such issuance.
6.4 FIXING RECORD DATE. 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. 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.
6.5 REGISTERED STOCKHOLDERS. The corporation shall be entitled to
recognize the exclusive right of a person registered
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on its books as the owner of shares to receive dividends, to receive
notifications, to vote as such owner, and to exercise all the rights and powers
of an owner; and the corporation 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 the State of Delaware.
7. INDEMNIFICATION. To the fullest extent permitted by the General
Corporation Law of the State of Delaware, the corporation shall indemnify any
current or former director or officer of the corporation and may, at the
discretion of the board of directors, indemnify any current or former employee
or agent of the corporation against all expenses, judgments, fines and amounts
paid in settlement actually and reasonably incurred by him in connection with
any threatened, pending or completed action, suit or proceeding, brought by or
in the right of the corporation or otherwise, to which he was or is a party or
is threatened to be made a party by reason of his current or former position
with the corporation or by reason of the fact that he is or was serving, at the
request of the corporation, as a director, officer, partner, trustee, employee
or agent of another corporation, partnership, joint venture, trust or other
enterprise.
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8. GENERAL PROVISIONS.
8.1 DIVIDENDS. Dividends upon the capital stock of the corporation,
subject to the provisions of the certificate of incorporation and the laws of
the State of Delaware, may be declared by the board of directors at any regular
or special meeting. Subject to the provisions of the General Corporation Law of
the State of Delaware, such dividends may be paid either out of surplus, as
defined in the General Corporation Law of the State of Delaware, or in the event
that there shall be no such surplus, out of the net profits for the fiscal year
in which the dividend is declared and/or the preceding fiscal year. Dividends
may be paid in cash, in property, or in shares of the corporation's capital
stock, subject to the provisions of the certificate of incorporation.
8.2 RESERVES. The directors of the corporation may set apart, out of
the funds of the corporation available for dividends, a reserve or reserves for
any proper purpose and may abolish any such reserve.
8.3 CONTRACTS AND OTHER INSTRUMENTS. Contracts and other written
documents of the corporation shall be executed as the board of directors may
from time to time direct. When the execution of any contract or other written
instrument of the corporation has been authorized by the board of directors
without
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specification of the executing officers, any officer may execute the same in the
name and on behalf of the corporation and the secretary or any assistant
secretary may affix the corporate seal thereto.
8.4 LOANS; EXECUTION OF INSTRUMENTS. No loans shall be contracted
for by or on behalf of the corporation and no evidences of indebtedness shall be
issued in its name unless authorized by a resolution of the board of directors.
The funds of the corporation shall be deposited to its credit in such financial
institutions as the board of directors may, from time to time, direct, and
monies so deposited shall only be drawn out for the purposes of the corporation
as determined by the board. All checks and 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.
8.5 VOTING OF SECURITIES. All securities which the corporation owns
or is otherwise entitled to vote may be voted by the chairman of the board or,
in the event that there is no chairman, or in the event of his absence or
inability or refusal to act, by the president, except as and to the extent that
such voting authority shall been vested in a different officer or agent of the
corporation by the board of directors.
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8.6 FISCAL YEAR. The fiscal year of the corporation shall be fixed
by resolution of the board of directors.
8.7 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 otherwise reproduced.
9. AMENDMENTS.
These By-Laws may be altered, amended or repealed and new By-Laws may
be adopted by the board of directors. The foregoing By-Laws were adopted by the
board of directors on September 28, 1984.
/s/
------------------------------
Secretary
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Exhibit 3.9
CERTIFICATE OF INCORPORATION
of
RWBV Acquisition Corp.
1. NAME. The name of the corporation is RWBV ACQUISITION CORP. (the
"Corporation").
2. REGISTERED OFFICE AND REGISTERED AGENT. The registered office of
the Corporation in the State of Delaware is located at Corporation Trust Center,
1209 Orange Street, in the City of Wilmington, County of New Castle. The name
and address of the Corporation's registered agent is The Corporation Trust
Company, Corporation Trust Center, 1209 Orange Street, Wilmington, Delaware
19801, County of New Castle.
3. CORPORATE PURPOSES. 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.
4. AUTHORIZED CAPITAL. The total number of shares of all classes of
capital stock which the Corporation shall have authority to issue is 1,000
shares of common stock, par value $0.01 per share (the "Stock").
The powers, preferences and rights and the qualifications, limitations
and restrictions of the Stock are as set forth below:
(a) DIVIDENDS. When, as and if dividends are declared on the Stock,
whether payable in cash, in property or in securities of the Corporation, the
holders of shares of the Stock shall be entitled to share equally, share for
share, in such dividends.
(b) VOTING RIGHTS. Except as otherwise provided by law and this
Certificate of Incorporation, the holders of shares of the Stock shall be
entitled to one vote per share on all matters to be voted on by the Stockholders
of the Corporation.
<PAGE>
(c) No holder of the Stock shall, except as provided herein, be
entitled as a matter of right to subscribe for or purchase, or have any
preemptive right with respect to, any part of any new or additional issue of
stock of any class whatsoever, or of securities convertible into any stock of
any class whatsoever, whether now or hereafter authorized and whether issued for
cash or other consideration or by way of dividend.
5. MANAGEMENT OF BUSINESS. 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:
5.1 BY-LAWS. The original By-Laws of the Corporation shall be
adopted by the sole incorporator. In furtherance and not in limitation of the
powers conferred by statute, the Board of Directors is expressly authorized to
adopt, amend or repeal the By-Laws of the Corporation.
5.2 NUMBER AND ELECTION OF DIRECTORS. The number of directors from
time to time shall be fixed by, or in the manner provided in, the By-Laws of the
Corporation. The election of directors need not be by written ballot unless the
By-Laws of the Corporation so provide.
6. INDEMNIFICATION BY THE CORPORATION; LIABILITY OF DIRECTORS. The
directors of the Corporation shall be entitled to the benefits of all
limitations on the liability of directors generally that are now or hereafter
become available under the Corporation Law, and the Corporation shall indemnify
all persons whom it is permitted to indemnify to the full extent permitted by
Section 145 of the Corporation Law, as amended from time to time. Without
limiting the generality of the foregoing, no director of the Corporation shall
be liable to the Corporation 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 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 Corporation Law, or
(iv) for any transaction from which the director derived an improper personal
benefit. Any repeal or modification of this Section 6 shall be prospective
only, and shall not affect, to the detriment of any director, any limitation on
the personal liability of a
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director of the Corporation existing at the time of such repeal or modification.
7. INCORPORATOR. The name and mailing address of the sole
incorporator is as follows:
Name Mailing Address
---- ---------------
Anu Dubey Dechert Price & Rhoads
30 Rockefeller Plaza
New York, New York 10112
The undersigned, being the sole incorporator hereinbefore named, for
the purpose of forming a corporation pursuant to the General Corporation Law of
the State of Delaware, does make this Certificate, hereby declaring and
certifying that the facts herein stated are true, and accordingly has hereunto
set her hand this 8th day of May, 1997.
/s/ Anu Dubey
----------------------------------
Anu Dubey
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<PAGE>
Exhibit 3.10
BY-LAWS
OF
RWBV ACQUISITION CORP.
ARTICLE I
STOCKHOLDERS
SECTION 1. ANNUAL MEETINGS. The annual meeting of the stockholders
(the "Annual Meeting of Stockholders") of RWBV ACQUISITION CORP. (the
"Corporation") for the purpose of electing directors and for the transaction of
such other business as may be brought before the meeting shall be held, in each
year on such day, at such time and such place within or without the State of
Delaware as shall be fixed by the Board of Directors and stated in the notice of
the meeting.
SECTION 2. SPECIAL MEETINGS. Special meetings of the stockholders
may be called at any time by the Board of Directors, by the Chairman of the
Board, by the President or by any number of stockholders owning an aggregate of
not less than fifty percent (50%) of outstanding shares of capital stock
entitled to vote. Special meetings shall be held on such day, at such time and
such place either within or without the State of Delaware specified in the
notice thereof.
SECTION 3. NOTICE OF MEETINGS. Except as otherwise expressly
required by law or the Certificate of Incorporation of the Corporation,
written notice to stockholders stating the place and time of the meeting, and
in the case of a special meeting, the purpose or purposes of such meeting,
shall be given either by delivering a notice personally or mailing a notice
to each stockholder of record entitled to vote thereat at his address as it
appears on the records of the Corporation not less than ten (10) nor more
than sixty (60) days prior to the meeting. No business other than that
stated in the notice shall be transacted at any special meeting. Notice of
any meeting of stockholders shall not be required to be given to any
stockholder who shall attend such meeting in person or represented by proxy;
and if any stockholder shall, in person or by attorney thereunto duly
authorized, in writing or by telegraph, cable or wireless, waive notice of
any meeting, whether before or after such meeting be held, the notice thereof
need not be given to him. Notice of any adjourned meeting of stockholders
need not be given except as provided in Section 5 of this Article I.
<PAGE>
SECTION 4. QUORUM. Subject to the provisions of law or the
Certificate of Incorporation in respect of the vote that shall be required for a
specific action, the number of shares the holders of which shall be present or
represented by proxy at any meeting of stockholders in order to constitute a
quorum for the transaction of any business, shall be majority of all the shares
issued and outstanding and entitled to vote at such meeting.
SECTION 5. ADJOURNMENT. At any meeting of stockholders, whether or
not there shall be a quorum present, the holders of a majority of shares voting
at the meeting, whether present in person at the meeting or represented by proxy
at the meeting, may adjourn the meeting from time to time. Except as otherwise
provided by law, notice of such adjourned meeting need not be given otherwise
than by announcement of the time and place of such adjourned meeting at the
meeting at which the adjournment is taken. At any adjourned meeting at which a
quorum shall be present, any business may be transacted which might have been
transacted at the original meeting.
SECTION 6. ORGANIZATION. The Chairman of the Board, or in his
absence or nonelection, the President, or in the absence of both of the
foregoing officers, a Vice President, shall call meetings of the stockholders to
order, and shall act as Chairman of such meetings. In the absence of the
Chairman of the Board, the President, or a Vice President, the holders of a
majority in number of the shares of the capital stock of the Corporation present
in person or represented by proxy and entitled to vote at such meeting shall
elect a chairman, who may be the Secretary of the Corporation. The Secretary of
the Corporation shall act as secretary of all meetings of the stockholders, but
in the absence of the Secretary, the Chairman may appoint any person to act as
secretary of the meeting.
SECTION 7. VOTING. Each stockholder of record, as determined in
accordance with Section 4 of Article V hereof, shall, except as otherwise
provided by law or by the Certificate of Incorporation, at every meeting of the
stockholders be entitled to one vote in person or by proxy for each share of
capital stock entitled to vote held by such stockholder, but no proxy shall be
voted on after three years from its date, unless said proxy provides for a
longer period. Unless otherwise provided by law or the Certificate of
Incorporation, no vote upon any matter before the meeting, including the
election of directors need be by ballot, PROVIDED, HOWEVER, upon the demand of
any stockholder, the vote for directors and the vote upon any matter before the
meeting, shall be by ballot. Except as
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otherwise provided by law, by the Certificate of Incorporation or by these
By-laws, all elections for directors shall be decided by plurality vote; and all
other matters shall be decided by a majority of the votes cast thereon.
SECTION 8. STOCKHOLDERS LIST. A complete list of the stockholders
entitled to vote at any meeting of the stockholders, arranged in alphabetical
order, with the address of each, and the number of shares held by each, 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 (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 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 9. ADDRESSES OF STOCKHOLDERS. Each stockholder shall
designate to the Secretary of the Corporation an address to which noticed of
meetings and all other corporate notices may be served upon or mailed to him,
and if any stockholder shall fail to designate such address, corporate notices
may be served upon him by mail directed to him at his last known post office
address.
SECTION 10. JUDGES OF VOTING. The Board of Directors may at any time
appoint one or more persons to serve as Judges of Voting at the next succeeding
Annual Meeting of Stockholders or at any other meeting or meetings and the Board
of Directors may at any time fill any vacancy in the office of Judges of Voting.
If the Board of Directors fails to appoint Judges of Voting, or if any Judges of
Voting appointed be absent or refuse to act, or if his office becomes vacant and
be not filled by the Board of Directors, the Chairman of any meeting of the
stockholders may appoint one or more temporary Judges of Voting for such
meeting. All proxies shall be filed with the Judges of Voting of the meeting
before being voted upon.
SECTION 11. CONSENT OF STOCKHOLDERS IN LIEU OF MEETING. Except as
otherwise provided by law, by the Certificate of Incorporation or by these
By-laws, any action required to be taken, or which may be taken, at any meeting
of 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 shares of outstanding stock
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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 of stock entitled
to vote thereon were present and voted; provided that prompt notice of the
taking of corporate action without a meeting by less than unanimous written
consent shall be given to those stockholders who have not consented in writing.
ARTICLE II
BOARD OF DIRECTORS
SECTION 1. GENERAL POWERS. The property, affairs and business of the
Corporation shall be managed by or under the direction of the Board of
Directors. The Board of Directors may exercise all the powers of the
Corporation and do all lawful acts and things which are not reserved to the
stockholders by law or by the Certificate of Incorporation.
SECTION 2. NUMBER, QUALIFICATION, TERM OF OFFICE AND ELECTION. The
number of Directors shall be such as the Board of Directors may from time to
time by resolution direct. Directors need not be stockholders. The initial
number of Directors shall be one (1), consisting of one class of Directors,
until such time as the Board of Directors may by resolution direct that the
Board of Directors be divided into three classes in accordance with this
Section 2. At such time as the Board of Directors by resolution directs, the
Board of Directors shall be divided into three classes, as nearly equal in
number as possible, with the term of office of the first class to expire at
the Annual Meeting of Stockholders next ensuing, the term of office of the
second class to expire at the Annual Meeting of Stockholders one year
thereafter, and the term of office of the third class to expire at the Annual
Meeting of Stockholders two years thereafter. At the time of the initial
classification, any vacancy on the Board of Directors caused by such increase
in the number of Directors shall be filed in accordance with Section 11 of
this Article II. At each annual election held after the initial
classification and election, the Directors chosen to succeed those whose
terms have expired shall be elected to hold office until the third succeeding
Annual Meeting of Stockholders after their election. If the number of
Directors is changed, any increase or decrease in Directors shall be
apportioned among the classes so as to maintain all classes as equal in
number as possible, and any additional Director elected to any class shall
hold office for a term which shall coincide with the terms of the other
Directors in such class. Each Director shall hold office for the term for
which he is appointed or elected and until his successor, if any, shall have
been elected and shall have qualified, or until his death or until he shall
have resigned or shall have been removed in the manner hereinafter provided.
Directors need not be elected by ballot, except upon demand of any
stockholder.
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SECTION 3. QUORUM AND MANNER OF ACTION. Except as otherwise provided
by statute or by these By-laws, a majority of the number of the Board of
Directors shall be required to constitute a quorum for the transaction of
business at any meeting, and 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. In the absence of a quorum, a majority of the directors present may
adjourn any meeting from time to time until a quorum be had. Notice of any
adjourned meeting need not be given if the time and place thereof are announced
at the meeting at which adjournment is taken. The directors shall act only as a
board and individual directors shall have no power as such.
SECTION 4. PLACE OF MEETING, ETC. The Board of Directors may hold
its meetings, have one or more offices, and keep the books and records of the
Corporation, at such place or places within or without the State of Delaware, as
the Board of Directors may from time to time determine or as shall be specified
or fixed in the respective notices or waivers of notice hereof.
SECTION 5. REGULAR MEETINGS. Commencing in 1997, a regular meeting
of the Board of Directors shall be held as soon as practicable after each Annual
Meeting of Stockholders, for the election of officers and the transaction of
other business, and other regular meetings of said Board of Directors shall be
held at such times and places as said Board shall direct. No notice shall be
required for any regular meeting of the Board of Directors but a copy of every
resolution fixing or changing the time or place of regular meetings shall be
mailed to every director at least five days before the first meeting held
pursuant to such resolution.
SECTION 6. SPECIAL MEETINGS; NOTICE AND WAIVER OF NOTICE. Special
meetings of the Board of Directors may be called by the Chairman of the Board,
the Secretary on the request of the Chairman of the Board, the President or any
two Directors. The Secretary or an Assistant Secretary shall give notice of the
time and place of each special meeting by mailing a written notice of the same
to each director at his last known post office address or usual place of
business at least two days before the meeting or by causing the same to be
delivered personally or to be transmitted by telegraph, cable, telephone or
orally at least 24 hours before the meeting to each Director. Neither the
business to be transacted at, nor the purpose of any special meeting of the
Board of Directors need be specified in any notice or written
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waiver of notice unless so required by law, the Certificate of Incorporation or
these By-laws. Notice of any meeting of the Board of Directors need not be
given to any Director if he shall sign a written waiver thereof either before or
after the time stated therein, or if he shall be present at the meeting and
participate in the business transacted thereat, except if a director attends for
the purpose of objecting, at the beginning of the meeting, to the transaction of
any business because the meeting is not lawfully called or convened. Any
meeting of the Board of Directors shall be a legal meeting without any notice
thereof having been given if all of the members shall be present thereat.
Unless limited by law, by the Certificate of Incorporation, by these By-laws, or
by the terms of the notice thereof, any and all business may be transacted at
any special meeting.
SECTION 7. ACTION BY CONSENT. 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 a written consent thereto is signed by all
members of the Board of Directors or of such committee, as the case may be, and
such written consent is filed with the minutes or proceedings of the Board of
Directors or committee.
SECTION 8. ORGANIZATION. At each meeting of the Board of Directors,
the Chairman of the Board, or, in his absence or nonelection, the President, or,
in the absence of both of the foregoing officers, a director chosen by a
majority of the Directors shall act as chairman. The Secretary, or in his
absence, an Assistant Secretary, or in the absence of both the Secretary and
Assistant Secretaries, any person appointed by the Chairman shall act as
secretary of the meeting.
SECTION 9. RESIGNATIONS. Any Director of the Corporation may resign
at any time by giving written notice to the Board of Directors or to the
President or to the Secretary of the Corporation. The resignation of any
Director shall take effect immediately unless a date certain specified therein
for it to take effect, in which event it shall be effective upon such date, and
the acceptance of such resignation shall not be necessary to make it effective,
irrespective of whether the resignation is tendered subject to such acceptance.
SECTION 10. REMOVAL OF DIRECTORS. Subject to the rights of any class
or series of stock having a preference over the Common Stock of the Corporation
to elect directors under specified circumstances, any Director may be removed
from office,
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with or without cause, at any time, by the affirmative vote of a majority in
interest of the holders of record of the stock having voting power at a special
meeting of the stockholders called for the purpose, and the vacancy in the Board
of Directors caused by any such removal may be filled by the stockholders at
such meeting or filled by the Board of Directors in the manner provided in
Section 11 of this Article II.
SECTION 11. VACANCIES. Any vacancy in the Board of Directors caused
by death, resignation, removal, disqualification, an increase in the number of
Directors, or any other cause may be filled by the affirmative vote of a
majority of the remaining Directors, even though less than a quorum, by a sole
remaining Director or by the stockholders of the Corporation at the next Annual
Meeting of Stockholders or any special meeting called for the purpose. Except
as otherwise provided by the Certificate of Incorporation, each Director so
elected shall hold office for the remainder of the full term of the class of
Directors in which the vacancy occurred or to which the new directorship was
apportioned pursuant to Section 2 of this Article II and until his successor, if
any, shall have been duly elected and shall have qualified, or until his death
or until he shall have resigned or shall have been removed in the manner herein
provided. No decrease in the number of Directors constituting the Board of
Directors shall shorten the term of any incumbent Director. In case all the
Directors shall die or resign or be removed or be disqualified, any stockholder
having voting powers may call a special meeting of the stockholders, upon notice
given as herein provided for meetings of the stockholders, at which Directors
may be elected for the unexpired term.
SECTION 12. COMPENSATION OF DIRECTORS. Directors, as such, shall
receive such sum for their services and expenses as may be directed by
resolution of the Board of Directors; provided that nothing herein contained
shall be construed to 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 their services and
expenses.
SECTION 13. COMMITTEES. By resolution or resolutions passed by a
majority of the whole Board of Directors at any meeting of the Board of
Directors, the Directors may designate one or more committees, including without
limitation executive, audit and compensation committees, each committee to
consist of two or more Directors. To the extent provided in said resolution
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or resolutions, unless otherwise provided by law, such committee or committees
shall have and may exercise all of the powers of the Board of Directors in the
management of the business and affairs of the Corporation, including without
limitation the power and authority to authorize the seal of the Corporation to
be affixed to all papers which may require it, except that no such committee
shall have any power or authority with respect to (i) amending the Certificate
of Incorporation of the Corporation or these By-laws, (ii) approving or
recommending to the stockholders of the Corporation any agreement or plan of
merger or consolidation, any sale, lease or exchange of all or substantially all
of the property and assets of the Corporation or the dissolution or liquidation
of the Corporation (or the abandonment or revocation thereof) or (iii) the
declaration of dividends and the authorization of the issuance of shares of
capital stock of the Corporation. The Board of Directors may designate one or
more Directors as alternate members of a committee who may replace an absent or
disqualified member at any meeting. 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. A committee may
make such rules for the conduct of its business and may appoint such committees
and assistants as it shall from time to time deem necessary for the transaction
of business of such committee. Regular meetings of a committee shall be held at
such times as such committee shall from time to time by resolution determine.
SECTION 14. PARTICIPATION IN MEETINGS. Members of the Board of
Directors or of any committee may participate in any meeting of the Board of
Directors or committee, as the case may be, by means of conference telephone or
similar communication equipment by means of which all persons participating in
the meeting can hear each other, and such participation shall constitute
presence in person at such meeting.
ARTICLE III
OFFICERS
SECTION 1. EXECUTIVE OFFICERS. The officers of the Corporation shall
be a President, a Treasurer, and a Secretary. In addition, the Board of
Directors may elect a Chairman of the Board and such other officers as may be
appointed in accordance
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with the provisions of Section 3 of this Article III. Any number of offices may
be held by the same person. Whenever any officer of the Corporation ceases to
be an employee of the Corporation and of all corporations which control or are
under common control with the Corporation, such officer shall thereupon also
cease to be an officer of the Corporation without any further action on his part
or on the part of the Board of Directors or the Chairman.
SECTION 2. ELECTION, TERM OF OFFICE AND QUALIFICATION. So far as is
practicable, the officers shall be elected annually by the Board of Directors at
their first meeting after each Annual Meeting of Stockholders of the
Corporation. Each officer, except such officers as may be appointed in
accordance with the provisions of Section 3 of this Article III, shall hold
office until his successor shall have been duly elected and shall have qualified
in his stead, or until his death or until he shall have resigned or shall have
become disqualified or shall have been removed in the manner hereinafter
provided. The Chairman of the Board shall be chosen from among the directors.
SECTION 3. SUBORDINATE OFFICERS. The Board of Directors or the
President may from time to time appoint such other officers, including one or
more Vice Presidents, one or more Assistant Treasurers and one or more Assistant
Secretaries, and such agents and employees of the Corporation as may be deemed
necessary or desirable. Such officers, agents and employees shall hold office
for such period and upon such terms and conditions, have such authority and
perform such duties as provided in these By-laws or as the Board of Directors or
the President may from time to time prescribe. The Board of Directors or the
President may from time to time authorize any officer to appoint and remove
agents and employees and to prescribe the powers and duties thereof.
SECTION 4. REMOVAL. Any officer may be removed, either with or
without cause, by the Board of Directors or, except in the case of any officer
elected by the Board of Directors, by any committee or superior officer upon
whom the power of removal may be conferred by the Board of Directors or by these
By-laws.
SECTION 5. RESIGNATIONS. Any officer may resign at any time by
giving written notice to the Board of Directors or to the President or to the
Secretary. Any such resignation shall take effect immediately unless a date
certain is specified therein for it to take effect, in which event it shall be
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effective upon such date, and the acceptance of such resignation shall not be
necessary to make it effective, irrespective of whether the resignation is
tendered subject to such acceptance.
SECTION 6. VACANCIES. A vacancy in any office because of death,
resignation, removal, disqualification or any other cause shall be filled for
the unexpired portion of the term in the manner prescribed in the By-laws for
the regular election or appointment to such office.
SECTION 7. THE CHAIRMAN OF THE BOARD. The Chairman of the Board, if
one be elected, shall preside, if present, at all meetings of the stockholders
and at all meetings of the Board of Directors and he shall perform such other
duties and have such other powers as may from time to time be designated and
assigned to him by the Board of Directors.
SECTION 8. THE PRESIDENT. The President shall have general direction
of the affairs of the Corporation and general supervision over its several
officers, subject, however, to the control of the Board of Directors. He shall
at each annual meeting and from time to time report to the stockholders and to
the Board of Directors all matters within his knowledge which the interest of
the Corporation may require to be brought to their notice; may sign with the
Treasurer or an Assistant Treasurer or the Secretary or an Assistant Secretary
any or all certificates of stock of the Corporation; in the absence of the
Chairman of the Board, shall preside at all meetings of the stockholders and at
all meetings of the Board of Directors; shall have the power to sign and execute
in the name of the Corporation all contracts, or other instruments authorized by
the Board of Directors, 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 or as are prescribed by these By-laws.
SECTION 9. THE VICE PRESIDENTS. Each Vice President shall have such
powers and shall perform such duties as may from time to time be assigned to him
by the Board of Directors or by the President; and shall have the power to sign
and execute in the name of the Corporation all contracts or other instruments
authorized by the Board of Directors, except where the Board of Directors or the
By-laws shall expressly delegate or permit some other officer to do so. A Vice
President may also sign with the Treasurer or an Assistant Treasurer or the
Secretary or an Assistant Secretary certificates of stock of the Corporation.
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SECTION 10. THE SECRETARY. The Secretary shall keep or cause to be
kept the minutes of the meetings of the stockholders, of the Board of Directors
and of any committee when so required; shall see that all notices are duly given
in accordance with the provisions of these By-laws and as required by law; shall
be custodian of the corporate records and of the seal of the Corporation and see
that the seal is affixed to all documents on which it is required, the execution
of which on behalf of the Corporation under its seal is duly authorized in
accordance with the provisions of the By-laws; shall keep or cause to be kept a
register of the post office address of each stockholder; may sign with the
President or Vice President certificates of stock of the Corporation; and, in
general, the Secretary shall 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 by the President.
SECTION 11. ASSISTANT SECRETARIES. At the request of the Secretary,
or in his absence or disability, an Assistant Secretary shall perform the duties
of the Secretary and, when so acting, shall have all the powers of, and be
subject to all the restrictions upon, the Secretary. An Assistant Secretary
shall perform such other duties as from time to time may be assigned to him by
the President, the Secretary or the Board of Directors.
SECTION 12. THE TREASURER. The Treasurer shall have charge and
custody of, and be responsible for, all funds and securities of the Corporation,
and deposit all such funds in the name of the Corporation in such banks, trust
companies or other depositaries as shall be selected in accordance with the
provisions of these By-laws; at all reasonable times exhibit his books of
account and records, and cause to be exhibited the books of account and records
of any corporation controlled by the Corporation, to any of the Directors of the
Corporation upon application during business hours at the office of the
Corporation, or such other corporation where such books and records are kept;
render a statement of the condition of the finances of the Corporation at all
regular meetings of the Board of Directors and a full financial report at the
Annual Meeting of Stockholders; if called upon to do so, receive and give
receipts for moneys due and payable to the Corporation from any source
whatsoever; may sign with the President or Vice President certificates of stock
of the Corporation; and, in general, perform all the duties incident to the
office of Treasurer and such other duties as from time to time may be assigned
to him by the Board of Directors or the President.
SECTION 13. ASSISTANT TREASURERS. At the request of
the Treasurer, or in his absence or disability, an Assistant Treasurer shall
perform the duties of the Treasurer, and, when so acting, shall have all the
powers of, and be subject to all the restrictions upon, the Treasurer. An
Assistant Treasurer shall perform such duties as from time to time may be
assigned to him by the President, the Treasurer or the Board of Directors.
SECTION 14. SALARIES. The salaries of the officers 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 is also a director of the
Corporation.
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ARTICLE IV
CONTRACTS, CHECKS, DRAFTS, BANK ACCOUNTS, ETC.
SECTION 1. CONTRACTS, ETC., HOW EXECUTED. The Board of Directors,
except as otherwise provided in these By-laws, may authorize any officer or
agent of the Corporation to enter into any contract or execute and deliver any
instrument in the name of and on behalf of the Corporation, and such authority
may be general or confined to specific instances; and, unless so authorized by
the Board of Directors or by such Committee or by these By-laws, no agent or
employee, other than an officer of the Corporation acting within the scope of
his authority, shall have any power or authority to bind the Corporation by any
contract or engagement or to pledge its credit or to render it liable for any
purpose or to any amount.
SECTION 2. CHECKS, DRAFTS, ETC. All checks, drafts or other orders
for the payment of money and all notes or other evidences of indebtedness issued
in the name of the Corporation shall be signed by such officer or officers,
employee or employees of the Corporation as shall from time to time be
determined by resolution of the Board of Directors.
SECTION 3. 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 depositaries as the Board of Directors may from time to time
designate, or as may be designated by any officer or officers of the Corporation
to whom such power may be delegated by the Board of Directors, and for the
purpose of such deposit, the President, or a Vice President, or the Treasurer or
an Assistant Treasurer, or the Secretary or an Assistant Treasurer, or the
Secretary or an Assistant Secretary may endorse, assign and deliver checks,
drafts and other orders for the payment of money which are payable to the order
of the Corporation.
SECTION 4. GENERAL AND SPECIAL BANK ACCOUNTS. The Board of Directors
may from time to time authorize the opening and keeping with such banks, trust
companies or other depositaries as it may designate or general and special bank
accounts, and may make such special rules and regulations with respect thereto,
not inconsistent with the provisions of these By-laws, as it may deem expedient.
SECTION 5. PROXIES. Except as otherwise provided in these By-laws or
in the Certificate of Incorporation of the
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Corporation, and unless otherwise provided by resolution of the Board of
Directors, the President may from time to time appoint an attorney or attorneys,
or agent or agents, of the Corporation, in the name of and on behalf of the
Corporation, to cast the votes which the Corporation may be entitled to cast as
a stockholder or otherwise of any other corporation any of whose stock or other
securities may be held by the Corporation at meetings of the holders of the
stock or other securities of such other corporation, or to consent in writing to
any action by such other corporation, and may instruct the person or persons so
appointed as to the manner of casting such votes or giving such consent, and may
execute or cause to be executed in the name of and on behalf of the Corporation
and under its corporate seal, or otherwise, all such written proxies or other
instruments as he may deem necessary or proper in the premises.
ARTICLE V
STOCK AND TRANSFER OF STOCK
SECTION 1. CERTIFICATES OF STOCK. Certificates for shares of the
capital stock of the Corporation shall be in such form, not inconsistent with
law, as shall be approved by the Board of Directors. They shall be numbered in
order of their issue, and shall be signed by 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 the seal of the Corporation shall be affixed
thereto. The signatures of any of such officers and the seal of the Corporation
upon such certificate may be facsimiles. In case any officer, transfer agent or
registrar who has signed or whose facsimile signature has been placed upon a
certificate shall have ceased to be such officer, transfer agent or registrar
before such certificate is issued, it may nevertheless be issued and delivered
by the Corporation with the same effect as if he were such officer, transfer
agent or registrar.
SECTION 2. TRANSFERS OF STOCK. Transfers of shares of the capital
stock of the Corporation shall be made only on the books of the Corporation by
the holder thereof, or by his attorney thereunto authorized by a power of
attorney duly executed and filed with the Secretary of the Corporation or with a
transfer agent of the Corporation, if any, and on surrender of the certificate
or certificates for such shares properly endorsed. A person in whose name
shares of stock stand on the books of the Corporation shall be deemed the owner
thereof as
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regards the Corporation and the Corporation shall not be bound to recognize any
equitable or other claim to, or interest in , such 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 the State of Delaware.
SECTION 3. LOST, DESTROYED AND MUTILATED CERTIFICATES. The holder of
any stock issued by the Corporation shall immediately notify the Corporation of
any loss, destruction or mutilation of the certificate therefor, or failure to
receive a certificate of stock issued by the Corporation, and the Board of
Directors or the Secretary of the Corporation may, in its or his discretion,
cause to be issued to such holder of stock a new certificate or certificates of
stock upon compliance with such rules, regulations and/or procedures as may have
been prescribed by the Board of Directors with respect to the issuance of new
certificates in lieu of such other certificate or certificates of stock.
SECTION 4. FIXING DATE FOR 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 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 (60) nor
less than ten (10) days before the date of such meeting, nor more than sixty
(60) days prior to any other action, and such stockholders and only such
stockholders as shall be entitled to such notice of, and to vote at, such
meeting and (except as provided in Section 4 of Article I hereof) any
adjournment thereof, or to express consent to any such corporate action, or to
receive payment of such dividend, or to receive allotment of rights, or to
exercise such rights, as the case may be, notwithstanding any transfer of any
stock on the books of the Corporation after any such record date fixed as
aforesaid.
ARTICLE VI
SEAL
The Board of Directors shall provide a suitable seal containing the
name of the Corporation, which seal shall be in the charge of the Secretary
and which may be used by causing it or a facsimile thereof to be impressed or
affixed or in any other manner reproduced. If and when so directed by the
Board of Directors, a duplicate of the seal may be kept and be used by any
officer of the Corporation designated by the Board.
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ARTICLE VII
MISCELLANEOUS PROVISIONS
SECTION 1. FISCAL YEAR. The fiscal year of the Corporation shall end
on such date in each year as shall be determined by resolution of the Board of
Directors of the Corporation.
SECTION 2. WAIVERS OF NOTICE. Whenever any notice whatever is
required to be given by law, or under the provisions of the Certificate of
Incorporation or of 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 3. QUALIFYING IN FOREIGN JURISDICTIONS. The Board of
Directors shall have the power at any time and from time to time to take or
cause to be taken any and all measures which they may deem necessary for
qualification to do business as a foreign corporation in any one or more foreign
jurisdictions and for withdrawal therefrom.
SECTION 4. INDEMNIFICATION. The Corporation shall, to the full
extent permitted by the General Corporation Law of Delaware and the Certificate
of Incorporation, in each case as amended from time to time, indemnify all
persons whom it has the power to indemnify pursuant thereto. Without limiting
the generality of the foregoing:
(a) 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 (other than an action by or in the right of
the Corporation) by reason of the fact that he 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 corporation, partnership, joint venture, trust or other enterprise,
against expenses (including attorneys' fees), judgments, fines and amounts
paid in settlement actually and reasonably incurred by him in connection
with such action, suit or proceeding if he acted in good faith and in a
manner he reasonably believed to be in or not opposed to the best interests
of the Corporation, and, with respect to any criminal action or proceeding,
had no reasonable cause to believe his conduct
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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 he reasonably
believed to be in or not opposed to the best interests of the Corporation
and, with respect to any criminal action or proceeding, had reasonable
cause to believe that his conduct was unlawful.
(b) 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 or suit by or in the right of the Corporation to procure a judgment
in its favor by reason of the fact that he 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
corporation, partnership, joint venture, trust or other enterprise against
expenses (including attorneys' fees) actually and reasonably incurred by
him in connection with the defense or settlement of such action or suit if
he acted in good faith and in a manner he reasonably believed to be in or
not opposed to the best interests of the Corporation and 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 his duty to the Corporation unless and
only to the extent that the Court of Chancery or the court in which such
action or suit was brought shall determine upon application that, despite
the adjudication of liability but in view of all the circumstances of the
case, such person is fairly and reasonably entitled to indemnity for such
expenses which the Court of Chancery or such other court shall deem proper.
(c) To the extent that a director, officer, employee or agent of the
Corporation has been successful on the merits or otherwise in defense of
any action, suit or proceeding referred to in paragraphs (a) and (b), or in
defense of any claim, issue or matter therein, he shall be indemnified
against expenses (including attorneys' fees) actually and reasonably
incurred by him in connection therewith.
(d) Any indemnification under paragraphs (a) and (b) (unless ordered
by a court) shall be made by the Corporation only as authorized in the
specific case upon a determination
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that indemnification of the director, officer, employee or agent is proper
in the circumstances because he has met the applicable standard of conduct
set forth in paragraphs (a) and (b). Such determination shall be made (1)
by the Board of Directors by a majority vote of a quorum consisting of
directors who were not parties to such action, suit or proceeding, or (2)
if such a quorum is not obtainable, or, even if obtainable a quorum of
disinterested directors so directs, by independent legal counsel in a
written opinion, or (3) by the stockholders.
(e) Expenses (including attorneys' fees) incurred in defending any
civil, criminal, administrative or investigative action, suit or proceeding
may be paid by the Corporation in advance of the final disposition of such
action, suit or proceeding as authorized by the Board of Directors in the
specific case upon receipt of an undertaking by or on the behalf of the
director, officer, employee or agent to repay such amount unless it shall
ultimately be determined that he is entitled to be indemnified by the
Corporation as authorized in this Section.
(f) The indemnification provided by this Section shall not have been
deemed exclusive of any other rights to which those seeking indemnification
may be entitled under any by-law, agreement, vote of stockholders or
disinterested directors or otherwise, both as to action in his official
capacity and as to action in another capacity while holding such office,
and shall continue as to a person who has ceased to be a director, officer,
employee or agent and shall inure to the benefit of the heirs, executors
and administrators of such a person.
(g) The Corporation shall have power to 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, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise against
any liability asserted against him and incurred by him in any such
capacity, or arising out of his status as such, whether or not the
Corporation would have the power to indemnify him against such liability
under the provisions of this Section.
(h) For the purposes of this Section, references to
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"the Corporation" include all constituent corporations absorbed in a
consolidation or merger as well as the resulting or surviving corporation
so that any person who is or was a director, officer, employee or agent of
such a constituent corporation or is or was serving at the request of such
constituent corporation as a director, officer, employee or agent of
another corporation, partnership, joint venture, trust or other enterprise
shall stand in the same position under the provisions of this Section with
respect to the resulting or surviving corporation as he would if he had
served the resulting or surviving corporation in the same capacity.
ARTICLE VIII
AMENDMENTS
All By-laws of the Corporation shall be subject to alteration or
repeal, and new By-laws not inconsistent with any provision of the Certificate
of Incorporation of the Corporation or any provision of law may be made, either
by the affirmative vote of a majority in interest of the holders of record of
the outstanding voting stock of the Corporation or by the affirmative vote of
the majority of the Board of Directors.
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Exhibit 3.11
CERTIFICATE OF AMENDMENT
OF
CERTIFICATE OF INCORPORATION
OF
B&G FOODS, INC.
Pursuant to Section 242 of the General Corporation Law of the State of
Delaware;
B&G FOODS, INC., a corporation organized and existing under and by
virtue of the General Corporation Law of the State of Delaware (the
"Corporation"), DOES HEREBY CERTIFY;
FIRST: That, by means of a certificate of consent of the sole director
of the Corporation, resolutions were duly adopted setting forth proposed
amendments to the Certificate of Incorporation of the Corporation, and
declaring said amendment to be advisable; and that the resolution setting
forth said proposed amendments is as follows:
RESOLVED, that the Certificate of Incorporation of the
Corporation be amended by: (1) deleting the terms "B&G FOODS,
INC." where they appear in the heading of the Certificate of
Incorporation of the Corporation and adding in lieu thereof the
terms "ROSELAND DISTRIBUTION COMPANY"; and (2) deleting Article 1
of the Certificate of Incorporation of the Corporation and adding
in lieu thereof the following new Article 1:
1. NAME. The name of the corporation is ROSELAND
DISTRIBUTION COMPANY (the "Corporation").
SECOND: That said amendments were authorized by the sole stockholder
of the Corporation, by means of a certificate of consent of the sole
stockholder.
<PAGE>
THIRD: That said amendments were duly adopted in accordance with the
provisions of Section 242 of the General Corporation Law of the State of
Delaware.
IN WITNESS WHEREOF, the Corporation has caused this certificate to be
signed by its officers thereto duly authorized this 6th day of August, 1997.
By: /s/
--------------------------------
David L. Wenner
President
ATTEST
/s/
- -------------------------
Robert Cantwell
Secretary
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Exhibit 3.12
BY-LAWS
OF
DSD, INC.
(now known as Roseland Distribution Company)
ARTICLE I
OFFICES
Section 1.1. CORPORATION'S OFFICE IN DELAWARE; MAILING ADDRESS FOR
SERVICE OF PROCESS. The location of the Corporation's registered office within
the State of Delaware, the name of the registered agent of the Corporation at
such office and the post office address to which the Secretary of State of the
State of Delaware shall mail a copy of process in any action or proceeding
against the Corporation that may be served upon him, shall be in each case as
stated in the Certificate of Incorporation.
Section 1.2. OTHER OFFICES. The Corporation may have other offices
within or without the State of Delaware.
ARTICLE II
STOCKHOLDERS MEETINGS
Section 2.1. ANNUAL MEETINGS. An annual meeting of stockholders to
elect directors and transact such other business as may properly be presented to
the meeting shall be held at such date and time as the Board of Directors from
time shall fix; PROVIDED, that such date shall be within five months after the
end of the preceding fiscal year of the Corporation and within 13 months after
the last annual meeting.
Section 2.2. SPECIAL MEETINGS. A special meeting of stockholders
may be called at any time and for any purpose by the Board of Directors and
shall be called by the Board of Directors or by the Secretary upon receipt of a
written request to do so specifying the matter or matters (which must be
appropriate for action at a special meeting) proposed to be presented to the
meeting and signed by holders of record of a majority of the shares outstanding
and entitled to act on such matter or matters on the date of receipt of such
<PAGE>
request. At any special meeting only such business may be transacted as is
related to the purpose or purposes set forth in the notice of such meeting
required by Section 2.4.
Section 2.3. PLACE OF MEETINGS. Each annual meeting shall be held
at such place, within or without the State of Delaware, as the Board of
Directors shall fix. Each special meeting shall be held at such place, within
or without the State of Delaware, as the person or persons calling the meeting
shall fix. If no place is so fixed, the meeting shall be held at the registered
office of the corporation in the State of Delaware.
Section 2.4. NOTICE OF MEETINGS.
(a) Written notice of a meeting of stockholders shall be given,
personally or by mail, not less than ten nor more than sixty days before
the meeting (unless otherwise required by law) to each stockholder entitled
to vote at such meeting. Such notice shall state the place, date and hour
of the meeting and, if it relates to a special meeting, the purpose or
purposes for which the meeting is called and the name or names of the
persons who have directed the calling of the meeting. If mailed, such
notice shall be deemed to be duly given when deposited in the United States
mail, first class postage prepaid, directed to each stockholder at his
address as it appears on the records of the Corporation.
(b) When a meeting is adjourned to another time or place, it shall
not be necessary to give any 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 for more than thirty days, however, a notice of
the adjourned meeting shall be given to each stockholder who is entitled to
vote at such adjourned meeting. At any adjourned meeting, any business may
be transacted that might have been transacted on the original date of the
meeting.
Section 2.5. QUORUM. Except as otherwise required by law or the
Certificate of Incorporation, the presence in person or by proxy of the holders
of record of a majority of the issued and outstanding shares entitled to vote at
a meeting shall be necessary
DSD, Inc.: By-Laws -- Adopted: January 28, 1993
<PAGE>
and sufficient to constitute a quorum for the transaction of business at the
meeting. In the absence of a quorum, the holders of record present or
represented by proxy at such meeting may vote to adjourn the meeting from time
to time, in which case the provisions of section 2.4(b) shall apply. A quorum
once present to organize a meeting is not broken by the subsequent withdrawal of
any stockholder.
Section 2.6. PRESIDING OFFICER AND SECRETARY AT MEETING. Each
meeting of stockholders shall be presided over by the Chairman of the Board, if
any, or if no such officer has been elected or, if elected, in his absence, by
the President or by a person designated in writing by the President. If the
President fails to so designate any person, then the meeting shall be presided
over by the Vice President or, if there is more than one Vice President, the
highest ranking Vice President as designated by the Board of Directors in
accordance with Section 4.9 or, in his absence, the next highest ranking Vice
President so designated who is present at the meeting. If no Vice President is
present at the meeting, then a chairman of the meeting shall be chosen by a
plurality vote of the stockholders present, in person or by proxy, at the
meeting. The Secretary or, in his absence, an Assistant Secretary shall act as
secretary of the meeting, or, if no such officer is present, a secretary of the
meeting shall be designated by the person presiding at the meeting.
Section 2.7. VOTING. Except as otherwise provided in these By-Laws
or in the Certificate of Incorporation:
(a) each stockholder of record shall be entitled at every meeting of
stockholders to one vote, in person or by proxy, for each share of stock
entitled to vote held by him;
(b) directors shall be elected by a plurality vote;
(c) each other matter properly presented to any meeting shall be
decided by a majority of the votes cast thereon;
(d) the holders of any and all classes or series of common Stock and
Preferred Stock which is entitled to vote shall vote as one class; and
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(e) election of directors and the vote on any other matter before a
meeting shall be by ballot only if so ordered by the person presiding at
the meeting or if so requested by any stockholder present, in person or by
proxy, such matter, as the case may be.
Section 2.8. PROXIES. Each stockholder entitled to vote at a
meeting of stockholders or to express consent or dissent to corporate action in
writing without a meeting may authorize another person or persons to act for him
by proxy, but no such proxy shall be voted or acted upon after three years from
its date, unless the proxy provides for a longer period. Every proxy must be
executed in writing by the stockholder or by his attorney-in-fact. 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.
Section 2.9. CONSENT OF STOCKHOLDERS IN LIEU OF MEETING. Unless
otherwise provided by the Certificate of Incorporation or by law, any action
which is required or permitted to be taken at any meeting of stockholders may be
taken without a meeting, without prior notice and without a vote, if a written
consent setting forth the action so taken is signed by the holders of record of
outstanding shares 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 2.10. RECORD DATE AND STOCKHOLDER LIST.
(a) For the purpose of determining the stockholders entitled to
notice of or to vote at any meeting of stockholders or any adjournment
thereof, to express consent to any corporate action in writing without a
meeting, to receive payment of any dividend or other distribution or
allotment of
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any rights, 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 date as the record, date for any such
determination of stockholders. Such date shall not be more then sixty nor
less than ten days before the date of the meeting, nor more than sixty days
prior to any other action. If no record date is fixed, 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 next preceding the day on which the meeting is held;
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; and the record date 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.
(b) When a determination of stockholders of record entitled to notice
of or to vote at any meeting of stockholders has been made, such
determination shall apply to any adjournment thereof, unless the Board of
Directors fixes a new record date for the adjourned meeting.
(c) The Secretary shall, or shall cause any other person who has
charge of the stock ledger of the Corporation to, prepare and make, 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, and number of the shares registered in the
name, of each stockholder. Such list shall be open to the examination of
any stockholder, for nay 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
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thereof, and may be inspected by any stockholder who is present.
ARTICLE III
DIRECTORS
Section 3.1. NUMBER; TERM OF OFFICE; QUALIFICATIONS; VACANCIES. The
business and affairs of the Corporation shall be managed under the direction of
the Board of Directors. The number of directors that shall constitute the
entire Board of Directors shall be at least five, unless fewer directors are
permitted by law, and shall be fixed from time to time by the affirmative vote
of a majority of the entire Board of Directors. No decrease in the number of
directors shall shorten the term of any incumbent director. No director need be
a stockholder of the Corporation.
Each director shall be elected at each annual meeting of stockholders
to hold office, subject to Sections 3.2 and 3.3, until the next annual meeting
of stockholders and until his successor has been elected and qualified. Newly
created directorships resulting from an increase in the number of directors or
vacancies occurring in the Board of Directors for any reason may be filled by
vote of a majority of the directors then in office, although less than a quorum
exists, or by a sole remaining director, and any director elected to fill a
vacancy shall hold office until the next meeting of stockholders at which the
election of directors is in the regular order of business and until his
successor is duly elected and has been qualified or until his earlier death,
resignation or removal. If at any time, by reason of any cause, there are no
directors in office, then any officer, stockholder or any executor,
administrator, trustee, guardian or other fiduciary entrusted with like
responsibility for the person or estate of a stockholder, may call a special
meeting of stockholders in accordance with the provisions of the Certificate of
Incorporation or the ByLaws, or may apply to the Delaware Court of Chancery for
a decree summarily ordering an election as provided in the General Corporation
Law of Delaware.
Section 3.2. RESIGNATION. Any director of the Corporation may
resign at any time by giving written notice of such resignation to the Board of
Directors, the Chairman of the Board, if any, the President or the Secretary of
the Corporation. Any such resigna-
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tion shall be effective at the time specified therein or, if no time is
specified, upon receipt thereof by the Board of Directors or one of the
aforementioned officers, and, unless specified in the notice, the acceptance of
such resignation shall not be necessary to make it effective.
Section 3.3. REMOVAL. A director may be removed, with or without
cause, by the vote of majority of the issued and outstanding shares of the
Corporation.
Section 3.4. REGULAR AND ANNUAL MEETING; NOTICE. Regular meetings of
the Board of Directors shall be held at such time and at such place, within or
without the State of Delaware, as the Board of Directors may from time to time
prescribe. No notice need be given of any regular meeting and a notice, if
given, need not specify the purposes thereof. A meeting of the Board of
Directors may be held without notice immediately after, and at the same place
as, an annual meeting of stockholders.
Section 3.5. SPECIAL MEETING; NOTICE. A special meeting of the
Board of Directors shall be called at any time by the Board of Directors, the
Chairman of the Board, if any, the President, or the Secretary upon receipt of a
written request to do so specifying the matter or matters (which must be
appropriate for action at such a meeting) proposed to be presented at the
meeting and signed by at least three directors. Any such meeting shall be held
at such time and at such place, within or without the State of Delaware, as
stated in the request. Notice of such meeting stating the date, hour and place
thereof shall be given either:
(a) personally, at least 24 hours before the time fixed for the
meeting,
(b) by deposit of the notice in the United States mails, first class
postage prepaid, at least ten days before the day fixed for the meeting,
addressed to each director at this address as it appears on the
Corporation's records or at such other address as the director may have
furnished the Corporation for that purpose, or
(c) by delivery of the notice (appropriately addressed for dispatch)
by telegraph, telephone,
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cable or radio, at least 24 hours before the time fixed for the meeting.
Section 3.6. PRESIDING OFFICER AND SECRETARY AT MEETING. Each
meeting of the Board of Directors shall be presided over by the Chairman of the
Board, if any, or, if no such officer has been elected, by the President, if a
director, or, if neither is present, by such member of the Board of Directors as
shall be chosen by the meeting. The Secretary, or, in his absence an Assistant
Secretary, shall act as secretary of the meeting, or is no such officer is
present, a secretary of the meeting shall be designated by the person presiding
over the meeting.
Section 3.7. QUORUM; VOTING. Except as otherwise provided in these
By-Laws or in the Certificate of Incorporation, a majority of the entire Board
of Directors shall constitute a quorum for the transaction of business at any
meeting thereof, and each matter acted on at any meeting shall be decided by the
vote of a majority of the Board of Directors present and constituting a quorum.
In the absence of a quorum, a majority of those present (or if only one is
present, then that one) may adjourn the meeting, without notice other than
announcement at the meeting, until such time as a quorum is present. In the
absence of any such announcement, notice of any adjournment shall be given in
accordance with the provisions of Section 3.5.
Section 3.8. MEETING BY TELEPHONE. Members of the Board of
Directors or of any committee thereof may participate in meetings of the Board
of Directors of such committee by means of conference telephone or similar
communications equipment by means of which all persons participating in the
meeting can hear each other, and such participation shall constitute presence in
person at such meeting.
Section 3.9. ACTION WITHOUT MEETING. Unless otherwise provided by
the Certificate of Incorporation, 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 of Directors or of such
committee, as the case may be, consent thereto in writing and the writing or
writings are filed with the minutes of the proceedings of the Board of Directors
or of such committee.
Section 3.10. EXECUTIVE AND OTHER COMMITTEES.
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(a) The Board of Directors, by resolution adopted by a majority of
the entire Board of Directors, may designate from among its members an
executive committee and other committees, each consisting of three or more
directors and each of which, to the extent provided in the resolution, may
exercise all of the powers and shall have all the authority of the Board of
Directors, except that no such committee shall have power or authority with
respect to the following matters:
(i) amending the Certificate of Incorporation, adopting an
agreement of merger of consolidation or recommending to the
stockholders the (A) sale, lease or exchange of all or substantially
all of the Corporation's property and assets or (B) a dissolution of
the Corporation or a revocation of such dissolution;
(ii) the filling of vacancies in the Board of Directors or in any
committee;
(iii) the fixing of compensation of any director for serving on
the Board of Directors or on any committee thereof;
(iv) the amendment or repeal of the ByLaws or the adoption of new
By-Laws; and
(v) the declaration of any dividends, whether of cash, stock or
property, and the issuance of any securities of the Corporation.
(b) The Board of Directors may designate one or more directors as
alternate members of any such committee, who may replace any absent or
disqualified member or members at any meeting thereof.
(c) Each such committee shall serve at the pleasure of the Board of
Directors.
Section 3.11. COMPENSATION. Unless authorized by a resolution of the
Board of Directors, no director shall receive any stated salary for his services
as a director or as a member of a committee but shall receive such sum, if any,
as may from time to
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time be fixed by the Board of Directors for attendance at each meeting of the
Board of Directors or of a committee thereof. He may also be reimbursed for his
expenses in attending any meeting. Any director who serves the Corporation in
any capacity other than as a member of the Board of Directors or of a committee,
however, may receive compensation therefore.
ARTICLE IV
OFFICERS
Section 4.1. ELECTION; QUALIFICATION. The officers of the
Corporation shall be a President, a Secretary and a Treasurer, each of whom
shall be elected by the Board of Directors. The Board of Directors may elect
such other officers, including a Chairman of the Board, a Vice Chairman of the
Board, a Chief Executive officer, a Chief Operating Officer, one or more
Executive Vice Presidents or Vice Presidents, a Chief Financial officer, a
Controller, and one or more Assistant Secretaries and Assistant Treasurers, as
it may from time to time determine. Two or more offices may be held by the same
person.
Section 4.2. TERM OF OFFICE. Each officer shall hold office from
the time of his election and qualification to the time of the earlier of
the-election and qualification of his successor, his death or resignation or his
removal pursuant to Section 4.4. Officers shall be elected annually by the
Board of Directors at a meeting thereof to be held immediately after each annual
meeting of stockholders.
Section 4.3. RESIGNATION. Any officer of the Corporation may resign
at any time by giving written notice of such resignation to the Board of
Directors, the President or the Secretary of the Corporation. Any such
resignation shall be effective at the time specified therein or, if no time is
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 4.4. REMOVAL. Any officer of the Corporation may be removed
at any time, with or without cause, by the vote of a majority of the entire
Board of Directors.
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Section 4.5. VACANCIES. Any vacancy occurring in any office of the
Corporation, however caused, may be filled by the Board of Directors.
Section 4.6. COMPENSATION. The compensation of each officer shall be
as determined by the Board of Directors from time to time.
Section 4.7. CHAIRMAN OF THE BOARD; VICE CHAIRMAN OF THE BOARD. The
Chairman of the Board, if elected, shall preside at all meetings of stockholders
and of the Board of Directors, shall be entitled to vote upon all questions at
meetings of the Board of Directors, and shall perform all such other duties as
are prescribed by the Board of Directors, subject to the direction of the Board
of Directors and the Executive committee, if any. The Vice Chairman of the
Board, if elected, shall, if the Chairman of the Board is absent or unable to
act, exercise the powers and perform the duties thereof, subject to the
direction of the Board of Directors and the Executive Committee, if any.
Section 4.8. CHIEF EXECUTIVE OFFICER; PRESIDENT. The Chief
Executive officer shall have charge of the Business and affairs of the
Corporation, subject to the right of the Board of Directors to confer specified
powers on other officers and, generally, to the direction of the Board of
Directors and the Executive Committee, if any. If no Chairman of the Board or
Vice Chairman of the Board has been elected, or if elected, during his or their
absence or inability to act of the Chief Executive officer shall exercise the
powers and perform the duties thereof, subject to the direction of the Board of
Directors and the Executive Committee, if any. The President shall have such
powers and duties as generally pertain to the office of President and as the
Board of Directors may from time to time prescribe, and such additional duties
as the Chief Executive Officer may from time to time prescribe, and, during the
absence or inability to act of the Chief Executive Officer, the President shall
exercise the powers and perform the duties of the Chief Executive officer.
Section 4.9. VICE PRESIDENT. Each Vice President shall have such
powers and duties as generally pertain to the office of Vice President and as
the Board of Directors may from time to time prescribe. If there is more than
on vice President, they shall be ranked.in an order designated by the Board of
Direc-
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tors, or failing such designation, the Vice Presidents will be deemed to be
ranked by the Board of Directors in the order of their election as set fourth in
the resolution or resolutions of the Board of Directors providing for their
election. During the absence of the President of his inability to act, the Vice
President, or, if there is more than one Vice President, the highest ranking
Vice President designated or deemed designated by the Board of Directors, shall
exercise the powers and perform the duties of the President, subject to the
direction of the Board of Directors and the Executive Committee, if any.
Section 4.10. SECRETARY AND ASSISTANT SECRETARIES. The secretary
shall attend and keep the minutes of all meetings of stockholders and of the
Board of Directors and any committees thereof. He shall be custodian of the
corporate seal and shall affix it or cause it be affixed to such instruments as
require such seal and attest the same and shall exercise the powers and perform
the duties incident to the office of Secretary, subject to the direction of the
Board of Directors and the Executive Committee, if any. The Assistant Secretary
(or in the event there is more than one, the Assistant Secretaries in the order
designated by the Board of Directors, or in the absence of such designation,
then in the order of their election), shall, in the absence of the Secretary or
in the event of his inability or refusal to act, perform the duties and exercise
the powers of the Secretary and perform such other duties and exercise such
other powers as the Board of Directors may from time to time prescribe, subject
to the direction of the Board of Directors and the Executive Committee, if any.
Section 4.11. TREASURER AND ASSISTANT TREASURERS. The Treasurer
shall have care of all funds and securities of the Corporation and shall
exercise the powers and perform the duties incident to the office of Treasurer,
subject to the direction of the Board of Directors and the Executive Committee,
if any. The Assistant Treasurer (or if there is more than one, the Assistant
Treasurers in the order designated by the Board of Directors, or in the absence
of such designation, then in the order of their election) shall, in the absence
of the Treasurer or in the event of his inability or refusal to act, perform the
duties and exercise the powers of the Treasurer and perform such other duties
and exercise such other powers as the Board of Directors may from time to time
prescribe,
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subject to the direction of the Board of Directors and the Executive Committee,
if any.
Section 4.12. OTHER OFFICERS. Each other officer of the Corporation
shall exercise the powers and perform the duties incident to this office,
subject to the direction of the Board of Directors and the Executive Committee,
if any.
Section 4.13. BOND. Any officer of the Corporation, if so required
by the Board of Directors, shall give to the Corporation such bond or other
security of the faithful performance of his duties and the return to the
corporation of any books, records, accounts, monies and other property
whatsoever in his possession or control which are the property of the
corporation, as may be satisfactory tot he Board of Directors of the Executive
Committee, if any.
ARTICLE V
INDEMNIFICATION OF OFFICERS AND DIRECTORS
Section 5.1. GENERALLY. The Company shall, with respect to
directors and officers, and may (in the sole discretion of the Board of
Directors), with respect to employees and agents, indemnify, subject to the
provisions of Section 5.4 of this Article V, 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
(other than an action by or in the right of the Corporation), by reason of the
fact that he 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 corporation, partnership, joint
venture, trust or other enterprise, against expenses (including attorneys'
fees), judgments, fines and amounts paid in settlement actually and reasonably
incurred by him in connection with such action, suit or proceeding if he acted
in good faith and in a manner he reasonably believed to be in or not opposed to
the best interests of the Corporation and, with respect to any criminal action
or proceeding, had no reasonable cause to believe his conduct was unlawful. The
termination of any action, suit or proceeding by judgment, order, settlement,
conviction or upon a pleas of NOLO CONTENDERE or its equivalent, shall not, of
itself, create a presumption that the person did not act in good faith
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and in a manner which he reasonably believed to be in or. not opposed to the
best interests of the Corporation, and, with respect to any criminal action or
proceeding, had reasonable cause to believe that his conduct was unlawful.
Section 5.2. ACTION BY CORPORATION. The Company shall, with respect
to directors and officers, and may (in the sole discretion of the Board of
Directors), with respect to employees and agents indemnify, subject to the
provisions of Section 5.4 of this Article V, any person who was or is a party 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 he 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 corporation, partnership, joint
venture, trust or other enterprise against expenses (including attorneys' fees)
actually and reasonably incurred by him in connection with the defense or
settlement of such action or suit if he acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interest 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 to the Corporation unless and only to the extent that the Court of
Chancery or the court in which such action or suit was brought determines upon
application that, despite the adjudication of liability but in view of all the
circumstances of the case, such person is fairly and reasonably entitled to
indemnity for such expenses which the Court of Chancery or such other court
deems proper.
Section 5.3. EXPENSES. To the extent that a director, officer,
employee or agent of the Corporation has been successful on the merits or
otherwise in defense of any action, suit or proceeding referred to in sections
5.1 and 5.2 of this Article V, or in defense of any claim, issue or matter
therein, he shall be indemnified against expenses (including attorneys' fees)
actually and reasonably incurred by him in connection therewith.
Section 5.4. DETERMINATION OF ENTITLEMENT. Any indemnification
under Sections 5.1 and 5.2 of this Article V (unless ordered by a court) shall
be made by
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the Corporation only as authorized in the specific case upon a determination
that indemnification of the director, officer, employee or agent is proper in
the circumstances because he has met the applicable standard of conduct set
forth in such Sections 5.1 and 5.2. Such determination shall be made:
(a) by the Board of Directors by a majority vote of a quorum
consisting of directors who were not parties to such action, suit or
proceeding, or
(b) if such a quorum is not obtainable, or, even if obtainable a
quorum of disinterested directors so directs, by independent legal counsel
in a written opinion or
(c) by the stockholders.
Section 5.5. EXPENSES IN ADVANCE. Expenses incurred in defending a
civil or criminal action, suit or proceeding shall, in the case of a director or
officer, and may (in the sole discretion of the Board of Directors), with
respect to an employee or agent, be paid by the Corporation in advance of the
final disposition of such action, suit or proceeding as authorized by the Board
of Directors in the specific case upon receipt of an undertaking by or on behalf
of the director, officer, employee or agent to repay such amount if it shall
ultimately be determined that he is not entitled to be indemnified by the
Corporation as authorized in this Article.
Section 5.6. NOT EXCLUSIVE. The indemnification provided by this
Section shall not be deemed exclusive of any other rights to which those seeking
indemnification may be entitled under any By-Law, agreement, vote of
stockholders or disinterested directors or otherwise, both as to action in his
official capacity and as to action in another capacity while holding such
office, and shall continue as to a person who has ceased to be a director,
officer, employee or agent and shall inure to the benefit of the heirs,
executors and administrators of such a person.
Section 5.7. 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, employee or agent o.f another corporation, partnership,
joint ven-
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ture, trust or other enterprise against any liability asserted against him and
incurred by him in any such capacity, or arising out of his status as such,
whether or not the Corporation would have the power to indemnify him against
such liability under the provisions of this Article V.
Section 5.8. DEFINITIONS
(a) For purposes of this Article V, references to "the Corporation"
shall include, in addition to the resulting corporation, any constituent
corporation (including any constituent of a constituent) absorbed in a
consolidation or merger which, if its separate existence had continued,
would have had power and authority to indemnify its directors, officers,
employees or agents, so that nay person who is or was a director, officer,
employee or agent of such constituent corporation, or is or was serving at
the request of such constituent corporation as a director, officer,
employee or agent of another corporation, partnership, joint venture, trust
or other enterprise, shall stand in the same position under the provisions
of this section with respect to the resulting or surviving corporation as
he would have with respect to such constituent corporation if its separate
existence had continued.
(b) For purposes of this Article V, references to:
(i)"other enterprises" shall include employee benefit plans;
(ii) "fines" shall include any excise taxes assessed on a-person
with respect to an employee benefit plan; and
(iii) "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
(iv) "not opposed to the best interests of the corporation" shall
be deemed to in-
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<PAGE>
clude the actions of 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.
ARTICLE VI
CAPITAL STOCK
Section 6.1. CERTIFICATES REPRESENTING SHARES. The shares of the
Corporation shall be represented by certificates in such form consistent with
law, and the Certificate of Incorporation as the Board of Directors may from
time to time prescribe and be signed by or in the name of the Corporation by the
Chairman of the Board, if any, or the President or any Vice president and by the
Treasurer or an Assistant Treasurer of the Secretary of an Assistant Secretary.
Any and all of the signatures on, a certificate may be a facsimile. In the
event that nay officer, transfer agent or registrar who has signed, or whose
facsimile signature has been placed upon, a certificate ceases to be such
officer, transfer agent or registrar before such certificate is issued, it may
be issued by the Corporation with the same effect as if he were such officer,
transfer agent or registrar at the date of issue. In the event that the
Corporation issues one or more series of Preferred Stock, the relative
designations, powers, preferences, rights, qualifications, limitations and
restrictions of the shares of each such series shall be set forth in full or
summarized on the face or back of the certificates for the shares of each such
series.
Section 6.2. TRANSFER OF SHARES. Shares of the Corporation shall be
transferable on the books of the Corporation, pursuant to applicable law and
such rule as the Board of Directors may prescribe from time to time, only by the
holder of record thereof or by his duly authorized attorney, upon the surrender
of the certificate or certificates for such shares to the Secretary or an
Assistant Secretary duly endorsed with proper evidence of authority to transfer.
The Corporation shall issue a new certificate or certificates for the shares
surrendered to the person or persons entitled thereto, cancel the old
certificate or certificates and shall record such transfer on the books of the
Corporation.
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Section 6.3. TRANSFER AGENT; REGISTRAR. The Board of Directors any
appoint one or more transfer agents and one or more registrars and may require
each certificate representing shares to bear the signature of a transfer agent,
of a registrar or of both.
Section 6.4. HOLDERS OF RECORD. Prior to due presentment for
registration of transfer, the Corporation may treat the holder of record of a
share as the owner thereof in fact, exclusively entitled to vote, and receive
dividends on, such share and otherwise entitled to all the rights and powers of
an owner thereof, notwithstanding notice to the contrary.
Section 6.5. LOST, DESTROYED OR STOLEN CERTIFICATES. The Corporation
shall issue a new certificate for shares to replace a certificate theretofore
issued by it and alleged to have been lost, stolen or destroyed, if the owner or
his legal representative (a) requests a new certificate before the Corporation
has notice that the certificate has been acquired by a bona fide purchaser, (b)
files with the Corporation a bond 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 any such new
certificate and (c) satisfies such other terms and conditions as the Board of
Directors may from time to time require, including, without limitation, the
owner's furnishing an affidavit to the Board of Directors to the effect that
such certificate has been lost, stolen or destroyed.
Section 6.6. DIVIDENDS. Except as otherwise provided by the
Certificate of Incorporation or by law, the Board of Directors, at any regular
or special meeting thereof, may declare dividends upon the issued and
outstanding shares of the stock of the Corporation. Dividends may be paid in
cash, in property or in shares of the stock of the corporation, subject to the
provisions of the Certificate of Incorporation and of law.
Before payment of any dividend, there may be set aside out of any
funds of the Corporation available for dividends such sums as the Board of
Directors, from time to time, in its absolute discretion, deems advisable as a
reserve or reserves to meet contingencies, for equalizing dividends, for
repairing or maintaining any property of the Corporation or for such other
purpose as the Board of Directors deems to be in the best interest of the
Corporation, and the Board of Directors
DSD, Inc.: By-Laws -18- Adopted: January 28, 1993
<PAGE>
may modify or abolish any such reserve in the manner in which it was created.
ARTICLE VII
MISCELLANEOUS
Section 7.1. INSPECTION OF RECORDS. Any stockholder of record, in
person or by attorney or other agent, shall upon written demand under oath
stating the purpose thereof, have the right, during usual business hours, 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 means a purpose reasonably related to such
persons's interest as a stockholder. In every instance where an attorney or
other agent is 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
authorizes 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 the State of Delaware or at its principal place of business.
Section 7.2. FORM OF RECORDS. Any records maintained by the
Corporation in the regular course of its business, including its stock ledger,
books of account and minute books, may be kept on, or be in the form of, punch
cards, magnetic tape, photographs, micro-photographs or any other information
storage device, provided that the records so kept can be converted into clearly
legible written form within a reasonable time. The Corporation shall so convert
any records so kept upon the request of any person entitled to inspect the same.
Section 7.3. WAIVER OF NOTICE. Whenever notice is required to be
given under Certificate of Incorporation of the By-Laws, a written waiver
thereof, signed by the person entitled to notice, whether before or after the
time stated therein, shall be deemed equivalent to notice. Attendance of a
person at a meeting shall constitute a waiver of notice of such meeting, except
when the person attends a meeting for the express purpose of objecting, at the
beginning of the meeting, 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,
DSD, Inc.: By-Laws -19- Adopted: January 28, 1993
<PAGE>
any regular or special meeting of the stockholders or of the Board of Directors
or any committee thereof need be specified in any written waiver of notice
unless so required by the Certificate of Incorporation or the ByLaws.
Section 7.4. FISCAL YEAR. The fiscal year of the Corporation shall
start on such date as the Board of Directors shall from time to time prescribe.
Section 7.5. CORPORATE SEAL. The corporate seal shall be in such
form consistent with law as the Board of Directors may from time to time
prescribe. The Board of Directors may give general authority to any officer in
addition to the Secretary to affix the corporate seal and to attest the affixing
by his signature.
ARTICLE VIII
AMENDMENT OF BY-LAWS
Section 8.1. AMENDMENT. The Board of Directors is authorized to
adopt, alter, amend or repeal the By-Laws of the Corporation, but any By-Laws
adopted, altered, amended or repealed by the Board of Directors may be altered,
amended or repealed by the stockholders of the Corporation.
DSD, Inc.: By-Laws -20- Adopted: January 28, 1993
<PAGE>
B&G FOODS, INC.
WRITTEN CONSENT OF THE SOLE DIRECTOR
THE UNDERSIGNED, being the sole director of B&G Foods, Inc., a
Delaware corporation (the "Company"), hereby consents to the taking of the
following actions and adoption of the following resolutions without a meeting,
in accordance with the procedures established in Section 141(f) of the Delaware
General Corporation Law, such actions and resolutions to have the same force and
effect as though duly taken and adopted at a meeting of the directors of the
Company duly called and legally held:
RESOLVED, that the first paragraph of Article III, Section 3.1 of the
ByLaws of Roseland Manufacturing, Inc. ("Roseland") be deleted in its
entirety and replaced with the following:
"Section 3.1. NUMBER; TERM OF OFFICE; QUALIFICATIONS; VACANCIES. The
business and affairs of the Corporation shall be managed under the
direction of the Board of Directors. The number of directors that
shall constitute the entire Board of Directors shall be one and shall
be fixed from time to time by the affirmative vote of a majority of
the entire Board of Directors. No decrease in the number of directors
shall shorten the term of any incumbent director. No director need be
a stockholder of the Corporation."
RESOLVED, that the existing directors of Roseland be removed from the
board of directors and that the following individual be elected as the sole
director of Roseland, to serve until the next annual meeting of
stockholders of Roseland and until his successor shall have been elected
and shall have qualified or as otherwise provided in the By-laws of
Roseland:
Stephen C. Sherrill; and
<PAGE>
RESOLVED, that any one or more of the officers of the Company are, and
each of.them hereby is, authorized and directed to execute and deliver such
agreements, documents, assignments, certificates and other instruments and
to take such other action as may be necessary, advisable, convenient or
proper to carry out the intent of these resolutions and to fully perform
the provisions of any and all agreements, documents, assignments,
certificates and instruments executed on behalf of the Company pursuant to
these resolutions.
IN WITNESS WHEREOF, the undersigned has executed this Written Consent
this 27th day of December, 1996.
------------------------------
Stephen C. Sherrill
Sole Director
<PAGE>
B&G FOODS, INC.
UNANIMOUS WRITTEN CONSENT OF THE SOLE STOCKHOLDER
THE UNDERSIGNED, being the sole stockholder of B&G Foods, Inc., a
Delaware corporation (the "Company"), hereby takes the following actions by
unanimous written consent in lieu of a meeting of the stockholders pursuant to
Section 228 of the Delaware General Corporation Law:
RESOLVED, that the first paragraph of Article III, Section 3.1 of the
By-Laws of the Company is hereby deleted in its entirety and replaced with
the following:
"Section 3.1. NUMBER; TERM OF OFFICE; QUALIFICATIONS; VACANCIES. The
business and affairs of the Corporation shall be managed under the
direction of the Board of Directors. The number of directors that
shall constitute the entire Board of Directors shall be one and shall
be fixed from time to time by the affirmative vote of a majority of
the entire Board of Directors. No decrease in the number of directors
shall shorten the term of any incumbent director. No director need be
a stockholder of the Corporation."
RESOLVED, that the existing directors of the Company are hereby
removed from the Board of Directors and that the following individual be,
and he hereby is, elected as the sole director of the Company, to serve
until the next annual meeting of stockholders of the Company and until his
successor shall have been elected and shall have qualified or as otherwise
provided in the By-laws of the Company:
Stephen C. Sherrill; and
RESOLVED, that any one or more of the officers of the Company are, and
each of them hereby is, authorized and directed to execute and deliver such
agreements, documents, assignments, certificates and other instruments and to
take such other action as may be necessary, advisable, convenient or proper to
carry out the intent of these resolutions and to fully perform the provisions of
any and all agreements, documents, assignments, certificates and instruments
executed on behalf of the Company pursuant to these resolutions.
- 2 -
<PAGE>
IN WITNESS WHEREOF, the undersigned has executed this Unanimous
Written Consent this 27th day of December, 1996.
B&G-DSD HOLDINGS, INC
By:
--------------------------------
Name: Robert C. Cantwell
Title: Vice President
- 3 -
<PAGE>
EXHIBIT 3.13
AMENDED AND RESTATED
CERTIFICATE OF INCORPORATION OF BAGEL CRISPS
ACQUISITION CORP.
The undersigned, the President of Bagel Crisps Acquisition Corp., a
Delaware corporation (the "Corporation"), does hereby execute the following
Amended and Restated Certificate of Incorporation pursuant to Sections 242(b)
and 245 of the Delaware General Corporation Law:
1. The name of the Corporation is:
BAGEL CRISPS ACQUISITION CORP.
2. The Certificate of Incorporation of the Corporation was filed in
the Office of the Secretary of State of Delaware on October 21, 1986.
3. The Certificate of Incorporation of the.Corporation is hereby
amended and restated to read in its entirety as follows:
"FIRST: The name of the Corporation is:
BURNS & RICKER, INC.
SECOND: The address of its registered office in the State of Delaware
is Corporation Trust Center, 1209 Orange Street, Wilmington, New Castle County,
Delaware 19801. The name of its registered agent at such address is The
Corporation Trust Company.
THIRD: The nature of the business or purposes to be conducted or
promoted is to engage in any lawful act or activity for which corporations may,
now or hereafter, be organized under the Delaware General Corporation Law
("Delaware Law").
FOURTH: The total number of shares of stock which the Corporation
shall have authority to issue is Four Thousand (4,000), which shall consist of
Two Thousand (2,000) shares of Common Stock, with a par value of One-Cent ($.01)
per share, and Two Thousand (2,000) shares of Preferred Stock, with a par value
of One-Cent ($.01) per share. The designations and the powers, preferences and
the relative, participating, optional and other rights, and the qualifications,
limitations or restrictions thereof of each class of capital stock of the
Corporation are as follows:
<PAGE>
A. PREFERRED STOCK
Expect with respect to the shares designated "Series A Preferred
Stock" herein after established, authority is hereby expressly vested in the
Board of Directors of the Corporation, subject to the limitations prescribed by
law, to authorize from time to time one or more series of Preferred Stock and
with respect to each such series to fix by resolution, adopted by the
affirmative vote of a majority of the whole Board of Directors providing for the
issue of such series, the voting powers, full or limited, if any, of the shares
of such series and the designations, preferences and relative, participating,
optional or other special rights and the qualifications, limitations or
restrictions thereof.
Each share of Preferred Stock of each-series of Preferred Stock shall
have the same relative rights as and be identical in all respects with all the
other shares of the same series.
Before the Corporation shall issue any shares of Preferred Stock of
any series (except shares of the Series A Preferred Stock) authorized as
hereinabove provided, a certificate setting forth (x) a copy of the resolution
or resolutions with respect to such shares adopted by the Board of Directors of
the Corporation pursuant to the foregoing authority vested in said board, and
(y) the number of shares of stock of such series, shall be made, executed,
acknowledged, filed and recorded in accordance with the applicable requirements,
if any, of the Delaware Law, or if no certificate is then so required, such
certificate shall be signed and acknowledged on behalf of the Corporation by its
president or a vice president and its corporate seal shall be affixed thereto
and attested by its secretary or assistant secretary, and such certificate shall
be filed and kept on file at the principal office of the Corporation in the
State of Delaware and in such other place or places as the Board of Directors
shall designate.
B. SERIES A PREFERRED STOCK
There is hereby established an initial series of Preferred Stock to
have the designations, powers, preferences and relative, participating, optional
or other special rights and the qualifications, limitations or restrictions
thereof hereinabove set forth and to have the following thereof not above set
forth:
1. Designation and Amount. The shares of such series shall be
designated as "Series A Preferred Stock" (the "Series A
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<PAGE>
Preferred Stock"), and the number of shares constituting such series shall be
seventy (70).
2. Dividends. (a) A holder of Series A Preferred Stock shall be
entitled to receive cash dividends at the rate of six percent (0) per annum
(calculated as a percentage of the Stated Value, as defined in Section 5 hereof)
per share (as adjusted for any stock dividends, splits or combinations with
respect to such shares), when, as and if declared by the Board of Directors of
the Corporation out of funds legally available therefor. Such dividends shall be
cumulative and shall accrue from the date hereof (the "Date of Issuance").
Accrued but unpaid dividends shall not bear interest and shall be due and
payable on each anniversary of the Date of Issuance or the date of conversion or
redemption, if earlier, Dividends paid on the shares of Series A Preferred Stock
in an amount less than the total amount of such dividends at the time payable on
such shares shall be allocated pro-rata on a share-by-share basis among all such
shares at the time outstanding;
(b) The Corporation shall not pay dividends on the Common Stock or
any other class of capital stock of the Corporation ranking junior to the Series
A Preferred Stock as to dividends (other than dividends payable in Common Stock
or in any other class of capital stock of the Corporation ranking junior to the
Series A Preferred Stock as to dividends and distribution of assets) during any
dividend period (which for purposes hereof shall mean the twelve (12) month
period from the Date of Issuance to but not including the first anniversary date
thereof and each twelve (12) month period thereafter) until (1) all accumulated
and unpaid dividends from all prior dividend years with respect to the Series A
Preferred Stock shall have been paid or declared and set apart for payment, and
(2) the dividends payable to the holders of Series A Preferred Stock pursuant to
subsection 2(a) above shall have been paid, or declared and set apart for
payment, during that dividend year;
(c) No dividend shall be paid on or declared and set apart for the
shares of any series of Preferred Stock (other than Series A Preferred Stock)
entitled to receive dividends, unless concurrently therewith, a dividend for the
same dividend period, ratably in proportion to the respective annual rates fixed
for such other series of Preferred,Stock and the Series A Preferred Stock, shall
be paid on or declared and set apart for the shares of Series A Preferred Stock;
and
(d) Except as otherwise herein provided by Delaware Law, no right
shall accrue to the holders of Series A Preferred Stock by reason of the fact
that dividends payable on said shares have not been paid or declared and set
aside for payment in any prior year.
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<PAGE>
3. Voting. Except as otherwise provided by Delaware Law, the shares
of Series A Preferred Stock shall not have any voting powers, either general or
specific, and a holder of Series A Preferred Stock shall not be entitled to
notice of any meeting of the stockholders of the Corporation.
4. Conversion. The shares of the Series A Preferred Stock shall be
converted into shares of Common Stock of the Corporation, on the terms and
conditions set forth below in this Section 4.
(a) If the holder of the Series A Preferred Stock exercises its
rights pursuant to an option granted on the date hereof by the Corporation and
the stockholders of the Corporation, to acquire additional shares of Common
Stock of the Corporation, then on the closing date with respect to the purchase
of such shares pursuant to such option, each share of Series A Preferred Stock
shall automatically be converted into one (1) fully paid and non-assessable
shares of Common Stock of the Corporation.
(b) In the event that the Corporation at any time after the issuance
of the Series A Preferred Stock shall declare or pay any dividend on the Common
Stock payable in Common Stock or in any right to acquire Common Stock, or shall
effect a subdivision of the outstanding shares of Common Stock into a greater
number of shares of Common Stock by stock split, reclassification or otherwise
than by payment of a dividend in Common Stock or in any right to acquire Common
Stock, or in the event the outstanding shares of Common Stock shall be combined
or consolidated, by reclassification or otherwise, into a lesser number of
shares of Common Stock, then the number of shares of Common Stock into which one
share of Series A Preferred Stock may be converted shall, concurrently with the
effectiveness of such event, be proportionately decreased or increased, as
appropriate. In the event that the.Corporation shall declare or pay any dividend
on the Common Stock payable in any right to acquire Common Stock, then the
Corporation shall be deemed to have made a dividend payable in Common Stock in
an amount of shares equal to. the maximum number of shares issuable upon
exercise of such rights to acquire Common Stock.
(c) If the Common Stock issuable upon conversion of the Series A
Preferred Stock shall be changed into the same or a different number of shares
of any other class or classes of stock, whether by capital reorganization,
reclassification or otherwise (other than a subdivision or combination of shares
provided for in subsection'(b) above), the number of shares of Common Stock into
which one share of Series A Preferred Stock may be converted shall be
proportionately adjusted so that the Series A Preferred Stock shall be
convertible into, in lieu of the number of shares of Common Stock which the
holder would
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<PAGE>
otherwise have been entitled to receive, a number of shares of such other class
or classes of stock equivalent to the number of shares of Common Stock that
would have been received by the holder of Series A Preferred Stock upon
conversion of the Series A Preferred Stock immediately before that change.
(d) Whenever the number of shares of Common Stock into which the
shares of Series A Preferred Stock are convertible is adjusted as provided in
this Section 4, the Corporation shall promptly mail to the holder of record of
the outstanding shares of Series A Preferred Stock a notice stating that the
number of shares of Common Stock into which the shares of Series A Preferred
Stock are convertible has been adjusted and setting forth the new number of
shares of Common Stock, or the number of shares of any other class or classes of
stock, into which each share of Series A Preferred Stock is convertible as
result of such adjustment and when such adjustment will become effective.
(e) If the shares of Series A Preferred Stock are converted into
shares of Common Stock, the certificate or certificates evidencing such shares
of Series A Preferred Stock shall be surrendered, duly endorsed, at the office
of the Corporation, and the Corporation shall, as soon as practicable
thereafter, issue and deliver at such office to such holder of Series A
Preferred Stock, a certificate for the number of shares of Common Stock or other
securities to which the holder shall be entitled as aforesaid. Such conversion
shall be deemed to have been made immediately prior to the close of business on
the date of surrender of the shares of Series A Preferred Stock to be converted,
and the person entitled to receive the shares of Common Stock issuable upon such
conversion shall be treated for all purposes as the record holder of such shares
of Common Stock on such date. The issuance of a certificate for shares of Common
Stock upon conversion shall be made without charge to the holder thereof for any
issuance tax with respect thereto.
(f) The Corporation shall at all times reserve and keep available
such number of its authorized but unissued shares of Common Stock, solely for
the purpose of effecting the conversion of the shares of Series A Preferred
Stock, as shall from time to time be sufficient to effect the conversion of all
outstanding shares of Series A Preferred Stock; and if at any time the number of
authorized but unissued shares of Common Stock shall not be sufficient to effect
the conversion of all then outstanding shares of Series A Preferred Stock, the
Corporation will take such corporate action as may, in the opinion of its
counsel, be necessary to increase its authorized but unissued shares of Common
Stock to such number of shares as shall be sufficient for such purpose,
including, without limitation, engaging in best efforts to obtain the requisite
stockholder approval of any necessary amendment to this Certificate. The
Corporation covenants and agrees that all shares of Common Stock
-5-
<PAGE>
which shall be so issuable shall upon issuance, be duly authorized, validly
issued, fully paid and non-assessable and free from all preemptive rights of
stockholders and liens and charges with respect to the issuance thereof.
(g) Shares of Series A Preferred Stock which have been issued and
reacquired by the Corporation upon conversion shall be cancelled and may not be
reissued.
5. Distribution Upon Liquidation, Dissolution or Winding Up. In the
event of any voluntary or involuntary liquidation, dissolution or winding up of
the Corporation, the holder of shares of Series A Preferred Stock shall be
entitled to receive out of assets of the Corporation available for distribution
to stockholders liquidating distributions in the amount of $7,500 per share (the
"Stated Value"), plus accrued and unpaid dividends, before any distribution of
assets shall be made to holders of Common stock or any other shares of capital
stock junior to the Series A Preferred Stock as to distributions to be received
upon liquidation, dissolution or winding up. If upon any voluntary or
involuntary liquidation dissolution or winding up of the Corporation, the
amounts payable with respect to the Series A Preferred Stock and any other
shares of stock of the Corporation ranking as to any such distribution on a
parity with the Series A Preferred Stock are not paid in full, the holder of the
Series A Preferred Stock and of such other shares will share ratably in any such
distribution of assets of the corporation in proportion to the full respective
preferential amounts to which they are entitled. After payment to the holders of
the Series A Preferred Stock of the full preferential amounts to which they are
entitled, the holders of shares of Series A Preferred Stock will not be entitled
to any further participation in any distribution of assets by the Corporation.
None-of the sale, conveyance, exchange or transfer of all or substantially all
of the property and assets of the corporation, the consolidation or merger of
the Corporation with or into another corporation or the merger or consolidation
of any other corporation into or with the Corporation shall be deemed to be a
liquidation, dissolution or winding up.of the Corporation.
6. Redemption.
(a) Right of Redemption. Each of the outstanding shares of Series A
Preferred Stock shall be subject to redemption by the Corporation at the option
of the holder thereof at any time after the fifth anniversary of the Date of
Issuance (the "Anniversary Date") at a price equal the Stated Value per share
plus accrued and unpaid dividends (the "Redemption Price") out of funds legally
available therefor.
(b) Redemption Notice.' Subject to the terms of Section B.(6)(a) of
this Article FOURTH, the holder of any
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<PAGE>
shares of Series A Preferred Stock may exercise the redemption right as to all
the shares of Series A Preferred Stock then owned by such holder by delivering
to the Corporation at any time after the Anniversary Date the certificate or
certificates for the shares to be exchanged, duly endorsed or assigned in blank,
accompanied by a written notice stating (i) that the holder elects to redeem
such shares, (ii) the number of shares to be redeemed and (iii) the date on
which the holder wishes to redeem such shares (the "Redemption Date"). The
Redemption Price shall be payable no more than 30 days after the Redemption
Date. Any such holder shall be entitled to receive payment of the Redemption
Price upon such redemption only upon surrender to the Corporation, at the
address of its principal offices, of the certificates representing such holder's
shares of Series A Preferred Stock to be redeemed.
(c) Effect of Redemption. No shares of Series A Preferred Stock
redeemed pursuant to this Section 6 shall be reissued or otherwise disposed of,
and no shares of Series A Preferred shall be issued in lieu thereof, and the
Corporation shall cause all shares of Series A Preferred Stock redeemed to be
retired and cancelled in the manner provided by law. .
(d) No Sinking Fund. The Series A Preferred Stock shall not be
entitled to the benefit of any sinking fund to be applied to the redemption
thereof.
7. Certificates. There shall be set forth on the face or back of each stock
certificate evidencing Series A Preferred Stock a statement that the Corporation
shall furnish without charge to each stockholder who so requests, the powers,
preferences, and rights of each share of the Series A Preferred Stock and the
qualifications, limitations or restrictions of such preferences or rights.
C. COMMON STOCK
Except as otherwise required by Delaware Law, the holders of the
Common Stock shall exclusively possess all voting power. Each holder of shares
of Common Stock shall be entitled to one vote for each share held by such
holder.
In the event of any liquidation, dissolution or winding up of the
Corporation, after there shall have been paid to or set aside for the holders of
the shares of Preferred Stock the full preferential amounts to which they are
entitled, the holders of the Common Stock shall be entitled to received the
remaining assets of the Corporation available for distribution, in cash or in
kind.
Each share of Common Stock shall have the same relative
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<PAGE>
rights as, and be identical in all respects with, all the other shares of Common
Stock.
FIFTH: Except to the extent otherwise specifically provided in the
bylaws of the Corporation, the Board of Directors may adopt, amend or repeal
bylaws of the Corporation.
SIXTH: To the fullest extent that Delaware Law as it exists on the
date hereof or as it may hereafter be amended permits the limitation or
elimination of the liability of directors, no director of the Corporation shall
be liable to the corporation or its stockholders for monetary damages for breach
of fiduciary duty as a director. No amendment to this Certificate of
Incorporation, directly or indirectly by merger, consolidation or otherwise,
having the effect of amending or repealing any of the provisions of this Article
SIXTH 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 or repeal, unless such amendment
shall have the effect of further limiting or eliminating such liability.
SEVENTH: The Corporation shall, to the broadest and maximum extent
permitted by Delaware Law, as the same exists or may hereafter be amended,
indemnify each 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 by reason of the fact that he
is or was a director or officer of the Corporation, or is or was serving at the
request of the Corporation as a director or officer of another corporation,
partnership, joint venture, trust or other enterprise, including service with
respect to employee benefit plans, against expenses (including attorneys' fees),
judgments, fines and amounts paid in settlement actually and reasonably incurred
by him in connection with such action, suit or proceeding. In addition, the
Corporation shall, to the broadest and maximum extent permitted by Delaware Law,
as the same exists or may hereafter be amended, pay to such person any and all
expenses (including attorneys' fees) incurred in defending or settling any such
action, suit or proceeding in advance of the final disposition of such action,
suit or proceeding upon receipt of an undertaking by or on behalf of the
director or officer, to repay such amount if it shall ultimately be determined
by a final judgment or other final adjudication that he is not entitled to be
indemnified by the Corporation as authorized in this Article SEVENTH.
The Corporation may purchase and maintain insurance, at its expense,
to protect itself and any person who is or was a director, officer, employee or
agent of the Corporation, or who is or was serving at the request of the
Corporation as a director, officer, employee or agent of another corporation,
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<PAGE>
partnership, joint venture, trust or other enterprise, against any expense,
liability or loss incurred by such person in any such capacity, whether or not
the Corporation would have the power to indemnify such person against such
expense, liability or loss under applicable law as the same exists or may
hereafter be amended.
The rights and authority conferred in this Article SEVENTH shall not
be exclusive of any other rights which any person may have or hereafter acquire
under any statute, provision of the certificate of incorporation of bylaws of
the Corporation, agreement, vote of stockholders or disinterested directors or
otherwise. No repeal or modification of the foregoing provisions of this Article
SEVENTH nor, to the fullest extent permitted by law, any modification of law,
shall adversely affect any right or protection of a director of the Corporation
existing at the time of such repeal or modification."
4. Each share of the one hundred thirty-five (135) shares of Common
Stock of the Corporation presently issued and outstanding is hereby changed into
ten (10) shares of Common Stock so that, upon such change of shares, there will
be one thousand three hundred fifty (1,350) issued and outstanding shares of
Common Stock.
5. The capital of the Corporation will not be reduced under or by
reason of any amendment in this Amended and Restated Certificate of
Incorporation.
6. The foregoing amendment to the Certificate of Incorporation of the
Corporation was adopted by unanimous written consent of the Board of Directors
and the stockholders of the Corporation in accordance with Sections 242 and 245
of the Delaware Law.
IN WITNESS WHEREOF, I have hereunto set my hand this ____ day of
April, 1990.
_________________________
Andre Jaeckle, President
Attest: _____________________
James F. Burns
Assistant Secretary
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<PAGE>
BURKE & RICKER, INC.
CERTIFICATE OF DESIGNATIONS, PREFERENCES
AND RIGHTS OF
SERIES C PREFERRED STOCK
The undersigned, the President of Burns A Ricker, Inc., a Delaware
corporation (the "Corporation"), pursuant to section 151(g) of the Delaware
General Corporation Law (the "Corporation Law"), does hereby certify as of this
2nd day of October, 1990 that pursuant to the authority contained in Article
FOURTH Of the Certificate of Incorporation of the Corporation, and in accordance
with the provisions of Section 151 of the Corporation Law, the Board of
Directors of the Corporation has adopted the following resolution creating a
series of Preferred Stock:
RESOLVED, that a series of the class of authorized Preferred Stock of
the Corporation, par value $.01 per share, be, and hereby is, created; and
that the power, designations, preferences and relative, participating,
optional or other rights of the shares of such series, and the
qualifications, limitations or restrictions thereof, are as follows:
1. Designation and Amount. The shares of such series shall be
designated as "Series C Preferred Stock" (the "Series C Preferred Stock"),
and the number of shares constituting such series shall be nine hundred
(900).
2. Dividends.
(a) A holder of Series C Preferred Stock shall be entitled to receive
cash dividends at the rate of six percent (0) per annum (calculated as a
percentage of the Stated Value, an defined in Section 4 hereof) per share
(as adjusted for any stock dividends, splits or combinations with respect
to such shares), when, as and if declared by the Board of Directors of the
Corporation out
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<PAGE>
of funds legally available therefor. Such dividends shall be cumulative and
shall accrue from the date of issuance (the "Date of Issuance"). Accrued
but unpaid dividends shall not bear interest and shall be due and payable
on each anniversary of the Data of Issuance. Dividends paid an the shares
of Series C Preferred Stock in an amount less than the total amount of such
dividends at the time payable on such shares shall be allocated pro-rata on
a share-by-share basis among all such shares at the time outstanding;
(b) The Corporation shall not M dividends on the Common Stock or any
other class of capital stock of the corporation ranking junior to the
Series C Preferred stock as to dividends (other than dividends payable in
Common stock or in any other class of capital stock of the Corporation
ranking Junior to the Series.C Preferred Stock as to dividends and
distribution of assets) during any dividend period (which for purposes
hereof shall mean the twelve (12) month period from the Date of Issuance to
but not including the first anniversary date thereof and each twelve (12)
month period thereafter) until (1) all accumulated and unpaid dividends
from all prior dividend years with respect to the Series C Preferred Stock
shall have been paid or declared and &at apart for payment, and (2) the
dividends payable to the holders of Series C Preferred Stock pursuant to
subsection 2(a) above shall have been paid, or declared and not apart for
payment, during that dividend year;
(c) No dividend shall be paid on or declared and set apart for the
shares of any series of Preferred Stock other than Series C Preferred
Stock, unless concurrently therewith, a dividend for the same dividend
period, ratably in proportion to the respective annual rates fixed for such
other series of Preferred Stock and the Series C Preferred stock, shall be
paid on or declared and set apart for the shares of Series C Preferred
Stock;
(d) Except as otherwise herein provided or by law, no right shall
accrue to the holders of Series C Preferred Stock by reason of the fact
that dividends payable On said shares have not been paid or declared and
set aside for payment in any prior year.
3. Voting. Except as otherwise provided by the Corporation Law, the
shares of Series C Preferred Stock shall not have any voting powers, either
general or specific, and a holder of Series C Preferred Stock shall
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not be entitled to notice of any meeting of the stockholders of the
Corporation.
4. Distribution Upon Liquidation, Dissolution or Winding-Up. In the
event of any voluntary or involuntary liquidation, dissolution or winding
up of the Corporation, the holder of shares of Series C Preferred Stock
shall be entitled to receive out of assets of the Corporation available for
distribution to stockholders liquidating distributions in the amount of
$7,500 per share (the "Stated Value"), plus accrued and unpaid dividends,
before any distribution of assets shall be made to holders of Common Stock
or any other shares of capital stock junior to the Series C Preferred Stack
as to distributions to be received upon liquidation, dissolution or winding
up. If upon any voluntary or involuntary liquidation, dissolution or
winding up of the Corporation, the amounts payable with respect to the
Series C Preferred Stock and any other shares of stock of the Corporation
ranking as to any such distribution on a parity with the series C Preferred
Stock are not paid in full, the bolder of the Series C Preferred Stock and
of such other shares will share ratably in any such distribution of assets
of the Corporation in proportion to the full respective preferential
amounts to which they are entitled. After payment to the holders of the
Series C Preferred Stock of the full preferential amounts to which they are
entitled, the holders of shares of Series C Preferred Stock will not be
entitled to any further participation in any distribution of assets by the
Corporation, None of the salt, conveyance, exchange or transfer of all or
substantially all of the property and assets of the Corporation,, the
consolidation or merger of the Corporation with or into another corporation
or the merger or consolidation of any other corporation into or with the
Corporation shall be deemed to be a liquidation, dissolution or winding up
of the Corporation.
5. Certificates. There shall be met forth on the face or back of
each stock certificate evidencing series C Preferred Stock a statement that
the Corporation shall furnish, without charge to each stockholder who so
re-
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quests, the powers, preferences and rights of each share of the Series C
Preferred stock and the qualifications, limitations or restrictions of such
preferences or rights.
IN WITNESS WHEREOF, I have hereunto set my hand this 2nd day of
October, 1990.
_________________________
Andre Jaeckle, President
ATTEST:
______________________
James Burns
Assistant Secretary
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<PAGE>
CERTIFICATE OF AMENDMENT
OF
CERTIFICATE OF DESIGNATIONS FILED WITH THE SECRETARY OF
STATE OF THE STATE OF DELAWARE
OF
BURNS & RICKER, INC.
(Pursuant to Section 242 of the General
Corporation Law of the State of Delaware)
We, the undersigned, Andre G. Jaeckle, President and James F. Burns,
Secretary of Burns & Ricker, Inc., a corporation organized and existing under
the laws of the State-of Delaware, do hereby certify that the following
amendment to the Certificate of Designations, Preferences and Rights of Series C
Preferred Stock has been duly adopted, and the filing of this certificate has
been duly authorized, in accordance with the provisions of Section 142 of the
General Corporation Law of the State of Delaware.
VOTED: That the Certificate of Designations of this corporation dated
October 2, 1990 and filed with the Secretary of State of Delaware on October 5,
1990 be amended by striking therefrom in the first sentence of Paragraph 4 the
phrase "$7,500 per share" and substituting in lieu thereof the phrase 11$1,000
per share".
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IN WITNESS WHEREOF, Burns & Ricker, Inc. has caused its corporate seal to
be hereunto affixed and this certificate to be signed by Andre G. Jaeckle, its
President and James F. Burns, its Secretary this 21 day of July, 1993.
BURNS & RICKER, INC.
By: ____________________________
Andre G. Jaeckle - President
By: ____________________________
James F. Burns - Secretary
[CORPORATE SEAL]
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<PAGE>
EXHIBIT 3.14
BY-LAWS
OF
BAGEL CRISPS ACQUISITION CORP.
(a Delaware corporation)
"Now known as "Burns & Ricker, Inc."
ARTICLE I
STOCKHOLDERS
1. CERTIFICATES REPRESENTING STOCK. Certificates representing stock
the corporation shall be signed by, or in the name of, the corporation by the
Chairman or Vice-Chairman of the Board of Directors, if any, or by the President
or a Vice-President and by the Treasurer or an Assistant Treasurer or the
Secretary or an Assistant Secretary of the corporation. Any or all the
signatures on any such certificate may be a facsimile. In case any officer,
transfer agent, or registrar who has signed or whose facsimile signature has
been placed upon a certificate shall have ceased to be such officer, transfer
agent, or registrar before such certificate is issued, it may be issued by the
corporation with the same effect as if he were such officer, transfer agent, or
registrar at the date of issue.
Whenever the corporation shall be authorized to issue more than one
class. of stock or more than one series of any class of stock, and whenever the
corporation shall issue any shares of its stock as partly paid stock, the
certificates representing shares of any such class or series or. of any such
partly paid stock shall set forth thereon the statements prescribed by the
General Corporation Law. Any restrictions on the transfer or registration of
transfer of any shares of stock of any class or series shall be noted
conspicuously on the certificates representing such shares.
The corporation may issue a new certificate of stock or uncertificated
shares in place of any certificate theretofore issued by it, alleged to have
been lost, stolen, or destroyed, and the Board of Directors may require -the
owner of the lost, stolen, or destroyed certificate, or his 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 loss,
<PAGE>
theft, or destruction of any such certificate or the issuance of any such now
certificate or uncertificated shares.
2. UNCERTIFICATED SHARES. Subject to any conditions imposed by the
General Corporation Law, the Board of Directors of the corporation may provide
by resolution or resolutions that some or all of any or all classes or series of
the stock of the corporation shall be uncertificated shares. Within a reasonable
time after the issuance or transfer of any uncertificated shares, the
corporation shall send to the registered owner thereof the written notice
prescribed by the General Corporation Law.
3. FRACTIONAL SHARE INTERESTS. The corporation may, but shall not be
required to, issue 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 form (either
represented by a certificate or uncertificated) or bearer form (represented by a
certificate) which shall entitle the holder to receive a full share upon the
surrender of such scrip or warrants aggregating a full share. A certificate for
a fractional share or an uncertificated 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 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 the
full shares or uncertificated full shares before a specified date, or subject to
the conditions 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.
4. STOCK TRANSFERS. Upon compliance with provisions restricting the
transfer or registration of transfer of shares of stock, if any, transfer or
registration of transfers of shares of stock of the corporation shall be made
only on the stock ledger of the corporation by the registered holder thereof, or
by his attorney thereunto authorized by power of attorney duly executed and
filed with the Secretary of the corporation or
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with a transfer agent or a registrar, if any, and, in the case of shares
represented by certificates, on surrender of the certificate or certificates for
such shares of stock properly endorsed and the payment of all taxes due thereon.
5. RECORD DATE FOR STOCKHOLDERS. For the Purpose of determining 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 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 directors may fix, in advance, a record date, which
shall not be more than sixty days 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, 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 next preceding the day on which the meeting is
held; 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; and 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 any 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.
6. MEANING OF CERTAIN TERMS. As used herein in respect of the right
to notice of a meeting of stockholders or a waiver thereof or to participate or
vote thereat or to consent or dissent in writing in lieu of a meeting, as the
case may be, the term "share" or 'shares' or "share of stock" or "shares of
stock" or "stockholder" or "stockholders" refers to an outstanding share or
shares of stock and to a holder or holders of record of outstanding shares of
stock when the corporation is authorized to issue only one class of shares of
stock, and said reference is also intended to include any outstanding share or
shares of
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stock and any holder or holders of record of outstanding shares of stock of any
class upon which or upon whom the certificate of incorporation confers such
rights where there are two or more classes or series of shares of stock or upon
which or upon whom the General Corporation Law confers such rights
notwithstanding that the certificate of incorporation may provide for more than
one class or series of shares of stock, one or more of which are limited or
denied such rights thereunder provided, however, that no such right shall vest
in the event of an increase or a decrease in the authorized number of shares of
stock of any class or series which is otherwise denied voting rights under the
provisions of the certificate of incorporation, except as any provision of law
may otherwise require.
7. STOCKHOLDER MEETINGS.
- TIME. The annual meeting shall be held on the date and at the
time fixed, from time to time, by the directors, provided, that the first annual
meeting shall be held on a date within thirteen months after the organization of
the corporation, and each successive annual meeting shall be held on a date
within thirteen months after the date of the preceding annual meeting. A special
meeting shall be held on the date and at the time fixed by the directors.
- PLACE. Annual meetings and special meetings shall be held at
such place, within or without the State of Delaware, as the directors may, from
time to time, fix. Whenever the directors shall fail to fix such place, the
meeting shall be held at the registered office of the corporation in the state
of Delaware.
- CALL. Annual meetings and special meetings may be called by the
directors or by any officer instructed by the directors to call the meeting.
- NOTICE OR WAIVER OF NOTICE. Written notice of all meeting and
stating the place, date, and hour of the meeting and stating the place within
the city or other municipality or community at which the list of stockholders of
the corporation may be examined. The notice of an annual meeting shall state
that the meeting is called for the election of directors and for the transaction
of other business which may properly come before the meeting, and shall, (if any
other action which could be taken at a special meeting is to be taken at such
annual meeting) state the purpose or purposes. The notice of a special meeting
shall in all instances state the purpose or purposes for
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<PAGE>
which the meeting is called. The notice of any meeting shall also include, or be
accompanied by, any additional statements, information, or documents prescribed
by the General Corporation Law. Except as otherwise provided by the General
Corporation Law, a copy of the notice of any meeting shall be given, personally
or by mail? not less than ten days nor more than sixty days before the date of
the meeting, unless the lapse of the prescribed period of time shall have bean
waived, and directed to each stockholder at his record address or at such other
address which he may have furnished by request in writing to the Secretary of
the corporation. 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 days hence, and/or to another place, and if
an announcement of the adjourned time and/or place is made at the meeting, it
shall not be necessary to give. notice of the adjourned meeting unless the
directors, after adjournment, fix a new record date for the adjourned meeting.
Notice need not be given to any stockholder who submits a written waiver of
notice signed by him before or after the time stated therein. Attendance of a
stockholder at a meeting of stockholders shall constitute a waiver of notice of
such meeting, except when the stockholder attends the meeting for the express
purpose of objecting, at the beginning of the meeting, 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 stockholders need be specified in any written waiver of notice.
- STOCKHOLDER LIST. The officer who has charge of the stock ledger
of corporation shall prepare and make, at least ten days before every meeting of
stockholders, a complete list of the stockholders, arranged in alphabetical
order, and 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 g, during stockholder, for any purpose germane to the meeting
ordinary business hours, for a period of at least ten days prior to the meeting,
either at a place within the city or other municipality or community 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. The stock ledger shall be the only evidence as to who are the
stockholders entitled to examine the stock
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<PAGE>
ledger, the list required by this section or the books of the corporation, or to
vote at any meeting of stockholders.
- CONDUCT OF MEETING. Meetings of the stockholders shall be
presided over by one of the following officers in the order of seniority and if
present and acting - the Chairman of the Board, if any, the Vice-Chairman of the
Board, if any, the President, a. Vice-President, or, if none of the foregoing is
in office and present and acting, by a chairman to be chosen by the
stockholders. The Secretary of the corporation, or in his absence, an Assistant
Secretary, shall act as secretary of every meeting, but if neither the Secretary
nor an Assistant Secretary is present the Chairman of the meeting shall appoint
a secretary of the meeting.
- PROXY REPRESENTATION. Every stockholder may authorize another
person or persons to act for him by proxy in all matters in which a stockholder
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 stockholder or by his attorney-in-fact. No
proxy shall be voted or acted upon after three years from its date unless such
proxy provides for a longer period. 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.
- INSPECTORS. The directors, in advance of any meeting, may, but
ne 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, but need not, 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 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 meting 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
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existence of a quorum, the validity and effect of proxies, and shall receive
votes , ballots or consents I 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 stockholders. On request of
the person presiding at the meeting, 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.
- QUORUM. The holders of a majority of the outstanding shares of
stock shall constitute a quorum at a meeting of stockholders for the transaction
of any business. The stockholders present may adjourn the meeting despite the
absence of a quorum.
- VOTING. 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 General Corporation Law prescribes a different percentage of
votes and/or a different exercise of voting power, and except as may.be
otherwise prescribed by the provisions of the certificate of incorporation and
these By-Laws. In the election of directors, and for any other action, voting
need not be by ballot.
8. STOCKHOLDER ACTION WITHOUT MEETINGS. Any action required by the
taken at any annual or special meeting of stockholders, or any action which may
be taken at any annual or special meeting of 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.
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<PAGE>
ARTICLE II
DIRECTORS
1. FUNCTIONS AND DEFINITION. The business and affairs of the
corporation shall be managed by or under the direction of the Board of Directors
of the corporation. The Board of Directors shall have the authority to fix the
compensation of the members thereof. The use of the phrase "whole board" herein
refers to the total number of directors which the corporation would have if
there were no vacancies.
2. QUALIFICATIONS AND NUMBER. A director need not be a stockholder,
a citizen of the United States, or a resident of the State of Delaware. The
initial Board of Directors shall consist of one person. Thereafter the number of
directors constituting the whole board shall be at least one. Subject to the
foregoing limitation and except for the first Board of Directors, such number
may be fixed from time to time by action of the stockholders or of the
directors, or, if the number is not fixed, the number shall be three. The number
of directors may be increased or decreased by action of the stockholders or of
the directors.
3. ELECTION AND TERM. The first Board of Directors, unless the
members thereof shall have been named in the certificate of incorporation, shall
be elected by the incorporator or incorporators and shall hold office until the
first annual meeting of stockholders and until their successors are elected and
qualified or until their earlier resignation or removal. Any director may resign
at any time upon written notice to the corporation. Thereafter, directors who
are elected at an annual meeting of stockholders, and directors who are elected
in the interim to fill vacancies and newly created directorships, shall hold
office until the next annual meeting of stockholders and until their successors
are elected and qualified or until their earlier resignation or removal. In the
interim between annual meetings of stockholders or of spacial meetings of
stockholders called for the election of directors and/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 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 quorum, or by the sole remaining director.
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4. MEETINGS.
- TIME. Meetings shall be held at such time as the Board shall
fix, except that the first meeting of a newly elected Board shall be held as
soon after its election as the directors may conveniently assemble.
- PLACE. Meetings shall be hold at such place within or without
the State of Delaware as shall be fixed by the Board.
- CALL. No call shall be required for regular meetings for which
the time and place have been fixed. Special meetings may be called by or at the
direction of the Chairman of the Board, if any, the Vice-Chairman of the Board,
if any, of the President, or of a majority of the directors in office.
- NOTICE OR ACTUAL OR CONSTRUCTIVE WAIVER. No notice shall be
required for regular meetings for which the time and place have been fixed.
written, oral, or any other mode of notice of the time and place shall be given
for special meetings in sufficient time for the convenient assembly of the
directors thereat, Notice need not be given to any director, or to any member of
a committee of directors who submits a written waiver of notice signed by him
before or after the time stated therein. Attendance of any such person at a
meeting shall constitute a waiver of notice of such meeting, except when he
attends a meeting for the express purpose of objecting, at the beginning of the
meeting, 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 directors need be specified in any
written waiver of notice.
- QUORUM MM ACTION. A majority of the whole Board shall constitute
a quorum except when a vacancy or vacancies prevents such majority, whereupon a
majority of the directors in office shall constitute a quorum, provided, that
such majority shall constitute at least one-third of the whole Board. A majority
of the directors present, whether or not a quorum is present, may adjourn a
meeting to another time and place. Except as herein otherwise provided, and
except as otherwise provided by the General 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. The quorum and voting provisions herein stated
shall not be construed as conflicting with any
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provisions of the General Corporation Law and these By-Laws which govern a
meeting of directors hold to fill vacancies and newly created directorships in
the Board or action of disinterested directors.
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 by means of which all persons participating in the
meeting can hear each other.
- CHAIRMAN OF THE MEETING. The Chairman of the Board, if any and if
present and acting, shall preside at all meetings. Otherwise, the Vice-Chairman
of the Board, if any and if present and acting, or the President, if present and
acting, or any other director chosen by the Board, shall preside.
5. REMOVAL OF DIRECTORS. Except as may otherwise be provided by the
General corporation Law, any director or the entire Board of Directors may be
removed, with or without cause, by the holders of a majority of the shares then
entitled to vote at an election of directors.
6. COMMITTEES. The Board of Directors may, by resolution passed by a
majority of the whole Board, 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 of any committee, who may
replace any absent or disqualified member at any meeting of the committee. In
the absence or disqualification of any member of any such committee or
committees, 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. Any such
committee, to the extent provided in the resolution of the Board, shall have and
may exercise the powers and authority of the Board of Directors in the
management of the business and affairs of the corporation with the exception of
any authority the delegation of which is prohibited by Section 141 of the
General Corporation Law, and may authorize the seal of the corporation to be
affixed to all papers which may require it.
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7. WRITTEN ACTION. Any action required or permitted to be taken at
any meeting of the Board of Directors or 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.
ARTICLE III
OFFICERS
The officers of the corporation shall consist of a President, a
Secretary, a Treasurer, and, if deemed necessary, expedient, or desirable by the
Board of Directors, a Chairman of the Board, a Vice-Chairman of the Board, an
Executive Vice-President, one or more other Vice-Presidents, one or more
Assistant Secretaries, one or more Assistant Treasurers, and such other officers
with such titles as the resolution of the Board of Directors choosing them shall
designate. Except as may otherwise be provided in the resolution of the Board of
Directors choosing him, no officer other than the chairman or Vice-Chairman of
the Board, if any, need be a director. Any number of offices may be held by the
same person, as the directors may determine.
Unless otherwise provided in the resolution choosing him, each officer
shall be chosen for a term which shall continue until the meeting of the Board
of Directors following the next annual meeting of stockholders and until his
successor shall have been chosen and qualified.
All officers of the corporation shall have such authority and perform
such duties in the management and operation of the corporation as shall be
prescribed in the resolutions of the Board of Directors designating and choosing
such officers and prescribing their authority and duties, and shall have such
additional authority and duties as are incident to their office except to the
extent that such resolutions may be inconsistent therewith. The Secretary or an
Assistant Secretary of the corporation shall record all of the proceedings of
all meetings and actions in writing of stockholders, directors, and committees
of directors, and shall exercise such additional authority and perform such
additional duties as the Board shall assign to him. Any officer may be removed,
with or without cause, by the Board of Directors. Any vacancy in any office may
be filled by the Board of Directors.
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ARTICLE IV
CORPORATE SEAL
The corporate seal shall be in such form an the Board of Directors
shall proscribe.
ARTICLE V
FISCAL YEAR
The fiscal year of the corporation shall be fixed, and shall be
subject to change, by the Board of Directors.
ARTICLE VI
CONTROL OVER BY-LAWS
Subject to the provisions of the certificate of incorporation and the
provisions. of the General Corporation Law, the power to amend, alter or repeal
these By-Laws and to adopt new By-Laws may be exercised by the Board of
Directors.
I HEREBY CERTIFY that the foregoing is a full, true and correct copy
of the By-Laws of BAGEL CRISPS ACQUISITION CORP., a Delaware corporation, as in
effect on the date hereof.
WITNESS my hand and the seal of the corporation.
Dated: December 31, 1986
______________________________
Secretary of
BAGEL CRISPS ACQUISITION CORP.
(SEAL)
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Exhibit 5.1
[LETTERHEAD OF DECHERT PRICE & RHOADS]
January 13, 1998
B&G Foods, Inc.
426 Eagle Rock Avenue
Roseland, NJ 07068
B&G Foods, Inc.
9 5/8% Senior Subordinated Notes due 2007
Dear Sirs:
We have acted as counsel for B&G Foods, Inc., a Delaware corporation
(the "Registrant"), and BGH Holdings, Inc., a Delaware corporation, Bloch &
Guggenheimer, Inc., a Delaware corporation, Burns & Ricker, Inc., a Delaware
corporation, Trappey's Fine Foods, Inc., a Delaware corporation, Roseland
Distribution Company, a Delaware corporation, and RWBV Acquisition Corp., a
Delaware corporation, (collectively, the "Guarantors") in connection with the
filing by the Registrant and the Guarantors of a Registration Statement on
Form S-4, Registration No. 333-39813, together with the amendments thereto
(the "Registration Statement"), with the Securities and Exchange Commission
for the purpose of registering $120 million aggregate principal amount of the
Registrant's 9 5/8% Senior Subordinated Notes due 2007 (the "New Notes")
under the Securities Act of 1933, as amended (the "Act"). The New Notes are
to be issued in exchange for an equal aggregate principal amount of the
Registrant's outstanding 9 5/8% Senior Subordinated Notes due 2007 (the
"Existing Notes") pursuant to the Registration Rights Agreement, dated as of
August 11, 1997, among the Registrant, the Guarantors, Lehman Brothers, Inc.
and Lazard Freres & Co. LLC, which Registration Rights Agreement has been
filed as Exhibit 10.1 to the Registration Statement. The New Notes are to be
guaranteed (the "Guarantees") by each of the Guarantors, and are to be issued
pursuant to the terms of the indenture, dated as of August 11, 1997, (the
"Indenture") between the Registrant, the Guarantors, and The Bank of New York
as trustee (the "Trustee"), which Indenture has been filed as Exhibit 4.1 to
the Registration Statement. The Indenture is to be qualified under the Trust
Indenture Act of 1939, as amended (the "TIA").
<PAGE>
B&G Foods, Inc.
January 13, 1998
Page 2
In connection with the foregoing, we have reviewed such records,
documents, agreements and certificates, and examined such questions of law,
as we have considered necessary or appropriate for the purpose of this
opinion. In making our examination of records, documents, agreements and
certificates, we have assumed the authenticity of the same, the correctness
of the information contained therein, the genuineness of all signatures, the
authority of all persons entering and maintaining records or executing
documents, agreements and certificates, and the conformity to authentic
originals of all items submitted to us as copies (whether certified,
conformed, photostatic or by other electronic means) of records, documents,
agreements or certificates. In rendering our opinion, we have relied as to
factual matters upon certificates of public officials and certificates and
representations of officers of the Registrant and Guarantors.
We have assumed that the Indenture has been duly authorized,
executed and delivered by the Trustee and constitutes a legal, valid and
binding agreement of the Trustee. In addition, we have assumed that there
will be no changes in applicable law between the date of this opinion and the
date of issuance and delivery of the New Notes.
Based upon the foregoing and having regard for such legal
considerations as we deem relevant, we are of the opinion that:
(1) The New Notes have been duly authorized by the Registrant. When (i)
the Registration Statement has been declared effective, (ii) the Indenture
has been duly qualified under the TIA, (iii) the New Notes have been duly
executed by the Registrant, (iv) the New Notes have been duly authenticated
by the Trustee in accordance with the terms of the Indenture, and (v) the New
Notes have been issued and delivered in exchange for the Existing Notes in
accordance with the terms set forth in the prospectus included in the
Registration Statement, then upon the occurrence of all of the foregoing, the
New Notes will be the valid and binding obligations of the Registrant.
(2) The Guarantees have been duly authorized by each of the Guarantors.
When (i) the Registration Statement has been declared effective, (ii) the
Indenture has been duly qualified under the TIA, (iii) the New Notes have
been duly executed by the Registrant, (iv) the notation of the Guarantees on
the New Notes has been duly endorsed by each Guarantor, and (v) the New Notes
have been duly authenticated by the Trustee in accordance with the terms of
the Indenture, then upon the occurrence of all of the foregoing, the
<PAGE>
B&G Foods, Inc.
January 13, 1998
Page 3
Guarantees will be the valid and binding obligations of the Guarantors.
This opinion is being delivered to the Registrant and the Guarantors in
connection with the filing of the Registration Statement and for no other
purpose. We are members of the Bar of the State of New York, and we express
no opinion as to the laws of any jurisdiction other than the federal laws of
the United States of America and the laws of the State of New York and, to
the extent applicable, to the General Corporation Law of the State of
Delaware.
We hereby consent to the filing of this opinion as Exhibit 5.1 to
the Registration Statement and to the use of our name under the caption
"Legal Matters" in the prospectus which is included in the Registration
Statement. In giving the foregoing consent, we do not admit that we come
within the category of persons whose consent is required by the Act or the
rules and regulations promulgated thereunder.
This opinion is not to be used or quoted for any other purpose
without our prior written approval.
Very truly yours,
/s/ DECHERT PRICE & RHOADS
<PAGE>
Exhibit 8.1
[LETTERHEAD OF DECHERT PRICE & RHOADS]
January 13, 1998
B&G Foods, Inc.
426 Eagle Rock Avenue
Roseland, NJ 07068
Re: Offer to Exchange
9 5/8% Senior Subordinated Notes due 2007
for all outstanding
9 5/8% Senior Subordinated Notes due 2007
of B&G Foods, Inc.
Ladies and Gentlemen:
We have acted as counsel for B&G Foods, Inc., a Delaware corporation
having its principal office in Roseland, New Jersey (the "Company"). We are
giving this opinion in connection with the filing by the Company of a
Registration Statement on Form S-4, Registration No. 333-39813 (as amended,
the "Registration Statement") with respect to the Exchange Offer.(1)
In arriving at our opinion we have examined and relied upon the
following documents: the Registration Statement; the Existing Notes and the
form of New Notes to be issued; the Indenture dated as of August 11, 1997, by
and between the Company, the Guarantors and The Bank of New York, as trustee;
and the Registration Rights Agreement. We have also read and relied upon
such records of the Company as we have deemed appropriate. For purposes of
this opinion, we have assumed the authenticity of original documents, the
accuracy of copies and the genuineness of signatures. We understand and
assume that (i) each agreement identified herein represents and will
represent the valid and binding obligation of the respective parties thereto,
enforceable in accordance with its respective terms, and the entire agreement
between the parties with respect to the subject matter thereof, (ii) the
parties to each agreement have complied, and will comply, with all of their
respective covenants, agreements and undertakings contained therein and (iii)
the transactions provided for by each agreement were and will be carried out
in accordance with their terms.
- -----------------------
(1) All capitalized terms used herein that are not otherwise defined have the
same meaning as set forth in the Registration Statement.
<PAGE>
Our opinion is based upon our analysis and interpretation of the
Internal Revenue Code of 1986, as amended (the "Code"), as well as upon court
decisions, regulations, and other administrative interpretations of such
statutes as of the date hereof. For purposes of this opinion, we assume that
there will be no changes in applicable law between the date hereof and the
date of issuance of the New Notes. The statutory provisions, regulations,
and interpretations upon which our opinion is based are subject to change,
and such changes could apply retroactively. In addition, our opinion has no
binding effect on the Internal Revenue Service or on any court and only
represents our professional judgment. Thus, there can be no assurance that
positions contrary to those stated in our opinion may not be asserted by the
Internal Revenue Service or another taxing authority.
In our opinion, the exchange of Existing Notes pursuant to the
Exchange Offer should be treated as a continuation of the corresponding
Existing Notes because the terms of the New Notes are not materially
different from the terms of the Existing Notes and, accordingly, (i) such
exchange should not constitute a taxable event to a U.S. Holder, (ii) no gain
or loss should be realized by a U.S. Holder upon receipt of a New Note, (iii)
the holding period of the New Note should include the holding period of the
Existing Note exchanged therefor and (iv) the adjusted tax basis of the New
Note should be the same as the adjusted tax basis of the Existing Note
exchanged therefor immediately before the exchange.
In our opinion, the description of the material United States
federal income tax consequences to a U.S. Holder that appears in the
Registration Statement under the caption "Certain Federal Income Tax
Considerations" is accurate in all material respects. Such description does
not discuss state, local or foreign tax consequences, nor does it discuss tax
consequences to certain categories of holders and our opinion is limited to
those United States tax consequences specifically described therein. This
opinion is given to the Company in connection with the filing of the
Registration Statement and for no other purpose. In giving the foregoing
opinion, we express no opinion other than as to the federal income tax laws
of the United States of America.
We consent to the filing of this opinion as Exhibit 8.1 to the
Registration Statement and to the reference to this opinion in the
Registration Statement. This opinion is not to be used or quoted for any
other purpose without our prior written approval in each instance.
Very truly yours,
/s/ DECHERT PRICE & RHOADS
---------------------------
<PAGE>
EXHIBIT 10.3
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
SECOND AMENDED AND RESTATED CREDIT AGREEMENT
DATED AS OF AUGUST 11, 1997
among
B&G FOODS, INC.,
(formerly known as B Companies Acquisition Corp.),
as Borrower
HELLER FINANCIAL, INC.
as Agent and as a Lender
and
THE OTHER LENDERS PARTY HERETO
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
<PAGE>
TABLE OF CONTENTS
SECTION 1
AMOUNTS AND TERMS OF LOANS 3
1.1 LOANS 3
(A) TERM LOANS 3
(B) REVOLVING LOANS 3
(C) LETTERS OF CREDIT AND RISK PARTICIPATION AGREEMENTS 4
(1) MAXIMUM AMOUNT 4
(2) REIMBURSEMENT 4
(3) CONDITIONS OF ISSUANCE OF LETTERS OF
CREDIT OR RISK PARTICIPATION AGREEMENTS 5
(4) REQUEST FOR LENDER LETTERS OF CREDIT OR
RISK PARTICIPATION AGREEMENTS 5
(D) NOTES 6
1.2 INTEREST AND RELATED FEES 6
(A) INTEREST 6
(B) COMMITMENT FEE 7
(C) RISK PARTICIPATION FEE 8
(D) COMPUTATION OF INTEREST AND RELATED FEES 8
(E) DEFAULT RATE OF INTEREST 8
1
<PAGE>
(F) EXCESS INTEREST 8
(G) LIBOR RATE ELECTION 9
1.3 OTHER FEES AND EXPENSES 9
(A) (1) CERTAIN FEES 9
(B) LIBOR BREAKAGE FEE 9
(C) EXPENSES AND ATTORNEYS FEES 9
1.4 PAYMENTS 10
1.5 PREPAYMENTS 10
(A) VOLUNTARY PREPAYMENT OF REVOLVING LOANS 10
(B) PREPAYMENTS FROM ASSET DISPOSITIONS 11
(C) PREPAYMENT FROM ISSUANCE OF SECURITIES 11
(D) APPLICATION OF PROCEEDS 11
1.6 TERM OF THE AGREEMENT 12
1.7 LOAN ACCOUNTS 12
1.8 CAPITAL ADEQUACY AND OTHER ADJUSTMENTS 12
1.9 TAXES 13
(A) NO DEDUCTIONS 13
(B) CHANGES IN TAX LAWS 13
(C) FOREIGN LENDERS 14
2
<PAGE>
1.10 OPTIONAL PREPAYMENT/REPLACEMENT OF LENDER IN RESPECT
OF INCREASED COSTS 15
SECTION 2
AFFIRMATIVE COVENANTS 16
2.1 COMPLIANCE WITH LAWS 16
2.2 MAINTENANCE OF PROPERTIES; INSURANCE 17
2.3 INSPECTION; LENDER MEETING 17
2.4 CORPORATE EXISTENCE, ETC 17
2.5 INTENTIONALLY OMITTED 17
2.6 FURTHER ASSURANCES. 17
2.7 LIQUIDATION OF B&G-DSD. 18
SECTION 3
NEGATIVE COVENANTS 18
3.1 INDEBTEDNESS 18
3.2 LIENS AND RELATED MATTERS 19
(A) NO LIENS 19
(B) NO NEGATIVE PLEDGES 21
(C) NO RESTRICTIONS ON SUBSIDIARY DISTRIBUTIONS TO BORROWER 21
3.3 INVESTMENTS; JOINT VENTURES 21
3.4 CONTINGENT OBLIGATIONS 22
3
<PAGE>
3.5 RESTRICTED JUNIOR PAYMENTS 24
3.6 RESTRICTION ON FUNDAMENTAL CHANGES 26
3.7 DISPOSAL OF ASSETS OR SUBSIDIARY STOCK 26
3.8 TRANSACTIONS WITH AFFILIATES 27
3.9 MANAGEMENT FEES AND COMPENSATION 27
3.10 CONDUCT OF BUSINESS 28
3.11 CHANGES RELATING TO SUBORDINATED INDEBTEDNESS;
EXCHANGE NOTES; CHANGES RELATING TO EAGLE ROCK AVENUE
DOCUMENTS 28
3.12 FISCAL YEAR 29
3.13 PRESS RELEASE; PUBLIC OFFERING MATERIALS 29
3.14 SUBSIDIARIES 29
3.15 BANK ACCOUNTS 29
3.16 USE OF PROCEEDS 29
3.17 NO VIOLATION OF SUBORDINATED DEBT DOCUMENTS 30
3.18 PERMITTED ACQUISITIONS 30
SECTION 4
FINANCIAL COVENANTS/REPORTING 33
4.1 CAPITAL EXPENDITURE LIMITS 33
4.2 INTENTIONALLY OMITTED 33
4.3 FIXED CHARGE COVERAGE 33
4
<PAGE>
4.4 TOTAL INTEREST COVERAGE 34
4.5 TOTAL INDEBTEDNESS TO EBIDAT RATIO 35
4.6 FINANCIAL STATEMENTS AND OTHER REPORTS 36
(A) MONTHLY FINANCIALS. 36
(B) YEAR-END FINANCIALS 36
(C) BORROWER COMPLIANCE CERTIFICATE 37
(D) ACCOUNTANTS' REPORTS 37
(E) INTENTIONALLY OMITTED. 37
(F) MANAGEMENT REPORT 37
(G) COLLATERAL VALUE REPORT 37
(H) APPRAISALS 37
(I) PROJECTIONS 38
(J) SEC FILINGS AND PRESS RELEASES 38
(K) EVENTS OF DEFAULT, ETC 38
(L) LITIGATION 38
(M) SUPPLEMENTED SCHEDULES; NOTICE OF CORPORATE CHANGES 38
(N) OTHER INFORMATION 39
4.7 ACCOUNTING TERMS; UTILIZATION OF GAAP FOR PURPOSES OF
CALCULATIONS UNDER AGREEMENT 39
5
<PAGE>
SECTION 5
REPRESENTATIONS AND WARRANTIES 39
5.1 DISCLOSURE 40
5.2 NO MATERIAL ADVERSE EFFECT 40
5.3 NO DEFAULT 40
5.4 ORGANIZATION, POWERS, CAPITALIZATION AND GOOD STANDING 40
(A) ORGANIZATION AND POWERS 40
(B) CAPITALIZATION 40
(C) BINDING OBLIGATION 41
(D) QUALIFICATION 41
5.5 FINANCIAL STATEMENTS 41
5.6 INTELLECTUAL PROPERTY 42
5.7 INVESTIGATIONS, AUDITS, ETC 42
5.8 EMPLOYEE MATTERS 42
5.9 SOLVENCY 42
5.10 EFFECT OF SUPPLEMENTAL RELATED TRANSACTIONS AND
NEW RELATED TRANSACTIONS 42
SECTION 6
DEFAULT, RIGHTS AND REMEDIES 43
6
<PAGE>
6.1 EVENT OF DEFAULT 43
(A) PAYMENT 43
(B) DEFAULT IN OTHER AGREEMENTS 43
(C) BREACH OF CERTAIN PROVISIONS 43
(D) BREACH OF WARRANTY 44
(E) OTHER DEFAULTS UNDER LOAN DOCUMENTS 44
(F) INVOLUNTARY BANKRUPTCY; APPOINTMENT OF RECEIVER, ETC 44
(G) VOLUNTARY BANKRUPTCY; APPOINTMENT OF RECEIVER, ETC 44
(H) GOVERNMENTAL LIENS 44
(I) JUDGMENT AND ATTACHMENTS 45
(J) DISSOLUTION 45
(K) SOLVENCY 45
(L) INJUNCTION 45
(M) ERISA; PENSION PLANS 45
(N) ENVIRONMENTAL MATTERS 45
(O) INVALIDITY OF LOAN DOCUMENTS 45
(P) DAMAGE; STRIKE; CASUALTY 45
(Q) LICENSES AND PERMITS 46
(R) FAILURE OF SECURITY 46
7
<PAGE>
(S) CHANGE IN CONTROL 46
(T) BRS FUNDING AGREEMENT 46
6.2 SUSPENSION OF COMMITMENTS 46
6.3 ACCELERATION 46
6.4 PERFORMANCE BY AGENT 47
SECTION 7
CONDITIONS TO LOANS 47
7.1 CONDITIONS TO THE AMENDMENT AND RESTATEMENT OF THIS AGREEMENT 47
7.2 CONDITIONS TO ALL LOANS 47
SECTION 8
ASSIGNMENT AND PARTICIPATION 48
8.1 ASSIGNMENTS AND PARTICIPATIONS IN LOANS AND NOTES 48
8.2 AGENT 49
(A) APPOINTMENT 49
(B) NATURE OF DUTIES 50
(C) RIGHTS, EXCULPATION, ETC 50
(D) RELIANCE 51
8
<PAGE>
(E) INDEMNIFICATION 51
(F) HELLER INDIVIDUALLY 51
(G) SUCCESSOR AGENT 52
(1) RESIGNATION 52
(2) APPOINTMENT OF SUCCESSOR 52
(3) SUCCESSOR AGENT 52
(H) COLLATERAL MATTERS 52
(1) RELEASE OF COLLATERAL 52
(2) CONFIRMATION OF AUTHORITY; EXECUTION OF RELEASES 53
(3) ABSENCE OF DUTY 53
(I) AGENCY FOR PERFECTION 53
(J) DISSEMINATION OF INFORMATION 54
8.3 AMENDMENTS, CONSENTS AND WAIVERS FOR CERTAIN ACTIONS 54
8.4 SET OFF AND SHARING OF PAYMENTS 54
8.5 DISBURSEMENT OF FUNDS 55
8.6 DISBURSEMENTS OF ADVANCES; PAYMENT 55
(A) REVOLVING LOAN ADVANCES, PAYMENTS AND SETTLEMENTS;
RELATED FEE PAYMENTS 55
(B) TERM LOAN PAYMENTS; RELATED FEE PAYMENTS 57
(C) AVAILABILITY OF LENDER'S PRO RATA SHARE 57
(D) RETURN OF PAYMENTS 57
9
<PAGE>
SECTION 9
MISCELLANEOUS 58
9.1 INDEMNITIES 58
9.2 AMENDMENTS AND WAIVERS 58
9.3 NOTICES 59
9.4 FAILURE OR INDULGENCE NOT WAIVER; REMEDIES CUMULATIVE 60
9.5 MARSHALLING; PAYMENTS SET ASIDE 60
9.6 SEVERABILITY 60
9.7 LENDERS' OBLIGATIONS SEVERAL; INDEPENDENT NATURE OF
LENDERS' RIGHTS 60
9.8 HEADINGS 60
9.9 APPLICABLE LAW 60
9.10 SUCCESSORS AND ASSIGNS 61
9.11 NO FIDUCIARY RELATIONSHIP 61
9.12 CONSTRUCTION 61
9.13 CONFIDENTIALITY 61
9.14 CONSENT TO JURISDICTION AND SERVICE OF PROCESS 61
9.15 WAIVER OF JURY TRIAL 62
10
<PAGE>
9.16 SURVIVAL OF WARRANTIES AND CERTAIN AGREEMENTS 62
9.17 ENTIRE AGREEMENT 63
9.18 COUNTERPARTS; EFFECTIVENESS 63
9.19 EFFECT OF AMENDMENT AND RESTATEMENT. 63
SECTION 10
DEFINITIONS 63
10.1 CERTAIN DEFINED TERMS 63
10.2 OTHER DEFINITIONAL PROVISIONS 75
11
<PAGE>
SECOND AMENDED AND RESTATED CREDIT AGREEMENT
This SECOND AMENDED AND RESTATED CREDIT AGREEMENT is dated as of
August 11, 1997 and entered into by and among B&G FOODS, INC., formerly known as
B Companies Acquisition Corp., a Delaware corporation ("Borrower"), with its
principal place of business c/o Bruckmann, Rosser, Sherrill & Co., Inc., 126
East 56th Street, New York, New York, 10022, HELLER FINANCIAL, INC., a Delaware
corporation (in its individual capacity "Heller"), with offices at 500 West
Monroe Street, Chicago, Illinois 60661, as a Lender (as hereinafter defined in
SECTION 10), and as agent for all Lenders, the other Lenders signatory hereto as
of the date hereof and such other persons executing this Agreement as Lenders at
any time hereafter.
R E C I T A L S:
WHEREAS, certain of the parties hereto are party to that certain
Credit Agreement dated as of December 27, 1996 (as amended, the "Original Credit
Agreement") pursuant to which the Lenders signatory thereto extended certain
term credit facilities and a revolving credit facility to Borrower to fund the
Acquisition (as hereinafter defined in SECTION 10), to provide working capital
financing for Borrower and its Subsidiaries and to provide funds for other
general corporate purposes of Borrower and its Subsidiaries;
WHEREAS, as of the First Amendment Date (as hereinafter defined in
SECTION 10), certain of the parties hereto entered into that certain Amended and
Restated Credit Agreement dated as of June 17, 1997 (as amended, the "Prior
Credit Agreement") pursuant to which the Lenders signatory thereto extended
certain additional term credit facilities and increased the revolving credit
facility in order to amend and restate the "Obligations" under the Original
Credit Agreement, to provide a portion of the funds for the 1997 Acquisition (as
hereinafter defined in SECTION 10), to continue to provide working capital
financing for Borrower and its Subsidiaries and to provide funds for other
general corporate purposes of Borrower and its Subsidiaries;
WHEREAS, Borrower, Agent and Lenders signatory hereto desire to enter
into this Agreement pursuant to which (a) certain of Borrower's "Obligations"
under and as defined in the Prior Credit Agreement (the "Prior Obligations")
shall be amended and restated on the terms herein contained, (b) the Term Loans
(as hereinafter defined in SECTION 10) shall be repaid in full with a portion of
the proceeds of the Permanent Subordinated Debt (as hereinafter defined in
SECTION 10), and (c) Lenders shall increase the amount of the revolving credit
facility in order to (i) amend and restate the remaining outstanding balance
(after giving effect to the New Related Transactions (as hereinafter defined in
SECTION 10)) of the Prior Obligations, (ii) continue to provide working capital
financing for Borrower and its Subsidiaries, (iii) provide funds for Permitted
Acquisitions (as hereinafter defined), subject to the provisions of SUBSECTIONS
3.16 and
1
<PAGE>
3.18 hereof, and (iv) provide funds for other general corporate purposes of
Borrower and its Subsidiaries;
WHEREAS, on the Original Closing Date, Borrower secured all of its
"Obligations" under the Original Loan Documents by pledging to Agent, for the
benefit of Agent and Lenders, the capital stock of its direct Subsidiaries (as
hereinafter defined in SECTION 10) and by granting to Agent, for the benefit of
Agent and Lenders, a security interest in and lien upon all of its personal and
real property, which security interests and liens shall be continuing in all
respects with respect to the Obligations hereunder pursuant to the Loan
Documents;
WHEREAS, on the Original Closing Date, Holdings guaranteed all
"Obligations" of Borrower under the Original Loan Documents and secured such
guaranty by pledging to Agent, for the benefit of Agent and Lenders, the capital
stock of Borrower, which guarantee and pledge were reaffirmed as of the First
Amendment Date, and Holdings is willing to reaffirm such guaranty and pledge on
the Effective Date, which guaranty and pledge shall be continuing in all
respects with respect to the Obligations hereunder pursuant to the Loan
Documents;
WHEREAS, on the Original Closing Date, each of Borrower's direct and
indirect Subsidiaries (other than RWBV) guaranteed all "Obligations" of Borrower
under the Original Loan Documents and secured such guaranty by pledging to
Agent, for the benefit of Agent and Lenders, the capital stock of its direct
Subsidiaries and by granting to Agent, for the benefit of Agent and Lenders, a
security interest and lien upon all of its real and personal property, which
guarantee and pledge were reaffirmed as of the First Amendment Date, and each
such Subsidiary is willing to reaffirm such guaranty and such security on the
Effective Date, which guaranty, security interests and liens shall be continuing
in all respect with respect to the Obligations hereunder pursuant to the Loan
Documents; and
WHEREAS, on the First Amendment Date, Borrower provided further
security for the Obligations by pledging to Agent, for the benefit of Agent and
Lenders, all of the issued and outstanding capital stock of RWBV (as hereinafter
defined in SECTION 10);
WHEREAS, on the First Amendment Date, RWBV guaranteed all
"Obligations" of Borrower under the Prior Loan Documents and secured such
guaranty by pledging to Agent, for the benefit of Agent and Lenders, the capital
stock of its direct Subsidiaries, if any, and by granting to Agent, for the
benefit of Agent and Lenders, a security interest and lien upon all of its real
and personal property, and RWBV is willing to reaffirm such guaranty and such
security on the Effective Date, which guaranty, security interests and liens
shall be continuing in all respects with respect to the Obligations hereunder
pursuant to the Loan Documents;
2
<PAGE>
WHEREAS, prior to the Effective Date, Borrower caused to be formed
RWBV Brands Company, a Delaware corporation and a wholly-owned Subsidiary of
RWBV (the "RWBV Trademark Subsidiary");
WHEREAS, on the Effective Date, RWBV shall provide further security
for the Obligations by pledging to Agent, for the benefit of Agent and Lenders,
all of the issued and outstanding capital stock of the RWBV Trademark
Subsidiary;
WHEREAS, on the Effective Date, the RWBV Trademark Subsidiary shall
guarantee all "Obligations" of Borrower under the Loan Documents and shall
secure such guaranty by pledging to Agent, for the benefit of Agent and Lenders,
the capital stock of its direct Subsidiaries, if any, and by granting to Agent,
for the benefit of Agent and Lenders, a security interest and lien upon all of
its real and personal property;
NOW, THEREFORE, in consideration of the premises and the agreements,
provisions and covenants herein contained, Borrower, Lenders and Agent agree as
follows:
SECTION 1
AMOUNTS AND TERMS OF LOANS
1.1 LOANS. Subject to the terms and conditions of this
Agreement and in reliance upon the representations and warranties of Borrower
contained herein:
(A) TERM LOANS TERM LOANS. On the Effective Date and after giving
effect to the consummation of the New Related Transactions, the principal
balance of the Term Loans (as set forth below) and all accrued and unpaid
interest thereon shall have been repaid in full with a portion of the proceeds
of the Permanent Subordinated Debt:
(1) "Term Loan A", having an aggregate principal balance as of
the Effective Date equal to $25,000,000; and
(1) "Term Loan B", having an aggregate principal balance as of
the Effective Date equal to $35,000,000.
The aggregate amount required to repay the foregoing Term Loans in
full on the Effective Date, including all accrued and unpaid interest thereon as
of such date, is $60,128,458.34, and the aggregate amount required to so repay
the Term Loans together with the
3
<PAGE>
Prior Revolving Loan and all interest and fees thereon as of the Effective Date
is $76,806,556.88. The parties hereto acknowledge that all Term Loans previously
borrowed under SUBSECTION 1.1(A) of the Original Credit Agreement or the Prior
Credit Agreement and repaid may not be reborrowed.
(A) REVOLVING LOANS . Subject to the satisfaction of the terms
and conditions set forth herein and in reliance upon the representations and
warranties of Borrower set forth herein, each Lender agrees, severally and
not jointly, to lend to Borrower from time to time from the Original Closing
Date to the Expiry Date its Pro Rata Share of the loans requested by
Borrower, to be made by Lenders under this SUBSECTION 1.1(B), up to an
aggregate maximum for all Lenders of $50,000,000 (as the same may be reduced
from time to time hereunder, the "Revolving Loan Commitment"). Advances or
amounts outstanding under the Revolving Loan Commitment will be called
"Revolving Loans". On the Effective Date, the outstanding balance of the
Prior Revolving Loan (after giving effect to the New Related Transactions)
shall be repaid in full with a portion of the proceeds of the Permanent
Subordinated Debt (without any permanent reduction of the Revolving Loan
Commitment). Revolving Loans may be repaid and reborrowed. The "Maximum
Revolving Loan Balance" at any time will be equal to the Revolving Loan
Commitment at such time less outstanding Risk Participation Liability at such
time. If at any time the outstanding Revolving Loans exceed the Maximum
Revolving Loan Balance, Lenders shall not be obligated to make Revolving
Loans and issue Lender Letters of Credit and Risk Participation Agreements,
and Revolving Loans must be repaid immediately, in an amount sufficient to
eliminate any such excess. Revolving Loans may be requested in any amount
with one (1) Business Day prior notice required for amounts greater than
$5,000,000. For amounts less than $5,000,000, written or telephonic notice
must be provided by noon CST on the day on which the Loan is to be made. All
LIBOR Loans require three (3) Business Days notice. All Loans requested
telephonically must be confirmed in writing within twenty-four (24) hours.
All such written requests or confirmations shall be in the form of EXHIBIT
1.1(B). Neither Agent nor any Lender shall incur any liability to Borrower
for acting upon any telephonic notice that Agent believes in good faith to
have been given by a duly authorized officer or other person authorized to
borrow on behalf of Borrower, which officer or other person has been
designated by Borrower to Agent in advance by an incumbency certificate or
other written notice. Assuming timely delivery of a Revolving Loan advance
request by Borrower as set forth above, each advance under the Revolving
Loans shall be deposited in immediately available funds by 3:00 CST on the
proposed Funding Date to such account as Borrower may from time to time
designate to Agent in writing.
(B) LETTERS OF CREDIT AND RISK PARTICIPATION AGREEMENTS . The
Revolving Loan Commitment may, in addition to Revolving Loan advances, be
utilized, upon the request of Borrower, for (i) the issuance of letters of
credit for the account of Borrower or any of its Subsidiaries by Agent (each
such letter of credit, a "Lender Letter of Credit") or (ii) the issuance by
Agent of risk participation agreements (each such agreement, a "Risk
Participation
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Agreement") to confirm payment to banks which issue letters of credit for the
account of Borrower or any of its Subsidiaries; PROVIDED, that Borrower shall be
a co-applicant with respect to each such Lender Letter of Credit or other letter
of credit issued for the account of any of its Subsidiaries. All Prior Lender
Letters of Credit and Prior Risk Participation Agreements issued under the Prior
Credit Agreement shall constitute Lender Letters of Credit and Risk
Participation Agreements hereunder and shall, from and after the Effective Date,
be subject to all of the terms and conditions set forth in this Agreement.
(1) MAXIMUM AMOUNT . The aggregate amount of Risk
Participation Liability with respect to all Lender Letters of Credit and Risk
Participation Agreements outstanding for the account of Borrower and its
Subsidiaries at any time shall not exceed $3,000,000.
(2) REIMBURSEMENT . Borrower shall be irrevocably and
unconditionally obligated immediately without presentment, demand, protest or
other formalities of any kind, to reimburse Agent for any amounts paid by
Agent with respect to a Lender Letter of Credit or a Risk Participation
Agreement, including all fees, costs and expenses paid by Agent to any bank
that issues letters of credit. Borrower hereby authorizes and directs Agent,
at Agent's option, to make a Revolving Loan in the amount of any payment made
by Agent with respect to any Lender Letter of Credit or any Risk
Participation Agreement. All amounts paid by Agent with respect to any Lender
Letter of Credit or Risk Participation Agreement that are not immediately
repaid by Borrower with the proceeds of a Revolving Loan or otherwise shall
bear interest at the interest rate applicable to Revolving Loans calculated
using the Base Rate. Each Lender agrees to fund its Pro Rata Share of any
Revolving Loan made pursuant to this SUBSECTION 1.1(C)(2). If no such
Revolving Loan is made, each Lender agrees to purchase, and shall be deemed
to have purchased, a participation in such Lender Letter of Credit or Risk
Participation Agreement, as the case may be, and each Lender agrees to pay
Agent upon Agent's demand (which payment shall be made to Agent on the
Business Day of such demand if made by Agent on or before 1:00 p.m. CST on
such Business Day and on the following Business Day if such demand is made
after 1:00 p.m. CST) such Lender's Pro Rata Share of any payments made by
Agent under such Lender Letter of Credit or Risk Participation Agreement. The
obligation of each Lender to deliver to Agent an amount equal to its
respective Pro Rata Share pursuant to the preceding two (2) sentences shall
be absolute and unconditional and such remittance shall be made
notwithstanding the occurrence or continuation of an Event of Default or
Default or the failure to satisfy any condition set forth in SUBSECTION 7.2.
If any Lender fails to make available to Agent the amount of such Lender's
Pro Rata Share of any payments made by Agent in respect of such Lender Letter
of Credit or Risk Participation Agreement as provided in this SUBSECTION
1.1(C)(2), Agent shall be entitled to recover such amount on demand from such
Lender together with interest at the Base Rate.
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(3) CONDITIONS OF ISSUANCE OF LETTERS OF CREDIT OR RISK
PARTICIPATION AGREEMENTS . In addition to all other terms and conditions set
forth in this Agreement, the issuance by Agent of any Lender Letter of Credit or
Risk Participation Agreement shall be subject to the conditions precedent that
the Lender Letter of Credit, the Risk Participation Agreement or the letter of
credit for which Borrower requests a Risk Participation Agreement shall support
a transaction entered into in the ordinary course of Borrower's or any of its
Subsidiaries' respective businesses and shall be in such form, and for such
amount, as is reasonably satisfactory to Agent. The expiration date of each
Lender Letter of Credit and each letter of credit to be issued under a Risk
Participation Agreement shall be on a date which is no later than the thirtieth
(30th) day before the date set forth in clause (c) of the definition of the term
Expiry Date. Each Risk Participation Agreement shall provide that the agreement
terminates and all demand or claims for payment must be presented by a date
certain, which date will be at least thirty (30) days before the date set forth
in clause (c) of the definition of the term Expiry Date.
(4) REQUEST FOR LENDER LETTERS OF CREDIT OR RISK
PARTICIPATION AGREEMENTS . Borrower shall give Agent at least three (3)
Business Days prior notice specifying the date a Lender Letter of Credit or
Risk Participation Agreement (or a letter of credit to be issued under a Risk
Participation Agreement) is requested to be issued, identifying the
beneficiary and describing the nature of the transactions proposed to be
supported thereby. After the issuance of a Risk Participation Agreement in
favor of a bank that will issue letters of credit on behalf of Borrower or
any of its Subsidiaries, Borrower shall give Agent at least two (2) Business
Days prior written notice specifying the date a letter of credit is to be
issued under a Risk Participation Agreement (five (5) Business Days in the
case of the first letter of credit to be issued under a particular Risk
Participation Agreement), identifying the beneficiary and describing the
nature of the transactions purposed to be supported thereby. Any notice
described in this paragraph shall be accompanied by the form of the Lender
Letter of Credit or the letter of credit to which such Risk Participation
Agreement relates.
(C) NOTES . Borrower shall execute and deliver to each Lender
a Note to evidence the Revolving Loans, such Note to be in the principal amount
of such Lender's Pro Rata Share of the Revolving Loan Commitment. In the event
of an assignment under SUBSECTION 8.1, Borrower shall, upon surrender of the
assigning Lender's Notes, issue new Notes to reflect the interests of the
assigning Lender and the Person to which interests are to be assigned. The
revolving note issued by Borrower under the Prior Credit Agreement shall be
cancelled and replaced by the Notes evidencing the Revolving Loan issued
hereunder on the Effective Date and the outstanding revolving loan obligations
of Borrower formerly evidenced by such cancelled note hereafter shall be
evidenced by such Notes issued hereunder and shall constitute Obligations
hereunder secured by all of the Collateral.
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1.2 FEES INTEREST AND RELATED FEES .
(A) INTEREST . From the date the Loans are made and the
date the other Obligations become due, the Loans and the other Obligations shall
bear interest, depending upon Borrower's election from time to time, as
permitted herein, to have portions of the Loans accrue interest based upon the
LIBOR, at the rates set forth in paragraphs (1) and (2) below:
(1) the Revolving Loans and all other Obligations shall bear
interest at the sum of the Base Rate PLUS one percent (1.00%) per annum.
"Base Rate" means a variable rate of interest per annum equal to the rate
of interest from time to time published by the Board of Governors of the
Federal Reserve System in Federal Reserve statistical release H.15 (519)
entitled "Selected Interest Rates" as the Bank prime loan rate. Base Rate
also includes rates published in any successor publications of the Federal
Reserve System reporting the Bank prime loan rate or its equivalent. The
statistical release generally sets forth a Bank prime loan rate for each
business day. The applicable Bank prime loan rate for any date not set
forth shall be the rate set forth for the last preceding date. In the
event the Board of Governors of the Federal Reserve System ceases to
publish a Bank prime loan rate or equivalent, the term "Base Rate" shall
mean a variable rate of interest per annum equal to the highest of the
"prime rate," "reference rate," "base rate" or other similar rate as
determined by Agent announced from time to time by any of Bankers Trust
Company, The Chase Manhattan Bank, National Association or Citibank, N.A.
(with the understanding that any such rate may merely be a reference rate
and may not necessarily represent the lowest or best rate actually charged
to any customer by such bank). "Base Rate Loans" means Loans bearing
interest at rates determined by reference to the Base Rate.
(1) the Revolving Loans shall bear interest at the sum of the
LIBOR PLUS two and one-half of one percent (2.50%) per annum. "LIBOR"
means, for each Interest Period, a rate equal to: (a) the rate of interest
determined by Agent at which deposits in U.S. dollars for the relevant
Interest Period are offered based on information presented on the Reuters
Screen LIBO Page as of 11:00 a.m. (London time) on the day which is two
(2) Business Days prior to the first day of such Interest Period, PROVIDED
that if at least two such offered rates appear on the Reuters Screen LIBO
Page in respect of such Interest Period, the arithmetic mean of all such
rates will be the rate used, PROVIDED, FURTHER, that if fewer than two
offered rates appear or if Reuters ceases to provide LIBOR quotations,
such rate shall be the rate of interest at which deposits in U.S. dollars
are offered for the
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relevant Interest Period by any of Bankers Trust Company, The Chase
Manhattan Bank, National Association or Citibank, N.A. to prime banks in
the London interbank market, DIVIDED BY (b) a number equal to 1.0 MINUS
the aggregate (but without duplication) of the rates (expressed as a
decimal fraction) of reserve requirements in effect on the day which is
two (2) Business Days prior to the beginning of such Interest Period
(including, without limitation, basic, supplemental, marginal and
emergency reserves under any regulations of the Board of Governors of the
Federal Reserve System or other U.S. governmental authority having
jurisdiction with respect thereto, as now and from time to time in effect)
for Eurocurrency funding (currently referred to as "Eurocurrency
Liabilities" in Regulation D of such Board) which are required to be
maintained by a member bank of the Federal Reserve System; such rate to be
rounded upward to the next whole multiple of one-sixteenth of one percent
(.0625%). "LIBOR Loans" means Loans bearing interest at rates determined
by reference to the LIBOR.
Each LIBOR Loan may be obtained for a one (1), two (2), three (3), or six
(6) month period (each being an "Interest Period"). With respect to all
LIBOR Loans: (a) the Interest Period will commence on the date that the
LIBOR Loan is made or the date on which a Base Rate Loan is converted into
a LIBOR Loan, as applicable, or in the case of immediately successive
Interest Periods, each successive Interest Period shall commence on the
day on which the next preceding Interest Period expires, (b) if the
Interest Period expires on a day that is not a Business Day, then it will
expire on the next Business Day, and (c) no Interest Period shall extend
beyond the date set forth in clause (c) of the definition of the term
"Expiry Date."
If the introduction of or the interpretation of any law, rule, or
regulation would increase the reserve requirement or otherwise increase
the cost to any Lender of making or maintaining a LIBOR Loan, then Agent,
on behalf of all affected Lenders, shall submit a certificate to Borrower
demonstrating the calculation of the increased cost and requiring payment
thereof to Agent for the benefit of the affected Lenders within ten (10)
days after the date of the certificate. Subject to SUBSECTION 1.8, there
are no limitations on the number of times such certificate may be
submitted.
(A) COMMITMENT FEE . From the Original Closing Date, Borrower shall
pay Agent, for the benefit of all Lenders committed to make Revolving Loans
(based upon their respective Pro Rata Shares), a fee in an amount equal to
(1)(a) the Revolving Loan Commitment as from time to time in effect LESS (b) the
sum of the average daily balance of (i) the Revolving Loans PLUS (ii) the
average daily aggregate amount of outstanding Risk Participation Liability
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during the preceding calendar quarter, MULTIPLIED BY (2) one-half of one percent
(.50%) per annum. Such fee is to be paid quarterly in arrears on the first day
of each calendar quarter.
(B) RISK PARTICIPATION FEE . From the Original Closing Date,
Borrower shall pay Agent, for the benefit of all Lenders committed to make
Revolving Loans (based upon their respective Pro Rata Shares), a fee for each
Lender Letter of Credit and each Risk Participation Agreement from the date of
issuance to the date of termination equal to the average daily outstanding
amount of the Risk Participation Liability MULTIPLIED BY two and one-half of one
percent (2.50%) per annum. Such fee is to be paid quarterly in arrears on the
first day of each calendar quarter. Borrower shall also reimburse Agent for any
and all fees and expenses paid to the issuer of any letter of credit that is in
any way related to a Risk Participation Agreement.
(C) COMPUTATION OF INTEREST AND RELATED FEES . Interest on all Loans
and all other Obligations and any fees set forth in this SUBSECTION 1.2 shall be
calculated daily on the basis of a three hundred sixty (360) day year for the
actual number of days elapsed in the period during which it accrues. The date of
funding a Base Rate Loan and the first day of an Interest Period with respect to
a LIBOR Loan shall be included in the calculation of interest. The date of
payment of a Base Rate Loan and the last day of an Interest Period with respect
to a LIBOR Loan shall be excluded from the calculation of interest. If a Loan is
repaid on the same day that it is made, one (1) day's interest shall be charged.
Interest on all Base Rate Loans is payable in arrears on the first day of each
calendar quarter and on the Expiry Date, whether by acceleration or otherwise.
Interest on LIBOR Loans shall be payable on the last day of the applicable
Interest Period, unless the Interest Period is greater than three (3) months, in
which case interest will be payable on the last day of each three (3) month
interval. In addition, interest on LIBOR Loans is due on the maturity of such
Loans, whether by acceleration or otherwise.
(D) DEFAULT RATE OF INTEREST . At the election of Agent or Requisite
Lenders, after the occurrence of an Event of Default and for so long as it
continues, the Loans and other Obligations shall bear interest at a rate that is
percent two (2%) in excess of the rates otherwise payable under this Agreement.
Furthermore, during any period in which any Event of Default is continuing, as
the Interest Periods for LIBOR Loans then in effect expire, such Loans shall be
converted at Agent's discretion into Base Rate Loans and the LIBOR election will
not be available to Borrower until all Events of Default are cured or waived.
(E) EXCESS INTEREST . Under no circumstances will the rate of
interest chargeable be in excess of the maximum amount permitted by law. If
excess interest is charged and paid in error, then the excess amount will be
promptly refunded. If any excess interest is provided for or determined by a
court of competent jurisdiction to have been provided for in this Agreement or
in any of the other Loan Documents, then in such event: (1) the provisions of
this subsection shall govern and control; (2) Borrower shall not be obligated to
pay any excess interest; and (3) the interest rate(s) provided for herein shall
be automatically reduced to the
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maximum lawful rate allowed from time to time under applicable law, and this
Agreement and the other Loan Documents shall be deemed to have been, and shall
be, reformed and modified to reflect such reduction.
(F) LIBOR RATE ELECTION . Borrower may request that Revolving Loans
be made as LIBOR Loans, that outstanding portions of the Base Rate Loans be
converted to LIBOR Loans and that all or any portion of a LIBOR Loan be
continued as a LIBOR Loan (for the same or a different Interest Period) upon
expiration of the applicable Interest Period. Any such request, which will be
made by submitting a LIBOR Loan request, in the form of EXHIBIT 1.2(G), shall
pertain to Loans in an aggregate minimum amount of $500,000 and integral
multiples of $10,000 in excess thereof. Once given, a LIBOR Loan request shall
be irrevocable and Borrower shall be bound thereby. Upon the expiration of an
Interest Period, in the absence of a new LIBOR Loan request submitted to Agent
not less than three (3) days prior to the end of such Interest Period, the LIBOR
Loan then maturing shall be automatically converted to a Base Rate Loan. There
may be no more than six (6) LIBOR Loans outstanding at any one time. Loans which
are not the subject of a LIBOR Loan request shall be Base Rate Loans. Agent will
notify Lenders, by telephonic or facsimile notice, of each LIBOR Loan request
received by Agent not less than two (2) Business Days prior to the Funding Date
of the LIBOR Loan requested thereby.
1.3 OTHER FEES AND EXPENSES .
(A) (1) CERTAIN FEES . Borrower paid to Heller, individually, on the
Original Closing Date, the fees specified in that certain letter agreement dated
the Original Closing Date between Borrower and Heller, and Borrower paid to
Heller, individually on the First Amendment Date, the fees specified in that
certain letter agreement dated the First Amendment Date between Borrower and
Heller. In addition to the foregoing, Borrower shall pay to Heller,
individually, the fees specified in that certain letter agreement dated the
Effective Date between Borrower and Heller, such fees to be paid on the dates
and in the amounts specified in such letter agreement.
(2) Borrower shall pay to Agent, for the account, of each Lender, a
fee on the Effective Date in an amount equal to (a) such Lender's Commitment as
of the Effective Date, multiplied by (b) one-quarter of one percent (.250%) per
annum.
(A) LIBOR BREAKAGE FEE . Upon (i) any default by Borrower in making
any borrowing of, conversion into or continuation of any LIBOR Loan following
Borrower's delivery to Agent of any LIBOR Loan request in respect thereof or
(ii) any payment of a LIBOR Loan on any day that is not the last day of the
Interest Period applicable thereto (regardless of the source of such prepayment
and whether voluntary, by acceleration or otherwise), Borrower shall pay Agent,
for the benefit of all affected Lenders, an amount (the "LIBOR Breakage Fee")
equal to the amount of any losses, expenses and liabilities (including, without
limitation, any loss (including interest paid) sustained by each such affected
Lender in connection with the re-
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employment of such funds) that any such affected Lender may sustain as a result
of such default or such payment.
(B) EXPENSES AND ATTORNEYS FEES . Borrower agrees to promptly pay
all reasonable fees, costs and expenses (including those of attorneys) incurred
by Agent in connection with any matters contemplated by or arising out of the
Loan Documents, in connection with the examination, review, due diligence
investigation, documentation, negotiation and closing of the transactions
contemplated herein and in connection with the syndication of the Loans and the
continued administration of the Loan Documents including any amendments,
modifications and waivers. Borrower agrees to promptly pay all reasonable fees,
costs and expenses incurred by Agent and Lenders in connection with any action
to enforce any Loan Document or to collect any payments due from Borrower or any
other Loan Party. All fees, costs and expenses for which Borrower is responsible
under this SUBSECTION 1.3(C) shall be deemed part of the Obligations when
incurred, payable in accordance with the final two sentences of SUBSECTION 1.4
and secured by the Collateral.
1.4 PAYMENTS . All payments by Borrower of the Obligations
shall be made in same day funds and delivered to Agent, for the benefit of Agent
and Lenders, as applicable, by wire transfer to the following account or such
other place as Agent may from time to time designate by written notice to
Borrower.
ABA No. 0710-0001-3
Account Number 55-00540
The First National Bank of Chicago
One First National Plaza
Chicago, IL 60670
Reference: Heller Corporate Finance Group
for the benefit of B&G Foods, Inc.
Borrower shall receive credit on the day of receipt for funds received by Agent
by 1:00 p.m. CST. In the absence of timely receipt, such funds shall be deemed
to have been paid on the next Business Day. Whenever any payment to be made
hereunder shall be stated to be due on a day that is not a Business Day, the
payment may be made on the next succeeding Business Day and such extension of
time shall be included in the computation of the amount of interest and fees due
hereunder.
Borrower hereby authorizes Lenders to make Revolving Loans, on the
basis of their Pro Rata Shares, for the payment when due of interest, commitment
fees, Risk Participation Liability fees, LIBOR Breakage Fees and Risk
Participation Liability payments. Prior to an Event of Default, other fees,
costs and expenses (including those of attorneys) reimbursable to Agent pursuant
to SUBSECTION 1.3(C) or elsewhere in any Loan Document may be debited to the
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Revolving Loan after fifteen (15) days written notice to Borrower. After the
occurrence of an Event of Default, no notice will be required.
1.5 PREPAYMENTS PREPAYMENTS .
(A) VOLUNTARY PREPAYMENT OF REVOLVING LOANS . At any time, Borrower
may prepay the Revolving Loans in whole or in part, without penalty, but with
LIBOR Breakage Fees, if applicable. Such prepayments shall be applied to reduce
the outstanding principal balance of the Revolving Loans (but not as a permanent
reduction of the Revolving Loan Commitment).
(B) PREPAYMENTS FROM ASSET DISPOSITIONS . Immediately upon the Loan
Parties' receipt of Net Proceeds of any Asset Disposition, Borrower shall repay
the outstanding principal balance of the Obligations by the amount of such Net
Proceeds; PROVIDED that Borrower or its Subsidiaries may reinvest all Net
Proceeds of such Asset Disposition, within two hundred seventy (270) days, in
productive replacement assets of a kind then used or usable in the business of
Borrower or its Subsidiaries. If (1) Borrower or its Subsidiaries do not intend
to so reinvest such Net Proceeds, or (2) the period set forth in the immediately
preceding sentence expires without Borrower or its Subsidiaries having
reinvested such Net Proceeds, Borrower shall prepay the Revolving Loans in an
amount equal to the Net Proceeds of such Asset Disposition. The payments shall
be applied in accordance with SUBSECTION 1.5(D).
(C) PREPAYMENT FROM ISSUANCE OF SECURITIES . Without duplication of
Section 1.5(B) above, immediately upon the receipt by any Loan Party of the
proceeds of the issuance of equity securities or options, warrants or other
rights to purchase equity securities (other than (1) proceeds of the issuance of
equity securities of Holdings or Borrower received on or before the Original
Closing Date, (2) proceeds of the issuance of equity securities of Holdings (or
options, warrants or other rights to purchase such equity securities) to members
of the management of the Loan Parties, (3) proceeds of the issuance of equity
securities by any Subsidiary of Borrower to Borrower, (4) the cancellation of
Indebtedness under the Eagle Rock Notes in exchange for equity securities of
Holdings, (5) proceeds of the issuance of equity securities of Holdings to the
BRS Investors so long as, before and after giving effect thereto, no Default or
Event of Default shall have occurred and be continuing, and (6) proceeds of the
issuance on the First Amendment Date of preferred stock of Holdings to BRS in
exchange for $7,000,000 in principal amount of the Original Subordinated Debt in
accordance with the terms of the applicable Supplemental Related Transaction
Documents), Borrower shall prepay the Loans in an amount equal to such proceeds,
net of underwriting discounts and commissions and other reasonable costs
associated therewith. The payments shall be applied in accordance with
SUBSECTION 1.5(D).
(D) APPLICATION OF PROCEEDS . With respect to the mandatory
prepayments described in SUBSECTION 1.5(C), such prepayments shall be applied to
reduce the outstanding principal balance of the Revolving Loans (but not as a
permanent reduction of the Revolving
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Loan Commitment). With respect to any mandatory prepayment described in
SUBSECTION 1.5(B) arising in connection with an Asset Disposition, such
prepayment shall first be applied to reduce the outstanding principal balance of
the Revolving Loans (but not as a permanent reduction of the Revolving Loan
Commitment), and any portion of any such prepayment which is not reinvested as
described in SUBSECTION 1.5(B) shall be applied to reduce the outstanding
principal balance of the Revolving Loans (and the Revolving Loan Commitment
shall be permanently reduced by the amount so applied) until such time as the
aggregate amount of Commitment reductions so effected equals $25,000,000. From
and after such date, any proceeds of Asset Dispositions shall be reinvested as
described in SUBSECTION 1.5(B), and in no event shall Borrower permit any such
proceeds to constitute "Excess Proceeds" as defined in the New Indenture which,
pursuant to the New Indenture, would be required to be applied to prepay any
portion of the Permanent Subordinated Debt.
1.6 TERM OF THE AGREEMENT . All of the Obligations shall become due
and payable as otherwise set forth herein, but in any event, all of the
remaining Obligations shall become due and payable on the Termination Date to
the extent not otherwise due and payable prior to such date. Upon such date and
following repayment in full of the Obligations, this Agreement will terminate.
Notwithstanding any such termination, until all Obligations have been fully paid
and satisfied and all Lender Letter of Credits and Risk Participation Agreements
have been terminated, Agent, for the benefit of Agent and Lenders, shall be
entitled to retain the security interests in the Collateral granted under the
Security Documents and the ability to exercise all rights and remedies available
to them under the Loan Documents and applicable laws.
1.7 LOAN ACCOUNTS LOAN ACCOUNTS . Agent will maintain loan account
records for (a) all Loans, interest charges and payments thereof, (b) all Risk
Participation Liability, (c) the charging and payment of all fees, costs and
expenses and (d) all other debits and credits pursuant to this Agreement. The
balance in the loan accounts shall be rebuttably presumptive evidence of the
amounts due and owing to Agent and Lenders, PROVIDED that any failure by Agent
to so record shall not limit or affect Borrower's obligation to pay. Within five
(5) days of the first of each month, Agent shall provide a statement for each
loan account setting forth the principal of each account and interest due
thereon. Borrower must deliver a written objection within sixty (60) days after
receipt of the statement or the statement will be presumptive evidence of the
Obligations absent manifest error. During the continuance of an Event of
Default, Borrower irrevocably waives the right to direct the application of any
and all payments and Borrower hereby irrevocably agrees that Agent shall have
the continuing exclusive right to apply and reapply payments in any manner it
deems appropriate.
1.8 CAPITAL ADEQUACY AND OTHER ADJUSTMENTS . In the event that
any Lender shall have determined that the adoption after the date hereof of
any law, treaty, governmental (or quasi-governmental) rule, regulation,
guideline or order regarding capital adequacy, reserve
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requirements or similar requirements or compliance by any Lender or any
corporation controlling such Lender with any request or directive regarding
capital adequacy, reserve requirements or similar requirements (whether or not
having the force of law and whether or not failure to comply therewith would be
unlawful) from any central bank or governmental agency or body having
jurisdiction does or shall have the effect of increasing the amount of capital,
reserves or other funds required to be maintained by such Lender or any
corporation controlling such Lender and thereby reducing the rate of return on
such Lender's or such corporation's capital as a consequence of its obligations
hereunder, then Borrower shall from time to time within fifteen (15) days after
notice and demand from such Lender (together with the certificate referred to in
the next sentence and with a copy to Agent) pay to Agent, for the account of
such Lender, additional amounts sufficient to compensate such Lender for such
reduction. A certificate as to the amount of such cost and showing the basis of
the computation of such cost submitted by such Lender to Borrower and Agent
shall, absent manifest error, be final, conclusive and binding for all purposes.
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1.9 TAXES .
(A) NO DEDUCTIONS NO DEDUCTIONS . Any and all payments or
reimbursements made hereunder or under the Notes shall be made free and clear of
and without deduction for any and all taxes, levies, imposts, deductions,
charges or withholdings, and all liabilities with respect thereto (all such
taxes, levies, imposts, deductions, charges or withholdings and all liabilities
with respect thereto excluding such taxes imposed on net income, herein "Tax
Liabilities"), excluding (i) any tax imposed on the overall net income
(including a franchise tax based on net income) of any Lender or the lending
office of any Lender, (ii) in the case of any Lender organized under the laws of
any jurisdiction other than the United States or any state thereof (including
the District of Columbia), any tax imposed by the United States by means of
withholding at the source unless such withholding results from a change in
applicable law, treaty or regulations or the interpretation or administration
thereof (including, without limitation, any guideline or policy not having the
force of law) by an authority charged with the administration thereof subsequent
to the date such Lender becomes a Lender with respect to the Loan or portion
thereof affected by such change and (iii) any tax imposed on or measured by the
overall net income (including a franchise tax based on net income) of a Lender
or an office or branch thereof by the United States of America or any political
subdivision or taxing authority thereof or therein. If Borrower shall be
required by law to deduct any such amounts from or in respect of any sum payable
hereunder to any Lender or Agent, then the sum payable hereunder shall be
increased as may be necessary so that, after making all required deductions,
such Lender or Agent receives an amount equal to the sum it would have received
had no such deductions been made. If Borrower makes any payment hereunder or
under any of the Loan Documents in respect of which it is required by law to
make any deduction or withholding of any Tax Liabilities, it shall pay the full
amount to be deducted or withheld to the relevant taxation or other authority
within the time allowed for such payment under applicable law and shall deliver
to Agent within 30 days after it has made such payment to the applicable
authority a receipt issued by such authority evidencing the payment to such
authority of all amounts so required to be deducted or withheld from such
payment.
(A) CHANGES IN TAX LAWS . In the event that,
subsequent to the Effective Date, (1) any changes in any existing law,
regulation, treaty or directive or in the interpretation or application thereof,
(2) any new law, regulation, treaty or directive enacted or any interpretation
or application thereof, or (3) compliance by Agent or any Lender with any
request or directive (whether or not having the force of law) from any
governmental authority, agency or instrumentality:
(1) does or shall subject Agent or any Lender to any tax of any
kind whatsoever with respect to this Agreement, the other Loan Documents
or any Loans made or Lender Letters of Credit or Risk Participation
Agreements issued hereunder, or
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change the basis of taxation of payments to Agent or such Lender of
principal, fees, interest or any other amount payable hereunder (except
for net income taxes, or franchise taxes imposed in lieu of net income
taxes, imposed generally by federal, state or local taxing authorities
with respect to interest or commitment or other fees payable hereunder or
changes in the rate of tax on the overall net income of Agent or such
Lender); or
(1) does or shall impose on Agent or any Lender any other
condition or increased cost in connection with the transactions
contemplated hereby or participations herein;
and the result of any of the foregoing is to increase the cost to Agent or any
such Lender of issuing any Lender Letter of Credit or Risk Participation
Agreement or making or continuing any Loan hereunder, as the case may be, or to
reduce any amount receivable hereunder, then, in any such case, Borrower shall
promptly pay to Agent or such Lender, upon its demand, any additional amounts
necessary to compensate Agent or such Lender, on an after-tax basis, for such
additional cost or reduced amount receivable, as determined by Agent or such
Lender with respect to this Agreement or the other Loan Documents (any such
amount being referred to herein as an "Indemnification Amount"). If Agent or
such Lender becomes entitled to claim any Indemnification Amount pursuant to
this subsection, it shall promptly notify Borrower of the event by reason of
which Agent or such Lender has become so entitled. A certificate as to any
Indemnification Amount payable pursuant to the foregoing sentence submitted by
Agent or such Lender to Borrower and Agent shall, absent manifest error, be
final, conclusive and binding for all purposes.
(A) FOREIGN LENDERS . Each Lender organized under the laws of a
jurisdiction outside the United States (a "Foreign Lender") as to which
payments to be made under this Agreement or under the Notes are exempt from
United States withholding tax or are subject to United States withholding tax
at a reduced rate under an applicable statute or tax treaty shall provide to
Borrower and Agent (1) either (a) a properly completed and executed Internal
Revenue Service Form 4224 or Form 1001 or other applicable form, certificate
or document prescribed by the Internal Revenue Service of the United States
certifying as to such Foreign Lender's entitlement to such exemption or
reduced rate of withholding with respect to payments to be made to such
Foreign Lender under this Agreement and under the Notes or (b) in the case of
a Foreign Lender that is not a "bank" within the meaning of IRC section
881(c)(3)(A), (i) a statement under penalties of perjury that it (x) is not a
bank within the meaning of IRC section 881(c)(3)(A), is not subject to
regulatory or other legal requirements as a bank for purposes of any tax,
securities law or other filing or submission made to any governmental
authority, any application made to a rating agency or qualification for
exemption from tax, securities law or other legal requirements, (y) is not a
10-percent shareholder within the meaning of IRC section 881(c)(3)(B) and (z)
is not a controlled foreign corporation receiving interest from a related
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person within the meaning of IRC section 881(c)(3)(c), and (ii) a properly
completed and duly executed Internal Revenue Service Form W-8 or applicable
successor form (a "Certificate of Exemption") or (2) a letter from any such
Foreign Lender stating that it is not entitled to any such exemption or reduced
rate of withholding (a "Letter of Non-Exemption"). Prior to becoming a Lender
under this Agreement and within fifteen (15) days after a reasonable written
request of Borrower or Agent from time to time thereafter, each Foreign Lender
that becomes a Lender under this Agreement shall provide a Certificate of
Exemption or a Letter of Non-Exemption to Borrower and Agent. In addition, each
Lender agrees that from time to time, when a lapse in time or change in
circumstances renders the previous Certificate of Exemption obsolete or
inaccurate in any material respect, upon written notification from Borrower of
such lapse or change in circumstances not less than ten (10) Business Days prior
to the date of any payment to such Lender under this Agreement for which
Borrower would have to withhold and pay any withholding Tax, such Lender will
deliver to Borrower and Agent two new accurate and complete original signed
Certificates of Exemption as the case may be, and such other forms as may be
required in order to confirm or establish the entitlement of such Lender to a
continued exemption from or reduction in United States withholding tax with
respect to payments under this Agreement and any Note, or it shall immediately
notify Borrower and Agent of its inability to deliver any such Certificate of
Exemption.
If a Foreign Lender is entitled to an exemption with respect to
payments to be made to such Foreign Lender under this Agreement (or to a reduced
rate of withholding) and does not provide a Certificate of Exemption to Borrower
and Agent within the time periods set forth in the preceding paragraph, Borrower
shall withhold taxes from payments to such Foreign Lender at the applicable
statutory rates and Borrower shall not be required to pay any additional amounts
as a result of such withholding, PROVIDED that all such withholding shall cease
upon delivery by such Foreign Lender of a Certificate of Exemption to Borrower
and Agent.
If any Lender receives a refund or credit (such credit to
include any increase in any foreign tax credit) in respect of any Tax
Liabilities or Indemnification Amount as to which it has been indemnified by
Borrower or with respect to which Borrower has paid increased amounts under this
SECTION 1.9, it shall promptly notify Borrower of such refund or credit and
shall, within 30 days after receipt of such refund or the benefit of such credit
(such benefit to include any reduction of the taxes for which the Lender would
otherwise be liable due to any increase in any foreign tax credit available to
such Lender) repay the amount of such refund or benefit of such credit to
Borrower (to the extent of amounts that have been paid by Borrower under this
SECTION 1.9 with respect to Tax Liabilities or Indemnification Amounts giving
rise to such refund or credit), plus any interest received with respect thereto,
net of all reasonable out-of-pocket expenses of such Lender and without interest
(other than interest actually received from the relevant taxing authority or
other governmental authority with respect to such refund or credit); PROVIDED,
HOWEVER, that Borrower, upon the request of such Lender, agrees to return the
amount of such refund or benefit of such credit (plus interest) to such Lender
in the event such
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Lender is required to repay the amount of such refund or benefit of such credit
to the relevant authority or other governmental authority.
1.10 OPTIONAL PREPAYMENT/REPLACEMENT OF LENDER IN RESPECT OF
INCREASED COSTS . Within fifteen (15) days after receipt by Borrower of written
notice and demand from any Lender (an "Affected Lender") for payment of
additional costs as provided in SUBSECTIONS 1.8 or 1.9(B), Borrower may, at its
option, notify Agent and such Affected Lender of its intention to do one of the
following:
(A) Borrower may obtain, at Borrower's expense, a replacement Lender
("Replacement Lender") for such Affected Lender, which Replacement Lender
shall be reasonably satisfactory to Agent. In the event Borrower obtains a
Replacement Lender within ninety (90) days following notice of its
intention to do so, the Affected Lender shall sell and assign its Loans
and its obligations under the Revolving Loan Commitment to such
Replacement Lender, PROVIDED that Borrower has reimbursed such Affected
Lender for its increased costs for which it is entitled to reimbursement
under this Agreement through the date of such sale and assignment; or
(A) Borrower may prepay in full all outstanding Obligations owed to
such Affected Lender and terminate such Affected Lender's Pro Rata Share
of the Revolving Loan Commitment, in which case the Revolving Loan
Commitment will be reduced by the amount of such Pro Rata Share. Borrower
shall, within ninety (90) days following notice of its intention to do so,
prepay in full all outstanding Obligations owed to such Affected Lender
(including such Affected Lender's increased costs for which it is entitled
to reimbursement under this Agreement through the date of such
prepayment), and terminate such Affected Lender's obligations under the
Revolving Loan Commitment.
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SECTION 2
AFFIRMATIVE COVENANTS
Borrower covenants and agrees that so long as the Revolving Loan
Commitment is in effect and until payment in full of all Obligations and
termination of all Lender Letters of Credit and Risk Participation Agreements,
unless Requisite Lenders shall otherwise give their prior written consent,
Borrower shall perform and comply with, and shall cause each of the other Loan
Parties to perform and comply with, all covenants in this SECTION 2 applicable
to such Person.
2.1 COMPLIANCE WITH LAWS . Each Loan Party will (a) comply with the
requirements of all applicable laws, rules, regulations and orders of any
governmental authority (including, without limitation, laws, rules, regulations
and orders relating to taxes, employer and employee contributions, securities,
employee retirement and welfare benefits, environmental protection matters and
employee health and safety) as now in effect and which may be imposed in the
future in all jurisdictions in which such Loan Party is now doing business or
may hereafter be doing business, other than such noncompliance which would not
reasonably be expected to have, either individually or in the aggregate, a
Material Adverse Effect, and (b) maintain or obtain all licenses, qualifications
and permits now held or hereafter required to be held by such Loan Party, for
which the loss, suspension, revocation or failure to obtain or renew, would
reasonably be expected to have a Material Adverse Effect. This SUBSECTION 2.1
shall not preclude any Loan Party from contesting any taxes or other payments,
if they are being diligently contested in good faith and if appropriate expense
provisions have been recorded in conformity with GAAP. Borrower represents and
warrants that, as of the date hereof (i) Borrower and each other Loan Party is
in compliance with the requirements of all applicable laws, rules, regulations
and orders of any governmental authority as now in effect, and (ii) Borrower and
each other Loan Party maintains all licenses, qualifications and permits
referred to above, in each case where the failure to comply or maintain would
not reasonably be expected to have a Material Adverse Effect.
2.2 MAINTENANCE OF PROPERTIES; INSURANCE . Each Loan Party will
maintain or cause to be maintained in good repair, working order and condition,
ordinary wear and tear and obsolescence excepted, all material properties used
in the business of such Loan Party and will make or cause to be made all
necessary repairs, renewals and replacements thereof. Each Loan Party will
maintain or cause to be maintained, with financially sound and reputable
insurers, public liability and property damage insurance with respect to its
business and properties and the business and properties of its Subsidiaries
against loss or damage of the kinds customarily carried or maintained by
corporations of established reputation engaged in similar businesses and in
amounts acceptable to Agent and will deliver evidence thereof to Agent. Borrower
will maintain and will cause its Subsidiaries to maintain business interruption
insurance in an
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aggregate amount, together with property damage insurance, not less than
$50,000,000. Borrower and each of its Subsidiaries shall cause, pursuant to
endorsements and assignments in form and substance reasonably satisfactory to
Agent, Agent, for the benefit of Agent and Lenders, to be named as lender's loss
payee in the case of casualty insurance, Agent, for the benefit of Agent and
Lenders, to be named as additional insured in the case of all liability
insurance and Agent, for the benefit of Agent and Lenders, to be named as
assignee in the case of all business interruption insurance. Borrower represents
and warrants that it and each other Loan Party currently maintains all material
properties as set forth above and maintains all insurance described above.
2.3 INSPECTION; LENDER MEETING . Each Loan Party shall permit any
authorized representatives of Agent to visit and inspect any of the properties
of such Loan Party, including its and their financial and accounting records,
and to make copies and take extracts therefrom, and to discuss its and their
affairs, finances and business with its and their officers and certified public
accountants, at such reasonable times and after reasonable notice during normal
business hours and as often as may be reasonably requested. Representatives of
each Lender will be permitted at their own expense to accompany representatives
of Agent during each visit, inspection and discussion referred to in the
immediately preceding sentence. Without in any way limiting the foregoing,
Borrower will participate and will cause its key management personnel to
participate in a meeting with Agent and Lenders at least once during each year,
which meeting shall be held at such time and such place as may be reasonably
requested by Agent.
2.4 CORPORATE EXISTENCE, ETC . Except as otherwise permitted by
SUBSECTION 3.6, each Loan Party will, and will cause each of its Subsidiaries
to, at all times preserve and keep in full force and effect its corporate
existence and all rights and franchises material to its business.
2.5 INTENTIONALLY OMITTED .
2.6 FURTHER ASSURANCES.
(A) Each Loan Party shall and shall cause each of its Subsidiaries
to, from time to time, execute such guaranties, financing statements, documents,
security agreements and reports as Agent or Requisite Lenders at any time may
reasonably request to evidence, perfect or otherwise implement the guaranties
and security for repayment of the Obligations contemplated by the Loan
Documents, PROVIDED that absent the occurrence and continuance of an Event of
Default, neither Agent nor Requisite Lenders shall request that any Loan Party
grant to Agent and Lenders a leasehold mortgage in respect of any real property
leased by any Loan Party on the Original Closing Date.
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(A) In the event Lenders hereafter consent to the creation or
acquisition by Borrower or any of its Subsidiaries of a new Subsidiary, Borrower
shall cause such Subsidiary to promptly to guaranty the Obligations and to grant
to Agent, for the benefit of Agent and Lenders, a security interest in the real,
personal and mixed property of such Subsidiary to secure the Obligations. The
documentation for such guaranty or security shall be substantially similar to
the Loan Documents executed concurrently herewith (or executed as of the
Original Closing Date or the First Amendment Date, as applicable), with such
modifications as are reasonably requested by Agent. Without limitation of the
foregoing, the parties hereto acknowledge that, as of the First Amendment Date,
Borrower caused RWBV to execute those Security Documents listed on SCHEDULE
7.1(B) to the Prior Credit Agreement and caused B&G to pledge all of the issued
and outstanding capital stock of RWBV to the Agent for the benefit of the Agent
and the Lenders. Further without limitation of the foregoing, as of the
Effective Date, Borrower and its Subsidiaries shall cause the RWBV Trademark
Subsidiary to execute those Security Documents listed on SCHEDULE 7.1, and
Borrower shall cause RWBV to pledge all of the issued and outstanding capital
stock of the RWBV Trademark Subsidiary to the Agent for the benefit of the Agent
and the Lenders
2.7 LIQUIDATION OF B&G-DSD. The parties hereto acknowledge that
Borrower caused B&G-DSD to be merged with and into BGH Holdings on the Original
Closing Date in accordance with that certain Plan of Distribution, Complete
Liquidation and Dissolution under Section 332 of the IRC.
SECTION 3
NEGATIVE COVENANTS
Borrower covenants and agrees that so long as the Revolving Loan
Commitment is in effect and until payment in full of all Obligations and
termination of all Lender Letters of Credit and Risk Participation Agreements,
unless Requisite Lenders shall otherwise give their prior written consent,
Borrower shall perform and comply with, and shall cause each of the other Loan
Parties to perform and comply with, all covenants in this SECTION 3 applicable
to such Person.
3.1 INDEBTEDNESS . No Loan Party will, nor will any
Loan Party permit any of its Subsidiaries, directly or indirectly to, create,
incur, assume, guaranty, or otherwise become or remain directly or indirectly
liable with respect to any Indebtedness except for the following:
(A) the Obligations;
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(A) intercompany Indebtedness among Borrower and its Subsidiaries;
PROVIDED that the obligations of each obligor of such Indebtedness shall:
(1) be subordinated in right of payment to the Obligations from and after
such time as any portion of the Obligations shall become due and payable
(whether at stated maturity, by acceleration or otherwise); and (2) be
evidenced by promissory notes, which shall have been pledged to Agent, for
the benefit of Agent and Lenders, as security for the Obligations;
(A) Subordinated Indebtedness of Borrower evidenced by the Permanent
Subordinated Notes or by any Exchange Notes issued in exchange therefor as
contemplated by Section 2.06(f) of the New Indenture and the provisions of
the Registration Rights Agreement so long as such Exchange Notes continue
to be governed by the terms and conditions set forth in the New Indenture;
(A) Indebtedness of Borrower and its Subsidiaries not to exceed
$3,000,000 in the aggregate at any time outstanding secured by purchase
money Liens or incurred with respect to capital leases;
(E) Indebtedness of Roseland Distribution evidenced by the Eagle Rock
Notes;
(F) Indebtedness of Borrower and its Subsidiaries outstanding on the
Effective Date (after giving effect to the New Related Transactions) and
described on SCHEDULE 3.1; and
(G) Refinancings of Indebtedness described in clauses (D) and (F)
above, so long as such refinancings are on terms and conditions no less
favorable to Borrower or the applicable Subsidiary of Borrower, as
determined by Agent, than the terms of the Indebtedness being refinanced
and so long as, in the case of any refinancing of secured Indebtedness, no
Liens attach to any property or assets of any Loan Party other than the
property and assets which previously secured the Indebtedness so
refinanced.
3.2 LIENS AND RELATED MATTERS .
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(A) NO LIENS . No Loan Party will, nor will any Loan Party
permit any of its Subsidiaries directly or indirectly to, create, incur, assume
or permit to exist any Lien on or with respect to any property or asset
(including any document or instrument with respect to goods or accounts
receivable) of such Loan Party or such Subsidiary, whether now owned or
hereafter acquired, or any income or profits therefrom, except Permitted
Encumbrances. "Permitted Encumbrances" means the following:
(1) Liens (other than any Lien imposed by the Employee
Retirement Income Security Act of 1974 or any rule or regulation
promulgated thereunder) for taxes, assessments or other governmental
charges not yet due and payable or where payment is not otherwise required
pursuant to SUBSECTION 2.1 hereof;
(1) statutory Liens of landlords, carriers, warehousemen,
mechanics, materialmen and other similar liens imposed by law, which are
incurred in the ordinary course of business for sums not more than thirty
(30) days delinquent or which are being contested in good faith; PROVIDED
that a reserve or other appropriate provision shall have been made
therefor;
(1) Liens (other than any Lien imposed by the Employee
Retirement Income Security Act of 1974 or any rule or regulation
promulgated thereunder) incurred or deposits made in the ordinary course
of business in connection with workers' compensation, unemployment
insurance and other types of social security, or to secure the performance
of tenders, statutory obligations, surety, stay, customs and appeal bonds,
bids, leases, government contracts, trade contracts, performance and
return of money bonds and other similar obligations (exclusive of
obligations for the payment of borrowed money);
(1) deposits, in an aggregate amount not to exceed $250,000,
made in the ordinary course of business to secure liability to insurance
carriers;
(1) Liens for purchase money obligations (including
refinancings thereof permitted under SUBSECTION 3.1); PROVIDED that: (a)
the purchase of the asset subject to any such Lien is permitted under
SUBSECTION 4.1; (b) the Indebtedness secured by any such Lien is permitted
under SUBSECTION 3.1; and (c) any such Lien encumbers only the asset so
purchased;
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(1) any attachment or judgment Lien not constituting an Event
of Default under SUBSECTION 6.1(I);
(1) easements, rights of way, covenants, restrictions, and
other similar charges or encumbrances not interfering in any material
respect with the ordinary conduct of the business of the applicable Loan
Party as currently conducted;
(1) any interest or title of a lessor or sublessor under any
operating lease;
(1) Liens in favor of Agent, for the benefit of Agent and
Lenders;
(1) Liens existing on the Effective Date and renewals and
extensions thereof, which Liens are set forth on SCHEDULE 3.2(A)(10)
hereto;
(11) Liens under licensing agreements for the use of
Intellectual Property entered into in the ordinary course of business;
(12) Liens permitted under the Security Documents; and
(13) any interest of a lessee or sublessee of real property
owned by Borrower or any of its Subsidiaries, so long as the lease by
Borrower or such Subsidiary of such real property is subordinate to the
Lien of Agent, for the benefit of Agent and Lenders, in such real property
and is otherwise permitted under SUBSECTION 3.7.
(A) NO NEGATIVE PLEDGES . No Loan Party will nor will any Loan
Party permit any of its Subsidiaries directly or indirectly to, enter into or
assume any agreement (other than the Loan Documents) prohibiting the creation
or assumption of any Lien upon its properties or assets, whether now owned or
hereafter acquired, except (1) pursuant to the Permanent Subordinated Debt
Documents; (2) for any such prohibition, encumbrance or restriction
consisting of customary nonassignment provisions in leases governing
leasehold interests to the extent such provisions restrict the transfer of
the lease or the property leased thereunder; (3) for restrictions contained
in security agreements, mortgages, or similar agreements evidencing or
governing Permitted Encumbrances securing Indebtedness which is permitted
hereunder, to the extent such restrictions restrict the transfer of the
property subject to such security agreement,
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mortgage, or similar agreement; and (4) any license or other arrangement
permitted by this Agreement concerning Intellectual Property, which prohibits or
limits the ability of such Loan Party to create, incur, assume or suffer to
exist any Lien upon such Intellectual Property (provided that any such
prohibition or limitation shall only be effective against such Intellectual
Property).
(B) NO RESTRICTIONS ON SUBSIDIARY DISTRIBUTIONS TO BORROWER .
Except as provided herein, Borrower will not and will not permit any of its
Subsidiaries directly or indirectly to create or otherwise cause or suffer to
exist or become effective any consensual encumbrance or restriction of any
kind on the ability of any such Subsidiary to: (1) pay dividends or make any
other distribution on any of such Subsidiary's capital stock owned by
Borrower or any Subsidiary of Borrower; (2) subject to subordination
provisions for the benefit of Agent and Lenders, pay any Indebtedness owed to
Borrower or any other Subsidiary of Borrower; (3) make loans or advances to
Borrower or any Subsidiary of Borrower; or (4) except as specified in CLAUSES
(2), (3) and (4) of SUBSECTION 3.2(B) above, transfer any of its property or
assets to Borrower or any other Subsidiary of Borrower.
3.3 INVESTMENTS; JOINT VENTURES . No Loan Party will nor will any
Loan Party permit any of its Subsidiaries directly or indirectly to make or own
any Investment in any Person except:
(A) Borrower and its Subsidiaries may make and own Investments in
Cash Equivalents; PROVIDED that such Cash Equivalents are not subject to
setoff rights, other than with respect to non-material bank service
charges;
(A) Borrower and its Subsidiaries may make intercompany loans to the
extent permitted under SUBSECTION 3.1;
(A) The Loan Parties may make loans and advances to employees for
moving, entertainment, travel and other similar expenses in the ordinary
course of business not to exceed $250,000 in the aggregate at any time
outstanding;
(D) Holdings may make loans in an aggregate principal amount not
exceeding $500,000 to employees of the Loan Parties to finance the sale of
Holdings capital stock by Holdings to such employees; and
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(E) Borrower and its Subsidiaries may consummate Permitted
Acquisitions.
"Investment" means (i) any direct or indirect purchase or other
acquisition by a Loan Party or any of its Subsidiaries of any beneficial
interest in, including stock, partnership interest or other equity securities
of, any other Person; and (ii) any direct or indirect loan, advance or capital
contribution by any Loan Party or any of its Subsidiaries to any other Person,
including all indebtedness and accounts receivable from that other Person that
are not current assets or did not arise from sales to that other Person in the
ordinary course of business. The amount of any Investment shall be the original
cost of such Investment PLUS the cost of all additions thereto, without any
adjustments for increases or decreases in value, or write-ups, write-downs or
write-offs with respect to such Investment.
"Cash Equivalents" means: (i) marketable direct obligations issued or
unconditionally guarantied by the United States Government or any State
government or issued by any agency thereof and backed by the full faith and
credit of the United States, in each case maturing within one (1) year from the
date of acquisition thereof; (ii) commercial paper maturing no more than one (1)
year from the date issued and, at the time of acquisition, having a rating of at
least A-1 from Standard & Poor's Corporation or at least P-1 from Moody's
Investors Service, Inc.; (iii) certificates of deposit or bankers' acceptances
maturing within one (1) year from the date of issuance thereof issued by, or
overnight reverse repurchase agreements from, any commercial bank organized
under the laws of the United States of America or any state thereof or the
District of Columbia having combined capital and surplus of not less than
$500,000,000; (iv) time deposits maturing no more than thirty (30) days from the
date of creation thereof with commercial banks having membership in the Federal
Deposit Insurance Corporation in amounts not exceeding the lesser of $100,000 or
the maximum amount of insurance applicable to the aggregate amount of the
applicable Loan Party's or any of its Subsidiaries' deposits at such
institution; and (v) deposits or investments in mutual or similar funds offered
or sponsored by brokerage or other companies having membership in the Securities
Investor Protection Corporation in amounts not exceeding the lesser of $100,000
or the maximum amount of insurance applicable to the aggregate amount of such
Loan Party's deposits at such institution.
3.4 CONTINGENT OBLIGATIONS . No Loan Party will nor will any Loan
Party permit any of its Subsidiaries directly or indirectly to create or become
or be liable with respect to any Contingent Obligation except those:
(A) resulting from endorsement of negotiable instruments for
collection in the ordinary course of business;
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(A) existing on the Effective Date and described in SCHEDULE 3.4
annexed hereto;
(A) arising under indemnity agreements to title insurers to cause
such title insurers to issue to Agent mortgagee title insurance policies;
(A) arising from agreements of any Loan Party providing for
customary indemnification, adjustment of purchase price or similar
obligations incurred in connection with the disposition of any business,
assets or a Loan Party or a Subsidiary of a Loan Party (to the extent such
disposition is permitted hereunder), other than guarantees of Indebtedness
incurred by any Person acquiring all or any portion of such business,
assets, Loan Party or Subsidiary for the purpose of financing such
acquisition, PROVIDED that (a) such Indebtedness is not reflected on the
balance sheet of any Loan Party (and contingent obligations referred to in
a footnote to financial statements and not otherwise reflected on the
balance sheet will not be deemed to be reflected on such balance sheet for
purposes of this subsection 3.4(D)), and (b) the maximum assumable
liability in respect of all such Indebtedness shall at no time exceed the
gross proceeds, including non-cash proceeds (the fair market value of such
non-cash proceeds being measured at the time received without giving
effect to any subsequent changes in value) actually received by such Loan
Party in connection with such disposition;
(A) incurred in the ordinary course of business with respect to
surety and appeal bonds, performance and return-of-money bonds and other
similar obligations not exceeding at any time outstanding $250,000 in
aggregate liability;
(A) incurred by any Loan Party with respect to Indebtedness
permitted by SUBSECTION 3.1;
(A) of B&G arising under that certain Guaranty dated as of the First
Amendment Date in favor of Nabisco and Nabisco Brands Company in respect
of RWBV's obligations under the 1997 Asset Purchase Agreement, the
Trademark Agreement, the Transition Services Agreement and the Seller
Co-Pack Agreement;
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(A) not permitted by clauses (A) through (F) above, so long as any
such Contingent Obligations, in the aggregate at any time outstanding, do
not exceed $250,000;
(A) arising in respect of any letter of credit issued for the
account of Borrower or any of its Subsidiaries with respect to which Agent
has issued a Risk Participation Agreement; and
(J) arising with respect to interest rate swap agreement or other
similar agreement or arrangement designed to alter the risks arising from
fluctuations in interest rates with respect to floating rate Indebtedness
(including the Obligations) permitted hereunder.
"Contingent Obligation", as applied to any Person, means any direct
or indirect liability of that Person: (i) with respect to any indebtedness,
lease, dividend or other obligation of another Person if the primary purpose or
intent of the Person incurring such liability, or the primary effect thereof, is
to provide assurance to the obligee of such liability that such liability will
be paid or discharged, or that any agreements relating thereto will be complied
with, or that the holders of such liability will be protected (in whole or in
part) against loss with respect thereto; (ii) with respect to any letter of
credit issued for the account of that Person or as to which that Person is
otherwise liable for reimbursement of drawings; or (iii) under any foreign
exchange contract, currency swap agreement, interest rate swap agreement or
other similar agreement or arrangement designed to alter the risks of that
Person arising from fluctuations in currency values or interest rates.
Contingent Obligations shall also include (a) the direct or indirect guaranty,
endorsement (other than for collection or deposit in the ordinary course of
business), co-making, discounting with recourse or sale with recourse by such
Person of the obligation of another, (b) the obligation to make take-or-pay or
similar payments if required regardless of nonperformance by any other party or
parties to an agreement, and (c) any liability of such Person for the
obligations of another through any agreement to purchase, repurchase or
otherwise acquire such obligation or any property constituting security
therefor, to provide funds for the payment or discharge of such obligation or to
maintain the solvency, financial condition or any balance sheet item or level of
income of another. The amount of any Contingent Obligation shall be equal to the
amount of the obligation so guaranteed or otherwise supported or, if not a fixed
and determined amount, the maximum amount so guaranteed.
3.5 RESTRICTED JUNIOR PAYMENTS . No Loan Party will nor will any
Loan Party permit any of its Subsidiaries directly or indirectly to declare,
order, pay, make or set apart any sum for any Restricted Junior Payment, except:
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(A) Subsidiaries of Borrower may make Restricted Junior Payments to
Borrower or to any Subsidiary of Borrower that is such Subsidiary's
parent;
(A) Borrower may make scheduled payments of accrued and unpaid
interest on the Permanent Subordinated Notes, at a per annum rate (absent
default) not in excess of 9.625% per annum, subject to the restrictions
contained in the New Indenture;
(C) Borrower may pay dividends to Holdings to permit Holdings to
redeem shares of Holdings' capital stock held by employees of any Loan
Party who have been terminated or who have died, retired or become
disabled, provided that (i) the aggregate cumulative amount of such
dividends paid by Borrower to Holdings as of any date of determination,
NET of the aggregate cumulative amount of cash capital contributions made
by Holdings to Borrower following the Effective Date through such date
with the proceeds received upon the issuance of Holdings' capital stock to
employees of the Loan Parties (excluding proceeds received upon any
issuance referenced in SUBSECTION 2.8 or CLAUSE (D) below), shall not
exceed (x) $1,000,000 in any fiscal year, or (y) $3,000,000 in the
aggregate during the term of this Agreement, and (ii) at the time any such
dividend is paid and after giving effect thereto, no Default or Event of
Default shall have occurred and be continuing;
(D) Borrower may pay dividends to Holdings to permit Holdings to
redeem shares of Holdings' capital stock held by the BRS Investors for the
purpose of contemporaneously reissuing such shares to employees of the
Loan Parties, PROVIDED that (i) Holdings shall immediately upon such
reissuance make a cash capital contribution to Borrower with the proceeds
received upon such reissuance in an amount at least equal to the amount of
the dividend paid to Holdings and (ii) at the time any such dividend is
paid and after giving effect thereto, no Default or Even of Default shall
have occurred and be continuing;
(E) Borrower may pay dividends to Holdings to permit Holdings to (1)
pay reasonable and customary directors' fees to the members of Holdings'
board of directors, (2) pay federal and state income and franchise tax
obligations actually due and payable in cash by Holdings, and (3) provide
funds for the payment of other miscellaneous expenses of Holdings, not to
exceed $100,000 in any fiscal
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year, provided that at the time any such dividend is paid and after
giving effect thereto, no Default or Event of Default shall have
occurred and be continuing;
(F) Borrower may pay Liquidated Damages to the holders of the
Permanent Subordinated Notes on the dates required pursuant to the
Registration Rights Agreement;
(G) Borrower may, on the Effective Date, use a portion of the
proceeds of the Permanent Subordinated Notes to redeem the Prior
Subordinated Debt in full; and
(H) Borrower may, after the Effective Date, consummate the exchange
of the Permanent Subordinated Notes issued as of the Effective Date for
the Exchange Notes so long as such exchange is made in compliance with the
provisions of SUBSECTION 3.11(B).
"Restricted Junior Payment" means, with respect to any Loan Party:
(i) any dividend or other distribution, direct or indirect, on account of any
shares of any class of stock of such Loan Party now or hereafter outstanding,
except a dividend payable solely in shares of that class of stock to the holders
of that class; (ii) any redemption, conversion, exchange, retirement, sinking
fund or similar payment, purchase or other acquisition for value, direct or
indirect, of any shares of any class of stock of such Loan Party now or
hereafter outstanding; (iii) any payment or prepayment of interest on, principal
of, premium, if any, redemption, conversion, exchange, purchase, retirement,
defeasance, sinking fund or similar payment with respect to, any Subordinated
Indebtedness, including any payment of Liquidated Damages; and (iv) any payment
made to retire, or to obtain the surrender of, any outstanding warrants, options
or other rights to acquire shares of any class of stock of such Loan Party now
or hereafter outstanding.
3.6 RESTRICTION ON FUNDAMENTAL CHANGES . (A) No Loan Party will
nor will any Loan Party permit any of its Subsidiaries directly or indirectly
to amend, modify or waive any term or provision of its articles of
incorporation or by-laws, or any term or provision of any certificates of
designations pertaining to preferred stock, in each case in any manner
adverse to Agent or Lenders unless required by law; provided that
notwithstanding the foregoing the parties acknowledge that prior to the
Effective Date (i) Borrower changed its name to "B&G Foods, Inc."; (ii) the
Subsidiary formerly known as B&G Foods, Inc. changed its name to "Roseland
Distribution Company"; and (iii) Holdings changed its name to "B&G Foods
Holdings Corp.", and the Lenders hereby consent to such name changes.
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(B) No Loan Party will nor will any Loan Party permit any of its
Subsidiaries directly or indirectly to: (i) enter into any transaction of merger
or consolidation, (ii) liquidate, wind-up or dissolve itself (or suffer any
liquidation or dissolution); or (iii) acquire by purchase or otherwise all or
any substantial part of the business or assets of any other Person, except that
(w) Borrower and/or any of its Subsidiaries may consummate Permitted
Acquisitions; (x) upon not less than ten (10) Business Days' prior written
notice to Agent and so long as no Default or Event of Default has occurred and
is continuing or will result therefrom, Borrower or any Subsidiary of Borrower
may acquire by purchase or otherwise all or any substantial part of the business
or assets of any other Subsidiary of Borrower; (y) upon not less than ten (10)
Business Days prior written notice to Agent and so long as no Default or Event
of Default has occurred and is continuing or would result therefrom, any
Subsidiary of Borrower may be merged or liquidated with or into Borrower or any
other Subsidiary of Borrower so long as Borrower is the survivor of any merger
or liquidation to which it is a party; and (z) as provided under SUBSECTION 2.7.
3.7 DISPOSAL OF ASSETS OR SUBSIDIARY STOCK . No Loan Party will nor
will any Loan Party permit any of its Subsidiaries directly or indirectly to
consummate an Asset Disposition unless (i) such Loan Party or such Subsidiary
receives consideration at the time of such Asset Disposition at least equal to
the fair market value (which, in the case of any Asset Disposition involving
shares or assets having a fair market value in excess of $2.0 million, shall be
determined in good faith by the Loan Party's Board of Directors) of the assets
or equity interests issued or sold or otherwise disposed of, (ii) at least 75%
of the consideration therefor received by such Loan Party or such Subsidiary is
in the form of cash or Cash Equivalents; PROVIDED that the amount of (x) any
Indebtedness of any Loan Party that is assumed by the transferee of any such
assets pursuant to a customary novation agreement that releases such Loan Party
or such Subsidiary from further liability thereon and (y) any securities, notes
or other obligations received by the Company or any such Subsidiary into cash
(to the extent of cash received), shall be deemed to be cash for purposes of
this provision; (iii) the Net Proceeds of such Asset Disposition are applied as
required by SUBSECTION 1.5(B); (iv) after giving effect to the sale or other
disposition of the assets included within the Asset Disposition and the
repayment of Indebtedness with the proceeds thereof, Borrower is in compliance
on a pro forma basis with the covenants set forth in SECTION 4 recomputed for
the most recently ended month for which information is available and is in
compliance with all other terms and conditions contained in this Agreement; (v)
no Default or Event of Default then exists or shall result from such sale or
other disposition; (vi) no such Asset Disposition shall give rise to any
requirement on the part of any Loan Party to prepay or redeem any Subordinated
Indebtedness; and (vii) the aggregate amount of Asset Dispositions consummated
by the Loan Parties in any fiscal year shall not exceed $3,000,000.
3.8 TRANSACTIONS WITH AFFILIATES . No Loan Party will nor will
any Loan Party permit any of its Subsidiaries directly or indirectly to enter
into or permit to exist any transaction
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(including the purchase, sale, lease or exchange of any property or the
rendering of any service) with any Affiliate or with any director, officer or
employee of any Loan Party, except transactions in the ordinary course of and
pursuant to the reasonable requirements of the business of such Loan Party and
upon fair and reasonable terms which are fully disclosed to Agent and are no
less favorable to such Loan Party than would be obtained in a comparable arm's
length transaction with a Person that is not an Affiliate, except the foregoing
shall not be deemed to prohibit (a) transactions among Borrower and its
Subsidiaries otherwise permitted under this Agreement, (b) the payment by the
Loan Parties of reasonable and customary directors' fees to, and the
indemnification of, members of their respective boards of directors, (c) the
Related Transactions, the Supplemental Related Transactions or the New Related
Transactions, (d) payment of the management fees permitted under SUBSECTION 3.9,
(e) the payment of rent and the issuance of the Eagle Rock Notes under the terms
of the Eagle Rock Lease, (f) payment of the Restricted Junior Payments permitted
under SUBSECTION 3.5, (g) any employment agreement entered into by any Loan
Party or any of its Subsidiaries in the ordinary course of business and
consistent with the past practice of such Loan Party or such Subsidiary, as the
case may be, (h) advances to employees for moving, entertainment and travel
expenses, drawing accounts and similar expenditures in the ordinary course of
business and consistent with past practices, and (i) maintenance in the ordinary
course of business of customary benefit programs or arrangements for employees,
officer or directors, including vacation plans, health and life insurance plans,
deferred compensation plans and retirement or savings plans and similar plans.
3.9 MANAGEMENT FEES AND COMPENSATION . No Loan Party will nor
will any Loan Party permit any of its Subsidiaries directly or indirectly to
pay any management, consulting, closing, placement, underwriting, financing
or similar fees to any Affiliate or to any director, officer or employee of
any Loan Party, except that, so long as no Default or Event of Default has
occurred and is then continuing or would result therefrom:
(A) the parties acknowledge that on January 2, 1997 Borrower
paid a one-time fee of $700,000 to BRS pursuant to the BRS Management
Agreement;
(B) Borrower may pay management fees to BRS pursuant to the BRS
Management Agreement, as amended from time to time, in an amount not
in excess of the lesser of (a) 2.0% of EBIDAT for the period in
respect of which such fees are to be paid, (b) the amount permitted
to be paid under the terms of the New Indenture, or (c) $700,000 per
year, payable in semi-annual installments in arrears on July 31 and
January 31 of each year; and
(C) Borrower may pay transaction fees to BRS or an affiliate thereof
in connection
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with Permitted Acquisitions made by a Loan Party in an
amount not to exceed 1% of total transaction value (and the parties
acknowledge that Borrower may pay such a fee in connection with the
1997 Acquisition in the amount of $500,000 and in connection with the
Trappey's Acquisition in the amount of 120,000, so long as such
acquisition constitutes a Permitted Acquisition).
3.10 CONDUCT OF BUSINESS . No Loan Party will nor will any Loan
Party permit any of its Subsidiaries directly or indirectly to engage in any
business other than businesses of the type described on SCHEDULE 3.10. In
further limitation of the foregoing, Holdings shall not engage in any
business activity other than the ownership of the capital stock of Borrower
and the performance by Holdings of its obligations under the Related
Transaction Documents, Supplemental Related Transactions Documents and New
Related Transaction(s) Documents to which it is a party.
3.11 CHANGES RELATING TO SUBORDINATED INDEBTEDNESS; EXCHANGE NOTES;
CHANGES RELATING TO EAGLE ROCK AVENUE DOCUMENTS .
(A) No Loan Party will, directly or directly, amend, modify,
supplement or otherwise change the terms of the Permanent Subordinated
Debt or any of the Permanent Subordinated Debt Documents, if the effect of
such amendment, modification, supplement, or change is to (i) increase the
principal amount of the Permanent Subordinated Debt; (ii) increase the
rate of interest on any of the Permanent Subordinated Debt or increase the
amount of or add any other payment, redemption, repurchase or defeasance
obligation in respect of the Permanent Subordinated Debt; (iii) advance
the dates upon which payments of principal or interest on, or other
amounts in respect of the Permanent Subordinated Debt are due; (iv) make
more restrictive any event of default or covenant, or add any event of
default, with respect to the Permanent Subordinated Debt, or add any
covenant with respect to the Permanent Subordinated Debt which is more
restrictive upon any Loan Party or adverse to Agent and Lenders than the
covenant set forth in such document as of the Effective Date; (v) change
the mandatory redemption or prepayment provisions of the Permanent
Subordinated Debt in a manner adverse to any Loan Party or Agent and
Lenders; (vi) alter the subordination provisions with respect to the
Permanent Subordinated Debt, including, without limitation, subordinating
the Permanent Subordinated Debt to any other debt; (vii) grant to any
holder of the Permanent Subordinated Debt any liens or security interests
in any assets of any Loan Party or any other assets securing the
Obligations; or (viii) change or amend any other term of the Permanent
Subordinated Debt Documents if such change or amendment would increase the
obligations of any Loan Party or confer additional rights on any holder of
the Permanent Subordinated Notes or the Exchange Notes in a manner adverse
to any Loan Party or Agent and Lenders. From and after the Effective Date,
no Loan Party shall cause any Indebtedness,
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other than the Obligations, to be designated as, or to otherwise be deemed
to constitute, "Designated Senior Debt" as defined in the New Indenture.
(A) Borrower may at any time exchange the Permanent Subordinated
Notes for the Exchange Notes pursuant to Section 2.06(f) of the New
Indenture and the provisions of the Registration Rights Agreement,
provided that such exchange shall be consummated strictly in accordance
with the terms of the Permanent Subordinated Debt Documents as in effect
as of the Effective Date, and such Exchange Notes shall be governed by the
terms and conditions set forth in the New Indenture as in effect on the
Effective Date (subject only to such amendments thereto as may have been
consummated in accordance with SUBSECTION 3.11(A)).
(A) The Loan Parties shall not amend the Eagle Rock Lease or the
Eagle Rock Notes in a manner adverse to any Loan Party or Agent and
Lenders. The Loan Parties will not cancel or prepay the Eagle Rock Notes
with or in exchange for cash, securities or other property of any Loan
Party except equity securities of Holdings. Agent and Lenders acknowledge
and agree that the BRS Funding Agreement and the obligations of BRS
thereunder shall be terminated as of the Effective Date.
3.12 FISCAL YEAR . No Loan Party nor any of its Subsidiaries shall
change its fiscal year.
3.13 PRESS RELEASE; PUBLIC OFFERING MATERIALS . No Loan Party will
nor will any Loan Party permit any of its Subsidiaries to disclose the name of
Agent or any Lender in any press release or in any prospectus, proxy statement
or other materials filed with any governmental entity relating to a public
offering of the capital stock of any Loan Party without Agent's or such Lender's
prior written approval (except for any public disclosure believed in good faith
by Borrower to be required by law), which approval shall not be unreasonably
withheld.
3.14 SUBSIDIARIES . No Loan Party will nor will any Loan Party
permit any of its Subsidiaries directly or indirectly to establish, create or
acquire any new Subsidiary, except that (A) the Agent and the Lenders hereby
consent to the formation of the Trademark Subsidiaries, and (B) Borrower may
cause new Subsidiaries to be created in connection with Permitted Acquisitions.
3.15 BANK ACCOUNTS . No Loan Party will nor will any Loan Party
permit any of its Subsidiaries to establish any new bank accounts without prior
written notice to Agent.
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3.16 USE OF PROCEEDS . The proceeds of the Loans shall be used only
for the purposes set forth in the recitals to this Agreement and, without
limiting the foregoing, not more than $20,000,000 of the proceeds of the Loans
made after the Effective Date shall be used to fund any single Permitted
Acquisition (or series of related Permitted Acquisitions), nor shall the
aggregate amount of Loans used to fund all Permitted Acquisitions in any fiscal
year of Borrower and its Subsidiaries exceed $20,000,000. No portion of the
proceeds of any Loan shall be used by any Loan Party in any manner that might
cause the borrowing or the application of such proceeds to violate Regulation G,
Regulation U, Regulation T or Regulation X or any other regulation of the Board
of Governors of the Federal Reserve System.
3.17 NO VIOLATION OF SUBORDINATED DEBT DOCUMENTS . No Loan Party
shall take or omit to take any action (including, without limitation, the
incurrence of Indebtedness or liabilities in respect of Contingent Obligations,
the granting of Liens, the making of any Investments or Restricted Junior
Payments, or any disposal or acquisition of assets), whether or not expressly
permitted to be taken or omitted hereunder or under the other Loan Documents,
if, at the time thereof or after giving effect thereto, the taking or omission
of such action would constitute a default or breach under the Permanent
Subordinated Debt Documents.
3.18 PERMITTED ACQUISITIONS .
No Loan Party will acquire all or any substantial part of the
assets or the stock of any Persons, except that Borrower or any of its
Subsidiaries may consummate such an acquisition if (i) such an acquisition is
consented to in writing by Requisite Lenders, or (ii) each of the following
conditions has been satisfied:
(a) such acquisition shall be structured as (i) an asset
acquisition by Borrower or any of its Subsidiaries, (ii) a merger of
the acquired Person with and into Borrower or any of its
Subsidiaries, with Borrower or such Subsidiary as the surviving
corporation in such merger (or the entity surviving such merger shall
become a Loan Party and a guarantor hereunder and under the other
Loan Documents), or (iii) a purchase of all of the issued and
outstanding capital stock of the acquired Person by Borrower or any
of its Subsidiaries;
(b) Agent shall have received such duly executed and delivered
agreements, instruments and documents as Agent shall request in order
to create in favor of Agent, for its own benefit and on behalf of
Lenders, a first priority perfected security interest in the real,
personal and mixed property so acquired to secure the Obligations
(and, in the case of an acquisition involving the purchase of the
acquired Person's equity interests, Borrower or the applicable
Subsidiary shall
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cause all of the issued and outstanding equity interests of such
Person to be pledged to Agent, for the benefit of itself and Lenders,
and shall cause the Persons whose equity interests have been acquired
to grant to Agent, for the benefit of itself and Lenders, a first
priority perfected security interest in the real, personal and mixed
property of such Person);
(c) such acquisition shall not subject Agent or any Lender to
regulatory or third party approvals in connection with the exercise
of its rights and remedies under this Agreement or any other Loan
Documents;
(d) Borrower and/or the applicable Subsidiary thereof shall have
obtained all material third party consents and approvals required in
connection with such acquisition;
(e) the business and assets (and, if applicable, all shares of
capital stock) so acquired in such acquisition shall be acquired by
Borrower or the applicable Subsidiary thereof free and clear of all
Liens (other than Permitted Encumbrances) and all Indebtedness and
liabilities unless otherwise permitted under this Agreement;
(f) no Indebtedness shall be incurred or assumed to finance such
acquisition, other than (i) the incurrence of Revolving Loans as
permitted hereunder in connection with any Permitted Acquisition,
subject to SUBSECTION 3.16, and (ii) the assumption of outstanding
Indebtedness of such acquired Person secured by purchase money Liens
or incurred with respect to capital leases to the extent permitted
under subsection 3.1(D). No Contingent Obligations will be incurred
or assumed in connection with such acquisition which are in excess of
$100,000, unless otherwise permitted under this Agreement;
(g) environmental audits, pro forma financial statements,
appraisals, if any, accounting reviews and material due diligence
reports conducted by Borrowers with respect to the business to be
acquired shall have been delivered to Agent not less than twenty (20)
Business Days prior to consummation of the Permitted Acquisition (or
within such lesser period of time prior to the consummation thereof
as may be acceptable to Agent, in the case of the Trappey's
Acquisition only);
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(h) at the time of such acquisition and after giving effect
thereto, no Default and no Event of Default exists or would be
continuing;
(i) Borrower shall have delivered to Agent projections for a
three (3) year period for the target of such Permitted Acquisition
and for Borrower and its Subsidiaries demonstrating, to the
satisfaction of Agent, compliance with the financial covenants
contained in this Agreement on a pro forma basis, and otherwise
satisfactory in form and substance to Agent;
(j) substantially all of the assets so acquired are located in
the continental United States or, if such acquisition is structured
as a purchase of stock, the Person so acquired is organized under the
laws of a state of the United States, and substantially all of the
assets owned by such Person are located in the continental United
States;
(k) Borrower shall have demonstrated in writing to the
satisfaction of Agent that the historical Operating Cash Flow (as
calculated on Exhibit 4.6(C)) for the business to be acquired for the
preceding twelve (12) months is greater than zero;
(l) not less than ten (10) Business Days prior to consummation
of the Permitted Acquisition (or within such lesser period of time
prior to the consummation thereof as may be acceptable to Agent, in
the case of the Trappey's Acquisition only), Borrower shall have
delivered to Agent a certificate in reasonable detail demonstrating
to Agent's satisfaction that immediately following consummation of
the Permitted Acquisition, the ratio of (i) Borrower's Total
Indebtedness (as defined in EXHIBIT 4.6(C)) LESS Borrower's
Subordinated Indebtedness, to (ii) Borrower's EBIDAT (as defined in
EXHIBIT 4.6(C)), calculated in each case on a consolidated basis and
after giving pro forma effect to such Permitted Acquisition, does not
exceed 3.0 to 1.0;
(m) the business to be acquired is in the same or substantially
related line of business as Borrowers and its Subsidiaries;
(n) (i) the amount funded under the Revolving Loan Commitment
does not exceed
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$20,000,000 in respect of any single such acquisition (or series of
related acquisitions), and the aggregate amount funded under the
Revolving Loan Commitment for all Permitted Acquisitions in the then
current fiscal year of Borrower and its Subsidiaries (including the
acquisition then proposed to be consummated) does not to exceed
$20,000,000; and (ii) the aggregate amount of all such Permitted
Acquisitions in any fiscal year (including all assumed Indebtedness,
all payments in respect of non-competition or similar agreements and
all other consideration payable in respect of such Permitted
Acquisitions) does not exceed $20,000,000;
(o) Borrower shall have delivered revised Schedules to this
Agreement and the other Loan Documents to the extent necessary to
disclose facts pertaining to the target of the proposed acquisition;
and
(p) if the proposed acquisition involves the creation of a new
Subsidiary or the acquisition of equity interests (including any
acquisition involving a merger in which Borrower or one of its
Subsidiaries is not the survivor), such newly created Subsidiary,
such Person whose equity interests are being acquired, or such
survivor, as the case may be, will, pursuant to documentation in form
and substance reasonably satisfactory to Agent, guarantee the
Obligations.
Each acquisition consummated by Borrower or any of its Subsidiaries
in accordance with the provisions of this SUBSECTION 3.18 shall be referred to
as a "Permitted Acquisition". The Agent and the Lenders acknowledge and agree
that the Trappey's Acquisition shall constitute a Permitted Acquisition so long
as each of the conditions set forth in this SUBSECTION 3.18 have been satisfied
as of the date such acquisition is consummated.
SECTION 4
FINANCIAL COVENANTS/REPORTING
Borrower covenants and agrees that so long as the Revolving Loan
Commitment is in effect and until payment in full of all Obligations and
termination of all Lender Letters of Credit and Risk Participation Agreements,
unless Requisite Lenders shall otherwise give their prior written consent,
Borrower shall perform and comply with, and shall cause each of the other Loan
Parties to perform and comply with, all covenants in this SECTION 4 applicable
to such Person.
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4.1 CAPITAL EXPENDITURE LIMITS . The aggregate amount of all Capital
Expenditures of Borrower and it Subsidiaries in any fiscal year of Borrower will
not exceed the amount set forth below for such fiscal year.
FISCAL YEAR MAXIMUM CAPITAL EXPENDITURES
1997 $5,500,000
1998 and each fiscal
year thereafter $3,000,000
Notwithstanding the foregoing, any Regina Capital Expenditures (as defined
below) not expended in 1997 may be carried forward and expended in fiscal year
1998, and the maximum Capital Expenditures permitted in 1998 shall be deemed
increased by the amount carried forward so long as (a) such amount carried
forward is expended only on Regina Capital Expenditures, and (b) the aggregate
amount of such Regina Capital Expenditures does not exceed $1,500,000.
"Regina Capital Expenditures" means Capital Expenditures relating to the
plant consolidation of Regina, which Capital Expenditures are projected to
aggregate $1,500,000.
"CAPITAL EXPENDITURES" will be calculated as illustrated on EXHIBIT
4.6(C).
4.2 INTENTIONALLY OMITTED .
4.3 FIXED CHARGE COVERAGE . Borrower shall not permit Fixed Charge
Coverage (a) calculated with respect to Borrower and its Subsidiaries (other
than RWBV) for the three fiscal quarters ended as of September 30, 1997 and with
respect to RWBV as of such date for the fiscal quarter then ended, on a combined
basis, to be less than 1.00:1.00; (b) calculated with respect to Borrower and
its Subsidiaries (other than RWBV) for the four fiscal quarters ended as of
December 31, 1997 and with respect to RWBV as of such date for the two fiscal
quarters then ended, on a combined basis, to be less than 1.05:1.00; and (c)
calculated with respect to Borrower and its Subsidiaries (other than RWBV) for
the four fiscal quarters ended as of March 31, 1998 and with respect to RWBV as
of such date for the three fiscal quarters then ended, on a combined basis, to
be less than 1.10:1.00. During the period commencing April 1, 1998 through and
including December 31, 1998, Borrower shall not permit Fixed Charge Coverage of
Borrower and its Subsidiaries (including RWBV) for the twelve (12) month period
ending on the last day of each fiscal quarter during such period to be less than
1.10:1.0. Commencing with Borrower's fiscal quarter ending March 31, 1999 and on
the last day of each fiscal quarter thereafter, Borrower shall not permit Fixed
Charge Coverage of Borrower and its Subsidiaries (including RWBV) for the twelve
(12) month period ending on the last day of each such fiscal quarter to be less
than 1.25:1.0.
"Fixed Charge Coverage" will be calculated as illustrated on
EXHIBIT 4.6(C).
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4.4 TOTAL INTEREST COVERAGE . Borrower shall not permit Total
Interest Coverage (a) calculated with respect to Borrower and its Subsidiaries
(other than RWBV) for the three fiscal quarters ended as of September 30, 1997
and with respect to RWBV as of such date for the fiscal quarter then ended, on a
combined basis, to be less than 1.50:1.00; (b) calculated with respect to
Borrower and its Subsidiaries (other than RWBV) for the four fiscal quarters
ended as of December 31, 1997 and with respect to RWBV as of such date for the
two fiscal quarters then ended, on a combined basis, to be less than 1.50:1.00;
and (c) calculated with respect to Borrower and its Subsidiaries (other than
RWBV) for the four fiscal quarters ended as of March 31, 1998 and with respect
to RWBV as of such date for the three fiscal quarters then ended, on a combined
basis, to be less than 1.50:1.00. Thereafter, Borrower shall not permit Total
Interest Coverage of Borrower and its Subsidiaries (including RWBV) for the
twelve (12) month period ending on each of the dates set forth below to be less
than the amount set forth below for such twelve month period.
12-MONTH PERIOD ENDING MINIMUM
ON FOLLOWING DATES TOTAL INTEREST COVERAGE
June 30, 1998 1.50:1.0
September 30, 1998 1.50:1.0
December 31, 1998 1.50:1.0
March 31, 1999 1.50:1.0
June 30, 1999 1.50:1.0
September 30, 1999 1.50:1.0
December 31, 1999 1.50:1.0
March 31, 2000 1.75:1.0
June 30, 2000 1.75:1.0
September 30, 2000 1.75:1.0
December 31, 2000 1.75:1.0
March 31, 2001 and on 2.00:1.0
the last day of each fiscal
quarter thereafter
"Total Interest Coverage" will be calculated as illustrated on EXHIBIT 4.6(C).
4.5 TOTAL INDEBTEDNESS TO EBIDAT RATIO . Borrower shall not permit
the ratio of Total Indebtedness calculated as of each of the dates set forth
below to EBIDAT for the twelve month period ending on such date to be greater
than the ratio set forth below for such twelve month period.
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12-MONTH PERIOD ENDING ON MAXIMUM
FOLLOWING DATES RATIO
March 31, 1998 6.00:1.0
June 30, 1998 6.00:1.0
September 30, 1998 5.50:1.0
December 31, 1998 5.50:1.0
March 31, 1999 5.50:1.0
June 30, 1999 5.50:1.0
September 30, 1999 5.50:1.0
December 31, 1999 5.50:1.0
March 31, 2000 5.00:1.0
June 30, 2000 5.00:1.0
September 30, 2000 5.00:1.0
December 31, 2000 5.00:1.0
March 31, 2001 4.50:1.0
June 30, 2001 4.50:1.0
September 30, 2001 4.50:1.0
December 31, 2001 4.50:1.0
March 31, 2002 and on the last 4.00:1.0
day of each fiscal quarter thereafter
"Total Indebtedness" and "EBIDAT" will be calculated as illustrated on EXHIBIT
4.6(C).
4.6 FINANCIAL STATEMENTS AND OTHER REPORTS . Each Loan Party will
maintain and cause each of its Subsidiaries to maintain a system of accounting
established and administered in accordance with sound business practices to
permit preparation of financial statements in conformity with GAAP (it being
understood that monthly financial statements are not required to have footnote
disclosures). Borrower will deliver each of the financial statements and other
reports described below to Agent (and each Lender in the case of the financial
statements and other reports described in SUBSECTIONS (A), (B), (C), (F), (H)
and (J)).
(A) MONTHLY FINANCIALS. As soon as available and in any event within
thirty (30) days after the end of each month, Borrower will deliver (1) the
consolidated and consolidating balance sheets of Borrower and its Subsidiaries,
as at the end of such month, and
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the related consolidated and consolidating statements of income, stockholders'
equity and cash flow for such month and for the period from the beginning of the
then current fiscal year of Borrower to the end of such month and (2) a schedule
of the outstanding Indebtedness for borrowed money of Borrower and its
Subsidiaries describing in reasonable detail each such debt issue or loan
outstanding and the principal amount and amount of accrued and unpaid interest
with respect to each such debt issue or loan. The information above shall be
presented in reasonable detail and shall be certified by the chief financial
officer of Borrower to the effect that such information fairly presents the
results of operations and financial condition of Borrower and its Subsidiaries
as at the dates and for the periods indicated.
(B) YEAR-END FINANCIALS . As soon as available and in any event
within ninety (90) days after the end of each fiscal year of Borrower, Borrower
will deliver (1) the consolidated and consolidating balance sheets of Borrower
and its Subsidiaries, as at the end of such year, and the related consolidated
and consolidating statements of income, stockholders' equity and cash flow for
such fiscal year, (2) a schedule of the outstanding Indebtedness for borrowed
money of Borrower and its Subsidiaries describing in reasonable detail each such
debt issue or loan outstanding and the principal amount and amount of accrued
and unpaid interest with respect to each such debt issue or loan, and (3) a
report with respect to the financial statements from a "Big Six" Accounting
Firm, which report shall be prepared in accordance with Statement of Auditing
Standards No. 58 (the "Statement") entitled "Reports on Audited Financial
Statements" and such report shall be "Unqualified" (as such term is defined in
such Statement).
(C) BORROWER COMPLIANCE CERTIFICATE . Together with each delivery of
financial statements of Borrower and its Subsidiaries pursuant to SUBSECTIONS
4.6(A) for the last month of each fiscal quarter of Borrower and with each
delivery of financial statements pursuant to SUBSECTION 4.6(B) above, Borrower
will deliver a fully and properly completed Compliance Certificate (in
substantially the same form as EXHIBIT 4.6(C)) signed by Borrower's chief
executive officer or chief financial officer.
(D) ACCOUNTANTS' REPORTS . Promptly upon receipt thereof, Borrower
will deliver copies of all significant reports submitted by Borrower's firm of
certified public accountants in connection with each annual, interim or special
audit or review of any type of the financial statements or related internal
control systems of Borrower or any of its Subsidiaries made by such accountants,
including any comment letter submitted by such accountants to management in
connection with their services.
(E) INTENTIONALLY OMITTED.
(F) MANAGEMENT REPORT . Together with each delivery of financial
statements of Borrower pursuant to SUBSECTIONS 4.6(A) for the last month of each
fiscal quarter of Borrower and with each delivery of financial statements
pursuant to SUBSECTION 4.6(B), Borrower will
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deliver a management report (1) describing the operations and financial
condition of Borrower and its Subsidiaries for the fiscal quarter then ended and
the portion of the current fiscal year then elapsed (or for the fiscal year then
ended in the case of year-end financials), (2) setting forth in comparative form
the corresponding figures for the corresponding periods of the previous fiscal
year and the corresponding figures from the most recent Projections for the
current fiscal year delivered pursuant to SUBSECTION 4.6(I) and (3) discussing
the reasons for any significant variations.
(G) COLLATERAL VALUE REPORT . Upon the request of Agent, which may
be made not more than once each year prior to an Event of Default, and at any
time (but not more often than quarterly) while and so long as an Event of
Default shall be continuing, Borrower will obtain and deliver to Agent a report
of an independent collateral auditor satisfactory to Agent (which may be, or be
affiliated with, a Lender) with respect to the accounts and inventory of
Borrower and its Subsidiaries, which report shall be based upon a review by such
auditors of the accounts (including verification with respect to the amount,
aging, identity and credit of the respective account debtors and the billing
practices of Borrower or any of its Subsidiaries) and inventory (including
verification as to the value, location and respective types).
(H) APPRAISALS . From time to time, if Agent or any
Lender determines that obtaining appraisals of real estate owned by Borrower or
its Subsidiaries is necessary in order for Agent or such Lender to comply with
applicable laws or regulations, Agent will, at Borrower's expense, obtain
appraisal reports in form and substance and from appraisers satisfactory to
Agent stating the then current fair market values of all or any portion of the
real estate owned by any Borrower or any of its Subsidiaries. In addition to the
foregoing, from time to time, but in the absence of an Event of Default not more
than once during each calendar year, Agent may require Borrower to obtain and
deliver to Agent appraisal reports in form and substance and from appraisers
satisfactory to Agent stating the then current market values of all or any
portion of the real estate and personal property owned by Borrower or any of its
Subsidiaries.
(I) PROJECTIONS PROJECTIONS . As soon as available and in any event
no later than the last day of each of Borrower's fiscal years, Borrower will
deliver Projections of Borrower and its Subsidiaries for the forthcoming three
fiscal years, year by year, and for the forthcoming fiscal year, month by month,
on a consolidated and consolidating basis.
(J) SEC FILINGS AND PRESS RELEASES . Promptly upon their becoming
available, Borrower will deliver copies of (1) all financial statements,
reports, notices and proxy statements sent or made available by any Loan Party
to its security holders, (2) all regular and periodic reports and all
registration statements and prospectuses, if any, filed by any Loan Party with
any securities exchange or with the Securities and Exchange Commission or any
governmental or private regulatory authority, and (3) all press releases and
other statements made
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available by any Loan Party to the public concerning developments in the
business of any such Person.
(K) EVENTS OF DEFAULT, ETC . Promptly upon any officer of Borrower
or any other Loan Party obtaining knowledge of any of the following events or
conditions, Borrower shall deliver copies of all notices given or received by
Borrower or such other Loan Party with respect to any such event or condition
and a certificate of Borrower's chief executive officer specifying the nature
and period of existence of such event or condition and what Borrower has taken,
is taking and proposes to take with respect thereto: (1) any condition or event
that constitutes an Event of Default or Default; or (2) any notice that any
Person has given to Borrower or any other Loan Party or any other action taken
with respect to a claimed default or event or condition of the type referred to
in SUBSECTION 6.1(B).
(L) LITIGATION . Promptly upon any officer of Borrower or any of its
Subsidiaries obtaining knowledge of (1) the institution of any action, suit,
proceeding, governmental investigation or arbitration against or affecting any
Loan Party or any property of any Loan Party not previously disclosed by
Borrower to Agent or (2) any material development in any action, suit,
proceeding, governmental investigation or arbitration at any time pending
against or affecting any Loan Party or any property of any Loan Party which, in
each case, if determined adversely to such Loan Party, would reasonably be
expected to have a Material Adverse Effect, Borrower will promptly give notice
thereof to Agent and provide such other information as may be reasonably
available to them to enable Agent and its counsel to evaluate such matter.
(M) SUPPLEMENTED SCHEDULES; NOTICE OF CORPORATE CHANGES . Annually,
concurrently with Borrower's delivery of the Projections required by SUBSECTION
4.6(I), Borrower shall supplement in writing and deliver revisions of the
Schedules annexed to this Agreement to the extent necessary to disclose new or
changed facts or circumstances after the Original Closing Date; PROVIDED that
subsequent disclosures shall not constitute a cure or waiver of any Default or
Event of Default resulting from the matters disclosed. Borrower shall provide
prompt written notice of (1) all jurisdictions in which a Loan Party becomes
qualified after the Original Closing Date to transact business, (2) any material
change after the Original Closing Date in the authorized and issued capital
stock or other equity interests of any Loan Party or any other material
amendment to their charter, by-laws or other organization documents and (3) any
Subsidiary created or acquired by any Loan Party after the Original Closing
Date, such notice, in each case, to identify the applicable jurisdictions,
capital structures or Subsidiaries, as applicable.
(N) OTHER INFORMATION . With reasonable promptness, Borrower will
deliver such other information and data with respect to any Loan Party as from
time to time may be reasonably requested by Agent.
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4.7 ACCOUNTING TERMS; UTILIZATION OF GAAP FOR PURPOSES OF
CALCULATIONS UNDER AGREEMENT . For purposes of this Agreement, all accounting
terms not otherwise defined herein shall have the meanings assigned to such
terms in conformity with GAAP. Financial statements and other information
furnished to Agent pursuant to SUBSECTION 4.6 shall be prepared in accordance
with GAAP as in effect at the time of such preparation. No "Accounting Changes"
(as defined below) shall affect financial covenants, standards or terms in this
Agreement; PROVIDED that Borrower shall prepare footnotes to each Compliance
Certificate and the financial statements required to be delivered hereunder that
show the differences between the financial statements delivered (which reflect
such Accounting Changes) and the basis for calculating financial covenant
compliance (without reflecting such Accounting Changes). "Accounting Changes"
means: (a) changes in accounting principles required by GAAP and implemented by
Borrower; (b) changes in accounting principles recommended by Borrower's
certified public accountants and implemented by Borrower; and (c) changes in
carrying value of Borrower's or any of its Subsidiary's assets, liabilities or
equity accounts resulting from (i) the application of purchase accounting
principles (A.P.B. 16 and/or 17 and EITF 88-16 and FASB 109) to the Related
Transactions or the Supplemental Related Transactions or (ii) as the result of
any other adjustments that, in each case, were applicable to, but not included
in, the Pro Forma, the Supplemental Pro Forma, or the New Pro Forma as
applicable. All such adjustments resulting from expenditures made subsequent to
the Original Closing Date (including, but not limited to, capitalization of
costs and expenses or payment of pre-Original Closing Date liabilities) shall be
treated as expenses in the period the expenditures are made.
SECTION 5
REPRESENTATIONS AND WARRANTIES
In order to induce Agent and Lenders to enter into this Agreement, to
make Loans and to issue Lender Letters of Credit and Risk Participation
Agreements, Borrower represents and warrants to Agent and each Lender that the
following statements are and, after giving effect to the Related Transactions,
the Supplemental Related Transactions and the New Related Transactions, will be
true, correct and complete on the Effective Date and on each date after the
Effective Date on which such representations and warranties are required or
deemed to be made or remade:
5.1 DISCLOSURE . No representation or warranty of any Loan Party
contained in this Agreement, the financial statements referred to in SUBSECTION
5.5, the other Related Transactions Documents, Supplemental Related Transactions
Documents or New Related Transactions Documents or any other document,
certificate or written statement furnished to Agent or any Lender by or on
behalf of any such Person for use in connection with the Loan Documents, the
Related Transactions Documents, the Supplemental Related Transactions Documents
or New Related Transactions Documents (to the extent still effective as of the
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Effective Date, in the case of the Related Transactions Documents and the
Supplemental Related Transactions Documents) contains any untrue statement of a
material fact or omitted, omits or will omit to state a material fact necessary
in order to make the statements contained herein or therein not misleading in
light of the circumstances in which the same were made.
5.2 NO MATERIAL ADVERSE EFFECT . Since December 31, 1995 there have
been no events or changes in facts or circumstances affecting any Loan Party
which individually or in the aggregate have had or could reasonably be expected
to have a Material Adverse Effect and that have not been disclosed herein or in
the attached Schedules.
5.3 NO DEFAULT . The consummation of the Related Transactions, the
Supplemental Related Transactions and the New Related Transactions does not and
will not violate, conflict with, result in a breach of, or constitute a default
(with due notice or lapse of time or both) under any contract of any Loan Party
except if such violations, conflicts, breaches or defaults have either been
waived on or before the Original Closing Date, in the case of the Related
Transactions, or on or before the First Amendment Date, in the case of the
Supplemental Related Transactions, or on or before the Effective Date, in the
case of the New Related Transactions, and are disclosed on SCHEDULE 5.3 or could
not reasonably be expected to have, either individually or in the aggregate, a
Material Adverse Effect.
5.4 ORGANIZATION, POWERS, CAPITALIZATION AND GOOD STANDING .
(A) ORGANIZATION AND POWERS . Each of the Loan Parties is a
corporation duly organized, validly existing and in good standing under the laws
of its jurisdiction of incorporation (which jurisdiction is set forth on
SCHEDULE 5.4(A)). Each of the Loan Parties has all requisite corporate power and
authority to own and operate its properties, to carry on its business as now
conducted and proposed to be conducted, to enter into each Related Transactions
Document, Supplemental Related Transactions Document and New Related
Transactions Document (to the extent still effective as of the Effective Date,
in the case of the Related Transactions Documents and the Supplemental Related
Transactions Documents) to which it is a party and to carry out the Related
Transactions, the Supplemental Related Transactions and the New Related
Transactions.
(B) CAPITALIZATION . The authorized capital stock of each of the
Loan Parties is as set forth on SCHEDULE 5.4(B). All issued and outstanding
shares of capital stock of each of the Loan Parties are duly authorized and
validly issued, fully paid, nonassessable, free and clear of all Liens other
than those in favor of Agent, for the benefit of Agent and Lenders, and such
shares were issued in compliance with all applicable state and federal laws
concerning the issuance of securities. The capital stock of each of the Loan
Parties is owned by the stockholders and in the amounts set forth on SCHEDULE
5.4(B). No shares of the capital stock of any Loan Party, other than those
described above, are issued and outstanding. There are no preemptive or
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other outstanding rights, options, warrants, conversion rights or similar
agreements or understandings for the purchase or acquisition from any Loan
Party, of any shares of capital stock or other securities of any such entity
except, with respect to the capital stock of Holdings, as set forth on SCHEDULE
5.4(B).
(C) BINDING OBLIGATION . This Agreement is, and the other Related
Transactions Documents, Supplemental Related Transactions Documents and New
Related Transactions Documents (to the extent still effective as of the
Effective Date, in the case of the Related Transactions Documents and the
Supplemental Related Transactions Documents) when executed and delivered will
be, the legally valid and binding obligations of the Loan Parties which are
parties thereto, each enforceable against each of such parties, as applicable,
in accordance with their respective terms, except as such enforceability may be
limited by applicable bankruptcy, insolvency, reorganization, moratorium or
similar laws affecting the enforcement of creditors' rights generally and by
general principles of equity.
(D) QUALIFICATION . Each of the Loan Parties is duly qualified and
in good standing wherever necessary to carry on its business and operations,
except in jurisdictions in which the failure to be qualified and in good
standing could not reasonably be expected to have a Material Adverse Effect. All
jurisdictions in which each Loan Party is qualified to do business are set forth
on SCHEDULE 5.4(D).
5.5 FINANCIAL STATEMENTS . All financial statements concerning the
Loan Parties which have been or will hereafter be furnished to Agent pursuant to
this Agreement, including those listed below, have been or will be prepared in
accordance with GAAP consistently applied (except as disclosed therein) and do
or will present fairly the financial condition of the corporations covered
thereby as at the dates thereof and the results of their operations for the
periods then ended.
(A) The unaudited consolidated balance sheet and consolidated
statements of income and cash flow of BGH Holdings, BRH Holdings,
B&G-DSD, B&G, Roseland Distribution (then known as B&G Foods, Inc.),
Roseland and B&R for each of the fiscal years ended December 31, 1994
and December 30, 1995.
(B) The unaudited consolidated balance sheet and statements of income
and cash flow of BGH Holdings, BRH Holdings, B&G-DSD, B&G, Roseland
Distribution (then known as B&G Foods, Inc.), Roseland and B&R for
the nine-month period ended September 28, 1996.
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(C) The unaudited consolidated balance sheet and statements of income
and cash flow of BGH Holdings, BRH Holdings, B&G-DSD, B&G, Roseland
Distribution (then known as B&G Foods, Inc.), Roseland and B&R for
the ten-month period ended October 26, 1996.
(D) The unaudited consolidated balance sheet and consolidated
statements of income and cash flow of BGH Holdings, BRH Holdings,
B&G-DSD, B&G, Roseland Distribution (then known as B&G Foods, Inc.),
Roseland and B&R for the fiscal year ended December 26, 1996.
(E) The unaudited consolidated balance sheet and statements of income
and cash flow of BGH Holdings, BRH Holdings, B&G, Roseland
Distribution (then known as B&G Foods, Inc.), Roseland and B&R for
the six-month period ended June __, 1997.
5.6 INTELLECTUAL PROPERTY . Each Loan Party is licensed to use or
otherwise has the right to use, all patents, trademarks, trade names,
copyrights, technology, know-how and processes used in or necessary for the
conduct of its business as currently conducted that are material to the
condition (financial or other), business or operations of such Loan Party
(collectively called "Intellectual Property") and all such Intellectual Property
is identified on SCHEDULE 5.6. Except as disclosed in SCHEDULE 5.6, no Loan
Party has received notice of any claim that the use of such Intellectual
Property by such Loan Party infringes on the rights of any Person.
5.7 INVESTIGATIONS, AUDITS, ETC . Except as set forth on SCHEDULE
5.7, none of the Loan Parties has any knowledge that it is the subject of any
review or audit by the Internal Revenue Service or any governmental
investigation concerning the violation or possible violation of any law.
5.8 EMPLOYEE MATTERS . Except as set forth on SCHEDULE 5.8, (a) no
Loan Party nor any of their respective employees is subject to any collective
bargaining agreement, (b) no petition for certification or union election is
pending with respect to the employees of any Loan Party and, to the knowledge of
any Loan Party, no union or collective bargaining unit has sought such
certification or recognition with respect to the employees of any Loan Party and
(c) there are no strikes, slowdowns, work stoppages or controversies pending or,
to the knowledge of any Loan Party, threatened between any Loan Party and its
respective employees, other than employee grievances arising in the ordinary
course of business which could not reasonably be
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expected to have, either individually or in the aggregate, a Material Adverse
Effect. Except as set forth on SCHEDULE 5.8, no Loan Party is party to an
employment contract.
5.9 SOLVENCY . Each Loan Party: (a) owns and will own
assets the fair saleable value of which are (i) greater than the total amount of
liabilities (including contingent liabilities) of such Loan Party and (ii)
greater than the amount that will be required to pay the probable liabilities of
such Loan Party's then existing debts as they become absolute and matured
considering all financing alternatives and potential asset sales reasonably
available to such Loan Party; (b) has capital that is not unreasonably small in
relation to its business as presently conducted or after giving effect to any
contemplated transaction; and (c) does not intend to incur and does not believe
that it will incur debts beyond its ability to pay such debts as they become
due.
5.10 EFFECT OF SUPPLEMENTAL RELATED TRANSACTIONS AND NEW RELATED
TRANSACTIONS . (A) On the First Amendment Date and after giving effect to the
Supplemental Related Transactions, the Original Subordinated Debt was redeemed
or cancelled in full with a portion of the proceeds of the Interim Subordinated
Debt and as otherwise described in the Prior Credit Agreement and the
Supplemental Related Transactions Documents.
(B) On the Effective Date and after giving effect to the New Related
Transactions, the Interim Subordinated Debt shall be redeemed in full with a
portion of the proceeds of the Permanent Subordinated Debt, the Rollover
Subordinated Debt Documents shall be released from escrow and returned to
Borrower, and neither Borrower nor any other Loan Party shall have any
continuing obligations in respect of the Interim Subordinated Debt or the
Rollover Subordinated Debt or under any of the Interim Subordinated Debt
Documents or the Rollover Subordinated Debt Documents, including without
limitation any obligation to pay any Prior Liquidated Damages and any
obligations under the Prior Registration Rights Agreements or the Sponsor Note,
and all such Interim Subordinated Debt Documents and the Rollover Subordinated
Debt Documents (including the Prior Registration Agreements and the Sponsor
Note) have been terminated in their entirety and are of no further force and
effect (other than in respect of indemnification provisions which survive the
termination of any such documents, instruments and agreements).
SECTION 6
DEFAULT, RIGHTS AND REMEDIES
6.1 EVENT OF DEFAULT . "Event of Default" shall mean the occurrence
or existence of any one or more of the following:
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(A) PAYMENT . Failure to pay any installment of principal of
the Revolving Loans (including any mandatory prepayment thereon) when due, or to
repay the Revolving Loans to reduce their balance to the Maximum Revolving Loan
Balance or to reimburse Agent for any payment made by Agent under or in respect
of any Lender Letters of Credit or Risk Participation Agreements when due or
failure to pay, within five (5) days after the due date, any interest on any
Loan or any other amount due under this Agreement or any of the other Loan
Documents; or
(B) DEFAULT IN OTHER AGREEMENTS . (1) Failure of any Loan Party to
pay when due or within any applicable grace period any principal or interest on
Indebtedness (other than the Loans) or any Contingent Obligations or (2) breach
or default of any Loan Party with respect to any Indebtedness (other than the
Loans) or any Contingent Obligations, if the effect of such breach or default
described in CLAUSES (1) and (2) above is to cause or to permit the holder or
holders then to cause (without giving effect to any subordination provisions),
Indebtedness and/or Contingent Obligations having an aggregate principal amount
in excess of $2,500,000 to become or be declared due prior to their stated
maturity; or
(C) BREACH OF CERTAIN PROVISIONS . Failure of any Loan Party to
perform or comply with any term or condition contained in that portion of
SUBSECTION 2.2 relating to such Loan Party's obligation to maintain insurance,
SUBSECTION 2.3, SUBSECTION 2.7, SUBSECTION 2.8, SUBSECTION 2.9, SECTION 3 or
SECTION 4; or
(D) BREACH OF WARRANTY . Any representation, warranty, certification
or other statement made by any Loan Party in any Loan Document or in any
statement or certificate at any time given by such Person in writing pursuant or
in connection with any Loan Document is false in any material respect on the
date made or deemed made; or
(E) OTHER DEFAULTS UNDER LOAN DOCUMENTS . Any Loan Party defaults in
the performance of or compliance with any term contained in this Agreement or
the other Loan Documents and such default is not remedied or waived within
thirty (30) days after receipt by Borrower of notice from Agent or Requisite
Lenders of such default (other than occurrences described in other provisions of
this SUBSECTION 6.1 for which a different grace or cure period is specified or
which constitute immediate Events of Default); or
(F) INVOLUNTARY BANKRUPTCY; APPOINTMENT OF RECEIVER, ETC . (1) A
court enters a decree or order for relief with respect to any Loan Party in an
involuntary case under the Bankruptcy Code, which decree or order is not stayed
or other similar relief is not granted under any applicable federal or state
law; or (2) the continuance of any of the following events for sixty (60) days
unless dismissed, bonded or discharged: (a) an involuntary case is commenced
against any Loan Party, under any applicable bankruptcy, insolvency or other
similar law now or hereafter in effect; or (b) a decree or order of a court for
the appointment of a receiver, liquidator,
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sequestrator, trustee, custodian or other officer having similar powers over any
Loan Party, or over all or a substantial part of its property, is entered; or
(c) an interim receiver, trustee or other custodian is appointed without the
consent of any Loan Party, for all or a substantial part of the property of any
Loan Party or any such Loan Party; or
(G) VOLUNTARY BANKRUPTCY; APPOINTMENT OF RECEIVER, ETC . (1) An
order for relief is entered with respect to any Loan Party or any Loan Party
commences a voluntary case under the Bankruptcy Code, or consents to the entry
of an order for relief in an involuntary case or to the conversion of an
involuntary case to a voluntary case under any such law or consents to the
appointment of or taking possession by a receiver, trustee or other custodian
for all or a substantial part of its property; or (2) any Loan Party makes any
assignment for the benefit of creditors; or (3) the Board of Directors of any
Loan Party adopts any resolution or otherwise authorizes action to approve any
of the actions referred to in this SUBSECTION 6.1(G); or
(H) GOVERNMENTAL LIENS . One or more liens, levies or assessments
involving an amount in the aggregate at any time in excess of $1,000,000, are
filed or recorded with respect to or otherwise imposed upon all or any part of
the Collateral or the assets of any Loan Party by the United States or any
department or instrumentality thereof or by any state, county, municipality or
other governmental agency (other than Permitted Encumbrances) and such liens,
levies or assessments are not discharged, vacated, paid or stayed within thirty
(30) days or in any event no later than five (5) Business Days prior to the date
of any proposed enforcement thereunder; or
(I) JUDGMENT AND ATTACHMENTS . One or more money judgments, writs or
warrants of attachment, or similar processes (other than those described in
SUBSECTION 6.1(H)) involving an amount in the aggregate at any time in excess of
$1,000,000 (not adequately covered by insurance as to which the insurance
company has acknowledged coverage) are entered or filed against any Loan Party
or any of their respective assets and remain undischarged, unvacated, unbonded
or unstayed for a period of sixty (60) days or in any event later than five (5)
Business Days prior to the date of any proposed sale or execution thereunder; or
(J) DISSOLUTION . Any order, judgment or decree is entered against
any Loan Party decreeing the dissolution or split up of such Loan Party and such
order remains undischarged or unstayed for a period in excess of fifteen (15)
days; or
(K) SOLVENCY . Any Loan Party ceases to be solvent (as represented
by the Loan Parties in SUBSECTION 5.9) or admits in writing its present or
prospective inability to pay its debts as they become due; or
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(L) INJUNCTION . Any Loan Party is enjoined, restrained
or in any way prevented by the order of any court or any administrative or
regulatory agency from conducting all or any material part of its business and
such order continues for more than thirty (30) days; or
(M) ERISA; PENSION PLANS . (1) Any Loan Party or any of its ERISA
Affiliates fails to make full payment when due of all amounts which, under the
provisions of any employee benefit plans or any applicable provisions of the
IRC, any such Person is required to pay as contributions thereto and such
failure results in or is likely to result in a Material Adverse Effect; or (2)
an accumulated funding deficiency in excess of $250,000 occurs or exists,
whether or not waived, with respect to any such employee benefit plans; or (3)
any employee benefit plan loses its status as a qualified plan under the IRC
which results in or could reasonably be expected to result in a Material Adverse
Effect; or
(N) ENVIRONMENTAL MATTERS . Any Loan Party fails to: obtain or
maintain any operating licenses or permits required by environmental
authorities; begin, continue or complete any remediation activities as required
by any environmental authorities; store or dispose of any hazardous materials in
accordance with applicable environmental laws and regulations; or comply with
any other environmental laws; if any such failure would, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect; or
(O) INVALIDITY OF LOAN DOCUMENTS . Any of the Loan Documents for any
reason, other than a partial or full release in accordance with the terms
thereof, ceases to be in full force and effect or is declared to be null and
void, or any Loan Party denies that it has any further liability under any Loan
Documents to which it is party, or gives notice to such effect; or
(P) DAMAGE; STRIKE; CASUALTY . Any material damage to, or loss,
theft or destruction of, any Collateral, whether or not insured, or any strike,
lockout, labor dispute, embargo, condemnation, act of God or public enemy, or
other casualty which causes, for more than thirty (30) consecutive days, the
cessation or substantial curtailment of revenue producing activities at any
facility of any Loan Party if any such event or circumstance could reasonably be
expected to have a Material Adverse Effect; or
(Q) LICENSES AND PERMITS . The loss, suspension or revocation of, or
failure to renew, any license or permit now held or hereafter acquired by any
Loan Party, if such loss, suspension, revocation or failure to renew would
reasonably be expected to have a Material Adverse Effect; or
(R) FAILURE OF SECURITY . Agent, for the benefit of Agent and
Lenders, does not have or ceases to have a valid and perfected first priority
security interest in the Collateral (subject to Permitted Encumbrances) or any
substantial portion thereof, in each case, for any reason other than the failure
of Agent to take any action within its control; or
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(S) CHANGE IN CONTROL . (1) The BRS Investors cease to beneficially
own and control, directly or indirectly, at least fifty-one percent (51%) of the
issued and outstanding shares of each class of capital stock of Holdings,
entitled (without regard to the occurrence of any contingency) to vote for the
election of a majority of the members of the board of directors of Holdings, or
(2) the BRS Investors cease to beneficially own and control at least fifty-one
percent (51%) of the aggregate number of shares of each class of Holdings
capital stock owned by such Persons on the Original Closing Date, or (3)
Borrower ceases to be a wholly-owned Subsidiary of Holdings, or (4) any
Subsidiary of Borrower ceases to be a wholly-owned Subsidiary of Borrower, or
(5) the occurrence of any "Change of Control" under and as defined in the New
Indenture; or
(T) BRS FUNDING AGREEMENT . Failure by the BRS Investors to perform
or comply with any term or condition contained in the BRS Funding Agreement.
6.2 SUSPENSION OF COMMITMENTS . Upon the occurrence of any Default
or Event of Default, at the election of Agent or Requisite Lenders, Agent and
each Lender may, without notice or demand, immediately cease making additional
Loans and issuing Lender Letters of Credit and Risk Participation Agreements and
cause its obligation to lend its Pro Rata Share of the Revolving Loan Commitment
to be suspended; PROVIDED that, in the case of a Default, if the subject
condition or event is cured, removed or waived by Requisite Lenders within any
applicable grace or cure period, any suspended portion of the Revolving Loan
Commitment shall be reinstated. At the election of Agent or Requisite Lenders,
each Lender may alternatively suspend only a portion of its obligation to lend
its Pro Rata Share of the Revolving Loan Commitment.
6.3 ACCELERATION . Upon the occurrence of any Event of Default
described in the foregoing SUBSECTIONS 6.1(F) or 6.1(G), the unpaid principal
amount of and accrued interest and fees on the Revolving Loans, payments under
the Lender Letters of Credit and Risk Participation Agreements and all other
Obligations shall automatically become immediately due and payable, without
presentment, demand, protest, notice of intent to accelerate, notice of
acceleration or other requirements of any kind, all of which are hereby
expressly waived by Borrower, and the obligations of Agent and Lenders to make
Revolving Loans and issue Lender Letters of Credit and Risk Participation
Agreements shall thereupon terminate. Upon the occurrence and during the
continuance of any other Event of Default, Agent may, and upon written demand by
Requisite Lenders shall, by written notice to Borrower (a) declare all or any
portion of the Loans and all or some of the other Obligations to be, and the
same shall forthwith become, immediately due and payable together with accrued
interest thereon, and the obligations of Agent and Lenders to make Revolving
Loans and issue Lender Letters of Credit and Risk Participation Agreements shall
thereupon terminate and (b) demand that Borrower immediately deposit with Agent
an amount equal to the aggregate outstanding Risk Participation Liability to
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enable Agent to make payments under the Lender Letters of Credit and Risk
Participation Agreements when required and such amount shall become immediately
due and payable.
6.4 PERFORMANCE BY AGENT . If any Loan Party shall fail to perform
any covenant, duty or agreement contained in any of the Loan Documents, Agent
may perform or attempt to perform such covenant, duty or agreement on behalf of
such Loan Party after the expiration of any cure or grace periods set forth
herein. In such event, Borrower shall, at the request of Agent, promptly pay any
amount reasonably expended by Agent in such performance or attempted performance
to Agent, together with interest thereon at the highest rate of interest in
effect upon the occurrence of an Event of Default as specified in SUBSECTION
1.2(E) from the date of such expenditure until paid. Notwithstanding the
foregoing, it is expressly agreed that Agent shall not have any liability or
responsibility for the performance of any obligation of any Loan Party under
this Agreement or any other Loan Document.
SECTION 7
CONDITIONS TO LOANS
The obligations of Lenders to make Loans and of Agent to issue Lender
Letters of Credit and Risk Participation Agreements are subject to satisfaction
of all of the applicable conditions set forth below.
7.1 CONDITIONS TO THE AMENDMENT AND RESTATEMENT OF THIS AGREEMENT .
The obligations of Lenders to make Loans and of Agent to issue any Lender
Letters of Credit and Risk Participation Agreements on the Effective Date are,
in addition to the conditions precedent specified in SUBSECTION 7.2, subject to
the delivery of all documents and satisfaction of all conditions listed on
SCHEDULE 7.1, all in form and substance satisfactory to Agent.
7.2 CONDITIONS TO ALL LOANS . The obligations of Lenders to make
Loans and of Agent to issue Lender Letters of Credit and Risk Participation
Agreements on any date ("Funding Date") are subject to the further conditions
precedent set forth below.
(A) Agent shall have received, in accordance with the provisions of
SUBSECTION 1.1, a notice requesting an advance of a Revolving Loan or issuance
of a Lender Letter of Credit or Risk Participation Agreement.
(B) The representations and warranties contained in SECTION 5 of
this Agreement and elsewhere herein and in the Loan Documents shall be (and each
request by Borrower for a Loan or a Lender Letter of Credit and Risk
Participation Agreement shall constitute a representation and warranty by
Borrower that such representations and warranties are) true, correct and
complete in all material respects on and as of that Funding Date to the same
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extent as though made on and as of that date, except for any representation or
warranty limited by its terms to a specific date and taking into account any
amendments to the Schedules or Exhibits as a result of any disclosures made in
writing by Borrower to Agent after the Original Closing Date and approved by
Agent in writing.
(C) No event shall have occurred and be continuing or would result
from the consummation of the borrowing contemplated (or notice requesting
issuance of a Lender Letter of Credit and Risk Participation Agreement) that
would constitute an Event of Default or a Default.
(D) No order, judgment or decree of any court, arbitrator or
governmental authority shall purport to enjoin or restrain any Lender from
making any Loan or Agent from issuing any Lender Letter of Credit or Risk
Participation Agreement.
SECTION 8
ASSIGNMENT AND PARTICIPATION
8.1 ASSIGNMENTS AND PARTICIPATIONS IN LOANS AND NOTES . Each Lender
(including Heller) may assign, subject to the terms of a Lender Addition
Agreement, its rights and delegate its obligations under this Agreement to
another Person, PROVIDED that (a) such Lender (excluding Heller) shall first
obtain the written consent of Agent, which consent shall not be unreasonably
withheld; (b) the Pro Rata Share of the Revolving Loan Commitment being assigned
shall in no event be less than the lesser of (i) $5,000,000 and (ii) the entire
amount of the Pro Rata Share of the Revolving Loan Commitment of the assigning
Lender; and (c) upon the consummation of each such assignment the assigning
Lender shall pay Agent an administrative fee of $5,000. The administrative fee
referred to in clause (c) of the preceding sentence shall not apply to an
assignment from a Lender to an affiliate of such Lender. In the case of an
assignment authorized under this SUBSECTION 8.1, the assignee shall have, to the
extent of such assignment, the same rights, benefits and obligations as it would
if it were an initial Lender hereunder. The assigning Lender shall be relieved
of its obligations hereunder with respect to its Pro Rata Share of the Revolving
Loan Commitment or assigned portion thereof. Borrower hereby acknowledges and
agrees that any assignment will give rise to a direct obligation of Borrower to
the assignee and that the assignee shall be considered to be a "Lender".
Each Lender (including Heller) may sell participations in all or any
part of its Pro Rata Share of the Revolving Loan Commitment to another Person,
PROVIDED that (a) such Lender (excluding Heller) shall first obtain the prior
written consent of Agent, which consent shall not be unreasonably withheld; and
(b) any such participation shall be in a minimum amount of $5,000,000 and
PROVIDED, FURTHER, that all amounts payable by Borrower hereunder shall be
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determined as if that Lender had not sold such participation and the holder of
any such participation shall not be entitled to require such Lender to take or
omit to take any action hereunder except action directly effecting (i) any
reduction in the principal amount, interest rate or fees payable with respect to
any Loan in which such holder participates; (ii) any extension of the Expiry
Date or any change of any date fixed for any payment of interest or fees payable
with respect to any Loan in which such holder participates; (iii) any change of
the aggregate unpaid principal amount of the Loans; (iv) any change of the
percentage of Lenders which shall be required for Lenders or any of them to take
any action hereunder; (v) any release of Collateral (except if the sale or
disposition of such Collateral is permitted under SUBSECTION 8.2 or any other
section hereof or any other Loan Document); (vi) any amendment or waiver of this
SUBSECTION 8.1 or the definitions of the terms used in this subsection 8.1
insofar as the definitions affect the substance of this SUBSECTION 8.1; (vii)
any consent to the assignment, delegation or other transfer by any Loan Party of
any of its rights and obligations under any Loan Document; and (viii) any change
in the form in which interest is required to be paid. Borrower hereby
acknowledges and agrees that any participation will not give rise to a direct
obligation of Borrower to the participant, except that the participant shall for
purposes of SUBSECTIONS 1.8, 1.9, 8.4 and 9.1 be considered to be a "Lender";
PROVIDED, that no participant shall be entitled to receive any greater amount
pursuant to such subsections than the Lender selling such participation would
have been entitled to receive in respect of such participation had it not sold
the same.
Except as otherwise provided in this SUBSECTION 8.1 no Lender shall,
as between Borrower and that Lender, be relieved of any of its obligations
hereunder as a result of any sale, assignment, transfer or negotiation of, or
granting of a participation in, all or any part of the Loans, the Notes or other
Obligations owed to such Lender. Each Lender may furnish any information
concerning the Loan Parties in the possession of that Lender from time to time
to assignees and participants (including prospective assignees and
participants), subject to the provisions of SUBSECTION 9.13.
Borrower agrees that it will use its best efforts to assist and
cooperate with Agent and any Lender in any manner reasonably requested by Agent
or such Lender to effect the sale of a participation or an assignment described
above, including without limitation assistance in the preparation of appropriate
disclosure documents or placement memoranda.
Agent shall provide Borrower with written notice of the name and
address of any new Lender after the date hereof.
Notwithstanding anything contained in this Agreement to the contrary,
so long as the Requisite Lenders shall remain capable of making LIBOR Loans, no
Person shall become a "Lender" hereunder unless such Person shall also be
capable of making LIBOR Loans.
8.2 AGENT .
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(A) APPOINTMENT . Each Lender hereby designates and appoints Heller
as its Agent under this Agreement and the other Loan Documents, and each Lender
hereby irrevocably authorizes Agent to take such action or to refrain from
taking such action on its behalf under the provisions of this Agreement and the
other Loan Documents and to exercise such powers as are set forth herein or
therein, together with such other powers as are reasonably incidental thereto.
Agent is authorized and empowered to amend, modify, or waive any provisions of
this Agreement or the other Loan Documents on behalf of Lenders subject to the
requirement that certain of Lenders' consent be obtained in certain instances as
provided in SUBSECTIONS 8.3 and 9.2. Agent agrees to act as such on the express
conditions contained in this SUBSECTION 8.2. The provisions of this SUBSECTION
8.2 are solely for the benefit of Agent and Lenders and neither Borrower nor any
other Loan Party shall have any rights as a third party beneficiary of any of
the provisions hereof. In performing its functions and duties under this
Agreement, Agent shall act solely as agent of Lenders and does not assume and
shall not be deemed to have assumed any obligation toward or relationship of
agency or trust with or for any Borrower or any other Loan Party. Agent may
perform any of its duties hereunder, or under the Loan Documents, by or through
its agents or employees.
(B) NATURE OF DUTIES . The duties of Agent shall be mechanical and
administrative in nature. Agent shall not have by reason of this Agreement a
fiduciary relationship in respect of any Lender. Nothing in this Agreement or
any of the Loan Documents, express or implied, is intended to or shall be
construed to impose upon Agent any obligations in respect of this Agreement or
any of the Loan Documents except as expressly set forth herein or therein. Each
Lender shall make its own independent investigation of the financial condition
and affairs of Borrower and the other Loan Parties in connection with the
extension of credit hereunder and shall make its own appraisal of the
creditworthiness of Borrower and the other Loan Parties, and Agent shall have no
duty or responsibility, either initially or on a continuing basis, to provide
any Lender with any credit or other information with respect thereto (other than
as expressly required herein). If Agent seeks the consent or approval of any
Lenders to the taking or refraining from taking any action hereunder, then Agent
shall send notice thereof to each Lender. Agent shall promptly notify each
Lender any time that the Requisite Lenders have instructed Agent to act or
refrain from acting pursuant hereto.
(C) RIGHTS, EXCULPATION, ETC . Neither Agent nor any of its
officers, directors, employees or agents shall be liable to any Lender for any
action taken or omitted by them hereunder or under any of the Loan Documents, or
in connection herewith or therewith, except that Agent shall be liable with
respect to its own gross negligence or willful misconduct. Agent shall not be
liable for any apportionment or distribution of payments made by it in good
faith and if any such apportionment or distribution is subsequently determined
to have been made in error the sole recourse of any Lender to whom payment was
due but not made, shall be to recover from other Lenders any payment in excess
of the amount to which they are determined to be entitled (and such other
Lenders hereby agree to return to such Lender any such erroneous payments
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received by them). In performing its functions and duties hereunder, Agent shall
exercise the same care which it would in dealing with loans for its own account,
but Agent shall not be responsible to any Lender for any recitals, statements,
representations or warranties herein or for the execution, effectiveness,
genuineness, validity, enforceability, collectibility, or sufficiency of this
Agreement or any of the Loan Documents or the transactions contemplated thereby,
or for the financial condition of any Loan Party. Agent shall not be required to
make any inquiry concerning either the performance or observance of any of the
terms, provisions or conditions of this Agreement or any of the Loan Documents
or the financial condition of any Loan Party, or the existence or possible
existence of any Default or Event of Default. Agent may at any time request
instructions from Lenders with respect to any actions or approvals which by the
terms of this Agreement or of any of the Loan Documents Agent is permitted or
required to take or to grant, and if such instructions are promptly requested,
Agent shall be absolutely entitled to refrain from taking any action or to
withhold any approval and shall not be under any liability whatsoever to any
Person for refraining from any action or withholding any approval under any of
the Loan Documents until it shall have received such instructions from Requisite
Lenders or all of the Lenders, as applicable. Without limiting the foregoing, no
Lender shall have any right of action whatsoever against Agent as a result of
Agent acting or refraining from acting under this Agreement, the Notes, or any
of the other Loan Documents in accordance with the instructions of Requisite
Lenders.
(D) RELIANCE . Agent shall be entitled to rely, and shall be fully
protected in relying, upon any written or oral notices, statements,
certificates, orders or other documents or any telephone message or other
communication (including any writing, telex, telecopy or telegram) believed by
it in good faith to be genuine and correct and to have been signed, sent or made
by the proper Person, and with respect to all matters pertaining to this
Agreement or any of the Loan Documents and its duties hereunder or thereunder,
upon advice of counsel selected by it. Agent shall be entitled to rely upon the
advice of legal counsel, independent accountants, and other experts selected by
Agent in its sole discretion.
(E) INDEMNIFICATION . Lenders will reimburse and indemnify Agent for
and against any and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses (including, without limitation,
attorneys' fees and expenses), advances or disbursements of any kind or nature
whatsoever which may be imposed on, incurred by, or asserted against Agent in
any way relating to or arising out of this Agreement or any of the Loan
Documents or any action taken or omitted by Agent under this Agreement or any of
the Loan Documents, in proportion to each Lender's Pro Rata Share, but only to
the extent that any of the foregoing is not paid by any Loan Party; PROVIDED,
HOWEVER, that no Lender shall be liable for any portion of such liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses, advances or disbursements resulting from Agent's gross negligence or
willful misconduct. If any indemnity furnished to Agent for any purpose shall,
in the opinion of Agent, be insufficient or become impaired, Agent may call for
additional indemnity and cease, or not
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commence, to do the acts indemnified against until such additional indemnity is
furnished. The obligations of Lenders under this SUBSECTION 8.2(E) shall survive
the payment in full of the Obligations and the termination of this Agreement.
(F) HELLER INDIVIDUALLY . With respect to its obligations under the
Revolving Loan Commitment, the Loans made by it, and the Notes issued to it,
Heller shall have and may exercise the same rights and powers hereunder and is
subject to the same obligations and liabilities as and to the extent set forth
herein for any other Lender. The terms "Lenders" or "Requisite Lenders" or any
similar terms shall, unless the context clearly otherwise indicates, include
Heller in its individual capacity as a Lender or one of the Requisite Lenders.
Heller may lend money to, and generally engage in any kind of banking, trust or
other business with any Loan Party as if it were not acting as Agent pursuant
hereto.
(G) SUCCESSOR AGENT .
(1) RESIGNATION . Agent may resign from the performance of all
its agency functions and duties hereunder at any time by giving at least thirty
(30) Business Days' prior written notice to Borrower and Lenders. Such
resignation shall take effect upon the acceptance by a successor Agent of
appointment pursuant to clause (2) below or as otherwise provided below.
(1) APPOINTMENT OF SUCCESSOR . Upon any such notice of
resignation pursuant to clause (1) above, Requisite Lenders shall, upon receipt
of Borrower's prior consent which shall not be unreasonably withheld, appoint a
successor Agent. If a successor Agent shall not have been so appointed within
the thirty (30) Business Day period, referred to in clause (1) above, the
retiring Agent, upon notice to Borrower, shall then appoint a successor Agent
who shall serve as Agent until such time, if any, as Requisite Lenders, upon
receipt of Borrower's prior written consent which shall not be unreasonably
withheld, appoint a successor Agent as provided above.
(2) SUCCESSOR AGENT . Upon the acceptance of any appointment as
Agent under the Loan Documents by a successor Agent, such successor Agent shall
thereupon succeed to and become vested with all the rights, powers, privileges
and duties of the retiring Agent, and the retiring Agent shall be discharged
from its duties and obligations under the Loan Documents. After any retiring
Agent's resignation as Agent under the Loan Documents, the provisions of this
SUBSECTION 8.2 shall inure to its benefit as to any actions taken or omitted to
be taken by it while it was Agent under the Loan Documents.
(A) COLLATERAL MATTERS .
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(1) RELEASE OF COLLATERAL . Lenders hereby irrevocably
authorize Agent, at its option and in its discretion, to release any Lien
granted to or held by Agent upon any property covered by the Security Documents
(i) upon termination of the Revolving Loan Commitment and payment and
satisfaction of all Obligations (other than contingent indemnification
Obligations not then due and payable); (ii) constituting property being sold or
disposed of if Borrower certifies to Agent that the sale or disposition is made
in compliance with the provisions of this Agreement (and Agent may rely in good
faith conclusively on any such certificate, without further inquiry); (iii)
constituting property leased to Borrower or any other Loan Party under a lease
which has expired or been terminated in a transaction permitted under this
Agreement or is about to expire and which has not been, and is not intended by
Borrower or such other Loan Party to be, renewed or extended; or (iv) in
accordance with the provisions of the succeeding sentence. Agent may release or
compromise any Collateral and the proceeds thereof having a value not greater
than ten percent (10%) of the total book value of all Collateral, either in a
single transaction or in a series of related transactions, with the consent of
Lenders owning an aggregate of at least eighty percent (80%) of the Revolving
Loan Commitment, PROVIDED that in no event will Agent, acting under the
authority granted to it pursuant to this sentence, release or compromise
Collateral or the proceeds thereof having a total book value in excess of twenty
percent (20%) of the book value of all Collateral, as determined by Agent,
during any calendar year.
(2) CONFIRMATION OF AUTHORITY; EXECUTION OF RELEASES . Without
in any manner limiting Agent's authority to act without any specific or further
authorization or consent by Lenders (as set forth in SUBSECTION 8.2(H)(1)), each
Lender agrees to confirm in writing, upon request by Agent or Borrower, the
authority to release any property covered by the Security Documents conferred
upon Agent under clauses (i) through (iii) of SUBSECTION 8.2(H)(1). Upon receipt
by Agent of confirmation from the requisite percentage of Lenders required by
SUBSECTION 8.2(H)(1), if any, of its authority to release or compromise any
particular item or types of property covered by the Security Documents, and upon
at least ten (10) Business Days prior written request by Borrower, Agent shall
(and is hereby irrevocably authorized by Lenders to) execute such documents as
may be necessary to evidence the release or compromise of the Liens granted to
Agent, for the benefit of Agent and Lenders, upon such Collateral, PROVIDED that
(i) Agent shall not be required to execute any such document on terms which, in
Agent's opinion, would expose Agent to liability or create any obligation or
entail any consequence other than the release or compromise of such Liens
without recourse or warranty, and (ii) such release or compromise shall not in
any manner discharge, affect or impair the Obligations or any Liens upon (or
obligations of any Loan Party, in respect of), all interests retained by any
Loan Party, including (without limitation) the proceeds of any sale, all of
which shall continue to constitute part of the property covered by the Security
Documents.
(4) ABSENCE OF DUTY . Agent shall have no obligation whatsoever
to any Lender or any other Person to assure that the property covered by the
Security Documents exists or is owned by Borrower or any other Loan Party or is
cared for, protected or insured or
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has been encumbered or that the Liens granted to Agent have been properly or
sufficiently or lawfully created, perfected, protected or enforced or are
entitled to any particular priority, or to exercise at all or in any particular
manner or under any duty of care, disclosure or fidelity, or to continue
exercising, any of the rights, authorities and powers granted or available to
Agent in this SUBSECTION 8.2(H) or in any of the Loan Documents, it being
understood and agreed that in respect of the property covered by the Security
Documents or any act, omission or event related thereto, Agent may act in any
manner it may deem appropriate, in its discretion, given Agent's own interest in
property covered by the Security Documents as one of the Lenders and that Agent
shall have no duty or liability whatsoever to any of the other Lenders, PROVIDED
that Agent shall exercise the same care which it would in dealing with loans for
its own account.
(B) AGENCY FOR PERFECTION . Agent and each Lender hereby appoint
each other Lender as agent for the purpose of perfecting Agent's security
interest in assets which, in accordance with ARTICLE 9 of the Uniform Commercial
Code in any applicable jurisdiction, can be perfected only by possession. Should
any Lender (other than Agent) obtain possession of any such Collateral, such
Lender shall notify Agent thereof, and, promptly upon Agent's request therefor,
shall deliver such Collateral to Agent or in accordance with Agent's
instructions. Each Lender agrees that it will not have any right individually to
enforce or seek to enforce any Security Document or to realize upon any
collateral security for the Loans, it being understood and agreed that such
rights and remedies may be exercised only by Agent.
(C) DISSEMINATION OF INFORMATION . Agent will use its best efforts
to provide Lenders with any information received by Agent from Borrower or any
other Loan Party which is required to be provided to a Lender hereunder,
PROVIDED that Agent shall not be liable to Lenders for any failure to do so,
except to the extent that such failure is attributable to Agent's gross
negligence or willful misconduct.
8.3 AMENDMENTS, CONSENTS AND WAIVERS FOR CERTAIN ACTIONS .
(A) Except as otherwise provided in this SUBSECTION 8.3, in
SUBSECTION 9.2 or in any Lender Addition Agreement and except as to matters set
forth in other subsections hereof or in any other Loan Document as requiring
only Agent's consent, the consent of Requisite Lenders and Borrower will be
required to amend, modify, terminate, or waive any provision of this Agreement
or any of the other Loan Documents.
(A) In the event Agent requests the consent of a Lender and does not
receive a written consent or denial thereof within ten (10) Business Days after
such Lender's receipt of such request, then such Lender will be deemed to have
denied the giving of such consent.
(B) In the event Agent requests the consent of a Lender and such
consent is denied, then Heller or the Lender which assigned its interest in the
Loans to such Lender (the
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"Assigning Lender") may, at its option, require such Lender to reassign its
interest in the Loans to Heller or the Assigning Lender, as applicable, for a
price equal to the then outstanding principal amount thereof PLUS accrued and
unpaid interest and fees due such Lender, which interest and fees will be paid
when collected from Borrower. In the event that Heller or the Assigning Lender
elects to require any Lender to reassign its interest to Heller or the Assigning
Lender, Heller or the Assigning Lender, as applicable, will so notify such
Lender in writing within forty-five (45) days following such Lender's denial,
and such Lender will reassign its interest to Heller or the Assigning Lender, as
applicable, no later than five (5) days following receipt of such notice.
8.4 SET OFF AND SHARING OF PAYMENTS . In addition to any rights now
or hereafter granted under applicable law and not by way of limitation of any
such rights, during the continuance of any Event of Default, each Lender is
hereby authorized by Borrower at any time or from time to time, with reasonably
prompt subsequent notice to Borrower (any prior or contemporaneous notice being
hereby expressly waived) to set off and to appropriate and to apply any and all
(A) balances held by such Lender at any of its offices for the account of
Borrower or any of its Subsidiaries (regardless of whether such balances are
then due to Borrower or its Subsidiaries), and (B) other property at any time
held or owing by such Lender to or for the credit or for the account of Borrower
or any of its Subsidiaries, against and on account of any of the Obligations.
Any Lender exercising a right to set off shall, to the extent the amount of any
such set off exceeds its Pro Rata Share of the amount set off, purchase for cash
(and the other Lenders shall sell) interests in each such other Lender's Pro
Rata Share of the Obligations as would be necessary to cause such Lender to
share such excess with each other Lender in accordance with their respective Pro
Rata Shares. Borrower agrees, to the fullest extent permitted by law, that any
Lender may, upon the occurrence and during the continuance of an Event of
Default, exercise its right to set off with respect to amounts in excess of its
Pro Rata Share of the Obligations and upon doing so shall deliver such excess to
the Agent for the benefit of all Lenders in accordance with their Pro Rata
Shares.
8.5 DISBURSEMENT OF FUNDS . Agent may, on behalf of Lenders,
disburse funds to Borrower for Loans requested. Each Lender shall reimburse
Agent on demand for all funds disbursed on its behalf by Agent, or if Agent so
requests, each Lender will remit to Agent its Pro Rata Share of any Loan before
Agent disburses same to Borrower. If Agent elects to require that each Lender
make funds available to Agent, prior to a disbursement by Agent to Borrower,
Agent shall advise each Lender by telephone or telecopy of the amount of such
Lender's Pro Rata Share of the Loan requested by Borrower no later than 1:00
p.m. CST on the Funding Date applicable thereto, and each such Lender shall pay
Agent such Lender's Pro Rata Share of such requested Loan, in same day funds, by
wire transfer to Agent's account on such Funding Date. If Agent has disbursed
funds to Borrower for any Loans requested and any Lender fails to pay the amount
of its Pro Rata Share forthwith upon Agent's demand, Agent shall promptly notify
Borrower, and Borrower shall immediately repay such amount to Agent. Any
repayment
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required pursuant to this SUBSECTION 8.5 shall be without premium or penalty.
Nothing in this SUBSECTION 8.5 or elsewhere in this Agreement or the other Loan
Documents, including without limitation the provisions of SUBSECTION 8.6, shall
be deemed to require Agent to advance funds on behalf of any Lender or to
relieve any Lender from its obligation to fulfill its commitments hereunder or
to prejudice any rights that Agent or Borrower may have against any Lender as a
result of any default by such Lender hereunder.
8.6 DISBURSEMENTS OF ADVANCES; PAYMENT .
(A) REVOLVING LOAN ADVANCES, PAYMENTS AND SETTLEMENTS; RELATED FEE
PAYMENTS .
(1) The Revolving Loan balance may fluctuate from day to day
through Agent's disbursement of funds to, and receipt of funds from, Borrower.
In order to minimize the frequency of transfers of funds between Agent and each
Lender notwithstanding terms to the contrary set forth in SECTION 1 or
SUBSECTION 8.5, Revolving Loan advances and payments will be settled among Agent
and Lenders according to the procedures described in this SUBSECTION 8.6.
Notwithstanding these procedures, each Lender's obligation to fund its portion
of any advances made by Agent to Borrower will commence on the date such
advances are made by Agent. Such payments will be made by such Lender without
set-off, counterclaim or reduction of any kind.
(2) On the second (2nd) Business Day of each week, or more
frequently (including daily), if Agent so elects (each such day being a
"Settlement Date"), Agent will advise each Lender by telephone or telecopy of
the amount of each such Lender's Pro Rata Share of the Revolving Loan balance as
of the close of business of the (2nd) second Business Day immediately preceding
the Settlement Date. In the event that payments are necessary to adjust the
amount of such Lender's required Pro Rata Share of the Revolving Loan balance to
such Lender's actual Pro Rata Share of the Revolving Loan balance as of any
Settlement Date, the party from which such payment is due will pay the other, in
same day funds, by wire transfer to the other's account not later than 3:00 p.m.
CST on the Business Day following the Settlement Date.
(3) For purposes of this SUBSECTION 8.6(A)(3), the following
terms and conditions will have the meanings indicated:
(a) "Daily Loan Balance" means an amount calculated as of the
end of each calendar day by subtracting (i) the cumulative principal
amount paid by Agent to a Lender on a Loan from the Original Closing Date
through and including such calendar day, from (ii) the cumulative
principal amount on a Loan advanced by such
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Lender to Agent on that Loan from the Original Closing Date through and
including such calendar day.
(b) "Daily Interest Rate" means an amount calculated by dividing
the interest rate payable to a Lender on a Loan (as set forth in
SUBSECTION 1.2) as of each calendar day by three hundred sixty (360).
(c) "Daily Interest Amount" means an amount calculated by
multiplying the Daily Loan Balance of a Loan by the associated Daily
Interest Rate on that Loan.
(d) "Interest Ratio" means a number calculated by dividing the
total amount of the interest on a Loan received by Agent with respect to
the immediately preceding month by the total amount of interest on that
Loan due from Borrower during the immediately preceding month.
On the first (1st) Business Day of each quarter, in the case of Base Rate Loans
and any fees, and on the date any interest payment is made by Borrower in
respect of any LIBOR Loan (each, an "Interest Settlement Date"), Agent will
advise each Lender by telephone, telex, or telecopy of the amount of such
Lender's Pro Rata Share of interest and fees on each of the Loans as of the end
of the last day of the immediately preceding quarter, in the case of Base Rate
Loans and fees, or as of the date such interest payment is received, in the case
of LIBOR Loans. Provided that such Lender has made all payments required to be
made by it under this Agreement, Agent will pay to such Lender, by wire transfer
to such Lender's account (as specified by such Lender on the signature page of
this Agreement or the applicable Lender Addition Agreement, as amended by such
Lender from time to time after the date hereof pursuant to the notice provisions
contained herein or in the applicable Lender Addition Agreement) not later than
3:00 p.m. (Chicago time) on the next Business Day following the Interest
Settlement Date, such Lender's Pro Rata Share of interest and fees on each of
the Loans. Such Lender's Pro Rata Share of interest on each Loan will be
calculated for that Loan by adding together the Daily Interest Amounts for each
calendar day of the prior quarter for that Loan, in the case of Base Rate Loans,
or for each day of the applicable Interest Period, in the case of LIBOR Loans,
and multiplying the total thereof by the Interest Ratio for that Loan. Such
Lender's Pro Rata Share of each of the commitment fee described in SUBSECTION
1.2(B) and the Risk Participation Liability fee described in SUBSECTION 1.2(C)
shall be paid and calculated in a manner consistent with the payment and
calculation of interest in respect of Base Rate Loans as described in this
SUBSECTION 8.6(A).
(A) TERM LOAN PAYMENTS; RELATED FEE PAYMENTS . Payments of
principal, interest and fees in respect of the Term Loans received on the
Effective Date, and payment of all
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other fees and expenses not otherwise described in SUBSECTION 8.6(A) from time
to time received by Agent, will be settled on the Business Day received by Agent
in accordance with the provisions of SECTION 1.
(C) AVAILABILITY OF LENDER'S PRO RATA SHARE .
(1) Unless Agent has been notified by a Lender prior to a
Funding Date of such Lender's intention not to fund its Pro Rata Share of the
Loan amount requested by Borrower, Agent may assume that such Lender will make
such amount available to Agent on the Business Day following the next Settlement
Date. If such amount is not, in fact, made available to Agent by such Lender
when due, Agent will be entitled to recover such amount on demand from such
Lender without set-off, counterclaim or deduction of any kind.
(2) Nothing contained in this SUBSECTION 8.6(C) will be deemed
to relieve a Lender of its obligation to fulfill its commitments or to prejudice
any rights Agent or Borrower may have against such Lender as a result of any
default by such Lender under this Agreement.
(3) Without limiting the generality of the foregoing, each
Lender shall be obligated to fund its Pro Rata Share of any Revolving Loan made
after any Event of Default or acceleration of the Obligations with respect to
any draw on a Lender Letter of Credit or a Risk Participation Agreement.
(D) RETURN OF PAYMENTS
(1) If Agent pays an amount to a Lender under this Agreement in
the belief or expectation that a related payment has been or will be received by
Agent from Borrower and such related payment is not received by Agent, then
Agent will be entitled to recover such amount from such Lender without set-off,
counterclaim or deduction of any kind.
(2) If Agent determines at any time that any amount received by
Agent under this Agreement must be returned to Borrower or paid to any other
person pursuant to any solvency law or otherwise, then, notwithstanding any
other term or condition of this Agreement, Agent will not be required to
distribute any portion thereof to any Lender. In addition, each Lender will
repay to Agent on demand any portion of such amount that Agent has distributed
to such Lender, together with interest at such rate, if any, as Agent is
required to pay to Borrower or such other Person, without set-off, counterclaim
or deduction of any kind.
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SECTION 9
MISCELLANEOUS
9.1 INDEMNITIES . Borrower agrees to indemnify, pay, and hold Agent,
each Lender and their respective officers, directors, employees, agents, and
attorneys (the "Indemnitees") harmless from and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits and claims of
any kind or nature whatsoever that may be imposed on, incurred by, or asserted
against the Indemnitee as a result of its being a party to this Agreement;
PROVIDED that Borrower shall have no obligation to an Indemnitee hereunder with
respect to liabilities arising from the gross negligence or willful misconduct
of that Indemnitee as determined by a court of competent jurisdiction. This
subsection and other indemnification provisions contained within the Loan
Documents shall survive the termination of this Agreement.
9.2 AMENDMENTS AND WAIVERS . Except as otherwise provided herein, no
amendment, modification, termination or waiver of any provision of this
Agreement, the Notes or any of the other Loan Documents, or consent to any
departure by any Loan Party therefrom, shall in any event be effective unless
the same shall be in writing and signed by Requisite Lenders (or Agent, if
expressly set forth herein, in any Note or in any other Loan Document) and the
applicable Loan Party; PROVIDED, that except to the extent permitted by the
applicable Lender Addition Agreement, no amendment, modification, termination or
waiver shall, unless in writing and signed by all Lenders, do any of the
following: (a) increase any Lender's Pro Rata Share of the Revolving Loan
Commitment; (b) reduce the principal of, rate of interest on or fees payable
with respect to any Loan; (c) extend the Expiry Date or change any date fixed
for any payment of interest or fees; (d) change the aggregate unpaid principal
amount of the Loans; (e) change the percentage of Lenders which shall be
required for Lenders or any of them to take any action hereunder; (f) release
Collateral (except if the sale or disposition of such Collateral is permitted
under SUBSECTION 8.2 or any other Loan Document); (g) amend or waive this
SUBSECTION 9.2 or the definitions of the terms used in this SUBSECTION 9.2
insofar as the definitions affect the substance of this SUBSECTION 9.2; (h)
consent to the assignment, delegation or other transfer by any Loan Party of any
of its rights and obligations under any Loan Document; and (i) change the form
in which interest is required to be paid; and PROVIDED, FURTHER, that no
amendment, modification, termination or waiver affecting the rights or duties of
Agent under any Loan Document shall in any event be effective, unless in writing
and signed by Agent, in addition to Lenders required hereinabove to take such
action. Each amendment, modification, termination or waiver shall be effective
only in the specific instance and for the specific purpose for which it was
given. No amendment, modification, termination or waiver shall be required for
Agent to take additional Collateral pursuant to any Loan Document. No amendment,
modification, termination or waiver of any provision of any Note shall be
effective without the written concurrence of the holder of that Note. No notice
to or demand on Borrower or any other Loan Party in any case shall entitle
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Borrower or any other Loan Party to any other or further notice or demand in
similar or other circumstances. Any amendment, modification, termination, waiver
or consent effected in accordance with this SUBSECTION 9.2 shall be binding upon
each holder of the Notes at the time outstanding, each future holder of the
Notes, and, if signed by a Loan Party, on such Loan Party.
9.3 NOTICES . Any notice or other communication required shall be in
writing addressed to the respective party as set forth below and may be
personally served, telecopied, sent by overnight courier service or U.S. mail
and shall be deemed to have been given: (a) if delivered in person, when
delivered; (b) if delivered by telecopy, on the date of transmission if
transmitted on a Business Day and receipt is confirmed by the recipient on such
date, or otherwise on the next Business Day; (c) if delivered by overnight
courier, two (2) days after delivery to the courier properly addressed; or (d)
if delivered by U.S. mail, four (4) Business Days after deposit with postage
prepaid and properly addressed.
Notices shall be addressed as follows:
If to Borrower: c/o Roseland Distribution Company
426 Eagle Rock Avenue
Roseland, New Jersey 07068
ATTN: Mr. Robert Cantwell
Telecopy: (201) 228-7461
With a copy to: Bruckmann, Rosser, Sherrill & Co., Inc .
126 East 56th Street
New York, New York 10022
ATTN: Mr. Stephen Sherrill
Telecopy: (212) 521-3799
and to: Dechert Price & Rhoads
30 Rockefeller Plaza
New York, New York 10112
ATTN: Roger Mulvihill, Esq.
Telecopy: (212) 698-3599
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If to Agent or
Heller: HELLER FINANCIAL, INC.
500 West Monroe Street
Chicago, Illinois 60661
ATTN: Portfolio Manager
Corporate Finance Group
Telecopy: (312) 441-7367
With a copy to: HELLER FINANCIAL, INC.
500 West Monroe Street
Chicago, Illinois 60661
ATTN: Legal Department
Corporate Finance Group
Telecopy: (312) 441-7367
If to a Lender:
To the address set forth on the signature page hereto
or in the applicable Lender Addition Agreement
9.4 FAILURE OR INDULGENCE NOT WAIVER; REMEDIES CUMULATIVE . No
failure or delay on the part of Agent or any Lender to exercise, nor any partial
exercise of, any power, right or privilege hereunder or under any other Loan
Documents shall impair such power, right, or privilege or be construed to be a
waiver of any Default or Event of Default. All rights and remedies existing
hereunder or under any other Loan Document are cumulative to and not exclusive
of any rights or remedies otherwise available.
9.5 MARSHALLING; PAYMENTS SET ASIDE . Neither Agent nor any Lender
shall be under any obligation to marshall any assets in payment of any or all of
the Obligations. To the extent that Borrower makes payment(s) or Agent enforces
its Liens or Agent or any Lender exercises its right of set-off, and such
payment(s) or the proceeds of such enforcement or set-off is subsequently
invalidated, declared to be fraudulent or preferential, set aside, or required
to be repaid by anyone, then to the extent of such recovery, the Obligations or
part thereof originally intended to be satisfied, and all Liens, rights and
remedies therefor, shall be revived and continued in full force and effect as if
such payment had not been made or such enforcement or set-off had not occurred.
9.6 SEVERABILITY . The invalidity, illegality, or unenforceability
in any jurisdiction of any provision under the Loan Documents shall not affect
or impair the remaining provisions in the Loan Documents.
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9.7 LENDERS' OBLIGATIONS SEVERAL; INDEPENDENT NATURE OF LENDERS'
RIGHTS . The obligation of each Lender hereunder is several and not joint and no
Lender shall be responsible for the obligation or commitment of any other Lender
hereunder. In the event that any Lender at any time should fail to make a Loan
as herein provided, the Lenders, or any of them, at their sole option, may make
the Loan that was to have been made by the Lender so failing to make such Loan.
Nothing contained in any Loan Document and no action taken by Agent or any
Lender pursuant hereto or thereto shall be deemed to constitute Lenders to be a
partnership, an association, a joint venture or any other kind of entity. The
amounts payable at any time hereunder to each Lender shall be a separate and
independent debt.
9.8 HEADINGS . Section and subsection headings are included herein
for convenience of reference only and shall not constitute a part of this
Agreement for any other purposes or be given substantive effect.
9.9 APPLICABLE LAW . THIS AGREEMENT SHALL BE GOVERNED BY AND SHALL
BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF
NEW YORK, WITHOUT REGARD TO CONFLICTS OF LAW PRINCIPLES.
9.10 SUCCESSORS AND ASSIGNS . This Agreement shall be binding upon
and inure to the benefit of the parties hereto and their respective successors
and assigns except that Borrower may not assign its rights or obligations
hereunder without the written consent of all Lenders.
9.11 NO FIDUCIARY RELATIONSHIP . No provision in the Loan Documents
and no course of dealing between the parties shall be deemed to create any
fiduciary duty owing to Borrower or any other Loan Party by Agent or any Lender.
9.12 CONSTRUCTION . Agent, each Lender and Borrower acknowledge that
each of them has had the benefit of legal counsel of its own choice and has been
afforded an opportunity to review the Loan Documents with its legal counsel and
that the Loan Documents shall be constructed as if jointly drafted by Agent,
each Lender and Borrower.
9.13 CONFIDENTIALITY . Agent and each Lender agree to exercise their
best efforts to keep any non-public information delivered pursuant to the Loan
Documents confidential from Persons other than those employed by or engaged by
Agent or such Lender and those employed by or engaged by Agent's or such
Lender's assignees or participants, or potential assignees or participants. This
subsection shall not apply to disclosures required to be made by Agent or any
Lender to any regulatory or governmental agency or pursuant to legal process.
9.14 CONSENT TO JURISDICTION AND SERVICE OF PROCESS .
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(A) BORROWER HEREBY IRREVOCABLY SUBMITS TO THE NON-EXCLUSIVE
JURISDICTION OF ANY UNITED STATES FEDERAL OR NEW YORK STATE COURT LOCATED WITHIN
THE COUNTY OF NEW YORK, STATE OF NEW YORK IN ANY ACTION OR PROCEEDING ARISING
OUT OF OR RELATING TO ANY LOAN DOCUMENTS AND BORROWER HEREBY IRREVOCABLY AGREES
THAT ALL CLAIMS IN RESPECT OF SUCH ACTION OR PROCEEDING MAY BE HEARD AND
DETERMINED IN ANY SUCH COURT AND IRREVOCABLY WAIVES ANY OBJECTION IT MAY NOW OR
HEREAFTER HAVE AS TO THE VENUE OF ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN
SUCH A COURT OR THAT SUCH COURT IS AN INCONVENIENT FORUM. NOTHING HEREIN SHALL
LIMIT THE RIGHT OF AGENT OR ANY LENDER TO BRING PROCEEDINGS AGAINST BORROWER IN
THE COURTS OF ANY OTHER JURISDICTION. ANY JUDICIAL PROCEEDING BY BORROWER
AGAINST AGENT OR ANY LENDER OR ANY AFFILIATE THEREOF INVOLVING, DIRECTLY OR
INDIRECTLY, ANY MATTER IN ANY WAY ARISING OUT OF, RELATED TO, OR CONNECTED WITH
ANY LOAN DOCUMENT SHALL BE BROUGHT ONLY IN A COURT LOCATED WITHIN THE COUNTY OF
NEW YORK, STATE OF NEW YORK.
(B) BORROWER DESIGNATES AND APPOINTS CT CORPORATION SYSTEM AND SUCH
OTHER PERSONS AS MAY HEREAFTER BE SELECTED BY BORROWER WHICH IRREVOCABLY AGREE
IN WRITING TO SO SERVE AS ITS AGENT TO RECEIVE ON ITS BEHALF SERVICE OF ALL
PROCESS IN ANY SUCH PROCEEDINGS IN ANY SUCH COURT, SUCH SERVICE BEING HEREBY
ACKNOWLEDGED BY BORROWER TO BE EFFECTIVE AND BINDING SERVICE IN EVERY RESPECT. A
COPY OF ANY SUCH PROCESS SO SERVED SHALL BE MAILED BY REGISTERED MAIL TO
BORROWER AT ITS ADDRESS PROVIDED IN SUBSECTION 9.3 EXCEPT THAT UNLESS OTHERWISE
PROVIDED BY APPLICABLE LAW, ANY FAILURE TO MAIL SUCH COPY SHALL NOT AFFECT THE
VALIDITY OF SERVICE OF PROCESS. IF ANY AGENT APPOINTED BY BORROWER REFUSES TO
ACCEPT SERVICE, BORROWER HEREBY AGREES THAT SERVICE UPON IT BY MAIL SHALL
CONSTITUTE SUFFICIENT NOTICE. NOTHING HEREIN SHALL AFFECT THE RIGHT TO SERVE
PROCESS IN ANY OTHER MANNER PERMITTED BY LAW.
9.15 WAIVER OF JURY TRIAL . BORROWER, AGENT AND EACH LENDER HEREBY
WAIVE THEIR RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION
BASED UPON OR ARISING OUT OF THIS AGREEMENT, ANY OF THE OTHER LOAN DOCUMENTS, OR
ANY DEALINGS BETWEEN THEM RELATING TO THE SUBJECT MATTER OF THIS LOAN
TRANSACTION AND THE LENDER/BORROWER RELATIONSHIP THAT IS BEING ESTABLISHED. THE
SCOPE OF THIS WAIVER IS INTENDED TO BE ALL-ENCOMPASSING OF ANY AND ALL DISPUTES
THAT MAY BE FILED IN ANY COURT AND THAT RELATE TO THE
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SUBJECT MATTER OF THIS TRANSACTION, INCLUDING WITHOUT LIMITATION, CONTRACT
CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS, AND ALL OTHER COMMON LAW AND
STATUTORY CLAIMS. BORROWER, AGENT AND EACH LENDER ACKNOWLEDGE THAT THIS WAIVER
IS A MATERIAL INDUCEMENT TO ENTER INTO A BUSINESS RELATIONSHIP, THAT EACH HAS
ALREADY RELIED ON THE WAIVER IN ENTERING INTO THIS AGREEMENT AND THAT EACH WILL
CONTINUE TO RELY ON THE WAIVER IN THEIR RELATED FUTURE DEALINGS. BORROWER, AGENT
AND EACH LENDER FURTHER WARRANT AND REPRESENT THAT EACH HAS REVIEWED THIS WAIVER
WITH ITS LEGAL COUNSEL, AND THAT EACH KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY
TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL. THIS WAIVER IS
IRREVOCABLE, MEANING THAT IT MAY NOT BE MODIFIED EITHER ORALLY OR IN WRITING,
AND THE WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS
OR MODIFICATIONS TO THE LOAN DOCUMENTS, OR TO ANY OTHER DOCUMENTS OR AGREEMENTS
RELATING TO THE LOANS OR THE LENDER LETTERS OF CREDIT OR RISK PARTICIPATION
AGREEMENTS. IN THE EVENT OF LITIGATION, THIS AGREEMENT MAY BE FILED AS A WRITTEN
CONSENT TO A TRIAL BY THE COURT. BORROWER, AGENT AND EACH LENDER ALSO WAIVE ANY
BOND OR SURETY OR SECURITY UPON SUCH BOND WHICH MIGHT, BUT FOR THIS WAIVER, BE
REQUIRED OF AGENT AND EACH LENDER.
9.16 SURVIVAL OF WARRANTIES AND CERTAIN AGREEMENTS . All agreements,
representations and warranties made herein shall survive the execution and
delivery of this Agreement, the making of the Loans, issuances of Lender Letters
of Credit and Risk Participation Agreements and the execution and delivery of
the Notes. Notwithstanding anything in this Agreement or implied by law to the
contrary, the agreements of Borrower set forth in SUBSECTIONS 1.3(C), 1.8 and
9.1 shall survive the payment of the Loans and the termination of this
Agreement.
9.17 ENTIRE AGREEMENT . This Agreement, the Notes and the other Loan
Documents referred to herein embody the final, entire agreement among the
parties hereto and supersede any and all prior commitments, agreements,
representations, understandings, whether oral or written, relating to the
subject matter hereof and may not be contradicted or varied by evidence of
prior, contemporaneous or subsequent oral agreements or discussions of the
parties hereto.
9.18 COUNTERPARTS; EFFECTIVENESS . This Agreement and any
amendments, waivers, consents or supplements may be executed in any number of
counterparts and by different parties hereto in separate counterparts, each of
which when so executed and delivered shall be deemed an original, but all of
which counterparts together shall constitute but one in the
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same instrument. This Agreement shall become effective upon the execution of a
counterpart hereof by each of the parties hereto.
9.19 EFFECT OF AMENDMENT AND RESTATEMENT. This Agreement amends and
restates the terms of the Prior Loan Agreement with respect to the Loan Parties
and the Prior Obligations. The Prior Obligations, as restated hereunder, and the
security interests and liens granted pursuant to the Prior Loan Agreement and
the other Prior Loan Documents remain in full force and effect under this
Agreement and the Loan Documents executed and delivered hereunder (as modified
by this Agreement and such Loan Documents) and such Prior Obligations and liens
and security interests are in no way terminated by the execution of this
Agreement and such other Loan Documents.
SECTION 10
DEFINITIONS
10.1 CERTAIN DEFINED TERMS CERTAIN DEFINED TERMS . The terms defined
below are used in this Agreement as so defined. Terms defined in the preamble
and recitals to this Agreement are used in this Agreement as so defined.
"Acquisition" means the acquisition by Borrower of all of the issued
and outstanding capital stock of BGH Holdings and BRH Holdings on the
Original Closing Date pursuant to the Purchase Agreement and the other
applicable Capitalization/Acquisition Documents.
"Affiliate" means any Person: (a) directly or indirectly controlling,
controlled by, or under common control with, any Loan Party; (b) directly
or indirectly owning or holding ten percent (10%) or more of any equity
interest in any Loan Party; or (c) five percent (5%) or more of whose
voting stock or other equity interest is directly or indirectly owned or
held by any Loan Party. For purposes of this definition, "control"
(including with correlative meanings, the terms "controlling", "controlled
by" and "under common control with") means the possession directly or
indirectly of the power to direct or cause the direction of the management
and policies of a Person, whether through the ownership of voting
securities or by contract or otherwise. Notwithstanding the foregoing, no
individual shall be deemed to be an Affiliate of a Person solely by reason
of his or her becoming a director, officer or employee of such Person.
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"Agent" means Heller in its capacity as agent for the Lenders under
this Agreement and each of the other Loan Documents and any successor in
such capacity appointed pursuant to SUBSECTION 8.2.
"Agreement" means this Second Amended and Restated Credit Agreement
(including all schedules and exhibits hereto), as from time to time
amended, restated, supplemented or otherwise modified.
"Asset Disposition" means the disposition whether by sale, lease,
transfer, loss, damage, destruction, condemnation or otherwise of any of
the following: (1) any of the stock of any of Borrower's Subsidiaries or
(2) any or all of the assets or rights (including, without limitation, by
way of a sale and leaseback) of any Loan Party, other than sales of
inventory in the ordinary course of business consistent with past
practices and other than inventory sold pursuant to the sale of the
facilities located in Seneca Castle, New York and Sandtown, Delaware and,
in the case of either clause (1) or clause (2), whether in a single
transaction or in a series of related transactions (i) that have a fair
market value in excess of $1.0 million or (ii) for Net Proceeds in excess
of $1.0 million. Notwithstanding the foregoing: (A) a transfer of assets
by a Subsidiary of Borrower to Borrower or by a Subsidiary of Borrower to
another Subsidiary of Borrower, (B) an issuance or sale of capital stock
by a Loan Party or its Subsidiary to the Borrower or to another Subsidiary
of Borrower, (C) a disposition of obsolete equipment or equipment that is
no longer useful in the conduct of business of the applicable Loan Party
and that is disposed of in the ordinary course of business; PROVIDED that
such dispositions do not exceed $500,000 per annum, (D) permitted
Restricted Junior Payments, (E) dispositions of Cash Equivalents in the
ordinary course of business, (F) leases and subleases of excess warehouse
or manufacturing facilities to non-Affiliate Persons with Agent's prior
written consent, which consent shall not be unreasonably withheld so long
as the activities of tenants and subtenants at such facilities do not, in
Agent's reasonable judgment, pose a material risk, environmental or
otherwise, to the Loan Parties and so long as the proceeds of such lease
or sublease are not required to be used to prepay or redeem any
Subordinated Indebtedness, and (G) the disposition of the facility located
in Sandtown, Delaware, will not be deemed to be Asset Dispositions.
"Bankruptcy Code" means Title 11 of the United States Code entitled
"Bankruptcy", as amended from time to time or any applicable bankruptcy,
insolvency or other similar law now or hereafter in effect and all rules
and regulations promulgated thereunder.
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"Business Day" means (a) for all purposes other than as covered by
clause (b) below, any day excluding Saturday, Sunday and any day which is
a legal holiday under the laws of the Commonwealth of Pennsylvania or the
States of Illinois, New Jersey or New York, or is a day on which banking
institutions located in any such states are closed, and (b) with respect
to all notices, determinations, fundings and payments in connection with
Loans bearing interest at the LIBOR, any day that is a Business Day
described in clause (a) above and that is also a day for trading by and
between banks in Dollar deposits in the applicable interbank LIBOR market.
"BGH Holdings" means BGH Holdings, Inc., a Delaware corporation.
"B&G" means Bloch & Guggenheimer, Inc., a Delaware corporation.
"B&G Business" means the business conducted by BGH Holdings and its
Subsidiaries as of the Original Closing Date, and shall refer to such
business as thereafter conducted by such Loan Parties and/or any other
Loan Parties.
"B&G-DSD" means B&G-DSD Holdings, Inc., a Delaware corporation.
"BRH Holdings" means BRH Holdings, Inc., a Delaware corporation.
"B&R" means Burns & Ricker, Inc., a Delaware corporation.
"B&R Business" means the business conducted by BRH Holdings and its
Subsidiaries as of the Original Closing Date, and shall refer to such
business as thereafter conducted by such Loan Parties and/or any other
Loan Parties.
"BRS" means Bruckmann, Rosser, Sherrill & Co., L.P. a Delaware
limited partnership.
"BRS Funding Agreement" means the Funding Agreement dated as of the
Original Closing Date between BRS and Agent, which agreement has been
terminated as of the Effective Date.
"BRS Investors" means collectively BRS, Bruce C. Bruckmann, Harold O.
Rosser II, Stephen C. Sherrill, Donald Bruckmann, H. Virgil Sherrill,
Nancy Zweng, BCB Partnership, NAZ Partnership, and Paul D. Kaminski.
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"BRS Management Agreement" means the Management Agreement dated as of
the Original Closing Date among BRS, Borrower and Holdings, as in effect
on the Original Closing Date.
"Capitalization/Acquisition Documents" means, collectively: (a) any
or all of the stock certificates, notes, debentures or other instruments
representing securities bought, sold or issued, or loans made, to
facilitate the consummation of the Related Transactions, the Supplemental
Related Transactions or the New Related Transactions, including without
limitation the Permanent Subordinated Debt Documents; (b) the indentures
or other documents pursuant to which such stock, notes, debentures or
other instruments are issued or to be issued; (c) each document governing
the issuance of, or setting forth the terms of, such stock, notes,
debentures or other instruments; (d) any stockholders, registration or
intercreditor agreement among or between the holders of such stock, notes,
debentures or other instruments; (e) the Purchase Agreement; (f) the
documents effecting the liquidation of B&G-DSD described in SUBSECTION
2.7; (g) the 1997 Acquisition Documents; and (h) all other instruments,
documents and agreements executed in connection with the Acquisition or
the 1997 Acquisition; but excluding all Loan Documents.
"Collateral" means, collectively: (a) all capital stock and other
property pledged pursuant to the Security Documents; (b) all "Collateral"
as defined in the Security Documents; (c) all real property mortgaged
pursuant to the Security Documents; and (d) any property or interest
provided in addition to or in substitution for any of the foregoing.
"Commitment" means, with respect to any Lender as of any date of
determination, the amount of such Lender's commitment to make Revolving
Loans, as set forth on the signature page of this Agreement opposite such
Lender's signature or in the most recent Lender Addition Agreement, if
any, executed by such Lender.
"Debt Registration Rights Agreement" means that certain Debt
Registration Rights Agreement dated as of the First Amendment Date among
Borrower, Holdings, the other Loan Parties signatory thereto and LBI
Group, Inc.
"Default" means a condition or event that, after notice or lapse of
time or both, would constitute an Event of Default if that condition or
event were not cured or removed within any applicable grace or cure
period.
"Eagle Rock Lease" means that certain Lease Agreement dated April 19,
1986, as amended by Memorandum of Agreement dated February 26, 1993,
between B&G
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Foods (as successor-in-interest to DSD, Inc.), as tenant, and
426 Eagle Rock Avenue Associates, as landlord.
"Eagle Rock Notes" means those certain promissory notes heretofore
issued and hereafter issuable by B&G Foods to 426 Eagle Rock Avenue
Associates pursuant to the Eagle Rock Lease.
"Effective Date" means August 11, 1997.
"Equity Registration Rights Agreement" means that certain Equity
Registration Rights Agreement dated as of the First Amendment Date between
Holdings and LBI Group, Inc.
"ERISA Affiliate" means, with respect to any Loan Party, any trade or
business (whether or not incorporated) which, together which such Loan
Party, are treated as a single employer within the meaning of Sections
414(b), (c), (m) or (o) of the IRC.
"Exchange Notes" means, collectively, the Series B 9.625% Senior
Subordinated Notes due 2007 issued by Borrower after the Effective Date in
exchange for the Permanent Subordinated Notes issued on the Effective Date
pursuant to Section 2.06(f) of the New Indenture and the provisions of the
Registration Rights Agreement.
"Escrow Agreement" means that certain Escrow Agreement dated as of
the First Amendment Date among Borrower, Holdings, LB I Group Incorporated
and The Bank of New York.
"Expiry Date" means the earlier of (a) the suspension (subject to
reinstatement) of the Lenders' obligations to make Revolving Loans
pursuant to SUBSECTION 6.2, (b) the acceleration of the Obligations
pursuant to SUBSECTION 6.3, or (c) August 31, 2002.
"First Amendment Date" means June 17, 1997.
"GAAP" means generally accepted accounting principles as set forth in
statements from Auditing Standards No. 69 entitled "The Meaning of
'Present Fairly in Conformance with Generally Accepted Accounting
Principles in the Independent Auditors Reports'" issued by the Auditing
Standards Board of the American Institute of Certified Public Accountants
and statements and pronouncements of the Financial Accounting Standards
Board that are applicable to the circumstances as of the date of
determination.
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"Holdings" means B&G Foods Holdings Corp., a Delaware corporation
formerly known as B Companies Holdings Corp.
"Indebtedness", as applied to any Person, means: (a) all indebtedness
for borrowed money; (b) that portion of obligations with respect to
capital leases that is properly classified as a liability on a balance
sheet in conformity with GAAP; (c) notes payable and drafts accepted
representing extensions of credit whether or not representing obligations
for borrowed money; (d) any obligation owed for all or any part of the
deferred purchase price of property or services if the purchase price is
due more than six (6) months from the date the obligation is incurred or
is evidenced by a note or similar written instrument; and (e) all
indebtedness secured by any Lien on any property or asset owned or held by
that Person regardless of whether the indebtedness secured thereby shall
have been assumed by that Person or is nonrecourse to the credit of that
Person.
"Interim Notes" means, collectively, the Senior Subordinated Notes
due December 16, 1997 issued by Borrower on the First Amendment Date in
the principal amount of $23,000,000.
"Interim Note Agreement" means the Senior Subordinated Note Purchase
Agreement dated as of the First Amendment Date among Borrower, the other
Loan Parties, LBI Group, Inc., as Syndication Agent and the purchasers of
the Interim Notes.
"Interim Subordinated Debt" means the Subordinated Indebtedness
evidenced by the Interim Notes and the other Interim Subordinated Debt
Documents.
"Interim Subordinated Debt Documents" means the Interim Notes, the
Interim Note Agreement and all other instruments, documents and agreements
executed pursuant to the Interim Note Agreement.
"IRC" means the Internal Revenue Code of 1986, as amended from time
to time and all rules and regulations promulgated thereunder.
"Lender" or "Lenders" means Heller together with the other Persons
signatory hereto as of the Effective Date as Lenders and their respective
successors and permitted assigns pursuant to SUBSECTION 8.1.
"Lender Addition Agreement" means an agreement, substantially in the
form of EXHIBIT 10.1(B), among Agent, a Lender and such Lender's assignee
regarding
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their respective rights and obligations with respect to assignments of the
Loans, the Revolving Loan Commitment and other interests under this
Agreement and the other Loan Documents.
"Lien" means any lien, mortgage, pledge, security interest, charge or
encumbrance of any kind, whether voluntary or involuntary (including any
conditional sale or other title retention agreement and any lease in the
nature thereof), and any agreement to give any lien, mortgage, pledge,
security interest, charge or encumbrance.
"Liquidated Damages" means all "Liquidated Damages" payable pursuant
to Section 5 of the Registration Rights Agreement.
"Loan" or "Loans" means an advance or advances under the Revolving
Loan Commitment.
"Loan Documents" means this Agreement, the Notes, the Security
Documents and all other instruments, documents and agreements executed by
or on behalf of any Loan Party and delivered concurrently herewith or at
any time hereafter to or for the benefit of Agent or any Lender in
connection with the Loans and other transactions contemplated by this
Agreement, all as amended, supplemented or modified from time to time; but
excluding all Capitalization/Acquisition Documents.
"Loan Party" means, collectively, Holdings, Borrower and each of
their respective Subsidiaries.
"Material Adverse Effect" means (a) a material adverse effect upon
the business, operations, properties, assets or financial condition of (i)
the Loan Parties taken as a whole, (ii) BGH Holdings and its Subsidiaries
taken as a whole, (iii) BRH Holdings and its Subsidiaries taken as a
whole, (iv) the B&G Business taken as a whole, or (v) the B&R Business
taken as a whole; or (b) the impairment in any material respect of the
ability of any Loan Party to perform any of its material obligations under
any Loan Document to which it is a party or of Agent or any Lender to
enforce any Loan Document or collect any of the Obligations. In
determining whether any individual event would result in a Material
Adverse Effect, notwithstanding that such event does not of itself have
such effect, a Material Adverse Effect shall be deemed to have occurred if
the cumulative effect of such event and all other then existing events
would result in a Material Adverse Effect.
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"Nabisco" means Nabisco, Inc.
"Net Proceeds" means cash proceeds or Cash Equivalents received by
any Loan Party from any Asset Disposition (including insurance proceeds,
awards of condemnation, and payments under notes or other debt securities
received in connection with any Asset Disposition), net of (a) the fees,
costs and expenses of such sale, lease, transfer or other disposition, any
relocation expenses incurred as a result thereof, and taxes attributable
to such sale, lease or transfer, (b) amounts applied to repayment of
Indebtedness (other than the Obligations) secured by a Lien on the asset
or property disposed, and (c) any reserve for adjustments in respect of
the sale price of such assets established in conformance with GAAP.
"New Indenture" means that certain Indenture dated as of the
Effective Date among Borrower, the other Loan Parties and The Bank of New
York, as trustee, with respect to the Permanent Subordinated Debt.
"New Pro Forma" means the unaudited consolidated and consolidating
balance sheets of Borrower and its Subsidiaries prepared in accordance
with GAAP as of the Effective Date after giving effect to the New Related
Transactions. The New Pro Forma is annexed hereto as Schedule 10.1(A)(3).
"New Related Transactions" means the execution and delivery of the
New Related Transactions Documents, the funding of all Loans[, if any,] on
the Effective Date, the funding of the Permanent Subordinated Debt on the
Effective Date, the redemption of the Interim Subordinated Debt on the
Effective Date, the termination of the Interim Subordinated Debt
Documents, Rollover Subordinated Debt, the Rollover Subordinated Debt
Documents, the Prior Registration Agreements and the Sponsor Note on the
Effective Date, and the payment of all fees, costs and expenses associated
with all of the foregoing.
"New Related Transactions Documents" means, collectively, the
Permanent Subordinated Debt Documents, the Loan Documents executed and
delivered as of the Effective Date, and the other
Capitalization/Acquisition Documents executed and delivered as of the
Effective Date.
"1997 Acquisition" means the acquisition of certain assets from
Nabisco and Nabisco Brands Company by RWBV pursuant to the 1997
Acquisition Documents.
"1997 Acquisition Documents" means, collectively, the 1997 Asset
Purchase Agreement, the Trademark Agreement, the Transition Services
Agreement, the
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Seller Co-Pack Agreement and each of the other documents, instruments and
agreements executed and delivered pursuant to any such agreements, all as
in effect as of the First Amendment Date.
"1997 Asset Purchase Agreement" means that certain Asset Purchase
Agreement dated as of May 9, 1997 by and between RWBV and Nabisco.
"Note" or "Notes" means one or more of the notes of Borrower
substantially in the form of EXHIBIT 10.1(A), or any combination thereof.
"Obligations" means all obligations, liabilities and indebtedness of
every nature of each Loan Party from time to time owed to Agent or any
Lender under the Loan Documents including the principal amount of all
debts, claims and indebtedness, accrued and unpaid interest and all fees,
costs and expenses, whether primary, secondary, direct, contingent, fixed
or otherwise, heretofore, now and/or from time to time hereafter owing,
due or payable whether before or after the filing of a proceeding under
the Bankruptcy Code by or against Borrower or any of its Subsidiaries.
"Original Closing Date" means December 27, 1996.
"Original Loan Documents" means the "Loan Documents" as defined in
the Original Credit Agreement.
"Original Subordinated Debt" means the Indebtedness evidenced by
those certain Senior Subordinated Notes due December 31, 2004 issued by
Borrower on the Original Closing Date in the principal amount of
$13,000,000.
"Permanent Subordinated Debt" means the Indebtedness evidenced by the
Permanent Subordinated Notes (or, upon the exchange thereof for the
Exchange Notes in accordance with the terms hereof and the terms of the
Permanent Subordinated Debt Documents, the Exchange Notes) and the other
Permanent Subordinated Debt Documents.
"Permanent Subordinated Debt Documents" means the Permanent
Subordinated Notes, the New Indenture and the Registration Rights
Agreement, and the other documents, instruments and agreements executed
and delivered pursuant to the foregoing.
"Permanent Subordinated Notes" means, collectively, the Series A
9.625% Senior Subordinated Notes due 2007 issued by Borrower on the
Effective Date in the
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aggregate principal amount of $120,000,000, together with any Exchange
Notes issued in exchange therefor pursuant to the terms of the Permanent
Subordinated Debt Documents.
"Person" means and includes natural persons, corporations, limited
liability companies, limited partnerships, limited liability partnerships,
general partnerships, joint stock companies, joint ventures, associations,
companies, trusts, banks, trust companies, land trusts, business trusts or
other organizations, whether or not legal entities, and governments and
agencies and political subdivisions thereof and their respective permitted
successors and assigns (or in the case of a governmental person, the
successor functional equivalent of such Person).
"Prior Lender Letters of Credit" means the "Lender Letters of Credit"
under and as defined in the Original Credit Agreement or the Prior Credit
Agreement which are outstanding as of the Effective Date.
"Prior Liquidated Damages" means collectively, all "Liquidated
Damages" payable pursuant to Section 3(b) of the Debt Registration Rights
Agreement and all "Liquidated Damages" payable pursuant to Section 3(b) of
the Equity Registration Rights Agreement.
"Prior Loan Documents" means the "Loan Documents" as defined in the
Prior Credit Agreement.
"Prior Registration Rights Agreements" means, collectively, the Debt
Registration Rights Agreement and the Equity Registration Rights
Agreement.
"Prior Revolving Loan" means the "Revolving Loan" under and as
defined in the Prior Credit Agreement, the outstanding principal balance
of which, as of the Effective Date and after giving effect to the
consummation of the New Related Transactions, is $16,678,098.54.
"Prior Risk Participation Agreements" means the "Risk Participation
Agreements" under and as defined in the Original Credit Agreement or the
Prior Credit Agreement which are outstanding as of the Effective Date.
"Prior Subordinated Debt" means collectively, the Interim
Subordinated Debt and the Rollover Subordinated Debt.
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"Pro Forma" means the unaudited consolidated and consolidating
balance sheets of Borrower and its Subsidiaries prepared in accordance
with GAAP as of the Original Closing Date after giving effect to the
Related Transactions. The Pro Forma is annexed hereto as SCHEDULE 10.1(A).
"Pro Rata Share" means with respect to any Lender, the percentage
obtained by dividing (i) such Lender's Commitment as of any date of
determination, by (ii) all Commitments of all Lenders as of such date.
"Projections" means Borrower's forecasted consolidated and
consolidating: (a) balance sheets; (b) profit and loss statements; (c)
cash flow statements; and (d) capitalization statements, all prepared on a
Subsidiary by Subsidiary basis on a consistent basis with the historical
financial statements delivered pursuant to SUBSECTION 5.5, together with
appropriate supporting details and a statement of underlying assumptions.
The Projections represent and will represent as of the date thereof the
good faith estimate of Borrower and its senior management concerning the
expected course of its business.
"Purchase Agreement" means that certain Stock Purchase Agreement
dated as of November 26, 1996 by and between Seller and Borrower, as in
effect on the Original Closing Date.
"Put and Contribution Agreement" shall mean that certain Put and
Contribution Agreement dated as of the First Amendment Date among
Borrower, Holdings, BRS, LBI Group Inc. and the other holders of the
Interim Notes.
"Registration Rights Agreement" means that certain Registration
Rights Agreement dated as of the Effective Date among Borrower, Holdings,
the other Loan Parties signatory thereto, Lehman Brothers Inc.
and Lazard Freres & Co. LLC.
"Related Transactions" means the Acquisition, the liquidation of
B&G-DSD into Borrower as described in SUBSECTION 2.7, the execution and
delivery of the Related Transactions Documents, the funding of all Loans
on the Original Closing Date, the funding of the Original Subordinated
Debt on the Original Closing Date, and the payment of all fees, costs and
expenses associated with all of the foregoing.
"Related Transactions Documents" means the Loan Documents, the
Capitalization/Acquisition Documents executed and delivered as of the
Original Closing Date and all other agreements, instruments and documents
executed or delivered in connection with the Related Transactions.
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"Requisite Lenders" means Lenders having (a) sixty-six and two-thirds
percent (66b%) or more of the Revolving Loan Commitment or, (b) if the
Revolving Loan Commitment has been terminated, sixty-six and two-thirds
percent (66b%) or more of the aggregate outstanding principal balance of
the Loans.
"Risk Participation Liability" means, as to each Lender Letter of
Credit and each Risk Participation Agreement, all reimbursement
obligations of Borrower and its Subsidiaries to the issuer of the Lender
Letter of Credit or to the issuer of the letter of credit with respect to
the transaction for which the Risk Participation Agreement was executed
and delivered, consisting of (without duplication) (a) the amount
available to be drawn or which may become available to be drawn; (b) all
amounts which have been paid and made available by the issuing bank to the
extent not reimbursed by Borrower and its Subsidiaries, whether by the
making of a Revolving Loan or otherwise; and (c) all accrued and unpaid
interest, fees and expenses of the issuer of such letter of credit with
respect thereto. For purposes of determining the outstanding amount of
Risk Participation Liability, the maximum amount potentially owing under
any Risk Participation Agreement will be considered outstanding unless the
bank which is the beneficiary of such Risk Participation Agreement reports
daily activity to Agent showing actual outstanding letters of credit
subject to such Risk Participation Agreement.
"Rollover Indenture" means that certain Indenture dated as of the
First Amendment Date among Borrower, the other Loan Parties and The Bank
of New York, as trustee, with respect to the Rollover Notes.
"Rollover Notes" means, collectively, the Senior Subordinated
Increasing Rate Rollover Notes due December 31, 2005 issued by Borrower on
the First Amendment Date (subject to the Escrow Agreement) in the
principal amount of $17,000,000.
"Rollover Subordinated Debt" means the Subordinated Indebtedness
evidenced by the Rollover Notes and the other Rollover Subordinated Debt
Documents.
"Rollover Subordinated Debt Documents" means the Rollover Notes, the
Rollover Indenture, the Put and Contribution Agreement and all other
instruments, documents and agreements executed as of the First Amendment
Date (subject to the Escrow Agreement) pursuant to the foregoing.
"Roseland" means Roseland Manufacturing, Inc., a Delaware
corporation.
"Roseland Distribution" means Roseland Distribution Company, a
Delaware corporation formerly known as B&G Foods, Inc.
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"RWBV" means RWBV Acquisition Corp., a Delaware corporation.
"Security Documents" means all instruments, documents and agreements
executed by or on behalf of any Loan Party to guaranty or provide
collateral security with respect to the Obligations including, without
limitation, any security agreement or pledge agreement, any guaranty of
the Obligations, any mortgage, and all instruments, documents and
agreements executed pursuant to the terms of the foregoing.
"Seller" means Specialty Foods Corporation, a Delaware corporation.
"Seller Co-Pack Agreement" means that certain Co-Pack Agreement dated
as of the First Amendment Date between RWBV and Nabisco.
"Sponsor Note" has the meaning assigned to such term in the Put and
Contribution Agreement.
"Subordinated Indebtedness" means all Indebtedness and other
obligations of Borrower and its Subsidiaries under the Permanent
Subordinated Debt Documents and all other Indebtedness of Borrower or any
of its Subsidiaries which is subordinated, in a manner satisfactory to
Agent, in right of payment to the Obligations.
"Subsidiary" means, with respect to any Person, any corporation,
partnership, association or other business entity of which more than fifty
percent (50%) of the total voting power of shares of stock (or equivalent
ownership or controlling interest) entitled (without regard to the
occurrence of any contingency) to vote in the election of directors,
managers or trustees thereof is at the time owned or controlled, directly
or indirectly, by that Person or one or more of the other Subsidiaries of
that Person or a combination thereof.
"Supplemental Pro Forma" means the unaudited consolidated and
consolidating balance sheets of Borrower and its Subsidiaries prepared in
accordance with GAAP as of the First Amendment Date after giving effect to
the Supplemental Related Transactions. The Supplemental Pro Forma is
annexed hereto as Schedule 10.1(A)(2).
"Supplemental Related Transactions" means the 1997 Acquisition, the
execution and delivery of the Supplemental Related Transactions Documents,
the funding of all Loans on the First Amendment Date, the funding of the
Interim Subordinated
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Debt on the First Amendment Date, the redemption of the Original
Subordinated Debt on the First Amendment Date as described in SUBSECTION
3.5(H) of the Prior Credit Agreement, the execution and delivery of the
Rollover Debt Documents (subject to the Escrow Agreement) on the First
Amendment Date, and the payment of all fees, costs and expenses associated
with all of the foregoing.
"Supplemental Related Transactions Documents" means the 1997
Acquisition Documents, the Loan Documents executed and delivered as of the
First Amendment Date, the Interim Subordinated Debt Documents, the
Rollover Subordinated Debt Documents, the Escrow Agreement and the other
Capitalization/Acquisition Documents executed and delivered as of the
First Amendment Date.
"Term Loans" has the meaning assigned to such term in the Prior
Credit Agreement.
"Termination Date" means August 31, 2002.
"Trademark Agreement" means that certain Trademark Purchase Agreement
dated as of May 9, 1997 among RWBV, Nabisco and Nabisco Brands Company.
"Transition Services Agreement" means that certain Transition
Services Agreement dated as of the First Amendment Date between RWBV and
Nabisco.
"Trappey's" means Trappey's Fine Foods, Inc.
"Trappey's Acquisition" means the acquisition by BGH Holdings of all
of the outstanding capital stock of JEM Brands, Inc., the holding company
of Trappey's, pursuant to a Stock Purchase Agreement dated as of July 18,
1997.
10.2 OTHER DEFINITIONAL PROVISIONS . References to "Sections",
"subsections", "Exhibits" and "Schedules" shall be to Sections, subsections,
Exhibits and Schedules, respectively, of this Agreement unless otherwise
specifically provided. Any of the terms defined in SUBSECTION 10.1 may, unless
the context otherwise requires, be used in the singular or the plural depending
on the reference. In this Agreement, "hereof," "herein," "hereto," "hereunder"
and the like mean and refer to this Agreement as a whole and not merely to the
specific section, paragraph or clause in which the respective word appears;
words importing any gender include the other gender; references to "writing"
include printing, typing, lithography and other means of reproducing words in a
tangible visible form; the words "including," "includes" and "include" shall be
deemed to be followed by the words "without limitation"; references to
agreements and other contractual instruments shall be deemed to include
subsequent amendments, assignments,
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and other modifications thereto, but only to the extent such amendments,
assignments and other modifications are not prohibited by the terms of this
Agreement or any other Loan Document; references to Persons include their
respective permitted successors and assigns or, in the case of governmental
Persons, Persons succeeding to the relevant functions of such Persons; and all
references to statutes and related regulations shall include any amendments of
same and any successor statutes and regulations.
[signature page follows]
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Witness the due execution hereof by the respective duly authorized
officers of the undersigned as of the date first written above.
B&G FOODS, INC., formerly known as B Companies
Acquisition Corp., as Borrower
By: /s/ David L. Wenner
--------------------------
Title: President & CEO
----------------------
Commitment to make Revolving
Loans HELLER FINANCIAL, INC., as Agent and a Lender
$9,000,000
Percentage of Revolving By: /s/ Tricia A. Marks
Loan Commitment: ---------------------------
18.0% Title: Assistant Vice President
------------------------
[signature page follows]
<PAGE>
Commitment to make Revolving Loans BANKBOSTON, N.A.
$9,000,000 as a Lender
Percentage of Revolving
Loan Commitment: By: /s/ Richard Hill, Jr.
18.0% ------------------------------
Title: Director
--------------------------
Commitment to make Revolving Loans CREDITANSTALT-BANKVEREIN, as a Lender
$9,000,000
Percentage of Revolving By: /s/ Clifford L. Wells
Loan Commitment: ------------------------------
18.0% Title: Vice President
---------------------------
By: /s/ Christina T. Schoen
------------------------------
Title: Vice President
--------------------------
[signature page follows]
<PAGE>
Commitment to make Revolving Loans FIRST SOURCE FINANCIAL LLP, by
$9,000,000 FIRST SOURCE FINANCIAL INC., its
Percentage of Revolving agent/manager, as a Lender
Loan Commitment:
18.0% By: /s/
--------------------------
Title: Vice President
-----------------------
Commitment to make Revolving Loans IBJ SCHRODER, as a Lender
$9,000,000
Percentage of Revolving By: /s/ M. McLaughlin
Loan Commitment: --------------------------
18.0% Title: Vice President
----------------------
Commitment to make Revolving Loans THE BANK OF NEW YORK, as a Lender
$5,000,000
Percentage of Revolving By: /s/ Vito Michael Ferrone
Loan Commitment: --------------------------
10.0% Title: Vice President
-----------------------
<PAGE>
LIST OF EXHIBITS AND SCHEDULES
EXHIBITS
Exhibit 1.1(B) - Revolving Loan Request
Exhibit 1.2(G) - LIBOR Loan Request
Exhibit 4.6(C) - Compliance Certificate
Exhibit 10.1(A) - Notes
Exhibit 10.1(B) - Lender Addition Agreement
SCHEDULES
Schedule 3.1 - Existing Indebtedness
Schedule 3.2(A)(10) - Liens
Schedule 3.4 - Contingent Obligations
Schedule 3.10 - Business Description
Schedule 5.3 - Violations, Conflicts, Breaches and Defaults
Schedule 5.4(A) - Jurisdictions of Organization
Schedule 5.4(B) - Capitalization
Schedule 5.4(D) - Foreign Qualifications
Schedule 5.6 - Intellectual Property
Schedule 5.7 - Investigations and Audits
Schedule 5.8 - Employee Matters
Schedule 7.1 - List of Closing Documents
Schedule 10.1(A)(1) - Pro Forma
Schedule 10.1(A)(2) - Supplemental Pro Forma
Schedule 10.1(A)(3) - New Pro Forma
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Exhibit 10.4
SECURITIES PURCHASE AND HOLDERS AGREEMENT
Dated as of
March 27, 1997
among
B COMPANIES HOLDINGS CORP.
BRUCKMANN, ROSSER, SHERRILL & CO., L.P.
and
MANAGEMENT INVESTORS
<PAGE>
TABLE OF CONTENTS
Page
----
Background.................................................................. 1
Terms....................................................................... 2
ARTICLE I PURCHASE OF SECURITIES........................................ 2
1.1 Sale and Purchase of Common Stock and Preferred Stock.............. 2
1.2 Closing; Termination............................................... 2
1.3 Conditions to Investor's Obligations............................... 3
1.4 Conditions to Holdings Corp.'s Obligations......................... 3
ARTICLE II REPRESENTATIONS, WARRANTIES AND
COVENANTS OF HOLDINGS CORP.......................... 4
2.1 Representations, Warranties and Covenants of
Holdings Corp..................................................... 4
ARTICLE III REPRESENTATIONS, WARRANTIES AND
COVENANTS OF EACH INVESTOR.......................... 5
3.1 Representations, Warranties and Covenants of Each Investor......... 5
3.2 Legend............................................................. 6
3.3 Management Investor Representations and Warranties................. 7
3.4 Representations and Warranties of BRS.............................. 7
3.5 Provisions Regarding Transfers of Securities....................... 7
3.6 Notation........................................................... 9
3.7 Limitation on Repurchase of Securities............................. 9
3.8 Reliance........................................................... 9
ARTICLE IV OTHER COVENANTS AND REPRESENTATIONS............................. 9
4.1 Financial Statements and Other Information......................... 9
4.2 Sale of Holdings Corp. or any of the Companies..................... 10
4.3 Tag-Along Rights................................................... 11
4.4 Covenant Not to Compete............................................ 14
ARTICLE V CORPORATE ACTIONS................................................ 15
5.1 Certificate of Incorporation and By-Laws........................... 15
5.2 Directors.......................................................... 15
5.3 Right to Remove Certain of Holdings Corp.'s Directors.............. 15
5.4 Right to Fill Certain Vacancies in Holdings Corp.'s Board.......... 15
5.5 Subsidiaries Governance............................................ 16
5.6 Management Rights.................................................. 16
5.7 Confidentiality.................................................... 17
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ARTICLE VI ADDITIONAL RESTRICTIONS ON TRANSFERS OF
SECURITIES HELD BY MANAGEMENT INVESTORS....................... 18
6.1 Certain Definitions................................................ 18
6.2 Restrictions on Transfer........................................... 21
6.3 Purchase Option.................................................... 22
6.4 Right of First Refusal on Transfer of Management Investor
Securities......................................................... 26
6.5 Purchaser Representative........................................... 27
6.6 Section 83(b) Elections............................................ 28
6.7 Involuntary Transfers.............................................. 28
6.8 Lapse.............................................................. 30
ARTICLE VII REGISTRATION RIGHTS............................................ 30
ARTICLE VIII MISCELLANEOUS.................................................. 31
8.1 Amendment and Modification......................................... 31
8.2 Survival of Representations and Warranties......................... 31
8.3 Successors and Assigns; Entire Agreement........................... 31
8.4 Separability....................................................... 32
8.5 Notices............................................................ 32
8.6 Governing Law...................................................... 33
8.7 Headings........................................................... 33
8.8 Counterparts....................................................... 33
8.9 Further Assurances................................................. 33
8.10 Remedies........................................................... 33
8.11 Party No Longer Owning Securities.................................. 33
8.12 No Effect on Employment............................................ 33
8.13 Pronouns........................................................... 34
ii
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SECURITIES PURCHASE AND HOLDERS AGREEMENT
SECURITIES PURCHASE AND HOLDERS AGREEMENT, dated as of March 27, 1997
(the "Agreement"), by and among (1) B COMPANIES HOLDINGS CORP., a Delaware
corporation ("Holdings Corp."), (2) BRUCKMANN, ROSSER, SHERRILL & CO., L.P., a
Delaware limited partnership ("BRS"), the individuals listed on Exhibit A hereto
as the BRS Co-Investors (the "BRS Co-Investors" and, together with BRS and their
respective BRS Permitted Transferees, the "BRS Entities") and (3) the
individuals listed on Exhibit A hereto as "Management Investors" (such
individuals, together with their Permitted Transferees, the "Management
Investors"). The BRS Entities and the Management Investors are sometimes
referred to hereinafter individually as an "Investor" and collectively as the
"Investors."
BACKGROUND
A. Holdings Corp. desires to sell, and each of the BRS Entities
desires to purchase, the number of shares of 13% Series A Cumulative Preferred
Stock, par value $.01 per share ("Preferred Stock"), of Holdings Corp. set forth
opposite its name on Exhibit A.
B. The Board of Directors of Holdings Corp. wishes to grant to the
Management Investors the opportunity to make an investment in Holdings Corp.,
and thereby to acquire an increased personal and proprietary interest in
Holdings Corp.'s and the Companies' (as defined below) success and progress
through the purchase of Securities (as defined below) pursuant to this
Agreement. Each of the Management Investors shall make an investment in (i) the
number of shares of Common Stock, par value $.01 per share ("Common Stock"), of
Holdings Corp. set forth opposite its name on Exhibit A, and (ii) the number of
shares of Preferred Stock of Holdings Corp. set forth opposite its name on
Exhibit A, by delivering cash.
C. As used herein, the term "Companies" shall mean, collectively,
(i) Bloch & Guggenheimer, Inc., a Delaware corporation, (ii) B&G Foods, Inc., a
Delaware corporation, (iii) Roseland Manufacturing, Inc., a Delaware corporation
and (iv) Burns & Ricker, Inc., a Delaware corporation, and the term "Company"
shall be construed accordingly. As used herein, the term "Securities" shall
mean the Common Stock and the Preferred Stock held by any party hereto,
including shares of Common Stock, Preferred Stock and all other securities of
Holdings Corp. (or a successor to Holdings Corp.) received on account of
ownership of the Common Stock or the Preferred Stock including all securities
issued in connection with any merger, consolidation, stock
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dividend, stock distribution, stock split, reverse stock split, stock
combination, recapitalization, reclassification, subdivision, conversion or
similar transaction in respect thereof. A reference to any class of Securities
shall be deemed to include reference to all Securities issued in respect
thereof.
D. The Investors and Holdings Corp. wish to set forth certain
agreements regarding their future relationships and their rights and obligations
with respect to the Securities.
TERMS
In consideration of the mutual representations, warranties and
covenants contained herein, and intending to be legally bound hereby, the
parties hereto agree as follows:
ARTICLE I
PURCHASE OF SECURITIES
1.1 SALE AND PURCHASE OF COMMON STOCK AND PREFERRED STOCK. Subject
to the terms and conditions set forth herein, at the Closing (as defined in
Section 1.2), Holdings Corp. will (i) issue and sell to each of the BRS Entities
on Exhibit A, and each of the BRS Entities on Exhibit A will purchase, the
number of shares of Preferred Stock set forth opposite the applicable name of
the BRS Entity on Exhibit A, and (ii) issue and sell to each of the Management
Investors on Exhibit A, and each of the Management Investors on Exhibit A will
purchase, the number of shares of Common Stock and Preferred Stock set forth
opposite the applicable name of the Management Investor on Exhibit A. The
purchase price for the Common Stock and Preferred Stock, together with the
aggregate purchase price to be paid by each Investor pursuant to this Section
1.1, is set forth opposite each Investor's name on Exhibit A.
1.2 CLOSING; TERMINATION. The closing (the "Closing") of the
purchase and sale of the Securities will take place on March 27, 1997, or at
such other time or on such other date as may be agreed by the parties hereto
(the "Closing Date").
(a) At the Closing, Holdings Corp. will deliver to each BRS
Entity on Exhibit A certificates evidencing the number of shares of Preferred
Stock to be purchased by such BRS Entity as set forth opposite each such BRS
Entity's name on Exhibit A, registered in such BRS Entity's name, against
payment of the purchase price therefor in cash, by certified bank, cashier's or
personal check or by federal wire transfer of immediately available funds, with
confirmed receipt (collectively, "Cash").
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(b) At the Closing, Holdings Corp. will deliver to each
Management Investor on Exhibit A certificates evidencing the number of shares of
Common Stock and Preferred Stock to be purchased by each such Management
Investor as set forth opposite each such Management Investor's name on Exhibit
A, registered in such Management Investor's name, against payment of the
purchase price therefor in Cash.
1.3 CONDITIONS TO INVESTOR'S OBLIGATIONS. The obligation of each
Investor to purchase and pay for the Common Stock and/or Preferred Stock at the
Closing is subject to the satisfaction on or prior to the Closing Date of the
following conditions:
(a) The representations and warranties of Holdings Corp. set
forth in Article II shall be true and correct in all material respects on and as
of the Closing Date as though then made, and all covenants of Holdings Corp. set
forth in Article II required to be performed on or prior to the Closing shall
have been performed in all material respects.
(b) Holdings Corp. shall have delivered to each of the Investors
certificates for the Common Stock and/or the Preferred Stock required pursuant
to Section 1.2.
(c) No preliminary or permanent injunction or order, decree or
ruling of any nature issued by any court or governmental agency of competent
jurisdiction, nor any statute, rule, regulation or executive order promulgated
or enacted by any United States federal, state or local governmental authority,
shall be in effect, that would prevent the consummation of the transactions
contemplated by this Agreement.
(d) The execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby will not violate Holdings
Corp.'s Amended and Restated Certificate of Incorporation ("Certificate of
Incorporation") or its Amended and Restated By-Laws ("By-Laws"), any applicable
laws or orders, regulations, rules or requirements of a court, public body or
authority by which Holdings Corp. is bound.
1.4 CONDITIONS TO HOLDINGS CORP.'S OBLIGATIONS. The obligations of
Holdings Corp. to issue and sell the Common Stock and the Preferred Stock to
each Investor as set forth herein at the Closing are subject to the satisfaction
on or prior to the Closing Date of the following conditions:
(a) The representations and warranties of each Investor set
forth in Article III shall be true and correct in all material respects at and
as of the Closing Date as though then made, and all covenants of each Investor
set forth in Article III
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required to be performed at or prior to the Closing shall have been performed in
all material respects.
(b) The execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby will not violate any
applicable laws or orders, regulations, rules or requirements of a court, public
body or authority by which any Investor is bound.
(c) The conditions set forth in subparagraph (c) of Section 1.3
hereof shall have been satisfied.
(d) Each of the Investors shall have paid or shall pay
concurrently the purchase price for the Securities required to be paid by it
pursuant to this Article I.
ARTICLE II
REPRESENTATIONS, WARRANTIES AND
COVENANTS OF HOLDINGS CORP.
2.1 REPRESENTATIONS, WARRANTIES AND COVENANTS OF HOLDINGS CORP.
Holdings Corp. represents and warrants to, and covenants and agrees with, each
of the Investors as follows:
(a) Holdings Corp. is a corporation validly existing and in good
standing under the laws of the State of Delaware.
(b) Holdings Corp. has full corporate power and corporate
authority to make, execute, deliver and perform this Agreement and to carry out
all of the transactions provided for herein.
(c) Holdings Corp. has taken such corporate action as is
necessary or appropriate to enable it to perform its obligations hereunder,
including, but not limited to, the issuance and sale of the Common Stock and the
Preferred Stock to be issued by it, and this Agreement constitutes the legal,
valid and binding obligation of Holdings Corp., enforceable against Holdings
Corp. in accordance with the terms hereof.
(d) The Securities, when issued in compliance with the
provisions of this Agreement, will be validly issued, fully paid and
non-assessable.
(e) As of the Closing, the authorized capital stock of Holdings
Corp. will consist of (i) 250,000 shares of Common Stock, of which 100,000
shares will be issued and outstanding and (ii) 50,000 shares of preferred stock,
par value $.01 per share, of which 12,000 shares will be designated as Preferred
Stock, all of
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which Preferred Stock will be issued and outstanding immediately after the
Closing. Except as provided in this Agreement, in the foregoing sentence or set
forth in the terms of the authorized capital stock of Holdings Corp., as of the
Closing Date (x) there will be no rights, subscriptions, warrants, options,
conversion rights, or agreements of any kind outstanding to purchase from
Holdings Corp., or otherwise require Holdings Corp. to issue, any shares of
capital stock of Holdings Corp. or securities or obligations of any kind
convertible into or exchangeable for any shares of capital stock of Holdings
Corp.; (y) Holdings Corp. will not be subject to any obligation (contingent or
otherwise) to repurchase or otherwise acquire or retire any shares of its
capital stock; and (z) the Securities will constitute all of the outstanding
shares of Holdings Corp.'s capital stock.
ARTICLE III
REPRESENTATIONS, WARRANTIES AND
COVENANTS OF EACH INVESTOR
3.1 REPRESENTATIONS, WARRANTIES AND COVENANTS OF EACH INVESTOR. Each
of the Investors severally represents and warrants to, and covenants and agrees
with, Holdings Corp. that:
(a) Such Investor has full legal right, capacity, power and
authority (including the due authorization by all necessary corporate action in
the case of corporate Investors) to enter into this Agreement and to perform
such Investor's obligations hereunder without the need for the consent of any
other person or entity; and this Agreement has been duly authorized, executed
and delivered and constitutes the legal, valid and binding obligation of such
Investor enforceable against such Investor in accordance with the terms hereof.
(b) The Securities being acquired hereunder are being acquired by
such Investor for investment and not with a view to any distribution thereof
that would violate the Securities Act of 1933, as amended (the "Securities
Act"), or the applicable state securities laws of any state; and such Investor
will not distribute the Securities in violation of the Securities Act or the
applicable securities laws of any state.
(c) Such Investor understands that the Securities being acquired
hereunder have not been registered under the Securities Act or the securities
laws of any state and must be held indefinitely unless transfer thereof is
subsequently registered under the Securities Act and any applicable state
securities laws or unless an exemption from such registration becomes or is
available.
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(d) Such Investor is financially able to hold the Securities
being acquired hereunder for long-term investment, believes that the nature and
amount of the Securities being purchased are consistent with such Investor's
overall investment program and financial position, and recognizes that there are
substantial risks involved in the purchase of the Securities.
(e) Each Investor acquiring Securities hereunder confirms that
(i) such Investor is familiar with the proposed business of Holdings Corp.,
(ii) such Investor has had the opportunity to ask questions of the officers and
directors of Holdings Corp. and to obtain (and that such Investor has received
to its satisfaction) such information about the business and financial condition
of Holdings Corp. as it has reasonably requested, and (iii) such Investor,
either alone or with such Investor's purchaser representative (as defined in
Rule 501(h) promulgated under the Securities Act), if any, has such knowledge
and experience in financial and business matters such that such Investor is
capable of evaluating the merits and risks of the prospective investment in the
Securities.
3.2 LEGEND. The certificates representing the Securities, including
certificates issued upon any voluntary or involuntary transfer of such
Securities, unless such transfer is pursuant to a registered public offering of
the Securities or the conditions specified in Section 3.5 hereof are satisfied,
shall bear the following legend in addition to any other legend required under
applicable law:
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED (THE "SECURITIES ACT"), OR THE SECURITIES LAWS OF ANY STATE AND
MAY NOT BE TRANSFERRED WITHOUT REGISTRATION UNDER THE SECURITIES ACT OR
STATE SECURITIES LAWS OR AN OPINION OF COUNSEL, SATISFACTORY TO B COMPANIES
HOLDINGS CORP., THAT SUCH REGISTRATION IS NOT REQUIRED.
THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE ALSO SUBJECT TO THE
TERMS AND CONDITIONS OF A SECURITIES PURCHASE AND HOLDERS AGREEMENT BY AND
AMONG B COMPANIES HOLDINGS CORP. AND THE HOLDERS SPECIFIED THEREIN, A COPY
OF WHICH AGREEMENT IS ON FILE AT THE PRINCIPAL OFFICE OF B COMPANIES
HOLDINGS CORP. THE SALE, TRANSFER OR OTHER DISPOSITION OF THE SECURITIES
IS SUBJECT TO THE TERMS OF SUCH AGREEMENT AND THE SECURITIES ARE
TRANSFERABLE ONLY UPON PROOF OF COMPLIANCE THEREWITH.
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3.3 MANAGEMENT INVESTOR REPRESENTATIONS AND WARRANTIES. Each
Management Investor severally represents and warrants to Holdings Corp. that:
(a) Such Management Investor's residence address and social
security number are as set forth below such Management Investor's signature to
this Agreement.
(b) In formulating a decision to enter into this Agreement, such
Management Investor has relied solely upon an independent investigation of
Holdings Corp.'s business and upon consultations with such Management Investor's
legal and financial advisors (including, if any, such Management Investor's
purchaser representative) with respect to this Agreement and the nature of such
Management Investor's investment; and that in entering into this Agreement, no
reliance was placed upon any representations or warranties other than those
contained in this Agreement.
3.4 REPRESENTATIONS AND WARRANTIES OF BRS.
(a) Each of the BRS Entities on Exhibit A represents and warrants
to Holdings Corp. that he or it qualifies as an "accredited investor" within the
meaning of Rule 501(a) of Regulation D under the Securities Act, and has such
knowledge and experience in financial and business matters that make him or it
capable of evaluating the merits and risks of his or its purchase of the
Preferred Stock.
(b) The execution, delivery and performance of this Agreement by
each BRS Entity do not contravene or violate any laws, rules or regulations
applicable to him or it.
3.5 PROVISIONS REGARDING TRANSFERS OF SECURITIES.
The following provisions shall apply with respect to the Transfer
(as hereinafter defined) of any Securities owned by any Management Investor:
(a) Except as provided in Sections 4.3 and 6.2 hereof and the
provisions set forth below in this Section 3.5, each Management Investor is
prohibited from Transferring any of his or its Securities except in the
following circumstances: (i) to Permitted Transferees (as hereinafter defined),
(ii) pursuant to an Approved Sale (as hereinafter defined) and in accordance
with Section 4.2 hereof, and (iii) pursuant to an effective registration
statement under the Securities Act following exercise of the Management
Investor's registration rights under the Registration Rights Agreement (as
defined in Article VII); PROVIDED, HOWEVER, that, in the case of any such
Transfer, except in the case of an Approved Sale or sale pursuant to an
effective registration statement, each such transferee shall take such
Securities subject to and be fully bound by the terms of this Agreement
applicable to
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it with the same effect as if it were a party hereto; and PROVIDED, FURTHER,
that no Transfer shall be effected except in compliance with the registration
requirements of the Securities Act (and applicable state securities laws) or
pursuant to an available exemption therefrom.
(b) No Transfer shall, in any event, be made by any Management
Investor unless in connection with such Transfer, the applicable transferee has
complied with the terms and provisions of this Agreement. No Management
Investor or transferee may effect any Transfer of Securities, whether to a
Permitted Transferee or otherwise, unless the transferee executes an agreement
pursuant to which such transferee agrees to be bound by the terms and provisions
of this Agreement applicable to the transferor (except in the case of an
Approved Sale, a sale pursuant to an effective registration statement under the
Securities Act or as otherwise specifically provided herein). Any purported
Transfer in violation of this covenant shall be null and void and of no force
and effect and the purported transferee shall have no rights or privileges in or
with respect to Holdings Corp. As used herein, "Transfer" means the making of
any sale, exchange, assignment, hypothecation, gift, security interest, pledge
or other encumbrance, or any contract therefor, any voting trust or other
agreement or arrangement with respect to the transfer of voting rights
(including any proxy or similar arrangement (whether or not revocable)) or any
other beneficial interest in any of the Securities, the creation of any other
claim thereto or any other transfer or disposition whatsoever, whether voluntary
or involuntary, affecting the right, title, interest or possession in or to such
Securities.
Prior to any proposed Transfer of any Securities, the holder
thereof shall give written notice to Holdings Corp. describing the manner and
circumstances of the proposed Transfer accompanied, if requested by Holdings
Corp., by a written opinion of legal counsel reasonably satisfactory to Holdings
Corp., addressed to Holdings Corp. and the transfer agent, if other than
Holdings Corp., and reasonably satisfactory in form and substance to each
addressee, to the effect that the proposed Transfer of the Securities may be
effected without registration under the Securities Act and applicable state
securities laws. Each certificate evidencing the Securities transferred shall
bear the legend set forth in Section 3.2, except that such certificate shall not
bear such legend if the opinion of counsel referred to above is to the further
effect that such legend is not required in order to establish compliance with
any provision of the Securities Act or applicable state securities laws.
(c) As used herein, "Permitted Transferee" shall mean in the
case of any Management Investor (a "Transferor Investor"), (A) Holdings Corp. or
any BRS Entity, (B) any spouse or lineal descendant of a Management Investor, or
any heir, executor, administrator, testamentary trustee, legatee or beneficiary
of a
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Management Investor or any of the foregoing persons referred to in this clause
(B) (collectively, "Transferor Investor Associates") and (C) any trust, the
beneficiaries of which, or any corporation, limited liability company or
partnership, the stockholders, members or general and limited partners of which
include only such Transferor Investors and their respective Transferor Investor
Associates, provided that, such beneficiary shall be deemed to be a "Management
Investor" within this clause (C) solely for the purpose of determining the
definition of "Permitted Transferee" pursuant to this Section 3.5(c).
(d) As used herein, "Affiliate" of any person means any person,
directly or indirectly, controlling, controlled by or under common control with
such person, and includes any person who is an officer, director or employee of
such person and any person who would be deemed to be an "affiliate" or an
"associate" of such person, as those terms are defined in Rule 12b-2 of the
General Rules and Regulations under the Securities Exchange Act of 1934, as
amended. As used in this definition, "controlling" (including, with its
correlative meanings, "controlled by" and "under common control with") means
possession, directly or indirectly, of power to direct or cause the direction of
management or policies (whether through ownership of securities, partnership or
other ownership interests, by contract or otherwise).
3.6 NOTATION. A notation will be made in the appropriate transfer
records of Holdings Corp. with respect to the restrictions on transfer of the
Securities referred to in this Agreement.
3.7 LIMITATION ON REPURCHASE OF SECURITIES. Each Management Investor
understands that Holdings Corp. has entered into certain financing agreements
which contain prohibitions, restrictions and limitations on the ability of
Holdings Corp. to purchase any of the Securities and to pay dividends on the
Common Stock and Preferred Stock.
3.8 RELIANCE. Each Investor acknowledges that Holdings Corp. and
each of the other Investors is entering into this Agreement in reliance upon
such Investor's representations and warranties and other covenants and
agreements contained herein.
ARTICLE IV
OTHER COVENANTS AND REPRESENTATIONS
4.1 FINANCIAL STATEMENTS AND OTHER INFORMATION. So long as BRS owns
any of the Securities, Holdings Corp. shall deliver to BRS:
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(a) as soon as available and in any event within 45 days after
the end of each of the first three quarters of each fiscal year of Holdings
Corp., consolidated balance sheets of Holdings Corp. and its subsidiaries as of
the end of such period, and consolidated statements of income and cash flows of
Holdings Corp. and its subsidiaries for the period then ended prepared in
conformity with generally accepted accounting principles applied on a consistent
basis, except as otherwise noted therein, and subject to the absence of
footnotes and to year-end adjustments; and
(b) as soon as available and in any event within 90 days after
the end of each fiscal year of Holdings Corp., a consolidated balance sheet of
Holdings Corp. and its subsidiaries as of the end of such year, and consolidated
statements of income and cash flows of Holdings Corp. and its subsidiaries for
the year then ended prepared in conformity with generally accepted accounting
principles applied on a consistent basis, except as otherwise noted therein,
together with an auditor's report thereon of a firm of established national
reputation.
4.2 SALE OF HOLDINGS CORP. OR ANY OF THE COMPANIES.
(a) If the Board of Directors of Holdings Corp. and holders of
at least a majority of Holdings Corp.'s Common Stock then outstanding approve
the sale of Holdings Corp. or any of the Companies to an unaffiliated third
person (whether by merger, consolidation, reorganization, sale of all or
substantially all of its assets or sale of a majority of the outstanding capital
stock) (an "Approved Sale"), each Investor and his or its transferees (including
Permitted Transferees, but excluding transferees who receive such shares of
Common Stock unrestricted as to transfer under the Securities Act)
("Transferees") will consent to, vote for, and raise no objections against, and
waive dissenters and appraisal rights (if any) with respect to, the Approved
Sale, and will sell all of his or its Securities in such Approved Sale upon the
terms and conditions approved by the Board of Directors of Holdings Corp. and
the holders of a majority of the Common Stock then outstanding, provided that
all Investors receive the same form and amounts of consideration per share of
the applicable Securities. Each Investor and Transferee will take all necessary
and desirable actions in connection with the consummation of an Approved Sale.
(b) The obligations of each of the Investors and the Transferees
with respect to an Approved Sale are subject to the satisfaction of the
conditions that: (i) upon the consummation of the Approved Sale, all of the
Investors and the Transferees will receive the same form and amount of
consideration per share of the applicable Securities, or if any holder of
Securities is given an option as to the form and amount of consideration to be
received, all Investors and Transferees will be given the same option and (ii)
the terms of the Approved Sale shall not include any
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provisions subjecting an Investor or its Transferees to any indemnification
obligation or other liability beyond the value of the consideration received in
the Approved Sale by such Investor or Transferees.
4.3 TAG-ALONG RIGHTS.
(a) Except as otherwise provided in Section 4.3(e), and subject
in all instances to the provisions of Section 3.5, each of the BRS Entities
covenants and agrees with the other Investors and their Transferees and assigns
that he, she or it will not effect a Transfer of shares of Common Stock and/or
Preferred Stock in, or otherwise participate in, any transaction that constitute
a "Significant Transfer" (as hereinafter defined) unless all other Investors and
their Transferees and assigns (collectively, the "Tag-Along Rightholders") are
offered an equal opportunity (the "Tag-Along Right") to participate in such
transaction or transactions on a pro rata basis (based on the number of shares
of Common Stock or Preferred Stock outstanding on a fully-diluted basis) and on
identical terms. As used herein, a "Significant Transfer" means a Transfer,
which either alone or taken together with all prior Transfers by any BRS Entity
to any person or persons other than a BRS Permitted Transferee (as hereinafter
defined), aggregate to one-half (1/2) or more of the total number of shares of
Common Stock or Preferred Stock held by such Investor on the Closing Date. A
"BRS Permitted Transferee" shall mean, (A) any other BRS Entity or other
Investor, (B) any general partner of a BRS Entity (a "BRS Partner") and any
corporation, partnership or other entity that is an Affiliate (as hereinafter
defined) of any BRS Entity or BRS Partner (collectively, "BRS Affiliates"), (C)
any managing director, director, general partner, limited partner, officer or
employee of any BRS Entity or any BRS Affiliate, or any spouse, lineal
descendant or immediate family member of any BRS Entity or any heir, executor,
administrator, testamentary trustee, legatee or beneficiary of a BRS Entity or
any of the foregoing persons described in this clause (C) PROVIDED, HOWEVER,
that no BRS Affiliate that becomes such an entity primarily for the purpose of
effecting a transfer of Securities shall be considered a Permitted Transferee
(collectively, "BRS Associates"), (D) any trust, the beneficiaries of which, or
any corporation, limited liability company or partnership, the stockholders,
members or general and limited partners of which include only BRS Entities, BRS
Affiliates, or BRS Associates, and (E) any other transferee of Common Stock from
any BRS Entity PROVIDED, that the aggregate number of shares of Common Stock
transferred to such transferee, together with all other transfers made by all
BRS Entities since the Closing Date to Permitted Transferees specified in this
clause (E), shall not exceed 33% of the number of shares of Common Stock
originally purchased by the BRS Entities on the Closing Date; and
(b) Prior to any sale of Common Stock and/or Preferred Stock
subject to the provisions of Section 4.3(a), the
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seller (the "Tag-Along Seller") shall notify Holdings Corp. in writing of the
proposed sale. Such notice (the "Tag-Along Sale Notice") shall set forth:(i)
the number of shares of Common Stock and/or Preferred Stock subject to the
proposed sale;(ii) the name and address of the proposed purchaser; and (iii) the
proposed amount of consideration and terms and conditions of payment offered by
such proposed purchaser. Holdings Corp. shall promptly, and in any event within
ten days, mail or hand deliver or cause to be mailed or hand delivered the
Tag-Along Sale Notice to the Tag-Along Rightholders. Each Tag-Along Rightholder
may exercise the Tag-Along Right by delivery of a written notice (the "Tag-Along
Acceptance Notice") to the Tag-Along Seller within fifteen days of the date
Holdings Corp. mailed or caused to be mailed the Tag-Along Sale Notice. The
Tag-Along Acceptance Notice shall state the number of shares of Common Stock
and/or Preferred Stock that the Tag-Along Rightholder proposes to include in the
proposed sale. If no Tag-Along Acceptance Notice is received during the
fifteen-day period referred to above, the Tag-Along Seller shall have the right
for a 90-day period to effect the proposed sale of shares of Common Stock and/or
Preferred Stock on terms and conditions no more favorable than those stated in
the Tag-Along Sale Notice. Any Investor delivering a Tag-Along Acceptance
Notice shall participate in the proposed transaction as set forth in Section
4.3(a). Concurrently with the consummation of the Significant Transfer, the
Tag-Along Seller shall (i) notify each Tag-Along Rightholder who has delivered a
Tag-Along Acceptance Notice (an "Accepting Tag-Along Holder"), (ii) remit to the
Accepting Tag-Along Holder the aggregate consideration for the shares of Common
Stock and/or Preferred Stock to be sold by the Accepting Tag-Along Holders in
the Significant Transfer as contemplated pursuant to Section 4.3(a) hereof, and
(iii) furnish such other evidence of the completion and time of completion of
the Significant Transfer and the terms thereof as may be reasonably requested by
the Accepting Tag-Along Holders.
(c) (i) Notwithstanding the other requirements of this Section
4.3, a Tag-Along Seller may sell Common Stock and/or Preferred Stock at any time
without complying with the requirements of Section 4.3(b) so long as the
Tag-Along Seller deposits into escrow with a nationally recognized financial
institution at the time of sale that amount of consideration received in the
sale equal to the "Escrow Amount." As used herein, the "Escrow Amount" shall
equal that amount of consideration that all Tag-Along Rightholders would have
been entitled to receive if they had the opportunity to participate in the sale
on a pro rata basis, determined as if each Tag-Along Rightholder (A) delivered a
Tag-Along Acceptance Notice to the Tag-Along Seller in the time period set forth
in Section 4.3(b) and (B) proposed to include all of her, his or its shares of
Common Stock and/or Preferred Stock in such sale.
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(ii) The Tag-Along Seller shall notify Holdings Corp. in
writing of the proposed sale pursuant to this Section 4.3(c) no later than the
date of such sale. Such notice (the "Escrow Notice") shall set forth the
information required in the Tag-Along Sale Notice, and in addition, such notice
shall state the name of the escrow agent and, if the consideration (in whole or
in part) for the sale was cash, then the account number of the escrow account.
Holdings Corp. shall promptly, and in any event within ten days, mail or cause
to be mailed the Escrow Notice to each Tag-Along Rightholder. Such Tag-Along
Rightholder may exercise the Tag-Along Right by delivery to the Tag-Along
Seller, within fifteen days of the date Holdings Corp. mailed or caused to be
mailed the Escrow Notice, of (A) a written notice specifying the number of
shares of Common Stock and/or Preferred Stock it proposes to sell and (B) the
certificates for such Common Stock and/or Preferred Stock, with stock powers
duly endorsed in blank and with signatures guaranteed.
(iii)Promptly after the expiration of the fifteenth day
after Holdings Corp. has mailed or caused to be mailed the Escrow Notice, (A)
the Tag-Along Seller shall purchase that number of shares of Common Stock and/or
Preferred Stock as the Tag-Along Seller would have been required to include in
the sale had the Tag-Along Seller complied with the provisions of Section
4.3(b), (B) all shares of Common Stock and/or Preferred Stock not required to be
purchased by the Tag-Along Seller shall be returned to the Tag-Along
Rightholders thereof and (C) all funds and other consideration held in escrow
shall be released to the Tag-Along Seller. If the Tag-Along Seller received
consideration other than cash in his, her or its sale, the Tag-Along Seller
shall purchase the shares of Common Stock and/or Preferred Stock tendered by
paying to the Tag-Along Rightholders the same non-cash consideration and cash in
the same proportion as received by the Tag-Along Seller in the sale. The
Tag-Along Seller shall pay all costs and expenses of the escrow agent, and any
interest on the Escrow Amount shall accrue to the benefit of Holdings Corp.
(d) The Tag-Along Rights provided pursuant to this Section 4.3
shall terminate upon an Initial Public Offering, or upon a distribution by BRS
of all the Securities to its partners. An "Initial Public Offering" shall mean
the sale by Holdings Corp. pursuant to an effective registration statement under
the Securities Act of Common Stock for gross offering proceeds of at least $20
million.
(e) Notwithstanding anything to the contrary, a Tag-Along Seller
may make any of the following sales without offering the Tag-Along Rightholders
the opportunity to participate: (a) sales by a Tag-Along Seller to any
Affiliate or Permitted Transferee, PROVIDED that the proposed purchaser agrees
in writing to be bound by the provisions of this Agreement; (b) sales pursuant
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to an effective registration statement under the Securities Act; and (c) sales
pursuant to an Approved Sale.
4.4 COVENANT NOT TO COMPETE. Each Management Investor hereby agrees
that during the term of his employment by any of the Companies and for a period
of six (6) months after the Management Investor has incurred a Termination Date
(as defined in Section 6.3(a)) for any reason other than termination without
Cause (as defined in Section 6.1) (the "Restriction Period"), such Management
Investor shall not, directly or indirectly, own, manage, operate, join, control
or participate in the ownership, management, operation or control of, or be
connected as an officer, director, employee, consultant, stockholder, partner or
otherwise with, any component of a business which at any relevant time during
such period directly or indirectly competes with any of the Companies or their
Affiliates in the Covered Business (as hereafter defined) in the States of New
York, New Jersey, Maryland, Michigan or Delaware or any other state in the
United States in which any of the Companies or their Affiliates are conducting
business during the term of his employment. For purposes hereof, the term
"Covered Business" shall mean the purchase, manufacture, marketing or selling of
the products and the raw materials with respect to such products as to which the
Management Investor has assisted the Companies or their Affiliates in
purchasing, manufacturing, marketing or selling during the term of the
employment of the Management Investor, together with any use or modification of
any such products for the same, new or additional purposes or applications. The
restrictive covenant contained in this Section 4.4 is a covenant independent of
any other provision of this Agreement, and the existence of any claim which such
Management Investor may allege against any of the Companies, whether based on
this Agreement or otherwise, shall not prevent the enforcement of this covenant.
Each of the Management Investors agrees that a breach by him of this Section 4.4
shall cause irreparable harm to the Companies and their Affiliates and that the
Companies' and Holdings Corp.'s remedies at law for any breach or threat of
breach by any of the Management Investors of the provisions of this Section 4.4
shall be inadequate, and that the Companies or Holdings Corp. shall be entitled
to an injunction or injunctions to prevent breaches of this Section 4.4 and to
enforce specifically the terms and provisions hereof, in addition to any other
remedy to which the Companies may be entitled at law or in equity. The length
of time for which this covenant not to compete shall be in force shall not
include any period of violation or any other period required for litigation
during which any of the Companies seeks to enforce this covenant. In the event
that this covenant not to compete shall be determined by any court of competent
jurisdiction to be unenforceable by reason of its extending for too long a
period of time or over too large a geographical area or by reason of its being
too extensive in any other respect, it shall be interpreted to extend only over
the longest period of time for which it may be enforceable, and/or over the
largest geographical area as to which
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it may be enforceable and/or to the maximum extent in all other aspects as to
which it may be enforceable, all as determined by such court in such action.
ARTICLE V
CORPORATE ACTIONS
5.1 CERTIFICATE OF INCORPORATION AND BY-LAWS. Each Investor has
reviewed the Certificate of Incorporation and By-Laws of Holdings Corp. in the
forms attached hereto as Exhibits B-1 and B-2, respectively, and hereby approves
and ratifies the same.
5.2 DIRECTORS.(a) Each Investor and Permitted Transferee agrees that
it shall take, at any time and from time to time, all action necessary
(including voting the Common Stock owned by him, her or it, calling special
meetings of stockholders and executing and delivering written consents) to
ensure that the Board of Directors of Holdings Corp. is composed at all times of
such number of persons as the Board of Directors shall determine and that the
Board of Directors shall be composed of at least the following persons: one
individual designated by the Management Investors holding a majority of the
Common Stock owned by the Management Investors (who shall be, subject to the
rights of the Management Investors under Section 5.3, David L. Wenner for so
long as he is President of BGH Holdings, Inc., a Delaware corporation); and two
individuals designated by BRS.
(b) Each Investor approves and ratifies the election of the
following persons as the directors of Holdings Corp. following the Closing:
Harold O. Rosser II
Stephen C. Sherrill
David L. Wenner
5.3 RIGHT TO REMOVE CERTAIN OF HOLDINGS CORP.'S DIRECTORS. Each of
BRS and the Management Investors, as the case may be, may request that any
director designated by it be removed (with or without cause) by written notice
to the other Investors, and, in any such event, each Investor shall promptly
consent in writing or vote or cause to be voted all shares of Common Stock now
or hereafter owned or controlled by it for the removal of such person as a
director. In the event any person ceases to be a director, such person shall
also cease to be a member of any committee of the Board of Directors of Holdings
Corp.
5.4 RIGHT TO FILL CERTAIN VACANCIES IN HOLDINGS CORP.'S BOARD. In
the event that a vacancy is created on Holdings Corp.'s Board of Directors at
any time by the death, disability, retirement, resignation or removal (with or
without cause) of a
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director designated by BRS or the Management Investors, as the case may be, or
if otherwise there shall exist or occur any vacancy on Holdings Corp.'s Board of
Directors in a directorship subject to designation by BRS or the Management
Investors, as the case may be, such vacancy shall not be filled by the remaining
members of Holdings Corp.'s Board of Directors, but each Investor hereby agrees
promptly to consent in writing or vote or cause to be voted all shares of Common
Stock now or hereafter owned or controlled by it to elect that individual
designated to fill such vacancy and serve as a director, as shall be designated
by BRS or the Management Investors, as the case may be.
5.5 SUBSIDIARIES GOVERNANCE. Each Investor agrees that the board of
directors of each of BGH Holdings, Inc., a Delaware corporation, BRH Holdings,
Inc., a Delaware corporation, and the Companies shall be comprised of one
individual designated by BRS (so long as the BRS Entities continue to own at
least 50% of the Common Stock held by BRS Entities on the Closing Date). Each
Investor agrees to vote all of its Securities and to cause its representatives
on the Board of Directors of Holdings Corp., subject to their fiduciary duties,
to vote and take other appropriate action to effectuate the agreement set forth
in this Sections 5.5 in respect of each of BGH Holdings, Inc., BRH Holdings,
Inc. and the Companies.
5.6 MANAGEMENT RIGHTS. For so long as BRS Entities own in the
aggregate at least 2% of the outstanding Securities on a fully diluted basis and
there has not been an Initial Public Offering:
(a) RIGHT OF CONSULTATION. BRS shall have the right, and
Holdings Corp. shall cause each of the Companies to grant to BRS the right, to
consult with and advise the management of Holdings Corp. and its subsidiaries,
at any time or from time to time, on all matters relating to the operation of
Holdings Corp. and its subsidiaries, including, without limitation, significant
changes in management personnel and compensation or employee benefits, the
introduction of new products or new lines of business, important acquisitions or
dispositions of plant and equipment, significant research and development
programs, the purchase or sale of important patents, trademarks, licenses and
concessions, and the proposed compromise of any significant litigation.
(b) OBSERVATION RIGHTS. BRS shall have the right, and Holdings
Corp. shall cause each of the Companies to grant to BRS the right, to have its
representatives (in addition to its representatives that are directors) attend
meetings of the Board of Directors (and committees thereof) of Holdings Corp.
and each of the Companies. Holdings Corp. shall give, or shall cause each of
the Companies to give, as appropriate, to BRS (i) at least three days' notice of
each regular meeting of the Board of Directors of
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Holdings Corp. and each of the Companies, (ii) such notice as is necessary under
the circumstances to enable BRS's representatives to attend each special or
emergency meeting of the Board of Directors of Holdings Corp. and each of the
Companies, (iii) on or prior to the date of each meeting of the Board of
Directors of Holdings Corp. and each of the Companies all information given to
the directors at such meeting and (iv) within 90 days following each meeting of
the Board of Directors of Holdings Corp. and each of the Companies, copies of
the minutes of such meeting.
(c) INSPECTION AND ACCESS. In addition to the reporting
requirements set forth in Section 4.1 hereof, Holdings Corp. shall provide to
BRS Entities true and correct copies of all quarterly and annual financial
reports of each of the Companies and budgets prepared by or on behalf of
Holdings Corp. and of each of the Companies, and such other documents, reports,
financial data and other information as BRS Entities may reasonably request.
Holdings Corp. shall permit any authorized representatives designated by BRS
Entities to visit and inspect any of the properties of Holdings Corp. or any of
its subsidiaries, including its and their books of account (and to make copies
and take extracts therefrom), and to discuss its and their affairs, finances and
accounts with its and their officers and their current and prior independent
public accountants (and by this provision Holdings Corp. authorizes such
accountants to discuss with such representatives the affairs, finances and
accounts of Holdings Corp. and its subsidiaries, whether or not a representative
of Holdings Corp. is present), all at such reasonable times and as often as BRS
Entities may reasonably request.
5.7 CONFIDENTIALITY. (a) Each Investor hereby agrees that
Confidential Information (as defined below) has been and will be made available
to him or it in connection with such Investor's interest in Holdings Corp. and
its subsidiaries. Each Investor agrees that he or it will not use the
Confidential Information in any way that is reasonably likely to result in a
material detriment to the business of Holdings Corp. and its subsidiaries. Each
Investor further acknowledges and agrees that he or it will not disclose any
Confidential Information to any person; PROVIDED that Confidential Information
may be disclosed (i) to such Investor's Representatives (as defined below) in
the normal course of the performance of their duties, (ii) to the extent
required by applicable statute, law, rule or regulation (including complying
with any oral or written questions, interrogatories, requests for information or
documents, subpoena, civil investigative demand or similar process to which an
Investor is subject) or by generally accepted accounting principles, (iii) to
any third party to whom such Investor is contemplating a transfer of his or its
Securities, PROVIDED that such transfer would not be in violation of the
provisions of this Agreement and as long as such third party is advised of the
confidential nature of such information and agrees to be bound by a
confidentiality agreement in form and substance
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satisfactory to Holdings Corp. and substantially similar to the provisions
hereof or (iv) if the prior consent of the Board of Directors of Holdings Corp.
shall have been obtained. Nothing contained herein shall prevent the use of
Confidential Information in connection with the assertion or defense of any
claim by or against Holdings Corp. or any Investor.
(b) "Confidential Information" means any information concerning
Holdings Corp., its financial condition, business, subsidiaries, operations or
prospects in the possession of or to be furnished to any Investor in his or its
capacity as a shareholder of Holdings Corp. or by virtue of his or its present
or former position as, or right to designate, a director of Holdings Corp.;
PROVIDED that the term "Confidential Information" does not include information
which (a) was or becomes generally available publicly other than as a result of
a disclosure by an Investor or his or its partners, directors, officers,
employees, agents, counsel, investment advisers, consultants or representatives
(all such persons being collectively referred to as "Representatives") in
violation of this Section 5.7 or (b) was or becomes available to such Investor
on a nonconfidential basis from a source other than Holdings Corp., any
regulatory entity or an Investor or his or its Representatives, PROVIDED that
such source is or was (at the time of receipt of the relevant information) not,
to the best of such Investor's knowledge, bound by a confidentiality agreement
with Holdings Corp. or another person.
ARTICLE VI
ADDITIONAL RESTRICTIONS ON TRANSFERS OF
SECURITIES HELD BY MANAGEMENT INVESTORS
6.1 CERTAIN DEFINITIONS. The terms defined below shall have the
following meanings when used in this Article VI:
(a) "Accumulated Dividends" mean, with respect to any share of
Preferred Stock, the dividends that have accumulated on such share as of such
specific date for dividend periods ending on or prior to such date and that have
not previously been paid in cash;
(b) "Adjusted Cost Price" for each share of Common Stock or
Preferred Stock means the lower of (i) the relevant Fair Market Value Price and
(ii) (X) in the case of the Common Stock, the original purchase price per share
for the Management Investor's Common Stock (adjusted for any stock dividend
payable upon, or subdivision or combination of, the Common Stock) and (Y) in the
case of the Preferred Stock, $1,000.00 (adjusted for any subdivision or
combination of the Preferred Stock);
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(c) "Cause", when used in connection with the termination of a
Management Investor's employment with any of the Companies, means that the
Management Investor shall have, in the judgment of a majority of the board of
directors of the relevant Company: (i) committed a felony, or committed an act
of fraud, embezzlement or theft in connection with his duties with such Company
or in the course of his employment with such Company; (ii)wrongfully caused
significant damage to property of such Company; (iii) engaged in conduct which
constitutes a material violation of published corporate policy of such Company,
(iv) been convicted of a criminal offense (whether felony or a misdemeanor) the
nature of which renders him unfit to serve in his present capacity with such
Company; or (v) persistently failed to adequately perform his duties and
responsibilities assigned in connection with his employment with such Company by
either the board of directors or a superior executive officer of such Company,
provided that in the case of Leonard S. Polaner such duties and responsibilities
shall be determined by the Board of Directors of Holdings Corp. and shall not
require Mr. Polaner to devote more than 100 days per year to the performance of
such duties and responsibilities (and it is understood that Mr. Polaner has
other responsibilities and conflicts that may require reasonable reconciliation
with his duties and responsibilities to the Companies; provided that, the
foregoing considerations in no way shall limit Mr. Polaner's obligations under
Section 4.4 hereof);
(d) "Consolidated Net Earnings" mean, for any period, the
consolidated net income of Holdings Corp. during such period determined in
accordance with generally accepted accounting principles, but excluding
therefrom all extraordinary and/or nonrecurring items of income or loss;
(e) "EBITDA" means, for any period, an amount equal to the sum
of (i) the Consolidated Net Earnings of Holdings Corp. for such period, plus
(ii) all amounts deducted in the computation thereof on account of (a) taxes,
(b) amortization and depreciation and (c) Interest Charges;
(f) "Fair Market Value Price" for each share of Common Stock or
Preferred Stock at any particular date of determination means (i) in the case of
the Common Stock, the price per share for the Management Investor's Common Stock
based on (a) multiplying Holdings Corp.'s EBITDA during the 12 full calendar
months immediately preceding such date by the number six (6), (b) subtracting
from the product obtained pursuant to clause (a) all Indebtedness for Borrowed
Money of Holdings Corp. and its subsidiaries outstanding on such date and the
aggregate liquidation preference (plus accrued and unpaid dividends) of all
shares of preferred stock, par value $.01, of Holdings Corp. and its
subsidiaries outstanding on such date and (c) dividing the difference of the
foregoing clauses (a) and (b) (such difference being referred to herein as the
"Enterprise Value") by the total
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number of outstanding shares of Common Stock; PROVIDED, that if any of the
Common Stock is traded on a national securities exchange or quoted on the
National Association of Securities Dealers, Inc. Automated Quotation System,
then the "Fair Market Value Price" shall equal for each share of Common Stock
the closing price per common share on such exchange, or as so quoted, on the
Management Investor's Termination Date; and (ii) in the case of the Preferred
Stock, the lesser of (a) the Liquidation Preference (plus an amount equal to a
pro rated dividend from the end of the last dividend period to the particular
date of determination) of each share of Preferred Stock and (b) the price per
share for the Management Investor's Preferred Stock calculated by dividing the
Enterprise Value (calculated without deducting the aggregate Liquidation
Preference of the outstanding Preferred Stock) by the number of outstanding
shares of Preferred Stock;
(g) "Indebtedness" includes all obligations, contingent and
otherwise, which in accordance with generally accepted accounting principles
should be classified upon the obligor's balance sheet as liabilities, or to
which reference should be made by footnotes thereto, including without
limitation, in any event and whether or not so classified: (i) all debt and
similar monetary obligations, whether direct or indirect; (ii) all liabilities
secured by any mortgage, pledge, security interest, lien, charge, or other
encumbrance existing on property owned or acquired subject thereto, whether or
not the liability secured thereby shall have been assumed; (iii) all guaranties,
endorsements and other contingent obligations whether direct or indirect in
respect of Indebtedness of others, including any obligation to supply funds to
or in any manner to invest in, directly or indirectly, the debtor, to purchase
Indebtedness, or to assure the owner of Indebtedness against loss, through an
agreement to purchase goods, supplies, or services for the purpose of enabling
the debtor to make payment of the Indebtedness held by such owner or otherwise;
and (iv) obligations to reimburse issuers of any letters of credit;
(h) "Indebtedness for Borrowed Money" means (i) all Indebtedness
of Holdings Corp. and its subsidiaries for borrowed money, whether current or
funded, or secured or unsecured, (ii) all Indebtedness of Holdings Corp. and its
subsidiaries for the deferred purchase price of property or services represented
by a note or other security, (iii) all Indebtedness of Holdings Corp. and its
subsidiaries created or arising under any conditional sale or other title
retention agreement with respect to property acquired by Holdings Corp. or its
subsidiaries (even though the rights and remedies of the seller or lender under
such agreement in the event of default are limited to repossession or sale of
such property), (iv) all Indebtedness of Holdings Corp. and its subsidiaries
secured by a purchase money mortgage or other lien to secure all or part of the
purchase price of property subject to such mortgage or lien, (v) all obligations
under leases which shall have
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been or should be, in accordance with generally accepted accounting principles,
recorded as capital leases in respect of which Holdings Corp. or its
subsidiaries are liable as lessee, (vi) any liability of Holdings Corp. or its
subsidiaries in respect of banker's acceptances or letters of credit, and (vii)
all Indebtedness referred to in clause (i), (ii), (iii), (iv), (v) or (vi) above
which is directly or indirectly guaranteed by Holdings Corp. or any of its
subsidiaries or which Holdings Corp. or any of its subsidiaries has agreed
(contingently or otherwise) to purchase or otherwise acquire or in respect of
which it has otherwise assured a creditor against loss;
(i) "Interest Charges" mean, for any period, the expenses of
Holdings Corp. and its subsidiaries for such period for interest on Indebtedness
(including the current portion thereof) and for commitment fees, agency fees,
facility fees, balance deficiency fees and similar expenses in connection with
the borrowing of money;
(j) "Liquidation Preference" means, on any specific date, with
respect to any share of Preferred Stock, the sum of (i) $1,000 per share plus
(ii) the Accumulated Dividends with respect to such share; and
(k) "Purchase Option Period" means, as to a particular
Management Investor, (i) in the event such Management Investor does not incur a
Termination Date (as defined in Section 6.3(a)) on or prior to the fifth
anniversary of the Closing Date, the period beginning on the Closing Date and
ending on (and including) the fifth anniversary of the Closing Date, and (ii) in
the event such Management Investor incurs a Termination Date on or prior to the
fifth anniversary of the Closing Date, the period beginning on the Closing Date
and ending on (and including) the date which is 165 days after the later of such
Termination Date or the date Holdings Corp. receives the notice of termination
of such Management Investor referred to in Section 6.3(a).
6.2 RESTRICTIONS ON TRANSFER. In addition to complying with the
conditions to Transfer imposed by Section 3.3, and notwithstanding anything to
the contrary contained herein, during the Purchase Option Period, no Management
Investor nor his Permitted Transferees shall effect a Transfer of any Securities
other than (i) pursuant to Section 4.2 in connection with an Approved Sale,(ii)
pursuant to Section 4.3 in connection with the exercise of Tag-Along
Rights,(iii) pursuant to the Registration Rights Agreement (as defined in
Article VII),(iv) pursuant to Section 6.3 in connection with the Purchase Option
(as hereinafter defined),(v) with the consent of Holdings Corp. (as evidenced by
a resolution duly adopted by at least a majority of the non-employee members of
Holdings Corp.'s Board of Directors) or (vi) to a Permitted Transferee of the
Transferor Investor in question. Following the Purchase Option Period, each
Management Investor and
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his Permitted Transferees agree that none of them will effect a Transfer of any
Securities without first complying with the provisions of Section 6.4 hereof, if
then in effect.
In exercising the consent and approval provided for in clause (v)
above, Holdings Corp. may employ its sole discretion in evaluating the nature of
the proposed transferee and Holdings Corp. may impose such conditions on
Transfer as it deems appropriate in its sole discretion, including, but not
limited to, requirements that the transferee be an employee of Holdings Corp. or
its subsidiaries and that the transferee purchase the Management Investor's (or
his Permitted Transferee's) Securities as a "Management Investor" subject to the
restrictions of this Agreement and, in particular, Section 3.3 and this Article
VI. In the event any Transfer is authorized pursuant to clause (v) above to an
employee of Holdings Corp. or its subsidiaries as a "Management Investor," such
employee shall execute an agreement, in form and substance satisfactory to
Holdings Corp., pursuant to which such employee shall agree to be bound by the
terms and conditions of this Agreement and such other provisions as Holdings
Corp. may determine, and upon such execution such employee shall be entitled to
the benefit of such provisions hereof and such other provisions as Holdings
Corp. determines and are set forth in such agreement. Any purported Transfer in
violation of this Agreement shall be null and void and of no force and effect
and the purported transferees shall have no rights or privileges in or with
respect to Holdings Corp. Notwithstanding the foregoing provisions, each
Management Investor agrees that he or it will not effect a Transfer of any
Securities prior to the lapse of such period of time following acquisition
thereof as may be required to comply with applicable state securities laws.
6.3 PURCHASE OPTION.
(a) GENERAL TERMS. In the event that on or prior to the fifth
anniversary of the Closing Date, any Management Investor shall cease to be
employed by any of the Companies for any reason (including, but not limited to,
death, temporary or permanent disability, retirement, resignation or termination
by such Company with or without Cause), other than by reason of a leave of
absence approved by such Company, such Management Investor or such Management
Investor's Permitted Transferees (or, in the case of death, his or their estate)
shall give prompt notice to Holdings Corp. of such termination of employment,
and Holdings Corp., or one or more designee(s) selected by a majority of the
members of the Board of Directors of Holdings Corp., shall have the right and
option (the "Purchase Option") at any time within 120 days after the later of
the effective date of such termination of employment (the "Termination Date") or
the date of Holdings Corp.'s receipt of the aforesaid notice, to purchase from
such Management Investor, or such Management Investor's Permitted Transferees,
as the case may be, any or all of the Securities then owned by such
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Management Investor and such Management Investor's Permitted Transferees at the
Option Purchase Price (as hereinafter defined). Holdings Corp. or its
designee(s) shall give notice to the terminated Management Investor (or such
Management Investor's Permitted Transferees) of its intention to purchase the
Securities not later than within 120 days after the later of the Termination
Date or the date of Holdings Corp.'s receipt of the aforesaid notice. The
Termination Date for a Permitted Transferee shall be the Termination Date with
respect to the Management Investor who first acquired the Securities held by
such Permitted Transferee pursuant to this Agreement.
(i) EXERCISE OF PURCHASE OPTION. The Purchase Option shall
be exercised by written notice to the terminated Management Investor and
Permitted Transferees signed by an officer of Holdings Corp. on behalf of
Holdings Corp. or by its designee(s), as the case may be, prior to the end of
the 120-day period. Such notice shall set forth the number of shares of Common
Stock and Preferred Stock desired to be purchased and shall set forth a time and
place of closing which shall be no earlier than 10 days and no later than 60
days after the date such notice is sent. At such closing, the seller shall
deliver the certificates evidencing the number of shares of Common Stock and
Preferred Stock to be purchased by Holdings Corp. and/or its designee(s),
accompanied by stock powers duly endorsed in blank or duly executed instruments
of transfer, and any other documents that are necessary to transfer to Holdings
Corp. and/or its designee(s) good title to the Securities to be transferred,
free and clear of all pledges, security interests, liens, charges, encumbrances,
equities, claims and options of whatever nature other than those imposed under
this Agreement, and concurrently with such delivery, Holdings Corp. and/or its
designee(s) shall deliver to the seller the full amount of the Option Purchase
Price for such Securities in cash or by certified or bank cashier's check.
In the event that Holdings Corp. (or its designee(s))
does not send the notice described above within such 120-day period or does not
exercise the Purchase Option with respect to all of the Securities subject to
the Purchase Option, Holdings Corp. (or if Holdings Corp. fails to give such
notice, the terminated Management Investor) shall give notice of such failure to
the other Investors, and the other Investors shall thereupon have the right and
option to purchase the Securities not to be purchased by Holdings Corp. (or its
designee(s)) and may give notice of such intention at any time not later than 45
days after the date on which the notice is sent to the other Investors. The
notice to the Investors shall set forth the number and kind of Securities
available for purchase by such Investors and the applicable purchase prices.
If the other Investors elect to purchase an aggregate
number of Common Stock and/or Preferred Stock in
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excess of the number of Common Stock and Preferred Stock that are ultimately
determined to be available for purchase by them, such Common Stock and/or
Preferred Stock shall be allocated among the other Investors who desire to
purchase such Common Stock and/or Preferred Stock in proportion to the number of
Common Stock and/or Preferred Stock (on a fully diluted basis) owned by each of
them; provided that no such other Investor shall become bound to purchase a
number of offered Common Stock and Preferred Stock greater than the number of
shares of such Common Stock and/or Preferred Stock it or he had elected to
purchase. If the foregoing allocation procedure does not allocate all the
Common Stock and Preferred Stock (because one or more Investors would otherwise
have been allocated more than the number of shares of Common Stock and/or
Preferred Stock it or he elected to purchase), then the remaining such shares of
Common Stock and Preferred Stock shall be allocated among the other Investors
who desire to purchase such Common Stock and/or Preferred Stock in proportion to
the number of shares of Common Stock and/or Preferred Stock (on a fully diluted
basis) owned by each of them, and such allocation procedure shall continue until
all such Common Stock and Preferred Stock shall have been allocated. Promptly
upon determining the number and kind of shares of Common Stock and/or Preferred
Stock which each purchasing Investor will purchase and the purchase prices
therefor, Holdings Corp. shall send notices thereof to the terminated Management
Investor and each of the purchasing Investors. Such notices shall also set
forth a time and place of closing for the purchases by the other Investors,
which closing shall be no earlier than 10 days and no later than 60 days after
the date such notices are sent.
(ii)OPTION PURCHASE PRICE. If the Management Investor shall
be terminated by any of the Companies without Cause or shall cease to be
employed by any of the Companies by reason of death, temporary or permanent
disability, the "Option Purchase Price" for the Common Stock and/or Preferred
Stock to be purchased from such Management Investor or such Management
Investor's Permitted Transferees pursuant to the Purchase Option (such number of
shares of Common Stock and/or such number of shares of Preferred Stock, each
being referred to as the "Purchase Number") shall equal the price calculated as
set forth in the table below opposite the applicable Termination Date of such
Management Investor:
Option
If the Termination Date Occurs: Purchase Price
- ------------------------------- --------------
On or prior to the first Adjusted Cost Price
anniversary of the Closing multiplied by the
Date Purchase Number
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After the first anniversary Adjusted Cost
of the Closing Date, and on or Price multiplied by
prior to the second anniversary 80% of the Purchase
of the Closing Date Number, plus Fair Market
Value Price multiplied by 20%
of the Purchase Number
After the second anniversary of Adjusted Cost Price multiplied
the Closing Date, and on or by 60% of the Purchase Number,
prior to the third anniversary plus Fair Market Value Price
of the Closing Date multiplied by 40% of the
Purchase Number
After the third anniversary of Adjusted Cost Price
the Closing Date, and on or multiplied by 40% of the
prior to the fourth anniversary Purchase Number, plus
of the Closing Date Fair Market Value Price
multiplied by 60% of the Purchase Number
After the fourth anniversary of Adjusted Cost Price
the Closing Date, and on or prior multiplied by 20% of the
to the fifth anniversary of the Purchase Number, plus
Closing Date Fair Market Value Price
multiplied by 80% of the Purchase Number
Notwithstanding anything to the contrary contained
herein, if the Management Investor shall cease to be employed by any of the
Companies for any reason other than those set forth in the first sentence of
this Section 6.3(a)(ii) (including, but not limited to, termination for Cause),
the Option Purchase Price for all shares of Common Stock and/or Preferred Stock
to be purchased from the Management Investor (and such Management Investor's
Permitted Transferees) pursuant to the Purchase Option shall equal the Adjusted
Cost Price multiplied by the Purchase Number.
The Purchase Option will lapse upon the earlier to
occur of (i) an Initial Public Offering, (ii) an Approved Sale and (iii) a
transfer of Securities by BRS as to which Tag-Along Rights apply.
(iii)SALE IN PUBLIC OFFERING. Common Stock sold pursuant to
an effective registration statement under the Securities Act will be sold free
of the restrictions contained in this Article VI, but this Article VI shall
continue to apply in accordance with its terms to all Common Stock not sold in
such offering. If less than all of a Management Investor's shares of Common
Stock are sold in such an offering, for purposes of any subsequent calculation
hereunder of the Option Purchase Price for the Common Stock, the Option Purchase
Price for the Common Stock
25
<PAGE>
shall equal: (a) the Adjusted Cost Price multiplied by the product of the
Adjusted Cost Price Percentage and the Adjusted Purchase Number (as hereinafter
defined); PLUS (b) the Fair Market Value Price multiplied by the product of the
Fair Market Value Price Percentage and the Adjusted Purchase Number, LESS (c)
the product of the Publicly-Sold Stock (as hereinafter defined) and the Fair
Market Value Price, where: (w) "Publicly-Sold Stock" means the total number of
shares of Common Stock previously sold by the respective Management Investor in
a public offering, (x) "Adjusted Purchase Number" means the sum of the Purchase
Number and the Publicly-Sold Stock, (y) "Fair Market Value Price Percentage"
means 20% multiplied by the number of full years elapsed since the Closing Date,
and (z) "Adjusted Cost Price Percentage" means 100% minus the Fair Market Value
Price Percentage. Notwithstanding the foregoing, the Option Purchase Price for
the Common Stock at all times shall equal or exceed the product of the Adjusted
Cost Price and the Purchase Number.
6.4 RIGHT OF FIRST REFUSAL ON TRANSFER OF MANAGEMENT INVESTOR
SECURITIES.
(a) RIGHT OF FIRST REFUSAL. In the event that any time after
the expiration of the Purchase Option Period, a Management Investor (or his
Permitted Transferees) receives a bona fide offer (a "Transfer Offer") to
purchase any or all of the Securities (the "Transfer Securities") then owned by
the Management Investor (or his Permitted Transferees) from any person (the
"Offeror") which the Management Investor (or his Permitted Transferees) wishes
to accept, then the Management Investor (and his Permitted Transferees) shall
give Holdings Corp. and the other Investors written notice thereof ("Transfer
Notice"), which Transfer Notice shall state in reasonable detail all material
terms of such proposed sale or other transfer, the identity of the Offeror, the
price or other consideration for which the Securities are proposed to be sold or
transferred, and the number of Securities to be sold or transferred, and shall
also contain an irrevocable offer to sell the Transfer Securities to Holdings
Corp. at the price and on the terms contained in the Transfer Offer. After its
receipt of the Transfer Notice, Holdings Corp. and/or its designee(s) shall have
the right and option to purchase all, but not less than all (unless other
Investors purchase the remainder), of the Transfer Securities at the price and
on the terms of the Transfer Offer set forth in the Transfer Notice. Within 45
days after receipt of the Transfer Notice, Holdings Corp. and/or its designee(s)
shall notify such Management Investor (or his Permitted Transferees) whether or
not it wishes to purchase the Transfer Securities and, if so, indicating the
number of Transfer Securities desired to be purchased.
In the event that Holdings Corp. and/or its designee(s) does
not elect to purchase all such Transfer Securities, the selling Management
Investor (or his Permitted
26
<PAGE>
Transferees) shall give notice of such failure to the other Investors, and the
other Investors shall thereupon have the right and option to purchase in the
aggregate all, but not less than all, the Transfer Securities not to be
purchased by Holdings Corp. and/or its designee(s) and may give notice to the
selling Management Investor (or his Permitted Transferees) (with a copy to
Holdings Corp.) of such intention at any time not later than 45 days after the
date on which such notice is sent by the selling Management Investor (or his
Permitted Transferees) to such other Investors. Each electing Investor's notice
shall indicate the number of Transfer Securities it desires to purchase. If the
other Investors elect to purchase an aggregate number of Transfer Securities in
excess of the number of Transfer Securities which Holdings Corp. and/or its
designee(s) did not elect to purchase, the Transfer Securities shall be
allocated among the other Investors who desire to purchase such Transfer
Securities in accordance with the allocation provisions which are set forth in
Section 6.3(a)(i). Promptly upon determining the number of the selling
Management Investor's Securities which each purchasing Investor will purchase
and the purchase price therefor, Holdings Corp. shall send notices thereof to
the selling Management Investor and each of the purchasing Investors.
(b) EXERCISE AND NONEXERCISE OF RIGHT OF FIRST REFUSAL.
Exercise of the option provided for in Section 6.4(a) shall be effected by the
giving of written notice to the Management Investor (and his Permitted
Transferees) by Holdings Corp. (on its own behalf and/or on behalf of its
designee(s), as the case may be), signed by an officer of Holdings Corp., and,
if applicable, the other Investors, prior to the end of the period during which
the option is exercisable (and such notice shall be effective when given). If
Holdings Corp. or Holdings Corp. and the other Investors in the aggregate elect
to purchase all of the Transfer Securities, the closing of the purchase and sale
of the Transfer Securities pursuant to any such option exercise shall be held at
such place and such date to be established by Holdings Corp. in the later of its
notice to the selling Management Investor in response to the Transfer Notice and
its notice to the other Investors of the allocation of the number of Transfer
Securities which such Investors are to purchase, which in no event shall be
earlier than 10 days or later than 60 days from the date of such notice.
In the event Holdings Corp. and/or its designees and the
other Investors fail to exercise the purchase option provided for in Section
6.4(a), then, subject to the other provisions of this Agreement, for a period of
30 days, the Transfer Securities may be sold or transferred by or an behalf of
the Management Investor (or his Permitted Transferees) to the Offeror specified
in the Transfer Notice at a price not less than the price per Securities
specified therein and otherwise on terms no less favorable to the Management
Investor and no more favorable to the Offeror than those contained in the
Transfer Notice.
27
<PAGE>
6.5 PURCHASER REPRESENTATIVE. If Holdings Corp. or any Investor
enters into any negotiation or transaction for which Rule 506 (or any similar
rule then in effect) promulgated by the Securities and Exchange Commission under
the Securities Act may be available with respect to such negotiation or
transaction (including a merger, consolidation or other reorganization), each
Investor will, at the request of Holdings Corp., appoint a purchaser
representative (as such term is defined in Rule 501(h) promulgated by the
Securities and Exchange Commission under the Securities Act) reasonably
acceptable to Holdings Corp. If any Investor appoints the purchaser
representative designated by Holdings Corp., Holdings Corp. will pay the fees of
such purchaser representative, but if any Investor declines to appoint the
purchaser representative designated by Holdings Corp., such Investor will
appoint, at his own expense, another purchaser representative (reasonably
acceptable to Holdings Corp.).
6.6 SECTION 83(B) ELECTIONS. Each Management Investor shall make the
election to include in his income, in the year he purchases the Common Stock and
the Preferred Stock, the excess, if any, of the fair market value of the Common
Stock and the Preferred Stock at that time over the Management Investor's
original purchase price for such Securities, pursuant to Section 83(b) of the
Internal Revenue Code of 1986, as amended, in the manner and within the time
period specified by the regulations promulgated thereunder. Unless required by
law or by any taxing authority, each party to this Agreement agrees to file its
income tax returns on the basis that: (i) the fair market value of the Common
Stock at the time of its purchase by a Management Investor pursuant to this
Agreement is equal to such Management Investor's original purchase price for the
Common Stock, and (ii) the fair market value of the Preferred Stock at the time
of its purchase by a Management Investor pursuant to this Agreement is equal to
such Management Investor's original purchase price for the Preferred Stock.
Unless required by law or by any taxing authority, Holdings Corp. will not seek
an income tax deduction for compensation for the services of a Management
Investor on the basis that: (i) the fair market value of the Common Stock at the
time of its purchase by a Management Investor pursuant to this Agreement exceeds
such Management Investor's original purchase price for the Common Stock, or (ii)
the fair market value of the Preferred Stock at the time of its purchase by a
Management Investor pursuant to this Agreement exceeds such Management
Investor's original purchase price for the Preferred Stock.
6.7 INVOLUNTARY TRANSFERS.
(a) OPTION TO PURCHASE. In the event that the Securities owned
by a Management Investor (or his Permitted Transferees) shall be subject to sale
or other transfer by reason of any of the following events (a "Nonvolitional
Event"): (i) bankruptcy or insolvency proceedings, whether voluntary or
28
<PAGE>
involuntary, or (ii) a divorce (whether in connection with a settlement of the
divorce or entry of a decree or judgment of divorce), or (iii) distraint, levy,
execution or other involuntary transfer, then the Management Investor (and his
Permitted Transferees) shall give Holdings Corp. written notice thereof
("Involuntary Transfer Notice") promptly upon the occurrence of such
Nonvolitional Event, which Involuntary Transfer Notice shall state the terms of
such proposed sale or other transfer, the identity of the proposed purchaser or
other transferee, the price or other consideration, if readily determinable, for
which the Securities are proposed to be sold or transferred, and the number of
Securities to be sold or transferred (the "Involuntarily Transferred
Securities"). After its receipt of the Involuntary Transfer Notice or, failing
such receipt, after Holdings Corp. otherwise obtains actual knowledge of such a
proposed sale or other transfer, Holdings Corp. and/or its designee(s) shall
have the right and option to purchase all, but not less than all, of the
Involuntarily Transferred Securities, such option to be exercisable at any time
within 120 days after receipt of the Involuntary Transfer Notice or, failing
such receipt, after Holdings Corp. otherwise obtains actual knowledge of such a
proposed sale or other transfer.
In the event that Holdings Corp. and/or its designee(s) does
not elect to purchase all such Involuntarily Transferred Securities, the
Management Investor (or his Permitted Transferees) shall give notice of such
failure to the other Investors, and the other Investors shall thereupon have the
right and option to purchase in the aggregate all, but not less than all, the
Involuntarily Transferred Securities not to be purchased by Holdings Corp.
and/or its designee(s) and may give notice to the Management Investor (or his
Permitted Transferees) (with a copy to Holdings Corp.) of such intention at any
time not later than 45 days after the date on which such notice is sent by the
selling Management Investor (or his Permitted Transferees) to such other
Investors. Each electing Investor shall indicate the number of Involuntarily
Transferred Securities it desires to purchase. If the other Investors elect to
purchase an aggregate number of Involuntarily Transferred Securities in excess
of the number of Involuntarily Transferred Securities which Holdings Corp.
and/or its designee(s) did not elect to purchase, the Involuntarily Transferred
Securities shall be allocated among the other Investors who desire to purchase
such Involuntarily Transferred Securities in accordance with the allocation
provisions which are set forth in Section 6.3(a)(i). Promptly upon determining
the number of the Involuntarily Transferred Securities which each purchasing
Investor will purchase and the purchase price thereof, Holdings Corp. shall send
notices thereof to the Management Investor and each of the purchasing Investors.
(b) PURCHASE PRICE. Any purchase pursuant to the foregoing
option contained in Section 6.7(a) shall be at the lower
29
<PAGE>
of (i) the price applicable to such proposed sale or transfer or (ii) on or
before the fifth anniversary of the Closing Date, the Adjusted Cost Price
multiplied by the number of Involuntarily Transferred Securities and, following
the fifth anniversary of the Closing Date, the Fair Market Value Price
multiplied by the number of Involuntarily Transferred Securities.
(c) EXERCISE AND NONEXERCISE OF OPTION. Exercise of the option
provided for in Section 6.7(a) shall be effected by the giving of written notice
to the Management Investor (and his Permitted Transferees) and the proposed
purchaser or transferee by Holdings Corp. (on its own behalf and/or on behalf of
its designee(s), as the case may be), signed by an officer of Holdings Corp.,
and, if applicable, by the purchasing Investors prior to the end of the period
during which the option is exercisable (and such notice shall be effective when
given). The closing of the purchase and sale of the Involuntarily Transferred
Securities pursuant to any such option exercise shall be held at such place and
such date to be established by Holdings Corp., which in no event shall be less
than 10 or more than 60 days from the date of such notice.
In the event Holdings Corp. and/or its designee(s) or the
other Investors fail to exercise the purchase option provided for in Section
6.7(a), then the Involuntarily Transferred Securities may be sold or transferred
by or on behalf of the Management Investor (and his Permitted Transferees) on
the terms contained in the Involuntary Transfer Notice, but the transferee or
purchaser shall be subject to all of the obligations contained in this Agreement
which were applicable to the Management Investor in respect of the Involuntarily
Transferred Securities and, without limiting the generality of the foregoing, if
the Management Investor incurs a Termination Date on or prior to the fifth
anniversary of the Closing Date the Purchase Option contained in Section 6.3
hereof shall apply to the Involuntarily Transferred Securities at the applicable
Option Purchase Price.
6.8 LAPSE. The provisions of Article VI shall terminate (i)
immediately after consummation of an Approved Sale or (ii) upon the consummation
of an Initial Public Offering.
ARTICLE VII
REGISTRATION RIGHTS
The Investors shall have registration rights with respect to the
Common Stock as set forth in the Registration Rights Agreement attached hereto
as Exhibit C (the "Registration Rights Agreement"). Each of the Investors
agrees not to effect any public sale or distribution of any securities of
Holdings Corp. during the periods specified in the Registration Rights
Agreement, except as permitted thereby, and each such Investor agrees to be
bound by the
30
<PAGE>
rights of priority to participate in offerings as set forth therein. Each of
the BRS Entities and Holdings Corp. acknowledges and agrees that the
Registration Rights Agreement attached hereto as Exhibit C shall amend and
supersede in its entirety the Registration Rights Agreement set forth in the
Securities Purchase Agreement dated December 27, 1996 between the BRS Entities
and Holdings Corp.
ARTICLE VIII
MISCELLANEOUS
8.1 AMENDMENT AND MODIFICATION. This Agreement may be amended or
modified, or any provision hereof may be waived, provided that such amendment,
modification or waiver is set forth in a writing executed by (i) Holdings Corp.,
(ii) BRS (so long as the BRS Entities own in the aggregate at least 5% of the
outstanding Common Stock on a fully diluted basis), (iii) the holders of a
majority of the Common Stock held by the Management Investors and (iv) the
holders of a majority of the outstanding Common Stock on a fully diluted basis
(including Common Stock owned by the BRS Entities, but not including Common
Stock held by holders not a party hereto or hereafter made a party hereto).
Notwithstanding the foregoing, no amendment or waiver of Sections 3.3, 4.1, 5.6,
this Section 8.1 and the Registration Rights Agreement will be effective against
any Investor that would be adversely affected by such amendment or waiver unless
such Investor consents to such amendment or waiver. No course of dealing
between or among any persons having any interest in this Agreement will be
deemed effective to modify, amend or discharge any part of this Agreement or any
rights or obligations of any person under or by reason of this Agreement.
8.2 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. The representations
and warranties set forth in Section 3.1 of this Agreement will survive the
execution and delivery of this Agreement, the Closing Date and the consummation
of the transactions contemplated hereby, regardless of any investigation made by
an Investor or on its behalf. No other representations, warranties or covenants
set forth herein shall so survive.
8.3 SUCCESSORS AND ASSIGNS; ENTIRE AGREEMENT. This Agreement and all
of the provisions hereof shall be binding upon and inure to the benefit of the
parties hereto and their respective successors and permitted assigns and
executors, administrators and heirs; PROVIDED, HOWEVER, that except as set forth
in this Agreement no party may assign, delegate or otherwise transfer any of its
rights or obligations under this Agreement, except that at any time prior to the
Closing, any BRS Entity may assign any or all of its rights or obligations
hereunder to any other BRS Entity so long as such BRS Entity agrees to be bound
by the provisions of this Agreement and upon such assignment, the assigning BRS
Entity
31
<PAGE>
shall have no further liability or obligation hereunder. This Agreement
(including the Registration Rights Agreement) sets forth the entire agreement
and understanding among the parties as to the subject matter hereof and merges
and supersedes all prior discussions, agreements and understandings of any and
every nature among them.
8.4 SEPARABILITY. In the event that any provision of this Agreement
or the application of any provision hereof is declared to be illegal, invalid or
otherwise unenforceable by a court of competent jurisdiction, the remainder of
this Agreement shall not be affected except to the extent necessary to delete
such illegal, invalid or unenforceable provision unless that provision held
invalid shall substantially impair the benefits of the remaining portions of
this Agreement.
8.5 NOTICES. All notices provided for or permitted hereunder shall
be made in writing by hand-delivery, registered or certified first-class mail,
telex, telecopier or air courier guaranteeing overnight delivery to the other
party at the following addresses (or at such other address as shall be given in
writing by any party to the others):
If to Holdings Corp., to:
B Companies Holdings Corp.
c/o Bruckmann, Rosser, Sherrill & Co., Inc.
126 East 56th Street, 29th Floor
New York, New York 10022
Attention: Stephen C. Sherrill
with a required copy to:
Dechert Price & Rhoads
4000 Bell Atlantic Tower
1717 Arch Street
Philadelphia, PA 19103-2793
Attention: Barton J. Winokur, Esq.
If to any BRS Entity, to:
Bruckmann, Rosser, Sherrill & Co., Inc.
126 East 56th Street, 29th Floor
New York, New York 10022
Attention: Stephen C. Sherrill
32
<PAGE>
with a required copy to:
Dechert Price & Rhoads
4000 Bell Atlantic Tower
1717 Arch Street
Philadelphia, PA 19103-2793
Attention: Barton J. Winokur, Esq.
If to the Management Investors or any of them, to their addresses
as listed in the books of Holdings Corp. or the relevant Company.
All such notices 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; when answered back, if
telexed; when receipt acknowledged, if telecopied; and on the next business day,
if timely delivered to an air courier guaranteeing overnight delivery.
8.6 GOVERNING LAW. The validity, performance, construction and effect
of this Agreement shall be governed by and construed in accordance with the
internal law of New York, without giving effect to principles of conflicts of
law, except to the extent that Delaware law shall be mandatorily applicable.
8.7 HEADINGS. The headings in this Agreement are for convenience of
reference only and shall not constitute a part of this Agreement, nor shall they
affect its meaning, construction or effect. Unless otherwise specified, section
references herein refer to sections of this Agreement and schedules and exhibits
refer to schedules and exhibits attached hereto.
8.8 COUNTERPARTS. This Agreement may be executed in two or more
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 instrument.
8.9 FURTHER ASSURANCES. Each party shall cooperate and take such
action as may be reasonably requested by another party in order to carry out the
provisions and purposes of this Agreement and the transactions contemplated
hereby.
8.10 REMEDIES. In the event of a breach or a threatened breach by any
party to this Agreement of its obligations under this Agreement, any party
injured or to be injured by such breach, in addition to being entitled to
exercise all rights granted by law, including recovery of damages, will be
entitled to specific performance of its rights under this Agreement. The
parties agree that the provisions of this Agreement shall be specifically
enforceable, it being agreed by the parties that the remedy at law, including
monetary damages, for breach of such provision will be
33
<PAGE>
inadequate compensation for any loss and that any defense in any action for
specific performance that a remedy at law would be adequate is waived.
8.11 PARTY NO LONGER OWNING SECURITIES. If a party hereto ceases to
own any Securities, such party will no longer be deemed to be an Investor or
Management Investor for purposes of this Agreement.
8.12 NO EFFECT ON EMPLOYMENT. Nothing herein contained shall confer
on any Management Investor the right to remain in the employ of Holdings Corp.
or any of the Companies or any of its subsidiaries or Affiliates.
8.13 PRONOUNS. Whenever the context may require, any pronouns used
herein shall be deemed also to include the corresponding neuter, masculine or
feminine forms.
34
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first above written.
B COMPANIES HOLDINGS CORP.
By: /s/ Robert Cantwell
-------------------------------------
Robert Cantwell
Vice President
BRUCKMANN, ROSSER, SHERRILL & CO., L.P.
By: BRS Partners, Limited Partnership, the general
partner,
By: BRSE Associates, Inc., its general partner
By: /s/ Stephen C. Sherrill
---------------------------------------
Name: Stephen C. Sherrill
Title: Executive Vice President
BRS CO-INVESTORS
*
---------------------------------------
Bruce C. Bruckmann
SS#: ###-##-####
Residence Address:
125 East 84th Street, Apt. 5A
New York, NY 10028
*
---------------------------------------
Harold O. Rosser II
SS#: ###-##-####
Residence Address:
499 Silvermine Road
New Canaan, CT 06840
35
<PAGE>
/s/ Stephen C. Sherrill
----------------------------------
Stephen C. Sherrill
SS#: ###-##-####
Residence Address:
765 Park Avenue, Apt. 4B
New York, NY 10021
*
----------------------------------
Donald Bruckmann
SS#: ###-##-####
Residence Address:
66 East 79th Street
New York, NY 10021
*
----------------------------------
H. Virgil Sherrill
SS#: ###-##-####
Residence Address:
One Sutton Place South
New York, NY 10022
*
----------------------------------
Nancy Zweng
SS#: ###-##-####
Residence Address:
125 East 84th Street, Apt. 5A
New York, NY 10028
*
----------------------------------
Paul D. Kaminski
SS#: ###-##-####
Residence Address:
54 W. 9th Street
New York, NY 10011
BCB PARTNERSHIP
By: Bruce C. Bruckmann, General Partner
By: *
-------------------------------
Name: Bruce C. Bruckmann
Title: General Partner
36
<PAGE>
NAZ PARTNERSHIP
By: Nancy Zweng, General Partner
By: *
-------------------------------
Name:
Title:
MERRILL LYNCH, PIERCE, FENNER
& SMITH INCORPORATED, CUSTODIAN FBO
PAUL D. KAMINSKI IRA
By: Paul D. Kaminski
By: *
-------------------------------
Name:
Title:
* By: /s/ Stephen C. Sherrill
-----------------------------
Stephen C. Sherrill
Attorney-in-Fact
37
<PAGE>
MANAGEMENT INVESTORS
/s/ Leonard S. Polaner
----------------------------------------
Name: Leonard S. Polaner
SS#:
Residence Address:
/s/ David L. Wenner
----------------------------------------
Name: David L. Wenner
SS#:
Residence Address:
/s/ David Burke
----------------------------------------
Name: David Burke
SS#:
Residence Address:
/s/ Robert C. Cantwell
----------------------------------------
Name: Robert C. Cantwell
SS#:
Residence Address:
/s/ James Brown
----------------------------------------
Name: James Brown
SS#:
Residence Address:
<PAGE>
EXHIBIT A
Shares of
-------------------------------------------------------
Common Preferred Aggregate
Stock Stock Purchase Price
------------- ----------------- ----------------
BRUCKMANN, ROSSER,
SHERRILL & CO., L.P. 117.18 $117,192.54
("BRS") (at $1,000/share)
BRS CO-INVESTORS
Bruce C. Bruckmann 2.44 $2,447.40
(at $1,000/share)
Harold O. Rosser II 0.48 $476.76
(at $1,000/share)
Stephen C. Sherrill 2.44 $2,447.40
(at $1,000/share)
Donald Bruckmann 0.32 $317.80
(at $1,000/share)
H. Virgil Sherrill 1.59 $1,588.98
(at $1,000/share)
Nancy Zweng 0.10 $95.38
(at $1,000/share)
BCB Partnership 0.14 $136.71
(at $1,000/share)
NAZ Partnership 0.07 $65.97
(at $1,000/share)
Paul D. Kaminski 0.12 $115.53
(at $1,000/share)
Merrill Lynch Pierce
Fenner and Smith,
custodian FBO Paul 0.12 $115.53
D. Kaminski IRA (at $1,000/share)
<PAGE>
MANAGEMENT INVESTORS
Leonard S. Polaner 3,000.00 145.00 $175,000.00
(at $10/share) (at $1,000/share)
David L. Wenner 3,000.00 20.00 $50,000.00
(at $10/share) (at $1,000/share)
David Burke 3,000.00 20.00 $50,000.00
(at $10/share) (at $1,000/share)
Robert C. Cantwell 3,000.00 20.00 $50,000.00
(at $10/share) (at $1,000/share)
James Brown 3,000.00 20.00 $50,000.00
(at $10/share) (at $1,000/share)
3
<PAGE>
EXHIBIT 12.1
B&G FOODS, INC.
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
(DOLLAR AMOUNTS IN THOUSANDS)
<TABLE>
<CAPTION>
39-WEEK
PERIOD ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
SEPTEMBER 27, DECEMBER 28, DECEMBER 30, DECEMBER 31, JANUARY 1,
1997 1996 1995 1994 1994
------------- ------------- ------------- ------------- -----------
<S> <C> <C> <C> <C> <C>
Income (loss) before income tax expense
and extraordinary item................. $ 459 $ 867 $ 1,614 $ 2,660 $ (1,031)
Add:
Interest expense....................... 5,635 4,649 3,780 2,394 1,769
Amortization of deferred financing
costs................................ 473 -- -- -- --
Portion of rents representative of the
interest factor...................... 374 578 500 466 434
------ ------ ------ ------ -----------
Income as adjusted................... 6,941 6,094 5,894 5,520 1,172
Fixed charges:
Interest expense....................... $ 5,635 $ 4,649 $ 3,780 $ 2,394 $ 1,769
Amortization of deferred financing
costs................................ 473 -- -- -- --
Portion of rents representative of the
interest factor...................... 374 578 500 466 434
------ ------ ------ ------ -----------
Fixed charges........................ 6,482 5,227 4,280 2,860 2,203
------ ------ ------ ------ -----------
Ratio of earnings to fixed charges....... 1.07 1.17 1.38 1.93 .53
------ ------ ------ ------ -----------
------ ------ ------ ------ -----------
</TABLE>
<PAGE>
EXHIBIT 21.1
[GRAPHIC]
<PAGE>
EXHIBIT 23.1
INDEPENDENT AUDITORS' CONSENT
The Board of Directors and Stockholders
B&G Foods, Inc.:
We consent to the use of our report dated October 31, 1997, relating to the
financial statements of B&G Foods, Inc. and subsidiaries included herein and to
the reference to our firm under the heading "Experts" in the prospectus.
Our report states that as further described in note 1, the Predecessor was
acquired on December 27, 1996 in a business combination accounted for as a
purchase. As a result, the Successor Consolidated financial statements are
presented on a different basis of accounting than the Predecessor Combined
financial statements and, therefore, are not comparable.
KPMG Peat Marwick LLP
Short Hills, New Jersey
January 13, 1998
<PAGE>
EXHIBIT 23.2
INDEPENDENT AUDITORS' CONSENT
The Board of Directors and Stockholders
B&G Foods, Inc.:
We consent to the use of our report dated September 30, 1997, relating to the
combined financial statements of the Nabisco Brands included herein and to the
reference to our firm under the heading "Experts" in the prospectus.
Our report states that the accompanying financial statements of the Nabisco
Brands were prepared to present the net assets acquired and the product
contribution of the Nabisco Brands pursuant to the purchase agreement between
Nabisco, Inc. and RWBV Acquisition Corp., a wholly-owned, indirect subsidiary of
B&G Foods, Inc. (the "Buyer") as described in note 1 and are not intended to be
a complete presentation of the Nabisco Brands' financial position, results of
operations and cash flows.
KPMG Peat Marwick LLP
Short Hills, New Jersey
January 13, 1998
<PAGE>
EXHIBIT 23.3
INDEPENDENT AUDITOR'S CONSENT
The Board of Directors
JEM Brands, Inc.:
We consent to the use of our report dated September 17, 1997, relating to the
consolidated financial statements of JEM Brands, Inc. and subsidiary included
herein and to the reference to our firm under the heading "Experts" in the
prospectus.
KPMG Peat Marwick LLP
New Orleans, Louisiana
January 13, 1998
<PAGE>
LETTER OF TRANSMITTAL
TO TENDER FOR EXCHANGE
9 5/8% SENIOR SUBORDINATED NOTES DUE 2007
OF
B&G FOODS, INC.
PURSUANT TO THE PROSPECTUS DATED JANUARY [ ], 1998
- --------------------------------------------------------------------------------
THE EXCHANGE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00 P.M., NEW YORK
CITY TIME, ON [ ], 1998 (THE "EXPIRATION DATE"), UNLESS
THE EXCHANGE OFFER IS EXTENDED BY THE COMPANY IN ITS SOLE DISCRETION, IN
WHICH CASE THE TERM "EXPIRATION DATE" SHALL MEAN THE LATEST DATE AND TIME
TO WHICH THE EXCHANGE OFFER IS EXTENDED. TENDERS MAY BE WITHDRAWN AT ANY
TIME PRIOR TO 5:00 P.M., NEW YORK CITY TIME, ON THE EXPIRATION DATE.
- --------------------------------------------------------------------------------
THE EXCHANGE AGENT IS:
The Bank of New York
BY REGISTERED OR CERTIFIED MAIL:
The Bank of New York
101 Barclay Street, 7E
New York, New York 10286
Attn: Reorganization Section
<TABLE>
<S> <C>
BY HAND OR OVERNIGHT COURIER: BY FACSIMILE
The Bank of New York (FOR ELIGIBLE INSTITUTIONS ONLY):
101 Barclay Street (212) 571-3080
Corporate Trust Services Window For General Questions or to
Ground Level Confirm Receipt of Notice of
Attn: Reorganization Section
</TABLE>
GUARANTEED DELIVERY BY TELEPHONE:
(212) 815-6333
DELIVERY OF THIS INSTRUMENT TO AN ADDRESS OTHER THAN AS SET FORTH ABOVE OR
TRANSMISSION OF INSTRUCTIONS VIA A FACSIMILE NUMBER OTHER THAN THE
ONE LISTED ABOVE WILL NOT CONSTITUTE A VALID DELIVERY. THE
INSTRUCTIONS SET FORTH IN THIS LETTER OF TRANSMITTAL
SHOULD BE READ CAREFULLY BEFORE THIS LETTER OF
TRANSMITTAL IS COMPLETED.
The undersigned acknowledges receipt of the Prospectus dated January [ ],
1998 (the "Prospectus"), of B&G Foods, Inc., a Delaware corporation (the
"Company"), and this Letter of Transmittal (the "Letter of Transmittal"), which
together with the Prospectus constitutes the Company's offer (the "Exchange
Offer") to exchange $1,000 principal amount of its 9 5/8% Senior Subordinated
Notes due 2007 (the "New Notes") for each $1,000 principal amount of its
outstanding 9 5/8% Senior Subordinated Notes due 2007 (the "Existing Notes").
Recipients of the Prospectus should read the requirements described in such
Prospectus with respect to eligibility to participate in the Exchange Offer.
Capitalized terms used but not defined herein have the meaning given to them in
the Prospectus.
<PAGE>
The undersigned hereby tenders the Existing Notes described in the box
entitled "Description of Existing Notes" below pursuant to the terms and
conditions described in the Prospectus and this Letter of Transmittal. The
undersigned is the registered owner of all the Existing Notes tendered herewith
and the undersigned represents that it has received from each beneficial owner
of Existing Notes ("Beneficial Owners") a duly completed and executed form of
"Instruction to Registered Holder from Beneficial Owner" accompanying this
Letter of Transmittal, instructing the undersigned to take the action described
in this Letter of Transmittal.
This Letter of Transmittal is to be used by a holder of Existing Notes (i)
if certificates representing Existing Notes are to be forwarded herewith, (ii)
if delivery of Existing Notes is to be made by book-entry transfer to the
Exchange Agent's account at The Depository Trust Company ("DTC"), pursuant to
the procedures set forth in the section of the
Prospectus entitled "The Exchange Offer--Procedures for Tendering Existing
Notes," or (iii) if a tender is made pursuant to the guaranteed delivery
procedures in the section of the Prospectus entitled "The Exchange
Offer--Guaranteed Delivery Procedures."
The undersigned hereby represents and warrants that the information received
from the beneficial owners is accurately reflected in the boxes entitled
"Beneficial Owner(s)--Purchaser Status" and "Beneficial Owner(s)--Residence."
Any beneficial owner whose Existing 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 of Existing Notes promptly and
instruct such registered holder of Existing Notes to tender on behalf of the
beneficial owner. If such beneficial owner wishes to tender on its own behalf,
such beneficial owner must, prior to completing and executing this Letter of
Transmittal and delivering its Existing Notes, either make appropriate
arrangements to register ownership of the Existing Notes in such beneficial
owner's name or obtain a properly completed bond power from the registered
holder of Existing Notes. The transfer of record ownership may take considerable
time.
In order to properly complete this Letter of Transmittal, a holder of
Existing Notes must (i) complete the box entitled "Description of Tendered
Notes," (ii) complete the boxes entitled "Beneficial Owner(s)-Purchaser Status"
and "Beneficial Owner(s)-Residence", (iii) if appropriate, check and complete
the boxes relating to book-entry transfer, guaranteed delivery, Special Issuance
Instructions and Special Delivery Instructions, (iv) sign the Letter of
Transmittal by completing the box entitled "Sign Here" and (v) complete the
Substitute Form W-9. Each holder of Existing Notes should carefully read the
detailed instructions below prior to completing the Letter of Transmittal.
Holders of Existing Notes who desire to tender their Existing Notes for
exchange and (i) whose Existing Notes are not immediately available or (ii) who
cannot deliver their Existing Notes, this Letter of Transmittal and all other
documents required hereby to the Exchange Agent on or prior to the Expiration
Date, must tender the Existing Notes pursuant to the guaranteed delivery
procedures set forth in the section of the Prospectus entitled "The Exchange
Offer--Guaranteed Delivery Procedures." See Instruction 2.
Holders of Existing Notes who wish to tender their Existing Notes for
exchange must complete columns (1) through (3) in the box below entitled
"Description of Tendered Notes," complete the boxes entitled and sign the box
below entitled "Sign Here." If only those columns are completed, such holder of
Existing Notes will have tendered for exchange all Existing Notes listed in
column (3) below. If the holder of Existing Notes wishes to tender for exchange
less than all of such Existing Notes, column (4) must be completed in full. In
such case, such holder of Existing Notes should refer to Instruction 5.
2
<PAGE>
<TABLE>
<CAPTION>
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DESCRIPTION OF TENDERED NOTES
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(1) (2) (3) (4)
TENDERED FOR
PRINCIPAL EXCHANGE EXISTING NOTE
AMOUNT (COMPLETE ONLY TENDERING LESS
OF EXISTING IF THAN AGGREGATE
NOTE(S), EXISTING PRINCIPAL
EXACTLY AS NOTES)(2) NUMBER(S)
APPEAR(S) ON REPRESENTED BY (ATTACH SIGNED
EXISTING ALL LIST AMOUNT IF
NAME(S) AND ADDRESS(ES) NOTE (PLEASE FILL NECESSARY)
OF REGISTERED HOLDER(S) NAME(S) CERTIFICATE(S) IN, IF BLANK) CERTIFICATE(S)(1)
<S> <C> <C> <C>
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</TABLE>
(1) Unless indicated in the column "Principal Amount Tendered For Exchange," any
tendering Holder of Existing Notes will be deemed to have tendered the
entire aggregate principal amount represented by the column labeled
"Aggregate Principal Amount Represented by Certificate(s)."
(2) The minimum permitted tender is $1,000 in principal amount of Existing
Notes. All tenders must be in integral multiples of $1,000.
/ / CHECK HERE IF ANY TENDERED EXISTING NOTE CERTIFICATES ARE ENCLOSED
HEREWITH.
/ / CHECK HERE IF ANY TENDERED EXISTING NOTE CERTIFICATES ARE BEING DELIVERED
BY BOOK-ENTRY TRANSFER MADE TO THE ACCOUNT MAINTAINED BY THE EXCHANGE AGENT
WITH DTC AND COMPLETE THE FOLLOWING (FOR USE BY ELIGIBLE INSTITUTIONS (AS
HEREINAFTER DEFINED) ONLY):
Name of Tendering Institution: _____________________________________________
Account Number: ____________________________________________________________
Transaction Code Number: ___________________________________________________
/ / CHECK HERE IF TENDERED EXISTING NOTES ARE BEING DELIVERED PURSUANT TO A
NOTICE OF GUARANTEED DELIVERY ENCLOSED HEREWITH AND COMPLETE THE FOLLOWING
(FOR USE BY ELIGIBLE INSTITUTIONS ONLY):
Name of Registered Holder of Existing Note(s): _____________________________
Date of Execution of Notice of Guaranteed Delivery: ________________________
Window Ticket Number (if available): _______________________________________
Name of Institution which Guaranteed Delivery: _____________________________
Account Number (if delivered by book-entry transfer): ______________________
3
<PAGE>
/ / CHECK HERE IF YOU ARE A BROKER-DEALER AND WISH TO RECEIVE 10 ADDITIONAL
COPIES OF THE PROSPECTUS AND 10 COPIES OF ANY AMENDMENTS OR SUPPLEMENTS
THERETO.
Name: ______________________________________________________________________
Address: ___________________________________________________________________
___________________________________________________________________
- -------------------------------------------
SPECIAL ISSUANCE INSTRUCTIONS
(SEE INSTRUCTIONS 1, 6, 7 AND 8)
To be completed ONLY (i) if the New Notes issued in exchange for Existing
Notes, certificates for Existing Notes in a principal amount not exchanged
for New Notes, or (if Existing Notes (if any) not tendered for exchange, are
to be issued in the name of someone other than the undersigned or (ii) if
Existing Notes tendered by book-entry transfer below which are not exchanged
are to be returned by credit to an account maintained at DTC.
Issue to:
Name _______________________________________________________________________
(PLEASE PRINT)
Address ____________________________________________________________________
____________________________________________________________________________
____________________________________________________________________________
(INCLUDE ZIP CODE)
__________________________________________________________________________
(TAX IDENTIFICATION OR SOCIAL SECURITY NO.)
Credit Existing Notes not exchanged and delivered by book-entry transfer
to DTC account set forth below:
____________________________________________________________________________
(ACCOUNT NUMBER)
- ------------------------------------------------------
- ------------------------------------------------------
SPECIAL DELIVERY
(SEE INSTRUCTIONS 1, 6, 7 AND 8)
To be completed ONLY if the New Notes in exchange for Existing Notes,
certificates for Existing Notes in a principal amount not exchanged for New
Notes, or Existing Notes if any) not tendered for exchange, are to be mailed
or delivered (i) to someone other than the undersigned or (ii) to the
undersigned at an address other than the address shown below the
undersigned's signature.
Mail or deliver to:
Name _______________________________________________________________________
(PLEASE PRINT)
Address ____________________________________________________________________
____________________________________________________________________________
____________________________________________________________________________
(INCLUDE ZIP CODE)
__________________________________________________________________________
(TAX IDENTIFICATION OR SOCIAL SECURITY NO.)
- -----------------------------------------------------
4
<PAGE>
BENEFICIAL OWNER(S) RESIDENCE
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------
STATE OF DOMICILE/PRINCIPAL PLACE OF
BUSINESS OF EACH BENEFICIAL OWNER OF PRINCIPAL AMOUNT OF EXISTING NOTES HELD
EXISTING NOTES FOR ACCOUNT OF BENEFICIAL OWNER(S)
- ----------------------------------------- -----------------------------------------
<S> <C>
</TABLE>
BENEFICIAL OWNER(S) PURCHASER STATUS
The beneficial owner of each of the Existing Notes described herein is
(check the box that applies):
/ / A "Qualified Institutional Buyer" (as defined in Rule 144A under the
Securities Act)
/ / An "Accredited Investor" (as defined in Rule 501(a)(1), (2), (3) or (7)
under the Securities Act)
/ / A non "U.S. person" (as defined in Regulation S of the Securities Act)
that purchased the Existing Notes outside the United States in
accordance with Rule 904 of the Securities Act
/ / Other (describe)
SIGNATURES MUST BE PROVIDED BELOW
PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY
Ladies and Gentlemen:
Pursuant to the offer by B&G Foods, Inc., a Delaware corporation (the
"Company"), upon the terms and subject to the conditions set forth in the
Prospectus dated January [ ], 1998 (the "Prospectus") and this Letter of
Transmittal (the "Letter of Transmittal"), which together with the Prospectus
constitutes the Company's offer (the "Exchange Offer") to exchange $1,000
principal amount of its 9 5/8% Senior Subordinated Notes due 2007 (the "New
Notes") for each $1,000 principal amount of its outstanding 9 5/8% Senior
Subordinated Notes due 2007 (the "Existing Notes"), the undersigned hereby
tenders to the Company for exchange the Existing Notes indicated above.
Capitalized terms used but not defined herein have the respective meanings
ascribed to them in the Prospectus.
By executing this Letter of Transmittal and subject to and effective upon
acceptance for exchange of the Existing Notes tendered for exchange herewith,
the undersigned will have irrevocably sold, assigned, transferred and exchanged,
to the Company, all right, title and interest in, to and under all of the
Existing Notes tendered for exchange hereby, and hereby will have appointed the
Exchange Agent as the true and lawful agent and attorney-in-fact (with full
knowledge that the Exchange Agent also acts as agent of the Company) of such
holder of Existing Notes with respect to such Existing Notes, with full power of
substitution to (i) deliver certificates representing such Existing Notes, or
transfer ownership of such Existing Notes on the account books maintained by DTC
(together, in any such case, with all accompanying evidences of transfer and
authenticity), to the Company, (ii) present and deliver such Existing Notes for
transfer on the books of the Company and (iii) receive all benefits and
otherwise exercise all rights and incidents of beneficial ownership with respect
to such Existing Notes, all in accordance with the terms of the Exchange Offer.
The power of attorney granted in this paragraph shall be deemed to be
irrevocable and coupled with an interest.
The undersigned hereby represents and warrants that (i) the undersigned is
the owner; (ii) has a net long position within the meaning of Rule 14e-4 under
the Exchange Act ("Rule 14e-4") equal to or greater
5
<PAGE>
than the principal amount of Existing Notes tendered hereby; (iii) the tender of
such Existing Notes complies with Rule 14e-4 (to the extent that Rule 14e-4 is
applicable to such exchange); (iv) the undersigned has full power and authority
to tender, exchange, assign and transfer the Existing Notes and (v) that when
such Existing Notes are accepted for exchange by the Company, the Company will
acquire good and marketable title thereto, free and clear of all liens,
restrictions, charges and encumbrances and not subject to any adverse claims.
The undersigned will, upon receipt, execute and deliver any additional documents
deemed by the Exchange Agent or the Company to be necessary or desirable to
complete the exchange, assignment and transfer of the Existing Notes tendered
for exchange hereby.
By tendering, the undersigned hereby further represents to the Company that
(i) the New Notes to be acquired by the undersigned in exchange for the Existing
Notes tendered hereby and any beneficial owner(s) of such Existing Notes in
connection with the Exchange Offer will be acquired by the undersigned and such
beneficial owner(s) in the ordinary course of business of the undersigned, (ii)
the undersigned have no arrangement or understanding with any person to
participate in the distribution of the New Notes, (iii) the undersigned and each
beneficial owner acknowledge and agree that any person who is a broker-dealer
registered under the Exchange Act or is participating in the Exchange Offer for
the purpose of distributing the New Notes must comply with the registration and
prospectus delivery requirements of the Securities Act in connection with a
secondary resale transaction of the New Notes acquired by such person and cannot
rely on the position of the staff of the Securities and Exchange Commission set
forth in certain no-action letters, (iv) the undersigned and each beneficial
owner understand that a secondary resale transaction described in clause (iii)
above and any resales of Exchange Notes obtained by the undersigned in exchange
for the Existing Notes acquired by the undersigned directly from the Company
should be covered by an effective registration statement containing the selling
securityholder information required by Item 507 or Item 508, as applicable, of
Regulation S-K of the Commission and (vi) neither the undersigned nor any
beneficial owner is an "affiliate," as defined under Rule 405 under the
Securities Act, of the Company. If the undersigned is a broker-dealer that will
receive New Notes for its own account in exchange for Existing Notes that were
acquired as a result of market-making activities or other trading activities, it
acknowledges that it will deliver a prospectus meeting the requirements of the
Securities Act in connection with any resale of such New Notes; however, by so
acknowledging and by delivering a prospectus, the undersigned will not be deemed
to admit that it is an "underwriter" within the meaning of the Securities Act.
For purposes of the Exchange Offer, the Company will be deemed to have
accepted for exchange and to have exchanged validly tendered Existing Notes if,
as and when the Company gives oral or written notice thereof to the Exchange
Agent. Tenders of Existing Notes for exchange may be withdrawn at any time prior
to 5:00 p.m., New York City time, on the Expiration Date. See "The Exchange
Offer--Withdrawal of Tenders" in the Prospectus. Any Existing Notes tendered by
the undersigned and not accepted for exchange will be returned to the
undersigned at the address set forth above unless otherwise indicated in the box
above entitled "Special Delivery Instructions" as promptly as practicable after
the Expiration Date.
The undersigned acknowledges that the Company's acceptance of Existing Notes
validly tendered for exchange pursuant to any one of the procedures described in
the section of the Prospectus entitled "The Exchange Offer" 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.
Unless otherwise indicated in the box entitled "Special Issuance
Instructions," please return any Existing Notes not tendered for exchange in the
name(s) of the undersigned. Similarly, unless otherwise indicated in the box
entitled "Special Delivery Instructions," please mail any certificates for
Existing Notes not tendered or exchanged (and accompanying documents, as
appropriate) to the undersigned at the address shown below the undersigned's
signature(s). In the event that both "Special Issuance Instructions" and
"Special Delivery Instructions" are completed, please issue the certificates
representing the New Notes issued in exchange for the Existing Notes accepted
for exchange in the name(s) of, and return any Existing Notes not tendered for
exchange or not exchanged to, the person(s) so indicated. The undersigned
recognizes that the Company has no obligation pursuant to the "Special Issuance
Instructions" and
6
<PAGE>
"Special Delivery Instructions" to transfer any Existing Notes from the name of
the holder of Existing Note(s) thereof if the Company does not accept for
exchange any of the Existing Notes so tendered for exchange or if such transfer
would not be in compliance with any transfer restrictions applicable to such
Existing Note(s).
In order to validly tender Existing Notes for exchange, holders of Existing
Notes must complete, execute, and deliver this Letter of Transmittal.
Except as stated in the Prospectus, all authority herein conferred or agreed
to be conferred shall survive the death, incapacity, or dissolution of the
undersigned, and any obligation of the undersigned hereunder shall be binding
upon the heirs, personal representatives, successors and assigns of the
undersigned. Except as otherwise stated in the Prospectus, this tender for
exchange of Existing Notes is irrevocable.
SIGN HERE
----------------------------------------------------------------------------
----------------------------------------------------------------------------
SIGNATURE(S) OF OWNER(S)
Dated: ______, 199__
Must be signed by the registered holder(s) of Existing Notes exactly as
name(s) appear(s) on certificate(s) representing the Existing Notes or on a
security position listing or by person(s) authorized to become registered
Existing Note holder(s) by certificates and documents transmitted herewith.
If signature is by trustees, executors, administrators, guardians,
attorneys-in-fact, officers of corporations or others acting in a fiduciary
or representative capacity, please provide the following information. (See
Instruction 6).
Name(s) ____________________________________________________________________
____________________________________________________________________________
(PLEASE PRINT)
Capacity (full title): _____________________________________________________
Address ____________________________________________________________________
____________________________________________________________________________
(INCLUDE ZIP CODE)
Principal place of business (if different from address listed above):
Area Code and Telephone No.: ( )
Tax Identification or Social Security Nos.: ________________________________
Please complete Substitute Form W-9
GUARANTEE OF SIGNATURE(S)
(SIGNATURE(S) MUST BE GUARANTEED IF REQUIRED BY INSTRUCTION 1)
Authorized Signature: ______________________________________________________
Dated: _________________________________________________________________
Name and Title: ________________________________________________________
(PLEASE PRINT)
Name of Firm: ______________________________________________________________
7
<PAGE>
INSTRUCTIONS
FORMING PART OF THE TERMS AND CONDITIONS OF THE EXCHANGE OFFER
1. GUARANTEE OF SIGNATURES. Except as otherwise provided below, all
signatures on this Letter of Transmittal must be guaranteed by an institution
which is (1) a member firm of a registered national securities exchange or of
the National Association of Securities Dealers, Inc., (2) a commercial bank or
trust company having an office or correspondent in the United States, or (3) an
"eligible guarantor institution" within the meaning of Rule 17Ad-15 under the
Securities Exchange Act of 1934 which is a member of one of the following
recognized Signature Guarantee Programs (an "Eligible Institution"):
a. The Securities Transfer Agents Medallion Program (STAMP)
b. The New York Stock Exchange Medallion Signature Program (MSP)
c. The Stock Exchange Medallion Program (SEMP)
Signatures on this Letter of Transmittal need not be guaranteed (i) if this
Letter of Transmittal is signed by the registered holder(s) of the Existing
Notes tendered herewith and such registered holder(s) have not completed the box
entitled "Special Issuance Instructions" or the box entitled "Special Delivery
Instructions" on this Letter of Transmittal or (ii) if such Existing Notes are
tendered for the account of an Eligible Institution. IN ALL OTHER CASES, ALL
SIGNATURES MUST BE GUARANTEED BY AN ELIGIBLE INSTITUTION.
2. DELIVERY OF THIS LETTER OF TRANSMITTAL AND EXISTING NOTES; GUARANTEED
DELIVERY PROCEDURES. This Letter of Transmittal is to be completed by holders of
Existing Notes (i) if certificates are to be forwarded herewith or (ii) if
tenders are to be made pursuant to the procedures for tender by book-entry
transfer or guaranteed delivery set forth in the section of the Prospectus
entitled "The Exchange Offer." Certificates for all physically tendered Existing
Notes or any timely confirmation of a book-entry transfer (a "Book-Entry
Confirmation"), as well as a properly completed and duly executed copy of this
Letter of Transmittal or facsimile hereof, and any other documents required by
this Letter of Transmittal, must be received by the Exchange Agent at its
address set forth on the cover of this Letter of Transmittal prior to 5:00 p.m.,
New York City time, on the Expiration Date. Holders of Existing Notes who elect
to tender Existing Notes and (i) whose Existing Notes are not immediately
available or (ii) who cannot deliver the Existing Notes, this Letter of
Transmittal or other required documents to the Exchange Agent prior to 5:00
p.m., New York City time, on the Expiration Date, must tender their Existing
Notes according to the guaranteed delivery procedures set forth in the
Prospectus. Holders may have such tender effected if: (a) such tender is made
through an Eligible Institution; (b) prior to 5:00 p.m., New York City time, on
the Expiration Date, the Exchange Agent has received from such Eligible
Institution a properly completed and duly executed Notice of Guaranteed
Delivery, setting forth the name and address of the holder of such Existing
Notes, the certificate number(s) of such Existing Notes and the principal amount
of Existing Notes tendered for exchange, stating that tender is being made
thereby and guaranteeing that, within five New York Stock Exchange trading days
after the Expiration Date, this Letter of Transmittal (or a facsimile thereof),
together with the certificate(s) representing such Existing Notes (or a
Book-Entry Confirmation), in proper form for transfer, and any other documents
required by this Letter of Transmittal, will be deposited by such Eligible
Institution with the Exchange Agent; and a properly executed Letter of
Transmittal (or facsimile hereof), as well as the certificate(s) for all
tendered Existing Notes in proper form for transfer or a Book-Entry
Confirmation, together with any other documents required by this Letter of
Transmittal, are received by the Exchange Agent within five New York Stock
Exchange trading days after the Expiration Date.
THE METHOD OF DELIVERY OF EXISTING NOTES, THIS LETTER OF TRANSMITTAL AND ALL
OTHER REQUIRED DOCUMENTS TO THE EXCHANGE AGENT IS AT THE ELECTION AND RISK OF
THE HOLDER. EXCEPT AS OTHERWISE PROVIDED BELOW, THE DELIVERY WILL BE DEEMED MADE
ONLY WHEN ACTUALLY RECEIVED OR CONFIRMED BY THE EXCHANGE AGENT. INSTEAD OF
DELIVERY BY MAIL, IT IS RECOMMENDED THAT HOLDERS USE AN
8
<PAGE>
OVERNIGHT OR HAND DELIVERY SERVICE, PROPERLY INSURED. IN ALL CASES, SUFFICIENT
TIME SHOULD BE ALLOWED TO ASSURE DELIVERY TO THE EXCHANGE AGENT BEFORE THE
EXPIRATION DATE. NEITHER THIS LETTER OF TRANSMITTAL NOR ANY EXISTING 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.
No alternative, conditional or contingent tenders will be accepted. All
tendering holders of Existing Notes, by execution of this Letter of Transmittal
(or facsimile here, if applicable), waive any right to receive notice of the
acceptance of their Existing Notes for exchange.
3. INADEQUATE SPACE. If the space provided in the box entitled "Description
of Existing Notes" above is inadequate, the certificate numbers and principal
amounts of the Existing Notes being tendered should be listed on a separate
signed schedule affixed hereto.
4. WITHDRAWALS. A tender of Existing Notes may be withdrawn at any time
prior to 5:00 p.m., New York City time, on the Expiration Date by delivery of
written or facsimile notice of withdrawal to the Exchange Agent at the address
set forth on the cover of this Letter of Transmittal. To be effective, a notice
of withdrawal of Existing Notes must (i) specify the name of the person having
deposited the Existing Notes to be withdrawn (the "Depositor"), (ii) identify
the Existing Notes to be withdrawn (including the certificate number or numbers
and aggregate principal amount of such Existing Notes), and (iii) be signed by
the holder of the Existing Notes in the same manner as the original signature on
the Letter of Transmittal by which such Existing Notes were tendered (including
any required signature guarantees). All questions as to the validity, form and
eligibility (including time of receipt) of such notices will be determined by
the Company in its sole discretion, whose determination shall be final and
binding on all parties. Any Existing Notes so withdrawn will be deemed not to
have been validly tendered for purposes of the Exchange Offer and no New Notes
will be issued with respect thereto unless the Existing Notes so withdrawn are
validly retendered. Properly withdrawn Existing Notes may be retendered by
following one of the procedures described in the section of the Prospectus
entitled "The Exchange Offer--Procedures for Tendering Existing Notes" at any
time prior to 5:00 p.m., New York City time, on the Expiration Date.
5. PARTIAL TENDERS. Tenders of Existing Notes will be accepted only in
integral multiples of $1,000 principal amount. If a tender for exchange is to be
made with respect to less than the entire principal amount of any Existing
Notes, fill in the principal amount of Existing Notes which are tendered for
exchange in column (4) of the box entitled "Description of Tendered Notes," as
more fully described in the footnotes thereto. In case of a partial tender for
exchange, a new certificate, in fully registered form, or the remainder of the
principal amount of the Existing Notes, will be sent to the holders of Existing
Notes unless otherwise indicated in the appropriate box on this Letter of
Transmittal as promptly as practicable after the expiration or termination of
the Exchange Offer.
6. SIGNATURES ON THIS LETTER OF TRANSMITTAL; ASSIGNMENT AND ENDORSEMENTS.
(a) The signature(s) of the holder of Existing Notes on this Letter of
Transmittal must correspond with the name(s) written on the face of the
Existing Notes without alteration, enlargement or any change whatsoever.
(b) If tendered Existing Notes are owned of record by two or more joint
owners, all such owners must sign this Letter of Transmittal.
(c) If any tendered Existing Notes are registered in different names on
several certificates, it will be necessary to complete, sign and submit as
many separate copies of this Letter of Transmittal and any necessary or
required documents as there are different registrations or certificates.
(d) When this Letter of Transmittal is signed by the holder of the
Existing Notes listed and transmitted hereby, no endorsements of Existing
Notes or bond powers are required. If, however, Existing Notes not tendered
or not accepted are to be issued or returned in the name of a person
9
<PAGE>
other than the holder of Existing Notes, then the Existing Notes transmitted
hereby must be endorsed or accompanied by a properly completed bond power,
in a form satisfactory to the Company, in either case signed exactly as the
name(s) of the holder of Existing Notes appears(s) on the Existing Notes.
Signatures on such Existing Notes or bond powers must be guaranteed by an
Eligible Institution (unless signed by an Eligible Institution).
(e) If this Letter of Transmittal or Existing 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.
(f) If this Letter of Transmittal is signed by a person other than the
registered holder of Existing Notes listed, the Existing Notes must be
endorsed or accompanied by a properly completed bond power, in either case
signed by such registered holder exactly as the name(s) of the registered
holder of Existing Notes appear(s) on the certificates. Signatures on such
Existing Notes or bond powers must be guaranteed by an Eligible Institution
(unless signed by an Eligible Institution).
7. TRANSFER TAXES. Except as set forth in this Instruction 7, the Company
will pay all transfer taxes, if any, applicable to the exchange of Existing
Notes pursuant to the Exchange Offer. If, however, a transfer tax is imposed for
any reason other than the exchange of the Existing Notes pursuant to the
Exchange Offer, then the amount of any such transfer taxes (whether imposed on
the registered holder or any other persons) will be payable by the tendering
holder. If satisfactory evidence of payment of such taxes or exemptions
therefrom is not submitted with this Letter of Transmittal, the amount of such
transfer taxes will be billed directly to such tendering holder.
8. SPECIAL ISSUANCE AND DELIVERY INSTRUCTIONS. If the New Notes are to be
issued, or if any Existing Notes not tendered for exchange are to be issued or
sent to someone other than the holder of Existing Notes or to an address other
than that shown above, the appropriate boxes on this Letter of Transmittal
should be completed. Holders of Existing Notes tendering Existing Notes by
book-entry transfer may request that Existing Notes not accepted be credited to
such account maintained at DTC as such holder of Existing Notes may designate.
9. IRREGULARITIES. All questions as to the validity, form, eligibility
(including time of receipt), compliance with conditions, acceptance and
withdrawal of tendered Existing Notes will be determined by the Company in its
sole discretion, which determination will be final and binding. The Company
reserves the absolute right to reject any and all Existing Notes not properly
tendered or any Existing Notes the Company's acceptance of which would, in the
opinion of counsel for the Company, be unlawful. The Company also reserves the
right to waive any defects, irregularities or conditions of tender as to
particular Existing 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 Existing 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 Existing Notes, neither the Company, the Exchange Agent nor any other person
shall incur any liability for failure to give such notification. Tenders of
Existing Notes will not be deemed to have been made until such defects or
irregularities have been cured or waived. Any Existing 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, as soon as practicable following the Expiration Date.
10. WAIVER OF CONDITIONS. The Company reserves the absolute right to waive,
amend or modify certain of the specified conditions as described under "The
Exchange Offer--Certain Conditions to the Exchange
10
<PAGE>
Offer" in the Prospectus in the case of any Existing Notes tendered (except as
otherwise provided in the Prospectus).
11. MUTILATED, LOST, STOLEN OR DESTROYED EXISTING NOTES. Any tendering
Holder whose Existing Notes have been mutilated, lost, stolen or destroyed
should contact the Exchange Agent at the address below for further instructions:
The Bank of New York
101 Barclay Street, 7E
New York, New York 10286
Telephone: (212) 815-6333
12. REQUESTS FOR INFORMATION OR ADDITIONAL COPIES. Requests for information
or for additional copies of the Prospectus and this Letter of Transmittal may be
directed to the Exchange Agent at the address or telephone number set forth on
the cover of this Letter of Transmittal.
IMPORTANT: This Letter of Transmittal (or a facsimile thereof, if
applicable) together with any certificates, the confirmation of book-entry or
the Notice of Guaranteed Delivery, and all other required documents must be
received by the Exchange Agent prior to 5:00 p.m., New York City time, on the
Expiration Date.
IMPORTANT TAX INFORMATION
Under current federal income tax law, a holder of Existing Notes whose
tendered Existing Notes are accepted for exchange may be subject to backup
withholding unless the holder provides the Company (as payor), through the
Exchange Agent, with either (i) such holder's correct taxpayer identification
number ("TIN") on Substitute Form W-9 attached hereto, certifying that the TIN
provided on Substitute Form W-9 is correct (or that such holder of Existing
Notes is awaiting a TIN) and that (A) the holder of Existing Notes has not been
notified by the Internal Revenue Service that he or she is subject to backup
withholding as a result of a failure to report all interest or dividends or (B)
the Internal Revenue Service has notified the holder of Existing Notes that he
or she is subject to backup withholding; or (ii) an adequate basis for exemption
from backup withholding. If such holder of Existing Notes is an individual, the
TIN is such holder's social security number. If the Exchange Agent is not
provided with the correct taxpayer identification number, the holder of Existing
Notes may be subject to certain penalties imposed by the Internal Revenue
Service.
Certain holders of Existing Notes (including, among others, all corporations
and certain foreign individuals) are not subject to these backup withholding and
reporting requirements. Exempt holders of Existing Notes should indicate their
exempt status on Substitute Form W-9. A foreign individual may qualify as an
exempt recipient by submitting to the Exchange Agent a properly completed
Internal Revenue Service Form W-8 (which the Exchange Agent will provide upon
request) signed under penalty of perjury, attesting to the holder's exempt
status. See the enclosed Guidelines for Certification of Taxpayer Identification
Number on Substitute Form W-9 (the "Guidelines") for additional instructions.
If backup withholding applies, the Company is required to withhold 31% of
any payment made to the holder of Existing Notes or other payee. Backup
withholding is not an additional federal income tax. Rather, the federal income
tax liability of persons subject to backup withholding will be reduced by the
amount of tax withheld. If withholding results in an overpayment of taxes, a
refund may be obtained from the Internal Revenue Service.
The holder of Existing Notes is required to give the Exchange Agent the TIN
(e.g., social security number or employer identification number) of the record
owner of the Existing Notes. If the Existing Notes are held in more than one
name or are not held in the name of the actual owner, consult the enclosed
Guidelines for additional guidance regarding which number to report.
11
<PAGE>
<TABLE>
<S> <C> <C>
PAYER'S NAME:
SUBSTITUTE PART 1--PLEASE PROVIDE YOUR TIN IN Social Security Number
THE BOX AT RIGHT AND CERTIFY BY OR
SIGNING AND DATING BELOW
Employer Identification Number
FORM W-9 PART 2--CERTIFICATION Under Penalties of Perjury, I certify that
DEPARTMENT OF THE TREASURY (1) The number shown on this form is my current taxpayer identification
INTERNAL REVENUE SERVICE number (or I am waiting for a number to be issued to me) and
(2) I am not subject to backup withholding either because I have not
been notified by the Internal Revenue Service (the "IRS") that I am
subject to backup withholding as a result of a failure to report
all interest or dividends, or the IRS has notified me that I am no
longer subject to backup withholding.
PAYER'S REQUEST FOR CERTIFICATE INSTRUCTIONS--You must cross out item (2) in Part 2 above if
TAXPAYER IDENTIFICATION you have been notified by the IRS that you are subject to backup
NUMBER (TIN) withholding because of underreporting interest or dividends on your tax
return. However, if after being notified by the IRS that you are subject
to backup withholding you receive another notification from the IRS
stating that you are no longer subject to backup withholding, do not
cross out item (2).
Signature Date
Name
Address
City State Zip Code
PART 3--Awaiting TIN / /
</TABLE>
NOTE: FAILURE TO COMPLETE AND RETURN THIS FORM MAY RESULT IN BACKUP WITHHOLDING
OF 31% OF ANY PAYMENT 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
YOU MUST COMPLETE THE FOLLOWING CERTIFICATE IF YOU CHECK THE BOX IN PART 3
OF SUBSTITUTE FORM W-9
PAYOR'S NAME: NORWEST BANK MINNESOTA, NATIONAL ASSOCIATION
CERTIFICATE OF AWAITING AT TAXPAYER IDENTIFICATION NUMBER
I certify under penalties of perjury that a taxpayer identification
number has not been issued to me, and either (a) I have mailed or delivered
an application to receive a taxpayer identification number to the
appropriate Internal Revenue Service Center or Social Security
Administration Office or (b) I intend to mail or deliver such an application
in the near future. I understand that if I do not provide a taxpayer
identification number with sixty (60) days, 31% of all reportable payments
made to me thereafter will be withheld until I provide such a number.
<TABLE>
<S> <C>
-------------------------------------------- ----------------------------
Signature Date
</TABLE>
12
<PAGE>
EXHIBIT 99.2
NOTICE OF GUARANTEED DELIVERY
WITH RESPECT TO
9 5/8% SENIOR SUBORDINATED NOTES DUE 2007
THIS FORM, OR ONE SUBSTANTIALLY EQUIVALENT HERETO, MUST BE USED BY ANY
HOLDER OF 9 5/8% SENIOR SUBORDINATED NOTES DUE 2007 (THE "EXISTING NOTES") OF
B&G FOODS, INC., A DELAWARE CORPORATION (THE "COMPANY"), WHO WISHES TO TENDER
EXISTING NOTES PURSUANT TO THE COMPANY'S EXCHANGE OFFER, AS DEFINED IN THE
PROSPECTUS DATED JANUARY [ ], 1998 (THE "PROSPECTUS") AND (I) WHOSE EXISTING
NOTES ARE NOT IMMEDIATELY AVAILABLE OR (II) WHO CANNOT DELIVER SUCH EXISTING
NOTES OR ANY OTHER DOCUMENTS REQUIRED BY THE LETTER OF TRANSMITTAL ON OR BEFORE
THE EXPIRATION DATE (AS DEFINED IN THE PROSPECTUS) OR (III) WHO CANNOT COMPLY
WITH THE BOOK-ENTRY TRANSFER PROCEDURE ON A TIMELY BASIS. SUCH FORM MAY BE
DELIVERED BY FACSIMILE TRANSMISSION, MAIL OR HAND DELIVERY TO THE EXCHANGE
AGENT. SEE "THE EXCHANGE OFFER--GUARANTEED DELIVERY PROCEDURES" IN THE
PROSPECTUS.
B&G FOODS, INC.
NOTICE OF GUARANTEED DELIVERY
To: The Bank of New York
The Exchange Agent
<TABLE>
<CAPTION>
BY REGISTERED OR CERTIFIED MAIL: BY HAND OR OVERNIGHT COURIER:
<S> <C>
The Bank of New York The Bank of New York
101 Barclay Street, 7E 101 Barclay Street
New York, New York 10286 Corporate Trust Services
Attn: Reorganization Section, Window Ground Level
Arwen Gibbons New York, New York 10286
Attn: Reorganization Section,
Arwen Gibbons
</TABLE>
BY FACSIMILE FOR ELIGIBLE INSTITUTIONS ONLY:
(212) 571-3080
For General Questions or to Confirm
Receipt of Notice of Guaranteed
Delivery by Telephone:
(212) 815-6333
DELIVERY OF THIS NOTICE OF GUARANTEED DELIVERY TO AN ADDRESS OTHER THAN AS
SET FORTH ABOVE OR TRANSMISSION VIA A FACSIMILE NUMBER OTHER THAN AS SET FORTH
ABOVE WILL NOT CONSTITUTE A VALID DELIVERY.
<PAGE>
PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY
Ladies and Gentlemen:
The undersigned hereby tenders to the Company upon the terms and subject to
the conditions set forth in the Prospectus and the related Letter of
Transmittal, receipt of which is hereby acknowledged, the principal amount of
Existing Notes specified below pursuant to the guaranteed delivery procedures
set forth under the caption "The Exchange Offer--Guaranteed Delivery Procedures"
in the Prospectus. By so tendering, the undersigned does hereby make, at and as
of the date hereof, the representations and warranties of a tendering Holder of
Existing Notes set forth in the Letter of Transmittal. The undersigned hereby
tenders the Existing Notes listed below:
<TABLE>
<CAPTION>
CERTIFICATE NUMBERS
(IF AVAILABLE) PRINCIPAL AMOUNT TENDERED
- ------------------------------------ ------------------------------------
<S> <C>
</TABLE>
All authority herein conferred or agreed to be conferred shall survive the
death, incapacity, or dissolution of the undersigned and every obligation of the
undersigned hereunder shall be binding upon the heirs, personal representatives,
successors and assigns of the undersigned.
If Existing Notes will be tendered by book-entry transfer:
____________________________________________________________________________
SIGN HERE
Name of Tendering Institution: _____________________________________________
SIGNATURE(S)
The Depository Trust Company Account No.:
____________________________________________________________________________
NAME(S) (PLEASE PRINT)
__________________________________________________________________________
ADDRESS
__________________________________________________________________________
ZIP CODE
__________________________________________________________________________
AREA CODE AND TELEPHONE NO.
__________________________________________________________________________
DATE:
2
<PAGE>
GUARANTEE
(NOT TO BE USED FOR SIGNATURE GUARANTEE)
The undersigned, a participant in a Recognized Signature Guarantee
Medallion Program, guarantees deposit with the Exchange Agent of the Letter
of Transmittal (or facsimile thereof), together with the Existing Notes
tendered hereby in proper form for transfer, or confirmation of the
book-entry transfer of such Existing Notes into the Exchange Agent's account
at the Depository Trust Company, pursuant to the procedure for book-entry
transfer set forth in the Prospectus, and any other required documents, all
by 5:00 p.m., New York City time, on the fifth New York Stock Exchange
trading day following the Expiration Date (as defined in the Prospectus).
SIGN HERE: _________________________________________________________________
Name of Firm: ______________________________________________________________
Authorized Signature: ______________________________________________________
Name (Please Print): _______________________________________________________
Address: ___________________________________________________________________
Zip Code: __________________________________________________________________
Area Code and Telephone No.: _______________________________________________
Date: ______________________________________________________________________
DO NOT SEND CERTIFICATES FOR EXISTING NOTES WITH THIS FORM. ACTUAL
SURRENDER OF CERTIFICATES FOR EXISTING NOTES MUST BE MADE PURSUANT TO, AND
BE ACCOMPANIED BY, A COPY OF THE PREVIOUSLY EXECUTED LETTER OF TRANSMITTAL.
3
<PAGE>
INSTRUCTIONS
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 one of its addresses set forth in the cover hereof prior to the
Expiration Date. The method of delivery of this Notice of Guaranteed Delivery
and all other required documents to the Exchange Agent is at the election and
risk of the Holder but, except as otherwise provided below, the delivery will be
deemed made only when actually received by the Exchange Agent. Instead of
delivery by mail, it is recommended that holders use an overnight or hand
delivery service, properly insured. If such delivery is by mail, it is
recommended that the Holder use properly insured, registered mail with return
receipt requested. For a full description of the guaranteed delivery procedures,
see the Prospectus under the caption "The Exchange Offer-- Guaranteed Delivery
Procedures." In all cases, sufficient time should be allowed to assure timely
delivery. No Notice of Guaranteed Delivery should be sent to the Company.
2. SIGNATURE ON THIS NOTICE OF GUARANTEED DELIVERY; GUARANTEE OF SIGNATURES.
If this Notice of Guaranteed Delivery is signed by the registered Holder(s) of
the Existing Notes referred to herein, then the signature must correspond with
the name(s) as written on the face of the Existing Notes without alteration,
enlargement or any change whatsoever.
If this Notice of Guaranteed Delivery is signed by a person other than the
registered Holder(s) of any Existing Notes listed, this Notice of Guaranteed
Delivery must be accompanied by a properly completed bond power signed as the
name of the registered Holder(s) appear(s) on the face of the Existing Notes
without alteration, enlargement or any change whatsoever.
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, unless waived by the Company, evidence satisfactory
to the Company of their authority so to act must be submitted with this Notice
of Guaranteed Delivery.
3. REQUESTS FOR ASSISTANCE OR ADDITIONAL COPIES. Questions relating to the
Exchange Offer or the procedure for consenting and tendering as well as requests
for assistance or for additional copies of the Prospectus, the Letter of
Transmittal and this Notice of Guaranteed Delivery, may be directed to the
Exchange Agent at the address set forth on the cover hereof or to your broker,
dealer, commercial bank or trust company.
4
