As filed with the Securities and Exchange Commission on July 15, 1996
Registration No. 33-
SECURITIES AND EXCHANGE COMMISSION
450 FIFTH STREET, N.W.
WASHINGTON, D.C. 20549
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FORM S-3
REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933
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BPI PACKAGING TECHNOLOGIES, INC.
(Exact name of registrant as specified in its charter)
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DELAWARE 04-2997486
(State or other (I.R.S. Employer
jurisdiction of Identification No.)
incorporation or
organization)
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DENNIS N. CAULFIELD, PRESIDENT
455 Somerset Avenue
Dighton, Massachusetts 02764
(508) 824-8636
Facsimile (508) 822-6872
(Address, Including Zip Code and Telephone Number
of Registrant's Principal Executive Offices and Name,
Address and Telephone Number of Agent for Service)
Copies to:
NEIL H. ARONSON, ESQUIRE
MARGUERITE J. HILL, ESQUIRE
O'CONNOR, BROUDE & ARONSON
950 Winter Street, Suite 2300
Waltham, Massachusetts 02154
(617) 890-6600
Facsimile (617) 890-9261
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
From time to time after the effective date of
this Registration Statement.
If the only securities being registered on this form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [ ]
If any of the securities being registered on this Form are to be
offered on a delayed or continuous basis pursuant to Rule 415 under the
Securities Act of 1933, as amended, other than securities offered only in
connection with dividend or interest reinvestment plans, check the following
box. [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, check the following box and
list the Securities Act registration statement number of earlier effective
registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule
462(c) under the Securities Act, check the following box and list the Securities
Act registration statement number of the earlier effective registration
statement for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule
434, please check the following box. [ ]
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<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
Proposed Proposed
Title of Each Class Maximum Maximum Amount of
of Securities to Be Amount to Offering Price Aggregate Registration
Registered Be Registered Per Share (1) Offering Price(1) Fee
- ---------------------- ------------- ------------- ----------------- ---------
<S> <C> <C> <C> <C>
Common Stock,
$.01 par value
per share(2) ......... 621,500 $ 2.375 $ 1,476,062.50 $ 508.99
------------ ------------- ---------
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(1) Estimated solely for calculation of the amount of the registration fee. All shares of Common Stock
are being offered by the Selling Securityholders, who are not restricted as to the price or prices
at which such securities may be sold. It is anticipated that such securities will be offered at
prices approximating fluctuating market prices. Therefore, pursuant to Rule 457 of the Securities
Act of 1933, as amended, the registration fee has been calculated based upon the average of $2 5/16
per share and $2 7/16 per share, the closing bid and asked prices of the Company's Common Stock on
July 10, 1996, as reported by the NASDAQ/NMS Stock Market.
(2) Pursuant to Rule 416 there are also registered hereunder such additional indeterminate number of
shares of Common Stock that may become issuable pursuant to antidilution adjustments, stock splits,
stock dividends and similar adjustments.
</TABLE>
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE
OR DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT
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, AS AMENDED, OR UNTIL THIS REGISTRATION STATEMENT
SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID
SECTION 8(A), MAY DETERMINE.
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CROSS REFERENCE SHEET
PURSUANT TO ITEM 501(B)
<TABLE>
<CAPTION>
CAPTION AND SUBCAPTION
ITEM NUMBER AND CAPTION IN PROSPECTUS
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<S> <C>
1. Forepart of the Registration Statement and
Outside Front Cover Page of Prospectus............................ Outside Front Cover Page
2. Inside Front and Outside Back Cover Pages Inside Front Cover Page;
of Prospectus..................................................... Back Cover Page
3. Summary Information; Risk Factors and Ratio of Prospectus Summary; Risk
Earnings to Fixed Charges......................................... Factors; Not Applicable
4. Use of Proceeds................................................... Use of Proceeds
5. Determination of Offering Price................................... Not Applicable
6. Dilution.......................................................... Not Applicable
7. Selling Stockholders.............................................. Selling Securityholders
8. Plan of Distribution.............................................. Outside Front Cover Page;
Plan of Distribution
9. Description of the Securities to be Registered.................... Outside Front Cover Page;
Description of Securities
10. Interest of Named Experts and Counsel............................. Experts
11. Material Changes.................................................. Recent Developments
12. Incorporation of Certain Information by Reference................. Available Information;
Incorporation by Reference
13. Disclosure of Commission Position on
Indemnification for Securities Act Liabilities.................... Indemnification
</TABLE>
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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.
SUBJECT TO COMPLETION, DATED JULY 15, 1996
PROSPECTUS
BPI PACKAGING TECHNOLOGIES, INC.
621,500 SHARES OF COMMON STOCK,
$.01 PAR VALUE PER SHARE
This Prospectus relates to 621,500 shares (the "Shares") of Common
Stock, $.01 par value per share (the "Common Stock"), of BPI Packaging
Technologies, Inc., a Delaware corporation (the "Company"), as follows: (i)
421,500 shares of Common Stock issued to certain investors (the "Investors") in
the Company's 1996 Private Placement (the "1996 Private Placement"); and (ii)
200,000 shares of Common Stock issuable upon the exercise of warrants (the
"Warrants") to purchase 200,000 shares of Common Stock issued pursuant to
consulting agreements dated May 28, 1996. See "Selling Securityholders." The
Investors and consultants are sometimes hereinafter referred to as "Selling
Securityholders." All of the Shares are being registered hereunder pursuant to
the terms of certain registration rights granted to the Selling Securityholders
by the Company.
This offering (the "Offering") is not being underwritten. The shares of
Common Stock being offered hereunder may be sold by the Selling Securityholders
and/or their registered representatives from time to time at prices to be
determined at the time of such sales. There is no minimum required purchase and
there is no arrangement to have funds received by such Selling Securityholders
and/or their registered representatives placed in an escrow, trust or similar
account or arrangement, unless the proceeds come from a purchaser residing in a
state in which the sale of those securities has not yet been qualified. See
"Plan of Distribution."
The Selling Securityholders and any broker-dealer who act in connection
with the sale of Shares hereunder may be deemed to be "underwriters" as that
term is defined in the Securities Act of 1933, as amended (the "Securities
Act"), and any commission received by them and profit on any resale of the
Shares as principal might be deemed to be underwriting discounts and commissions
under the Securities Act. The Selling Securityholders will pay or assume
brokerage commissions or underwriting discounts incurred in connection with the
sale of their Shares, which commissions or discounts will not be paid or assumed
by the Company. The Company will not receive any part of the proceeds of any
sale of Common Stock by the Selling Securityholder. The Company is paying all of
the other expenses of registering the securities offered hereby under the
Securities Act estimated to be $17,000 for filing, legal, accounting and
miscellaneous fees and expenses, and has agreed to indemnify the Selling
Securityholders in certain circumstances against certain liabilities, including
liabilities under the Securities Act. See "Plan of Distribution."
The Company's Common Stock is traded on the NASDAQ National Market
System ("NASDAQ/NMS") under the symbol "BPIE." The shares of Common Stock to be
offered for sale pursuant to this Prospectus may be offered for sale on
NASDAQ/NMS or in privately negotiated transactions. On July 10, 1996, the
closing bid price of the Company's Common Stock on NASDAQ/NMS was $2 5/16 per
share.
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THESE SECURITIES INVOLVE A HIGH DEGREE OF RISK AND SHOULD ONLY BE
CONSIDERED BY PERSONS WHO CAN AFFORD THE LOSS OF THEIR ENTIRE INVESTMENT. SEE
"RISK FACTORS" BEGINNING ON PAGE 2 OF THIS PROSPECTUS.
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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.
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THE DATE OF THIS PROSPECTUS IS __________ __, 1996.
RISK FACTORS
THE COMMON STOCK OFFERED HEREBY INVOLVES A HIGH DEGREE OF RISK. THE
COMMON STOCK SHOULD NOT BE PURCHASED BY PERSONS WHO CANNOT AFFORD TO LOSE THEIR
ENTIRE INVESTMENT. PURCHASERS SHOULD CAREFULLY CONSIDER THE FOLLOWING MATTERS IN
CONNECTION WITH AN INVESTMENT IN THE COMMON STOCK IN ADDITION TO THE OTHER
INFORMATION CONTAINED OR INCORPORATED BY REFERENCE IN THIS PROSPECTUS.
INFORMATION CONTAINED OR INCORPORATED BY REFERENCE IN THIS PROSPECTUS CONTAINS
"FORWARD-LOOKING STATEMENTS" WITHIN THE MEANING OF THE PRIVATE SECURITIES
LITIGATION REFORM ACT OF 1995, WHICH STATEMENTS CAN BE IDENTIFIED BY THE USE OF
FORWARD-LOOKING TERMINOLOGY SUCH AS "MAY," "WILL," "WOULD," "CAN," "COULD,"
"INTEND," "PLAN," "EXPECT," "ANTICIPATE," "ESTIMATE" OR "CONTINUE" OR THE
NEGATIVE THEREOF OR OTHER VARIATIONS THEREON OR COMPARABLE TERMINOLOGY. THE
FOLLOWING MATTERS CONSTITUTE CAUTIONARY STATEMENTS IDENTIFYING IMPORTANT FACTORS
WITH RESPECT TO SUCH FORWARD-LOOKING STATEMENTS, INCLUDING CERTAIN RISKS AND
UNCERTAINTIES, THAT COULD CAUSE ACTUAL RESULTS TO DIFFER MATERIALLY FROM THOSE
IN SUCH FORWARD-LOOKING STATEMENTS.
PREVIOUS LOSSES; ACCUMULATED DEFICIT; NO ASSURANCE OF FUTURE PROFITS
At May 24, 1996, the Company had an accumulated stockholders' deficit
of $17,619,959. Since its inception in 1988, the Company has not operated
profitably in any fiscal year (exclusive of net income of $311,022 for its
fiscal year ending March 1, 1991, which included extraordinary income of
$337,179) and incurred a loss of $4,510,145 for the fiscal year ended February
23, 1996. No assurance can be given that the Company will be profitable or
attain improved operating results in future fiscal years.
INTENSE COMPETITION
The manufacture of plastic bags is a highly competitive industry. In
particular, the Company competes with major companies such as Tenneco, Inc.
("Tenneco") and Sonoco Products Corporation ("Sonoco"). The Company's in-store
advertising and promotion products compete in the same markets that are
dominated by Heritage Media Corporation and Catalina Marketing Corporation, both
of which offer in-store advertising and promotion products which are not related
to the floor or the FRESH-SAC(R) produce bag dispensing systems. These companies
have substantially greater research and development, marketing, financial and
human resources than the Company. In addition, competitors may succeed in
developing new or enhanced products that are more effective than any that may be
sold or developed by the Company, and such companies may also prove to be more
successful than the Company in marketing and selling such products. No assurance
can be given that the Company will be able to compete successfully with any of
these companies or achieve a greater market share than it currently possesses.
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POSSIBLE PATENT CLAIMS BY MOBIL OIL CORPORATION AND SONOCO PRODUCTS COMPANY;
POSSIBLE PAYMENT OF LICENSE FEES AND LITIGATION COSTS
Mobil Oil Corporation ("Mobil") owns a reissue patent that relates to
avoiding stress concentration and preventing the tearing of plastic bags. This
reissue patent originally was to expire in 1996. Due to a change in U.S. patent
law, the reissue patent is now extended until 1998. On December 4, 1995, Mobil
filed suit against the Company in the U.S. District Court for the District of
Delaware, Civil Action No. 95-737. Mobil also named Inteplast Corporation and
Integrated Bagging Systems Corporation as defendants in this matter. Mobil has
alleged that the Company has infringed on Mobil's rights under U.S. Patent No.
Re. 34,019 (the "Patent"), regarding the manufacture of plastic carrying bags
known as "T-shirt bags." Mobil is seeking injunctive relief prohibiting the
Company from selling products which allegedly infringe on the Patent, money
damages to compensate Mobil for the Company's alleged infringement, interest,
attorney's fees and costs. The Company intends to vigorously defend this law
suit. However, if Mobil was to succeed in this or any infringement claim against
the Company, Mobil might be able to prevent the future use, sale and manufacture
of the Company's grocery T-shirt sacks and similar products which might be found
to infringe the patent, or alternatively, might require the Company to pay Mobil
a license fee for the prior and future use of this technology. Either outcome
could have a material adverse effect on the Company's business. The Company has
been advised by patent counsel that the Patent applies to the traditional
grocery T-shirt sack and does not apply to the Company's proprietary
HANDI-SAC(TM) and FRESH-SAC(R) bag products.
In 1990, Sonoco Products Company ("Sonoco") indicated its intent to
seek licenses under a broadened reissue patent from all manufacturers of plastic
bags which utilize a particular method for holding plastic bags in a metal rack.
Sonoco has commenced litigation against several plastic bag manufacturers other
than the Company. The United States District Court for the Central District of
California entered summary judgment in February 1994 for the defendants in a
suit relating to alleged patent infringement by the defendants. The court
declared Sonoco's three reissue claims to be invalid. The court is also allowing
the defendants' counterclaim against Sonoco for unfair competition to continue.
It is expected that Sonoco will appeal this judgment. Subsequent to this
decision, the Company filed suit against Sonoco alleging infringement of the
Company's patent by Sonoco. In the first quarter of Fiscal 1997, the patent
infringement suit against Sonoco and Sonoco counterclaims against the Company
were dismissed by mutual agreement of the parties.
If Sonoco was to appeal the February 1994 judgment which declared
Sonoco's three reissue claims invalid, and have that judgment reversed, Sonoco
could institute a patent infringement suit against the Company. If Sonoco was to
succeed in any infringement claim against the Company, it might be able to
prevent the future use, sale and manufacture of certain of the Company's
products which use racking systems. Alternatively, the Company could be required
to pay a license fee for the prior and future use of this technology which might
place the Company at a competitive disadvantage in the sale of certain of its
products. Either outcome could have a material adverse effect on the Company's
business. Infringement of any patent may also render the Company liable to
purchasers and end-users of the infringing product. The Company has been advised
by patent
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counsel that the Sonoco patent applies to the traditional grocery T-shirt sack
and does not apply to the Company's proprietary HANDI-SAC(TM) and FRESH-SAC(R)
bag products.
No assurance can be given that the Company's products will not infringe
patents or rights of others. The Company could incur substantial costs if
required to defend itself in any patent litigation.
DEPENDENCE ON PATENTS AND PROPRIETARY TECHNOLOGY
In 1993, the Company was issued a United States patent for the
dispensing system used in conjunction with its FRESH-SAC(R) product and other
T-shirt sack products and has filed patent applications for this dispensing
system in approximately 20 foreign countries. The Company has filed patent
applications in the United States and approximately 14 foreign countries for the
FRESH- SAC(R) HMWPE material, and was notified that this patent has been issued
in a foreign country. Notwithstanding the issuance of the patent in a foreign
country, the Company has elected not to further prosecute this patent
application in other countries because of technological changes that the Company
plans to make in its manufacturing process which make it uneconomical to
continue to invest in the original patent applications. The Company owns patents
issued in the United States and Canada relating to the method for making a pack
of T-shirt sacks which permit the individual sacks to be mounted on a handle
supported rack dispensing system and to be easily separated and dispensed from
the pack utilizing a central "pull tab." The Company has also filed a United
States patent application for its Fresh Focus Cartridge Talker(TM). No assurance
can be given that any of these patents will be granted or that the patents
currently owned by the Company and any patents that may be granted in the future
will be enforceable or provide the Company with meaningful protection from
competitors. Even if a competitor's products were to infringe patents owned by
the Company, it could be costly for the Company to enforce its rights in an
infringement action and would divert funds and resources otherwise used in the
Company's operations. Furthermore, no assurance can be given that the Company
would be successful in enforcing such rights. No assurance can be given that any
of the Company's patent applications will be allowed or, if allowed, will
provide the Company with any advantage against competitors selling similar
products. Similarly, no assurance can be given that the Company's products will
not infringe patents or rights of others.
The Company also relies on unpatented proprietary know-how, which may
be duplicated, and employs various methods including confidentiality agreements
with employees to protect its proprietary know-how. However, such methods may
not afford complete protection and no assurance can be given that others will
not independently develop such know-how or obtain access thereto.
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UNCERTAINTY OF MARKET ACCEPTANCE FOR THE COMPANY'S IN-STORE ADVERTISING AND
PROMOTION PRODUCTS
As is typical in the case of newly introduced products, demand and
market acceptance for such products is subject to a high level of uncertainty.
Achieving and maintaining market acceptance for the Company's in-store
advertising and promotion products will require substantial marketing efforts
and expenditure of significant funds. No assurance can be given that the
Company's in-store advertising and promotion products will achieve and maintain
market acceptance, or that increased marketing efforts will result in successful
commercialization of the in-store advertising and promotion products, or that
such products will generate sufficient revenues to permit profitable operations.
DEPENDENCE ON LICENSE FOR FLOOR FOCUS AD-TILE(TM)
The Company's success in implementing its strategy for its in-store
advertising and promotion products depends in part on its exclusive, worldwide
license to use the patented Floor Focus Ad-Tile(TM) system. The termination of
this license may limit the Company's ability to market its in-store advertising
and promotion products. Pursuant to this license agreement, the Company is
required to purchase a minimum number of Floor Focus Ad-Tiles(TM) at the price
set forth in the license agreement. In the event the Company does not purchase
the minimum requirements, it must pay a minimum royalty fee based on the
deficiency. Such license is also subject to infringement claims from third
parties. No assurance can be given that this license will not be terminated, or
that a third party will not be successful in an infringement action. The
termination of this license could have a material adverse effect on the
Company's in-store advertising and promotion products.
NEED FOR ADDITIONAL FINANCING
A significant portion of the Company's capital requirements to date has
been funded through equity and subordinated debt investments by Beresford Box
Company Ltd. (formerly Beresford Packaging, Inc.) (subsequently converted into
the Company's Series B and Series C Preferred Stock), owned 100% by C. Jill
Beresford, a principal stockholder, the Company's Vice President of Marketing
and a director, the proceeds from the Company's three prior public offerings,
the exercise of warrants sold in these public offerings and private placements.
The Company has also utilized bank loan and line of credit facilities, trade
credit facilities and equipment leases. Although management believes that fixed
asset or lease financing is now available at competitive rates from banks and
leasing companies to finance a substantial part of the planned $1.8 million
increase in capacity at the Dighton facility during Fiscal 1997, and that its
current bank line of credit together with anticipated cash from operations will
be sufficient to fund the Company's current operations, the Company may raise
additional financing through the sale of equity or debt in order to fund all or
part of the planned increased capacity at the Dighton facility over the next six
months as well as to increase its in-store advertising and promotion business
and general working capital. The Company has no commitments for such financing,
and no assurance can be given that the Company
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will be successful in obtaining such additional financing, that such financings
will be successfully completed or that such financing will be available on terms
favorable to the Company, if at all.
DEPENDENCE UPON KEY PERSONNEL
The Company's ability to continue to develop and to market its products
depends, in large part, on its ability to attract and retain qualified
personnel. Competition for such personnel is intense and no assurance can be
given that the Company will be able to retain and attract such personnel.
The Company is dependent in particular upon the services of Dennis N.
Caulfield, its President and Chief Executive Officer, C. Jill Beresford, its
Vice President of Marketing, and Gregory M. Davall, its Vice President of
Manufacturing, and has employment agreements with these officers. The loss of
the services of any of these individuals could have a material adverse effect on
the Company. The Company maintains and is the beneficiary of key-person life
insurance on each of Dennis N. Caulfield and C. Jill Beresford in the amount of
at least $1,000,000 per individual.
SUBSTANTIAL SHARES OF PREFERRED STOCK OUTSTANDING; POSSIBLE ISSUANCE OF
ADDITIONAL PREFERRED STOCK
The Company is authorized to issue up to 2,000,000 shares of Preferred
Stock, $.01 par value per share (the "Preferred Stock"). As of July 10, 1996,
there were issued and outstanding 372,146 shares of Series A Convertible
Preferred Stock, 146,695 shares of Series B Convertible Preferred Stock and
18,337 shares of Series C Redeemable Preferred Stock.
The Company has no present intention to issue any additional shares of
Preferred Stock. However, the issuance of any such Preferred Stock could affect
the rights of the holders of the Common Stock and reduce its value. In
particular, specific rights granted to future holders of Preferred Stock could
be used to restrict the Company's ability to merge with or sell its assets to a
third party, thereby preserving control of the Company by its present owners.
SUBSTANTIAL SHARES OF COMMON STOCK RESERVED FOR THE EXERCISE OR GRANT OF OPTIONS
AND WARRANTS; POTENTIAL DILUTIVE EFFECT THEREOF; REGISTRATION RIGHTS OF WARRANT
HOLDERS
The Company has reserved 933,750 shares of Common Stock for issuance
upon exercise of options granted or available for grant to employees, officers,
directors and consultants pursuant to the Company's 1990 and 1993 Stock Option
Plans, as well as an aggregate of 2,433,931 shares of Common Stock for issuance
upon (i) exercise of the Class B Warrants, subject to anti-dilution adjustments;
(ii) conversion of the Series A and Series B Convertible Preferred Stock; (iii)
exercise of the warrants issued to an individual and principals of the placement
agent in the Company's private placements to overseas investors; (iv) the
exercise of warrants issued to financial consultants of the Company; and (v) the
attainment of certain performance goals by RC America, Inc. The existence of the
aforementioned options, warrants, and Preferred Stock may prove to be a
hindrance to future financing by the Company. Although the book value of the
Company's Common Stock is
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currently significantly lower than the exercise prices of the outstanding
options and warrants, the exercise of any such options or warrants in the future
could dilute the book value of the Company's Common Stock. Further, the holders
of such options and warrants may exercise them at a time when the Company would
otherwise be able to obtain additional equity capital on terms more favorable to
the Company.
REDEMPTION OF CLASS B WARRANTS; POSSIBLE PROHIBITION ON MARKET MAKING ACTIVITIES
BY THE UNDERWRITER
The Company issued 1,526,000 Class B Redeemable Common Stock Purchase
Warrants (the "Class B Warrants") in its public offering in October 1992. The
Class B Warrants are subject to redemption at $.05 per warrant on thirty days'
written notice provided the last sale price of the Common Stock as reported on
the NASDAQ National Market System for ten (10) consecutive trading days ending
within twenty-five (25) days of the notice of redemption averages in excess of
$14.00 per share. In the event the Company exercises the right to redeem the
Class B Warrants, such Class B Warrants will be exercisable until the close of
business on the date fixed for redemption in such notice. In addition, the right
of the Company to redeem the Class B Warrants may reduce the market value of
such Warrants. If any Class B Warrant called for redemption is not exercised by
such time it will cease to be exercisable and the holder will be entitled only
to the redemption price. During the solicitation of the Class B Warrants, H.J.
Meyers & Co., Inc. may be prohibited from engaging in any market making
activities prior to and during the solicitation period.
EFFECT OF FUTURE SALES OF RESTRICTED SECURITIES
Of the 13,418,359 shares of the Company's Common Stock outstanding on
July 10, 1996, 2,312,269 shares are held by Dennis N. Caulfield (through a
corporation controlled by Mr. Caulfield), Beresford Box Company Ltd. (a
corporation controlled by Ms. Beresford) (excluding 146,695 shares of Series B
Convertible Preferred Stock), C. Jill Beresford and Alex F. Vaicunas, and an
aggregate of 1,148,970 shares were issued in five Regulation D offerings to
accredited investors. Of the 1,148,970 shares, an aggregate of 515,000 shares of
Common Stock issued in the first three Regulation D offerings were registered by
the Company on Form S-1 Registration Statements that were declared effective on
September 13, 1993 and April 7, 1994, respectively. The 212,470 shares of Common
Stock sold in the fourth Regulation D offering were registered in a Registration
Statement declared effective on January 5, 1995. The remaining 421,500 shares of
Common Stock sold in the last Regulation D are included in this Prospectus. None
of the 2,312,269 shares have been registered under the Securities Act of 1933,
as amended (the "Securities Act"), and are "restricted securities" under Rule
144 of the Securities Act, exclusive of 3,200 shares, which are registered but
also subject to the resale limitations (except the holding period) of Rule 144
since they are held by an affiliate of the Company. Ordinarily, under Rule 144,
a period holding restricted securities for a period of two years may, every
three months, sell in ordinary brokerage transactions or in transactions
directly with a market maker an amount equal to the greater of one percent of
the Company's then outstanding Common Stock or the average weekly trading volume
during the four calendar weeks prior to such sale. Rule 144 also permits sales
by a person who is not an affiliate of
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the Company and who has satisfied a three-year holding period to sell with out
any quantity limitation. Future sales under Rule 144 may have a depressive
effect on the market price of the Common Stock. All of the shares of Common
Stock held by Messrs. Caulfield and Vaicunas, and Beresford Box Company Ltd. are
currently eligible for sale pursuant to Rule 144.
From December 1992 through June 1994 and in April and May 1996, the
Company issued an aggregate of 2,477,000 shares of its Common Stock in
Regulation S offerings. These shares are subject to the restrictions of
Regulation S and may not be sold unless such shares are registered under the Act
and any applicable state securities law in the United States or such offer or
sale is made pursuant to exemptions from those registration requirements.
In addition, in April 1993, the Company registered 200,000 shares of
its Common Stock underlying the 1990 Stock Option Plan on a Form S-8
registration statement, which shares when exercised will become freely
tradeable. To date, 16,250 shares have been exercised under the 1990 Stock
Option Plan and are freely tradeable. Options to purchase up to an additional
134,250 shares have also been granted under the 1990 Stock Option Plan, and
options to purchase 679,880 shares have been granted under the 1993 Stock Option
Plan.
ANTI-TAKEOVER MEASURES; POSSIBLE ANTI-TAKEOVER EFFECTS OF CERTAIN CHARTER
PROVISIONS
The Company, as a Delaware corporation, is subject to the General
Corporation Law of the State of Delaware, including Section 203, an
anti-takeover law enacted in 1988. In general, the law restricts the ability of
a public Delaware corporation from engaging in a "business combination" with an
"interested stockholder" for a period of three years after the date of the
transaction in which the person became an interested stockholder. As a result,
potential acquirors of the Company may be discouraged from attempting to effect
an acquisition transaction with the Company, thereby possibly depriving holders
of the Company's securities of certain opportunities to sell or otherwise
dispose of such securities at above-market prices pursuant to such transactions.
As a result of the application of Section 203 and certain provisions in the
Company's Certificate of Incorporation and Bylaws, as amended, including the
adoption of a classified Board of Directors and the requirement for increased
shareholder vote to take certain actions involving the directors and the
Certificate of Incorporation and Bylaws, potential acquirors of the Company may
find it more difficult or be discouraged from attempting to effect and
acquisition transaction with the Company, thereby possibly depriving holders of
the Company's securities of certain opportunities to sell or otherwise dispose
of such securities at above-market prices pursuant to such transactions.
LIMITATION ON DIRECTOR LIABILITY UNDER DELAWARE LAW
Pursuant to the Company's Certificate of Incorporation, as amended, and
under Delaware law, directors of the Company are not liable to the Company or
its stockholders for monetary damages for breach of fiduciary duty, except for
liability in connection with a breach of the duty of loyalty, for acts or
omissions not in good faith or which involve intentional misconduct or a knowing
violation of law, for dividend payments or stock repurchases illegal under
Delaware law or for any
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transaction in which a director has derived an improper personal benefit.
However, insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers, or persons controlling the Company
pursuant to the foregoing, the Company has been informed that in the opinion of
the Securities and Exchange Commission, such indemnification is against public
policy as expressed in the Securities Act, and is, therefore, unenforceable.
NO ACTIVE PUBLIC MARKET; ARBITRARY DETERMINATION OF EXERCISE PRICES; POSSIBLE
VOLATILITY OF TRADING PRICES FOR COMMON STOCK
Although the Common Stock and Class B Warrants are quoted on
NASDAQ/NMS, and the Preferred Stock is quoted on NASDAQ, no assurance can be
given that an active public market in such securities will be sustained. The
exercise price of the Class B Warrants and the Underwriter's Warrants was
arbitrarily determined by negotiation between the Company and the Underwriters.
Such exercise prices do not necessarily bear any relationship to the Company's
assets, book value, total revenue or other established criteria of value, and
should not be considered indicative of the actual value of the Common Stock. The
trading prices of the Common Stock could be subject to wide fluctuations in
response to the Company's operating results, announcements by the Company or
others of developments affecting the Company or its competitors or customers and
other events or factors. In addition, the stock market has experienced extreme
price and volume fluctuations in recent years. These fluctuations have had a
substantial effect on the market prices for many companies and similar events in
the future may adversely affect the market prices of the Common Stock.
NO DIVIDENDS
The Company has not paid dividends to its stockholders since its
inception and does not plan to pay dividends in the foreseeable future. The
Company intends to reinvest earnings, if any, in the development and expansion
of its business.
-9-
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and, in
accordance therewith, files reports, proxy statements and other information with
the Securities and Exchange Commission (the "Commission"). Such reports, proxy
statements and other information can be inspected and copies thereof may be
obtained, at prescribed rates, at the public reference facilities maintained by
the Commission at the Public Reference Section, Room 1024, 450 Fifth Street,
N.W., Washington, D.C. 20549, and at the Commission's Regional Offices located
at 7 World Trade Center, 13th Floor, New York, New York 10048. Copies of such
material can be obtained at prescribed rates by writing to the Public Reference
Section of the Commission at 450 Fifth Street, N.W., Washington, D.C. 20549.
The Company's Common Stock is listed for trading on NASDAQ/NMS. Reports
and other information concerning the Company can be inspected at the offices of
The NASDAQ Stock Market, located at 1735 K Street, N.W. Washington, D.C. 20006.
The Company has filed a Registration Statement on Form S-3 under the
Securities Act, covering the Common Stock included in this Prospectus. This
Prospectus does not contain all the information set forth in or annexed to
exhibits to the Registration Statement filed by the Company with the Commission
and reference is made to such Registration Statement and the exhibits thereto
for the complete text thereof. For further information with respect to the
Company and the securities offered hereby, reference is made to the Registration
Statement, including the exhibits filed as part thereof, copies of which may be
obtained at prescribed rates upon request to the Commission in Washington, D.C.
Any statements contained herein concerning the provisions of any documents are
not necessarily complete, and, in each instance, such statements are qualified
in their entirety by reference to such document filed as an exhibit to the
Registration Statement or otherwise filed with the Commission.
NO DEALER, SALESMAN, OR ANY OTHER PERSON HAS BEEN AUTHORIZED TO GIVE
ANY INFORMATION OR TO MAKE ANY REPRESENTATIONS, OTHER THAN THOSE CONTAINED OR
INCORPORATED BY REFERENCE IN THIS PROSPECTUS, AND, IF GIVEN OR MADE, SUCH
INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED
BY THE COMPANY OR THE SELLING SECURITYHOLDERS. THIS PROSPECTUS DOES NOT
CONSTITUTE AN OFFER BY THE SELLING SECURITYHOLDERS TO SELL ANY OF THE SECURITIES
OFFERED HEREBY IN ANY JURISDICTION TO ANY PERSON TO WHOM IT IS UNLAWFUL FOR THE
SELLING SECURITYHOLDERS TO MAKE SUCH OFFER IN SUCH JURISDICTION. NEITHER THE
DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL, UNDER ANY
CIRCUMSTANCE, CREATE ANY IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE
AFFAIRS OF THE COMPANY SINCE THE DATE HEREOF.
The Company furnishes its stockholders with annual reports containing
financial statements and such interim reports as it deems appropriate.
-10-
INCORPORATION OF CERTAIN INFORMATION BY REFERENCE
The following documents, which have been previously filed by the
Company with the Commission under the Act, and the Exchange Act are incorporated
by reference in this Prospectus:
1. The Company's Annual Report on Form 10-K for the year ended
February 23, 1996 ("Fiscal 1996");
2. The Company's Quarterly Report on Form 10-Q for the quarter
ended May 24, 1996, filed with the Commission on July 8, 1996.
3. The description of the Company's Common Stock in the Company's
Form 8-A Registration Statement and amendment thereto,
declared effective on June 13, 1991.
All documents filed by the Company pursuant to Sections 13(a), 13(c),
14 or 15(d) of the Exchange Act subsequent to the date of this Prospectus and
prior to the termination of the Offering described herein shall be deemed to be
incorporated by reference into this Prospectus from the respective dates those
documents are filed.
Any statement contained herein or in a document incorporated or deemed
to be incorporated by reference herein shall be deemed to be modified or
superseded for purposes of the Registration Statement and this Prospectus to the
extent that a statement contained herein or in any subsequently filed document
which also is or is deemed to be incorporated by reference herein modifies or
supersedes such statement. Any such statement so modified or superseded shall
not be deemed, except as so modified or superseded, to constitute a part of the
Registration Statement or this Prospectus.
The Company will provide, without charge, to each person to whom this
Prospectus is delivered, on the written or oral request of any such person, a
copy of any or all of the documents which have been incorporated herein by
reference, other than exhibits to such documents (unless such exhibits are
specifically incorporated by reference into such documents). Requests should be
directed to Dennis N. Caulfield, President, BPI Packaging Technologies, Inc.,
455 Somerset Avenue, Dighton, Massachusetts 01764, telephone: (508) 824-8636.
-11-
RECENT DEVELOPMENTS
No material changes in the Company's affairs have occurred since the
end of Fiscal 1996, which have not been described in an Annual Report on Form
10-K, a Quarterly Report on Form 10-Q or a Current Report on Form 8-K filed by
the Company under the Exchange Act.
-12-
THE COMPANY
AN INVESTMENT IN THE SECURITIES OFFERED HEREBY INVOLVES A HIGH DEGREE
OF RISK AND SHOULD NOT BE PURCHASED BY PERSONS WHO CANNOT AFFORD THE LOSS OF
THEIR ENTIRE INVESTMENT. IN ANALYZING THIS OFFERING AND THE DISCUSSION IN THE
REMAINDER OF THIS PROSPECTUS, PROSPECTIVE INVESTORS SHOULD CAREFULLY CONSIDER
THE RISKS DESCRIBED PREVIOUSLY IN THE "RISK FACTORS" SECTION OF THIS PROSPECTUS
BEGINNING ON PAGE 2.
BPI Packaging Technologies, Inc. (the "Company") is a specialty
packaging and in-store advertising and promotion company that develops,
manufactures, markets and sells plastic bags and advertising and promotion
products to grocery, convenience, retail and drug store chains. The Company
manufactures traditional plastic grocery carryout bags of "T-shirt sack" design
commonly used at the checkout counter and plastic T-shirt carryout bags in
proprietary, value added dispensing systems for use in the produce section of
the supermarket and the checkout counters in convenience, retail, and drug store
chains. The Company's T-shirt carryout bags are manufactured in a new, state-
of-the-art plant which utilizes some of the world's most advanced and highest
quality printing, extrusion and bag making equipment. The Company's investment
in state-of-the-art manufacturing equipment and computer controlled process
technology, allows it to be a lower cost and high quality producer in the
T-shirt bag market.
The Company's strategy is to (i) integrate its proprietary bag products
and proprietary in-store advertising and promotion products in grocery,
convenience, retail and drug store chains, and (ii) replace the lower margin
traditional plastic grocery carryout bag with higher margin proprietary bag and
in-store advertising and promotion products. Total sales for the year ended
February 23, 1996 ("Fiscal 1996") were $28.8 million, of which $7.1 million was
attributed to sales of proprietary bag products, an increase of 29% over a year
earlier. Management believes, based on existing trends, that proprietary bag
products will show a substantially stronger performance in Fiscal 1997.
Proprietary bag products were 22.4% of sales in the first quarter of Fiscal 1997
compared to 24.0% of sales in the same period last year.
During the period June 1991 to May 1996, the Company acquired and
brought online approximately $36 million of new, state-of-the-art extrusion,
printing and bag making equipment in its Dighton, Massachusetts facility and
developed and acquired patented and proprietary bag and in-store advertising and
promotion products. The Company's proprietary bag and in-store advertising and
promotion products are uniquely positioned in the market which has limited
direct competition. The Company's present manufacturing capacity will support
estimated sales of $40 to $50 million annually. The Company currently has
outstanding commitments of $1.8 million that have been entered into to complete
the planned increase in capacity in Fiscal 1997 to support estimated sales of
$50 to $60 million annually. All capacity estimates are based upon certain
assumptions regarding pricing, manufacturing efficiencies and product mix.
Management's goal is to have the capacity fully utilized by the end of Fiscal
1998 with higher margin proprietary bag products.
-13-
Potential sales for the Company's in-store advertising and promotion
products, Floor Focus Ad-Tile(TM) and Produce Profit Builder(TM) are directly
related to market penetration and are not constrained by manufacturing capacity.
Developing the capability to penetrate the in-store advertising and promotion
market requires an investment in sales and marketing infrastructure, but
management expects that this capital investment will be significantly less than
the investment required to support equivalent sales of bag products.
Management's goal of integrating proprietary bag products and proprietary
in-store advertising and promotion products is expected to create in the future,
new market opportunities and reduce the capital requirements necessary to
support growth.
The Company competes in the $731 million annual market (based on 1994
industry information) for traditional plastic grocery carryout T-shirt bags.
This market is highly competitive and margins have remained low for several
years. Management's goal is to substantially reduce sales from this market by
the end of Fiscal 1998 and concentrate on the markets for its higher margin
proprietary T-shirt bag products (estimated at $384 million annually in 1994)
and its in-store advertising and promotion products for the supermarket and
convenience store markets (which are currently estimated by management at
approximately $600 million annually).
The Company has recently entered the in-store advertising and promotion
market with two new products: (1) Product Profit Builder(TM), which incorporates
the Company's established proprietary FRESH-SAC(R) T-shirt produce bag, which is
used by approximately 3,000 supermarkets, into a new in-store advertising and
promotion vehicle for supermarkets, and (2) the new patented Floor Focus
Ad-Tile(TM) system, which is a semi-permanent floor tile which contains full
color advertising messages manufactured into it and is installed in the floor in
strategic locations throughout the store. Market Media, Inc., a wholly owned
subsidiary, has entered into a contract with Winn-Dixie Stores, Inc., of
Florida, the fifth largest grocery chain in the U.S., to install its patented
Floor Focus Ad-Tile(TM) advertising product in all of the 1,178 Winn-Dixie
supermarkets. The objective of the Produce Profit Builder program and Floor
Focus Ad-Tile(TM) is to increase sales in-store at the point of purchase. In the
first quarter of Fiscal 1997, the Floor Focus Ad-Tile(TM) rollout began for the
first Winn-Dixie Division (109 stores of which 10 stores will be control stores)
with national brand advertisers which include Nestle, Campbell Soup, Hebrew
National, and H.J. Heinz.
PRODUCTS AND MARKETS
FRESH-SAC(R) T-shirt produce bag is a thin, high clarity, high
molecular weight, high density ("HMWPE") produce bag manufactured from a patent
pending plastic developed by the Company and sold in a patented dispensing
mechanism. The product is presently sold to approximately 3,000 supermarkets
directly and through distributors. In 1994, it was estimated that there were
32,500 supermarkets in the United States, which represents an annual market
potential for this product of an estimated $264 million. The Company has no
direct competition in this market, but has indirect competition from the
traditional produce bag on a roll. In this section, direct competition refers to
competition from identical products, and indirect competition refers to products
which are not identical, but which could be substituted for the Company's
product.
-14-
HANDI-SAC(TM) is a T-shirt bag sold in a patented dispensing mechanism.
The system allows the retailer to effectively store and dispense T-shirt bags in
a limited space, which is important to drug, convenience and hardware stores.
The marketing program for this product began in Fiscal 1995 and at the end of
the first quarter of Fiscal 1997, the product is being sold to approximately
7,000 convenience, drug and hardware stores. The annual market potential for
HANDI-SAC(TM) in the 93,000 convenience store industry is estimated at
approximately $120 million. The sales and marketing program is accelerating for
this product. The Company has no direct competition in this market, but has
indirect competition from paper bags and the T-shirt bag on a roll manufactured
by Sonoco Products Company ("Sonoco"). The principal competition in this market
is paper bags, which have the largest share of the market and cost approximately
two to three times the price of HANDI-SAC(TM).
TRADITIONAL GROCERY T-SHIRT BAG is classified as a non-proprietary
product although the Company owns an issued patent on this product. The bags are
manufactured using HMWPE plastic resin and are sold to grocery, convenience,
drug and retail chains.
The $731 million annual market in 1994 for T-shirt bags has developed
over the past ten years primarily because the T-shirt bag has been approximately
one-half to one-quarter the price of kraft paper bags over the period and the
T-shirt bag has been a less expensive alternative to paper and plastic
merchandise bags. Plastic T-shirt bags have an estimated 75% marketshare of the
supermarket industry. This market is highly competitive. The Company's
competitors include divisions of large multinational companies (e.g., Tenneco,
Inc. ("Tenneco") and Sonoco) and, to a lesser extent, other specialty bag
manufacturers. The Company believes that Sonoco and Tenneco are, respectively,
the leading manufacturers of HMWPE and linear low density polyethylene ("LLDPE")
T-shirt grocery bags. (Mobil Oil Corporation ("Mobil") recently exited the
grocery T-shirt sack market and sold this business to Tenneco.) There are
significant barriers to entry into the market due to the significant capital
requirements (management estimates that it presently requires a capital
investment of approximately $10 million for each one billion bags of
manufacturing capacity, exclusive of real estate costs, start-up costs and
working capital requirements).
IN-STORE ADVERTISING AND PROMOTION PRODUCTS are the Floor Focus
Ad-Tile(TM), an in-floor advertising system, and the Produce Profit Builder(TM),
which consists of the (i) Floor Focus Ad-Tile(TM), (ii) the FRESH-SAC(R) T-shirt
sack produce bag in a patented dispensing system, and (iii) the patent pending
Fresh Focus Cartridge Talker(TM), an attachment to the patented dispensing
system, which is utilized as an advertising and promotion vehicle and coupon
dispensing mechanism. The patented Floor Focus Ad-Tile(TM) system has full-color
advertising messages manufactured into a tile which is then installed in the
floor in strategic locations throughout the store with the objective of
increasing brand sales at the point of purchase. Floor Focus Ad-Tile(TM) is a
semi-permanent installation that withstands heavy traffic, yet is easily
replaced when the message changes.
-15-
Market Media, Inc. ("Market Media"), a wholly-owned subsidiary, was
organized in the first quarter of Fiscal 1996 to develop in-store advertising
and promotion products, which are to be marketed with the FRESH-SAC(R) produce
bag. Subsequently, the Floor Focus Ad-Tile(TM) product was acquired.
In the second quarter of Fiscal 1996, Market Media entered into a
contract with Winn-Dixie Stores, Inc. of Florida to install its Floor Focus
Ad-Tile(TM) advertising product in all of the 1,178 Winn-Dixie supermarkets. In
the first quarter of Fiscal 1997, the rollout began for the first Winn- Dixie
Division (109 stores of which ten stores will be control stores) with national
brand advertisers which include Nestle, Campbell Soup, Hebrew National, and H.J.
Heinz. In the second quarter of Fiscal 1997, the Floor Focus Ad-Tile(TM) rollout
will be expanded to 433 Winn-Dixie supermarkets with S.C. Johnson & Son, Inc.
Armstrong Floor Cleaner Floor Focus Ad-Tiles(TM) being installed in all 433
supermarkets. Initial advertising contracts total approximately $200,000 with
individual contracts from one to three advertising cycles (4 to 12 weeks).
Under the contract, Market Media is responsible for the sale of Floor
Focus Ad-Tile(TM) advertising to consumer package goods advertisers in the 1,178
Winn-Dixie supermarkets. Management estimates that the sale of Floor Focus
Ad-Tile(TM) at Winn-Dixie Stores, Inc. could result in annual sales of up to
$12.3 million when the rollout is complete in mid 1997, assuming all Floor Focus
Ad-Tile(TM) locations are fully utilized at current advertising rates.
Market Media's new Floor Focus Ad-Tile(TM), for the supermarket,
convenience store and non-food retail store industries, has the potential of
creating new in-store advertising and promotion markets, which management
estimates at approximately $600 million annually.
Market Media's Floor Focus Ad-Tile(TM), under the Winn-Dixie contract,
is located in the dry goods sections of the supermarket, and it is anticipated
that any competitive products will be directed at this market. While Market
Media is marketing the Floor Focus Ad-Tile(TM) to the dry goods section of the
supermarket, the Company plans to market Floor Focus Ad-Tile(TM) to the produce
department as an element of its Produce Profit Builder program.
The Company's Produce Profit Builder has three elements: FRESH-SAC(R)
T-shirt produce bag, Fresh Focus Cartridge Talker(TM), and Floor Focus
Ad-Tile(TM). All three products create a marketing program for the produce
department of the supermarket and have the objective of increasing produce
sales.
The Produce Profit Builder program provides a platform for the Company
to potentially reach its goal of capturing a 60% marketshare of the 1994 $264
million annual potential market for the FRESH-SAC(R) T-shirt produce bag by
replacing the produce bag on a roll with FRESH-SAC(R). FRESH-SAC(R) is now sold
to approximately 3,000 supermarkets. In the context of the Produce Profit
Builder program, FRESH-SAC(R) becomes an important component of a marketing
program that can increase store profits. This marketing program has been well
received, and in-store market
-16-
tests have been successful in Canada and are planned to begin at several leading
U.S. grocery chains in the second quarter of Fiscal 1997.
Floor Focus Ad-Tile(TM) marked the Company's entry into the in-store
advertising and promotion market. The Produce Profit Builder program is also the
platform to launch a second proprietary product, Fresh Focus Cartridge
Talker(TM), into this market.
3M has entered the floor tile advertising market with a "decal" that is
attached to the existing floor tile surface and is regarded as an indirect
competitor of Floor Focus Ad-Tile(TM). 3M is classified as an indirect
competitor because its decal advertising message is attached to the surface of
the floor tile rather than having the advertising message manufactured into the
floor tile similar to the Floor Focus Ad-Tile(TM).
Traditional in-store advertising and promotion markets are estimated at
approximately $500 million in 1995 and the major companies are Heritage Media
Corporation and Catalina Marketing Corporation, both of which offer in-store
advertising and promotional products which are not related to the floor tile or
the FRESH-SAC(R) produce bag dispensing systems.
COMPETITION
The plastic bag and the in-store advertising and promotion industries
are highly competitive. In the plastic bag industry, the Company's competitors
include divisions of large multinational companies (e.g. Tenneco and Sonoco) and
to a lesser extent, other specialty bag manufacturers. The Company believes that
Sonoco and Tenneco are, respectively, the leading manufacturers of HMWPE and
LLDPE T-shirt grocery bags. (Mobil recently exited the grocery T-shirt sack
market and sold this business to Tenneco.) There are significant barriers to
entry into the plastic bag market due to the significant capital requirements
(management estimates that it presently requires a capital investment of
approximately $10 million for each one billion bags of manufacturing capacity,
exclusive of real estate costs, start-up costs and working capital
requirements).
The Company's in-store advertising and promotion products compete in
the same markets that are dominated by Heritage Media Corporation and Catalina
Marketing Corporation, both of which offer in-store advertising and promotion
products which are not related to the floor tile or the FRESH-SAC(R) produce bag
dispensing systems. Consequently, the Company anticipates much of its
competition will come from larger, well-capitalized businesses which have
significantly greater financial and other resources than the Company.
Accordingly, no assurance can be given that the Company will be able to compete
successfully with any of these companies or achieve a greater market share than
it currently possesses. The Company competes in the plastic bag and in-store
advertising and promotion industries by (i) developing and marketing what it
believes are innovative plastic bags and in-store advertising and promotion
products, (ii) filing for patent protection in the United States and numerous
foreign countries for its proprietary products, (iii) using state-of-the-art
manufacturing equipment in an effort to increase productivity and lower costs,
and (iv) integrating its proprietary bag and in-store advertising and promotion
products to create barriers to market entry
-17-
for manufacturers of plastic bags, which do not have in-store advertising and
promotion products, and to create barriers to market entry for in-store
advertising and promotion companies that do not manufacture plastic bags.
PROPRIETARY PROCESSES, PATENTS AND OTHER RIGHTS
PATENT STRATEGY
The Company's strategy is to, first, be a low cost producer in each of
its markets, and second, to develop patentable, proprietary products in order to
differentiate its products in the marketplace.
The Company has developed a patent position in the T-shirt bag and
in-store advertising markets. The Company owns a patent issued in 1989 for its
T-shirt carryout bag and patents for its HANDI-SAC(TM) and FRESH-SAC(R)
dispensing systems and has patents pending on several other T-shirt bag and
in-store advertising products. The Company also has an exclusive worldwide
license for the patented Floor Focus Ad-Tile(TM) system.
In 1993, the Company was issued a United States patent for the
dispensing system used in conjunction with its FRESH-SAC(R) product and other
T-shirt sack products and has filed patent applications for the dispensing
system in 20 foreign countries. The Company has filed patent applications for
the FRESH-SAC(R) HMWPE material, and was notified that this patent has been
issued in a foreign country. Notwithstanding the issuance of the patent in a
foreign country, the Company has elected not to further prosecute this patent
application in other countries because of technological changes that the Company
plans to make in its manufacturing process which make it uneconomical to
continue to invest in the original patent applications. The Company has also
filed patent applications in the United States for its RAPID-SACTM product and
for its RACK 'N SACKTM product, a new dispensing system for T-shirt sacks for
non-food retail markets. The Company has filed a United States patent
application for its Fresh Focus Cartridge Talker(TM). For Fiscal 1996, the
Company spent approximately $61,000 for patent activities, including
applications, legal fees and related costs. No assurance can be given that any
of these patents will be granted or that the patents currently owned by the
Company and any patents that may be granted in the future will be enforceable or
provide the Company with meaningful protection from competitors. Even if a
competitor's products were to infringe patents owned by the Company, it could be
costly for the Company to enforce its rights in an infringement action and would
divert funds and resources otherwise used in the Company's operations.
Furthermore, no assurance can be given that the Company would be successful in
enforcing such rights. No assurance can be given that any of the Company's
patent applications will be allowed, or if allowed, will provide the Company
with any advantage against competitors selling similar products. Similarly, no
assurance can be given that the Company's products will not infringe patents or
rights of others. The Company has a registered trademark in the United States
for FRESH-SAC(R).
The Company has developed a number of proprietary manufacturing methods
and processes utilized in the manufacture of its products, including processes
that utilize greater percentages of
-18-
recycled plastic materials in plastic bags, and produce strong, thin, high
clarity and traditional HMWPE bags using less plastic. The Company relies on and
employs various methods to protect the concepts, ideas, and documentation for
these manufacturing methods such as patents and confidentiality agreements with
its employees. However, such methods may not afford sufficient protection and no
assurance can be given that others will not independently develop such know-how
or obtain access to the Company's know-how, concepts, ideas and documentation.
The Company owns patents in the United States and Canada relating to
the methods for making a pack of plastic T-shirt sacks which permits the
individual sacks to be mounted on a handle-supported dispensing rack system and
to be easily separated and dispensed from the pack utilizing a central "pull
tab." Sonoco also owns a patent relating to the methods for holding plastic bags
in a metal rack. In 1990, Sonoco indicated its intent to seek licenses under a
broadened reissue patent from all manufacturers of plastic bags which utilize a
particular method for holding plastic bags in a metal rack. Sonoco has commenced
litigation against several plastic bag manufacturers other than the Company. The
United States District Court for the Central District of California entered
summary judgment in February 1994 for the defendants in a suit relating to
alleged patent infringement by the defendants. The court declared Sonoco's three
reissue claims to be invalid. It is expected that Sonoco will appeal this
judgment. Subsequent to this decision, the Company filed suit against Sonoco
alleging infringement of the Company's patent by Sonoco. In the first quarter of
Fiscal 1997, the patent infringement suit against Sonoco and Sonoco
counterclaims against the Company were dismissed by mutual agreement of the
parties.
If Sonoco was to appeal the February 1994 judgment which declared
Sonoco's three reissue claims invalid, and have that judgment reversed, Sonoco
could institute a patent infringement suit against the Company. If Sonoco was to
institute and succeed in any infringement claim against the Company, Sonoco
might be able to prevent the future use, sale and manufacture of certain of the
Company's products using certain racking systems, or alternatively, might
require the Company to pay Sonoco a license fee for the use of this technology.
Either outcome could have a material adverse effect on the Company's business.
Infringement of any patent may also render the Company liable to purchasers and
end-users of the infringing product. The Company has been advised by patent
counsel that the Sonoco patent applies to the traditional grocery T-shirt sack
and does not apply to the Company's proprietary HANDI-SAC(TM) and FRESH-SAC(R)
bag products.
Mobil owns a reissue patent that relates to avoiding stress
concentration and preventing the tearing of plastic bags. This reissue patent
originally was to expire in 1996. Due to a change in U.S. patent law, the
reissue patent is now extended until 1998. On December 4, 1995, Mobil instituted
an infringement claim against the Company. The Company intends to vigorously
defend this suit. However, if Mobil was to succeed in this or any infringement
claim against the Company, Mobil might be able to prevent the future use, sale
and manufacture of the Company's grocery T-shirt sacks and similar products
which might be found to infringe the patent, or alternatively, might require the
Company to pay Mobil a license fee for the prior and future use of this
technology. Either outcome could have a material adverse effect on the Company's
business. The Company has been advised
-19-
by patent counsel that the Mobil patent applies to the traditional grocery
T-shirt sack and does not apply to the Company's proprietary HANDI-SAC(TM) and
FRESH-SAC(R) bag products.
No assurance can be given that the Company's products will not infringe
patents or rights of others. The Company could incur substantial costs in
defending itself in any patent litigation.
MANUFACTURING
All of the Company's plastics products are manufactured in its Dighton,
Massachusetts facility. The HMWPE resin is delivered to the Company by rail car,
where it is brought into the facility to be heated and blown into a thin film on
blown film extrusion lines. The film is cooled and wound on large rolls and
printed with the customer's information using non-toxic inks. The film is then
cut into bags, reviewed by quality control inspectors, boxed, and shipped to
customers. The Company retains customer design ink plates for future use and has
an art department which assists in graphic design for the bags.
The Company's manufacturing equipment consists of blown film extrusion
lines, printing presses and bag making machines. The Company anticipates further
increases in manufacturing capacity in the Dighton facility during Fiscal 1997
from its present manufacturing capacity of approximately 2.5 to 3.3 billion bags
to manufacturing capacity of approximately 4.0 to 4.8 billion bags. All capacity
estimates are based upon certain assumptions regarding pricing, manufacturing
efficiencies and product mix.
RAW MATERIALS
HMWPE resin comprises the principal raw material in the Company's
products, the principal component of which is ethylene, a derivative of natural
gas. HMWPE resin is currently available from several sources, but is being
produced at over 90% of industry capacity utilization. During the past fiscal
year, as in some prior fiscal years, resin prices fluctuated significantly,
which trend the Company expects will continue. Although the Company currently
purchases the additives used in the production of its FRESH-SAC(R) products from
a single source, it believes that alternate sources would be available, if the
current manufacturer were to cease production. In such event, however, the
Company may experience delays in obtaining the additives, which could result in
temporary delays in FRESH-SAC(R) production. To date, the Company has not
experienced any shortages of raw materials.
GENERAL
The Company's predecessor, Beresford Packaging, Inc.
("Beresford-U.S."), was organized as a wholly owned subsidiary of Beresford
Packaging, Inc. a Canadian corporation that was subsequently amalgamated into
Beresford Box Company Limited ("Beresford-Canada") in February 1988 to acquire
certain assets and assume certain liabilities of Surrey Industries, Inc., an
unaffiliated entity, which manufactured traditional HMWPE plastic bags. The
Company was organized as a
-20-
Delaware corporation in May 1990 and in August 1990 Beresford-U.S. merged into
the Company. In February 1993, the stockholders and directors of the Company
approved the name change of the Company from BPI Environmental, Inc. to BPI
Packaging Technologies, Inc. The Company operates four wholly owned
subsidiaries: RC America, Inc., which purchases surplus inventory from
manufacturers of consumer products and markets and sells the products to mass
merchandise retailers and other retail chains; BPI Packaging (UK) Limited, which
markets and sells the Company's products in Europe; Market Media, Inc., which
sells and markets in-store advertising promotion programs; and BPI Packaging,
Inc., which was established to purchase, sell and market plastic bag products
manufactured by another bag manufacturer. Unless otherwise indicated, the term
"Company" includes BPI Packaging Technologies, Inc., its predecessor
Beresford-U.S., and its four subsidiaries.
USE OF PROCEEDS
The Company will not receive any part of the proceeds of any sale or
transactions for the Shares made by the Selling Securityholders. The Company
would receive $850,000 in gross proceeds if all of the Warrants are exercised.
The proceeds from such exercise will be used by the Company for general working
capital and general corporate purposes.
The Company has agreed to pay all of the costs and fees relating to the
registration of the shares of Common Stock covered by this Prospectus. The
Company will not pay any discounts, concessions or commissions payable to
underwriters, dealers or agents incident to the offering of the shares of Common
Stock covered by this Prospectus.
-21-
SELLING SECURITYHOLDERS
The following table sets forth, as of July 10, 1996, the number of
shares beneficially owned prior to the Offering, the number of shares of Common
Stock offered hereby, and the number of shares beneficially owned after the
Offering (assuming sale of all shares of Common Stock being offered hereby) by
the Selling Securityholders.
<TABLE>
<CAPTION>
Common Percentage of
Stock Common Stock Common Stock
Material Beneficially Common Beneficially Beneficially
Relationship Owned Stock Owned After Owned After
with the Prior to Being Completion of Completion of
Selling Securityholders Company (1) Offering Offered Offering Offering
- ----------------------- ----------- -------------- --------- ------------- -------------
<S> <C> <C> <C> <C> <C>
Robert Beren 25,500 25,500 0 0
Chinook Equities 11,000 11,000 0 0
James J. Dowling 50,000 50,000 0 0
S. Marcus Finkle 50,000 50,000 0 0
George M. Garfunkel Trust 25,000 25,000 0 0
David S. Gottesman 71,500 71,500 0 0
David S. Gottesman Trust 10,000 10,000 0 0
Gottesman Fund 30,000 30,000 0 0
Milton M. Gottesman Trust 10,000 10,000 0 0
Ruth L. Gottesman 50,000 50,000 0 0
Alan H. Glick 12,000 12,000 0 0
Jon W. Rotenstreich 11,500 11,500 0 0
Jerome L. Stern IRA 15,000 15,000 0 0
Diane Stupay 25,000 25,000 0 0
Arthur Zankel 25,000 25,000 0 0
H.J. Meyers & Co., Inc. (2) 607,295(4) 176,000 431,295 *
Culverwell & Co., Inc. (3) 24,000(5) 24,000 0 *
- -------------
* Less than one percent
(1) Except for H.J. Meyers & Co., Inc. and Culverwell & Co., Inc., all of the Selling Securityholders
purchased their Shares in the 1996 Private Placement.
(2) H.J. Meyers & Co., Inc. (formerly known as Thomas James Associates, Inc.) served as the underwriter in
connection with the Company's second and third public offering.
(3) Culverwell & Co., Inc. served as the underwriter in connection with the Company's initial public offering.
(4) Assumes full exercise of the Warrants and the 10,700 Class B Redeemable Common Stock Purchase Warrants
(the "Class B Warrants") and the conversion of 101,900 shares of Series A Preferred Stock held by H.J.
Meyers & Co., Inc. Each Class B Warrant entitles the holder thereof to purchase 1.04 shares of Common
Stock at an exercise price of $8.65 per share, subject to adjustment.
(5) Assumes full exercise of the Warrants.
</TABLE>
-22-
The shares of Common Stock are being registered to permit public
secondary trading of the Shares from time to time by the Investors and the
Warrantholders, upon exercise of the Warrants. The Selling Securityholders'
shares are being registered, at the expense of the Company, pursuant to the
terms of the registration rights granted in connection with the 1996 Private
Placement and Warrants, exclusive of fees and expenses of the Selling
Securityholders' attorneys, or other representatives and selling or brokerage
commissions, if any, as the result of the sale of such shares.
The Selling Securityholders are not restricted as to the price or
prices at which they may sell their securities and sales of such securities at
less than the market price may depress the market price of the Company's Common
Stock. It is anticipated that the sale of the securities being offered hereby
when made, will be made through customary channels either through broker-dealers
acting as agents or brokers for the seller, or through broker-dealers acting as
principals, who may then resell the shares in the over-the-counter market, or at
private sales in the over-the-counter market or otherwise, at negotiated prices
related to prevailing market prices at the time of the sales, or by a
combination of such methods. Thus, the period for sale of such securities by the
Selling Securityholders may occur over an extended period of time.
-23-
PLAN OF DISTRIBUTION
The shares of Common Stock and Warrants covered hereby may be offered
and sold from time to time by the Selling Securityholders listed above, and in
the case of Warrants, after the exercise of such Warrants, by their respective
holders. The Selling Securityholders will act independently of the Company in
making decisions with respect to the timing, market, or otherwise at prices
related to the then current market price or in negotiated transactions.
To exercise the Warrant, the holder must pay the exercise price of
$4.25 per share and transfer the Warrant to the Company in exchange for one
share of Common Stock. The aggregate warrant price is not adjustable. The number
of shares received upon exercise is adjustable upon combinations or
consolidations of shares, mergers and reorganizations, reclassifications,
exchanges or substitutions.
The shares of Common Stock may be offered and sold from time to time by
the Selling Securityholders, or by pledgees, donees, transferees or other
successors in interest. The shares of Common Stock covered by this Prospectus
may be sold by the Selling Securityholders in one or more transactions on
NASDAQ/NMS, or otherwise at prices and at terms then prevailing or at prices
related to the then current market price, or in negotiated transactions. The
Selling Securityholders will act independently of the Company in making
decisions with respect to such offers and sales. The shares of Common Stock may
be sold by one or more of the following: (a) a block trade in which the broker
or dealer so engaged will attempt to sell the shares of Common Stock as agent
but may position and resell a portion of the block as principal to facilitate
the transaction; (b) purchases by a broker or dealer as principal and resale by
such broker or dealer for its account pursuant to this prospectus; and (c)
ordinary brokerage transactions and transactions in which the broker solicits
purchasers. Thus, the period of distribution of such shares of Common Stock may
occur over an extended period of time. The Company is paying all of the other
expenses of registering the Shares offered hereby under the Securities Act
estimated to be $17,000 for filing, legal, accounting and miscellaneous fees and
expenses, and has agreed to indemnify the Selling Securityholders against
certain liabilities, including liabilities under the Securities Act. In
effecting sales, broker-dealers engaged by the Selling Securityholders may
arrange for other broker-dealers to participate. Usual and customary or
specifically negotiated brokerage fees or commissions may be paid by the Selling
Securityholders in connection with such sales. The Company will not receive any
proceeds from any sales of the Common Stock by the Selling Securityholders.
The Company will receive $850,000 in gross proceeds if all of Warrants
described above are exercised. Any proceeds from such exercise would be used for
general corporate purposes. The Company will not receive any part of the
proceeds of any sale or transactions of the Shares made by the Selling
Securityholders.
In offering the Shares, the Selling Securityholders and any
broker-dealers and any other participating broker-dealers who execute sales for
the Selling Securityholders may be deemed to be "underwriters" within the
meaning of the Securities Act in connection with such sales, and any
-24-
profits realized by the Selling Securityholders and the compensation of such
broker-dealer may be deemed to be underwriting discounts and commissions. In
addition, any shares covered by this Prospectus which qualify for sale pursuant
to Rule 144 may be sold under Rule 144 rather than pursuant to this Prospectus.
The Selling Securityholders will pay or assume brokerage commissions or
underwriting discounts incurred in connection with the sale of their Shares,
which commissions or discounts will not be paid or assumed by the Company.
The Company has advised the Selling Securityholders that during such
time as they may be engaged in a distribution of Common Stock included herein
they are required to comply with Rules 10b-6 and 10b-7 under the Exchange Act
(as those Rules are described in more detail below) and, in connection
therewith, that they may not engage in any stabilization activity, except as
permitted under the Exchange Act, are required to furnish each broker-dealer
through which Common Stock included herein may be offered copies of this
Prospectus, and may not bid for or purchase any securities of the Company or
attempt to induce any person to purchase any securities except as permitted
under the Exchange Act.
Rule 10b-6 under the Exchange Act prohibits, with certain exceptions,
participants in a distribution from bidding for or purchasing, for an account in
which the participant has a beneficial interest, any of the securities that are
the subject of the distribution. Rule 10b-7 governs bids and purchases made in
order to stabilize the price of a security in connection with a distribution of
the security.
TRANSFER AGENT
The transfer agent for the Company's Common Stock is American Stock
Transfer, Incorporated of 99 Wall Street, New York, New York 10005.
LEGAL MATTERS
Certain legal matters relating to the Common Stock offered hereby will
be passed upon for the Company by O'Connor, Broude & Aronson, 950 Winter Street,
Waltham, Massachusetts 02154. Dennis M. O'Connor, a partner of the firm and
Secretary of the Company, is the brother-in-law of Dennis N. Caulfield, the
Company's Chairman of the Board and Chief Executive Officer.
EXPERTS
The financial statements of the Company as of February 24, 1996,
February 24, 1995 and February 25, 1994 and for the years then ended have been
incorporated by reference herein and elsewhere in this registration statement in
reliance upon the report of Price Waterhouse LLP, independent accountants,
incorporated by reference herein, given upon the authority of said firm as
experts in accounting and auditing.
-25-
INDEMNIFICATION
Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers, and controlling persons of the
Company pursuant to the foregoing provisions, or otherwise, the Company has been
advised that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Securities Act and
is, therefore, unenforceable.
Delaware General Corporation Law, Section 102(b)(7), enables a
corporation in its original certificate of incorporation or an amendment thereto
validly approved by stockholders to eliminate or limit personal liability of
members of its Board of Directors for violations of a director's fiduciary duty
of care. However, the elimination of limitation shall not apply where there has
been a breach of the duty of loyalty, failure to act in good faith, engaging in
intentional misconduct or knowingly violating a law, paying a dividend or
approving a stock repurchase which is deemed illegal or obtaining an improper
personal benefit. The Company's Certificate of Incorporation, as amended,
includes the following language:
To the maximum extent permitted by Section 102(b)(7) of the
General Corporation Law of Delaware, a director of this 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
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 an improper personal benefit.
Delaware General Corporation Law, Section 145, permits a corporation
organized under Delaware law to indemnify directors and officers with respect to
any matter in which the director or officer acted in good faith and in a manner
he reasonably believed to be not opposed to the best interests of the Company,
and, with respect to any criminal action, he had reasonable cause to believe his
conduct was not unlawful. The Bylaws of the Company, as amended, include the
following provision:
"Reference is made to Section 145 and any other relevant
provisions of the General Corporation Law of the State of Delaware.
Particular reference is made to the class of persons, hereinafter
called "Indemnitees," who may be indemnified by a Delaware corporation
pursuant to the provisions of such Section 145, namely, any person, or
the heirs, executors, or administrators of such 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 such
person is or was a director, officer, employee, or agent of such
corporation or is or was serving at the request of such corporation as
a director, officer, employee, or agent of another corporation,
partnership, joint
-26-
venture, trust, or other enterprise. The Corporation shall, and is
hereby obligated to, indemnify the Indemnitees, and each of them, in
each and every situation where the Corporation is obligated to make
such indemnification pursuant to the aforesaid statutory provisions.
The Corporation shall indemnify the Indemnitees, and each of them, in
each and every situation where, under the aforesaid statutory
provisions, the Corporation is not obligated, but is nevertheless
permitted or empowered, to make such indemnification, it being
understood that, before making such indemnification, with respect to
any situation covered under this sentence, (i) the Corporation shall
promptly make or cause to be made, by any of the methods referred to in
Subsection (d) of such Section 145, a determination as to whether each
Indemnitee 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, in the case of any criminal action or proceeding, had no
reasonable cause to believe that his conduct was unlawful, and (ii)
that no such indemnification shall be made unless it is determined that
such Indemnitee 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, in the case of any criminal action or proceeding, had
no reasonable cause to believe that his conduct was unlawful."
-27-
================================================================================
NO DEALER, SALESMAN OR ANY OTHER PERSON HAS BEEN AUTHORIZED IN CONNECTION WITH
THIS OFFERING TO GIVE ANY INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN
THOSE 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 SECURITIES OFFERED HEREBY IN ANY JURISDICTION IN
WHICH SUCH OFFER OR SOLICITATION IS NOT AUTHORIZED OR IN WHICH THE PERSON MAKING
SUCH OFFER A SOLICITATION IS NOT QUALIFIED TO DO SO OR TO ANY PERSON TO WHOM IT
IS UNLAWFUL TO MAKE SUCH AN OFFER OR SOLICITATION. NEITHER THE DELIVERY OF THIS
PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE AN
IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE CIRCUMSTANCES OF THE COMPANY OR
THE FACTS HEREIN SET FORTH SINCE THE DATE HEREOF.
--------
TABLE OF CONTENTS
PAGE
Risk Factors.............................................. 2
Available Information..................................... 10
Incorporation of Certain Information
by Reference............................................. 11
Recent Developments....................................... 12
The Company .............................................. 13
Use of Proceeds .......................................... 21
Selling Securityholders................................... 22
Plan of Distribution ..................................... 24
Transfer Agent............................................ 25
Legal Matters............................................. 25
Experts................................................... 25
Indemnification........................................... 26
--------
================================================================================
================================================================================
621,500 SHARES
OF COMMON STOCK
BPI PACKAGING TECHNOLOGIES, INC.
----------
PROSPECTUS
----------
, 1996
================================================================================
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The following is an itemization of all expenses (subject to future
contingencies) incurred or expected to be incurred by the Company in connection
with the issuance and distribution of the securities being offered hereby other
than underwriting discounts and commissions (items marked with an asterisk (*)
represent estimated expenses):
Registration Fee (SEC).................................$ 508.99
Registration Fee (NASD)................................$ 647.61
Transfer Agent's Fees*.................................$ 1,000.00
Printing Costs*........................................$ 1,100.00
Legal Fees*............................................$ 5,000.00
Accounting Fees*.......................................$ 5,000.00
Miscellaneous*.........................................$ 3,743.40
-----------
TOTAL* $ 17,000.00
===========
ITEM 15. INDEMNIFICATION OF OFFICERS AND DIRECTORS
See "Indemnification" contained in Part I hereof, which is incorporated
by reference.
ITEM 16. EXHIBITS
(a) The following is a list of exhibits filed herewith as part of this
Registration Statement:
<TABLE>
<CAPTION>
Exhibit
No. Title
--- -----
<S> <C>
4a Form of 1996 Private Placement subscription agreement.
4b Warrant Certificate, dated May 28, 1996, issued to H.J. Meyers & Co., Inc.
4c Warrant Certificate, dated May 28, 1996, issued to Culverwell & Co., Inc.
5 Opinion letter of O'Connor, Broude & Aronson as to legality of shares being
registered.
10a Consulting Agreement, dated May 28, 1996, by and between the Company and H.J.
Meyers & Co., Inc.
10b Consulting Agreement, dated May 28, 1996, by and between the Company and
Culverwell & Co., Inc.
23a Consent of Price Waterhouse LLP.
23b Consent of O'Connor, Broude & Aronson (contained in Opinion filed as Exhibit 5).
</TABLE>
II-1
(b) The following exhibits were filed as part of the Company's
quarterly report on Form 10-Q for the quarter ended November 24, 1995, as
amended, as initially filed with the Securities and Exchange Commission on
January 11, 1996 and is incorporated herein by reference:
<TABLE>
<CAPTION>
Exhibit
No. Title
--- -----
<S> <C>
3a Certificate of Amendment of Certificate of Incorporation, dated May 26 ,1994.
3b Bylaws
</TABLE>
ITEM 17. UNDERTAKINGS
The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made,
a post-effective amendment to this registration statement to include any
additional or changed material information on the plan of distribution.
(2) For the purpose of determining any liability under the Securities
Act, each such post-effective amendment shall be deemed to be a new registration
statement relating to the securities offered therein, and the offering of the
securities at that time shall be deemed to be the initial bona fide offering
thereof.
(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.
Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers, and controlling persons of the
Registrant pursuant to the foregoing provisions, or otherwise, the Registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Securities 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 Registrant will, unless in the opinion of its counsel the
matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Act and will be governed by the final
adjudication of such issue.
II-2
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended,
the Registrant certifies that it has reasonable grounds to believe that it meets
all of the requirements for filing on Form S-3 and has duly caused this
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the Town of Dighton, Commonwealth of Massachusetts on
July 12, 1996.
BPI PACKAGING TECHNOLOGIES, INC.
By:/s/ Dennis N. Caulfield
----------------------------------
Dennis N. Caulfield, President
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Registration Statement on Form S-3 has been signed by the following persons
in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Name Capacity Date
- ---- -------- ----
<S> <C> <C>
/s/ Dennis N. Caulfield President, Chief Executive July 12, 1996
- --------------------------------- Officer and Chairman of
Dennis N. Caulfield the Board of Directors
(Principal Executive
Officer)
/s/ James F. Koehlinger Chief Financial Officer July 12, 1996
- --------------------------------- (Principal Financial and
James F. Koehlinger Principal Accounting
Officer)
/s/ C. Jill Beresford Vice President of July 12, 1996
- ----------------------------------- Marketing, Treasurer
C. Jill Beresford and Director
/s/ Gregory M. Davall Vice President of July 12, 1996
- ------------------------------ Manufacturing and Director
Gregory M. Davall
/s/ Ronald V. Caulfield Director July 12, 1996
- ---------------------------------
Ronald V. Caulfield
/s/ Ivan J. Hughes Director July 12, 1996
- ---------------------------------
Ivan J. Hughes
/s/ David N. Laux Director July 12, 1996
- ---------------------------------
David N. Laux
</TABLE>
II-3
NUMBER:_________________
ISSUED TO:_____________________
BPI PACKAGING TECHNOLOGIES, INC.
SUBSCRIPTION AGREEMENT
In the event you decide not to participate in this
offering please return the Subscription Agreement
to the principal office of the Company as set forth herein.
FOR ACCREDITED INVESTORS ONLY
SUBSCRIPTION AGREEMENT
LIMITED OFFERING OF COMMON STOCK
OF BPI PACKAGING TECHNOLOGIES, INC.
THE COMMON STOCK OFFERED HEREBY HAS NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR APPLICABLE STATE SECURITIES
LAWS, NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE REGULATORY
AUTHORITY PASSED UPON THE ACCURACY OR ADEQUACY OF THIS AGREEMENT OR ENDORSED THE
MERITS OF THIS OFFERING. ANY REPRESENTATION TO THE CONTRARY IS UNLAWFUL. THE
SHARES MAY NOT BE TRANSFERRED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE ACT AND ANY APPLICABLE STATE SECURITIES LAWS OR AN OPINION
OF COUNSEL ACCEPTABLE TO THE COMPANY AND ITS COUNSEL THAT SUCH REGISTRATION IS
NOT REQUIRED.
THE INFORMATION CONTAINED IN THIS AGREEMENT DOES NOT PURPORT TO BE ALL
INCLUSIVE OR TO CONTAIN ALL THE INFORMATION THAT A PROSPECTIVE INVESTOR MAY
DESIRE IN INVESTIGATING THE COMPANY. EACH INVESTOR MUST RELY ON THE INVESTOR'S
OWN EVALUATION OF THE COMPANY AND THE TERMS OF THE OFFERING, INCLUDING THE
MERITS AND RISKS INVOLVED, IN MAKING AN INVESTMENT DECISION WITH RESPECT TO THE
COMMON STOCK. SEE "RISK FACTORS" FOR A DISCUSSION OF CERTAIN FACTORS WHICH
SHOULD BE CONSIDERED IN CONNECTION WITH THE PURCHASE OF THE SHARES OF COMMON
STOCK.
THIS AGREEMENT DOES NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION
OF AN OFFER TO BUY THE COMMON STOCK IN ANY STATE OR OTHER JURISDICTION TO ANY
PERSON TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION.
EXCEPT AS OTHERWISE INDICATED, THIS AGREEMENT SPEAKS AS OF THE DATE
HEREOF. NEITHER THE DELIVERY OF THIS AGREEMENT NOR ANY SALE MADE HEREUNDER
SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THERE HAS BEEN NO
CHANGE IN THE AFFAIRS OF THE COMPANY AFTER THE DATE HEREOF.
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS AGREEMENT IN CONNECTION WITH
THE OFFERING MADE HEREBY, AND, IF GIVEN OR MADE, SUCH OTHER INFORMATION OR
REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY
OR THE PLACEMENT AGENT. EACH INVESTOR WILL BE ENTITLED TO RELY SOLELY ON THOSE
i
REPRESENTATIONS AND WARRANTIES WHICH MAY BE MADE TO IT IN ANY FINAL SUBSCRIPTION
AGREEMENT RELATING TO THE COMMON STOCK.
PROSPECTIVE INVESTORS ARE NOT TO CONSTRUE THE CONTENTS OF THIS
AGREEMENT AS LEGAL ADVICE. EACH INVESTOR SHOULD CONSULT THEIR OWN ATTORNEY OR
BUSINESS ADVISOR AS TO THE LEGAL, TAX AND OTHER CONSIDERATIONS RELATING TO AN
INVESTMENT IN THE COMMON STOCK.
OFFERS AND SALES WILL ONLY BE MADE TO PERSONS WHOM THE COMPANY BELIEVES
TO BE "ACCREDITED INVESTORS" AS DEFINED IN REGULATION D, PROMULGATED UNDER THE
ACT WHO, EITHER ALONE OR WITH SUCH INVESTORS PURCHASER REPRESENTATIVE, HAVE SUCH
KNOWLEDGE AND EXPERIENCE IN FINANCIAL AND BUSINESS MATTERS THAT SUCH INVESTOR IS
CAPABLE OF EVALUATING THE MERITS AND RISKS OF THE PROSPECTIVE INVESTMENT. IT IS
EXPECTED THAT SUCH SECURITIES WOULD BE EXEMPT FROM REGISTRATION UNDER THE ACT
PURSUANT TO AN EXEMPTION FROM REGISTRATION CONTAINED IN SECTION 4(2) OF THE ACT
AND RULE 506 UNDER REGULATION D.
A PURCHASER'S INVESTMENT IN THE SECURITIES PROPOSED UNDER THE TERMS OF
THIS OFFERING WILL BE SUBJECT TO CERTAIN RESTRICTIONS AS DESCRIBED MORE FULLY IN
THE TERMS OF THE OFFERING AND THE SUBSCRIPTION AGREEMENT. THESE SECURITIES ARE
SUBJECT TO RESTRICTIONS ON TRANSFERABILITY AND RESALE AND MAY NOT BE TRANSFERRED
OR RESOLD EXCEPT AS PERMITTED UNDER THE ACT, AND THE APPLICABLE STATE SECURITIES
LAWS PURSUANT TO REGISTRATION OR EXEMPTION THEREFROM. INVESTORS MUST EXPECT TO
BEAR THE ECONOMIC RISK OF AN INVESTMENT IN THE COMMON STOCK FOR AN INDEFINITE
PERIOD OF TIME.
THIS AGREEMENT DOES NOT CONSTITUTE AN OFFER TO SELL OR SOLICITATION OF
AN OFFER TO BUY ANY SECURITIES OTHER THAN THE COMMON STOCK OFFERED HEREBY.
CERTAIN PROVISIONS OF VARIOUS OF DOCUMENTS ARE SUMMARIZED IN THIS
AGREEMENT BUT PROSPECTIVE INVESTORS SHOULD NOT ASSUME THAT THESE SUMMARIES ARE
COMPLETE. SUCH SUMMARIES ARE QUALIFIED IN THEIR ENTIRETY BY REFERENCE TO TEXT OF
THE ORIGINAL DOCUMENT WHICH WILL BE MADE AVAILABLE TO PROSPECTIVE INVESTORS BY
THE COMPANY UPON REQUEST.
BY ACCEPTANCE OF THIS AGREEMENT, PROSPECTIVE INVESTORS RECOGNIZE AND
ACCEPT THE NEED TO CONDUCT THEIR OWN THOROUGH INVESTIGATION AND DUE DILIGENCE
BEFORE CONSIDERING PURCHASING THE COMMON STOCK OFFERED HEREBY.
ii
STATE SECURITIES NOTICES
IN MAKING AN INVESTMENT DECISION INVESTORS MUST RELY ON THEIR OWN
EXAMINATION OF THE COMPANY AND THE TERMS OF THE OFFERING, INCLUDING THE MERITS
AND RISKS INVOLVED. THESE SECURITIES HAVE NOT BEEN RECOMMENDED BY ANY FEDERAL OR
STATE SECURITIES COMMISSION OR REGULATORY AUTHORITY. FURTHERMORE, THE FOREGOING
AUTHORITIES HAVE NOT CONFIRMED THE ACCURACY OR DETERMINED THE ADEQUACY OF THIS
DOCUMENT. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
THESE SECURITIES ARE SUBJECT TO RESTRICTIONS ON TRANSFERABILITY AND
RESALE AND MAY NOT BE TRANSFERRED OR RESOLD EXCEPT AS PERMITTED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, AND THE APPLICABLE STATE SECURITIES LAWS
PURSUANT TO REGISTRATION OR EXEMPTION THEREFROM. INVESTORS SHOULD BE AWARE THAT
THEY MAY BE REQUIRED TO BEAR THE FINANCIAL RISKS OF THIS INVESTMENT FOR AN
INDEFINITE PERIOD OF TIME.
iii
RISK FACTORS
AN INVESTMENT IN THE COMMON STOCK OFFERED HEREBY INVOLVES A HIGH DEGREE
OF RISK AND SHOULD NOT BE PURCHASED BY PERSONS WHO CANNOT AFFORD THE LOSS OF
THEIR ENTIRE INVESTMENT. IN ANALYZING THIS OFFERING, PROSPECTIVE INVESTORS
SHOULD CAREFULLY CONSIDER THE FOLLOWING RISK FACTORS:
PREVIOUS LOSSES; ACCUMULATED DEFICIT; NO ASSURANCE OF FUTURE PROFITS
At November 24, 1995, the Company had an accumulated stockholders'
deficit of $12,907,840. Since its inception in 1988, the Company has not
operated profitably in any fiscal year (exclusive of net income of $311,022 for
its fiscal year ending March 1, 1991, which included extraordinary income of
$337,179) and incurred a loss of $847,486 for the fiscal year ended February 24,
1995. The Company also expects to incur a loss for the fiscal year ended
February 23, 1996. No assurance can be given that the Company will be profitable
or attain improved operating results.
INTENSE COMPETITION
The manufacture of plastic bags is a highly competitive industry. In
particular, the Company competes with major companies such as Tenneco, Inc.
("Tenneco") and Sonoco Products Corporation ("Sonoco"). The Company's in-store
advertising and promotion products compete in the same markets that are
dominated by Heritage Media Corporation and Catalina Marketing Corporation, both
of which offer in-store advertising and promotion products which are not related
to the floor or the FRESH-SAC(R) produce bag dispensing systems. These companies
have substantially greater research and development, marketing, financial and
human resources than the Company. In addition, competitors may succeed in
developing new or enhanced products that are more effective than any that may be
sold or developed by the Company, and such companies may also prove to be more
successful than the Company in marketing and selling such products. No assurance
can be given that the Company will be able to compete successfully with any of
these companies or achieve a greater market share than it currently possesses.
POSSIBLE PATENT CLAIMS BY MOBIL OIL CORPORATION AND SONOCO PRODUCTS COMPANY;
POSSIBLE PAYMENT OF LICENSE FEES AND LITIGATION COSTS
Mobil Oil Corporation ("Mobil") owns a reissue patent that relates to
avoiding stress concentration and preventing the tearing of plastic bags. This
reissue patent originally was to expire in 1996. Due to a change in U.S. patent
law, the reissue patent is now extended until 1998. On December 4, 1995, Mobil
instituted an infringement claim against the Company. The Company intends to
vigorously defend this suit. However, if Mobil was to succeed in this or any
infringement claim against the Company, Mobil might be able to prevent the
future use, sale and manufacture of the Company's grocery T-shirt sacks and
similar products which might be found to infringe the patent, or alternatively,
might require the Company to pay Mobil a license fee for the prior and future
iv
use of this technology. Either outcome could have a material adverse effect on
the Company's business.
In 1990, Sonoco Products Company ("Sonoco") indicated its intent to
seek licenses under a broadened reissue patent from all manufacturers of plastic
bags which utilize a particular method for holding plastic bags in a metal rack.
Sonoco has commenced litigation against several plastic bag manufacturers other
than the Company. The United States District Court for the Central District of
California entered summary judgment in February 1994 for the defendants in a
suit relating to alleged patent infringement by the defendants. The court
declared Sonoco's three reissue claims to be invalid. The court is also allowing
the defendants' counterclaim against Sonoco for unfair competition to continue.
It is expected that Sonoco will appeal this judgment. Subsequent to this
decision, the Company filed suit against Sonoco alleging infringement of the
Company's patent by Sonoco.
If Sonoco was to commence and succeed in any infringement claim against
the Company, it might be able to prevent the future use, sale and manufacture of
certain of the Company's products which use racking systems. Alternatively, the
Company could be required to pay a license fee for the prior and future use of
this technology which might place the Company at a competitive disadvantage in
the sale of certain of its products. Either outcome could have a material
adverse effect on the Company's business. Infringement of any patent may also
render the Company liable to purchasers and end-users of the infringing product.
No assurance can be given that the Company's products will not infringe
patents or rights of others. The Company could incur substantial costs if
required to defend itself in any patent litigation.
DEPENDENCE ON PATENTS AND PROPRIETARY TECHNOLOGY
In 1993, the Company was issued a United States patent for the
dispensing system used in conjunction with its FRESH-SAC(R) product and other
T-shirt sack products and has filed patent applications for this dispensing
system in approximately 20 foreign countries. The Company has filed patent
applications in the United States and approximately 14 foreign countries for the
FRESH- SAC(R) HMWPE material, and was notified that this patent has been issued
in a foreign country. The Company owns patents issued in the United States and
Canada relating to the method for making a pack of T-shirt sacks which permit
the individual sacks to be mounted on a handle supported rack dispensing system
and to be easily separated and dispensed from the pack utilizing a central "pull
tab." The Company has also filed a United States patent application for its
Fresh Focus Cartridge Talker(TM). No assurance can be given that any of these
patents will be granted or that the patents currently owned by the Company and
any patents that may be granted in the future will be enforceable or provide the
Company with meaningful protection from competitors. Even if a competitor's
products were to infringe patents owned by the Company, it could be costly for
the Company to enforce its rights in an infringement action and would divert
funds and resources otherwise used in the Company's operations. Furthermore, no
assurance can be given that the
v
Company would be successful in enforcing such rights. No assurance can be given
that any of the Company's patent applications will be allowed or, if allowed,
will provide the Company with any advantage against competitors selling similar
products. Similarly, no assurance can be given that the Company's products will
not infringe patents or rights of others.
The Company also relies on unpatented proprietary know-how, which may
be duplicated, and employs various methods including confidentiality agreements
with employees to protect its proprietary know-how. However, such methods may
not afford complete protection and no assurance can be given that others will
not independently develop such know-how or obtain access thereto.
UNCERTAINTY OF MARKET ACCEPTANCE FOR THE COMPANY'S IN- STORE ADVERTISING AND
PROMOTION PRODUCTS
As is typical in the case of newly introduced products, demand and
market acceptance for such products is subject to a high level of uncertainty.
Achieving and maintaining market acceptance for the Company's in-store
advertising and promotion products will require substantial marketing efforts
and expenditure of significant funds. No assurance can be given that the
Company's in-store advertising and promotion products will achieve and maintain
market acceptance, or that increased marketing efforts will result in successful
commercialization of the in-store advertising and promotion products, or that
such products will generate sufficient revenues to permit profitable operations.
DEPENDENCE ON LICENSE FOR FLOOR FOCUS AD-TILE(TM)
The Company's success in implementing its strategy for its in-store
advertising and promotion products depends in part on its exclusive, worldwide
license to use the patented Floor Focus Ad-Tile(TM) system. The termination of
this license may limit the Company's ability to market its in-store advertising
and promotion products. Pursuant to this license agreement, the Company is
required to purchase a minimum number of Floor Focus Ad-Tiles(TM) at the price
set forth in the license agreement. In the event the Company does not purchase
the minimum requirements, it must pay a minimum royalty fee based on the
deficiency. Such license is also subject to infringement claims from third
parties. No assurance can be given that this license will not be terminated, or
that a third party will not be successful in an infringement action. The
termination of this license could have a material adverse effect on the
Company's in-store advertising and promotion products.
NEED FOR ADDITIONAL FINANCING
A significant portion of the Company's capital requirements to date has
been funded through equity and subordinated debt investments by Beresford Box
Company Ltd. (formerly Beresford Packaging, Inc.) (subsequently converted into
the Company's Series B and Series C Preferred Stock), a principal stockholder,
the proceeds from the Company's three prior public offerings, the exercise of
warrants sold in these public offerings and private placements. The Company has
also utilized
vi
bank loan and line of credit facilities, trade credit facilities and equipment
leases. Although management believes that fixed asset or lease financing is now
available at competitive rates from banks and leasing companies to finance a
substantial part of the remainder of the planned increase in capacity at the
Dighton facility during the next six months, and that the availability of this
financing together with its current bank line of credit, and anticipated funds
from operations will be sufficient to fund the Company's operations and proposed
expansion of its business and in-store advertising and promotion business for at
least the next 12 months, the Company may require additional financing. The
Company may raise additional financing through the sale of equity or debt
securities in order to finance all or part of the remainder of the planned
increased capacity at the Dighton facility over the next six months as well as
to increase its in-store advertising and promotion business and general working
capital. The Company has no commitments for such financing, and no assurance can
be given that the Company will be successful in obtaining such additional
financing or that such financing will be available on terms favorable to the
Company, if at all.
DEPENDENCE UPON KEY PERSONNEL
The Company's ability to continue to develop and to market its products
depends, in large part, on its ability to attract and retain qualified
personnel. Competition for such personnel is intense and no assurance can be
given that the Company will be able to retain and attract such personnel.
The Company is dependent in particular upon the services of Dennis N.
Caulfield, its President and Chief Executive Officer, C. Jill Beresford, its
Vice President of Marketing, and Gregory M. Davall, its Vice President of
Manufacturing, and has employment agreements with these officers. The loss of
the services of any of these individuals could have a material adverse effect on
the Company. The Company maintains and is the beneficiary of key-person life
insurance on each of Dennis N. Caulfield and C. Jill Beresford in the amount of
at least $1,000,000 per individual.
SUBSTANTIAL SHARES OF PREFERRED STOCK OUTSTANDING; POSSIBLE ISSUANCE OF
ADDITIONAL PREFERRED STOCK
The Company is authorized to issue up to 2,000,000 shares of Preferred
Stock, $.01 par value per share (the "Preferred Stock"). As of April 1, 1996,
there were issued and outstanding 303,946 shares of Series A Convertible
Preferred Stock, 146,695 shares of Series B Convertible Preferred Stock and
18,337 shares of Series C Redeemable Preferred Stock.
The Company has no present intention to issue any additional shares of
Preferred Stock. However, the issuance of any such Preferred Stock could affect
the rights of the holders of the Common Stock and reduce its value. In
particular, specific rights granted to future holders of Preferred Stock could
be used to restrict the Company's ability to merge with or sell its assets to a
third party, thereby preserving control of the Company by its present owners.
vii
SUBSTANTIAL SHARES OF COMMON STOCK RESERVED FOR THE EXERCISE OR GRANT OF OPTIONS
AND WARRANTS; POTENTIAL DILUTIVE EFFECT THEREOF; REGISTRATION RIGHTS OF WARRANT
HOLDERS
The Company has reserved 933,750 shares of Common Stock for issuance
upon exercise of options granted or available for grant to employees, officers,
directors and consultants pursuant to the Company's 1990 and 1993 Stock Option
Plans, as well as an aggregate of 2,539,881 shares of Common Stock for issuance
upon (i) exercise of the Class B Warrants and the Underwriter's Warrants I and
II; (ii) conversion of the Series A and Series B Convertible Preferred Stock;
(iii) exercise of the warrants issued to an individual and principals of the
placement agent in the Company's private placements to overseas investors; and
(iv) the attainment of certain performance goals by RC America, Inc. The
existence of the aforementioned options, warrants, and Preferred Stock may prove
to be a hindrance to future financing by the Company. Although the book value of
the Company's Common Stock is currently significantly lower than the exercise
prices of the outstanding options and warrants, the exercise of any such options
or warrants in the future could dilute the book value of the Company's Common
Stock. Further, the holders of such options and warrants may exercise them at a
time when the Company would otherwise be able to obtain additional equity
capital on terms more favorable to the Company.
EFFECT OF FUTURE SALES OF RESTRICTED SECURITIES
Of the 11,800,909 shares of the Company's Common Stock outstanding on
April 1, 1996, 2,332,269 shares are held by Dennis N. Caulfield (through a
corporation controlled by Mr. Caulfield), Beresford Box Company Ltd. (a
corporation controlled by Ms. Beresford) (excluding 146,695 shares of Series B
Convertible Preferred Stock), C. Jill Beresford and Alex F. Vaicunas, and an
aggregate of 727,470 shares were issued in four Regulation D offerings to
accredited investors. Of the 727,470 shares, an aggregate of 515,000 shares of
Common Stock issued in the first three Regulation D offerings were registered by
the Company on Form S-1 Registration Statements that were declared effective on
September 13, 1993 and April 7, 1994, respectively. The remaining 212,470 shares
of Common Stock sold in the last Regulation D offering were registered in a
Registration Statement declared effective on January 5, 1995 and are also
included in this Prospectus. None of the 2,332,269 shares have been registered
under the Securities Act of 1933, as amended (the "Securities Act"), and are
"restricted securities" under Rule 144 of the Securities Act, exclusive of 3,200
shares, which are registered but also subject to the resale limitations (except
the holding period) of Rule 144 since they are held by an affiliate of the
Company. Ordinarily, under Rule 144, a period holding restricted securities for
a period of two years may, every three months, sell in ordinary brokerage
transactions or in transactions directly with a market maker an amount equal to
the greater of one percent of the Company's then outstanding Common Stock or the
average weekly trading volume during the four calendar weeks prior to such sale.
Rule 144 also permits sales by a person who is not an affiliate of the Company
and who has satisfied a three-year holding period to sell with out any quantity
limitation. Future sales under Rule 144 may have a depressive effect on the
market price of the Common Stock. All of the shares of Common Stock held by
Messrs. Caulfield and Vaicunas, and Beresford Box Company Ltd. are currently
eligible for sale pursuant to Rule 144.
viii
From December 1992 through June 1994, the Company issued an aggregate
of 1,718,000 shares of its Common Stock in Regulation S offerings. These shares
are subject to the restrictions of Regulation S and may not be sold unless such
shares are registered under the Act and any applicable state securities law in
the United States or such offer or sale is made pursuant to exemptions from
those registration requirements.
In addition, in April 1993, the Company registered 200,000 shares of
its Common Stock underlying the 1990 Stock Option Plan on a Form S-8
registration statement, which shares when exercised will become freely
tradeable. To date, 16,250 shares have been exercised under the 1990 Stock
Option Plan and are freely tradeable. Options to purchase up to an additional
173,750 shares have also been granted under the 1990 Stock Option Plan, and
options to purchase 661,380 shares have been granted under the 1993 Stock Option
Plan.
ANTI-TAKEOVER MEASURES; POSSIBLE ANTI-TAKEOVER EFFECTS OF CERTAIN CHARTER
PROVISIONS
The Company, as a Delaware corporation, is subject to the General
Corporation Law of the State of Delaware, including Section 203, an
anti-takeover law enacted in 1988. In general, the law restricts the ability of
a public Delaware corporation from engaging in a "business combination" with an
"interested stockholder" for a period of three years after the date of the
transaction in which the person became an interested stockholder. As a result,
potential acquirors of the Company may be discouraged from attempting to effect
an acquisition transaction with the Company, thereby possibly depriving holders
of the Company's securities of certain opportunities to sell or otherwise
dispose of such securities at above-market prices pursuant to such transactions.
As a result of the application of Section 203 and certain provisions in the
Company's Certificate of Incorporation and Bylaws, including the adoption of a
classified Board of Directors and the requirement for increased shareholder vote
to take certain actions involving the directors and the Certificate of
Incorporation and Bylaws as amended, potential acquirors of the Company may find
it more difficult or be discouraged from attempting to effect and acquisition
transaction with the Company, thereby possibly depriving holders of the
Company's securities of certain opportunities to sell or otherwise dispose of
such securities at above-market prices pursuant to such transactions.
LIMITATION ON DIRECTOR LIABILITY UNDER DELAWARE LAW
Pursuant to the Company's Certificate of Incorporation, as amended, and
under Delaware law, directors of the Company are not liable to the Company or
its stockholders for monetary damages for breach of fiduciary duty, except for
liability in connection with a breach of the duty of loyalty, for acts or
omissions not in good faith or which involve intentional misconduct or a knowing
violation of law, for dividend payments or stock repurchases illegal under
Delaware law or for any transaction in which a director has derived an improper
personal benefit. However, insofar as indemnification for liabilities arising
under the Securities Act may be permitted to directors, officers, or persons
controlling the Company pursuant to the foregoing, the Company has been informed
that in the opinion of the Securities and Exchange Commission, such
indemnification is against public policy as expressed in the Securities Act, and
is, therefore, unenforceable.
ix
NO ACTIVE PUBLIC MARKET; ARBITRARY DETERMINATION OF EXERCISE PRICES; POSSIBLE
VOLATILITY OF TRADING PRICES FOR COMMON STOCK
Although the Common Stock and Class B Warrants are quoted on
NASDAQ/NMS, and the Preferred Stock is quoted on NASDAQ, no assurance can be
given that an active public market in such securities will be sustained. The
exercise price of the Class B Warrants and the Underwriter's Warrants was
arbitrarily determined by negotiation between the Company and the Underwriters.
Such exercise prices do not necessarily bear any relationship to the Company's
assets, book value, total revenue or other established criteria of value, and
should not be considered indicative of the actual value of the Common Stock. The
trading prices of the Common Stock could be subject to wide fluctuations in
response to the Company's operating results, announcements by the Company or
others of developments affecting the Company or its competitors or customers and
other events or factors. In addition, the stock market has experienced extreme
price and volume fluctuations in recent years. These fluctuations have had a
substantial effect on the market prices for many companies and similar events in
the future may adversely affect the market prices of the Common Stock.
NO DIVIDENDS
The Company has not paid dividends to its stockholders since its
inception and does not plan to pay dividends in the foreseeable future. The
Company intends to reinvest earnings, if any, in the development and expansion
of its business.
x
SUBSCRIPTION AGREEMENT
THIS AGREEMENT (the "Agreement") made and entered into by and between
BPI Packaging Technologies, Inc., a Delaware (U.S.A.) corporation with its
principal place of business at 455 Somerset Avenue, Dighton, Massachusetts 02764
(the "Company"); and the undersigned (hereinafter referred to individually as a
"Buyer" and collectively, as the "Buyers") .
W I T N E S S E T H :
WHEREAS, the Company is offering up to 1,000,000 shares (the "Shares"),
on a "best efforts" basis to raise up to $2,000,000 in gross proceeds from the
sale of the Shares (the "Offering");
WHEREAS, the Buyers wish to participate in the Offering whereby they
will invest in the Shares as contemplated by this Agreement and all exhibits
attached hereto;
WHEREAS, the Shares being offered in the Offering have not been
registered under the registration provisions of the Securities Act of 1933, as
amended (the "Act") or under applicable state securities laws, and are being
offered and sold by the Company in reliance upon an exemption from registration
under Sections 4(2) and/or 4(6) of the Act, and Regulation D promulgated
thereunder; and
WHEREAS, as a new Buyer, you have indicated your desire to participate
in this Offering and to subscribe to and agree to purchase _____ Shares at $2.00
per Share for an aggregate subscription price of $_________.
NOW, THEREFORE, in consideration of the covenants and agreements herein
contained, and other valuable consideration, the receipt and sufficiency of
which is hereby acknowledged, the Company and the Buyers agree as follows:
1. PAYMENT. Buyer hereby agrees to pay to the Company the amount set
forth above via wired funds to: Cambridge Trust Company, 1336 Massachusetts
Avenue, Cambridge, Massachusetts 02138; ABA #: 011300595, Account #:
57-240-3-01, O'Connor, Broude & Aronson, Client Fund Account, in favor of BPI
Packaging Technologies, Inc. Upon acceptance of the Subscription Agreement by
the Company, the company may use such funds for working capital and general
corporate purposes. Should this Agreement not be accepted by the Company, the
proceeds shall be returned to the Buyer without interest.
2. AUTHORIZATION AND SALE OF SHARES.
2.1 AUTHORIZATION OF SHARES. The Company has duly authorized
the sale and issuance of up to 1,000,000 Shares of Common Stock.
-1-
2.2 SALE OF SHARES. Subject to the terms and conditions of
this Agreement, the Buyer hereby subscribes for and agrees to purchase from the
Company the number of Shares set forth above, at a purchase price of $2.00 per
Share. There is no placement agent acting on behalf of the Company in connection
with the Offering.
3. THE CLOSING.
3.1 CLOSING DATE. This Subscription Agreement constitutes an
offer by the Buyer to purchase the Shares. The Company expects to hold one or
more closings (the "Closing") of this Offering, with the first Closing expected
to be held on April 12, 1996. The final Closing of this Offering is expected to
be held upon the earlier of (i) five (5) days after the Company has accepted
subscriptions for an aggregate of $2,000,000 or (ii) April 26, 1996 (the
"Termination Date"). No minimum number of Shares is required to be sold before a
Closing occurs. The Termination Date of the Offering is subject to prior
termination or extension for up to an additional sixty (60) days in the
discretion of the Company. Buyers will be notified in the event of such
termination or extension.
3.2 DELIVERY. Within fifteen (15) days following the Closing,
the Company will deliver to each Buyer a certificate or certificates, in such
denominations and registered in such name or names as each Buyer may designate
by notice to the Company, representing the Shares purchased by each Buyer from
the Company. Prior to the Closing, each Buyer shall have delivered to the
Company payment of the purchase price therefor by wire transfer to such Company
account as the Company shall designate. If, at the Closing, any of the Buyers
shall have failed to tender the purchase price for the Shares to be purchased by
such Buyer at the Closing or any of the conditions specified herein shall not
have been fulfilled to the satisfaction of the Company, the Company shall, at
its election, be relieved of all of its obligations under this Agreement to such
Buyer. The Company shall be under no obligation to accept this offer and to
close this transaction until the Closing.
3.3 FURTHER UNDERTAKINGS BY BUYERS. Each Buyer undertakes to
execute and deliver to the Company, within five (5) days after receipt of the
Company's reasonable request therefor, such further designations,
authorizations, and other instruments as the Company deems necessary or
appropriate to carry out the provisions of this Agreement.
4. REPRESENTATIONS, WARRANTIES AND COVENANTS OF BUYER. The Buyer
acknowledges that the Company is offering the Shares in reliance upon the
representations, warranties, and other information set forth by the Buyer
herein. The Buyer undertakes to notify the Company immediately of any changes in
any of the representations, warranties, and other information contained herein.
In order to induce the Company to accept the subscription made hereby, the Buyer
hereby represents, warrants and acknowledges to the Company as follows:
4.1 FINDINGS OR RECOMMENDATIONS. The Buyer is aware that
neither the Securities and Exchange Commission (the "SEC") nor the Attorney
General of the State of Delaware nor any other federal or state agency has made
any findings or determination as to the fairness of the
-2-
Common Stock, nor has any recommendation been made as to the fairness of the
Common Stock, nor has any recommendation or any endorsement of the Common Stock
been made and the Common Stock offered is not registered under federal, Delaware
or any other state law and the securities are restricted securities within the
meaning of the U.S. Federal Securities laws because of the Company's
representations that this is intended to be a non-public offering pursuant to
Section 4(2) and/or 4(6) of the Act.
4.2 SOPHISTICATION. The Buyer represents that he has reached
the age of majority in the state in which the Buyer resides, has such knowledge
and experience in financial and business matters that he is capable of
evaluating the merits and risks of purchasing of the Shares and of making an
informed investment decision with respect thereto. The Buyer recognizes that the
purchase of Shares involves a high degree of risk in that (i) the Company has
incurred losses in most years of its existence; (ii) he may not be able to
liquidate his investment; (iii) transferability is extremely limited and (iv) in
the event of disposition, he could sustain the loss of his entire investment.
4.3 ACCESS TO INFORMATION. The Buyer, in making the decision
to purchase the Shares subscribed for, acknowledges that he and his
representatives, if any, have been given access to and the opportunity to
examine all material books and records of the Company and all material contracts
and documents relating to this Offering, specifically the following documents
(the "Documents"):
1. The Company's Post Effective Amendment No. 1 to Form S-1
Registration Statement on Form S-3, filed with the Commission
on March 5, 1996;
2. Annual Report on Form 10-K for the year ended February 24,
1995;
3. The Company's Quarterly Reports on Form 10-Q for the quarters
ended May 26, 1995, August 25, 1995, and November 24, 1995, as
amended;
4. The Company's Definitive Proxy Statement for the 1995 Annual
Meeting, filed with the Commission on August 8, 1995; and
5. The Company's Current Reports on Form 8-K, dated January 26,
1996 and December 30, 1995.
The Buyer understands all of the risk factors related to the purchase
of the Shares. The Buyer or his legal counsel or investment advisor has been
given a full opportunity to ask questions of, and to receive answers from, the
Company and its officers and directors concerning the terms and conditions of
the Offering, the documents prepared in connection therewith, the finances and
operations of the business of the Company and to obtain additional information
necessary to verify the accuracy of the information contained in the Documents,
or such other information as he or his
-3-
legal counsel or investment advisor desired in order to evaluate an investment
in the Shares, and all such questions have been answered to the full
satisfaction of the undersigned.
4.4 BUYER'S ACKNOWLEDGMENT OF SECURITIES LAWS EXEMPTIONS. The
Buyer acknowledges that the Shares are being sold pursuant to an exemption from
the registration provisions of the Act in reliance upon the representations made
by the Buyer herein.
4.5 INVESTMENT REPRESENTATION. The Buyer understands that the
Shares have not been registered under the Act by reason of a claimed exemption
under the provisions of the Act which depends, in part, upon his investment
intention.
The Buyer further represents that he is acquiring the securities
hereunder for his own account and not with a view to reselling or otherwise
distributing such securities in violation of any federal or state securities
laws and understands and agrees that the securities to be issued hereunder are
restricted on transfer and must be held unless (i) they are registered under the
Act and applicable state securities laws; or (ii) an exemption from registration
is available, and the Company has received an opinion of counsel, in form and
substance satisfactory to it, to such effect. Although the Company has agreed to
use its best efforts to file the reports and make publicly available other
information so long as necessary to permit sales pursuant to Rule 144 under the
Act, no assurance can be given that the Company will be able to do so.
Each Buyer agrees that the Shares purchased hereunder may only be
transferred if registered under the Act and applicable state securities laws or
pursuant to an exemption from such registration requirements. The Buyer
understands that Rule 144 promulgated under the Act is not available with
respect to the Shares, and that compliance with an applicable exemption under
the Act may be required for a sale or other disposition of Shares that are not
registered under the Act. The Buyer agrees that the following legend and any
appropriate state legend may be placed on any certificates evidencing the
securities purchased herein:
"THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT") OR
UNDER ANY STATE LAW AND ARE "RESTRICTED SECURITIES" AS THAT TERM IS
DEFINED IN RULE 144 UNDER THE ACT. THE SHARES MAY NOT BE SOLD,
TRANSFERRED, OR OTHERWISE DISPOSED OF EXCEPT PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE ACT OR PURSUANT TO AN EXEMPTION FROM
REGISTRATION UNDER THE ACT, THE AVAILABILITY OF WHICH IS TO BE
ESTABLISHED AND ACCOMPANIED BY AN OPINION OF COUNSEL TO THE
SATISFACTION OF THE COMPANY."
Each Buyer understands that, so long as the legend(s) may remain on the
certificates representing the securities sold hereby, the Company may maintain
appropriate "stop transfer" orders with respect to such shares on its books and
records and with those to whom it may delegate registrar and transfer functions.
-4-
4.6 ABILITY TO RISK LOSS OF INVESTMENT. The Buyer warrants and
represents that he has determined that the Shares are a suitable investment for
him and that his financial condition is such that (i) he has no need for
liquidity in such investment; (ii) he is able to bear all risks of holding the
Shares for an indefinite period of time; and (iii) he is able to bear all risks
of losing his entire investment. The Buyer further acknowledges that he has
prior investment experience, including investment in non-registered securities,
or he has employed the services of an investment advisor, attorney or accountant
to read all of the documents, including the Documents, furnished or made
available by the Company both to him and to all other prospective investors in
the Shares and to evaluate the merits and risks of such an investment on his
behalf; that he recognizes the highly speculative nature of this investment; and
is able to bear the economic risk he hereby assumes.
4.7 NET WORTH EFFECT FROM INVESTMENT. The Buyer represents
that his overall commitment to investments which are not readily marketable is
not disproportionate to his net worth and that his investment in the Company
will not cause such overall commitment to become excessive. The Buyer represents
that he is an "accredited investor" as such term is defined in Rule 501 of
Regulation D promulgated under the Act, as indicated by his responses below and
in the Confidential Buyer Questionnaire.
The Buyer is an accredited investor because the Buyer is (CHECK
APPROPRIATE ITEM):
---
--- (a) a bank as defined in Section 3(a)(2) of the Act;
---
--- (b) a savings and loan association or other institution
as defined in Section 3(a)(5)(A) of the Act;
---
--- (c) a broker or dealer registered pursuant to Section 15
of the Securities Exchange Act of 1934;
---
--- (d) an insurance company as defined in Section 2(13) of
the Act;
---
--- (e) an investment company registered under the Investment
Company Act of 1940 or a business development company
as defined in Section 2(a)(48) of such Act;
-5-
---
--- (f) a Small Business Investment Company licensed by the
U.S. Small Business Administration under Section
301(C) or (d) of the Small Business Investment Act
of 1958;
---
--- (g) an employee benefit plan within the meaning of Title
I of the Employee Retirement Income Security Act of
1974, if the investment decision is made by a plan
fiduciary, as defined in Section 3(21) of such Act,
which is either a bank, savings and loan
association, insurance company, or registered
investment adviser, or if the employee benefit plan
has total assets in excess of $5,000,000 or, if a
self-directed plan, with investment decisions made
solely by persons that are accredited investors;
---
--- (h) a private business development company as defined in
Section 202(a)(22) of the Investment Advisers Act of
1940;
---
--- (i) an organization described in Section 401(c)(3) of
the Internal Revenue Code with total assets in
excess of $5,000,000;
---
--- (j) an organization described in Section 501(c)(3) of
the Internal Revenue Code, corporation,
Massachusetts or similar business trust, or
partnership, not formed for the specific purpose of
acquiring the securities offered, with total assets
in excess of $5,000,000;
---
--- (k) a natural person whose individual net worth or joint
net worth with that person's spouse, at the time of
his purchase exceeds $1,000,000;
---
--- (l) a natural person who had an individual income in
excess of $200,000 in each of the two most recent
years or joint income with that person's spouse in
excess of $300,000 in each of those years and has a
reasonable expectation of reaching the same income
level in the current year;
---
--- (m) a trust, with total assets in excess of $5,000,000,
not formed for the specific purpose of acquiring the
securities offered, whose purchase is directed by a
sophisticated person as described in Section
230.506(b)(2)(ii); or
-6-
---
--- (n) an entity in which all of the equity owners are
accredited investors. (If this alternative is
checked, you must identify each equity owner and
provide statements signed by each demonstrating how
each qualifies as an accredited investor.)
4.8 BINDING EFFECT OF SUBSCRIPTION AGREEMENT. This Agreement
shall not be binding on the Company until such Agreement is accepted by the
Company. The Buyer hereby acknowledges and agrees, subject to any applicable
state securities law, that the subscription and application hereunder are
irrevocable, that the Buyer is not entitled to cancel, terminate or revoke this
Subscription Agreement or any agreements of the Buyer hereunder and that this
Subscription Agreement and such other agreements shall survive the death or
disability of the undersigned and shall be binding upon and inure to the benefit
of the parties and their heirs, executors, administrators, successors, legal
representatives and assigns. If the Buyer is more than one person, the
obligations of the undersigned hereunder shall be joint and several, and the
agreements, representations, warranties and acknowledgments herein contained
shall be deemed to be made by and be binding upon each such person and his
heirs, executors, administrators, successors, legal representatives and assigns.
4.9 DECISION TO INVEST. In making his decision to purchase the
Shares herein subscribed for, the Buyer has relied solely upon the information
about the Company contained in the Agreement and Documents provided to him, and
upon independent investigations made by him or his legal counsel or investment
advisor. He is not relying on any representations or warranties from the Company
or any of its officers, directors, affiliates, employees or agents, other than
the information provided by the Company to him in this Offering. In addition, he
is not subscribing pursuant hereto for any Shares as a result of or subsequent
to (i) any advertisement, article, notice or other communication published in
any newspaper, magazine or similar media or broadcast over television or radio
or (ii) any seminar or meeting whose attendees, including the undersigned, had
been invited as a result of, subsequent to, or pursuant to, any of the
foregoing.
4.10 BUYER'S FINANCIAL CONDITION. The Buyer has completed the
accompanying Confidential Buyer Questionnaire and has delivered it herewith and
represents and warrants that it accurately sets forth his financial condition on
the date hereof. The Buyer has no reason to expect there will be any material
adverse change in his financial condition and will advise the Company of any
such changes occurring prior to the Closing or termination of the Offering.
4.11 BUYER'S RESIDENCE. The Buyer represents that he is a
resident and domiciliary (not a temporary or transient resident) of the state,
county, and country set forth below, has no present intention to become a
resident of any other jurisdiction, and all communications, written or oral,
concerning the Shares have been directed to the Buyer in, and received by him
in, such state jurisdiction.
-7-
4.12 BUYER AS REPRESENTATIVE. The Buyer represents and
warrants that if the Buyer is executing this Agreement in a representative or
fiduciary capacity, the Buyer has full power and authority to execute and
deliver the Agreement on behalf of the subscribing corporation, partnership,
trust or other entity for whom the Buyer is executing this Agreement, and such
corporation, partnership, trust or other entity has full right and power to
enter into and perform this Agreement.
4.13 BUYER AS AGENT. The Buyer may purchase Shares as agent
for various principals to be designated, in which case it shall hereby make the
above representations and warranties on behalf of such principals.
4.14 UNREGISTERED SECURITIES. The Buyer understands that the
Shares have not been registered under the Act or under applicable state
securities laws in reliance upon specific exemptions from registration
thereunder. The Buyer is aware that the Shares are and will be, when issued,
"restricted securities" as that term is defined in Rule 144 under the Act.
4.15 BUYER'S UNDERSTANDING. The Buyer has read, understands
and acknowledges receipt of the written material supplied by the Company,
including the Documents.
4.16 NO PROTECTION OF BUYER'S INTERESTS. The Buyer has been
advised that the Company has not retained any independent professionals to
review or comment on this Offering or otherwise protect the interests of the
Buyer. Although the Company has retained its own counsel, neither such firm nor
any other firm has acted on behalf of the Buyer, and any purchaser of the Shares
offered hereby should not rely on the firm so retained by the Company with
respect to any matters herein described.
4.17 NO REGISTRATION. The Buyer has been advised that the
Shares have not been registered under the Act, and he may not be able to
liquidate his investment in the Company quickly or on acceptable terms in the
event he should desire to do so.
4.18 NO REPRESENTATIONS ON COMPANY'S RESULTS OF OPERATIONS.
There has never been represented, guaranteed, or warranted to the Buyer by any
broker, the Company, its officers, directors, agents, or employees or any other
person, expressly or by implication (i) the percentage of profits and/or amount
of or type of consideration, profit or loss to be realized, if any, as a result
of the Company's operations; and (ii) that the past performance or experience on
the part of the management of the Company, or of any other person, will in any
way result in the overall profitable operations of the Company.
4.19 REVIEW OF SUBSCRIPTION AGREEMENT. The Buyer understands
that the Company will review this Agreement and is hereby given authority by the
undersigned to call his bank or place of employment or otherwise review the
financial standing of the Buyer; and it is further agreed that the Company
reserves the unrestricted right to reject or limit any subscription and to close
the offer at any time.
-8-
4.20 DUE EXECUTION, DELIVERY AND PERFORMANCE OF THIS AGREEMENT
AND OTHER OBLIGATIONS. Buyer has full right, power, authority and capacity to
enter into this Agreement and to consummate the transactions contemplated
hereby; and, if Buyer is a company or corporation, the execution, delivery and
performance of this Agreement by Buyer have been duly authorized by all
requisite corporate and shareholder action of Buyer. Upon the execution and
delivery of this Agreement and its acceptance by the Company, this Agreement
shall constitute the legal, valid and binding obligations of Buyer, enforceable
against Buyer in accordance with its terms (except insofar as the enforcement
thereof may be limited by any applicable laws relating to or affecting the
enforcement of creditors' rights generally or by general equitable principles).
4.21 VALUATION OF THE COMMON STOCK. The Buyer understands that
the valuation placed upon the Common Stock has been based on the recent
performance of the Common Stock as reported by NASDAQ/NMS. The Buyer represents
that he has independently evaluated the fairness of the offering price for the
Common Stock.
5. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company hereby
represents and warrants to the Buyer that as of the date hereof, and as of the
first Closing and any interim Closings, except as otherwise set forth herein:
5.1 ORGANIZATION AND CORPORATE POWER. The Company is a
corporation duly organized, validly existing and in good standing under the laws
of the State of Delaware, and is qualified to do business as a foreign
corporation in each jurisdiction in which such qualification is required, except
where failure so to qualify would not have a material adverse effect on the
Company. The Company has all required corporate power and authority to own its
property, to carry on its business as presently conducted or contemplated, to
enter into and perform this Agreement and generally to carry out the
transactions contemplated hereby. The Company is not in violation of any term of
its Certificate of Incorporation or its By-laws, or any material instrument,
agreement, judgment, decree, order, statute, rule or regulation of any federal,
state or local government or agency applicable to the Company.
5.2 AUTHORIZATION. This Agreement, and all documents and
instruments executed pursuant hereto are legal, valid and binding obligations of
the Company, enforceable in accordance with their terms, subject to applicable
bankruptcy, insolvency, reorganization, moratorium and other laws applicable to
creditors' rights and remedies and to the exercise of judicial discretion in
accordance with general principles of equity. The execution, delivery and
performance of this Agreement and the issuance of the Common Stock have been
duly authorized by all necessary corporate or other action of the Company.
5.3 CAPITALIZATION. As of April 1, 1996, the authorized
capital stock of the Company consisted of (i) 30,000,000 shares of Common Stock,
$.01 par value, of which 11,800,909 shares were issued and outstanding; and (ii)
2,000,000 shares of Preferred Stock, $.01 par value, of which 1,400,000 shares
have been designated as Series A Convertible Preferred Stock, $.01 par value per
share, 303,946 of which shares are validly issued, fully paid and
non-assessable, one share
-9-
of Series A Preferred Stock is convertible for one share of Common Stock;
146,695 shares have been designated as Series B Convertible Preferred Stock,
$.01 par value per share, 146,695 of which shares are validly issued, fully paid
and non-assessable; 36,674 shares have been designated as Series C Redeemable
Preferred Stock, $.01 par value per share, 18,337 of which shares are validly
issued, fully paid and non-assessable. The Company has also reserved the
following securities for issuance: (i) 1,587,040 shares of Common Stock issuable
upon exercise of the 1,526,000 Class B Redeemable Common Stock Purchase Warrants
(the "Class B Warrants") issued in the Company's third public offering (the
"Public Offering"); (ii) 145,600 shares of Common Stock issuable upon exercise
of the warrant (the "Underwriter's Warrant I") issued to the underwriter of the
Company's Public Offering; (iii) 140,000 Class B Warrants issuable upon exercise
of the Underwriter's Warrant I; (iv) 145,600 shares of Common Stock issuable
upon exercise of the Class B Warrants underlying the Underwriter's Warrant I;
(v) 50,000 shares of Common Stock issuable upon exercise of the warrant (the
"Underwriter's Warrant II") issued to the underwriter of the Company's second
public offering in June 1991; (vi) 100,000 shares of Series A Preferred Stock
issuable upon exercise of the Underwriter's Warrant II; (vii) 50,000 warrants
(the "SPO Warrants") issuable upon exercise of the Underwriter's Warrant II; and
(viii) 103,000 shares of Common Stock issuable upon exercise of the
Underwriter's Warrant II and the underlying SPO Warrants; (ix) 21,000 shares of
Common Stock issuable upon exercise of warrants issued to an individual and
principals of the placement agent in the Company's Regulation S offerings; (x)
933,750 options granted or available for grant under the Company's 1990 and 1993
Stock Option Plans; and (xi) up to 82,600 additional shares issuable in
connection with the acquisition of the interest of a minority shareholder of RC
America, Inc.
6. REGISTRATION RIGHTS.
6.1 REGISTRATION RIGHTS.
(a) Within ninety (90) days after the final closing
of this Offering, the Company will use its commercially reasonable efforts to
prepare and file with the Securities and Exchange Commission a registration
statement on Form S-1 or Form S-3 (or any successor form) relating to the shares
of the Common Stock sold in this Offering. In addition, the Company may, in its
sole discretion, at any time and after notice to the Investors, elect to
register all of such Common Stock on a Form S-1 or Form S-3 (or other
appropriate form) in connection with any other registration statement or on a
stand-alone basis.
(b) If permitted by applicable law and regulation,
the Company at the request of the holders owning a majority of the Shares, shall
file such amendments and/or supplements to such registration statement, and,
subject to this Section 6 hereof, take such other steps as may be required to
maintain such registration statement in effect, and to keep the information
therein current, until the earlier of the sale of all of the Shares included in
the registration statement or the expiration of eighteen months from the
effective date of such registration statement.
-10-
(c) In connection with any registration statement
referred to in Section 6 of this Agreement, Subscriber will furnish to the
Company such information as the Company may reasonably require from the
Subscriber for inclusion in the registration statement (and the prospectus
included therein).
(d) The Company's obligations under this Agreement
shall be conditioned upon the Subscriber executing and delivering to the Company
an appropriate agreement, if necessary in the reasonable opinion of counsel to
the Company, in form reasonably satisfactory to counsel for the Company, that it
will comply with all anti-stabilization, manipulation, and similar provisions of
Section 10 of the 1934 Act, and any rules promulgated thereunder and will
furnish to the Company information about sales made in such public offering.
(e) The Company, at its expense, shall cause all of
the Shares included in a registration statement referred to in Section 6 hereof
to be qualified under the laws of such reasonable number of jurisdictions, as
the Company may reasonably designate, and the Company will continue such
qualification in effect for such period of time not to exceed eighteen months
from the effective date of the registration statement referred to in Section 6
which relates to such Shares.
(f) The Company shall not be required to effect any
registration within three months after the effective date of any other
underwritten registration statement of the Company. The Company shall have the
right to designate the managing underwriter in respect of a public offering
pursuant to this Section 6.1.
(g) If at the time the Company is registering the
Common Stock pursuant to this subsection 6.1, the Company is engaged or has
fixed demonstrable plans to engage within ninety (90) days of the time of the
request in an underwritten public offering (other than on a Form S-4 or S-8) as
to which the holders may include Common Stock pursuant to subsection 6.1 or is
engaged in any other activity which, in the good faith determination of the
Company's Board of Directors, would be adversely affected by the registration to
the material detriment of the Company, then the Company may, at its option,
direct that if it effectuates the registration, the holders of conversion shares
shall agree not to publicly sell such registered Common Stock for such period of
time as requested by the underwriter managing the public offering or by the
Company's Board of Directors.
6.2 EXPENSES.
(a) With respect to the registration right granted in
Section 6.1 hereof, all fees, costs and expenses of an incidental to such
registration, inclusion and public offering (as specified in paragraph (b)
below) in connection therewith shall be borne by the Company, provided, however,
that any security holders participating in such registration shall bear their
pro rata share of the underwriting discount and commissions and transfer taxes.
-11-
(b) The fees, costs and expenses of registration to
be borne by the Company as provided in paragraph (a) above shall include,
without limitation, all registration, filing, and NASD fees, printing expenses,
fees and disbursements of counsel and accountants for the Company, and all legal
fees and disbursements and other expenses of complying with state securities or
blue sky laws of any jurisdictions in which the securities to be offered are to
be registered and qualified (except as provided in 6.2(a) above). Fees and
disbursements of counsel and accountants for the selling security holders and
any other expenses incurred by the selling security holders not expressly
included above shall be borne by the selling security holders.
6.3 INDEMNIFICATION.
(a) With respect to the registration right described
in this Section 6 and to the extent permitted by law, the Company hereby agrees
to indemnify, hold harmless and defend the holders and each person, if any, who
is deemed a "controlling person" of any such Investor within the meaning of the
1933 Act, against any and all losses, claims, damages or liabilities (including
legal and other expenses incurred in investigating and defending against the
same), to which they, or any of them, may become subject under the 1933 Act or
other statute or common law, arising out of or based upon:
(i) any alleged untrue statement of a
material fact contained in any registration statement, preliminary
prospectus or prospectus included therein, any amendment thereof or
supplement thereto; or
(ii) the alleged omission to state therein a
material fact required to be stated therein or necessary to make the
statements contained therein not misleading; provided, however, that
the indemnity contained in this Section 6.3(a) shall not apply to any
such alleged untrue statement or omission made in reliance upon and in
conformity with information furnished in writing to the Company by or
on behalf of the holders. The Buyer agrees that as soon as practicable,
but in any event within ten (10) days after the receipt of notice of
any claim or action against it in respect of which indemnity may be
sought from the Company hereunder, to notify the Company thereof in
writing, and the Company shall assume the defense of such claim or
action (and the cost thereof) by counsel of its own choosing, who shall
be reasonably satisfactory to the holders.
(b) The Buyer hereby agrees to indemnify, hold
harmless and defend the Company, its directors and officers, each person, if
any, who is deemed a controlling person of the Company within the meaning of the
1933 Act, and the underwriter, to the extent permitted by law, against any and
all losses, claims, damages or liabilities, including legal or other expenses
incurred in investigating and defending against the same, to which they or any
of them may become subject under the 1933 Act or other statute or common law,
arising out of or based upon:
-12-
(i) any alleged untrue statement by such
Buyer of a material fact contained in any such registration statement,
or prospectus or preliminary prospectus included therein, or any
amendment thereof or supplement thereto; or
(ii) the alleged omission by such Investor
to state therein a material fact required to be stated therein or
necessary to make the statements contained therein not misleading.
The Company, and any other person or entity seeking indemnity from the
Buyer hereunder, agree that as soon as practicable, but in any event within ten
(10) days after receipt of notice of any claim or action against the Company or
such other person or entity, to notify the Buyer thereof in writing, and the
Buyer shall assume the defense of any such claim or action (and the cost
thereof) by counsel of his own choosing, who shall be reasonably satisfactory to
the Company. If Buyer does not promptly assume such defense, the Company may at
its option defend such action at the expense of the Buyer.
7. MISCELLANEOUS PROVISIONS.
7.1 USE OF SPEECH. All pronouns contained herein and any
variations thereof, shall be deemed to refer to the masculine, feminine or
neuter, singular or plural, as the identity of the parties may require.
7.2 NO WAIVER. Neither this Agreement nor any provisions
hereof shall be waived, modified, discharged, or terminated except by an
instrument in writing signed by the party against whom any such waiver,
modification, discharge, or termination is sought, and no waiver of any right
arising from any breach or failure to perform shall be deemed to be a waiver of
any future such right or of any other right arising under this Agreement.
7.3 ENTIRE AGREEMENT, MODIFICATION. This Agreement constitutes
the entire agreement between the parties and supersedes any prior understanding
or agreements concerning the subject matter hereof. This Agreement may be
amended, modified, or terminated only by a written instrument signed by the
Company and the Buyers hereunder.
7.4 SEVERABILITY. The invalidity or unenforceability of any
provision hereof shall in no way affect the validity or enforceability of any
other provision.
7.5 GOVERNING LAW. This Agreement shall be governed by the
laws of the Commonwealth of Massachusetts and the validity and interpretation
hereof and thereof and the performance hereunder and thereunder shall be
governed by and construed in accordance with the laws of the Commonwealth of
Massachusetts applicable to agreements made and to be performed entirely in such
state. Venue for any dispute relating to the provisions of this Agreement shall
be in the United States District Court for the District of Massachusetts.
-13-
7.6 SUBMISSION TO JURISDICTION. Each of the parties submits to
the jurisdiction of any state or federal court sitting in the Commonwealth of
Massachusetts, in any action or proceeding arising out of or relating to this
Agreement and offering and agrees that all claims in respect of the action or
proceeding may be heard and determined in any such court. Each party also agrees
not to bring any action or proceeding arising out of or relating to this
Agreement in any other court. Each of the parties waives any defense or
inconvenient forum to the maintenance of any action or proceeding so brought and
waives any bond, surety, or other security that might be required of any other
party with respect thereto.
7.7 NOTICES. All notices, requests, demands, and
communications related to this Agreement will be deemed given if and when
delivered personally or sent by registered or certified mail, return receipt
requested, postage prepaid, to the following addresses:
If to the Company: BPI Packaging Technologies, Inc.
455 Somerset Avenue
Dighton, Massachusetts 02764
Attention: Dennis N. Caulfield
President
With a copy to: O'Connor, Broude & Aronson
950 Winter Street, Suite 2300
Waltham, Massachusetts 02154
Attention: Neil H. Aronson, Esquire
If to the Buyers: To the addresses set forth in the
Questionnaire attached hereto
or, as to each of the foregoing, at such other address as shall be designated by
the addressee in a written notice to the other parties complying as to delivery
with the terms of this Section 8. Notwithstanding anything to the contrary
contained in this Agreement, all notices, requests, demands and other
communications shall be effective when received.
7.8 BINDING EFFECT. This Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective legal
representatives and successors.
7.9 HEADINGS. Headings contained in this Agreement are only as
a matter of convenience and in no way define, limit, extend, or describe the
scope of this Agreement or the intent of any provisions hereof.
7.10 UNENFORCEABILITY. If any provision of this Agreement is
or becomes or is deemed invalid, illegal, or unenforceable in any jurisdiction,
to the maximum extent permissible, such provision shall be deemed amended to
conform to applicable laws so as to be materially
-14-
altering the intention of the parties, it shall be stricken and the remainder of
this Agreement shall remain in full force and effect.
7.11 ASSIGNMENT. The Buyers may not assign this Agreement or
its rights hereunder without the Company's written consent.
7.12 MULTIPLE BUYERS. If more than one person is signing this
Agreement, each representation, warranty, and undertaking stated herein shall be
the joint and several representation, warranty, and undertaking of each such
person. Notwithstanding the foregoing, no Buyer shall be liable with respect to
any representation, warranty or undertaking of any other Buyer who signed a
separate Subscription Agreement. The Buyers understand the meaning and legal
consequences of the representations and warranties contained in this Agreement.
7.13 COUNTERPARTS. This Agreement may be executed
simultaneously in any number of counterparts, each of which when so executed and
delivered shall be taken to be an original; but such counterparts shall together
constitute one and the same document binding all parties, notwithstanding that
all parties are not signatories to the same counterpart.
-15-
IN WITNESS WHEREOF, the undersigned have executed this Agreement as of
__________ __, 1996.
THIS SUBSCRIPTION AGREEMENT
SHOULD BE READ CAREFULLY
BEFORE BEING SIGNED.
Name of Buyer:_________________________________________________________________
(please print)
Social Security Number:________________________________________________________
Residence Address of Buyer:____________________________________________________
____________________________________________________
____________________________________________________
Telephone Number of Buyer: ____________________________________________________
Buyer is a resident and domiciliary (not a temporary or transient
resident) of the state set forth above and has no present intention to become a
resident of any other jurisdiction.
---------- -----------
Yes No
All communications, written or oral, concerning the securities offered hereby
have been directed to the Buyer in, and received by him in, such jurisdiction.
DATED:_______________________ AGREED TO AND ACCEPTED:
----------------------------------
(Buyer's Signature)
----------------------------------
(Buyer's Name Printed)
Certificates to be made out and sent as follows (please print):
- ----------------------------------
- ----------------------------------
- ----------------------------------
- ----------------------------------
AGREED AND ACCEPTED AS TO ______________________ SHARES:
BPI PACKAGING TECHNOLOGIES, INC.
By: Date:
------------------------------- --------------------------
Dennis N. Caulfield, President
Duly Authorized
BUYERS SHOULD SIGN AND RETURN BOTH COPIES OF THIS PAGE.
-16-
IN WITNESS WHEREOF, the undersigned have executed this Agreement as of
__________ __, 1996.
THIS SUBSCRIPTION AGREEMENT
SHOULD BE READ CAREFULLY
BEFORE BEING SIGNED.
Name of Buyer:_________________________________________________________________
(please print)
Social Security Number:________________________________________________________
Residence Address of Buyer:____________________________________________________
____________________________________________________
____________________________________________________
Telephone Number of Buyer: ____________________________________________________
Buyer is a resident and domiciliary (not a temporary or transient
resident) of the state set forth above and has no present intention to become a
resident of any other jurisdiction.
---------- -----------
Yes No
All communications, written or oral, concerning the securities offered hereby
have been directed to the Buyer in, and received by him in, such jurisdiction.
DATED:_______________________ AGREED TO AND ACCEPTED:
----------------------------------
(Buyer's Signature)
----------------------------------
(Buyer's Name Printed)
Certificates to be made out and sent as follows (please print):
- ----------------------------------
- ----------------------------------
- ----------------------------------
- ----------------------------------
AGREED AND ACCEPTED AS TO ______________________ SHARES:
BPI PACKAGING TECHNOLOGIES, INC.
By: Date:
------------------------------- --------------------------
Dennis N. Caulfield, President
Duly Authorized
BUYERS SHOULD SIGN AND RETURN BOTH COPIES OF THIS PAGE.
-17-
IMPORTANT: Buyer Name:____________________
Please Complete Booklet No.____________________
INDIVIDUAL INVESTOR QUESTIONNAIRE
---------------------------------
BPI PACKAGING TECHNOLOGIES, INC.
---------------------------------
BPI Packaging Technologies, Inc.
455 Somerset Avenue
Dighton, Massachusetts 02764
The information contained in this Questionnaire is being furnished in
order to determine whether the undersigned's subscription to purchase Shares of
BPI Packaging Technologies, Inc. (the "Company") may be accepted.
ALL INFORMATION CONTAINED IN THIS QUESTIONNAIRE WILL BE TREATED
CONFIDENTIALLY. The undersigned understands, however, that the Company may
present this Questionnaire to such parties as it deems appropriate if called
upon to establish that the proposed offer and sale of the Shares is exempt from
registration under the Securities Act of 1933, as amended, or meets the
requirements of applicable state securities or "blue sky" laws. Further, the
undersigned understands that the Offering is required to be reported to the
Securities and Exchange Commission and to various state securities or "blue sky"
regulators.
IF YOU ARE PURCHASING SHARES WITH YOUR SPOUSE, YOU MUST BOTH SIGN THE
SIGNATURE PAGE (PAGE A-5).
IF YOU ARE PURCHASING SHARES WITH ANOTHER PERSON NOT YOUR SPOUSE, YOU
MUST EACH FILL OUT A SEPARATE QUESTIONNAIRE. PLEASE MAKE A PHOTOCOPY OF PAGES
A-1 TO A-5 AND RETURN BOTH COMPLETED QUESTIONNAIRES TO THE COMPANY IN THE SAME
ENVELOPE.
A-1
I. PLEASE INDICATE DESIRED TYPE OF OWNERSHIP OF SHARES
___ Individual
___ Joint Tenants (rights of survivorship)
___ Tenants in Common (no rights of survivorship)
II. PLEASE CHECK ANY OF STATEMENTS 1-3 BELOW THAT APPLY TO YOU
___ 1. I have an individual net worth* or joint net worth
with my spouse in excess of $1,000,000.
___ 2. I have had an individual income* in excess of
$200,000 in each of the two most recent years and I
reasonably expect an individual income in excess of
$200,000 for the current year. NOTE: IF YOU ARE
BUYING JOINTLY WITH YOUR SPOUSE, YOU MUST EACH HAVE
AN INDIVIDUAL INCOME IN EXCESS OF $200,000 IN EACH OF
THESE YEARS IN ORDER TO CHECK THIS BOX.
___ 3. My spouse and I have had a joint income* in excess of
$300,000 in each of the two most recent years and I
reasonably expect a joint income in excess of
$300,000 for the current year.
III. OTHER CERTIFICATIONS
By signing the Signature Page, I certify the following (or, if I am
purchasing Shares with my spouse as co-owner, each of us certifies the
following):
(a) that I am at least 21 years of age;
(b) that my purchase of Shares will be solely for my own account
and not for the account of any other person (other than my
spouse, if co-owner);
(c) that the name, home address and social security number or
taxpayer identification number as set forth in this
Questionnaire are true, correct and complete; and
(d) that one of the following is true and correct (check one):
A-2
Spouse, if
Purchaser Co-Owner
- --------- --------
___ ___ (i) I am a United States citizen or resident of
the United States for United States federal
income tax purposes.
___ ___ (ii) I am neither a United States citizen nor a
resident of the United States for United
States federal income tax purposes.
* For purposes of this Questionnaire, the term "net worth" means the excess of
total assets over total liabilities. In determining income, an investor should
add to his or her adjusted gross income any amounts attributable to tax-exempt
income received, losses claimed as a limited partner in any limited partnership,
deductions claimed for depletion, contributions to IRA or Keogh retirement
plans, alimony payments and any amount by which income from long-term capital
gains has been reduced in arriving at adjusted gross income.
IV. GENERAL INFORMATION
(A) PERSONAL INFORMATION.
PURCHASER
Name:
---------------------------------------------------------------------------
Social Security or Taxpayer Identification Number:
------------------------------
Residence Address:
--------------------------------------------------------------
(Number and Street)
- --------------------------------------------------------------------------------
(City) (State) (Zip Code)
Residence Telephone Number:
-----------------------------------------------------
(Area Code) (Number)
Business Address:
---------------------------------------------------------------
(Number and Street)
- --------------------------------------------------------------------------------
(City) (State) (Zip Code)
Business Telephone Number:
------------------------------------------------------
(Area Code) (Number)
A-3
I prefer to have correspondence sent to: ____ Residence ____ Business
SPOUSE, IF CO-OWNER
Name:
---------------------------------------------------------------------------
Social Security or Taxpayer Identification Number:
------------------------------
Residence Address:
--------------------------------------------------------------
(Number and Street)
- --------------------------------------------------------------------------------
(City) (State) (Zip Code)
Residence Telephone Number (if different from Purchaser's):
---------------------
(Area Code) (Number)
Business Address:
---------------------------------------------------------------
(Number and Street)
- --------------------------------------------------------------------------------
(City) (State) (Zip Code)
Business Telephone Number (if different from Purchaser's):
----------------------
(Area Code) (Number)
I prefer to have correspondence sent to: ____ Residence ____ Business
V. SIGNATURE
The Signature Page to this Questionnaire is contained on page A-5,
entitled Individual Signature Page.
A-4
INDIVIDUAL SIGNATURE PAGE
--------------------------------
BPI PACKAGING TECHNOLOGIES, INC.
--------------------------------
Your signature on this Individual Signature Page evidences your
agreement to be bound by the Questionnaire and the Subscription Agreement.
1. The undersigned represents that (a) he/she has read and understands this
Subscription Agreement, (b) the information contained in this Questionnaire is
complete and accurate and (c) he/she will telephone the Company (contact at
508-824-8636) immediately if any material change in any of this information
occurs before the acceptance of his/her subscription and will promptly send the
Company written confirmation of such change.
- ------------------------------ ---------------------------------
Number of Shares applied for Date
---------------------------------
Name (Please Type or Print)
---------------------------------
Signature
---------------------------------
Name of Spouse if Co-Owner
(Please Type or Print)
---------------------------------
Signature of Spouse if Co-Owner
IF YOU ARE PURCHASING SHARES WITH YOUR SPOUSE, YOU MUST BOTH SIGN THE
SIGNATURE PAGE (PAGE A-5).
IF YOU ARE PURCHASING SHARES WITH ANOTHER PERSON NOT YOUR SPOUSE, YOU
MUST EACH FILL OUT A SEPARATE QUESTIONNAIRE. PLEASE MAKE A PHOTOCOPY OF PAGES
A-1 TO A-5 AND RETURN BOTH COMPLETED QUESTIONNAIRES TO THE COMPANY IN THE SAME
ENVELOPE.
THE SHARES OF COMMON STOCK HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "ACT") OR UNDER ANY STATE LAWS, AND MAY
NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED UNLESS SUCH SECURITIES ARE
INCLUDED IN AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT OR AN OPINION OF
COUNSEL, CONCURRED IN BY COUNSEL TO THE COMPANY, HAS BEEN DELIVERED TO THE
EFFECT THAT REGISTRATION OF SUCH SECURITIES IS NOT REQUIRED.
A-5
IMPORTANT: Buyer Name:____________________
Please complete Booklet No.____________________
TRUST QUESTIONNAIRE
--------------------------------
BPI PACKAGING TECHNOLOGIES, INC.
--------------------------------
BPI Packaging Technologies, Inc.
455 Somerset Avenue
Dighton, Massachusetts 02764
The information contained in this Questionnaire is being furnished in
order to determine whether the undersigned TRUST's subscription to purchase
Shares of BPI Packaging Technologies, Inc. (the "Company") may be accepted.
NOTE: RETIREMENT PLANS SHOULD COMPLETE THE QUESTIONNAIRE ON PAGES E-1
TO E-4.
ALL INFORMATION CONTAINED IN THIS QUESTIONNAIRE WILL BE TREATED
CONFIDENTIALLY. The undersigned TRUST understands, however, that the Company may
present this Questionnaire to such parties as it deems appropriate if called
upon to establish that the proposed offer and sale of the Shares is exempt from
registration under the Securities Act of 1933, as amended, or meets the
requirements of applicable state securities or "blue sky" laws. Further, the
undersigned TRUST understands that the Offering is required to be reported to
the Securities and Exchange Commission and to various state securities or "blue
sky" regulators.
I. PLEASE CHECK STATEMENTS 1 AND 2 BELOW, AS APPLICABLE
___ 1. (a) the TRUST has total assets in excess of $5,000,000;
and
(b) the TRUST was not formed for the specific purpose of
acquiring the Shares; and
(c) the purchase by the TRUST is directed by a person who
has such knowledge and experience in financial and
business matters that he/she is capable of evaluating
the merits and risks of an investment in the Shares.
B-1
(d) the purchase by the TRUST is directed by a person who
has such knowledge and experience in financial and
business matters that he/she is capable of evaluating
the merits and risks of an investment in the Shares.
___ 2. The grantor of the TRUST may revoke the TRUST at any time; the
grantor retains sole investment control over the assets of the trust AND
(a) the grantor is a natural person whose individual net
worth* or joint net worth with the grantor's spouse
exceeds $1,000,000; or
(b) the grantor is a natural person who had an individual
income* in excess of $200,000 in each of the two most
recent years and who reasonably expects an individual
income in excess of $200,000 in the current year; or
(c) the grantor is a natural person who, together with
his or her spouse, has had a joint income* in excess
of $300,000 in each of the two most recent years and
who reasonably expects a joint income in excess of
$300,000 in the current year.
IF YOU CHECKED STATEMENT 2 IN SECTION I AND DID NOT CHECK STATEMENT 1,
THE GRANTOR MUST PROVIDE A COMPLETED INDIVIDUAL INVESTOR QUESTIONNAIRE (PAGES
A-1 TO A-5) FOR EACH GRANTOR.
II. OTHER CERTIFICATIONS
By signing the Signature Page, the undersigned certifies the following:
(a) that the TRUST's purchase of the Shares will be solely for the
TRUST's own account and not for the account of any other
person;
(b) that the TRUST's purchase of the Shares is within the
investment powers and authority of the TRUST (as set forth in
the declaration of trust or other governing instrument) and
that all necessary consents, approvals and authorizations for
such purchase have been obtained and that each person who
signs the Signature Page has all requisite power and authority
as trustee to execute this Questionnaire and the Subscription
Agreement on behalf of the TRUST;
(c) that the TRUST has not been established in connection with
either (i) an employee benefit plan (as defined in Section
3(3) of ERISA), whether or not subject to the provisions of
Title I of ERISA, or (ii) a plan described in Section
4975(e)(i) of the Internal Revenue Code;
B-2
(d) that the TRUST's name, address of principal office, place of
formation and taxpayer identification number as set forth in
this Questionnaire are true, correct and complete; and
(e) that one of the following is true and correct (check one):
___ (i) the TRUST is an estate or trust whose income from
sources outside of the United States is includable in
its gross income for United States federal tax
purposes regardless of its connection with a trade or
business carried on in the United States.
___ (ii) the TRUST is an estate or trust whose income from
sources outside the United States is not includable
in its gross income for United States federal income
taxes purposes regardless of its connection with a
trade or business carried on in the United States.
* For purposes of this Questionnaire, the term "net worth" means the excess of
total assets over total liabilities. In determining income, an investor should
add to his or her adjusted gross income any amounts attributable to tax-exempt
income received, losses claimed as a limited partner in any limited partnership,
deductions claimed for depletion, contributions to IRA or Keogh retirement
plans, alimony payments and any amount by which income from long-term capital
gains has been reduced in arriving at adjusted gross income.
III. GENERAL INFORMATION
(a) PROSPECTIVE PURCHASER (THE TRUST)
Name:
---------------------------------------------------------------------------
Address:
------------------------------------------------------------------------
(Number and Street)
- --------------------------------------------------------------------------------
(City) (State) (Zip Code)
Address for Correspondence (if different):
- --------------------------------------------------------------------------------
(Number and Street)
- --------------------------------------------------------------------------------
(City) (State) (Zip Code)
B-3
Telephone Number:
---------------------------------------------------------------
(Area Code) (Number)
State in which Formed:
----------------------------------------------------------
Date of Formation:
--------------------------------------------------------------
Taxpayer Identification Number:
-------------------------------------------------
(b) TRUSTEES WHO ARE EXECUTING THIS QUESTIONNAIRE ON BEHALF OF
THE TRUST
Name(s) of Trustee(s):
----------------------------------------------------------
IV. ADDITIONAL INFORMATION
A TRUST MUST ATTACH A COPY OF ITS DECLARATION OF TRUST OR OTHER
GOVERNING INSTRUMENT, AS AMENDED, AS WELL AS ALL OTHER DOCUMENTS THAT AUTHORIZE
THE TRUST TO INVEST IN THE SHARES. ALL DOCUMENTATION MUST BE COMPLETE AND
CORRECT.
V. SIGNATURE
The Signature Page to this Questionnaire is contained on page B-5,
entitled Trust Signature Page.
B-4
TRUST SIGNATURE PAGE
--------------------------------
BPI PACKAGING TECHNOLOGIES, INC.
--------------------------------
Your signature on this TRUST Signature Page evidences the agreement by
the Trustee(s), on behalf of the TRUST, to be bound by the Questionnaire and the
Subscription Agreement.
1. The undersigned represent that (a) the information contained in this
Questionnaire is complete and accurate and (b) the TRUST will notify the Company
(contact at 508-824-8636) immediately if any material change in any of this
information occurs before the acceptance of the TRUST's subscription and will
promptly send the Company written confirmation of such change.
2. The undersigned Trustees hereby certify that they have read and understand
this Subscription Agreement.
3. The undersigned TRUST hereby represents and warrants that the persons signing
this Subscription Agreement on behalf of the TRUST are duly authorized to
acquire the Shares and sign this Subscription Agreement on behalf of the TRUST
and, further, that the undersigned TRUST has all requisite authority to purchase
such Shares and enter into this Subscription Agreement.
- ---------------------------- --------------------------------------------
Number of Shares applied for Date
--------------------------------------------
Title of Trust
(Please Type or Print)
By:
-----------------------------------------
Signature of Trustee
Name of Trustee:
----------------------------
(Please Type or Print)
By:
-----------------------------------------
Signature of Co-Trustee
Name of Co-Trustee:
-------------------------
(Please Type or Print)
THE SHARES OF COMMON STOCK HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "ACT") OR UNDER ANY STATE LAWS, AND MAY
NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED UNLESS SUCH SECURITIES ARE
INCLUDED IN AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT OR AN OPINION OF
COUNSEL, CONCURRED IN BY COUNSEL TO THE COMPANY, HAS BEEN DELIVERED TO THE
EFFECT THAT REGISTRATION OF SUCH SECURITIES IS NOT REQUIRED.
B-5
IMPORTANT: Buyer Name:_________________
Please complete Booklet No._________________
PARTNERSHIP QUESTIONNAIRE
--------------------------------
BPI PACKAGING TECHNOLOGIES, INC.
--------------------------------
BPI Packaging Technologies, Inc.
455 Somerset Avenue
Dighton, Massachusetts 02764
The information contained in this Questionnaire is being furnished in
order to determine whether the undersigned PARTNERSHIP's subscription to
purchase Shares of BPI Packaging Technologies, Inc. (the "Company") may be
accepted.
ALL INFORMATION CONTAINED IN THIS QUESTIONNAIRE WILL BE TREATED
CONFIDENTIALLY. The undersigned PARTNERSHIP understands, however, that the
Company may present this Questionnaire to such parties as it deems appropriate
if called upon to establish that the proposed offer and sale of the Shares is
exempt from registration under the Securities Act of 1933, as amended, or meets
the requirements of applicable state securities or "blue sky" laws.
Further, the undersigned PARTNERSHIP understands that the Offering is
required to be reported to the Securities and Exchange Commission and to various
state securities or "blue sky" regulators.
I. PLEASE CHECK ANY OF STATEMENTS 1-3 BELOW THAT APPLY TO THE PARTNERSHIP
___ 1. Each of the partners of the undersigned PARTNERSHIP is able to certify
that such partner meets at least one of the following conditions:
(a) The partner is a natural person whose individual net worth* or
joint net worth with his or her spouse exceeds $1,000,000.
(b) The partner is a natural person whose individual income* was
in excess of $200,000 in each of the two most recent years and
who reasonably expects an individual income in excess of
$200,000 in the current year.
C-1
___ 2. Each of the partners of the undersigned PARTNERSHIP is able to certify
that such partner is a natural person who, together with his or her spouse, has
had a joint income* in excess of $300,000 in each of the two most recent years
and who reasonably expects a joint income in excess of $300,000 in the current
year.
___ 3. The undersigned PARTNERSHIP: (a) was not formed for the specific purpose
of acquiring the Shares; and (b) has total assets in excess of $5,000,000.
IF YOU CHECKED STATEMENT 1 OR STATEMENT 2 IN SECTION I AND DID NOT
CHECK STATEMENT 3, YOU MUST PROVIDE A LETTER SIGNED BY A GENERAL PARTNER OF THE
UNDERSIGNED PARTNERSHIP LISTING THE NAME OF EACH PARTNER (WHETHER A GENERAL OR
LIMITED PARTNER) AND THE REASON (UNDER STATEMENT 1 OR STATEMENT 2) SUCH PARTNER
QUALIFIES AS AN ACCREDITED INVESTOR (ON THE BASIS OF NET WORTH, INDIVIDUAL
INCOME OR JOINT INCOME), OR EACH PARTNER MUST PROVIDE A COMPLETED INDIVIDUAL
INVESTOR QUESTIONNAIRE (PAGES A-1 TO A-5).
II. OTHER CERTIFICATIONS
By signing the Signature Page, the undersigned certifies the following:
(a) that the PARTNERSHIP's purchase of the Shares will be solely
for the PARTNERSHIP's own account and not for the account of
any other person;
(b) that the PARTNERSHIP's name, address of principal office,
place of formation and taxpayer identification number as set
forth in this Questionnaire are true, correct and complete;
and
(c) that one of the following is true and correct (check one):
___ (i) the PARTNERSHIP is a partnership formed in or under
the laws of the United States or any political
subdivision thereof.
___ (ii) the PARTNERSHIP is not a partnership formed in or
under the laws of the United States or any political
subdivision thereof.
* For purposes of this Questionnaire, the term "net worth" means the excess of
total assets over total liabilities. In determining income, an investor should
add to his or her adjusted gross income any amounts attributable to tax-exempt
income received, losses claimed as a limited partner in any limited partnership,
deductions claimed for depletion, contributions to IRA or Keogh retirement
plans, alimony payments and any amount by which income from long-term capital
gains has been reduced in arriving at adjusted gross income.
C-2
III. GENERAL INFORMATION
(a) PROSPECTIVE PURCHASER (THE PARTNERSHIP)
Name:
---------------------------------------------------------------------------
Principal Place of Business:
----------------------------------------------------
(Number and Street)
- --------------------------------------------------------------------------------
(City) (State) (Zip Code)
Address for Correspondence
(if different):
-----------------------------------------------------------------
(Number and Street)
- --------------------------------------------------------------------------------
(City) (State) (Zip Code)
Telephone Number:
---------------------------------------------------------------
(Area Code) (Number)
State in which Formed:
----------------------------------------------------------
Date of Formation:
--------------------------------------------------------------
Taxpayer Identification Number:
-------------------------------------------------
Number of Partners:
-------------------------------------------------------------
(b) INDIVIDUAL WHO IS EXECUTING THIS QUESTIONNAIRE ON BEHALF OF THE
PARTNERSHIP
--------------------------------------------
Name
--------------------------------------------
Position or Title
IV. SIGNATURE
The Signature Page to this Questionnaire is contained on page C-4,
entitled Partnership Signature Page.
C-3
PARTNERSHIP SIGNATURE PAGE
--------------------------------
BPI PACKAGING TECHNOLOGIES, INC.
--------------------------------
Your signature on this PARTNERSHIP Signature Page evidences the
agreement by the PARTNERSHIP to be bound by the Questionnaire and the
Subscription Agreement.
1. The undersigned PARTNERSHIP represents that (a) the information contained in
this Questionnaire is complete and accurate and (b) the PARTNERSHIP will notify
the Company (contact at 508-824-8636) immediately if any material change in any
of this information occurs before the acceptance of the undersigned
PARTNERSHIP's subscription and will promptly send the Company written
confirmation of such change.
2. The undersigned PARTNERSHIP hereby certifies that it has read and understands
this Subscription Agreement.
3. The undersigned PARTNERSHIP hereby represents and warrants that the person
signing this Subscription Agreement on behalf of the PARTNERSHIP is a general
partner of the PARTNERSHIP, has been duly authorized by the PARTNERSHIP to
acquire the Shares and sign this Subscription Agreement on behalf of the
PARTNERSHIP and, further, that the undersigned PARTNERSHIP has all requisite
authority to purchase such Shares and enter into this Subscription Agreement.
- ---------------------------- ------------------------------------------
Number of Shares applied for Date
------------------------------------------
Name of Partnership (Please Type or Print)
------------------------------------------
Signature
------------------------------------------
Name (Please Type or Print)
THE SHARES OF COMMON STOCK HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "ACT") OR UNDER ANY STATE LAWS, AND MAY
NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED UNLESS SUCH SECURITIES ARE
INCLUDED IN AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT OR AN OPINION OF
COUNSEL, CONCURRED IN BY COUNSEL TO THE COMPANY, HAS BEEN DELIVERED TO THE
EFFECT THAT REGISTRATION OF SUCH SECURITIES IS NOT REQUIRED.
C-4
IMPORTANT: Buyer Name:_______________________
Please Complete Booklet No.:______________________
CORPORATION QUESTIONNAIRE
--------------------------------
BPI PACKAGING TECHNOLOGIES, INC.
--------------------------------
BPI Packaging Technologies, Inc.
455 Somerset Avenue
Dighton, Massachusetts 02764
The information contained in this Questionnaire is being furnished in
order to determine whether the undersigned CORPORATION's subscription to
purchase Shares of BPI Packaging Technologies, Inc. (the "Company") may be
accepted.
ALL INFORMATION CONTAINED IN THIS QUESTIONNAIRE WILL BE TREATED
CONFIDENTIALLY. The undersigned CORPORATION understands, however, that the
Company may present this Questionnaire to such parties as it deems appropriate
if called upon to establish that the proposed offer and sale of the Shares is
exempt from registration under the Securities Act of 1933, as amended, or meets
the requirements of applicable state securities or "blue sky" laws.
Further, the undersigned CORPORATION understands that the Offering is
required to be reported to the Securities and Exchange Commission and to various
state securities or "blue sky" regulators.
I. PLEASE CHECK ANY OF STATEMENTS 1-3 BELOW THAT APPLY TO THE
CORPORATION
___ 1. Each of the shareholders of the undersigned CORPORATION is able to
certify that such shareholder meets at least one of the following two
conditions:
(a) The shareholder is a natural person whose individual net
worth* or joint net worth with his or her spouse exceeds
$1,000,000; or
(b) The shareholder is a natural person who had an individual
income* in excess of $200,000 in each of the two most recent
years and who reasonably expects an individual income in
excess of $200,000 in the current year.
___ 2. Each of the shareholders of the undersigned CORPORATION is able to
certify that such shareholder is a natural person who, together with his or her
spouse, has had a joint income*
D-1
in excess of $300,000 in each of the two most recent years and who reasonably
expects a joint income in excess of $300,000 during the current year.
__ 3. The undersigned CORPORATION: (a) was not formed for the specific purpose
of acquiring any Shares; and (b) has total assets in excess of $5,000,000.
IF YOU CHECKED STATEMENT 1 OR STATEMENT 2 IN SECTION 1 AND DID NOT
CHECK STATEMENT 3, YOU MUST PROVIDE A LETTER SIGNED BY AN OFFICER OF THE
UNDERSIGNED CORPORATION LISTING THE NAME OF EACH SHAREHOLDER AND THE REASON
(UNDER STATEMENT 1 OR STATEMENT 2) WHY SUCH SHAREHOLDER QUALIFIES AS AN
ACCREDITED INVESTOR (ON THE BASIS OF NET WORTH, INDIVIDUAL INCOME OR JOINT
INCOME), OR EACH SHAREHOLDER MUST PROVIDE A COMPLETED INDIVIDUAL INVESTOR
QUESTIONNAIRE (PAGES A-1 TO A-5).
II. OTHER CERTIFICATIONS
By signing the Signature Page, the undersigned certifies the following:
(a) that the CORPORATION's purchase of the Shares will be solely
for the CORPORATION's own account and not for the account of
any other person or entity;
(b) that the CORPORATION's name, address of principal office,
place of incorporation and taxpayer identification number as
set forth in this Questionnaire are true, correct and
complete; and
(c) that one of the following is true and correct (check one):
___ (i) the CORPORATION is a corporation organized in or
under the laws of the United States or any political
subdivision thereof.
___ (ii) the CORPORATION is a corporation which is neither
created nor organized in or under the United States
or any political subdivision thereof, but which has
made an election under either Section 897(i) or
897(k) of the United States Internal Revenue Code of
1986, as amended, to be treated as a domestic
corporation for certain purposes of United States
federal income taxation (A COPY OF THE INTERNAL
REVENUE SERVICE ACKNOWLEDGMENT OF THE UNDERSIGNED'S
ELECTION MUST BE ATTACHED TO THIS SUBSCRIPTION
AGREEMENT IF THIS PROVISION IS APPLICABLE).
___ (iii) neither (i) nor (ii) above is true.
D-2
* For purposes of this Questionnaire, the term "net worth" means the excess of
total assets over total liabilities. In determining income, an investor should
add to his or her adjusted gross income any amounts attributable to tax-exempt
income received, losses claimed as a limited partner in any limited partnership,
deductions claimed for depletion, contributions to IRA or Keogh retirement
plans, alimony payments and any amount by which income from long-term capital
gains has been reduced in arriving at adjusted gross income.
III. GENERAL INFORMATION
(a) PROSPECTIVE PURCHASER (THE CORPORATION)
Name:
---------------------------------------------------------------------------
Principal Place of Business:
----------------------------------------------------
(Number and Street)
- --------------------------------------------------------------------------------
(City) (State) (Zip Code)
Address for Correspondence
(if different):
-----------------------------------------------------------------
(Number and Street)
- --------------------------------------------------------------------------------
(City) (State) (Zip Code)
Telephone Number:
---------------------------------------------------------------
(Area Code) (Number)
State of Incorporation:
---------------------------------------------------------
Date of Formation:
--------------------------------------------------------------
Taxpayer Identification Number:
-------------------------------------------------
Number of Shareholders:
---------------------------------------------------------
D-3
(b) INDIVIDUAL WHO IS EXECUTING THIS QUESTIONNAIRE ON BEHALF OF
THE CORPORATION
Name:
---------------------------------------------------------------------------
Position or Title:
--------------------------------------------------------------
IV. SIGNATURE
The Signature Page to this Questionnaire is contained on page D-5,
entitled Corporation Signature Page.
D-4
CORPORATION SIGNATURE PAGE
--------------------------------
BPI PACKAGING TECHNOLOGIES, INC.
--------------------------------
Your signature on this CORPORATION Signature Page evidences the
agreement by the CORPORATION to be bound by the Questionnaire and the
Subscription Agreement.
1. The undersigned CORPORATION represents that (a) the information contained in
this Questionnaire is complete and accurate and (b) the CORPORATION will notify
the Company (contact at 508-824-8636) immediately if any material change in any
of the information occurs prior to the acceptance of the undersigned
CORPORATION's subscription and will promptly send the Company written
confirmation of such change.
2. The undersigned CORPORATION hereby certifies that it has read and understands
this Subscription Agreement.
3. The undersigned CORPORATION hereby represents and warrants that the person
signing this Subscription Agreement on behalf of the CORPORATION has been duly
authorized by all requisite action on the part of the CORPORATION to acquire the
Shares and sign this Subscription Agreement on behalf of the CORPORATION and,
further, that the undersigned CORPORATION has all requisite authority to
purchase the Shares and enter into this Subscription Agreement.
- ----------------------------- ------------------------------------------
Number of Shares applied for Date
------------------------------------------
Name of Corporation (Please Type or Print)
By:
---------------------------------------
Signature
Title:
------------------------------------
(Please Type or Print)
THE SHARES OF COMMON STOCK HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "ACT") OR UNDER ANY STATE LAWS, AND MAY
NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED UNLESS SUCH SECURITIES ARE
INCLUDED IN AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT OR AN OPINION OF
COUNSEL, CONCURRED IN BY COUNSEL TO THE COMPANY, HAS BEEN DELIVERED TO THE
EFFECT THAT REGISTRATION OF SUCH SECURITIES IS NOT REQUIRED.
D-5
IMPORTANT: Buyer Name:____________________
Please Complete Booklet No.:___________________
RETIREMENT PLAN QUESTIONNAIRE
--------------------------------
BPI PACKAGING TECHNOLOGIES, INC.
--------------------------------
BPI Packaging Technologies, Inc.
455 Somerset Avenue
Dighton, Massachusetts 02764
The information contained in this Questionnaire is being furnished in
order to determine whether the undersigned RETIREMENT PLAN's subscription to
purchase Shares of BPI Packaging Technologies, Inc. (the "Company") may be
accepted.
ALL INFORMATION CONTAINED IN THIS QUESTIONNAIRE WILL BE TREATED
CONFIDENTIALLY. The undersigned RETIREMENT PLAN understands, however, that the
Company may present this Questionnaire to such parties as it deems appropriate
if called upon to establish that the proposed offer and sale of the Shares is
exempt from registration under the Securities Act of 1933, as amended, or meets
the requirements of applicable state securities or "blue sky" laws. Further, the
undersigned RETIREMENT PLAN understands that the Offering is required to be
reported to the Securities and Exchange Commission and to various state
securities or "blue sky" regulators.
I. PLEASE CHECK ANY OF THE FOLLOWING STATEMENTS, AS APPLICABLE
___ 1. The undersigned RETIREMENT PLAN certifies that it is an employee benefit
plan within the meaning of the Employee Retirement Income Security Act of 1974
("ERISA") and:
(a) the investment decisions are made by a plan fiduciary
as defined in Section 3(21) of ERISA that (i) is
either a bank, insurance company or registered
investment advisor or (ii) is a savings and loan
association; or
(b) The undersigned RETIREMENT PLAN has total assets in
excess of $5,000,000; or
E-1
(c) The undersigned RETIREMENT PLAN is self-directed,
with investment decisions made solely by persons each
of whom satisfies at least one of the following
conditions:
(i) such person's individual net worth* or joint
net worth with his or her spouse exceeds
$1,000,000; or
(ii) such person had an individual income* in
excess of $200,000 in each of the two most
recent years and reasonably expects an
individual income in excess of $200,000 in
the current year; or
(iii) such person together with his or her spouse,
had a joint income* in excess of $300,000 in
each of the two most recent years and
reasonably expects a joint income in excess
of $300,000 in the current year.
___ 2. The undersigned RETIREMENT PLAN certifies that it is an employee benefit
plan, Keogh plan or Individual Retirement Account in which each participant
satisfies at least one of the following conditions:
(a) such person's individual net worth* or joint net
worth with his or her spouse exceeds $1,000,000; or
(b) such person had an individual income* in excess of
$200,000 in each of the two most recent years and
reasonably expects an individual income in excess of
$200,000 in the current year; or
(c) such person, together with his or her spouse, had a
joint income* in excess of $300,000 in each of the
two most recent years and reasonably expects a joint
income in excess of $300,000 in the current year.
* For purposes of this Questionnaire, the term "net worth" means the excess of
total assets over total liabilities. In determining income, an investor should
add to his or her adjusted gross income any amounts attributable to tax-exempt
income received, losses claimed as a limited partner in any limited partnership,
deductions claimed for depletion, contributions to IRA or Keogh retirement
plans, alimony payments and any amount by which income from long-term capital
gains has been reduced in arriving at adjusted gross income.
E-2
IF YOU CHECKED STATEMENT 1(C) OR STATEMENT 2 AND NOT STATEMENT 1(A) OR
STATEMENT 1(B), YOU MUST PROVIDE A LETTER SIGNED BY A PERSON DULY AUTHORIZED BY
THE RETIREMENT PLAN LISTING, AS APPLICABLE (I) THE NAMES OF THE PERSONS (OR
ENTITIES) MAKING THE INVESTMENT DECISIONS, OR (II) THE NAMES OF ALL OF THE
PARTICIPANTS IN THE PLAN AND THE REASON (UNDER STATEMENT 1(C) OR STATEMENT 2)
SUCH PERSON (OR ENTITY), QUALIFIES AS AN ACCREDITED INVESTOR (ON THE BASIS OF
NET WORTH, INDIVIDUAL INCOME, JOINT INCOME OR OTHERWISE), OR EACH SUCH PERSON
(OR ENTITY) MUST COMPLETE THE APPROPRIATE QUESTIONNAIRE (I.E. FOR AN INDIVIDUAL,
TRUST, PARTNERSHIP OR CORPORATION).
II. OTHER CERTIFICATIONS
By signing the Signature Page, the undersigned certifies the following:
(a) that the RETIREMENT PLAN's purchase of the Shares will be
solely for the RETIREMENT PLAN's own account and not for the
account of any other person or entity;
(b) that the RETIREMENT PLAN's governing documents duly authorize
the type of investment contemplated herein, and the
undersigned is authorized and empowered to make such
investment on behalf of the RETIREMENT PLAN.
(c) that one of the following is true and correct (check one):
___ (i) the RETIREMENT PLAN is a retirement plan whose income
from sources outside of the United States is
includable in its gross income for United States
federal tax purposes regardless of its connection
with a trade or business carried on in the United
States.
___ (ii) the RETIREMENT PLAN is a retirement plan whose income
from sources outside the United States is not
includable in its gross income for United States
federal income tax purposes regardless of its
connection with a trade or business carried on in the
United States.
E-3
III. GENERAL INFORMATION
(a) PROSPECTIVE PURCHASER (THE RETIREMENT PLAN)
Name:
---------------------------------------------------------------------------
Address:
------------------------------------------------------------------------
(Number and Street)
- --------------------------------------------------------------------------------
(City) (State) (Zip Code)
Address for Correspondence
(if different):
-----------------------------------------------------------------
(Number and Street)
- --------------------------------------------------------------------------------
(City) (State) (Zip Code)
Telephone Number:
---------------------------------------------------------------
(Area Code) (Number)
State in which Formed:
----------------------------------------------------------
Date of Formation:
--------------------------------------------------------------
Taxpayer Identification Number:
-------------------------------------------------
(b) INDIVIDUAL WHO IS EXECUTING THIS QUESTIONNAIRE ON BEHALF OF
THE RETIREMENT PLAN
Name:
---------------------------------------------------------------------------
Position or Title:
--------------------------------------------------------------
IV. ADDITIONAL INFORMATION
THE RETIREMENT PLAN MUST ATTACH COPIES OF ALL DOCUMENTS GOVERNING THE
PLAN AS WELL AS ALL OTHER DOCUMENTS AUTHORIZING THE RETIREMENT PLAN TO INVEST IN
THE SHARES. INCLUDE, AS NECESSARY, DOCUMENTS DEFINING PERMITTED INVESTMENTS BY
THE RETIREMENT PLAN, AND DEMONSTRATING AUTHORITY OF THE SIGNING INDIVIDUAL TO
ACT ON BEHALF OF THE PLAN. ALL DOCUMENTATION MUST BE COMPLETE AND CORRECT.
V. SIGNATURE
The Signature Page to this Questionnaire is contained on page E-5,
entitled Retirement Plan Signature Page.
E-4
RETIREMENT PLAN SIGNATURE PAGE
--------------------------------
BPI PACKAGING TECHNOLOGIES, INC.
--------------------------------
Your signature on this RETIREMENT PLAN Signature Page evidences the
agreement by the RETIREMENT PLAN to be bound by the Questionnaire and the
Subscription Agreement.
1. The undersigned RETIREMENT PLAN represents that (a) the information contained
in this Questionnaire is complete and accurate and (b) the RETIREMENT PLAN will
notify the Company (contact at 508-824- 8636) immediately if any material change
in any of the information occurs prior to the acceptance of the undersigned
RETIREMENT PLAN's subscription and will promptly send the Company written
confirmation of such change.
2. The undersigned RETIREMENT PLAN hereby certifies that it has read and
understands this Subscription Agreement.
3. The undersigned RETIREMENT PLAN hereby represents and warrants that the
person signing this Subscription Agreement on behalf of the RETIREMENT PLAN has
been duly authorized to acquire the Shares and sign this Subscription Agreement
on behalf of the RETIREMENT PLAN and, further, that the undersigned RETIREMENT
PLAN has all requisite authority to purchase the Shares and enter into this
Subscription Agreement.
- ---------------------------- -----------------------------------------------
Number of Shares applied for Date
-----------------------------------------------
Name of Retirement Plan (Please Type or Print)
By:
--------------------------------------------
Signature
Name:
------------------------------------------
(Please Type or Print)
Title:
-----------------------------------------
(Please Type or Print)
THE SHARES OF COMMON STOCK HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "ACT") OR UNDER ANY STATE LAWS, AND MAY
NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED UNLESS SUCH SECURITIES ARE
INCLUDED IN AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT OR AN OPINION OF
COUNSEL, CONCURRED IN BY COUNSEL TO THE COMPANY, HAS BEEN DELIVERED TO THE
EFFECT THAT REGISTRATION OF SUCH SECURITIES IS NOT REQUIRED.
-1-
<PAGE>
WC-1 176,000 WARRANTS EACH TO
PURCHASE ONE SHARE OF COMMON
STOCK UPON EXERCISE
NEITHER THESE WARRANTS NOR THE SHARES OF COMMON STOCK ISSUABLE UPON EXERCISE OF
THESE WARRANTS HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE "SECURITIES ACT"), AND NEITHER THESE WARRANTS NOR SUCH SHARES MAY BE SOLD,
ENCUMBERED OR OTHERWISE TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT UNDER SUCH ACT OR AN EXEMPTION FROM SUCH REGISTRATION REQUIREMENT,
AND, IF AN EXEMPTION SHALL BE APPLICABLE, THE HOLDER SHALL HAVE DELIVERED AN
OPINION OF COUNSEL ACCEPTABLE TO THE CORPORATION THAT SUCH REGISTRATION IS NOT
REQUIRED.
VOID AFTER 5:00 P.M. BOSTON TIME, ON DECEMBER 31, 1997, OR EARLIER
AS PROVIDED IN THIS WARRANT.
WARRANT TO PURCHASE SHARES OF COMMON STOCK
OF
BPI PACKAGING TECHNOLOGIES, INC.
FOR VALUE RECEIVED, BPI PACKAGING TECHNOLOGIES, INC. (the
"Corporation"), a Delaware corporation hereby certifies that H.J. Meyers & Co.,
Inc. or its successors or permitted assigns (the "Holder"), is entitled to
purchase from the Corporation, at any time or from time to time commencing May
28, 1996 and through the "Warrant Termination Date", which shall be 5:00 P.M.,
Boston time, on December 31, 1997, one hundred seventy-six thousand (176,000)
fully paid and nonassessable shares (the "Shares") of Common Stock, $.01 par
value per share, of the Corporation at a purchase price of $4.25 per share or an
aggregate purchase price of $748,000.
Hereinafter, (i) the shares underlying this Warrant, together with any
other equity securities which may be issued by the Corporation with respect
thereto or in substitution therefor, are referred to as the "Shares," (ii) the
Shares purchasable hereunder are referred to as the "Warrant Shares," (iii) the
aggregate purchase price payable hereunder for the Warrant Shares is referred to
as the "Aggregate Warrant Price," (iv) the price payable hereunder for each of
the Warrant Shares is referred to as the "Per Share Warrant Price," (v) this
Warrant, and all warrants hereafter issued in exchange or substitution for this
Warrant are referred to as the "Warrant," and (vi) the holder of this Warrant is
referred to as the "Holder." The Aggregate Warrant Price is not subject to
adjustment. The Per Share Warrant Price is subject to adjustment as hereinafter
provided; in the event of any such adjustment, the number of Warrant Shares
shall be adjusted by dividing the Aggregate Warrant Price by the Per Share
Warrant Price in effect immediately after such adjustment.
1. EXERCISE OF WARRANT. This Warrant may be exercised, in whole at any
time or in part from time to time, commencing on the issuance of this Warrant
and prior to the Warrant Termination Date by the Holder of this Warrant by the
surrender of this Warrant (with the subscription form at the end hereof duly
executed) at the address set forth in Subsection 9(a) hereof, together with
proper payment of the Aggregate Warrant Price, or the proportionate part thereof
if this Warrant is exercised in part. Payment for Warrant Shares shall be made
by certified or official bank check payable to the order of the Corporation. If
this Warrant is exercised in part, this Warrant must be exercised for a minimum
of ten thousand (10,000) Shares, and the Holder is entitled to receive a new
Warrant covering the number of Warrant Shares in respect of which this Warrant
has not been exercised and setting forth the proportionate part of the Aggregate
Warrant Price applicable to such Warrant Shares. Upon such surrender of this
Warrant, the Corporation will (a) issue a certificate or certificates in the
name of the Holder for the largest number of whole Shares to which the Holder
shall be entitled and, if this Warrant is exercised in whole, in lieu of any
fractional Share to which the Holder shall be entitled, cash equal to the fair
value of such fractional Share (determined in such reasonable manner as the
Board of Directors of the Corporation shall determine), and (b) deliver the
proportionate part thereof if this Warrant is exercised in part, pursuant to the
provisions of this Warrant.
The Corporation agrees that, prior to the expiration of this Warrant,
the Corporation will at all times have authorized and in reserve, and will keep
available, solely for issuance or delivery upon the exercise of this Warrant,
the Shares as from time to time shall be receivable upon the exercise of this
Warrant.
2. ADJUSTMENTS.
(a) Adjustment for Combinations or Consolidation of Shares. In
the event the outstanding Shares shall be combined or consolidated, by
reclassification or otherwise, into a lesser number of Shares, the applicable
Warrant Price in effect immediately prior to such combination or consolidation
shall, concurrently with the effectiveness of such combination or consolidation,
be increased proportionately.
(b) Adjustment for Merger or Reorganization, etc. In case of
any consolidation or merger (except a merger in connection with the
reincorporation of the Corporation) of the Corporation with or into another
corporation or the sale of all or substantially all of the assets of the
Corporation to another corporation, each Share issuable upon exercise of this
Warrant shall thereafter be convertible into the kind and amount of shares of
stock or other securities or property (including cash) to which a holder of the
number of Shares of the Corporation deliverable upon exercise of this Warrant
would have been entitled upon such consolidation, merger or sale; and, in such
case, appropriate adjustment (as determined in good faith by the Board of
Directors) shall be made in the application of the provisions in this Subsection
set forth with respect to the rights and interest thereafter of the holders of
the Shares, to the end that the provisions set forth in this Subsection
(including provisions with respect to changes in and other adjustments of the
Warrant Price) shall
-2-
thereafter be applicable, as nearly as reasonably may be, in relation to any
shares of stock or other property (including cash) thereafter deliverable upon
the exercise of this Warrant.
(c) Adjustment for Reclassification, Exchange or Substitution.
If the Shares issuable upon the exercise of this Warrant shall be changed into
the same or a different number of shares of any class of classes of stock,
whether by capital reorganization, reclassification, or otherwise (other than a
subdivision or combination of shares or stock dividend provided for above, or a
reorganization, merger, consolidation, or sale of assets provided for below),
then and in each such event the holder of this Warrant to purchase such Shares
shall have the right thereafter to convert such share into the kind and amount
of shares of stock and other securities and property receivable upon such
reorganization, reclassification, or other change, by holders of the number of
Shares into which such Shares might have been converted immediately prior to
such reorganization, reclassification, or change, all subject to further
adjustment as provided herein.
(d) Certificate as to Adjustments. Upon the occurrence of each
adjustment or readjustment of the Warrant Price pursuant to this Section 2, the
Corporation at its expense shall promptly compute such adjustment or
readjustment in accordance with the terms hereof and furnish to the holder of
this Warrant a notice setting forth such adjustment or readjustment and showing
in detail the facts upon which such adjustment or readjustment is based.
4. FULLY PAID STOCK; TAXES. The Corporation agrees that the Shares
represented by each and every certificate for Warrant Shares delivered on the
exercise of this Warrant shall, at the time of such delivery, be validly issued
and outstanding, fully paid and non-assessable, and not subject to pre-emptive
rights, and the Corporation will take all such actions as may be necessary to
assure that the par value or stated value, if any, per share of the Shares is at
all times equal to or less than the then Per Share Warrant Price. The
Corporation further covenants and agrees that it will pay, when due and payable,
any and all Federal and state stamp, original issue or similar taxes which may
be payable in respect of the issue of any Warrant Share or certificate therefor.
5. TRANSFER.
(a) Securities Laws. Neither this Warrant nor the Warrant
Shares issuable upon the exercise hereof have been registered under the
Securities Act of 1933, as amended (the "Securities Act") or under any state
securities laws and unless so registered may not be transferred, sold, pledged,
hypothecated or otherwise disposed of unless an exemption from such registration
is available. In the event the Holder desires to transfer this Warrant or any of
the Warrant Shares issued, the Holder must give the Corporation prior written
notice of such proposed transfer including the name and address of the proposed
transferee. Such transfer may be made only either (i) upon publication by the
Securities and Exchange Commission (the "Commission") of a ruling,
interpretation, opinion or "no action letter" based upon facts presented to said
Commission, or (ii) upon receipt by the Corporation of an opinion of counsel to
the Corporation in either case to the effect that the proposed transfer will not
violate the provisions of the Securities Act, the Securities Exchange Act of
1934, as amended, or the rules and regulations promulgated under either such
act,
-3-
or in the case of clause (ii) above, to the effect that the Warrant or Warrant
Shares to be sold or transferred has been registered under the Securities Act,
and that there is in effect a current prospectus meeting the requirements of
Subsection 10(a) of the Securities Act, which is being or will be delivered to
the purchaser or transferee at or prior to the time of delivery of the
certificates evidencing the Warrant or Warrant Shares to be sold or transferred.
(b) Conditions to Transfer. Prior to any such proposed
transfer, and as a condition thereto, if such transfer is not made pursuant to
an effective registration statement under the Securities Act, the Holder will,
if requested by the Corporation, deliver to the Corporation (i) an investment
covenant signed by the proposed transferee, (ii) an agreement by such transferee
to the impression of the restrictive investment legend set forth herein on the
certificate or certificates representing the securities acquired by such
transferee, (iii) an agreement by such transferee that the Corporation may place
a "stop transfer order" with its transfer agent or registrar, and (iv) an
agreement by the transferee to indemnify the Corporation to the same extent as
set forth in the next succeeding paragraph.
(c) Indemnity. The Holder acknowledges that the Holder
understands the meaning and legal consequences of this Section 4, and the Holder
hereby agrees to indemnify and hold harmless the Corporation, its
representatives and each officer and director thereof from and against any and
all loss, damage or liability (including all attorneys' fees and costs incurred
in enforcing this indemnity provision) due to or arising out of (a) the
inaccuracy of any representation or the breach of any warranty of the Holder
contained in, or any other breach of, this Warrant, (b) any transfer of any of
the Warrant or the Warrant Shares in violation of the Securities Act, the
Securities Exchange Act of 1934, as amended, or the rules and regulations
promulgated under either of such acts, (c) any transfer of the Warrant or any of
the Warrant Shares not in accordance with this Warrant, or (d) any untrue
statement or omission to state any material fact in connection with the
investment representations or with respect to the facts and representations
supplied by the Holder to counsel to the Corporation upon which its opinion as
to a proposed transfer shall have been based.
(d) Transfer. Subject to applicable securities laws and
Section 5(a), and except as restricted hereby, this Warrant and the Warrant
Shares issued may be transferred by the Holder in whole or in part at any time
or from time to time. Upon surrender of this Warrant to the Corporation or at
the office of its stock transfer agent, if any, with the Assignment Form annexed
hereto duly executed and funds sufficient to pay any transfer tax, and upon
compliance with the foregoing provisions, the Corporation shall, without charge,
execute and deliver a new Warrant in the name of the assignee named in such
instrument of assignment, and this Warrant shall promptly be cancelled. Any
assignment, transfer, pledge, hypothecation or other disposition of this Warrant
attempted contrary to the provisions of this Warrant, or any levy of execution,
attachment or other process attempted upon the Warrant, shall be null and void
and without effect.
(e) Legend and Stop Transfer Orders. Unless the Warrant Shares
have been registered under the Securities Act, upon exercise of any of the
Warrant and the issuance of any of the Warrant Shares, the Corporation shall
instruct its transfer agent to enter stop transfer orders with
-4-
respect to such Shares, and all certificates representing the Warrant Shares
shall bear on the face thereof substantially the following legend:
"THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT") OR
UNDER ANY STATE LAW AND ARE "RESTRICTED SECURITIES" AS THAT TERM IS
DEFINED IN RULE 144 UNDER THE ACT. THE SHARES MAY NOT BE SOLD,
TRANSFERRED, OR OTHERWISE DISPOSED OF EXCEPT PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE ACT OR PURSUANT TO AN EXEMPTION FROM
REGISTRATION UNDER THE ACT, THE AVAILABILITY OF WHICH IS TO BE
ESTABLISHED AND ACCOMPANIED BY AN OPINION OF COUNSEL TO THE
SATISFACTION OF THE COMPANY."
6. REGISTRATION RIGHTS.
6.1 REGISTRATION RIGHTS.
(a) Within one hundred twenty (120) days after the
date of this Warrant, the Company will use its commercially reasonable efforts
to prepare and file with the Securities and Exchange Commission a registration
statement on Form S-1 or Form S-3 (or any successor form) relating to the Shares
underlying this Warrant. In addition, the Company may, in its sole discretion,
at any time, elect to register all of such Common Stock on a Form S-1 or Form
S-3 (or other appropriate form) in connection with any other registration
statement or on a stand-alone basis.
(b) If permitted by applicable law and regulation,
the Company at the request of the Holders owning a majority of the Shares, shall
file such amendments and/or supplements to such registration statement, and,
subject to this Section 6 hereof, take such other steps as may be required to
maintain such registration statement in effect, and to keep the information
therein current, until the earlier of the sale of all of the Shares included in
the registration statement or the expiration of nine months from the effective
date of such registration statement.
(c) In connection with any registration statement
referred to in Section 6 of this Warrant, Holder will furnish to the Company
such information as the Company may reasonably require from the Holder for
inclusion in the registration statement (and the prospectus included therein).
(d) The Company's registration obligations under this
Warrant shall be conditioned upon the Holder executing and delivering to the
Company an appropriate agreement, if necessary in the reasonable opinion of
counsel to the Company, in form reasonably satisfactory to counsel for the
Company, that it will comply with all anti-stabilization, manipulation, and
similar provisions of Section 10 of the 1934 Act, and any rules promulgated
thereunder and will furnish to the Company information about sales made in such
public offering.
-5-
(e) The Company, at its expense, shall cause all of
the Shares included in a registration statement referred to in Section 6 hereof
to be qualified under the laws of such reasonable number of jurisdictions, as
the Company may reasonably designate, and the Company will continue such
qualification in effect for such period of time not to exceed nine months from
the effective date of the registration statement referred to in Section 6 which
relates to such Shares.
(f) The Company shall not be required to effect any
registration within three months after the effective date of any other
underwritten registration statement of the Company. The Company shall have the
right, in its sole discretion, to designate the managing underwriter in respect
of a public offering pursuant to this Section 6.1.
(g) If at the time the Company is registering the
Shares pursuant to this subsection 6.1, the Company is engaged or has fixed
demonstrable plans to engage in an underwritten public offering (other than on a
Form S-4 or S-8) as to which the Holders may, in the sole discretion of the
managing underwriter of such public offering, include the Shares pursuant to
subsection 6.1 or is engaged in any other activity which, in the good faith
determination of the Company's Board of Directors, would be adversely affected
by the registration to the detriment of the Company, then the Company may, at
its option, elect not to proceed with such registration of the Holders' Shares
or direct that if it effectuates the registration of the Holders' Shares, the
Holders of the Shares shall agree not to publicly sell such registered Shares
for such period of time as requested by the underwriter managing the public
offering or by the Company's Board of Directors.
6.2 EXPENSES.
(a) With respect to the registration right granted in
Section 6.1 hereof, all fees, costs and expenses of an incidental to such
registration, inclusion and public offering (as specified in paragraph (b)
below) in connection therewith shall be borne by the Company, provided, however,
that any security holders participating in such registration shall bear their
pro rata share of the underwriting discount and commissions and transfer taxes.
(b) The fees, costs and expenses of registration to
be borne by the Company as provided in paragraph (a) above shall include,
without limitation, all registration, filing, and NASD fees, printing expenses,
fees and disbursements of counsel and accountants for the Company, and all legal
fees and disbursements and other expenses of complying with state securities or
blue sky laws of any jurisdictions in which the securities to be offered are to
be registered and qualified (except as provided in 6.2(a) above). Fees and
disbursements of counsel and accountants for the Holders and any other expenses
incurred by the Holders not expressly included above shall be borne by the
Holders.
6.3 INDEMNIFICATION.
(a) With respect to the registration right described
in this Section 6 and to the extent permitted by law, the Company hereby agrees
to indemnify, hold harmless and defend
-6-
the Holders and each person, if any, who is deemed a "controlling person" of any
such Holder within the meaning of the 1933 Act, against any and all losses,
claims, damages or liabilities (including legal and other expenses incurred in
investigating and defending against the same), to which they, or any of them,
may become subject under the 1933 Act or other statute or common law, arising
out of or based upon:
(i) any alleged untrue statement of a
material fact contained in any registration statement, preliminary
prospectus or prospectus included therein, any amendment thereof or
supplement thereto; or
(ii) the alleged omission to state therein
a material fact required to be stated therein or necessary to make the
statements contained therein not misleading; provided, however, that
the indemnity contained in this Section 6.3(a) shall not apply to any
such alleged untrue statement or omission made in reliance upon and in
conformity with information furnished in writing to the Company by or
on behalf of the Holders.
The Holder agrees that as soon as practicable, but in any event within
ten (10) days after the receipt of notice of any claim or action against it in
respect of which indemnity may be sought from the Company hereunder, to notify
the Company thereof in writing, and the Company shall assume the defense of such
claim or action (and the cost thereof) by counsel of its own choosing.
(b) The Holder hereby agrees to indemnify, hold
harmless and defend the Company, its directors and officers, each person, if
any, who is deemed a controlling person of the Company within the meaning of the
1933 Act, and the underwriter, to the extent permitted by law, against any and
all losses, claims, damages or liabilities, including legal or other expenses
incurred in investigating and defending against the same, to which they or any
of them may become subject under the 1933 Act or other statute or common law,
arising out of or based upon:
(i) any alleged untrue statement by such
Holder of a material fact contained in any such registration statement,
or prospectus or preliminary prospectus included therein, or any
amendment thereof or supplement thereto; or
(ii) the alleged omission by such Holder
to state therein a material fact required to be stated therein or
necessary to make the statements contained therein not misleading.
The Company, and any other person or entity seeking indemnity from the
Holder hereunder, agree that as soon as practicable, but in any event within ten
(10) days after receipt of notice of any claim or action against the Company or
such other person or entity, to notify the Holder thereof in writing, and the
Holder shall assume the defense of any such claim or action (and the cost
thereof) by counsel of his own choosing, who shall be reasonably satisfactory to
the Company. If Holder does not promptly assume such defense, the Company may at
its option defend such action at the expense of the Holder.
-7-
7. LOSS, ETC. OF WARRANT. Upon receipt of evidence satisfactory to the
Corporation of the loss, theft, destruction or mutilation of this Warrant, and
of indemnity reasonably satisfactory to the Corporation, if lost, stolen or
destroyed, and upon surrender and cancellation of this Warrant, if mutilated,
the Corporation shall execute and deliver to the Holder a new Warrant of like
date, tenor and denomination.
8. WARRANT HOLDER NOT SHAREHOLDER. Except as otherwise provided herein,
this Warrant does not confer upon the Holder any right to vote or to consent to
or receive notice as a shareholder of the Corporation, as such, in respect of
any matters whatsoever, or any other rights or liabilities as a shareholder,
prior to the exercise hereof.
9. COMMUNICATION. No notice or other communication under this Warrant
shall be effective unless the same is in writing and is mailed by first-class
mail, postage prepaid, addressed to:
(a) the Corporation at 455 Somerset Avenue, Dighton,
Massachusetts 02764, or such other address as the Corporation has designated in
writing to the Holder, or
(b) the Holder at H.J. Meyers & Co., Inc., 1895 Mt. Hope
Avenue, Rochester, New York 14620 or such other address as the Holder has
designated in writing to the Corporation.
10. HEADINGS. The headings of this Warrant have been inserted as a
matter of convenience and shall not affect the construction hereof.
11. APPLICABLE LAW. This Warrant shall be governed by and construed in
accordance with the laws of the Commonwealth of Massachusetts without giving
effect to the principles of conflicts of law thereof.
IN WITNESS WHEREOF, BPI PACKAGING TECHNOLOGIES, INC., has caused this
Warrant to be signed by its President and its corporate seal to be hereunto
affixed and attested by its Assistant Secretary as of this 28th day of May,
1996.
ATTEST: BPI PACKAGING TECHNOLOGIES, INC.
By:
- ---------------------------------- -----------------------------------
Neil H. Aronson Dennis N. Caulfield
Assistant Secretary President
[Corporate Seal]
-8-
SUBSCRIPTION
The undersigned, _________, pursuant to the provisions of the foregoing
Warrant, hereby agrees to subscribe for the purchase of __________ shares of the
Common Stock of BPI PACKAGING TECHNOLOGIES, INC. covered by said Warrant, and
makes payment therefor in full at the price per share provided by said Warrant.
Dated: Signature
-------------------------------- --------------------------
Address
----------------------------
-----------------------------------
ASSIGNMENT
FOR VALUE RECEIVED _____________ hereby sells, assigns and transfers
unto ___________________________ the foregoing Warrant and all rights evidenced
thereby, and does irrevocably constitute and appoint ____________________,
attorney, to transfer said Warrant on the books of BPI PACKAGING TECHNOLOGIES,
INC.
Dated: Signature
-------------------------------- --------------------------
Address
----------------------------
-----------------------------------
PARTIAL ASSIGNMENT
FOR VALUE RECEIVED___________________ hereby assigns and transfers unto
________________________ the right to purchase ____________ shares of the Common
Stock of BPI PACKAGING TECHNOLOGIES, INC. by the foregoing Warrant, and a
proportionate part of said Warrant and the rights evidenced hereby, and does
irrevocably constitute and appoint _______________________, attorney, to
transfer that part of said Warrant on the books of BPI PACKAGING TECHNOLOGIES,
INC.
Dated: Signature
-------------------------------- --------------------------
Address
----------------------------
-----------------------------------
-9-
WC-2
24,000 WARRANTS EACH TO
PURCHASE ONE SHARE OF COMMON
STOCK UPON EXERCISE
NEITHER THESE WARRANTS NOR THE SHARES OF COMMON STOCK ISSUABLE UPON EXERCISE OF
THESE WARRANTS HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE "SECURITIES ACT"), AND NEITHER THESE WARRANTS NOR SUCH SHARES MAY BE SOLD,
ENCUMBERED OR OTHERWISE TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT UNDER SUCH ACT OR AN EXEMPTION FROM SUCH REGISTRATION REQUIREMENT,
AND, IF AN EXEMPTION SHALL BE APPLICABLE, THE HOLDER SHALL HAVE DELIVERED AN
OPINION OF COUNSEL ACCEPTABLE TO THE CORPORATION THAT SUCH REGISTRATION IS NOT
REQUIRED.
VOID AFTER 5:00 P.M. BOSTON TIME, ON DECEMBER 31, 1997, OR EARLIER
AS PROVIDED IN THIS WARRANT.
WARRANT TO PURCHASE SHARES OF COMMON STOCK
OF
BPI PACKAGING TECHNOLOGIES, INC.
FOR VALUE RECEIVED, BPI PACKAGING TECHNOLOGIES, INC. (the
"Corporation"), a Delaware corporation hereby certifies that Culverwell & Co.,
Inc. or its successors or permitted assigns (the "Holder"), is entitled to
purchase from the Corporation, at any time or from time to time commencing May
28, 1996 and through the "Warrant Termination Date", which shall be 5:00 P.M.,
Boston time, on December 31, 1997, twenty-four thousand (24,000) fully paid and
nonassessable shares (the "Shares") of Common Stock, $.01 par value per share,
of the Corporation at a purchase price of $4.25 per share or an aggregate
purchase price of $102,000.
Hereinafter, (i) the shares underlying this Warrant, together with any
other equity securities which may be issued by the Corporation with respect
thereto or in substitution therefor, are referred to as the "Shares," (ii) the
Shares purchasable hereunder are referred to as the "Warrant Shares," (iii) the
aggregate purchase price payable hereunder for the Warrant Shares is referred to
as the "Aggregate Warrant Price," (iv) the price payable hereunder for each of
the Warrant Shares is referred to as the "Per Share Warrant Price," (v) this
Warrant, and all warrants hereafter issued in exchange or substitution for this
Warrant are referred to as the "Warrant," and (vi) the holder of this Warrant is
referred to as the "Holder." The Aggregate Warrant Price is not subject to
adjustment. The Per Share Warrant Price is subject to adjustment as hereinafter
provided; in the event of any such adjustment, the number of Warrant Shares
shall be adjusted by dividing the Aggregate Warrant Price by the Per Share
Warrant Price in effect immediately after such adjustment.
1. EXERCISE OF WARRANT. This Warrant may be exercised, in whole at any
time or in part from time to time, commencing on the issuance of this Warrant
and prior to the Warrant Termination Date by the Holder of this Warrant by the
surrender of this Warrant (with the subscription form at the end hereof duly
executed) at the address set forth in Subsection 9(a) hereof, together with
proper payment of the Aggregate Warrant Price, or the proportionate part thereof
if this Warrant is exercised in part. Payment for Warrant Shares shall be made
by certified or official bank check payable to the order of the Corporation. If
this Warrant is exercised in part, this Warrant must be exercised for a minimum
of Ten Thousand (10,000) Shares, and the Holder is entitled to receive a new
Warrant covering the number of Warrant Shares in respect of which this Warrant
has not been exercised and setting forth the proportionate part of the Aggregate
Warrant Price applicable to such Warrant Shares. Upon such surrender of this
Warrant, the Corporation will (a) issue a certificate or certificates in the
name of the Holder for the largest number of whole Shares to which the Holder
shall be entitled and, if this Warrant is exercised in whole, in lieu of any
fractional Share to which the Holder shall be entitled, cash equal to the fair
value of such fractional Share (determined in such reasonable manner as the
Board of Directors of the Corporation shall determine), and (b) deliver the
proportionate part thereof if this Warrant is exercised in part, pursuant to the
provisions of this Warrant.
The Corporation agrees that, prior to the expiration of this Warrant,
the Corporation will at all times have authorized and in reserve, and will keep
available, solely for issuance or delivery upon the exercise of this Warrant,
the Shares as from time to time shall be receivable upon the exercise of this
Warrant.
2. ADJUSTMENTS.
(a) Adjustment for Combinations or Consolidation of Shares. In
the event the outstanding Shares shall be combined or consolidated, by
reclassification or otherwise, into a lesser number of Shares, the applicable
Warrant Price in effect immediately prior to such combination or consolidation
shall, concurrently with the effectiveness of such combination or consolidation,
be increased proportionately.
(b) Adjustment for Merger or Reorganization, etc. In case of
any consolidation or merger (except a merger in connection with the
reincorporation of the Corporation) of the Corporation with or into another
corporation or the sale of all or substantially all of the assets of the
Corporation to another corporation, each Share issuable upon exercise of this
Warrant shall thereafter be convertible into the kind and amount of shares of
stock or other securities or property (including cash) to which a holder of the
number of Shares of the Corporation deliverable upon exercise of this Warrant
would have been entitled upon such consolidation, merger or sale; and, in such
case, appropriate adjustment (as determined in good faith by the Board of
Directors) shall be made in the application of the provisions in this Subsection
set forth with respect to the rights and interest thereafter of the holders of
the Shares, to the end that the provisions set forth in this Subsection
(including provisions with respect to changes in and other adjustments of the
Warrant Price) shall
-2-
thereafter be applicable, as nearly as reasonably may be, in relation to any
shares of stock or other property (including cash) thereafter deliverable upon
the exercise of this Warrant.
(c) Adjustment for Reclassification, Exchange or Substitution.
If the Shares issuable upon the exercise of this Warrant shall be changed into
the same or a different number of shares of any class of classes of stock,
whether by capital reorganization, reclassification, or otherwise (other than a
subdivision or combination of shares or stock dividend provided for above, or a
reorganization, merger, consolidation, or sale of assets provided for below),
then and in each such event the holder of this Warrant to purchase such Shares
shall have the right thereafter to convert such share into the kind and amount
of shares of stock and other securities and property receivable upon such
reorganization, reclassification, or other change, by holders of the number of
Shares into which such Shares might have been converted immediately prior to
such reorganization, reclassification, or change, all subject to further
adjustment as provided herein.
(d) Certificate as to Adjustments. Upon the occurrence of each
adjustment or readjustment of the Warrant Price pursuant to this Section 2, the
Corporation at its expense shall promptly compute such adjustment or
readjustment in accordance with the terms hereof and furnish to the holder of
this Warrant a notice setting forth such adjustment or readjustment and showing
in detail the facts upon which such adjustment or readjustment is based.
4. FULLY PAID STOCK; TAXES. The Corporation agrees that the Shares
represented by each and every certificate for Warrant Shares delivered on the
exercise of this Warrant shall, at the time of such delivery, be validly issued
and outstanding, fully paid and non-assessable, and not subject to pre-emptive
rights, and the Corporation will take all such actions as may be necessary to
assure that the par value or stated value, if any, per share of the Shares is at
all times equal to or less than the then Per Share Warrant Price. The
Corporation further covenants and agrees that it will pay, when due and payable,
any and all Federal and state stamp, original issue or similar taxes which may
be payable in respect of the issue of any Warrant Share or certificate therefor.
5. TRANSFER.
(a) Securities Laws. Neither this Warrant nor the Warrant
Shares issuable upon the exercise hereof have been registered under the
Securities Act of 1933, as amended (the "Securities Act") or under any state
securities laws and unless so registered may not be transferred, sold, pledged,
hypothecated or otherwise disposed of unless an exemption from such registration
is available. In the event the Holder desires to transfer this Warrant or any of
the Warrant Shares issued, the Holder must give the Corporation prior written
notice of such proposed transfer including the name and address of the proposed
transferee. Such transfer may be made only either (i) upon publication by the
Securities and Exchange Commission (the "Commission") of a ruling,
interpretation, opinion or "no action letter" based upon facts presented to said
Commission, or (ii) upon receipt by the Corporation of an opinion of counsel to
the Corporation in either case to the effect that the proposed transfer will not
violate the provisions of the Securities Act, the Securities Exchange Act of
1934, as amended, or the rules and regulations promulgated under either such
act,
-3-
or in the case of clause (ii) above, to the effect that the Warrant or Warrant
Shares to be sold or transferred has been registered under the Securities Act,
and that there is in effect a current prospectus meeting the requirements of
Subsection 10(a) of the Securities Act, which is being or will be delivered to
the purchaser or transferee at or prior to the time of delivery of the
certificates evidencing the Warrant or Warrant Shares to be sold or transferred.
(b) Conditions to Transfer. Prior to any such proposed
transfer, and as a condition thereto, if such transfer is not made pursuant to
an effective registration statement under the Securities Act, the Holder will,
if requested by the Corporation, deliver to the Corporation (i) an investment
covenant signed by the proposed transferee, (ii) an agreement by such transferee
to the impression of the restrictive investment legend set forth herein on the
certificate or certificates representing the securities acquired by such
transferee, (iii) an agreement by such transferee that the Corporation may place
a "stop transfer order" with its transfer agent or registrar, and (iv) an
agreement by the transferee to indemnify the Corporation to the same extent as
set forth in the next succeeding paragraph.
(c) Indemnity. The Holder acknowledges that the Holder
understands the meaning and legal consequences of this Section 4, and the Holder
hereby agrees to indemnify and hold harmless the Corporation, its
representatives and each officer and director thereof from and against any and
all loss, damage or liability (including all attorneys' fees and costs incurred
in enforcing this indemnity provision) due to or arising out of (a) the
inaccuracy of any representation or the breach of any warranty of the Holder
contained in, or any other breach of, this Warrant, (b) any transfer of any of
the Warrant or the Warrant Shares in violation of the Securities Act, the
Securities Exchange Act of 1934, as amended, or the rules and regulations
promulgated under either of such acts, (c) any transfer of the Warrant or any of
the Warrant Shares not in accordance with this Warrant, or (d) any untrue
statement or omission to state any material fact in connection with the
investment representations or with respect to the facts and representations
supplied by the Holder to counsel to the Corporation upon which its opinion as
to a proposed transfer shall have been based.
(d) Transfer. Subject to applicable securities laws and
Section 5(a), and except as restricted hereby, this Warrant and the Warrant
Shares issued may be transferred by the Holder in whole or in part at any time
or from time to time. Upon surrender of this Warrant to the Corporation or at
the office of its stock transfer agent, if any, with the Assignment Form annexed
hereto duly executed and funds sufficient to pay any transfer tax, and upon
compliance with the foregoing provisions, the Corporation shall, without charge,
execute and deliver a new Warrant in the name of the assignee named in such
instrument of assignment, and this Warrant shall promptly be cancelled. Any
assignment, transfer, pledge, hypothecation or other disposition of this Warrant
attempted contrary to the provisions of this Warrant, or any levy of execution,
attachment or other process attempted upon the Warrant, shall be null and void
and without effect.
(e) Legend and Stop Transfer Orders. Unless the Warrant Shares
have been registered under the Securities Act, upon exercise of any of the
Warrant and the issuance of any of the Warrant Shares, the Corporation shall
instruct its transfer agent to enter stop transfer orders with
-4-
respect to such Shares, and all certificates representing the Warrant Shares
shall bear on the face thereof substantially the following legend:
"THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT") OR
UNDER ANY STATE LAW AND ARE "RESTRICTED SECURITIES" AS THAT TERM IS
DEFINED IN RULE 144 UNDER THE ACT. THE SHARES MAY NOT BE SOLD,
TRANSFERRED, OR OTHERWISE DISPOSED OF EXCEPT PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE ACT OR PURSUANT TO AN EXEMPTION FROM
REGISTRATION UNDER THE ACT, THE AVAILABILITY OF WHICH IS TO BE
ESTABLISHED AND ACCOMPANIED BY AN OPINION OF COUNSEL TO THE
SATISFACTION OF THE COMPANY."
6. REGISTRATION RIGHTS.
6.1 REGISTRATION RIGHTS.
(a) Within one hundred twenty (120) days after the
date of this Warrant, the Company will use its commercially reasonable efforts
to prepare and file with the Securities and Exchange Commission a registration
statement on Form S-1 or Form S-3 (or any successor form) relating to the Shares
underlying this Warrant. In addition, the Company may, in its sole discretion,
at any time, elect to register all of such Common Stock on a Form S-1 or Form
S-3 (or other appropriate form) in connection with any other registration
statement or on a stand-alone basis.
(b) If permitted by applicable law and regulation,
the Company at the request of the Holders owning a majority of the Shares, shall
file such amendments and/or supplements to such registration statement, and,
subject to this Section 6 hereof, take such other steps as may be required to
maintain such registration statement in effect, and to keep the information
therein current, until the earlier of the sale of all of the Shares included in
the registration statement or the expiration of nine months from the effective
date of such registration statement.
(c) In connection with any registration statement
referred to in Section 6 of this Warrant, Holder will furnish to the Company
such information as the Company may reasonably require from the Holder for
inclusion in the registration statement (and the prospectus included therein).
(d) The Company's registration obligations under this
Warrant shall be conditioned upon the Holder executing and delivering to the
Company an appropriate agreement, if necessary in the reasonable opinion of
counsel to the Company, in form reasonably satisfactory to counsel for the
Company, that it will comply with all anti-stabilization, manipulation, and
similar provisions of Section 10 of the 1934 Act, and any rules promulgated
thereunder and will furnish to the Company information about sales made in such
public offering.
-5-
(e) The Company, at its expense, shall cause all of
the Shares included in a registration statement referred to in Section 6 hereof
to be qualified under the laws of such reasonable number of jurisdictions, as
the Company may reasonably designate, and the Company will continue such
qualification in effect for such period of time not to exceed nine months from
the effective date of the registration statement referred to in Section 6 which
relates to such Shares.
(f) The Company shall not be required to effect any
registration within three months after the effective date of any other
underwritten registration statement of the Company. The Company shall have the
right, in its sole discretion, to designate the managing underwriter in respect
of a public offering pursuant to this Section 6.1.
(g) If at the time the Company is registering the
Shares pursuant to this subsection 6.1, the Company is engaged or has fixed
demonstrable plans to engage in an underwritten public offering (other than on a
Form S-4 or S-8) as to which the Holders may, in the sole discretion of the
managing underwriter of such public offering, include the Shares pursuant to
subsection 6.1 or is engaged in any other activity which, in the good faith
determination of the Company's Board of Directors, would be adversely affected
by the registration to the detriment of the Company, then the Company may, at
its option, elect not to proceed with such registration of the Holders' Shares
or direct that if it effectuates the registration of the Holders' Shares, the
Holders of the Shares shall agree not to publicly sell such registered Shares
for such period of time as requested by the underwriter managing the public
offering or by the Company's Board of Directors.
6.2 EXPENSES.
(a) With respect to the registration right granted in
Section 6.1 hereof, all fees, costs and expenses of an incidental to such
registration, inclusion and public offering (as specified in paragraph (b)
below) in connection therewith shall be borne by the Company, provided, however,
that any security holders participating in such registration shall bear their
pro rata share of the underwriting discount and commissions and transfer taxes.
(b) The fees, costs and expenses of registration to
be borne by the Company as provided in paragraph (a) above shall include,
without limitation, all registration, filing, and NASD fees, printing expenses,
fees and disbursements of counsel and accountants for the Company, and all legal
fees and disbursements and other expenses of complying with state securities or
blue sky laws of any jurisdictions in which the securities to be offered are to
be registered and qualified (except as provided in 6.2(a) above). Fees and
disbursements of counsel and accountants for the Holders and any other expenses
incurred by the Holders not expressly included above shall be borne by the
Holders.
6.3 INDEMNIFICATION.
(a) With respect to the registration right described
in this Section 6 and to the extent permitted by law, the Company hereby agrees
to indemnify, hold harmless and defend
-6-
the Holders and each person, if any, who is deemed a "controlling person" of any
such Holder within the meaning of the 1933 Act, against any and all losses,
claims, damages or liabilities (including legal and other expenses incurred in
investigating and defending against the same), to which they, or any of them,
may become subject under the 1933 Act or other statute or common law, arising
out of or based upon:
(i) any alleged untrue statement of a
material fact contained in any registration statement, preliminary
prospectus or prospectus included therein, any amendment thereof or
supplement thereto; or
(ii) the alleged omission to state therein a
material fact required to be stated therein or necessary to make the
statements contained therein not misleading; provided, however, that
the indemnity contained in this Section 6.3(a) shall not apply to any
such alleged untrue statement or omission made in reliance upon and in
conformity with information furnished in writing to the Company by or
on behalf of the Holders.
The Holder agrees that as soon as practicable, but in any event within
ten (10) days after the receipt of notice of any claim or action against it in
respect of which indemnity may be sought from the Company hereunder, to notify
the Company thereof in writing, and the Company shall assume the defense of such
claim or action (and the cost thereof) by counsel of its own choosing.
(b) The Holder hereby agrees to indemnify, hold
harmless and defend the Company, its directors and officers, each person, if
any, who is deemed a controlling person of the Company within the meaning of the
1933 Act, and the underwriter, to the extent permitted by law, against any and
all losses, claims, damages or liabilities, including legal or other expenses
incurred in investigating and defending against the same, to which they or any
of them may become subject under the 1933 Act or other statute or common law,
arising out of or based upon:
(i) any alleged untrue statement by such
Holder of a material fact contained in any such registration statement,
or prospectus or preliminary prospectus included therein, or any
amendment thereof or supplement thereto; or
(ii) the alleged omission by such Holder to
state therein a material fact required to be stated therein or
necessary to make the statements contained therein not misleading.
The Company, and any other person or entity seeking indemnity from the
Holder hereunder, agree that as soon as practicable, but in any event within ten
(10) days after receipt of notice of any claim or action against the Company or
such other person or entity, to notify the Holder thereof in writing, and the
Holder shall assume the defense of any such claim or action (and the cost
thereof) by counsel of his own choosing, who shall be reasonably satisfactory to
the Company. If Holder does not promptly assume such defense, the Company may at
its option defend such action at the expense of the Holder.
-7-
7. LOSS, ETC. OF WARRANT. Upon receipt of evidence satisfactory to the
Corporation of the loss, theft, destruction or mutilation of this Warrant, and
of indemnity reasonably satisfactory to the Corporation, if lost, stolen or
destroyed, and upon surrender and cancellation of this Warrant, if mutilated,
the Corporation shall execute and deliver to the Holder a new Warrant of like
date, tenor and denomination.
8. WARRANT HOLDER NOT SHAREHOLDER. Except as otherwise provided herein,
this Warrant does not confer upon the Holder any right to vote or to consent to
or receive notice as a shareholder of the Corporation, as such, in respect of
any matters whatsoever, or any other rights or liabilities as a shareholder,
prior to the exercise hereof.
9. COMMUNICATION. No notice or other communication under this Warrant
shall be effective unless the same is in writing and is mailed by first-class
mail, postage prepaid, addressed to:
(a) the Corporation at 455 Somerset Avenue, Dighton,
Massachusetts 02764, or such other address as the Corporation has designated in
writing to the Holder, or
(b) the Holder at Culverwell & Co., Inc., 60 State Street,
Boston, Massachusetts 02109 or such other address as the Holder has designated
in writing to the Corporation.
10. HEADINGS. The headings of this Warrant have been inserted as a
matter of convenience and shall not affect the construction hereof.
11. APPLICABLE LAW. This Warrant shall be governed by and construed in
accordance with the laws of the Commonwealth of Massachusetts without giving
effect to the principles of conflicts of law thereof.
IN WITNESS WHEREOF, BPI PACKAGING TECHNOLOGIES, INC., has caused this
Warrant to be signed by its President and its corporate seal to be hereunto
affixed and attested by its Assistant Secretary as of this 28th day of May,
1996.
ATTEST: BPI PACKAGING TECHNOLOGIES, INC.
By:
- ------------------------------------- -------------------------------
Neil H. Aronson Dennis N. Caulfield
Assistant Secretary President
[Corporate Seal]
-8-
SUBSCRIPTION
The undersigned, ___________________, pursuant to the provisions of the
foregoing Warrant, hereby agrees to subscribe for the purchase of _________
shares of the Common Stock of BPI PACKAGING TECHNOLOGIES, INC. covered by said
Warrant, and makes payment therefor in full at the price per share provided by
said Warrant.
Dated: Signature
-------------------------------- --------------------------
Address
----------------------------
-----------------------------------
ASSIGNMENT
FOR VALUE RECEIVED _________________ hereby sells, assigns and
transfers unto _________________ the foregoing Warrant and all rights evidenced
thereby, and does irrevocably constitute and appoint ______________________,
attorney, to transfer said Warrant on the books of BPI PACKAGING TECHNOLOGIES,
INC.
Dated: Signature
-------------------------------- --------------------------
Address
----------------------------
-----------------------------------
PARTIAL ASSIGNMENT
FOR VALUE RECEIVED _____________________ hereby assigns and transfers
unto ____________________ the right to purchase _____________ shares of the
Common Stock of BPI PACKAGING TECHNOLOGIES, INC. by the foregoing Warrant, and a
proportionate part of said Warrant and the rights evidenced hereby, and does
irrevocably constitute and appoint __________________, attorney, to transfer
that part of said Warrant on the books of BPI PACKAGING TECHNOLOGIES, INC.
Dated: Signature
-------------------------------- --------------------------
Address
----------------------------
-----------------------------------
-9-
O'CONNOR, BROUDE & ARONSON
ATTORNEYS AT LAW
THE BAY COLONY CORPORATE CENTER
ROUTE 128 AND WINTER STREET
950 WINTER STREET, SUITE 2300
WALTHAM, MASSACHUSETTS 02154
-----
617-890-6600 FACSIMILE: 617-890-9261
July 12, 1996
Board of Directors
BPI Packaging Technologies, Inc.
455 Somerset Avenue
Dighton, Massachusetts 02764
Re: BPI Packaging Technologies, Inc.
---------------------------------
Ladies and Gentlemen:
This firm has represented BPI Packaging Technologies, Inc., a Delaware
corporation (hereinafter called the "Corporation"), in connection with the
filing of the Registration Statement described below.
In our capacity as corporate counsel to the Corporation, we are
familiar with the Certificate of Incorporation, as amended, and the Bylaws of
the Corporation, as amended. We are also familiar with the corporate proceedings
taken by the Corporation in connection with the preparation and filing of a
Registration Statement on Form S-3 covering: (i) 421,500 shares of Common Stock
issued to investors in the Corporation's 1996 private placement; and (ii)
200,000 shares of Common Stock issuable upon exercise of warrants (the
"Warrants") issued pursuant to the terms of consulting agreements dated May 28,
1996.
Based upon the foregoing, we are of the opinion that:
1. The Corporation is duly organized and validly existing under
the laws of State of Delaware.
2. The 421,500 shares of Common Stock have been duly authorized
and are legally issued, fully paid and non-assessable.
3. The 200,000 shares of Common Stock underlying the Warrants
will be when issued and paid for in accordance with the terms
of the Warrants legally issued, fully paid and non-assessable.
Board of Directors
Re: BPI Packaging Technologies, Inc.
--------------------------------
July 12, 1996
Page 2
This opinion is provided solely for the benefit of the addressee hereof
and is not to be relied upon any other person or party without prior
notification to, and the consent of, this firm. Nevertheless, we hereby consent
to the use of this opinion and to all references to our firm in or made part of
the Registration Statement and any amendments thereto.
Very truly yours,
O'CONNOR, BROUDE & ARONSON
By: /s/ Neil H. Aronson
----------------------------
Neil H. Aronson
NHA:MJH:anr
c: Dennis N. Caulfield, President
BPI PACKAGING TECHNOLOGIES, INC.
455 SOMERSET AVENUE
NORTH DIGHTON, MASSACHUSETTS 02764
CONSULTING AGREEMENT
May 28, 1996
H.J. Meyers & Co., Inc.
1895 Mt. Hope Avenue
Rochester, New York 14620
Ladies and Gentlemen:
This will confirm the arrangements, terms and conditions (hereinafter
referred to as the "Agreement"), whereby BPI Packaging Technologies, Inc. (the
"Company") has retained you, H.J. Meyers & Co., Inc. (the "Consultant"), to
serve as financial and business consultant and advisor to the Company, on a
non-exclusive basis for a period twelve (12) months commencing on this date.
The undersigned hereby agree to the following terms and conditions:
1. CONSULTING SERVICES. The Consultant will render financial and
business consulting and advice pertaining to the Company's financial and
business affairs as it may from time to time request.
2. FINANCING. The Consultant will assist and represent the Company in
obtaining both short and long-term financing whether from banks or the sale of
the Company's debt or equity.
3. WALL STREET LIAISON. The Consultant will, when appropriate, arrange
meetings between individuals and financial institutions in the investment
community, such as security analysts, portfolio managers and market makers, and
representatives of the Company.
4. COMPENSATION. As consideration for the Consultant's services, the
Company agrees to issue to the Consultant 176,000 warrants to purchase 176,000
shares of the Company's Common Stock at an exercise price of $4.25 per share.
5. RELATIONSHIP. Nothing herein shall constitute an employment or
agency relationship between the Consultant and the Company except to such extent
as might hereafter be agreed upon for a particular purpose. Except as expressly
agreed, the Consultant shall not have the authority to obligate or commit the
Company in any manner whatsoever.
6. ASSIGNMENT AND TERMINATION. This Agreement shall not be assignable
by any party except to successors to all or substantially all of the business of
either the Consultant or the Company, nor may this Agreement be terminated by
either party for any reason whatsoever without
H.J. Meyers & Co., Inc.
May 28, 1996
Page 2
the prior written consent of the other party, which consent may not be
arbitrarily withheld by the party whose consent is required.
7. GOVERNING LAW. This Agreement shall in all respects be construed in
accordance with and governed by the laws of the Commonwealth of Massachusetts,
without regard to its conflict of laws principles, and the parties hereto
expressly consent to the exclusive jurisdiction of the Massachusetts courts.
8. SEVERABILITY. If any provisions contained in this Agreement shall to
any extent be held invalid or unenforceable, such invalidity or unenforceability
shall not affect the validity or enforceability of any other provision of this
Agreement which shall remain in full force and effect. Any provision contained
in this Agreement which is held to be invalid or unenforceable under applicable
law shall be, if possible, modified or altered to conform to such applicable
law, or if not possible, shall be deemed to be omitted.
9. AMENDMENTS. Any amendment to this Agreement or waiver by the Company
of any right hereunder shall be effective only if evidenced by a written
instrument executed by the parties hereto, upon authorization of the Company's
Board of Directors.
10. HEADINGS. The headings of the sections contained in this Agreement
are inserted for convenience and reference only and in no way define, limit,
extend or describe the scope of this Agreement, the intent of any provisions
hereof, and shall not be deemed to constitute a part hereof nor to affect the
meaning of this Agreement in any way.
11. NOTICES. Any notices or other communications in connection with
this Agreement shall be in writing and be deemed to be delivered three (3) days
after being sent by certified mail, return receipt requested, addressed as
follows:
If to the Company: BPI Packaging Technologies, Inc.
455 Somerset Avenue
North Dighton, Massachusetts 02764
Attention: Dennis N. Caulfield, President
With a copy to: O'Connor, Broude & Aronson
950 Winter Street, Suite 2300
Waltham, Massachusetts 02154
Attention: Neil H. Aronson, Esquire
If to Consultant: H.J. Meyers & Co., Inc.
1895 Mt. Hope Avenue
Rochester, New York 14620
H.J. Meyers & Co., Inc.
May 28, 1996
Page 3
12. ENTIRE AGREEMENT. This Agreement sets forth the entire agreement
between the Consultant and the Company and supersedes all prior communications,
agreements and understandings, whether written or oral, with respect to your
consultancy by the Company and any of its affiliates, the termination of that
consultancy and all related matters. In signing this Agreement, the parties give
assurances that they have not relied on any promises or representations, written
or oral, express or implied, by the Consultant or anyone at the Company or any
of its affiliates, that are not set forth expressly in this Agreement.
Very truly yours,
BPI PACKAGING TECHNOLOGIES, INC.
By:
--------------------------------
Dennis N. Caulfield
President
ACKNOWLEDGED, AGREED
AND ACCEPTED:
H.J. MEYERS & CO., INC.
By:
-----------------------------------
Name:
---------------------------------
Title:
--------------------------------
BPI PACKAGING TECHNOLOGIES, INC.
455 SOMERSET AVENUE
NORTH DIGHTON, MASSACHUSETTS 02764
CONSULTING AGREEMENT
May 28, 1996
Culverwell & Co., Inc.
60 State Street
Boston, Massachusetts 02109
Ladies and Gentlemen:
This will confirm the arrangements, terms and conditions (hereinafter
referred to as the "Agreement"), whereby BPI Packaging Technologies, Inc. (the
"Company") has retained you, Culverwell & Co., Inc. (the "Consultant"), to serve
as financial and business consultant and advisor to the Company, on a
non-exclusive basis for a period twelve (12) months commencing on this date.
The undersigned hereby agree to the following terms and conditions:
1. CONSULTING SERVICES. The Consultant will render financial and
business consulting and advice pertaining to the Company's financial and
business affairs as it may from time to time request.
2. FINANCING. The Consultant will assist and represent the Company in
obtaining both short and long-term financing whether from banks or the sale of
the Company's debt or equity.
3. WALL STREET LIAISON. The Consultant will, when appropriate, arrange
meetings between individuals and financial institutions in the investment
community, such as security analysts, portfolio managers and market makers, and
representatives of the Company.
4. COMPENSATION. As consideration for the Consultant's services, the
Company agrees to issue to the Consultant 24,000 warrants to purchase 24,000
shares of the Company's Common Stock at an exercise price of $4.25 per share.
5. RELATIONSHIP. Nothing herein shall constitute an employment or
agency relationship between the Consultant and the Company except to such extent
as might hereafter be agreed upon for a particular purpose. Except as expressly
agreed, the Consultant shall not have the authority to obligate or commit the
Company in any manner whatsoever.
6. ASSIGNMENT AND TERMINATION. This Agreement shall not be assignable
by any party except to successors to all or substantially all of the business of
either the Consultant or the Company, nor may this Agreement be terminated by
either party for any reason whatsoever without
Culverwell & Co., Inc.
May 28, 1996
Page 2
the prior written consent of the other party, which consent may not be
arbitrarily withheld by the party whose consent is required.
7. GOVERNING LAW. This Agreement shall in all respects be construed in
accordance with and governed by the laws of the Commonwealth of Massachusetts,
without regard to its conflict of laws principles, and the parties hereto
expressly consent to the exclusive jurisdiction of the Massachusetts courts.
8. SEVERABILITY. If any provisions contained in this Agreement shall to
any extent be held invalid or unenforceable, such invalidity or unenforceability
shall not affect the validity or enforceability of any other provision of this
Agreement which shall remain in full force and effect. Any provision contained
in this Agreement which is held to be invalid or unenforceable under applicable
law shall be, if possible, modified or altered to conform to such applicable
law, or if not possible, shall be deemed to be omitted.
9. AMENDMENTS. Any amendment to this Agreement or waiver by the Company
of any right hereunder shall be effective only if evidenced by a written
instrument executed by the parties hereto, upon authorization of the Company's
Board of Directors.
10. HEADINGS. The headings of the sections contained in this Agreement
are inserted for convenience and reference only and in no way define, limit,
extend or describe the scope of this Agreement, the intent of any provisions
hereof, and shall not be deemed to constitute a part hereof nor to affect the
meaning of this Agreement in any way.
11. NOTICES. Any notices or other communications in connection with
this Agreement shall be in writing and be deemed to be delivered three (3) days
after being sent by certified mail, return receipt requested, addressed as
follows:
If to the Company: BPI Packaging Technologies, Inc.
455 Somerset Avenue
North Dighton, Massachusetts 02764
Attention: Dennis N. Caulfield, President
With a copy to: O'Connor, Broude & Aronson
950 Winter Street, Suite 2300
Waltham, Massachusetts 02154
Attention: Neil H. Aronson, Esquire
If to Consultant: Culverwell & Co., Inc.
60 State Street
Boston, Massachusetts 02109
Culverwell & Co., Inc.
May 28, 1996
Page 3
12. ENTIRE AGREEMENT. This Agreement sets forth the entire agreement
between the Consultant and the Company and supersedes all prior communications,
agreements and understandings, whether written or oral, with respect to your
consultancy by the Company and any of its affiliates, the termination of that
consultancy and all related matters. In signing this Agreement, the parties give
assurances that they have not relied on any promises or representations, written
or oral, express or implied, by the Consultant or anyone at the Company or any
of its affiliates, that are not set forth expressly in this Agreement.
Very truly yours,
BPI PACKAGING TECHNOLOGIES, INC.
By:
----------------------------------
Dennis N. Caulfield
President
ACKNOWLEDGED, AGREED
AND ACCEPTED:
CULVERWELL & CO., INC.
By:
-----------------------------------
Name:
---------------------------------
Title:
--------------------------------
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the Prospectus
constituting part of the Registration Statement on From S-3 of our report dated
June 7, 1996 appearing on Page F-1 of BPI Packaging Technologies, Inc.'s Annual
Report on Form 10-K for the year ended February 23, 1996. We also consent to the
reference made to us under the heading "Experts" in such Prospectus.
Price Waterhouse LLP
Boston, Massachusetts
July 12, 1996
